Document:

exv10w6

 

Exhibit 10.6

MARINA VILLAGE

Alameda, California

INDUSTRIAL GROSS

BASIC LEASE INFORMATION

	 	 	 	 	 
	 
	 	 	 	Lease Reference
	Effective Date:
	 	November 15, 2003	 	 
	 
	 	 	 	 
	Landlord:
	 	ALAMEDA REAL ESTATE INVESTMENTS,	 	 
	 
	 	a California limited partnership	 	 
	 
	 	 	 	 
	Tenant:
	 	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.,	 	 
	 
	 	a Delaware corporation	 	 
	 
	 	 	 	 
	Premises and
Building Address:
	 	960 Atlantic Avenue, Suite 102,
Alameda, CA 94501	 	Paragraph 1
	 
	 	 	 	 
	Approximate Area
of Premises:
	 	13,112 rentable square feet (“rsf”)	 	Paragraph 1
	 
	 	 	 	 
	Term Commencement:
	 	March 1,  2004	 	Paragraph 2
	 
	 	 	 	 
	Term Expiration:
	 	February 28, 2009	 	Paragraph 2
	 
	 	 	 	 
	Base Rent:
	 	3/1/04 – 2/28/05 $19,012/Month	 	Paragraph 3(a)
	 
	 	3/1/05 – 2/28/06 $19,563/Month	 	 
	 
	 	3/1/06 – 2/28/07 $20,130/Month	 	 
	 
	 	3/1/07 – 2/28/08 $20,715/Month	 	 
	 
	 	3/1/08 – 2/28/09 $21,316/Month	 	 
	 
	 	 	 	 
	Tenant’s
Percentage Share:
	 	13,112 rsf ÷ 40,003 rsf = 32.78%	 	Paragraph 4(a)
	 
	 	 	 	 
	Base Year:
	 	2003	 	Paragraph 4(a)
	 
	 	 	 	 
	Use:
	 	General office and laboratory testing of medical devices	 	Paragraph 6(a)
	 
	 	 	 	 
	Security Deposit:
	 	$233,697	 	Paragraph 16
	 
	 	 	 	 
	Tenant’s Address
for Notices:
	 	960 Atlantic Avenue, Suite 102
Alameda, CA  94501	 	Paragraph 21
	 
	 	 	 	 
	Landlord’s Address
for Notices:
	 	Alameda Real Estate Investments
2479 Bayshore Road, Suite 704	 	Paragraph 21
	 
	 	Palo Alto, CA 94303	 	 
	 
	 	Attn: Joseph R. Seiger	 	 
	 
	 	Telecopier No. (650) 463-1615	 	 
	 
	 	 	 	 

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	With a copy to (and address for payment of rent):	 	 
	 
	 	Alameda Real Estate Investments	 	 
	 
	 	1150 Marina Village Parkway, Suite 100	 	 
	 
	 	Alameda, CA  94501	 	 
	 
	 	Telecopier No. (510) 523-1638	 	 
	 
	 	 	 	 
	Broker(s):
	 	Cornish & Carey	 	Paragraph 22(j)
	 
	 	 	 	 
	Exhibits &
Other Attachments:
	 	Addendum
Exhibit A - Outline of Premises	 	 
	 
	 	Exhibit B - Initial Improvement of the Premises	 	 
	 
	 	Exhibit C - Verification Memorandum	 	 
	 
	 	Exhibit D - Form of Letter of Credit	 	 
	 
	 	Exhibit E - Operating Expense Exclusions	 	 

The provisions of the Lease identified above in the margin are those provisions where references to
particular Basic Lease Information appear. Each such reference shall incorporate the applicable
Basic Lease Information. In the event of any conflict between any Basic Lease Information and the
Lease, the latter shall control.

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.	 	ALAMEDA REAL ESTATE INVESTMENTS,
	A Maryland Corporation	 	a California limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Vintage Alameda Investments, LP,

a California limited partnership,

operating general partner
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Henry 	 	 	 	By:	 	Vintage Properties-Alameda Commercial,

a California corporation,

managing general partner
	 

	 	 	 	 	 	 	 	 	 	 
	
Name:
	 	Henry Klyce 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	/s/ Joseph R. Seiger
	 

	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Pres 	 	 	 	 	 	Name:
	 	Joseph R. Seiger
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 President
	Date:

	 	11/17/03 	 	 	 	 	 	Date:	 	11/20/03 
	 

	 	 
	 	 	 	 	 	 	 	 

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MARINA VILLAGE

INDUSTRIAL GROSS LEASE

THIS LEASE (“Lease”) is made and entered into as of the Effective Date by and between
ALAMEDA REAL ESTATE INVESTMENTS, a California limited partnership (“Landlord”), and ST.
FRANCIS MEDICAL TECHNOLOGIES, INC., a Delaware corporation (“Tenant”).

WITNESSETH

	1.	 	Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord
or the term of this Lease and at the rental and upon the conditions set forth below, the
Premises (the “Premises”) described in the Basic Lease Information and identified on
the drawing attached hereto as Exhibit A (“Exhibit A”). The Premises are
located within the building identified in the Basic Lease Information (the
“Building”). The Building is located with the approximately 200-acre development (the
“Project”) commonly known as Marina Village, Alameda, California. Subject to
substantial completion by Landlord of any improvements to the Building or the Premises which
Landlord is explicitly required to make under this Lease, Tenant shall accept the Premises in
its “as-is” condition as of the date of delivery by Landlord.

	2.	 	Term. The term of this Lease shall commence and, unless sooner terminated as
hereinafter provided, shall end on the dates respectively specified in the Basic Lease
Information. If Landlord shall permit Tenant to occupy the Premises prior to the date of term
commencement, such occupancy shall be subject to all the terms of this Lease. If Landlord,
for any reason whatsoever, cannot deliver possession of the Premises to Tenant on the date of
term commencement, this Lease shall not be void or voidable, nor shall Landlord be liable to
Tenant for any loss or damage resulting there from, but in that event, subject to any contrary
provisions in any agreement with Landlord covering initial improvement of the Premises, rental
shall be waived for the period between commencement of the term and the time when Landlord can
deliver possession. The date of term expiration shall be extended by the number of days of
delay in delivery of possession and any additional period required so that it will expire on
the last day of a calendar month, and the commencement and expiration dates shall be confirmed
in a Verification Memorandum in the form of Exhibit C (“Exhibit C”) executed
by Landlord and Tenant promptly following delivery of possession.

	3.	 	Rent.

(a) Tenant shall pay to Landlord as rental the amount specified in the Basic Lease
Information as the Base Rent. Base Rent shall be payable upon Tenant’s execution of this
Lease and in advance on or before the first day of the first (1st) full calendar month
following commencement of the term and of each successive calendar month thereafter during
the term. If the term commences on other than the first day of a calendar month any excess
payment of Base Rent shall be credited against the last payment of Base Rent otherwise due.

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(b) Effective as of each anniversary date of the commencement of the term, the Base Rent
shall be increased to equal the sum of (i) the Base Rent as specified in the Basic Lease
Information, plus (ii) the product obtained by multiplying such amount by the percentage
increase in the Consumer Price Index measured from the measuring month which is two months
preceding the commencement of the term to the measuring month two months preceding the
anniversary date in question. As used herein, the term “Consumer Price Index”
(“Consumer Price Index”) shall mean the United States Department of Labor’s Bureau
of Labor Statistics Consumer Price Index, All Urban Consumers, All Items, San
Francisco-Oakland-San Jose, California (1982-84 equals 100), or the successor of such index.
Tenant shall continue paying the current Base Rent until the increased Base Rent has been
calculated. Upon such calculation, Landlord shall give notice to Tenant of the amount of
the new Base Rent which shall be due and payable effective as of the anniversary date and
Tenant shall upon the giving of such notice pay Landlord any shortage in Base Rent accruing
between the current anniversary date and the date of the notice.

(c) Tenant shall pay, as additional rent, all amounts of money required to be paid to
Landlord by Tenant hereunder in addition to monthly rent, whether or not the same be
designated “additional rent” (“additional rent”).

(d) Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and other
amounts due hereunder will cause Landlord to incur costs not contemplated by this Lease, the
exact amount of which will be extremely difficult to ascertain. Such costs include, but are
not limited to, processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any loan secured by the Building. Accordingly, if any installment
of rent or any other sums due from Tenant shall not be received by Landlord on the date due,
Tenant shall pay to Landlord a late charge equal to ten percent (10%) of such overdue
amount. The parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant. Acceptance
of such late charge by Landlord shall in no event constitute a waiver of Tenant’s default
with respect to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies under this Lease.

(e) Any amount payable by Tenant to Landlord, if not paid when due, shall bear interest from
the date due until paid at the rate of ten percent (10%) per annum or, if a higher rate is
legally permissible, at the highest rate legally permitted, provided that interest shall not
be payable on late charges incurred by Tenant nor on any amounts upon which late charges are
paid by Tenant to the extent such interest would cause the total interest to be in excess of
that legally permitted. Payment of interest shall not excuse or cure any default by Tenant
under this Lease.

(f) All payments due from Tenant to Landlord hereunder shall be made to Landlord without
deduction or offset in lawful money of the United States of America at the address for
payment set forth in the Basic Lease Information, or to such other person or at such other
place as Landlord may from time to time designate by notice to Tenant.

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	4.	 	Taxes and Operating Expense.

(a) For each calendar year during the term after the year specified in the Basic Lease
Information as the Base Year, Tenant shall pay its percentage share, as specified in the
Basic Lease Information, of the increase in Property Taxes over Base Property Taxes and its
percentage share of the increase in Operating Expenses for such calendar year over Base
Operating Expenses. For the purposes hereof, “Property Taxes” shall mean all real property
taxes and assessments or governmentally imposed fees or charges (and any tax levied wholly
or partly in lieu thereof) levied, assessed, confirmed, imposed or which have become a lien
against the Building (which for the purposes of defining “Property Taxes” shall include the
land underlying the Building), and “Operating Expenses” shall mean: (1) all costs of
management, operation, maintenance, and repair of the Building, (2) the cost of all
insurance maintained by Landlord with respect to the Building and (3) the share allocable to
the Building of dues and assessments payable under any reciprocal easement or common area
maintenance agreements or declaration or by any owners’ associations affecting the building.
“Base Property Taxes” shall mean those Property Taxes payable during the fiscal year ending
in June of the Base Year, and “Base Operating Expenses” shall mean Operating Expenses
incurred by Landlord during the Base Year. Operating Expenses for both the Base Year and
each subsequent calendar year shall be adjusted to equal Landlord’s reasonable estimate of
Operating Expenses had the total rentable area of the building been 95% occupied.

(b) In the event the Building is not separately assessed for tax purposes, then the Property
Taxes to be paid by Tenant shall be Tenant’s percentage share of the product obtained by
multiplying the total of the real property taxes and assessments levied against the tax
parcel of which the Building is a part by a fraction, the numerator of which is the rentable
area of the Building and the denominator of which is total rentable area of all improvements
located within the tax parcel of which the building is a part.

(c) Tenant shall pay to Landlord each month at the same time and in the same manner as
monthly rent 1/12th of Landlord’s estimate of the increase in Property Taxes and Operating
Expenses from Base Property Taxes and Base Operating Expenses from the then current calendar
year. Within ninety (90) days after the close of each calendar year, or as soon after such
ninety (90)-day period as practicable, Landlord shall deliver to Tenant a statement of
actual Property Taxes and Operating Expenses for such calendar year. If on the basis of
such statement Tenant owes an amount that is less than the estimated payments for such
calendar year previously made by Tenant, Landlord shall refund such excess to Tenant. If on
the basis of such statement Tenant owes an amount that is more than the estimated payments
for such calendar year previously made by Tenant, Tenant shall pay the deficiency to
Landlord within thirty (30) days after delivery of the statement. The obligations of
Landlord and Tenant under this subparagraph with respect to the reconciliation between
estimated payments and actual Property Taxes and Operating Expenses for the last year of the
term shall survive the termination of the Lease.

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	5.	 	Other Taxes. Tenant shall pay or reimburse Landlord within thirty (30) days
following its demand for any taxes (other than local, state or federal, personal or corporate
income taxes measured by the net income of Landlord from all sources), assessments, excises,
levies, business taxes, license, permit, inspection, authorization, service payments in lieu
of taxes and any other fees or charges of any kind, which are levied, assessed, confirmed or
imposed by any public authority: (a) upon, measured by or reasonably attributable to the cost
or value of Tenant’s equipment, furniture, fixtures and other personal property located in the
Premises or leasehold improvements made in or to the Premises at Tenant’s expense; (b) upon or
by reason of the development, possession, use or occupancy of the Premises or the parking
facilities used by Tenant in connection with the Premises; (c) imposed with respect to the
rental payable hereunder; or (d) upon this transaction or any document to which Tenant is a
party.

	6.	 	Use.

(a) The Premises shall be used and occupied by Tenant for the use set forth in the Basic
Lease Information and for no other purpose. Tenant shall, at Tenant’s expense, comply
promptly with all applicable statutes, ordinances, rules, regulations, orders and
requirements in effect during the term regulating the use by Tenant of the Premises. Tenant
shall not use or permit the use of the Premises in any manner that will tend to create waste
or a nuisance, or which unreasonably disturbs other tenants of the Building, nor shall
Tenant, its employees, agents or invitees damage the Premises, the Building or any portion
of the Project, nor place or maintain any signs on or visible from the exterior of the
Premises, or use any corridors, sidewalks or other areas outside of the Premises for storage
or any purpose other than access to the Premises. Tenant shall not conduct any auction at
the Premises. Notwithstanding any other provision of this Lease, Tenant shall not use, keep
or permit to be used or kept on the Premises any foul or noxious gas or substance, nor shall
Tenant do or permit to be done anything in and about the Premises, either in connection with
activities hereunder expressly permitted or otherwise, which would cause an increase in
premiums payable under, or a cancellation of, any policy of insurance maintained by Landlord
in connection with the Building or the Project or which would violate the terms of any
covenants, conditions or restrictions affecting the Building or the land on which it is
located.

(b) Tenant shall strictly comply with all statutes, laws, ordinances, rules, regulations,
and precautions now or hereafter mandated or advised by any federal, state, local or other
governmental agency with respect to the use, generation, storage, or disposal of hazardous,
toxic, or radioactive materials (collectively, “Hazardous Materials”). As herein
used, Hazardous Materials shall include, but not be limited to, those materials identified
in Sections 66680 through 66685 of Title 22 of the California Code of Regulations, Division
4, Chapter 30, as amended from time to time, and those substances defined as “hazardous
substances,” “hazardous materials, “hazardous wastes,” “chemicals known to cause cancer or
reproductive toxicity,” “radioactive materials,” or other similar designations in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the Hazardous Materials Transportation Act, 49
U.S.C. Section 1801 et seq., 33 U.S.C. Section 1251 et seq., 42 U.S.C.
Section

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300(f) et seq., 42 U.S.C. 7401 et seq., California Health and Safety Code Section
25249.5 et seq., California Water Code Section 13000 et seq., California Health and Safety
Code Section 39000 et seq. and any other governmental statutes, ordinances, rules,
regulations, and precautions adopted pursuant to the preceding laws or other similar laws,
regulations and guidelines now or hereafter in effect. Tenant shall not cause, or allow
anyone else to cause, any Hazardous Materials to be used, generated, stored, or disposed of
on or about the Premises or the Building other than reasonable quantities of office and
cleaning supplies in their retail containers. Tenant shall defend (with counsel approved by
Landlord), indemnify and hold Landlord, its members and its and their officers, directors,
employees and agents, any entity having a security interest in the Premises or the Building,
and its and their employees and agents (collectively, “Indemnitees”) harmless from
and against all liabilities, claims, costs, damages, and depreciation of property value,
including all foreseeable and unforeseeable consequential damages, directly or indirectly
arising out of the use, generation, storage, or disposal of Hazardous Materials by Tenant or
any person claiming under Tenant, including, without limitation, the cost of any required or
necessary investigation, monitoring, repair, cleanup, or detoxification and the preparation
of any closure or other required plans, whether such action is required or necessary prior
to or following the termination of this Lease, as well as penalties, fines and claims for
contribution to the full extent that such action is attributable, directly or indirectly, to
the use, generation, storage, or disposal of Hazardous Materials by Tenant or any person
claiming under Tenant. Neither the consent by Landlord to the use, generation, storage, or
disposal of Hazardous Materials nor the strict compliance by Tenant with all statutes, laws,
ordinances, rules, regulations, and precautions pertaining to Hazardous Materials shall
excuse Tenant from Tenant’s obligation of indemnification set forth above. Tenant’s
obligations unless this paragraph 6 shall survive the expiration or termination of this
Lease.

	7.	 	Utilities.

(a) Tenant shall pay for all water, sewer, gas, electricity, heat, cooling, energy,
telephone, refuse collection, alarm monitoring services, and other utility-type services
furnished to Tenant or the premises, together with all related installation or connection
charges or deposits. Wherever it is practical to do so such service shall be separately
metered or charged to Tenant by the provider thereof and paid for directly by Tenant. To
the extent any of the foregoing services are provided by Landlord, Tenant shall reimburse
Landlord for all actual out-of-pocket costs incurred by Landlord in connection will the
provision of such services as billed by the provider thereof based on Landlord’s reasonable
estimate of the level of Tenant’s use or consumption of such services. Landlord shall bill
Tenant for such services as incurred and payment shall be made by Tenant within ten (10)
days after submittal of Landlord’s statement.

(b) Landlord shall not be in default hereunder or be liable for any damages directly or
indirectly resulting therefrom, and there shall not be any rent abatement, by reason of any
interruption or curtailment whatsoever in utility services which is due to fire, accident,
strike, governmental authority, act of God or other causes beyond the reasonable control
of Landlord or any temporary interruption in such service which is necessary in the making
of alterations, repairs or improvements to the Buildings or any part of it.

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	8.	 	Maintenance, Repairs and Alterations.

(a) Subject to the provisions of Paragraph 10 below, and except for damages caused by
Tenant, its agents or invitees, Landlord shall keep in good condition and repair the
foundations and exterior walls and roof of the Building and all common areas within the
Building not leased to tenants. Tenant expressly waives the benefits of any statute now or
hereafter in effect which would otherwise afford Tenant the right to make repairs at
Landlord’s expense or to terminate this Lease because of Landlord’s failure to keep the
Premises or the Building in good order, condition and repair.

(b) Tenant shall, at Tenant’s expense, maintain the interior portion of the Premises
including, but not limited to, all plumbing and electrical fixtures and outlets, all
computer and telecommunications wiring and outlets, and any interior glass in good condition
and repair. If Tenant falls to do so Landlord may, but shall not be required to, enter the
Premises and put them in good condition, and Landlord’s costs thereof as set forth in
Landlord’s demand to Tenant shall automatically become due and payable as additional rent.
Tenant shall also cause to be maintained, at its expense and in good operating condition and
repair, all heat, ventilating, and air conditioning equipment installed in the premises. If
Landlord so elects, Tenant shall retain the services of Landlord or a maintenance company
retained by it to perform maintenance of Tenant’s heating, ventilating and air conditioning
equipment and shall reimburse Landlord for the cost thereof upon demand. At the expiration
or earlier termination of the term Tenant shall deliver up possession of the Premises in
good condition and repair, only ordinary wear and tear excepted, and with only such
improvements and alterations as shall have been made with Landlord’s consent and not
required by Landlord to be removed at the end of the term.

(c) Tenant shall not, without Landlord’s prior consent, make any alterations, improvements
or additions in or about the Premises. As a condition to giving such consent, Landlord may
require that Tenant remove any such alterations, improvements or additions at the expiration
of the term, and to restore the Premises to their prior condition. Before commencing any
work relating to alterations, additions or improvements affecting the Premises, Tenant shall
notify Landlord of the expected date of commencement thereof and of the anticipated cost
thereof, and shall furnish complete drawings and specifications describing such work as well
as such information as shall reasonably be requested by Landlord substantiating Tenant’s
ability to pay for such work. Tenant shall give Landlord at least five (5) business days’
notice prior to commencing any such work and Landlord shall then have the right at any time
and from time to time to post and maintain on the Premises such notices as Landlord
reasonably deems necessary to protect the Premises, the Building and Landlord from
mechanics’ liens or any other liens. In any event, Tenant shall pay when due all claims for
labor or materials furnished to or for Tenant at or for use in the Premises. Tenant shall
not permit any mechanics’ liens to be
levied against the Premises for any labor or materials furnished to Tenant or claimed to
have been furnished to Tenant or to Tenant’s agents or contractors in connection with work
performed or claimed to have been performed on the Premises by or at the direction

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of
Tenant. All alterations, improvements or additions in or about the Premises performed by or
on behalf of Tenant shall be done by contractors designated or approved by Landlord, in a
first-class, workmanlike manner which does not disturb or interfere with other tenants and
is in compliance with all applicable laws, ordinances, regulations and orders of any
governmental authority having jurisdiction thereover, as well as the requirements of
insurers of the Premises and the Building. Prior to commencing any such work, if required
by Landlord, Tenant shall purchase builder’s risk insurance in an amount no less than the
value of the completed work of alteration, addition or improvement on an all-risk basis,
covering all perils then customarily covered by such insurance. In addition, prior to the
commencement of any such work, if Landlord so requests, Tenant shall furnish to Landlord
performance and payments bonds in a form and issued by a surety reasonably acceptable to
Landlord in an amount equal to the cost of such work of alteration, improvement or addition.
Notwithstanding anything in this Paragraph 8 to the contrary, upon Landlord’s request,
Tenant shall remove any contractor, subcontractor or material supplier from the Premises and
the Building if the work or presence of such person or entity results in labor disputes in
or about the Building or damage to the Premises or the Building. Upon completion of work
performed for Tenant, at Landlord’s request Tenant shall deliver to Landlord evidence of
full payment therefor and full and unconditional waivers and releases of liens for all
labor, services and/or materials used. Unless Landlord requires their removal, as set forth
above, all alterations, improvements or additions which may be made on the Premises shall,
at Landlord’s option, become the property of Landlord and remain upon and be surrendered
with the Premises at the termination or expiration of the term; provided, however, that
Tenant’s machinery, equipment and trade fixtures, other than any which may be affixed to the
Premises so that they cannot be removed without material damage to the Premises, shall
remain the property of Tenant and shall be removed by Tenant on or before such time.

	9.	 	Insurance and Indemnity.

(a) Tenant shall obtain and maintain during the term of this Lease commercial general
liability insurance with a combined single limit for personal injury and property damage in
an amount not less than $2,000,000, and employer’s liability and workers’ compensation
insurance as required by law. Tenant’s commercial general liability insurance policy shall
(i) include coverage for premises and operations liability, products and completed
operations liability, broad form property damage, blanket contractual liability and personal
and advertising liability; (ii) provide that the insurer has the duty to defend all
insureds, and (iii) provide that defense costs do not deplete policy limits. Such insurance
shall also be endorsed to provide that (1) it may not be canceled or altered in such a
manner as adversely to affect the coverage afforded thereby without thirty (30) days’ prior
written notice to Landlord, (2) Landlord and other entities designated by Landlord are named
as additional insureds, (3) the insurer acknowledges acceptance of the mutual waiver of
claims by Landlord and Tenant pursuant to subparagraph (b) below, and (4) such insurance is
primary with respect to Landlord and that any other insurance maintained by Landlord is
excess and noncontributing with such insurance. If, in the
opinion of Landlord’s insurance adviser, based on a substantial increase in recovered
liability claims generally or in amounts of insurance which tenants in similar premises are
then being required to maintain, the specified amounts of coverage are no longer

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adequate,
within thirty (30) days following Landlord’s request, such coverage shall be appropriately
increased. Tenant shall also obtain and maintain insurance (“Personal Property
Insurance”) covering leasehold improvements paid for by Tenant and Tenant’s personal
property and fixtures from time to time in, on, or at the Premises, in an amount not less
than one hundred (100%) of the full replacement cost, without deduction for depreciation,
providing protection against events protected under “All Risk Coverage,” as well as against
sprinkler damage, vandalism, and malicious mischief. Any proceeds from the Personal
Property Insurance shall be used for the repair or replacement of the property damaged or
destroyed, unless this Lease is terminated under an applicable provision herein. If the
Premises are not repaired or restored following damage or destruction in accordance with
other provisions herein, Landlord shall receive any proceeds from the Personal Property
Insurance allocable to Tenant’s leasehold improvements. Tenant shall obtain and maintain
business interruption insurance in an amount not less than the lesser of Tenant’s annual
gross revenue or an amount adequate to provide for payment of Base Rent and other amounts
due Landlord under this Lease during a one year interruption of Tenant’s business by fire or
other casualty. Prior to the commencement of the term, Tenant shall deliver to Landlord
duplicates of such policies or certificates thereof with endorsements, and at least thirty
(30) days prior to the expiration of such policy or any renewal thereof, Tenant shall
deliver to Landlord replacement or renewal binders, followed by duplicate policies or
certificates within a reasonable time thereafter. If Tenant fails to obtain such insurance
or to furnish Landlord any such duplicate policies or certificates as herein required,
Landlord may, at its election, upon notice to Tenant but without any obligation so to do,
procure and maintain such coverage and Tenant shall reimburse Landlord on demand as
additional rent for any premium so paid by Landlord. Tenant shall have the right to provide
all insurance coverage required herein to be provided by Tenant pursuant to blanket policies
so long as such coverage is expressly afforded by such policies.

(b) Landlord hereby waives all claims against Tenant, and Tenant’s partners, and its and
their officers, directors, partners, employees, agents and representatives for loss or
damage to the extent that such loss or damage is insured against under any valid and
collectable insurance policy insuring Landlord or would have been insured against but for
any deductible amount under any such policy, and Tenant waives all claims against Landlord
including Landlord’s partners, and its and their officers, directors, partners, employees,
agents and representatives (collectively, “Landlord’s Parties”) for loss or damage
to the extent such loss or damage is insured against under any valid and collectable
insurance policy insuring Tenant or required to be maintained by Tenant under this Lease, or
would have been insured against but for any deductible amount under any such policy.

(c) As insurance is available to protect it, and as long as such waiver does not violate
public policy, Tenant hereby waives all claims against Landlord and Landlord’s Parties for
damage to any property or injury to or death of any person in, upon or about the Premises,
the Building or the Project arising at any time and from any cause, and Tenant
shall hold Landlord and Landlord’s Parties harmless from and defend Landlord and Landlord’s
Parties against (i) all claims for damage to any property or injury to or death of any
person arising in or from the use of the Premises by Tenant, except as to Landlord

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or any of
Landlord’s Parties such as is caused by the sole negligence or willful misconduct of
Landlord or that of Landlord’s Parties otherwise entitled to indemnification, or (ii)
arising from the negligence or willful misconduct of Tenant, its employees, agents or
contractors in, upon or about those portions of the Building other than the Premises or the
Project. The foregoing indemnity obligation of Tenant shall include attorneys’ fees,
investigation costs and all other costs and expenses incurred by Landlord or any of
Landlord’s Parties from the first notice that any claim or demand is to be made or may be
made. The provisions of this Paragraph 9 shall survive the expiration or termination of
this Lease with respect to any damage, injury or death occurring prior to such time.

	10.	 	Damage or Destruction.

(a) If during the term the Premises are totally or partially destroyed, or any other portion
of the Building is damaged in such a way that Tenant’s use of the Premises is materially
interfered with, from a risk which is wholly covered by insurance proceeds made available to
Landlord for such purpose, Landlord shall proceed with reasonable diligence to repair the
damage or destruction and this Lease shall not be terminated; provided, however, that if in
the opinion of Landlord’s architect or contractor the work of repair cannot be completed in
ninety (90) days following such damage or destruction, Landlord may at its election
terminate this Lease by notice given to Tenant within thirty (30) days following the event
or such longer period as may reasonably be necessary to obtain information from its
architect or contractor.

(b) If during the term the Premises are totally or partially destroyed, or any other portion
of the Building is damaged in such a way that Tenant’s use of the Premises is materially
interfered with, from a risk which is not wholly covered by insurance proceeds made
available to Landlord for repair or reconstruction, Landlord may at its election by notice
to Tenant given within thirty (30) days following the event or such longer period as may
reasonably be necessary for Landlord to obtain information from its architect or contractor,
either restore the Premises or terminate this Lease.

(c) In case of destruction or damage which materially interferes with Tenant’s use of the
Premises, if this Lease is not terminated as above provided, rent shall be abated during the
period required for the work of repair based upon the degree of interference with Tenant’s
use of the Premises. Except for abatement of rent, Tenant shall have no claim against
Landlord for any loss suffered by Tenant due to damage or destruction of the Premises or any
work of repair undertaken as herein provided. Tenant expressly waives the provisions of
applicable law which would otherwise provide for termination of a hiring upon destruction of
the thing hired, which are superseded by this Paragraph 10.

	11.	 	Eminent Domain.
If all or any part of the Premises shall be taken as a result of the exercise of the power
of eminent domain or sold by Landlord under threat thereof, this Lease shall terminate as to
the part so taken as of the date of taking or sale and, in the case of a partial taking,
either Landlord or Tenant shall have the right to terminate this Lease as to the balance of
the Premises by notice to the other within thirty (30) days after

9

 

	 	 	such date if the portion
of the Premises taken shall be of such extent and nature as substantially to handicap,
impede or impair Tenant’s use of the balance of the Premises for Tenant’s purposes. In the
event of any taking or such sale, Landlord shall be entitled to any and all compensation,
damages, income, rent, awards, or any interest therein whatsoever which may be paid or made
in connection therewith, and Tenant shall have no claim against Landlord for the value of
any unexpired term of this Lease or otherwise. In the event of a partial taking of the
Premises which does not result in a termination of this Lease, the monthly rental thereafter
to be paid shall be equitably reduced on a pro rata basis based upon relative area.

	12.	 	Assignment and Subletting.

(a) Tenant shall not assign this Lease or any interest herein or sublet the Premises or any
part thereof, either directly or by operation of law, without the prior consent of Landlord,
which consent shall not be unreasonably withheld; Tenant shall not hypothecate this Lease or
any interest herein or permit the use of the Premises by any party other than Tenant without
the prior consent of Landlord, which consent may be withheld by Landlord in its absolute
discretion. Any of the foregoing acts without such consent shall be void and shall, at the
option of Landlord, terminate this Lease. In connection with each consent requested by
Tenant, Tenant shall submit to Landlord the terms of the proposed transaction, the identity
of the parties to the transaction, the proposed documentation for the transaction, current
financial statements of any proposed assignee or sublessee and all other information
reasonably requested by Landlord concerning the proposed transaction and the parties
involved therein. In the case of any assignment or subletting, the proposed assignee or
sublessee shall agree in writing to perform for the benefit of Landlord all of the Tenant’s
obligations under this Lease or so much thereof as are allocable to any portion of the
Premises proposed to be sublet.

(b) Without limiting the other instances in which it may be reasonable for Landlord to
withhold its consent to an assignment or subletting, Landlord and Tenant acknowledge that it
shall be reasonable for Landlord to withhold its consent in the following instances:

	 	(i)	 	the proposed assignee or sublessee is a governmental agency,
	 
	 	(ii)	 	in Landlord’s reasonable judgment, the use of the Premises would entail any
alterations which would lessen the value of the leasehold improvements in the Premises,
or would require increased services by Landlord;
	 
	 	(iii)	 	in Landlord’s reasonable judgment, the financial worth of the proposed
assignee or sublessee does not meet the credit standards applied by Landlord for other
tenants under leases with comparable terms, or the character, reputation or
business of the proposed assignee or sublessee is not consistent with the quality of
the other tenancies in the Project;
	 
	 	(iv)	 	in Landlord’s reasonable judgment, the proposed assignee or sublessee does not
have a good reputation as a tenant of property;

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	 	(v)	 	Landlord has received from any prior lessor to the proposed assignee or
subtenant a negative report concerning such prior lessor’s experience with the proposed
assignee or subtenant;
	 
	 	(vi)	 	Landlord has experienced previous defaults by or is in litigation with the
proposed assignee or subtenant;
	 
	 	(vii)	 	the use of the Premises by the proposed assignee or subtenant will violate any
applicable law, ordinance or regulation;
	 
	 	(viii)	 	the proposed assignee or subtenant is a person with whom Landlord is negotiating to
lease space in the Project or is currently a tenant in the Project;
	 
	 	(ix)	 	Tenant is in default of any obligation of Tenant under this Lease, or Tenant
has defaulted under this Lease on more than one occasion during the 12 months preceding
the date that Tenant shall request consent; or
	 
	 	(x)	 	in the case of a subletting of less than the entire Premises, if the subletting
would result in the division of the Premises into more than two subparcels or would
require access to be provided through space leased or held for lease to another tenant
or improvements to be made outside of the Premises.

(c) If at any time or from time to time during the term of this Lease Tenant desires to
sublet all or any part of the Premises, Tenant shall give notice to Landlord setting forth
the terms of the proposed subletting and the space so proposed to be sublet. Landlord shall
have the option, exercisable by notice given to Tenant within thirty (30) days after
Tenant’s notice is given, to terminate the Lease as to that portion of the Premises proposed
to be sublet, effective as of the date of the proposed subletting. Landlord may enter into
a lease with the proposed subtenant. If Tenant proposes to assign this Lease, Landlord may,
by notice given within thirty (30) days of Tenant’s notice, elect to terminate this Lease as
of the date of the proposed assignment. If Landlord so terminates this Lease, Landlord may,
if it elects, enter into a new lease covering the Premises or a portion thereof with the
intended assignee or subtenant on such terms as Landlord and such person may agree, or enter
into a new lease covering the Premises or a portion thereof with any other person; in such
event, Tenant shall not be entitled to any portion of the profit, if any, which Landlord may
realize on account of such termination and reletting. Landlord’s exercise of its aforesaid
option shall not be construed to impose any liability upon Landlord with respect to any real
estate brokerage commission(s) or any other costs or expenses incurred by Tenant in
connection with its proposed subletting or assignment. If Landlord does not exercise its
options to terminate this Lease or sublet the Premises, Tenant shall be free to sublet such
space to any third party on the same terms
set forth in the notice given to Landlord, subject to obtaining Landlord’s prior consent as
hereinabove provided.

(d) As used in this Paragraph 12, the term “assign” or “assignment” (“assign” or
“assignment”) shall include, without limitation, any sale, transfer or other
disposition of

11

 

all or any portion of Tenant’s estate under this Lease, whether voluntary or
involuntary, and whether by operation of law or otherwise including any of the following:

	 	(i)	 	If Tenant is a corporation or a limited liability company: (A) any
dissolution, merger, consolidation or other reorganization of Tenant, or (B) a sale of
more than 50% of the value of the assets of Tenant, or (C) if Tenant is a corporation
or limited liability company with fewer than 500 shareholders, sale or other transfer
of a controlling percentage of the capital stock of or membership interests in Tenant.
The phrase “controlling percentage” (“controlling percentage”) means the
ownership of, and the right to vote, stock or membership interests possessing at least
fifty percent (50%) of the total combined voting power of all classes of Tenant’s stock
or membership interests issued, outstanding and permitted to vote for the election of
directors;
	 
	 	(ii)	 	If Tenant is a trust, the transfer of more than fifty percent (50%) of the
beneficial interest of Tenant, or the dissolution of the trust;
	 
	 	(iii)	 	If Tenant is a partnership or joint venture, the withdrawal, or the transfer
of the interest of any general partner or joint venturer or the dissolution of the
partnership or joint venture; or
	 
	 	(iv)	 	If Tenant is composed of tenants-in-common, the transfer of interest of any
co-tenants, or the partition or dissolution of the co-tenancy.

(e) No sublessee shall have a right further to sublet, and any assignment by a sublessee of
its sublease shall be subject to Landlord’s prior consent in the same manner as if Tenant
were entering into a new sublease.

(f) In the case of an assignment, all sums or other economic consideration received by
Tenant as compensation for such assignment shall be paid to Landlord after first deducting
the cost of any real estate commissions incurred in connection with such assignment. In the
event such consideration is received by Tenant in installments, the portion of each
installment to be paid to Landlord shall be determined by subtracting from the installment
an amount equal to the total amount of the foregoing permitted deductions divided by the
total number of installments.

(g) In the case of a subletting, all sums or economic consideration received by Tenant as a
result of such subletting shall be paid to Landlord after first deducting (i) the rental due
hereunder, prorated to reflect only rental allocable to the sublet portion of the Premises,
and (ii) the cost of any real estate commissions incurred in connection with such
subletting, amortized over the term of the sublease.

(h) Regardless of Landlord’s consent, no subletting or assignment shall release Tenant of
Tenant’s obligations or alter the primary liability of Tenant to pay the rental and to
perform all other obligations to be performed by Tenant hereunder. The acceptance of rental
by Landlord from any other person shall not be deemed to be a waiver by Landlord of any
provision hereof. Consent to one assignment or subletting shall not be deemed consent to
any subsequent assignment or subletting. In the event of default by any

12

 

assignee 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
assignee or successor. Landlord may consent to subsequent assignments or subletting of this
Lease or amendments or modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining its or their consent
thereto and such action shall not relieve Tenant of liability under this Lease.

(i) If Tenant shall assign or sublet the Premises or request the consent of Landlord to any
assignment or subletting or if Tenant shall request the consent of Landlord for any act that
Tenant proposes to do, then Tenant shall pay Landlord’s reasonable attorneys’ fees incurred
in connection therewith.

(j) The voluntary or other surrender of this Lease by Tenant, the mutual cancellation
thereof or the termination of this Lease by Landlord as a result of Tenant’s default shall,
at the option of Landlord, terminate all or any existing subtenancies or may, at the option
of Landlord, operate as an assignment to Landlord of any or all of such subtenancies.

	13.	 	Default by Tenant.

(a) Any of the following events shall constitute events of default under this Lease:

	 	(i)	 	Tenant’s failure to pay any rent or other sum payable hereunder when due;
	 
	 	(ii)	 	Tenant’s failure to perform any of the other terms, covenants, agreements or
conditions contained herein (other than Tenant’s breach of Paragraph 12(a) or Paragraph
17 as to which no cure period shall apply) and, if the default is curable, the
continuation of such default for a period of thirty (30) days after notice by Landlord
or beyond the time reasonably necessary for cure if the default is of the nature to
require more than thirty (30) days to remedy, but in any event, within sixty (60) days
following Landlord’s notice, provided that if Tenant has defaulted in the performance
of the same obligation more than one time in any twelve-month period and notice of such
default has been given by Landlord in such instance, no cure period shall thereafter be
applicable hereunder;
	 
	 	(iii)	 	the bankruptcy or insolvency of Tenant, any transfer by Tenant in fraud of
creditors, assignment by Tenant for the benefit of creditors, or the commencement of
any proceedings of any kind by or against Tenant under any provision of the Federal
Bankruptcy Act or under any other insolvency, bankruptcy or reorganization act unless,
in the event any such proceedings are involuntary, Tenant is discharged from the same
within sixty (60) days thereafter; the
appointment of a receiver for a substantial part of the assets of Tenant; or the
levy upon this Lease or any estate of Tenant hereunder by any attachment or
execution; or
	 
	 	(iv)	 	the abandonment of the Premises.

13

 

(b) Upon the occurrence of any event of default by Tenant hereunder, Landlord may, at its
option and without any further notice or demand, in addition to any other rights and
remedies given hereunder or by law, do any of the following:

	 	(i)	 	Landlord shall have the right, so long as such default continues, to give
notice of termination to Tenant, and on the date specified in such notice this Lease
shall terminate.
	 
	 	(ii)	 	In the event of any such termination of this Lease, Landlord may then or at any
time thereafter, reenter the Premises and remove therefrom all persons and property and
again repossess and enjoy the Premises, without prejudice to any other remedies that
Landlord may have by reason of Tenant’s default or of such termination.
	 
	 	(iii)	 	In the event of any such termination of this Lease, and in addition to any
other rights and remedies Landlord may have, Landlord shall have all of the rights and
remedies of a landlord provided by Section 1951.2 of the California Civil Code. The
amount of damages which Landlord may recover in event of such termination shall
include, without limitation, (i) the worth at the time of award (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) of the amount by which the unpaid rent
for balance of the term after the time of award exceeds the amount of rental loss that
Tenant proves could be reasonably avoided, (ii) all legal expenses and other related
costs incurred by Landlord following Tenant’s default, (iii) all costs incurred by
Landlord in restoring the Premises to good order and condition, or in remodeling,
renovating or otherwise preparing the Premises for reletting, and (iv) all costs
(including, without limitation, any brokerage commissions) incurred by Landlord in
reletting the Premises.
	 
	 	(iv)	 	Landlord shall also have the remedy described in California Civil Code Section
1951.4 (lessor may continue the lease in effect after lessee’s breach and abandonment
and recover rent as it becomes due, if lessee has right to sublet or assign, subject
only to reasonable limitations).
	 
	 	(v)	 	For the purpose of determining the unpaid rent in the event of a termination of
this Lease, or the rent due hereunder in the event of a reletting of the Premises, the
monthly rent reserved in this Lease shall be deemed to be the sum of the rental due
under Paragraph 3 above and the amounts last payable by Tenant pursuant to Paragraph 4
above and any “free rent” (“free rent”) or rent waived or abated by Landlord as
an inducement for Tenant to enter into this Lease.
	 
	 	(vi)	 	Landlord’s acceptance of payment from Tenant of less than the amount of rent
then due shall not constitute a waiver of any rights of Landlord or Tenant including,
without limitation, any right of Landlord to recover possession of the Premises.

14

 

	 	(vii)	 	After terminating this Lease, Landlord may remove any and all personal
property located in the Premises and place such property in a public or private
warehouse or elsewhere at the sole cost and expense of Tenant.

(c) Even though Tenant has breached this Lease and abandoned the Premises, this Lease shall
continue in effect for so long as Landlord does not terminate Tenant’s right to possession,
and Landlord may enforce all its rights and remedies under this Lease, including the right
to recover rental as it becomes due under this Lease. Acts of maintenance or preservation,
efforts to relet the Premises, or the appointment of a receiver upon initiative of Landlord
to protect Landlord’s interest under this Lease, shall not constitute a termination of
Tenant’s right to possession.

(d) Tenant hereby waives all rights under California Code of Civil Procedure Section 1179
and California Civil Code Section 3275 providing for relief from forfeiture, and any other
right now or hereafter existing to redeem the Premises or reinstate this Lease after
termination pursuant to this Paragraph 13 or by order or judgment of any court or by any
legal process.

(e) Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim
brought by either of the parties hereby against the other on any matters not relating to
personal injury or property damage but otherwise arising out of or in any way connected with
this Lease, the relationship of Landlord and Tenant, Tenant’s use or occupancy of the
Premises, and any statutory remedy.

(f) The remedies provided for in this Lease are in addition to any other remedies available
to Landlord at law or in equity, by statute or otherwise.

	14.	 	Landlord’s Right to Cure Default. If Tenant shall fail to pay any sum of money,
other than rental, required to be paid by it hereunder or shall fail to perform any other
act on its part to be performed hereunder and such failure shall continue for thirty (30)
days after notice thereof by Landlord, Landlord may, but shall not be obligated so to do,
and without waiving or releasing Tenant from any obligations of Tenant, make any such
payment or perform any such other act on Tenant’s part to be made or performed as in this
Lease provided. All sums so paid by Landlord and all necessary incidental costs shall be
deemed additional rent hereunder and shall be payable to Landlord on demand, and Landlord
shall have (in addition to any other right or remedy of Landlord) the same rights and
remedies in the event of the nonpayment thereof by Tenant as in the case of default by
Tenant in the payment of rental.
	 
	15.	 	Default by Landlord.
Landlord shall not be in default under this Lease unless Landlord fails to perform
obligations required of Landlord hereunder within a reasonable time, but in no event later
than thirty (30) days after notice by Tenant to Landlord specifying wherein Landlord has
failed to perform such obligation; provided, however, that if the nature of Landlord’s
obligation is such that more than thirty (30) days are required for performance, then
Landlord shall not be in default if Landlord commences performance within such 30 day period
and thereafter diligently prosecutes the same to completion.

15

 

	16.	 	Security Deposit. On execution of this Lease Tenant shall deposit with Landlord the
sum specified in the Basic Lease Information (the “Deposit”). The Deposit shall be
held by Landlord as security for the performance by Tenant of all of the provisions of this
Lease. Following an event of default by Tenant under this Lease, Landlord may use, apply or
retain all or any portion of the Deposit for the payment of any rent or other charge in
default, or the payment of any other sum to which Landlord may become obligated by Tenant’s
default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby.
If Landlord so uses or applies all or any portion of the Deposit, then within ten (10) days
after demand therefor Tenant shall deposit cash with Landlord in an amount sufficient to
restore the Deposit to the full amount thereof, and Tenant’s failure to do so shall be a
material breach of this Lease. Landlord shall not be required to keep the Deposit separate
from its general accounts. If Tenant performs all of Tenant’s obligations hereunder, the
Deposit, or so much thereof as has not theretofore been applied by Landlord, shall be
returned, without payment of interest for its use, to Tenant (or, at Landlord’s option, to the
last assignee, if any, of Tenant’s interest hereunder) at the expiration of the term hereof,
and after Tenant has vacated the Premises. No trust relationship is created herein between
Landlord and Tenant with respect to the Deposit.

	17.	 	Estoppel Certificate.

(a) Tenant shall at any time within ten (10) days following request from Landlord execute,
acknowledge and deliver to Landlord a statement certifying (i) that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect), (ii) the date to
which the rent, the Deposit, and other sums payable hereunder have been paid, (iii)
acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord hereunder, or specifying such defaults, if any, which are claimed, and (iv) such
other matters as may reasonably be requested by Landlord. Any such statement may be
conclusively relied upon by any prospective purchaser or encumbrancer of the Building.

(b) Tenant’s failure to deliver such statement within such time shall be deemed Tenant’s
confirmation that: (i) this Lease is in full force and effect, without modification except
as may be represented by Landlord, (ii) there are no uncured defaults in Landlord’s
performance, and (iii) not more than one month’s rent has been paid in advance.

(c) If Landlord desires to sell, finance or refinance the Building, within ten (10) days of
Landlord’s request, Tenant shall deliver to any lender designated by Landlord such financial
statements of Tenant as may be reasonably required by such lender. All such financial
statements shall be received by Landlord in confidence and shall be used for the purposes
herein set forth.

	18.	 	Relocation. Landlord shall have the right to relocate the Premises to other space in
the Building designated by Landlord, provided that such other space is of equal or larger size
than the Premises and the Base Rent shall be at the same per square foot rate in effect under
this Lease at the time of relocation with the same increases, if any, for the

16

 

	 	 	remainder of the
initial Term (the per square foot rate is determined by dividing the annual amount(s) of Base
Rent then in effect or to be in effect, as set forth in Paragraph 3(a) by the rentable square
footage of the existing Premises). Landlord shall pay all reasonable out-of-pocket expenses
of any such relocation, including the expenses of moving and reconstruction of all Tenant
furnished and Landlord furnished improvements. In the event of such relocation, this Lease
shall continue in full force and effect without any change in the terms or other conditions,
but with the new location substituted for the old location as described in a new Exhibit
A (“Exhibit A”) under an amendment of this Lease.

	19.	 	Subordination, Amendment for Lender.

(a) This Lease, at Landlord’s option, shall be subordinate to any ground lease, first
mortgage, first deed of trust, or any other hypothecation for security now or hereafter
placed upon the Building and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant’s right to quiet possession of the Premises shall
not be disturbed if Tenant is not in default and so long as Tenant shall pay the rent and
observe and perform all of the provisions of this Lease, unless this Lease is otherwise
terminated pursuant to its terms. If any first mortgagee, first priority deed of trust
beneficiary, trustee or ground lessor shall elect to have this Lease prior to the lien of
its mortgage, deed of trust or ground lease, and shall give notice thereof to Tenant, this
Lease shall be deemed prior to such mortgage, deed of trust, or ground lease, whether this
Lease is dated prior to or subsequent to the date of said mortgage, deed of trust or ground
lease or the date of recording thereof. If any mortgage or deed of trust to which this
Lease is subordinate is foreclosed or a deed in lieu of foreclosure is given to the
mortgagee or beneficiary, Tenant shall attorn to the purchaser at the foreclosure sale or to
the grantee under the deed in lieu of foreclosure; if any ground lease to which this Lease
is subordinate is terminated, Tenant shall attorn to the ground lessor. Promptly following
the request of any such purchaser, grantee, or ground lessor, Tenant shall execute and
deliver a new lease, in the form of this Lease, with such requesting party as the Landlord.
Tenant agrees to execute any documents required to effectuate such subordination or to make
this Lease prior to the lien of any mortgage, deed of trust or ground lease, as the case may
be, or to evidence such attornment.

(b) Tenant shall give any holder of a first mortgage or deed of trust placed upon the
Building (“Holder”), in compliance with the notice provisions of this Lease, a copy of any
notice of default served upon Landlord, provided that prior to such notice Tenant has been
notified in writing (by way of notice of assignment of rents and leases or otherwise) of the
address of such Holder. If Landlord shall have failed to cure such default within thirty
(30) or such longer period of time as Landlord shall have the right to cure the default
under the Lease, Holder shall have the right, but not the duty, to cure such default within
an additional thirty (30) day period or if such default cannot be cured within that time,
then such additional time as may be necessary to cure such default, including the time
necessary to foreclose or otherwise terminate its first mortgage or deed of trust if
necessary to effectuate such cure.

17

 

(c) Within ten (10) days of Landlord’s request therefor, Tenant shall execute and deliver
such amendments of this Lease as shall have been required by Landlord’s tender in connection
with the making of a loan to be secured by the Property, provided such amendment does not
increase the obligations of Tenant under this Lease or materially and adversely affect
Tenant’s leasehold interest.

	20.	 	Attorneys’ Fees. If either party commences an action or proceeding against the other
party arising out of or in connection with this Lease, or institutes any proceeding in a
bankruptcy or similar court which has jurisdiction over the other party or any or all of its
property or assets, the prevailing party in such action or proceeding and in any appeal in
connection therewith shall be entitled to have and recover from the unsuccessful party
reasonable attorneys’ fees, court costs, expenses and other costs of investigation and
preparation. If such prevailing party recovers a judgment in any such action, proceeding, or
appeal, such attorneys’ fees, court costs and expenses shall be included in and as a part of
such judgment.

	21.	 	Notices. All notices, consents, demands and other communications from one party to
the other given pursuant to the terms of this Lease shall be in writing and shall be deemed to
have been fully given when deposited in the United States mail, certified or registered,
postage prepaid, or delivered to a generally recognized overnight courier service, charges
prepaid, and addressed as follows: to Tenant at the address specified in the Basic Lease
Information or to such other place as Tenant may from time to time designate in a notice to
Landlord; to Landlord at the address specified in the Basic Lease Information, or to such
other place and with such other copies as Landlord may from time to time designate in a notice
to Tenant; or, in the case of Tenant, delivered to Tenant at the Premises. In addition, such
communications shall be deemed given when transmitted to a party by electronic facsimile, with
confirmation of receipt, to the telephone number specified in the Basic Lease Information, as
it may be changed by notice.

	22.	 	General Provisions.

(a) This Lease shall be governed by and construed in accordance with the laws of the State
of California.

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

(c) This Lease contains all agreements of the parties with respect to any matter mentioned
herein and supersedes any verbal and any prior written understanding, conditions,
representations, agreements or covenants, and may be modified in writing only, signed by the
parties.

(d) No waiver by Landlord of any provision hereof shall be deemed a waiver of any other
provision or of any subsequent breach by Tenant of the same or any other provision.
Landlord’s consent to or approval of any act shall not be deemed to render unnecessary the
obtaining of Landlord’s consent to or approval of any subsequent act by Tenant. The
acceptance of rent or any partial payment hereunder by Landlord shall not

18

 

be a waiver of any
preceding breach by Tenant of any provision hereof, other than the failure of Tenant to pay
the particular rent accepted, regardless of Landlord’s knowledge of such preceding breach at
the time of acceptance of such rent.

(e)

	 	(i)	 	If, without objection by Landlord, Tenant holds possession of the premises
after expiration of the term of this Lease, Tenant shall become a tenant from month to
monthly upon the term herein specified but at a monthly rental equivalent to two times
of the then prevailing monthly rental paid by Tenant at the expiration of the term of
this Lease, payable in advance on or before the first day of each month. Each party
shall give the other notice at least one month prior to the date of termination of such
monthly tenancy of its intention to terminate such tenancy; and
	 
	 	(ii)	 	If, over Landlord’s objection, Tenant holds possession of the premises after
expiration of the term of this Lease or expiration of its holdover tenancy, without
limiting the liability of Tenant for its unauthorized occupancy of the premises, Tenant
shall indemnify Landlord and any replacement tenant for the premises for any damages or
loss suffered by either Landlord or the replacement tenant resulting from Tenant’s
failure timely to vacate the premises.

(f) Subject to the provisions of this Lease restricting assignment or subletting by Tenant,
this Lease shall bind the parties, their personal representatives, successors and assigns.

(g) Landlord and Landlord’s agents shall have the right to enter the Premises at reasonable
times for the purpose of inspecting the same, showing the same to prospective purchasers or
lenders, and making such alterations, repairs, improvements or additions to the Premises or
to the Building as Landlord may deem necessary or desirable. Landlord may at any time
during the last one hundred twenty (120) days of the term place on or about the Premises any
ordinary “For Lease” sign.

(h) If Tenant is a corporation, limited liability company or other entity, each individual
executing this Lease on behalf of Tenant represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of the entity and that this Lease is
binding upon the entity in accordance with its terms.

(i) The term “Landlord” as used herein means the then owner of the Building and in the event
of a sale of the Building the selling owner shall be automatically relieved of all
obligations of Landlord hereunder, except for acts or omissions of Landlord theretofore
occurring.

(j) Tenant warrants that it has had no dealings with any real estate broker or agent other
than the Broker(s) identified in the Basic Lease Information in connection with the Premises
or this Lease. Tenant shall indemnify Landlord and hold it harmless from and against all
claims, demands, costs or liabilities (including, without limitation, attorneys’

19

 

fees)
asserted by any party other than such Broker(s) based upon dealings of that party with
Tenant in connection with the Premises or this Lease.

(k) Tenant covenants for itself, its heirs, executors, administrators, and assigns, and all
persons claiming under or through it, and this Lease is made and accepted upon it subject to
the condition that there shall be no discrimination against or segregation of any person or
group of persons, on account of race, color, creed, religion, sex, marital status, national
origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the premises herein leased nor shall the Tenant itself, or any person claiming
under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or occupancy of tenants,
subtenants, or vendees in the premises.

	23.	 	Exhibits. The exhibits, if any, specified in the Basic Lease Information are
attached to this Lease and by this reference made a part hereof,

IN WITNESS WHEREOF, the parties have executed this Lease on the respective dates indicated below.

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.	 	ALAMEDA REAL ESTATE INVESTMENTS,
	A Maryland Corporation	 	a California limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Vintage Alameda Investments, LP,

a California limited partnership,

operating general partner
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	

/s/ Henry 	 	 	 	By:	 	Vintage Properties-Alameda Commercial,

a California corporation,

managing general partner
	 

	 	 	 	 	 	 	 	 	 	 
	
Name:
	 	
Henry Klyce 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	/s/ Joseph R. Seiger 
	 

	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Pres 	 	 	 	 	 	Name:
	 	Joseph R. Seiger
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 President
	Date:

	 	11/17/03 	 	 	 	 	 	Date:	 	11/20/03 
	 

	 	 
	 	 	 	 	 	 	 	 

20

 

MARINA VILLAGE

ADDENDUM

TO

INDUSTRIAL GROSS LEASE

THIS ADDENDUM TO MARINA VILLAGE INDUSTRIAL GROSS LEASE shall constitute part of that certain
Marina Village Lease by and between ALAMEDA REAL ESTATE INVESTMENTS, a California limited
partnership (“Landlord”), and ST. FRANCIS MEDICAL TECHNOLOGIES, INC., a Delaware
corporation (“Tenant”), and the terms hereof shall for all purposes be considered part of
the Lease and supersede any provisions of the Lease to the contrary.

	1.	 	Amendment of Paragraph 2. The following language is hereby added after the final
sentence of Paragraph 2 of the Lease:

“Notwithstanding the foregoing, in the event that Landlord has not delivered possession of
the Premises to Tenant in accordance herewith by June 1, 2004, which date shall be extended
day for day for any event of force majure, on or before the earlier of the date Landlord so
delivers possession and June 10, 2004, Tenant may cancel this Lease by notice to Landlord.”

	2.	 	Amendment of Paragraph 3.

	 	a.	 	Paragraph 3(a) of the Lease is hereby amended to read as follows:

“(a) Tenant shall pay to Landlord as rental the amount specified in the Basic Lease
Information as the Base Rent. Base Rent for the first month of the term of this
Lease shall be payable upon Tenant’s execution of this Lease and for each month of
the term thereafter, in advance on or before the first day of the month.”

	 	b.	 	Paragraph 3(b) of the Lease is hereby deleted in its entirety.
	 
	 	c.	 	The third sentence of Paragraph 3(d) of the Lease is hereby amended to read as
follows:

“Accordingly, if any installment of Base Rent or any other sums due from Tenant
shall not be received by Landlord on the date due, Tenant shall pay to Landlord a
late charge equal to five percent (5%) of such overdue amount if such installment is
not paid by Tenant within five (5) days after Landlord’s notice to Tenant that such
amount is owing; provided, that, if Tenant’s rent installment is not
paid on the date due one (1) time in any twelve month (12) period, then no further
notice shall be required thereafter for the next twenty-four (24) month period.

	 	d.	 	The first sentence of Paragraph 3(e) of the Lease is hereby amended to read as
follows:

Addendum-1

 

“Any amount payable by Tenant to Landlord, if not paid when due, shall bear interest
from the date due until paid at the rate of ten percent (10%) per annum, provided
that interest shall not be payable on late charges incurred by Tenant nor on any
amounts upon which late charges are paid by Tenant to the extent such interest would
cause the total interest to be in excess of that legally permitted.”

	3.	 	Amendment of Paragraph 4.

	 	a.	 	Paragraph 4(a) of the Lease is hereby amended to read as follows:

“(a) For each calendar year during the term after the year specified in the Basic
Lease Information as the Base Year, Tenant shall pay its percentage share, as
specified in the Basic Lease Information, of the increase in Property Taxes over
Base Property Taxes, and its percentage share of the increase in Operating Expenses
for such calendar year over Base Operating Expenses. For the purposes hereof,
“Property Taxes” shall mean all real property taxes and assessments or
governmentally imposed fees or charges (and any tax levied wholly or partly in lieu
thereof) levied, assessed, confirmed or imposed (which for the purposes of defining
“Property Taxes” shall include the land underlying the Building), and “Operating
Expenses” shall mean: (1) all costs of management, operation, maintenance, and
repair of the Building, (2) the cost of all insurance maintained by Landlord with
respect to the Building and (3) the share allocable to the Building of dues and
assessments payable under any reciprocal easement or common area maintenance
agreements or declaration or by any owners’ associations affecting the Building.
Notwithstanding the foregoing, the items listed in Exhibit E shall not be
included in Operating Expenses. “Base Property Taxes” shall mean those Property
Taxes payable during the calendar year which is the Base Year, and “Base Operating
Expenses” shall mean Operating Expenses incurred by Landlord during the Base Year.
Operating Expenses for both the Base Year and each subsequent calendar year shall be
adjusted to equal Landlord’s reasonable estimate of Operating Expenses had the total
rentable area of the Building been ninety-five percent (95%) occupied. The foregoing
notwithstanding, the annual increase in Operating Expenses that are to be paid by
Tenant (excluding increases in insurance, utility charges, and the cost of
nonrecurring maintenance work) over the Base Operating Expenses, shall not exceed
four percent (4%) per annum, compounded annually.”

	 	b.	 	Paragraph 4(b) of the Lease is hereby amended to read as follows:

“(b) In the event the Building is not separately assessed for tax purposes, then the
Property Taxes to be paid by Tenant shall be Tenant’s percentage share of the
product obtained by multiplying the total of the real property taxes and assessments
levied against the tax parcel of which the Building is a part by a fraction, the
numerator of which is the rentable area of the Building and the denominator of which
is total rentable area of all improvements located within the tax parcel of which
the Building is a part.”

Addendum-2

 

	 	c.	 	The third sentence of Paragraph 4(c) of the Lease is hereby amended to read as
follows:

“If on the basis of such statement Tenant owes an amount that is less than the
estimated payments for such calendar year previously made by Tenant, Landlord shall
refund such excess to Tenant within thirty (30) days after delivery of the
statement.”

	 	d.	 	The following language is hereby added as Paragraph 4(d) of the Lease:

“(d) Tenant shall have the right, during normal business hours within sixty (60)
days following Landlord’s delivery of Landlord’s statement regarding actual Property
Taxes and Operating Expenses, to review and contest Landlord’s determination. No
such audit shall be conducted by any subtenant of Tenant. Unless within such sixty
(60) day period, Tenant gives notice to Landlord of its contest of Landlord’s
determination, Landlord’s statement shall be deemed final and accepted by Tenant.
Pending resolution of any dispute with Landlord, Tenant shall pay the amount set
forth in Landlord’s statement, Tenant shall be deemed to have waived any objection
to Landlord’s determination of Operating Expenses and Property Taxes for the
calendar year for which Tenant has given notice unless, within ninety (90) days
following the commencement of Tenant’s audit, Tenant delivers notice of challenge of
Landlord’s statement together with a copy of the audit report establishing the basis
of such challenge. If such audit shows that the amount paid by Tenant for Operating
Expenses and Property Taxes for any calendar year exceeds the amount due for such
period, then unless Landlord contests the results of the audit as provided below,
Landlord shall refund the amount overpaid by Tenant, together with interest at the
rate set forth in Paragraph 3(e), from the end of the calendar year to which such
payments relate until paid. If such audit shows that the amount paid by Tenant for
Operating Expenses and Property Taxes was less than that due, then within sixty (60)
days following commencement of Tenant’s audit, Tenant shall pay such shortfall to
Landlord, together with interest thereon at the rate set forth in Paragraph 3(e)
from the end of the calendar year to which such payments relate until paid. If
Landlord contests Tenant’s audit, then within thirty (30) days following Landlord’s
contest, Tenant may submit the matter to binding arbitration conducted by a sole
arbitrator under the jurisdiction and the rules of the American Arbitration
Association in San Francisco, California. The arbitrator shall award fees and costs
to the prevailing party.”

	4.	 	Amendment of Paragraph 6.

	 	a.	 	The second sentence of Paragraph 6(a) is hereby amended to read as follows:

“Tenant shall, at Tenant’s expense, comply promptly with all applicable statutes,
ordinances, rules, regulations, orders and requirements in effect during the term
regulating the use by Tenant of the Premises; provided, that,
Landlord shall reimburse Tenant for any reasonable, out-of-pocket costs incurred by
Tenant as

Addendum-3

 

the result of the failure of the Building or the Premises to comply with all
applicable laws as of the Effective Date.”

	 	b.	 	The third sentence of Paragraph 6(b) of the Lease is hereby amended to read as
follows:

“Tenant shall not cause, or allow anyone else under its control to cause, any
Hazardous Materials to be used, generated, stored, or disposed of on or about the
Premises or the Building other than reasonable quantities of office and cleaning
supplies in their retail containers.”

	 	c.	 	The following language is hereby added after the final sentence of Paragraph
6(b) of the Lease:

“Landlord shall reimburse Tenant for reasonable, out-of-pocket costs incurred by
Tenant as the result of the presence of Hazardous Materials in or under the Premises
or the Building as of the Effective Date.”

	5.	 	Amendment of Paragraph 7.

	 	a.	 	Paragraph 7(a) of the Lease is hereby amended to read as follows:

“(a) Tenant shall pay for all water, sewer, gas, electricity, heat, cooling, energy,
telephone, refuse collection, alarm monitoring services, and other utility-type
services furnished to Tenant or the Premises, together with all related installation
or connection charges or deposits. To the extent any of the foregoing services are
provided by Landlord, Tenant shall reimburse Landlord for all actual out-of-pocket
costs incurred by Landlord in connection with the provision of such services as
billed by the provider thereof based on Landlord’s reasonable estimate of the level
of Tenant’s use or consumption of such services. Water service costs shall be
allocated on the basis of relative rentable area. Landlord shall bill Tenant for
such services as incurred and payment shall be made by Tenant within ten (10) days
after submittal of Landlord’s statement.”

	 	b.	 	The following language is hereby added after the final sentence of Paragraph
7(b) of the Lease:

“If for reasons within the reasonable control of Landlord there is an interruption
in gas, water, electric, sewer or telephone service to the Premises (“Critical
Service(s)”), if (i) Tenant’s ability to conduct business at the Premises is
materially and adversely affected for five (5) or more consecutive days, and (ii)
notice thereof has been given to Landlord and Landlord has not taken commercially
reasonable measures to remedy such failure within five (5) days of Tenant’s notice,
Base Rent shall be abated from the end of such five (5) day period until such time
as such Critical Service(s) have been restored.”

	6.	 	Amendment of Paragraph 8.

Addendum-4

 

	 	a.	 	The first sentence of Paragraph 8(a) of the Lease is hereby amended to read as
follows:

“Subject to the provisions of Paragraph 10 below, and except for damages caused by
Tenant, its agents or invitees, Landlord shall keep in good condition and repair the
foundations and exterior walls (including plate glass), the roof of the Building,
the structural components of the Building (including the Premises) and all common
areas within the Building not leased to tenants.”

	 	b.	 	Paragraph 8(b) of the Lease is hereby amended to read as follows:

“(b) Tenant shall, at Tenant’s expense, maintain the interior portion of the
Premises including, by not limited to, all plumbing and electrical fixtures and
outlets, all computer and telecommunications wiring and outlets, and any interior
glass in good condition and repair. If Tenant fails to do so Landlord may, but
shall not be required to, enter the Premises and put them in good condition, and
Landlord’s costs thereof as set forth in Landlord’s demand to Tenant shall become
due and payable as additional rent within ten (10) days after such demand. Tenant
shall also cause to be maintained, at its expense and in good operating condition
and repair, all heat, ventilating, and air conditioning equipment installed in the
Premises. If Landlord so elects, Tenant shall retain the services of Landlord or a
maintenance company retained by it to perform maintenance of Tenant’s heating,
ventilating and air conditioning equipment and shall reimburse Landlord for the cost
thereof within fifteen (15) days after demand. Notwithstanding the foregoing, as of
the Effective Date, all heat, ventilating, and air conditioning equipment installed
in the Premises shall be in good operating condition and repair. At the expiration
or earlier termination of the term, Tenant shall deliver up possession of the
Premises in good condition and repair, only ordinary wear and tear or damage caused
by casualty excepted, and with only such improvements and alterations as shall have
been made with Landlord’s consent and not required by Landlord to be removed at the
end of the term.”

	 	c.	 	The first sentence of Paragraph 8(c) of the Lease is hereby amended to read as
follows:

“Tenant shall not, without Landlord’s prior consent, make any alterations,
improvements or additions in or about the Premises, which affect Building structural
or mechanical systems or which entail a cost reasonably estimated by Landlord to
exceed twenty thousand dollars ($20,000.00).”

	 	d.	 	The second sentence of Paragraph 8(c) of the Lease is hereby amended to read as
follows:

“As a condition to giving such consent, Landlord may require that Tenant remove any
such alterations, improvements or additions at the expiration of the term, and to
restore the Premises to their prior condition, and at Tenant’s request made at the
time it seeks such consent, Landlord shall make such election.”

Addendum-5

 

	 	e.	 	The eighth sentence of Paragraph 8(c) of the Lease is hereby amended to read as
follows:

“In addition, prior to the commencement of any such work, if Landlord so requests,
Tenant shall furnish to Landlord performance and payment bonds in a form and issued
by a surety reasonably acceptable to Landlord in an amount equal to the cost of such
work of alteration, improvement or addition; provided, that,
Landlord shall not require Tenant to furnish such bonds if the contractor can
demonstrate to the satisfaction of Landlord the ability to obtain a payment and
performance bond in an amount which equals or exceeds two (2) times Landlord’s
reasonable estimate of the cost of the work to be performed by such contractor.”

	 	f.	 	The ninth sentence of Paragraph 8(c) of the Lease is hereby amended to read as
follows:

“Notwithstanding anything in this Paragraph 8 to the contrary, upon Landlord’s
reasonable request, Tenant shall remove any contractor, subcontractor or material
supplier from the Premises and the Building, if the work or presence of such person
or entity results in labor disputes in or about the Building or damage to the
Premises or the Building.”

	 	g.	 	The final sentence of Paragraph 8(c) of the Lease is hereby amended to read as
follows:

“Unless Landlord requires their removal, as set forth above, all alterations,
improvements or additions which may be made on the Premises shall, at Landlord’s
option, become the property of Landlord and remain upon and be surrendered with the
Premises at the termination or expiration of the term; provided,
that, Tenant’s personal property, machinery, equipment and trade fixtures,
other than any which may be affixed to the Premises so that they cannot be removed
without material damage to the Premises, shall remain the property of Tenant and
shall be removed by Tenant on or before such time.”

	7.	 	Amendment of Paragraph 9.

	 	a.	 	Paragraph 9(a) of the Lease is hereby amended to read as follows:

“(a) Tenant shall obtain and maintain during the term of this Lease commercial
general liability insurance with a combined single limit for personal injury and
property damage in an amount not less than two million dollars ($2,000,000), and
employer’s liability and workers’ compensation insurance as required by law.
Tenant’s commercial general liability insurance policy shall (i) include coverage
for premises and operations liability, products and completed operations liability,
broad form property damage, blanket contractual liability and personal and
advertising liability, (ii) provide that the insurer has the duty to defend all
insureds, and (iii) provide that defense costs do not deplete policy limits. Such
insurance shall also be endorsed to provide that (1) it may not be canceled or
altered in such a manner as adversely to affect the coverage afforded thereby

Addendum-6

 

without thirty (30) days’ prior written notice to Landlord, (2) Landlord and other
entities designated by Landlord are named as additional insureds, (3) the insurer
acknowledges acceptance of the mutual waiver of claims by Landlord and Tenant
pursuant to subparagraph (b) below, and (4) such insurance is primary with respect
to Landlord and that any other insurance maintained by Landlord is excess and
noncontributing with such insurance. Tenant shall also obtain and maintain
insurance (“Personal Property Insurance”) covering leasehold improvements
paid for by Tenant and Tenant’s personal property and trade fixtures from time to
time in, on, or at the Premises, in an amount not less than one hundred percent
(100%) of the full replacement cost, without deduction for depreciation, providing
protection against events protected under “All Risk Coverage,” as well as against
sprinkler damage, vandalism, and malicious mischief. Any proceeds from the Personal
Property Insurance shall be used for the repair or replacement of the property
damaged or destroyed, unless this Lease is terminated under an applicable provision
herein. Tenant shall obtain and maintain business interruption insurance in an
amount not less than the lesser of Tenant’s annual gross revenue or an amount
adequate to provide for payment of Base Rent and other amounts due Landlord under
this Lease during a one (1) year interruption of Tenant’s business by fire or other
casualty. Prior to the commencement of the term, Tenant shall deliver to Landlord
duplicates of such policies or certificates thereof with endorsements, and at least
thirty (30) days prior to the expiration of such policy or any renewal thereof,
Tenant shall deliver to Landlord replacement or renewal binders, followed by
duplicate policies or certificates within a reasonable time thereafter. If Tenant
fails to obtain such insurance or to furnish Landlord any such duplicate policies or
certificates as herein required, Landlord may, at its election, upon notice to
Tenant but without any obligation so to do, procure and maintain such coverage and
Tenant shall reimburse Landlord within fifteen (15) days after such demand as
additional rent for any premium so paid by Landlord. Tenant shall have the right to
provide all insurance coverage required herein to be provided by Tenant pursuant to
blanket policies so long as such coverage is expressly afforded by such policies.”

	 	b.	 	Paragraph 9(c) of the Lease is hereby amended to read as follows:

“(c) As insurance is available to protect it, and as long as such waiver does not
violate public policy, Tenant hereby waives all claims against Landlord and
Landlord’s Parties for damage to any property or injury to or death of any person
in, upon or about the Premises, the Building or the Project arising at any time and
from any cause, and Tenant shall hold Landlord and Landlord’s Parties harmless from
and defend Landlord and Landlord’s Parties against (i) all claims for damage to any
property or injury to or death of any person arising in or from the use of the
Premises by Tenant, except to the extent the damage is caused by the negligence or
willful misconduct of Landlord or any of Landlord’s Parties otherwise entitled to
indemnification, or (ii) arising from the negligence or willful misconduct of
Tenant, its employees, agents or contractors in, upon or about those portions of the
Building other than the Premises or the Project. The foregoing indemnity obligation
of Tenant shall include attorneys’ fees, investigation costs and all other

Addendum-7

 

costs and expenses incurred by Landlord or any of Landlord’s Parties from the first
notice that any claim or demand is to be made or may be made. The provisions of
this Paragraph 9 shall survive the expiration or termination of this Lease with
respect to any damage, injury or death occurring prior to such time.”

	 	c.	 	The following language is hereby added as Paragraph 9(d) of the Lease:

“(d) Landlord shall obtain and maintain during the term of this Lease casualty
insurance covering the Building in an amount not less than one hundred percent
(100%) of the full replacement cost, without deduction for depreciation, providing
protection against events protected under “All Risk Coverage,” as well as against
sprinkler damage, vandalism, and malicious mischief, and Landlord may also maintain
insurance against earthquakes. Landlord shall maintain commercial general liability
insurance against claims for personal injury, death or property damage occurring
upon, in or about the Project, such insurance to afford protection to Landlord and
its managing agent. Landlord shall have the right to provide all insurance coverage
required herein to be provided by Landlord pursuant to blanket policies so long as
such coverage is expressly afforded by such policies for the location which is the
Building.”

	8.	 	Amendment of Paragraph 10.

	 	a.	 	Paragraph 10(a) of the Lease is hereby amended to read as follows:

“(a) If during the term the Premises are totally or partially destroyed, or any
other portion of the Building is damaged in such a way that Tenant’s use of the
Premises is materially interfered with, from a risk which is wholly covered by
insurance proceeds made available to Landlord for such purpose, Landlord shall
proceed with reasonable diligence to repair the damage or destruction and this Lease
shall not be terminated; provided, that, that if in the opinion of
Landlord’s architect or contractor, the work of repair cannot be completed in two
hundred seventy (270) days following such damage or destruction, Landlord may at its
election terminate this Lease by notice given to Tenant within thirty (30) days
following the event or such longer period as may reasonably be necessary to obtain
information from its architect or contractor, and Tenant may in such event also
terminate this Lease by notice to Landlord given within fifteen (15) days after
Landlord gives Tenant notice of the estimated time for repair as determined by
Landlord’s architect or contractor.”

	 	b.	 	The first sentence of Paragraph 10(c) of the Lease is hereby amended to read as
follows:

“In case of destruction or damage which materially interferes with Tenant’s use of
the Premises, if this Lease is not terminated as provided above, rent shall be
abated during the period required for the repair work based upon the ratio of the
area of Premises that cannot be used due to the damage or destruction to the total
area of the Premises.”

Addendum-8

 

	 	c.	 	The following language is hereby added as Paragraph 10(d) of the Lease:

“(d) Tenant shall also have the right to terminate this Lease: (i) upon thirty (30)
days’ prior notice, if within the time provided for Landlord to elect to restore the
Premises or to terminate this Lease, in paragraphs (a) and (b) above, Landlord does
not elect to terminate this Lease but Landlord fails for reasons under its
reasonable control to proceed with reasonable diligence with the process of
arranging for and repairing the Premises and Building, or (ii) as of the end of the
two hundred seventy (270) day period identified in paragraph (a) above, if Tenant
gives notice at least sixty (60) days prior thereto and, for whatever reason, the
Premises and Building are not rebuilt within such two hundred seventy (270) day
period, or (iii) by notice to Landlord given within fifteen (15) days following
Landlord’s notice to Tenant of the estimated time to repair, if the Premises are
damaged or destroyed during the last twelve (12) months of the Lease term, and it
would require more than sixty (60) days to repair the Premises.”

	9.	 	Amendment to Paragraph 11. The following language is hereby added after the final
sentence to Paragraph 11 of the Lease:

“Notwithstanding the foregoing, Tenant shall be entitled to claim in a separate action,
which does not diminish Landlord’s award, and to receive any and all compensation, damages,
income, rent, awards, or any interest arising from the loss of Tenant’s equipment,
furniture, fixtures and other personal property, Tenant’s relocation expenses, and loss of
goodwill or other damage to Tenant’s business by reason of such taking.”

	10.	 	Amendment of Paragraph 12.

	 	a.	 	The first sentence of Paragraph 12(a) of the Lease is hereby amended to read as
follows:

“Tenant shall not assign this Lease or any interest herein or sublet the Premises or
any part thereof, either directly or by operation of law, hypothecate this Lease or
any interest herein or permit the use of the Premises by any party other than Tenant
without the prior consent of Landlord, which consent shall not unreasonably be
withheld.”

	 	b.	 	The second sentence of Paragraph 12(a) of the Lease is hereby amended to read
as follows:

“Any of the foregoing acts without such consent shall be void.”

	 	c.	 	Paragraph 12(b) of the Lease is hereby amended to read as follows:

“Without limiting the other instances in which it may be reasonable for Landlord to
withhold its consent to an assignment or subletting, Landlord and Tenant acknowledge
that it shall be reasonable for Landlord to withhold its consent in the following
instances:

Addendum-9

 

	 	(i)	 	the proposed assignee or sublessee is a governmental agency;
	 
	 	(ii)	 	in Landlord’s reasonable judgment, the use of the Premises
would entail any alterations which would materially lessen the value of the
leasehold improvements in the Premises for which Landlord has paid, or would
require increased services by Landlord;
	 
	 	(iii)	 	in Landlord’s reasonable judgment, the character, reputation
or business of the proposed assignee or sublessee is not consistent with the
quality of the other tenancies in the Project;
	 
	 	(iv)	 	in Landlord’s reasonable judgment, the proposed assignee or
sublessee does not have a good reputation as a tenant of property;
	 
	 	(v)	 	Landlord has experienced previous defaults by or is in
litigation with the proposed assignee or subtenant;
	 
	 	(vi)	 	the use of the Premises by the proposed assignee or subtenant
will violate any applicable law, ordinance or regulation; or
	 
	 	(vii)	 	in the case of a subletting of less than the entire Premises,
if the subletting would result in the division of the Premises into more than
two subparcels or would require access to be provided through space leased or
held for lease to another tenant or improvements to be made outside of the
Premises.”

	 	d.	 	The first four sentences of Paragraph 12(c) of the Lease are hereby amended to
read as follows:

“(c) If at any time, or from time to time during the term of this Lease, Tenant
desires to sublet substantially all of the Premises for substantially the remainder
of the term, Tenant shall give notice to Landlord setting forth the terms of the
proposed subletting and the space so proposed to be sublet. Landlord shall have the
option, exercisable by notice given to Tenant within thirty (30) days after Tenant’s
notice is given, to terminate the Lease as to that portion of the Premises proposed
to be sublet, effective as of the date of the proposed subletting. Landlord may
enter into a lease with the proposed subtenant. Except as otherwise provided
herein, if Tenant proposes to assign this Lease in a transaction for which
Landlord’s consent is required, Landlord may, by notice given within thirty (30)
days of Tenant’s notice, elect to terminate this Lease as of the date of the
proposed assignment.”

	 	e.	 	The following language is hereby added to Paragraph 12(d) of the Lease:

“Notwithstanding anything in this Lease to the contrary, transfers to any of the
following entities (“Permitted Transferees”) shall not require consent of
Landlord nor shall any transfer, premium recapture or excess rent provisions apply:

Addendum-10

 

	 	(i)	 	An entity succeeding to the business and assets of Tenant,
whether by way of merger or consolidation or by way of acquisition of all or
substantially all of the assets of Tenant; provided that the acquiring entity
is, as a matter of law, or otherwise agrees to become directly obligated under
this Lease; or
	 
	 	(ii)	 	An entity which is either the parent of the Tenant, controlled
by Tenant or controlled by the same persons who own Tenant, but only for so
long as such relationship remains in effect.”

	 	f.	 	The first sentence of Paragraph 12(f) of the Lease is hereby amended to read as
follows:

“(f) In the case of an assignment, fifty percent (50%) of all sums or other economic
consideration received by Tenant as compensation for such assignment shall be paid
to Landlord after first deducting the cost of any real estate commissions incurred
in connection with such assignment.”

	 	g.	 	Paragraph 12(g) of the Lease is hereby amended to read as follows:

“(g) In the case of a subletting, fifty percent (50%) of all sums or economic
consideration received by Tenant as a result of such subletting shall be paid to
Landlord after first deducting (i) the rental due hereunder, prorated to reflect
only rental allocable to the sublet portion of the Premises, and (ii) the cost of
any real estate commissions, tenant improvements, legal fees incurred, and other
reasonable out of pocket expenses incurred in connection with such subletting,
amortized over the term of the sublease.”

	 	h.	 	The following language is hereby added after the final sentence of Paragraph
12(h) of the Lease:

“Notwithstanding the foregoing, Tenant shall not be liable for any increase in its
obligations under this Lease which may otherwise result from Landlord’s amendments
or modifications to this Lease with such assignee or successor of Tenant.”

	 	i.	 	Paragraph 12(i) of the Lease is hereby amended to read as follows:

“If Tenant shall assign or sublet the Premises or request the consent of Landlord to
any assignment or subletting, or if Tenant shall request the consent of Landlord for
any act that Tenant proposes to do, then Tenant shall pay Landlord’s reasonable out
of pocket attorneys’ fees incurred in connection therewith.”

	11.	 	Amendment of Paragraph 13. Subparagraph 13(a)(iv) of the Lease is hereby deleted.

	12.	 	Amendment of Paragraph 14. The second sentence of Paragraph 14 is hereby amended to
read as follows:

Addendum-11

 

“All sums so paid by Landlord and all necessary incidental costs shall be deemed additional
rent hereunder and shall be payable to Landlord within fifteen (15) days after demand, and
Landlord shall have (in addition to any other right or remedy of Landlord) the same rights
and remedies in the event of the nonpayment thereof by Tenant as in the case of default by
Tenant in the payment of rental.”

	13.	 	Amendment of Paragraph 16. The following language is hereby added to Paragraph 16 of
the Lease, to read as follows:

“At any time Tenant may deliver to Landlord an irrevocable, standby letter of credit in the
sum specified in the Basic Lease Information, in the form attached hereto as Exhibit
D and issued by a bank acceptable to Landlord in its sole discretion (the “Letter of
Credit”). Promptly following delivery of the Letter of Credit to Landlord, Landlord
shall return the cash then held as the Deposit to Tenant. Following an event of default by
Tenant under this Lease, Landlord may draw down a portion of the amount of the Letter of
Credit, as it may have been amended from time to time as provided in this Lease, and use,
apply or retain all or any such portion of the amount so drawn, for the payment of any Base
Rent or other charge payable by Tenant and then in default, or the payment of any other sum
to which Landlord may become obligated by Tenant’s event of default, or to compensate
Landlord for any loss or damage which Landlord may suffer as a result of Tenant’s event of
default. If Landlord so draws the Letter of Credit, then within ten (10) days after demand
therefor Tenant shall give to Landlord another letter of credit which is similarly
acceptable to Landlord in an amount sufficient, when taken together with the amount
remaining undrawn under any other letter of credit given by Tenant to Landlord and the
proceeds of any letter of credit drawn by Landlord and not previously applied as described
above, to be equal to the full amount of the Letter of Credit, and Tenant’s failure to do so
shall be a material breach of this Lease. Landlord shall not be required to keep any
proceeds of any letter of credit provided by Tenant separate from its general accounts. If
Tenant performs all of Tenant’s obligations under this Lease, the Letter of Credit, any
replacements thereof or additions thereto, and any proceeds therefrom (without any interest
for the use of such proceeds) not previously applied as described above, shall be returned
to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest
under this Lease) at the expiration of the term hereof, and after Tenant has vacated the
Premises. No trust relationship is created herein between Landlord and Tenant with respect
to the Letter of Credit and any replacements thereof, additions thereto and proceeds of any
of the foregoing.”

	14.	 	Amendment of Paragraph 17. Paragraph 17(b) of the Lease is hereby amended to read as
follows:

“(b) Tenant’s failure to deliver such statement within such time shall be deemed Tenant’s
confirmation that: (i) this Lease is in full force and effect, without modification except
as may be represented by Landlord, (ii) to Tenant’s knowledge, there are no uncured defaults
in Landlord’s performance, and (iii) not more than one month’s rent has been paid in
advance.”

	15.	 	Amendment of Paragraph 18. Paragraph 18 of the Lease is hereby deleted.

Addendum-12

 

16. Amendment of Paragraph 19.

	 	a.	 	The following language is hereby added to Paragraph 19(a) of the Lease:

“Landlord shall use commercially reasonable, good faith efforts to cause any lender
with a security interest in the Building to execute and deliver a subordination,
non-disturbance and attornment agreement, in the lender’s standard form, in favor of
Tenant.”

	 	b.	 	Paragraph 19(c) of the Lease is hereby deleted.

	17.	 	Amendment of Paragraph 21. The first sentence of Paragraph 21 of the Lease is hereby
amended to read as follows:

“All notices, consents, demands and other communications from one party to the other given
pursuant to the terms of this Lease shall be in writing and shall be deemed to have been
fully given when deposited in the United States mail, certified or registered, postage
prepaid, or delivered to a generally recognized overnight courier service, charges prepaid,
and addressed to each party at the address specified in the Basic Lease Information or to
such other place as such party may from time to time designate in a notice to the other
party.”

	18.	 	Amendment of Paragraph 22.

	 	a.	 	Paragraph 22(e)(i) of the Lease is hereby amended to read as follows:

“(i) If, without objection by Landlord, Tenant holds possession of the premises after
expiration of the term of this Lease, Tenant shall become a tenant from month to monthly
upon the term herein specified but at a monthly rental equivalent to 150% of the then
prevailing monthly rental paid by Tenant at the expiration of the term of this Lease,
payable in advance on or before the first day of each month. Each party shall give the
other notice at least one month prior to the date of termination of such monthly tenancy of
its intention to terminate such tenancy; and”

	 	b.	 	Paragraph 22(g) of the Lease is hereby amended to read as follows:

“(g) Landlord and Landlord’s agents shall have the right to enter the Premises at reasonable
times upon reasonable prior notice for the purpose of inspecting the same, showing the same
to prospective purchasers or lenders, and making such alterations, repairs, improvements or
additions to the Premises or to the Building as Landlord may deem necessary or desirable.
If Landlord enters the Premises pursuant to this Paragraph 22(g), Landlord shall make
commercially reasonable efforts to minimize the disruption to Tenant. Landlord may at any
time during the last one hundred twenty (120) days of the term place on or about the
Premises any ordinary “For Lease” sign.”

	19.	 	Building Hours/Access. Access, utility and HVAC services to the Premises shall be
available twenty-four (24) hours per day, three hundred sixty-five (365) days per year,

Addendum-13

 

	 	 	including normal business holidays, subject to emergencies and periodic major maintenance
(for which Landlord shall provide reasonable notice).

	20.	 	Signage. Tenant shall be allowed, at its expense, to place a sign at the entry to
its premises in accordance with Marina Village Signage Criteria and any applicable
governmental regulations.

	21.	 	Parking. Tenant shall be entitled to the free non-exclusive use of parking, on a
non-designated basis, at the rate of 3.4 spaces per 1,000 rentable square feet of the areas of
the Premises.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum to the Lease as of the date of
the Lease.

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.	 	ALAMEDA REAL ESTATE INVESTMENTS,
	A Maryland Corporation	 	a California limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Vintage Alameda Investments, LP,

a California limited partnership,

operating general partner
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Henry	 	 	 	By:	 	Vintage Properties-Alameda Commercial,

a California corporation,

managing general partner
	 

	 	 	 	 	 	 	 	 	 	 
	
Name:
	 	Henry Klyce 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	/s/ Joseph R. Seiger 
	 

	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Pres 	 	 	 	 	 	Name:
	 	Joseph R. Seiger
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 President
	Date:

	 	11/17/03 	 	 	 	 	 	Date:	 	11/20/03 
	 

	 	 
	 	 	 	 	 	 	 	 

Addendum-14

 

MARINA VILLAGE

EXHIBIT
A

OUTLINE OF PREMISES

A-1

 

MARINA VILLAGE

EXHIBIT B

INITIAL IMPROVEMENT OF THE PREMISES

	1.	 	Tenant Improvements. Landlord, through its general contractor, shall furnish and
install the Premises substantially in accordance with the drawings and specifications listed
on Schedule 1 to this Exhibit B (the “Tenant Improvements”). Although
the Tenant Improvements includes casework and cabinets, distribution pipes for compressed air
and electrical wiring, conduits and fixtures for other than normal 20 amp, 110 volt service
for normal desktop equipment serving or located in the Machine shop, Room 109, (all of the
foregoing being, “Additional Improvements”), Landlord shall have no responsibility or
liability for the design or installation of the Additional Improvements or their freedom from
defects, but has only agreed to include such work under its agreement with its contractor as
an accommodation to Tenant. At its expense, Landlord shall cause to be performed any
construction or modifications which may be required to bring the public restrooms and path of
travel serving the Building into compliance with the Americans with Disabilities Act. The
quantities, character and manner of installation of all of the Tenant Improvements shall be
subject to the limitations imposed by any applicable governmental regulations.

	2.	 	Allocation of Cost. Landlord shall bear the cost of the construction of the Tenant
Improvements but not the cost of the Additional Improvements, permits, architectural and
engineering services related to the Tenant Improvements other than the Additional Improvements
(collectively, “Landlord’s Work”). Tenant shall pay the cost of all improvements in
the Premises which are not part of Landlord’s Work including the cost of the Additional
Improvements. Landlord shall obtain and submit to Tenant a bid for the cost of the Additional
Improvements from Landlord’s contractor. Tenant shall approve or disapprove such bid within
seven days. If disapproved, then within seven days following such disapproval Tenant shall
provide Landlord with additional information adequate to permit the revision of the plans and
specifications and re-pricing of the Additional Improvements for Tenant’s approval. Landlord
shall pay a share of each progress billing submitted for work completed from its general
contractor determined by multiplying the amount of such billing by a fraction, the numerator
of which is the cost of the Landlord’s Work and the denominator of which is the estimated
construction cost of all of the Tenant Improvements, including professionals’ fees and
permits. Tenant shall pay the balance of such progress billing, provided that at such time as
Landlord has paid the cost of all Landlord’s Work, all billings shall be paid entirely by
Tenant.

	3.	 	Payment of Tenant’s Cost. Tenant shall pay to Landlord all amounts due under the
terms of this Exhibit B within ten (10) days after billing by Landlord. Bills may be
rendered during the progress of the plans and specifications and the Tenant Improvements so as
to enable Landlord to pay permit and processing fees and its architects, engineers and general
contractor without advancing Landlord’s funds.

B-1

 

	 	 	Landlord shall not be obligated to continue installation of the Tenant Improvements if
Tenant does not pay Tenant’s share of the cost of the Tenant Improvements to Landlord when
due. If Tenant does not make timely payment to Landlord, Landlord may, but shall not be
obligated to, advance Landlord’s funds to pay Tenant’s share of the cost of the Tenant
Improvements and any funds so advanced shall be payable to Landlord upon demand as
additional rent and shall bear interest as provided in paragraph 3(d) of the Lease.

	4.	 	Changes. Tenant shall bear the cost of any changes in the Tenant Improvements
requested by Tenant after final approval of the bid plans and specifications by Tenant,
together with a fee for Landlord’s construction administration in an amount not to exceed
fifteen percent (15%) of the cost of such changes. In the event Landlord or its general
contractor is instructed by Tenant to proceed with such changes without approval of such
increases by Tenant, the amount thereof shall be as determined by Landlord upon completion of
the Tenant Improvements, subject only to Landlord’s furnishing to Tenant, upon Tenant’s
Request, of appropriate back-up information from Landlord’s general contractor concerning
increased costs and construction delays.

5. Tenant Vendors.

a. Any items or work beyond the scope of normal construction trades for which Tenant
contracts separately (hereinafter “Tenant Vendor’s Work”), shall be subject to
Landlord’s reasonable policies and schedules and shall be conducted in such a way as not to
unreasonably hinder, cause any disharmony with or delay work of improvements in the
Building. To this end, Tenant shall conform with a schedule determined by Landlord’s
contractor and no work shall be done by Tenant which would cause Landlord’s contractor to be
dependent upon such work for completion of Landlord’s contractor’s work. In no event shall
work involving the sprinkler, plumbing, mechanical, electrical power, lighting or fire
safety systems of the Building be performed by any contractor or subcontractor other than
Landlord’s approved subcontractors and all telecommunications and other special electrical
equipment shall be installed under the supervision of Landlord’s electrical subcontractor.

b. Not less than five (5) days prior to the date Tenant desires to commence Tenant’s Work,
it shall give a written request to Landlord setting forth or accompanied by all of the
following:

	 	1.	 	A description and schedule for the work to be performed;
	 
	 	2.	 	The names and addresses of all contractors, subcontractors and material
suppliers who will perform the Tenant Vendor’s Work;
	 
	 	3.	 	The approximate number of individuals, itemized by trade, who will be present
in the premises;
	 
	 	4.	 	Copies of all plans and specifications pertaining to the Tenant Vendor’s Work;

B-2

 

	 	5.	 	Copies of all licenses and permits which may be required in connection with the
performance of Tenant Vendor’s Work;
	 
	 	6.	 	Certificates of insurance indicating compliance with the insurance requirements
set forth in the Lease; and
	 
	 	7.	 	Performance and labor and materials bonds in an amount not less than Landlord’s
reasonable estimate of the total cost of such Tenant Vendor’s Work; provided,
that, Landlord shall not require Tenant to furnish such bonds if Tenant’s
contractor can demonstrate to the satisfaction of Landlord the ability to obtain a
payment and performance bond in an amount which equals or exceeds two (2) times
Landlord’s reasonable estimate of the cost of the work proposed to be performed by such
contractor.

All of the foregoing shall be subject to Landlord’s approval, which approval shall not be
unreasonably withheld, which shall be rendered with ten (10) days of receipt of
notification.

c. Tenant shall be responsible for any out of pocket expenses incurred by Landlord due to
inadequate cleanup by those performing Tenant Vendor’s Work.

d. If, in Landlord’s reasonable opinion, any supplier, contractor or workman performing
Tenant Vendor’s Work hinders or delays, directly or indirectly, any other work of
improvement in the Building or performs any work which may or does impair the quality,
integrity or performance of any portion of the Building, Landlord shall give notice to
Tenant and immediately thereafter, Tenant shall cause such supplier, contractor or workman
immediately to remove all of its tools, equipment and materials and to cease working in the
Building. As additional rent under the Lease, Tenant shall reimburse Landlord for any
reasonable repairs or corrections of the improvements or of any portion of the Building or
the reasonable cost of any delays to the extent caused by or resulting from the actions or
omissions of anyone performing Tenant Vendor’s Work.

	6.	 	Completion and Rental Commencement Date. Notwithstanding anything to the contrary
contained in the Lease, Tenant’s obligation for the payment of rental under the Lease shall
not commence until Landlord has substantially completed the Landlord’s Work, subject only to
the completion of punch list items. Substantial completion shall mean the date when Landlord
has received the final inspection from the building inspector of the City of Alameda and sign
off of the building permit issued by the City of Alameda. If Landlord shall be delayed in
substantially completing the Tenant Improvements as a result of:

a. Tenant’s changes to plans and specifications listed on Schedule 1;

B-3

 

b. Tenant’s request for materials, finishes, or installations other than building standard
improvements;

d. Tenant’s request for changes in the Tenant Improvements after commencement of
construction;

e. Hindrance or disruption of the work of Landlord’s contractor resulting from Tenant
Vendor’s Work or any other reason under Tenant’s control; or

f. Cessation or termination of work in the Premises due to Tenant’s failure to pay when due
all amounts payable by Tenant pursuant to this Exhibit B;

then the commencement date of Tenant’s obligation for payment of rental shall be advanced by the
number of days of such delay. All time periods referred to in this Exhibit B shall be
computed on a calendar basis with no allowance for holidays or weekends.

IN WITNESS WHEREOF, the parties have executed this Exhibit B on the respective dates they
executed the Lease.

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.	 	ALAMEDA REAL ESTATE INVESTMENTS,
	A Maryland Corporation	 	a California limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Vintage Alameda Investments, LP,

a California limited partnership,

operating general partner
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Henry 	 	 	 	By:	 	Vintage Properties-Alameda Commercial,

a California corporation,

managing general partner
	 

	 	 	 	 	 	 	 	 	 	 
	
Name:
	 	Henry Klyce 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	/s/ Joseph R. Seiger 
	 

	 	 	 	 	 	 	 	 	 	 
	Title:

	 	Pres —	 	 	 	 	 	Name:
	 	Joseph R. Seiger
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 President
	Date:

	 	11/17/03 	 	 	 	 	 	Date:	 	11/20/03 
	 

	 	 
	 	 	 	 	 	 	 	 

B-4

 

SCHEDULE B-1

CONSTRUCTION DRAWINGS

Tenant Improvement Drawings for St. Francis Medical Technologies, Inc.

960 Atlantic Avenue, Alameda, CA 94501

Drawings prepared by Burns/Nettle Architects

	 	 	 
	Drawing No.	 	Date
	A0.0

	 	11-11-03
	A0.2

	 	11-11-03
	A1.1

	 	11-11-03
	A2.1

	 	11-11-03
	A3.1

	 	11-11-03
	A4.1

	 	11-11-03
	A5.1

	 	11-11-03

B-5

 

MARINA VILLAGE

EXHIBIT C

VERIFICATION MEMORANDUM

Re: Industrial Gross Lease dated as of ___, 2003 between ALAMEDA REAL ESTATE
INVESTMENTS, a California limited partnership (“Landlord”), and ST. FRANCIS MEDICAL
TECHNOLOGIES, INC., a Delaware corporation (“Tenant”), and for Premises known as Marina
Village Parkway, Suites 100, Alameda, California. Tenant hereby verifies that the dates and
amounts stated below are correct and further acknowledges and accepts possession of the Premises.

	 	 	 
	Area:

	 	13,112 rentable square feet
	 
	 	 
	Commencement Date:
	 	 
	 
	 	 
	Expiration Date:
	 	 
	 
	 	 
	Option(s) to Extend:

	 	None
	 
	 	 
	Initial Base Rent:
	 	 

	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	LANDLORD:
	 
	 	 	 	 	 	 	 	 	 	 
	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.	 	ALAMEDA REAL ESTATE INVESTMENTS,
	A Maryland Corporation	 	a California limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Vintage Alameda Investments, LP,

a California limited partnership,

operating general partner
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	By:	 	Vintage Properties-Alameda Commercial,

a California corporation,

managing general partner
	 

	 	 	 	 	 	 	 	 	 	 
	
Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	 	 	Name:
	 	Joseph R. Seiger
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Title:
	 	 President
	Date:

	 	 	 	 	 	 	 	Date:	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

C-1

 

MARINA VILLAGE

EXHIBIT D

FORM OF LETTER OF CREDIT

Date

[Name and Address of

Issuing Bank]

San Francisco, CA

STANDBY LETTER OF CREDIT

Beneficiary:

Alameda Real Estate Investments

2479 East Bayshore, Suite 704

Palo Alto, CA 94303

     Re: Letter of Credit No.                                         

Gentlemen:

By order of our client, [insert name and address of tenant], we hereby open our irrevocable,
transferable Standby Letter of Credit No.                     , in your favor for an amount not to exceed
in aggregate USD                      (                    U.S. Dollars and 00/100), effective immediately
and expiring at the counters of our office located at                                         , San Francisco, CA
                     on [at least one year following issuance].

Funds hereunder are available to you or your transferee against presentation of your Sight
Draft(s), drawn on us, mentioning thereon our Letter of Credit Number                     , accompanied by
your written and dated Statement as per Annex A, attached hereto.

It is a condition of this Letter of Credit that it shall be deemed automatically extended, without
amendment, for additional period(s) of one year from the expiry date hereof, or any future
expiration date, but not beyond [insert date at least 30 days following expiration of Lease],
unless thirty (30) days prior to any expiration date we notify you by certified mail (return
receipt requested) or by any other receipted means that we elect not to consider this Letter of
Credit renewed for any such additional period, whereupon you may draw your one sight Draft on us
for an amount not to exceed the unutilized balance of this Letter of Credit, mentioning thereon our
reference number, accompanied by your written and dated Statement, purportedly signed by an
authorized representative of your company as per Annex B, attached hereto.

D-1

 

It is a condition of this Letter of Credit that it is transferable and may be transferred in its
entirety, but not in party, and may be successively transferred by you or any transferee hereunder
to a successor transferee(s).

Transfer under this Letter of Credit to such Transferee shall be effected upon the presentation to
us of the original of this Letter of Credit and any amendments hereto, accompanied by a request
designating the transferee in the form of Annex C attached hereto, appropriately completed, along
with payment of our transfer fee of $                    .

We hereby agree to honor each draft drawn under and in compliance with the terms and conditions of
this Letter of Credit, if presented, as specified, at our Office on or before the expiration date.

Should you have occasion to communicate with us regarding this Letter of Credit, please direct your
correspondence to our office located at                                         , San Francisco, CA                     ,
Attention:                     , mentioning our Letter of Credit Number indicated above.

Except as otherwise stated herein, this Letter of Credit is subject to the International Standby
Practices (“ISP98”), International Chamber of Commerce, Publication No. 590, and as to matters not
governed by the ISP98, shall be governed by and construed in accordance with the laws of the State
of California and applicable U.S. Federal Law.

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	                                    , Vice President 	 
	 	 	 	 

D-2

 

	 	 	 	 	 

ANNEX A

Date:

[Issuing Bank]

Ref: Letter of Credit No.

Gentlemen:

The undersigned, authorized representative of the beneficiary, certifies that an event of default
has occurred pursuant to that certain Marina Village Industrial Gross Lease dated [insert date of
Lease].

	 	 	 	 	 
	[Signature]	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title	 	 

D-3

 

ANNEX B

Date:

[Issuing Bank]

Ref: Standby Letter of Credit No.

Gentlemen:

The undersigned, authorized representative of the beneficiary, certifies that Letter of Credit No.
                     issued by                      is scheduled to expire within thirty (30) or fewer days
and Applicant has failed to provide the Beneficiary with a new or an extended Letter of Credit in
the amount and for the time required pursuant to that certain Marina Village Industrial Gross Lease
dated [insert date of Lease].

	 	 	 	 	 
	[Signature]	 	 
	By:
	 	 	 	 
	 

	 	 

	 	 
	Title	 	 

D-4

 

ANNEX C

Request for Full Transfer

Relinquishing all Rights as Beneficiary

(This form is to be used when the Letter of Credit is to be Transferred in its entirety, and,
no substitution of invoices is involved and, no rights are to be retained by the undersigned
Beneficiary.)

	 	 	 
	[Issuing bank]

	 	Date:

	 	 	 	 	 	 	 
	 

	 	Re: L/C No.	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Issued by:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Ref:	 	 	 	 
	 

	 	 	 	 

	 	 

Gentlemen:

Receipt is acknowledged of the original instrument which you forwarded to us relative to the
issuance of a Letter of Credit (herein called the “Credit”) bearing your reference number as above
in favor of ourselves and/or Transferees and we hereby request you to transfer the said Letter of
Credit, in its entirety, to:

	 	 	 
	 

	 
	 	 
	Whose address is

	 	 

	 
	 	 
	 

	 
	 	 
	(Optional) Please advise Beneficiary through the below indicated Advising Bank:
	 
	 	 
	 

	 
	 	 
	 

We are returning the original instrument to you herewith in order that you may deliver it to the
Transferees together with your customary letter of transfer.

It is understood that any amendments to the Letter of Credit which you may receive are to be
advised by you directly to the Transferees and that the drafts and documents of the Transferees, if
issued in accordance with the conditions of the Letter of Credit, are to be forwarded by you
directly to the party for whose account the credit was opened (or any intermediary) without our
intervention.

D-5

 

Page 2

Request for Full Transfer Relinquishing all Rights as Beneficiary

____________________, reference _____________

___
We enclose our check for $                     to cover your charges.

___
We authorize you to charge our                      account No.                     .

	 	 	 
	SIGNATURE GUARANTEED

	 	Sincerely yours,
	 
	 	 
	The First Beneficiary’s signature(s) with
titles(s) conforms with that on file with us
and such is/are authorized for the execution
of this instrument.
	 	 
	 
	 	 
	 
	 

	 	 
	(Name of Bank)

	 	(Name of First Beneficiary)
	 
	 	 
	 

	 	 
	(Bank Address)

	 	(Telephone Number)
	 
	 	 
	 

	 	 
	(City, State, Zip Code)

	 	(Authorized Name and Title)
	 
	 	 
	 

	 	 
	(Telephone Number)

	 	(Authorized Signature)
	 
	 	 
	 

	 	 
	(Authorized Name and Title)

	 	(Authorized Name and Title)
	 

	 	(If applicable)
	 
	 	 
	 

	 	 
	(Authorized Signature)

	 	(Authorized Signature)
	 

	 	(If applicable)

D-6

 

EXHIBIT E

OPERATING EXPENSE EXCLUSIONS

Operating Expenses shall include the reasonable and necessary expenses, which are actually
paid by Landlord in connection with the operation, maintenance and repair of the Building, Premises
and Project (collectively, the ”Project”) as reasonably determined in accordance with generally
accepted accounting principles (“GAAP”), consistently applied, but specifically excluding the
following:

	i)	 	interest, principal, points and fees on, and any other costs relating to, any debt instrument
encumbering, or any other financing relating to, all or any portion of the Project;
	 
	ii)	 	ground lease rental;
	 
	iii)	 	costs for utilities, services and other benefits that are provided
selectively to other tenants or occupants for their benefit and not
provided to Tenant;
	 
	iv)	 	costs, which are paid or reimbursed to Landlord by warranties or
guarantees, insurers or governmental authorities, or which are
exclusively provided to and paid by Tenant, other tenants or
occupants;
	 
	v)	 	leasing, brokers’ and other fees and commissions, attorneys’ fees, court costs and other
legal expenses, space preparation costs, leasing inducements and concessions, and other costs
incurred in connection with leasing of the Project (including advertising, marketing and
promotional expenses) or negotiations or disputes with past, present, future or prospective
tenants or other occupants, or in enforcing leases, or in defense of Landlord’s interest in or
title to the Project;
	 
	vi)	 	management, administrative, coordination, supervision or similar
fees, or Landlord’s general and administrative and overhead
expenses, except for a property management fee not to exceed three
percent (3%) of gross revenues for the Project;
	 
	vii)	 	any improvements, alterations or other capital expenditures, or
depreciation or amortization thereof or of any portion of the
Project or any improvements or equipment (and the costs of leasing
HVAC, elevators and other equipment normally considered to be of a
capital nature) other than capital expenditures required by laws
which become effective following the date of this Lease, amortized
over their useful lives, those intended to reduce other Operating
Expenses, but only to the extent of such reduction and those
incurred in connection with major repairs;
	 
	viii)	 	tenant improvement costs and other costs (including permit, license,
inspection and other fees) incurred in renovating or otherwise
improving, decorating, painting or altering space for Tenant, other
tenants or occupants or vacant space at the Project;
	 
	ix)	 	repairs, alterations, additions, improvements, or replacements made
to rectify or correct any defect in the design, materials or
workmanship of any portion of the Project, or to comply with any
laws or governmental regulations in effect as of the date of this
Lease including ADA and state and local disability access
requirements;
	 
	x)	 	the cost of repairing damage covered under any insurance policy carried by, or required to be
carried by, Landlord in connection with the Project in excess of the deductibles under such
policy;
	 
	xi)	 	compensation, benefits and other costs of executives and
employees above the grade of building manager;

E-1

 

	xii)	 	compensation, benefits and other costs of all other personnel to the extent such personnel provide services not
solely in connection with the operation or maintenance of the Project;
	 
	xiii)	 	interest, penalties or other costs arising out of Landlord’s failure to make timely payment and performance of its
obligations;
	 
	xiv)	 	costs of or other amounts paid to subsidiaries or affiliates of Landlord for management or other services for the
Project or for supplies or other materials to the extent that such costs or amounts exceed the competitive cost of
similar services, supplies or materials available from third parties unrelated to Landlord;
	 
	xv)	 	costs (including expert and consulting fees and expenses) incurred to test, monitor, survey, cleanup, contain, abate,
remove or otherwise remedy Hazardous Substances from the Project;
	 
	xvi)	 	rent for space within the Project or other locations other than the Project management office and storage space for
Project maintenance supplies and equipment;
	 
	xvii)	 	costs of sculptures, paintings, decorations and other objects of art;
	 
	xviii)	 	costs of any political, charitable, civic or other contribution or donation;
	 
	xix)	 	costs incurred in connection with any portion of the Project which is used for parking and for which parking, valet
or other fees are charged;
	 
	xx)	 	any duplication of costs between Operating Expenses and Taxes;

E-2exv10w7

 

Exhibit 10.7

MARINA VILLAGE

LEASE

LEGACY PARTNERS I ALAMEDA, LLC,

a Delaware limited liability company

as Landlord,

and

ST. FRANCIS MEDICAL TECHNOLOGIES, INC.,

a Delaware corporation

as Tenant

MARINA VILLAGE

[St. Francis]

 

 

INDEX

	 	 	 	 	 
	 	 	Page(s)
	SUMMARY OF BASIC LEASE INFORMATION
	 	(i)
	 
	 	 	 	 
	LEASE
	 	 	 	 
	 
	 	 	 	 
	ARTICLE 1 PROJECT, BUILDING AND PREMISES
	 	 	1	 
	ARTICLE 2 LEASE TERM
	 	 	3	 
	ARTICLE 3 BASE RENT
	 	 	4	 
	ARTICLE 4 ADDITIONAL RENT
	 	 	4	 
	ARTICLE 5 USE OF PREMISES
	 	 	10	 
	ARTICLE 6 SERVICES AND UTILITIES
	 	 	10	 
	ARTICLE 7 REPAIRS
	 	 	11	 
	ARTICLE 8 ADDITIONS AND ALTERATIONS
	 	 	12	 
	ARTICLE 9 COVENANT AGAINST LIENS
	 	 	13	 
	ARTICLE 10 INDEMNIFICATION AND INSURANCE
	 	 	14	 
	ARTICLE 11 DAMAGE AND DESTRUCTION
	 	 	15	 
	ARTICLE 12 CONDEMNATION
	 	 	16	 
	ARTICLE 13 COVENANT OF QUIET ENJOYMENT
	 	 	17	 
	ARTICLE 14 ASSIGNMENT AND SUBLETTING
	 	 	17	 
	ARTICLE 15 SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
	 	 	19	 
	ARTICLE 16 HOLDING OVER
	 	 	20	 
	ARTICLE 17 ESTOPPEL CERTIFICATES
	 	 	20	 
	ARTICLE 18 SUBORDINATION
	 	 	20	 
	ARTICLE 19 TENANT’S DEFAULTS; LANDLORD’S REMEDIES
	 	 	20	 
	ARTICLE 20 SECURITY DEPOSIT
	 	 	22	 
	ARTICLE 21 COMPLIANCE WITH LAW
	 	 	22	 
	ARTICLE 22 ENTRY BY LANDLORD
	 	 	23	 
	ARTICLE 23 PARKING
	 	 	23	 
	ARTICLE 24 MISCELLANEOUS PROVISIONS
	 	 	24	 

EXHIBITS

	 	 	 	 	 
	A
	 	OUTLINE OF PREMISES
	A-1
	 	SITE PLAN OF PROJECT
	B
	 	TENANT WORK LETTER
	C
	 	AMENDMENT TO LEASE
	D
	 	RULES AND REGULATIONS
	E
	 	FORM OF LEASE TERMINATION AGREEMENT

MARINA VILLAGE

[St. Francis]

(ii)

 

	 	 	 	 	 
	 	 	Page(s)	 
	Abated Rent
	 	 	4	 
	Abatement Period
	 	 	4	 
	Additional Rent
	 	 	4	 
	Allowance
	 	Exhibit B	 
	Alterations
	 	 	12	 
	Amendment
	 	Exhibit C
	Approved Working Drawings
	 	Exhibit B
	Base Rent
	 	 	4	 
	Base, Shell and Core
	 	Exhibit B
	BOMA
	 	 	2	 
	Brokers
	 	 	26	 
	Calendar Year
	 	 	4	 
	Construction
	 	 	26	 
	Construction Drawings
	 	Exhibit B
	Cost Pools
	 	 	5	 
	Estimate
	 	 	8	 
	Estimate Statement
	 	 	8	 
	Estimated Excess
	 	 	8	 
	Excess
	 	 	7	 
	Excluded Changes
	 	 	22	 
	Expense Base Year
	 	 	4	 
	Expense Year
	 	 	4	 
	Final Space Plan
	 	Exhibit B
	Force Majeure
	 	 	25	 
	Hazardous Material
	 	 	10	 
	Holidays
	 	 	10	 
	Interest Rate
	 	 	9	 
	Landlord
	 	 	1	 
	Landlord Parties
	 	 	14	 
	Lease
	 	 	1	 
	Lease Commencement Date
	 	 	3	 
	Lease Expiration Date
	 	 	3	 
	Lease Term
	 	 	3	 
	Lease Year
	 	 	3	 
	Notices
	 	 	25	 
	Operating Expenses
	 	 	4	 
	Other Buildings
	 	 	8	 
	Other Existing Buildings
	 	 	1	 
	Over-Allowance Amount
	 	Exhibit B
	Premises
	 	 	1	 
	Project
	 	 	1	 
	Proposition 13
	 	 	6	 
	Rent
	 	 	4	 
	rentable square feet
	 	 	2	 
	Security Deposit
	 	 	22	 
	Statement
	 	 	7	 
	Subject Space
	 	 	17	 
	Subleasing Costs
	 	 	18	 
	Summary
	 	 	i	 
	Systems and Equipment
	 	 	6	 
	Tax Expense Base Year
	 	 	6	 
	Tax Expenses
	 	 	6	 
	Tenant
	 	 	1	 
	Tenant Delays
	 	Exhibit B
	Tenant Work Letter
	 	Exhibit B
	Tenant’s Share
	 	 	7	 
	Transfer Notice
	 	 	17	 
	Transfer Premium
	 	 	18	 
	Transfers
	 	 	17	 
	Utilities Base Year
	 	 	7	 
	Utilities Costs
	 	 	7	 
	Wi-Fi Network
	 	 	13	 
	Working Drawings
	 	Exhibit B

MARINA VILLAGE

[St. Francis]

(iii)

 

SUMMARY OF BASIC LEASE INFORMATION

     This Summary of Basic Lease Information (“Summary”) is hereby incorporated into and made a
part of the attached Lease. Each reference in the Lease to any term of this Summary shall have the
meaning as set forth in this Summary for such term. In the event of a conflict between the terms
of this Summary and the Lease, the terms of the Lease shall prevail. Any capitalized terms used
herein and not otherwise defined herein shall have the meaning as set forth in the Lease.

	 	 	 
	TERMS OF LEASE	 	DESCRIPTION
	(References are to the Lease)	 	 
	1. Date:

	 	July 26, 2006
	 
	 	 
	2. Landlord:

	 	LEGACY PARTNERS I ALAMEDA, LLC,

a Delaware limited liability company
	 
	 	 
	3. Address of Landlord (Section 24.19):

	 	Legacy Partners I Alameda, LLC
	 

	 	c/o Legacy Partners Commercial, Inc.
	 

	 	1150 Marina Village Parkway
	 

	 	Alameda, California 94501
	 

	 	Attention: Property Manager
	 
	 	 
	 

	 	with a copy to:
	 
	 	 
	 

	 	Legacy Partners I Alameda, LLC
	 

	 	c/o Legacy Partners Commercial, Inc.
	 

	 	4000 East Third Avenue, Suite 600
	 

	 	Foster City, California 94404-4805
	 

	 	Attention: Regional Vice President
	 
	 	 
	4. Tenant:

	 	ST. FRANCIS MEDICAL TECHNOLOGIES, INC., a Delaware corporation
	 
	 	 
	5. Address of Tenant (Section 24.19):

	 	960 Atlantic Avenue
	 

	 	Alameda, California 94501
	 

	 	Attention: Christine Barcelos
	 

	 	(Prior to Lease Commencement Date)
	 
	 	 
	 

	 	and
	 
	 	 
	 

	 	1201 Marina Village Parkway, Suite 200
	 

	 	Alameda, California 94501
	 

	 	Attention: Christine Barcelos
	 

	 	(After Lease Commencement Date)
	 
	 	 
	6. Premises (Article 1):
	 	 
	 
	 	 
	     6.1 Premises:

	 	31,642 rentable square feet of space located on the first
(1st) and second (2nd) floors of the
Building (as defined below), as set forth in
Exhibit A attached
hereto, and commonly known as Suites 102 and 200.
	 
	 	 
	     6.2 Building:

	 	The Premises are located in the building whose address is 1201
Marina Village Parkway, Alameda, California
	 
	 	 
	7. Term (Article 2):
	 	 
	 
	 	 
	     7.1 Lease Term:

	 	Five (5) years.
	 
	 	 
	     7.2 Lease Commencement Date:
	 	 
	 
	 	 
	 

	 	The earlier of (i) the date Tenant commences business
operations in the Premises, or (ii) the date the Premises are
Ready for Occupancy (as defined in the Tenant Work Letter
attached hereto as Exhibit B), which Lease Commencement Date is
anticipated to be September 1, 2006.
	 
	 	 
	     7.3 Lease Expiration Date:

	 	The last day of the month in which the fifth (5th)
anniversary of the Lease Commencement Date occurs.

MARINA VILLAGE

[St. Francis]

(i)

 

	 	 	 
	TERMS OF LEASE	 	DESCRIPTION
	(References are to the Lease)	 	 
	     7.4 Amendment to Lease:

	 	Landlord and Tenant may confirm the Lease Commencement Date and
Lease Expiration Date in an Amendment to Lease (Exhibit C) to
be executed pursuant to Article 2 of the Lease.
	 
	 	 
	8. Base Rent (Article 3):
	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly	 	 	Annual Rental	 
	 	 	Annual	 	 	Installment	 	 	Rate per Rentable	 
	Lease Year	 	Base Rent	 	 	of Base Rent	 	 	Square Foot	 
	1*
	 	$	759,408.00	 	 	$	63,284.00	 	 	$	24.00	 
	2
	 	$	782,190.24	 	 	$	65,182.52	 	 	$	24.72	 
	3
	 	$	804,972.48	 	 	$	67,081.04	 	 	$	25.44	 
	4
	 	$	831,551.76	 	 	$	69,295.98	 	 	$	26.28	 
	5
	 	$	854,334.00	 	 	$	71,194.50	 	 	$	27.00	 

 

			
	*	 	Subject to abatement for the first (1st) month of the Lease Term pursuant to Article 3 of the Lease.

	 	 	 
	9. Additional Rent (Article 4):
	 	 
	 
	 	 
	     9.1 Expense Base Year:

	 	Calendar year 2006.
	 
	 	 
	     9.2 Tax Expense Base Year:

	 	Calendar year 2006.
	 
	 	 
	     9.3 Utilities Base Year:

	 	Calendar year 2006.
	 
	 	 
	     9.4 Tenant’s Share of Operating Expenses, Tax

           Expenses and Utilities Costs:

	 	38.12% (31,642 rentable square feet within the Premises/82,997
rentable square feet within the Building).
	 
	 	 
	10. Security Deposit (Article 20):

	 	$71,194.50. 
	 
	 	 
	11. Brokers (Section 24.25):

	 	Cornish and Carey, representing Landlord and Tenant.
	 
	 	 
	12. Parking (Article 23):

	 	3.4 unreserved parking spaces for every 1,000 rentable square
feet of the Premises.

MARINA VILLAGE

[St. Francis]

(ii)

 

LEASE

     This Lease, which includes the preceding Summary and the exhibits attached hereto and
incorporated herein by this reference (the Lease, the Summary and the exhibits to be known
sometimes collectively hereafter as the “Lease”), dated as of the date set forth in Section 1 of
the Summary, is made by and between LEGACY PARTNERS I ALAMEDA, LLC, a Delaware limited liability
company (“Landlord”), and ST. FRANCIS MEDICAL TECHNOLOGIES, INC., a Delaware corporation
(“Tenant”).

ARTICLE 1

PROJECT, BUILDING AND PREMISES

     1.1 Project, Building and Premises.

          1.1.1 Premises. Upon and subject to the terms, covenants and conditions hereinafter
set forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
the premises set forth in Section 6.1 of the Summary (the “Premises”), which Premises are located
in the Building defined in Section 6.2 of the Summary and located within the Project (as defined
below). The outline of the floor plan of the Premises is set forth in Exhibit A attached
hereto.

          1.1.2 Building and Project. The Building is part of a multi-building commercial
project known as “Marina Village” and located on the approximately 200-acre site on the estuary
side of the island of Alameda. The term “Project” as used in this Lease, shall mean, collectively:
(i) the Building; (ii) the other existing buildings located within such 200-acre site
(collectively, the “Other Existing Buildings”); (iii) the surface parking areas servicing the
Building and the Other Existing Buildings and located within such 200-acre site; (iv) 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/or the Other Existing Buildings, which are designated from time
to time by Landlord (and/or any other owners of Marina Village) as common areas appurtenant to or
servicing the Building, the Other Existing Buildings and any such other improvements; (v) any
additional buildings, improvements, facilities and common areas which Landlord (any other owners of
Marina Village and/or any common area association formed by Landlord, Landlord’s
predecessor-in-interest and/or Landlord’s assignee for the Project) may add thereto from time to
time within or as part of the Project; and (vi) the land upon which any of the foregoing are
situated. The site plan depicting the current configuration of the Project is set forth in
Exhibit A-1 attached hereto. Notwithstanding the foregoing or anything contained in this
Lease to the contrary, (1) except in connection with Landlord’s obligation to maintain and operate
the Project in a manner consistent with comparable buildings in the vicinity of the Project as
provided in Section 1.1.3 below, 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-1 attached hereto (as
the same may be modified by Landlord (and/or any other owners of Marina Village) from time to time
without notice to Tenant), other than Landlord’s obligations (if any) specifically set forth in the
Tenant Work Letter, and (2) Landlord (and/or any other owners of Marina Village) shall have the
right from time to time to include or exclude any improvements or facilities within the Project, at
such party’s sole election, as more particularly set forth in Section 1.1.3 below.

          1.1.3 Tenant’s and Landlord’s Rights. Tenant is hereby granted the right to the
nonexclusive use of the common corridors and hallways, stairwells, elevators (if any), restrooms
and other public or common areas located within the Building, and the non-exclusive use of those
areas located on the Project that are designated by Landlord from time to time as common areas for
the Building; provided, however, that (i) Tenant’s use thereof shall be subject to (A) the
provisions of any covenants, conditions and restrictions regarding the use thereof now or hereafter
recorded against the Project, and (B) such reasonable, non-discriminatory rules, regulations and
restrictions as Landlord may make from time to time (which shall be provided in writing to Tenant),
and (ii) Tenant may not go on the roof of Building or the Other Existing Buildings without
Landlord’s prior consent (which may be withheld in Landlord’s sole and absolute discretion) and
without otherwise being accompanied by a representative of Landlord. Landlord (and/or any other
owners of Marina Village) reserve the right from time to time to use any of the common areas of the
Project, and the roof, risers and conduits of the Building and the Other Existing Buildings for
telecommunications and/or any other purposes, and to do any of the following: (1) make any
changes, additions, improvements, repairs and/or replacements in or to the Project or any portion
or elements thereof, including, without limitation, (x) changes in the location, size, shape and
number of driveways, entrances, loading and unloading areas, ingress, egress, direction of traffic,
landscaped areas, walkways, public and private streets, plazas, courtyards, transportation
facilitation areas and common areas, and (y) expanding or decreasing the size of the Project and
any common areas and other elements thereof, including adding, deleting and/or excluding buildings
(including any of the Other Existing Buildings) thereon and therefrom; (2) close temporarily any of
the common areas while engaged in making repairs, improvements or alterations to the Project; (3)
retain and/or 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, public and private streets, plazas, courtyards, transportation
facilitation areas and/or other common areas located outside of the Building and the Other Existing
Buildings and, subject to Article 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 or Tax Expenses; and (4) 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; provided, however, that Landlord shall maintain and
operate the Project, including, without limitation, the common areas of the Project, in a manner

MARINA VILLAGE

[St. Francis]

 

 

consistent with comparable buildings in the vicinity of the Project. Notwithstanding the
foregoing to the contrary, in connection with any work by Landlord in and alterations or
improvements to the common areas of the Project, and/or the Building, and/or the management and
administration of the common areas of the Project by Landlord and the exercise by Landlord of any
of the foregoing rights with respect the common areas of the Project, Landlord shall use diligent
efforts to minimize any material adverse interference with Tenant’s use of the Premises for
Tenant’s permitted use thereof, and any unreasonable interference with Tenant’s access to the
Premises.

     1.2 Existing Lease; Condition of Premises. Tenant is currently in possession of
certain premises (the “Original Premises”) commonly known as Suite 102, containing approximately
13,112 rentable square feet of space and located on the first (1st) floor of that
certain building in the Project addressed as 960 Atlantic Avenue, Alameda, California, pursuant to
that certain Industrial Gross Lease dated as of November 17, 2003, by and between Landlord’s
predecessor-in-interest, Alameda Real Estate Investments, a California limited partnership
(“Alameda”), and Tenant, as amended by that certain Verification Memorandum dated April 4, 2004, by
and between Alameda and Tenant (collectively, the “Existing Lease”). Tenant hereby acknowledges
and agrees that concurrently with the mutual execution of this Lease, Landlord and Tenant shall
enter into a lease termination agreement in the form attached hereto as Exhibit E (the
“Lease Termination Agreement”), pursuant to which (i) the Existing Lease shall terminate as of
11:59 P.M. on the date which is fifteen (15) days after the Lease Commencement Date, and (ii)
Tenant shall be obligated to vacate and surrender possession of the Original Premises on or prior
to such termination date; provided, however, that notwithstanding such termination or anything in
the Existing Lease to the contrary, Landlord shall retain a portion of the security deposit held by
Landlord under the Existing Lease (which total security deposit held by Landlord under the Existing
Lease equals $233,697.00 [the “Existing Security
Deposit”]) in the amount of $71,194.50 (the
“Retained Existing Security Deposit”) as the Security Deposit to be provided by Tenant for this
Lease (as well as security for the performance by Tenant of its obligations under the Existing
Lease until the same is terminated, and the Lease Termination Agreement), and as set forth in
Article 20 below, Landlord shall be obligated to return the remainder of the Existing
Security Deposit to Tenant following the termination date of the Existing Lease in accordance with
the provisions of the Lease Termination Agreement. Except as expressly set forth in this Lease and
in the Tenant Work Letter attached hereto as Exhibit B, Landlord shall not be obligated to
provide or pay for any improvement, remodeling or refurbishment work or services related to the
improvement, remodeling or refurbishment of the Premises, and Tenant shall accept the Premises in
its “As Is” condition on the Lease Commencement Date. Notwithstanding the foregoing to the
contrary, if (A) as of the Lease Commencement Date, the Building’s Systems and Equipment (as
defined in Section 4.2.5 of this Lease) which serve the Premises are not in good order, condition
and repair and in compliance with applicable laws in effect as of such date (the “Compliance
Condition”), and (B) Tenant becomes aware thereof and delivers to Landlord written notice that such
Systems and Equipment are not in the Compliance Condition (the “Non-Compliance Notice”) by the date
which is sixty (60) days after the Lease Commencement Date (the “Non-Compliance Outside Date”),
then Tenant’s sole remedy shall be that Landlord shall, at its sole cost and expense, do that which
is necessary to put such Systems and Equipment into the Compliance Condition within a reasonable
period of time after Landlord’s receipt of the Non-Compliance Notice. If Tenant fails to deliver
the Non-Compliance Notice to Landlord on or prior to the Non-Compliance Outside Date, Landlord
shall have no obligation to perform the work described above in this Section 1.2 (but such
release of such obligation shall not relieve Landlord of its other obligations under this Lease,
including in Section 7.2 and Article 21 below).

     1.3 Rentable Square Feet. The rentable square feet of the Premises is approximately
as set forth in Section 6.1 of the Summary. For purposes hereof, the “rentable square feet” of the
Premises and the Building shall be calculated by Landlord pursuant to the Standard Method for
Measuring Floor Area in Office Buildings, ANSI Z65.1-1996 (“BOMA”), as modified for the Building
pursuant to Landlord’s standard rentable area measurements for the Building, to include, among
other calculations, a portion of the common areas and service areas of the Building. The rentable
square feet of the Premises and the Building are subject to verification from time to time by
Landlord’s planner/designer and such verification shall be made in accordance with the provisions
of this Section 1.3. Tenant’s architect may consult with Landlord’s planner/designer regarding
such verification, except to the extent it relates to the rentable square feet of the Building;
provided, however, the determination of Landlord’s planner/designer shall be conclusive and binding
upon the parties. In the event that Landlord’s planner/designer determines that the rentable
square footage amounts shall be different from those set forth in this Lease, all amounts,
percentages and figures appearing or referred to in this Lease based upon such incorrect rentable
square feet (including, without limitation, the amount of the Base Rent and Tenant’s Share) shall
be modified in accordance with such determination. If such determination is made, it will be
confirmed in writing by Landlord to Tenant.

     1.4 Right of First Offer. At any time during the initial Lease Term (the “First Offer
Eligibility Period”), Tenant shall have a one-time right of first offer to lease any space in the
Building which is other than the Premises (the “First Offer Space”) when and if such applicable
First Offer Space becomes available for lease as provided hereinbelow, as determined by Landlord.
For purposes hereof, the applicable First Offer Space shall become available for lease prior to the
first time within the First Offer Eligibility Period that Landlord intends to submit to a third
party (excluding existing tenants, holders of Superior Rights [as hereinafter defined], affiliates
of existing tenants or affiliates of holders of Superior Rights) a bona fide proposal or letter of
intent to lease all or any portion of such First Offer Space. Notwithstanding anything herein to
the contrary, Tenant’s right of first offer set forth herein shall be subject and subordinate to
all expansion, renewal, extension, first refusal, first offer and similar rights to lease all or
any portion of the applicable First Offer Space currently set forth in any lease for space in the
Building which has been executed as of the date of execution of this Lease (collectively, the
“Superior Rights”).

          1.4.1 Term of First Offer. Landlord shall give Tenant written notice (the “First
Offer Notice”) that all or any portion of the applicable First Offer Space will or has become
available for lease by Tenant as provided above (as such availability is determined by Landlord)
pursuant to the terms of Tenant’s right of first offer, as set forth in this Section 1.4.1,
provided that no holder of Superior Rights desires to lease all or any portion of such
space. Any such Landlord’s First Offer Notice delivered by Landlord in accordance with the
provisions of this

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Section 1.4.1 shall set forth the rentable square feet of such applicable First
Offer Space as described by Landlord pursuant to Section 1.2 above, and the terms upon which
Landlord would lease the applicable First Offer Space to Tenant, including, without limitation (i)
the anticipated date upon which the such First Offer Space will be available for lease by Tenant
and the commencement date therefor, (ii) a schedule of construction of tenant improvements for such
First Offer Space, if any, (iii) the Base Rent payable for such First Offer Space, (as determined
by Landlord), (iv) any tenant improvement allowance for such First Offer Space, if any, and (v) the
term of the lease for such space.

          1.4.2 Procedure for Acceptance. On or before the date which is five (5) business days
after Tenant’s receipt of Landlord’s First Offer Notice (the “Election Date”), Tenant shall deliver
written notice to Landlord (“Tenant’s Election Notice”) pursuant to which Tenant shall have the
right to elect either to: (i) lease the entire applicable First Offer Space described in the First
Offer Notice upon the terms set forth in the First Offer Notice; or (ii) refuse to lease such First
Offer Space identified in the First Offer Notice. Notwithstanding anything to the contrary
contained herein, Tenant must elect to exercise its right of first offer provided herein, if at
all, with respect to all of the First Offer Space offered by Landlord to Tenant in Landlord’s First
Offer Notice, and Tenant may not elect to lease only a portion thereof. If Tenant does not respond
in writing to Landlord’s First Offer Notice by the Election Date, Tenant shall be deemed to have
elected not to lease the applicable First Offer Space identified in the First Offer Notice. If
Tenant elects or is deemed to have elected not to lease the applicable First Offer Space described
in the First Offer Notice, then Tenant’s right of first offer set forth in this Section 1.4 shall
terminate and be of no further force or effect with respect to the applicable First Offer Space
identified in the First Offer Notice, and Landlord shall thereafter have the right to lease all or
any portion of such applicable First Offer Space to anyone to whom Landlord desires on any terms
Landlord desires. If Tenant elects or is deemed to have elected not to lease the applicable First
Offer Space described in the First Offer Notice, and if the First Offer Notice only pertains to a
portion of the First Offer Space not previously identified in any prior First Offer Notice, then
Tenant’s right of first offer shall continue with respect to such unidentified portion until such
time as such unidentified portion of the First Offer Space first becomes available for lease within
the First Offer Eligibility Period.

          1.4.3 Amendment to Lease. If Tenant leases any First Offer Space pursuant to this
Section 1.4, Landlord and Tenant shall promptly execute an amendment to this Lease covering the
First Offer Space and the lease terms thereof.

          1.4.4 Suspension of Right of First Offer. Notwithstanding anything in the foregoing
to the contrary, at Landlord’s option, and in addition to all of Landlord’s remedies under this
Lease, at law or in equity, the right of first offer hereinabove granted to Tenant shall not be
deemed to be properly exercised if, as of the date Tenant exercises its right of first offer or on
the scheduled commencement date for the applicable First Offer Space, Tenant is in default under
this Lease beyond the expiration of any applicable notice and cure periods. In addition, Tenant’s
right of first offer hereinabove granted to Tenant is personal to the original Tenant executing
this Lease (the “Original Tenant”) and any Affiliate to which Tenant’s entire interest in this
Lease has been assigned pursuant to Section 14.7 below, and may not be assigned or exercised,
voluntarily or involuntarily, by or to, any person or entity other than the Original Tenant (or any
such Affiliate assignee, as the case may be), and shall only be available to and exercisable by the
Tenant when the Original Tenant (or any such Affiliate assignee, as the case may be) is in actual
and physical possession of the entire Premises.

ARTICLE 2

LEASE TERM

     The terms and provisions of this Lease shall be effective as of the date of this Lease except
for the provisions of this Lease relating to the payment of Rent. The term of this Lease (the
“Lease Term”) shall be as set forth in Section 7.1 of the Summary and shall commence on the date
(the “Lease Commencement Date”) set forth in Section 7.2 of the Summary (subject, however, to the
terms of the Tenant Work Letter), and shall terminate on the date (the “Lease Expiration Date”) set
forth in Section 7.3 of the Summary, unless this Lease is sooner terminated as hereinafter
provided. For purposes of this Lease, the term “Lease Year” shall mean each consecutive twelve
(12) month period during the Lease Term, provided that the last Lease Year shall end on the Lease
Expiration Date. Except as provided below in this Article 2, if Landlord does not deliver
possession of the Premises to Tenant on or before the anticipated Lease Commencement Date (as set
forth in Section 7.2(ii) of the Summary), Landlord shall not be subject to any liability nor shall
the validity of this Lease nor the obligations of Tenant hereunder be affected. Notwithstanding
the foregoing, if Landlord is unable to tender possession of the Premises to Tenant Ready for
Occupancy on or before December 31, 2006 (the “Delivery Outside Date”), as such date may be
extended as a result of any Tenant Delays (as defined in the Tenant Work Letter) and/or as a result
of any Force Majeure events (as defined in Section 24.17 below), then as Tenant’s sole and
exclusive remedy therefor, Tenant shall receive one (1) day of abated Base Rent for each day within
the period (the “Delivery Outside Date Abatement Period”) commencing as of the originally scheduled
Delivery Outside Date (as the same may be extended pursuant to this Article 2 above) and expiring
upon the date that Landlord actually tenders possession of the Premises to Tenant Ready for
Occupancy (which abated Base Rent shall be applied toward the Base Rent first due and payable under
this Lease following the Lease Commencement Date). If the Base Rent is abated pursuant to this
Article 2, the Lease Term shall be extended by the number of days that Base Rent is so abated such
that the Lease Term shall commence upon the Lease Commencement Date (as determined pursuant to
Section 7.2 of the Summary) and shall expire upon the date that is the last day of the month that
is five (5) years following the expiration of the Outside Delivery Date Abatement Period, and
Tenant’s payment of Base Rent to Landlord pursuant to the rent schedule set forth in Section 8 of
the Summary shall commence following expiration of the Outside
Delivery Date Abatement Period. In the event that the Lease Commencement Date is a date which
is other than the anticipated Lease Commencement Date set forth in Section 7.2(ii) of the Summary,
within a reasonable period of time after the date

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Tenant takes possession of the Premises Landlord
shall deliver to Tenant an amendment to lease in the form attached hereto as Exhibit C,
attached hereto, setting forth, among other things, the Lease Commencement Date and the Lease
Expiration Date, and Tenant shall execute and return such amendment to Landlord within five (5)
days after Tenant’s receipt thereof. In the event that Landlord does not deliver such amendment to
Tenant, the Lease Commencement Date shall be deemed to be the anticipated Lease Commencement Date
set forth in Section 7.2(ii) of the Summary.

ARTICLE 3

BASE RENT

     Tenant shall pay, without notice or demand, to Landlord or Landlord’s agent at the management
office of the Building, or at such other place as Landlord may from time to time designate in
writing, in currency or a check for currency which, at the time of payment, is legal tender for
private or public debts in the United States of America, base rent (“Base Rent”) as set forth in
Section 8 of the Summary, payable in equal monthly installments as set forth in Section 8 of the
Summary in advance on or before the first day of each and every month during the Lease Term,
without any setoff or deduction whatsoever. The Base Rent for the second (2nd) full
month of the Lease Term shall be paid at the time of Tenant’s execution of this Lease. If any
rental payment date (including the Lease Commencement Date) falls on a day of the month other than
the first day of such month or if any rental payment is for a period which is shorter than one
month, then the rental for any such fractional month shall be a proportionate amount of a full
calendar month’s rental based on the proportion that the number of days in such fractional month
bears to the number of days in the calendar month during which such fractional month occurs. All
other payments or adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis. Notwithstanding anything to the
contrary contained herein and provided that Tenant faithfully performs all of the terms and
conditions of this Lease, Landlord hereby agrees to abate Tenant’s obligation to pay Tenant’s
monthly Base Rent (the “Abated Rent”) for the first (1st) month of the Lease Term (the
“Abatement Period”). During the Abatement Period, Tenant shall remain responsible for the payment
of all of its other monetary obligations under this Lease. In the event of a default by Tenant
under the terms of this Lease that results in the early termination of this Lease pursuant to the
provisions of Article 19 of this Lease, then as a part of the recovery set forth in Article 19 of
this Lease, Landlord shall be entitled to the recovery of the Abated Rent.

ARTICLE 4

ADDITIONAL RENT

     4.1 Additional Rent. In addition to paying the Base Rent specified in Article 3 of
this Lease, Tenant shall pay as additional rent the sum of the following: (i) Tenant’s Share (as
such term is defined below) of the annual Operating Expenses allocated to the Building (pursuant to
Section 4.3.4 below) which are in excess of the amount of Operating Expenses allocated to the
Building and applicable to the Expense Base Year; plus (ii) Tenant’s Share of the annual Tax
Expenses allocated to the Building (pursuant to Section 4.3.4 below) which are in excess of the
amount of Tax Expenses allocated to the Building and applicable to the Tax Expense Base Year; plus
(iii) Tenant’s Share of the annual Utilities Costs allocated to the Building (pursuant to Section
4.3.4 below) which are in excess of the amount of Utilities Costs allocated to the Building and
applicable to the Utilities Base Year. Such additional rent, together with any and all other
amounts payable by Tenant to Landlord pursuant to the terms of this Lease (including, without
limitation, pursuant to Article 6), shall be hereinafter collectively referred to as the
“Additional Rent.” The Base Rent and Additional Rent are herein collectively referred to as the
“Rent.” All amounts due under this Article 4 as Additional Rent shall be payable for the same
periods and in the same manner, time and place as the Base Rent. Without limitation on other
obligations of Tenant which shall survive the expiration of the Lease Term, the obligations of
Tenant to pay the Additional Rent provided for in this Article 4 shall survive the expiration of
the Lease Term.

     4.2 Definitions. As used in this Article 4, the following terms shall have the
meanings hereinafter set forth:

          4.2.1 “Calendar Year” shall mean each calendar year in which any portion of the Lease Term
falls, through and including the calendar year in which the Lease Term expires.

          4.2.2 “Expense Base Year” shall mean the year set forth in Section 9.1 of the Summary.

          4.2.3 “Expense Year” shall mean each Calendar Year, provided that Landlord, upon notice to
Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive-month
period, and, in the event of any such change, Tenant’s Share of Operating Expenses, Tax Expenses
and Utilities Costs shall be equitably adjusted for any Expense Year involved in any such change.

          4.2.4 “Operating Expenses” shall mean all expenses, costs and amounts of every kind and nature
which Landlord shall pay during any Expense Year because of or in connection with the ownership,
management, maintenance, repair, replacement, restoration or operation of the Project, including,
without limitation, any amounts paid for: (i) the cost of operating, maintaining, repairing,
renovating and
managing the utility systems, mechanical systems, sanitary and storm drainage systems, any
elevator systems (if applicable) and all other “Systems and Equipment” (as defined in Section 4.2.5
of this Lease), and the cost of supplies and equipment and maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and inspections, and the
cost of contesting the validity or applicability of any governmental enactments which may affect

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Operating Expenses, and the costs incurred in connection with implementation and operation (by
Landlord or any common area association(s) formed for the Project) of any transportation system
management program or similar program; (iii) the cost of insurance carried by Landlord, in such
amounts as Landlord may reasonably determine or as may be required by any mortgagees or the lessor
of any underlying or ground lease affecting the Project; (iv) the cost of landscaping, relamping,
supplies, tools, equipment and materials, and all fees, charges and other costs (including
consulting fees, legal fees and accounting fees) incurred in connection with the management,
operation, repair and maintenance of the Project; (v) any equipment rental agreements or management
agreements (including the cost of any management fee and the fair rental value of any office space
provided thereunder); (vi) wages, salaries and other compensation and benefits of all persons
engaged in the operation, management, maintenance or security of the Project, and employer’s Social
Security taxes, unemployment taxes or insurance, and any other taxes which may be levied on such
wages, salaries, compensation and benefits; (vii) payments under any easement, license, operating
agreement, declaration, restrictive covenant, underlying or ground lease (excluding rent), or
instrument pertaining to the sharing of costs by the Project; (viii) the cost of janitorial
service, trash removal, alarm and security service, if any, window cleaning, replacement of wall
and floor coverings, ceiling tiles and fixtures in lobbies, corridors, restrooms and other common
or public areas or facilities, maintenance and replacement of curbs and walkways, repair to roofs
and re-roofing; (ix) amortization (including interest on the unamortized cost) of the cost of
acquiring or the rental expense of personal property used in the maintenance, operation and repair
of the Project; and (x) the cost of any capital improvements or other costs (I) which are intended
as a labor-saving device or to effect other economies in the operation or maintenance of the
Project, but only to the extent of the reasonably anticipated cost savings to result therefrom,
(II) made to the Project or any portion thereof after the Lease Commencement Date that are required
under any governmental law or regulation not in effect on the Lease Commencement Date, (III)
pertaining to replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies,
corridors, restrooms and other common or public areas or facilities, or (IV) which are reasonably
determined by Landlord to be reasonably required to maintain the functional character of the
Project as a first-class mixed-use project; provided, however, that if any such cost described in
(I), (II) (III) or (IV) above, is a capital expenditure, such cost shall be amortized (including
interest on the unamortized cost) over its useful life as Landlord shall reasonably determine in
accordance with standard real estate management and accounting practices consistently applied by
Landlord. If Landlord is not furnishing any particular work or service (the cost of which, if
performed by Landlord, would be included in Operating Expenses) to a tenant who has undertaken to
perform such work or service in lieu of the performance thereof by Landlord, Operating Expenses
shall be deemed to be increased by an amount equal to the additional Operating Expenses which would
reasonably have been incurred during such period by Landlord if it had at its own expense furnished
such work or service to such tenant. If any of (x) the Building, (y) the Other Existing Buildings
(but only during the period of time the same are included by Landlord within the Project) and (z)
any additional buildings are added to the Project pursuant to Section 1.1.3 above (but only during
the period of time after such additional buildings have been fully constructed and ready for
occupancy and are included by Landlord within the Project) are less than ninety-five percent (95%)
occupied during all or a portion of any Expense Year (including the Expense Base Year), Landlord
shall make an appropriate adjustment to the variable components of Operating Expenses for such year
or applicable portion thereof, employing sound accounting and management principles, to determine
the amount of Operating Expenses that would have been paid had the Building, such Other Existing
Buildings and such additional buildings (if any) been ninety-five percent (95%) occupied; and the
amount so determined shall be deemed to have been the amount of Operating Expenses for such year,
or applicable portion thereof.

     Subject to the provisions of Section 4.3.4 below, Landlord shall have the right, from time to
time, to equitably allocate some or all of the Operating Expenses (and/or Tax Expenses and
Utilities Costs) between the Building and the Other Existing Buildings and/or among different
tenants of the Project and/or among 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 the
tech/R&D space tenants of the Project or of a building or buildings within the Project. Such Cost
Pools may also include an allocation of certain Operating Expenses (and/or Tax Expenses and
Utilities Costs) 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, Tax Expenses and Utilities Costs and/or the provision of various services and amenities
thereto, including allocation of Operating Expenses, Tax Expenses and Utilities Costs in any such
Cost Pools.

     Notwithstanding anything to the contrary set forth in this Article 4, when calculating
Operating Expenses for the Expense Base Year, Operating Expenses shall exclude market-wide
labor-rate increases due to extraordinary circumstances, including, but not limited to, boycotts
and strikes, and costs relating to capital improvements or expenditures.

          Notwithstanding the foregoing, Operating Expenses shall not, however, include: (A) costs of
leasing commissions, attorneys’ fees and other costs and expenses incurred in connection with
negotiations or disputes with present or prospective tenants or other occupants of the Project; (B)
costs (including permit, license and inspection costs) incurred in renovating or otherwise
improving, decorating or redecorating rentable space for other tenants or vacant rentable space;
(C) costs incurred due to the violation by Landlord of the terms and conditions of any lease of
space in the Project; (D) costs of overhead or profit increment paid to Landlord or to subsidiaries
or affiliates of Landlord for services in or in connection with the Project to the extent the same
exceeds the costs of overhead and profit increment included in the costs of such services which
could be obtained from third parties on a competitive basis; (E) except as otherwise specifically
provided in this Section 4.2.4, costs of interest on debt or amortization on any mortgages, and
rent payable under any ground lease of the Project; (F) compensation
(including benefits) of any employee of Landlord above the grade of Project manager; (G)
depreciation on the Building or any other buildings in the Project, or the Systems and Equipment
therein, except as expressly provided in this Section 4.2.3, and except on materials, tools,
supplies and vendor-type equipment purchased by Landlord to enable Landlord to supply services
Landlord might otherwise contract for with a third party, and when depreciation

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or amortization is
permitted or required, the item shall be amortized (together with interest) over its useful life in
the manner described in Section 4.2.3(x) above; (H) costs of items considered capital improvements,
capital repairs, capital replacements, and/or capital equipment, all as determined in accordance
with standard real estate accounting practices, except as specifically permitted in Sections
4.2.4(ix) and (x) above; (I) advertising and promotional expenditures; (J) costs incurred by
Landlord for the repair of damage to the Building or the Project, to the extent that Landlord is
reimbursed by insurance proceeds (or would have been reimbursed had Landlord maintained the
insurance required under Section 10.2 below); (K) expenses in connection with services, goods
and/or other items for which Tenant or any other tenant, occupant, person or party reimburses
Landlord (other than through the Operating Expense pass-through provisions of this Lease and other
occupancy leases for the Project); (L) costs, including penalties, fines and associated legal
expenses, incurred due to the violation by Landlord or any other tenant in the Project of
applicable laws, that would not have been incurred but for any such violations by Landlord or any
tenant in the Project; (M) Landlord’s general corporate overhead and administrative expenses,
except for the property management fee and except as they relate to the specific management of the
Project; (N) costs incurred to comply with applicable laws with respect to the cleanup, removal,
investigation and/or remediation (collectively, “Remediation Costs”) of any Hazardous Materials (as
such term is defined in Article 5 below) in, on or under the Project and/or the Building to the
extent such Hazardous Materials are: (1) in existence as of the Lease Commencement Date and in
violation of applicable laws in effect as of the Lease 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 at 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 Lease Commencement Date by Landlord or any of Landlord’s agents, employees,
contractors or other tenants 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 at the Project, would have then
required removal, remediation or other action with respect to such Hazardous Materials; (O)
Utilities Costs; and (P) Tax Expenses.

          4.2.5 “Systems and Equipment” shall mean any plant, machinery, transformers, duct work, cable,
wires, and other equipment, facilities, and systems designed to supply heat, ventilation, air
conditioning and humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler, communications, alarm,
security, or fire/life safety systems or equipment, or any other mechanical, electrical,
electronic, computer or other systems or equipment which serve the Building and/or any other
building in the Project in whole or in part.

          4.2.6 “Tax Expense Base Year” shall mean the year set forth in Section 9.2 of the Summary.

          4.2.7 “Tax Expenses” shall mean all federal, state, county, or local governmental or municipal
taxes, fees, assessments, charges or other impositions of every kind and nature, whether general,
special, ordinary or extraordinary, (including, without limitation, real estate taxes, general and
special assessments, transit assessments, fees and taxes, child care subsidies, fees and/or
assessments, job training subsidies, fees and/or assessments, open space fees and/or assessments,
housing subsidies and/or housing fund fees or assessments, public art fees and/or assessments,
leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes
applicable to the receipt of rent, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property
used in connection with the Project), which Landlord shall pay during any Expense Year because of
or in connection with the ownership, leasing and operation of the Project or Landlord’s interest
therein. For purposes of this Lease, Tax Expenses shall be calculated as if (i) the tenant
improvements in the Building, the Other Existing Buildings and any additional buildings added to
the Project pursuant to Section 1.1.3 above (but only during the period of time that such Other
Existing Buildings and additional buildings are included by Landlord within the Project) were fully
constructed, and (ii) the Project, the Building, such Other Existing Buildings and such additional
buildings (if any) and all tenant improvements therein were fully assessed for real estate tax
purposes.

               4.2.7.1 Tax Expenses shall include, without limitation:

                    (i) Any tax on Landlord’s rent, right to rent or other income from the Project or as against
Landlord’s business of leasing any of the Project;

                    (ii) Any assessment, tax, fee, levy or charge in addition to, or 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 (“Proposition 13”) 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 and all similar assessments, taxes, fees, levies and charges be included within the
definition of Tax Expenses for purposes of this Lease;

                    (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the
Premises or the rent payable hereunder, including, without limitation, any gross income tax upon or
with respect to the possession, leasing, operating, management, maintenance, alteration,
repair, use or occupancy by Tenant of the Premises, or any portion thereof;

                    (iv) 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

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                    (v) Any reasonable expenses incurred by Landlord in attempting to protest, reduce or minimize
Tax Expenses.

               4.2.7.2 In no event shall Tax Expenses for any Expense Year be less than the Tax Expenses for
the Tax Expense Base Year. In addition, in no event shall the component of Tax Expenses comprised
of certain assessments paid by Landlord in connection with the Marina Village Assessment District
84-3, less certain incremental real estate tax refunds granted to Landlord in connection therewith
(collectively, the “Net Bond Assessment Component”) for any Expense Year be less than the Net Bond
Assessment Component of Tax Expenses for the Tax Expense Base Year.

               4.2.7.3 Notwithstanding anything to the contrary contained in this Section 4.2.7, there shall
be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, gift taxes, capital
stock taxes, inheritance and succession taxes, estate taxes, federal and state net income taxes,
and other taxes to the extent applicable to Landlord’s net income (as opposed to rents, receipts or
income attributable to operations at the Project), (ii) any items included as Operating Expenses,
and (iii) any items paid by Tenant under Section 4.4 of this Lease.

          4.2.8 “Tenant’s Share” shall mean the percentage set forth in Section 9.4 of the Summary.
Tenant’s Share was calculated by dividing the number of rentable square feet of the Premises by the
total rentable square feet in the Building (as set forth in Section 9.4 of the Summary), and
stating such amount as a percentage. Landlord shall have the right from time to time to
redetermine the rentable square feet of the Premises and/or Building, and Tenant’s Share shall be
appropriately adjusted to reflect any such redetermination. If Tenant’s Share is adjusted pursuant
to the foregoing, as to the Expense Year in which such adjustment occurs, Tenant’s Share for such
year shall be determined on the basis of the number of days during such Expense Year that each such
Tenant’s Share was in effect.

          4.2.9 “Utilities Base Year” shall mean the year set forth in Section 9.3 of the Summary.

          4.2.10 “Utilities Costs” shall mean all actual charges for utilities for the Building and the
Project (including utilities for the Other Existing Buildings and additional buildings, if any,
added to the Project during the period of time the same are included by Landlord within the
Project) which Landlord shall pay during any Expense Year, including, but not limited to, the costs
of water, sewer and electricity, and the costs of HVAC and other utilities (but excluding those
charges for which tenants directly reimburse Landlord or otherwise pay directly to the utility
company) as well as related fees, assessments and surcharges. Utilities Costs shall be calculated
assuming the Building (and, during the period of time when such buildings are included by Landlord
within the Project, the Other Existing Buildings and any additional buildings, if any, added to the
Project) are at least ninety-five percent (95%) occupied. If, during all or any part of any
Expense Year, Landlord shall not provide any utilities (the cost of which, if provided by Landlord,
would be included in Utilities Costs) to a tenant (including Tenant) who has undertaken to provide
the same instead of Landlord, Utilities Costs shall be deemed to be increased by an amount equal to
the additional Utilities Costs which would reasonably have been incurred during such period by
Landlord if Landlord had at its own expense provided such utilities to such tenant. Utilities
Costs shall include any costs of utilities which are allocated to the Project under any
declaration, restrictive covenant, or other instrument pertaining to the sharing of costs by the
Project or any portion thereof, including any covenants, conditions or restrictions now or
hereafter recorded against or affecting the Project. For purposes of determining Utilities Costs
incurred for the Utilities Base Year, Utilities Costs for the Utilities Base Year shall not include
any one time special charges, costs or fees or extraordinary charges or costs incurred in the
Utilities Base Year only, including those attributable to boycotts, embargoes, strikes or other
shortages of services or fuel. In addition, if in any Expense Year subsequent to the Utilities
Base Year, the amount of Utilities Costs decreases due to a reduction in the cost of providing
utilities 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 providers, then
for purposes of the Expense Year in which such decrease in Utilities Costs occurred and all
subsequent Expense Years, the Utilities Costs for the Utilities Base Year shall be decreased by an
amount equal to such decrease.

     4.3 Calculation and Payment of Additional Rent.

          4.3.1 Calculation of Excess. If for any Expense Year ending or commencing within the
Lease Term, (i) Tenant’s Share of Operating Expenses allocated to the Building pursuant to Section
4.3.4 below for such Expense Year exceeds Tenant’s Share of Operating Expenses allocated to the
Building for the Expense Base Year and/or (ii) Tenant’s Share of Tax Expenses allocated to the
Building pursuant to Section 4.3.4 below for such Expense Year exceeds Tenant’s Share of Tax
Expenses allocated to the Building for the Tax Expense Base Year, and/or (iii) Tenant’s Share of
Utilities Costs allocated to the Building pursuant to Section 4.3.4 below for such Expense Year
exceeds Tenant’s Share of Utilities Costs allocated to the Building for the Utilities Base Year,
then Tenant shall pay to Landlord, in the manner set forth in Section 4.3.2, below, and as
Additional Rent, an amount equal to such excess (the “Excess”).

          4.3.2 Statement of Actual Operating Expenses, Tax Expenses and Utilities Costs and Payment
by Tenant. Landlord shall endeavor to give to Tenant on or before the first day of May
following the end of each Expense Year, a statement (the “Statement”) which shall state the
Operating Expenses, Tax
Expenses and Utilities Costs incurred or accrued for such preceding Expense Year, and which
shall indicate the amount, if any, of any Excess. Upon receipt of the Statement for each Expense
Year ending during the Lease Term, if an Excess is present, Tenant shall pay, with its next
installment of Base Rent due, the full amount of the Excess for such Expense Year, less the
amounts, if any, paid during such Expense Year as “Estimated Excess,” as that term is defined in
Section 4.3.3 of this Lease. If any Statement reflects that the amount of Estimated Expenses paid
by Tenant to Landlord for such Expense Year is greater than the actual amount of Tenant’s Share of
Operating Expenses, Tax Expenses and Utilities Costs incurred or accrued for such preceding Expense
Year, then Landlord shall either

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(i) credit against Rent next payable under this Lease the amount
of such overpayment, or (ii) remit such overpayment to Tenant within thirty (30) days after such
applicable Statement is delivered to Tenant. The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice Landlord from enforcing its rights under this
Article 4. Even though the Lease Term has expired and Tenant has vacated the Premises, when the
final determination is made of Tenant’s Share of the Operating Expenses, Tax Expenses and Utilities
Costs for the Expense Year in which this Lease terminates, Tenant shall pay to Landlord any
underpayment of Estimated Expenses, or Landlord shall pay to Tenant any overpayment of Estimated
Expenses, as the case may be, made by Tenant for such last Expense Year as calculated pursuant to
the provisions of Section 4.3.1 of this Lease, such payment to be made within thirty (30) days
after Landlord’s delivery to Tenant of the Statement for Operating Expenses, Tax Expenses and
Utilities Costs for such last Expense Year. The provisions of this Section 4.3.2 shall survive the
expiration or earlier termination of the Lease Term.

          4.3.3 Statement of Estimated Operating Expenses, Tax Expenses and Utilities Costs. In
addition, Landlord shall endeavor to give Tenant a yearly expense estimate statement (the “Estimate
Statement”) which shall set forth Landlord’s reasonable estimate (the “Estimate”) of what the total
amount of Operating Expenses, Tax Expenses and Utilities Costs allocated to the Building pursuant
to Section 4.3.4 below for the then-current Expense Year shall be and the estimated Excess (the
“Estimated Excess”) as calculated by comparing (i) Tenant’s Share of Operating Expenses allocated
to the Building, which shall be based upon the Estimate, to Tenant’s Share of Operating Expenses
allocated to the Building for the Expense Base Year, (ii) Tenant’s Share of Tax Expenses allocated
to the Building, which shall be based upon the Estimate, to Tenant’s Share of Tax Expenses
allocated to the Building for the Tax Expense Base Year, and (iii) Tenant’s Share of Utilities
Costs allocated to the Building, which shall be based upon the Estimate, to Tenant’s Share of
Utilities Costs allocated to the Building for the Utilities Base Year. The failure of Landlord to
timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Excess under this Article 4. If pursuant to the
Estimate Statement an Estimated Excess is calculated for the then-current Expense Year, Tenant
shall pay, with its next installment of Base Rent due, a fraction of the Estimated Excess for the
then-current Expense Year (reduced by any amounts paid pursuant to the last sentence of this
Section 4.3.3). Such fraction shall have as its numerator the number of months which have elapsed
in such current Expense Year to the month of such payment, both months inclusive, and shall have
twelve (12) as its denominator. Until a new Estimate Statement is furnished, Tenant shall pay
monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the
total Estimated Excess set forth in the previous Estimate Statement delivered by Landlord to
Tenant.

          4.3.4 Allocation of Operating Expenses, Tax Expenses and Utilities Costs to Building.
The parties acknowledge that the Building is part of a multi-building commercial project consisting
of the Building, and the Other Existing Buildings and such other buildings as Landlord (and/or any
other owners of Marina Village) may elect to construct and include as part of the Project from time
to time (the Other Existing Buildings and any such other buildings are sometimes referred to
herein, collectively, as the “Other Buildings”), and that certain of the costs and expenses
incurred in connection with the Project (i.e. the Operating Expenses, Tax Expenses and
Utilities Costs) shall be shared among the Building and/or such Other Buildings, while certain
other costs and expenses which are solely attributable to the Building and such Other Buildings, as
applicable, shall be allocated directly to the Building and the Other Buildings, respectively.
Accordingly, as set forth in Sections 4.1 and 4.2 above, Operating Expenses, Tax Expenses and
Utilities Costs are determined annually for the Project as a whole, and a portion of the Operating
Expenses, Tax Expenses and Utilities Costs, which portion shall be determined by Landlord on an
equitable basis, shall be allocated to the Building (as opposed to the tenants of the Other
Buildings), and such portion so allocated shall be the amount of Operating Expenses, Tax Expenses
and Utilities Costs payable with respect to the Building upon which Tenant’s Share shall be
calculated. Such portion of the Operating Expenses, Tax Expenses and Utilities Costs allocated to
the Building shall include all Operating Expenses, Tax Expenses and Utilities Costs which are
attributable solely to the Building, and an equitable portion of the Operating Expenses, Tax
Expenses and Utilities Costs attributable to the Project as a whole. As an example of such
allocation with respect to Tax Expenses and Utilities Costs, it is anticipated that Landlord
(and/or any other owners of Marina Village) may receive separate tax bills which separately assess
the improvements component of Tax Expenses for each building in the Project and/or Landlord may
receive separate utilities bills from the utilities companies identifying the Utilities Costs for
certain of the utilities costs directly incurred by each such building (as measured by separate
meters installed for each such building), and such separately assessed Tax Expenses and separately
metered Utilities Costs shall be calculated for and allocated separately to each such applicable
building. In addition, in the event Landlord (and/or any other owners of Marina Village) elect to
subdivide certain common area portions of the Project such as landscaping, public and private
streets, driveways, walkways, courtyards, plazas, transportation facilitation areas and/or
accessways into a separate parcel or parcels of land (and/or separately convey all or any of such
parcels to a common area association to own, operate and/or maintain same), the Operating Expenses,
Tax Expenses and Utilities Costs for such common area parcels of land may be aggregated and then
reasonably allocated by Landlord to the Building and such Other Buildings on an equitable basis as
Landlord (and/or any applicable covenants, conditions and restrictions for any such common area
association) shall provide from time to time.

     4.4 Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant shall
reimburse Landlord upon demand for any and all taxes or assessments required to be paid by Landlord
(except to the extent included in Tax Expenses by Landlord), excluding state, local and federal
personal or corporate income taxes
measured by the net income of Landlord from all sources and estate and inheritance taxes,
whether or not now customary or within the contemplation of the parties hereto, when:

          4.4.1 said taxes are measured by or reasonably attributable to the cost or value of Tenant’s
equipment, furniture, fixtures and other personal property located in the Premises, or by the cost
or value of any leasehold improvements made in or to the Premises by or for Tenant, to the extent
the cost or value of such leasehold improvements exceeds the cost or value of a building standard
build-out as determined by Landlord regardless of whether title to such improvements shall be
vested in Tenant or Landlord;

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          4.4.2 said taxes are assessed upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any
portion of the Project; or

          4.4.3 said taxes are assessed upon this transaction or any document to which Tenant is a party
creating or transferring an interest or an estate in the Premises.

     4.5 Late Charges. If any installment of Rent or any other sum due from Tenant shall
not be received by Landlord or Landlord’s designee within five (5) business days after the due date
therefor, then Tenant shall pay to Landlord a late charge equal to ten percent (10%) of the amount
due plus any attorneys’ fees incurred by Landlord by reason of Tenant’s failure to pay Rent and/or
other charges when due hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord’s other rights and remedies hereunder, at law
and/or in equity and shall not be construed as liquidated damages or as limiting Landlord’s
remedies in any manner. In addition to the late charge described above, any Rent or other amounts
owing hereunder which are not paid by the date that they are due shall thereafter bear interest
until paid at a rate (the “Interest Rate”) equal to the lesser of (i) the “Prime Rate” or
“Reference Rate” announced from time to time by the Bank of America (or such reasonable comparable
national banking institution as selected by Landlord in the event Bank of America ceases to exist
or publish a Prime Rate or Reference Rate), plus four percent (4%), or (ii) the highest rate
permitted by applicable law.

     4.6 Audit Rights. In the event Tenant disputes the amount of the Operating Expenses,
Tax Expenses and Utilities Costs set forth in the Statement for the particular Expense Year
delivered by Landlord to Tenant pursuant to Section 4.3.2 above, then Tenant shall have the right,
at Tenant’s cost, after reasonable notice to Landlord, to have Tenant’s authorized employees (or
the Accountant, as such term is defined below) inspect, at Landlord’s office during normal business
hours, Landlord’s books, records and supporting documents concerning the Operating Expenses, Tax
Expenses and Utilities Costs for such Expense Year set forth in such 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, Tax
Expenses and Utilities Costs set forth in any such Statement unless Tenant notifies Landlord of
such objection and dispute, completes such inspection, and has the Accountant commence and complete
such audit within one (1) year following Landlord’s delivery of the particular 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 4.6, 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 Article 4 in accordance with such 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 and/or audit
performed by the Accountant as described below, (i) Landlord and Tenant shall reasonably cooperate
with each other so that such inspection and/or audit can be performed pursuant to a mutually
acceptable schedule, in an expeditious manner and without undue interference with Landlord’s
operation and management of the Project, and (ii) Landlord shall make available in such inspections
and/or such audit reasonable supporting documentation in Landlord’s possession relating to the
applicable Statement as Tenant may reasonably request. If after such inspection of Landlord’s
books and records, Tenant still disputes the amount of the Operating Expenses, Tax Expenses and/or
Utilities Costs set forth in the Statement, Landlord and Tenant shall meet and attempt in good
faith to resolve the dispute. If the parties are unable to resolve the dispute, then Tenant shall
have the right, within the Review Period, to cause an independent certified public accountant
(which is not paid on a commission or contingency basis and is not representing or engaged by
Tenant in other matters, and has not represented or been engaged by Tenant for any matter for the
immediately preceding 5-year period) selected by Tenant and reasonably approved by Landlord (the
“Accountant”) to complete an audit of Landlord’s books and records to determine the proper amount
of the Operating Expenses, Tax Expenses and Utilities Costs incurred and amounts payable by Tenant
for the Expense Year which is the subject of such 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 commission or contingency basis and is not representing or
engaged by Tenant or Landlord in other matters, and has not represented or been engaged by Tenant
or Landlord for any matter for the 5-year period preceding the audit), as selected by Tenant. 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, together with interest on the amount of the over-charge at the Interest Rate
(as defined in Section 4.5 above). 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 Statement which was the subject of
such audit overstated Operating Expenses, Tax Expenses and Utilities Costs by five percent (5%) or
more of the originally reported Operating Expenses, Tax Expenses and Utilities Costs which was the
subject of such audit, in which case all reasonable and documented costs incurred by Tenant in
connection with said audit (but not in excess of the over-charge) shall be reimbursed by Landlord
within thirty (30) days after demand therefor. The
payment by Tenant of any amounts pursuant to this Article 4 shall not preclude Tenant from
questioning, during the Review Period, the correctness of the particular Statement in question
provided by Landlord, but the failure of Tenant to object thereto, conduct and complete its
inspection and have the Accountant conduct the audit as described above prior to the expiration of
the Review Period for such Statement shall be conclusively deemed Tenant’s approval of the
Statement in question and the amount of Operating Expenses, Tax Expenses and Utilities Costs shown
thereon. In connection with any inspection and/or audit conducted by Tenant pursuant to this
Section 4.7, 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 (except if required by any court
to disclose such information or if such information is available from an inspection of public
records), and in connection therewith, Tenant shall cause such employees, consultants

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and the
Accountant to execute such commercially reasonable confidentiality agreements as Landlord may
require prior to conducting any such inspections and/or audits.

ARTICLE 5

USE OF PREMISES

     5.1 Use. Tenant shall use the Premises solely for general office purposes consistent
with the character of the Building as a first-class office building, and Tenant shall not use or
permit the Premises to be used for any other purpose or purposes whatsoever. Tenant further
covenants and agrees that it shall not use, or suffer or permit any person or persons to use, the
Premises or any part thereof for any use or purpose contrary to the provisions of Exhibit
D, attached hereto, or in violation of the laws of the United States of America, the state in
which the Project is located, or the ordinances, regulations or requirements of the local municipal
or county governing body or other lawful authorities having jurisdiction over the Project. Tenant
shall comply with all recorded covenants, conditions, and restrictions, and the provisions of all
ground or underlying leases, now or hereafter affecting the Project.

     5.2 Hazardous Materials. Tenant shall not use or allow another person or entity to
use any part of the Premises for the storage, use, treatment, manufacture or sale of “Hazardous
Material,” as that term is defined below. As used herein, the term “Hazardous Material” means any
hazardous or toxic substance, material or waste which is or becomes regulated by any local
governmental authority, the state in which the Project is located or the United States Government.

     5.3 Asbestos. Tenant acknowledges that Landlord has advised Tenant that the Building
contains or, because of its age, is likely to contain, asbestos. Reports indicate that such
asbestos is present in various locations throughout the Building. Upon request by Tenant, Landlord
shall make available for review by Tenant at the Project during normal business hours (without
warranty) copies of any current asbestos management plans, inspection reports, test results or
other similar documents in Landlord’s possession relating to the presence of asbestos at the
Building. To the extent such reports or documents indicate the presence of asbestos at the
Building, this Section 5.3 shall constitute notice to Tenant as required by the California Health &
Safety Code. In connection with performing any work that may disturb asbestos at the Building,
Tenant shall comply, at its cost, with any applicable laws and asbestos management plans relating
to the Building. Tenant shall also comply with all applicable laws, rules and regulations
requiring disclosure to employees and/or invitees of the presence of asbestos or other Hazardous
Materials at or around the Premises, the Building or the Project. Landlord has no special
knowledge of the general procedures or handling restrictions to minimize or prevent the
disturbance, release or exposure to asbestos or of the potential health risks that may result from
any exposure to asbestos. Tenant is encouraged to contact local or state public health agencies for
further information.

ARTICLE 6

SERVICES AND UTILITIES

     6.1 Standard Tenant Services. Landlord shall provide the following services on all
days during the Lease Term, unless otherwise stated below.

          6.1.1 Subject to reasonable changes implemented by Landlord and to all governmental rules,
regulations and guidelines applicable thereto, Landlord shall provide heating and air conditioning
when necessary for normal comfort for normal office use in the Premises, from Monday through
Friday, during the period from 6:00 a.m. to 7:00 p.m., and on Saturday during the period from 10:00
a.m. to 2:00 p.m., except for the date of observation of New Year’s Day, Presidents’ Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day and other locally or nationally
recognized holidays as designated by Landlord (collectively, the “Holidays”).

          6.1.2 Landlord shall provide adequate electrical wiring and facilities and power for normal
general office use for Building standard lighting and standard office equipment, as determined by
Landlord. Landlord shall designate the electricity utility provider from time to time.

          6.1.3 Landlord shall provide city water from the regular Building outlets for drinking,
lavatory and toilet purposes.

          6.1.4 As part of Operating Expenses or Utilities Costs (as determined by Landlord), Landlord
shall replace lamps, starters and ballasts for Building standard lighting fixtures within the
Premises. In addition,
Tenant shall bear the cost of replacement of lamps, starters and ballasts for non-Building
standard lighting fixtures within the Premises.

          6.1.5 Landlord shall provide janitorial services five (5) days per week, except the date of
observation of the Holidays, in and about the Premises and window washing services in a manner
consistent with other comparable buildings in the vicinity of the Project.

          6.1.6 Landlord shall provide nonexclusive automatic passenger elevator service at all times.

     6.2 Overstandard Tenant Use. Tenant shall not, without Landlord’s prior written
consent, use heat-generating machines other than normal fractional horsepower office machines, or
equipment or lighting other than Building standard lights in the Premises, which may affect the
temperature otherwise maintained by the air

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conditioning system or increase the need for water
normally furnished for the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease.
If such consent is given, Landlord shall have the right to install supplementary air conditioning
systems or equipment in the Premises, including supplementary or additional metering devices, and
the cost thereof, including the cost of installation, operation and maintenance, increased wear and
tear on existing equipment and other similar charges, shall be paid by Tenant to Landlord upon
billing by Landlord. If Tenant uses water or heat or air conditioning in excess of that supplied
by Landlord pursuant to Section 6.1 of this Lease, or if Tenant’s consumption of electricity shall
exceed two (2) watts connected load per usable square foot of the Premises, calculated on an
monthly basis for the hours described in Section 6.1.1 above, Tenant shall pay to Landlord, within
ten (10) days after billing and as additional rent, the cost of such excess consumption, the cost
of the installation, operation, and maintenance of equipment which is installed in order to supply
such excess consumption, and the cost of the increased wear and tear on existing equipment caused
by such excess consumption; and Landlord may install devices to separately meter any increased use,
and in such event Tenant shall pay, as additional rent, the increased cost directly to Landlord,
within ten (10) days after demand, including the cost of such additional metering devices. If
Tenant desires to use heat, ventilation or air conditioning during hours other than those for which
Landlord is obligated to supply such utilities pursuant to the terms of Section 6.1 of this Lease,
(i) Tenant shall give Landlord such prior notice, as Landlord shall from time to time establish as
appropriate, of Tenant’s desired use, (ii) Landlord shall supply such utilities to Tenant at an
hourly cost of Fifty Dollars ($50.00) per hour, and (iii) Tenant shall pay such cost within ten
(10) days after billing, as additional rent.

     6.3 Separate Metering. Notwithstanding the foregoing provisions of this Section 6 to
the contrary, Landlord shall have the right, at Landlord’s sole cost and expense, to cause some or
all of the electricity, water and/or other utilities to be separately metered for the Premises, and
Tenant shall pay for the cost of all such utilities so separately metered, or which are billed
directly to Tenant, within ten (10) days after invoice, in which event Utilities Costs for the
Utilities Base Year and each Expense Year shall be equitably reduced to exclude all such utilities
provided to Tenant and other tenants in the Building and the Other Existing Buildings.

     6.4 Interruption of Use. Except as otherwise provided in Section 6.6 below, Tenant
agrees that Landlord shall not be liable for damages, by abatement of Rent or otherwise, for
failure to furnish or delay in furnishing any service (including telephone and telecommunication
services), or for any diminution in the quality or quantity thereof, when such failure or delay or
diminution is occasioned, in whole or in part, by repairs, replacements, or improvements, by any
strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other
fuel at the Building or Project after reasonable effort to do so, by any accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other cause beyond Landlord’s
reasonable control; and such failures or delays or diminution shall never be deemed to constitute
an eviction or disturbance of Tenant’s use and possession of the Premises or relieve Tenant from
paying Rent (except as provided in Section 6.6 below) or performing any of its obligations under
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 or utilities as set forth in this Article 6.

     6.5 Additional Services. Landlord shall also have the exclusive right, but not the
obligation, to provide any additional services which may be required by Tenant, including, without
limitation, locksmithing, lamp replacement, additional janitorial service, and additional repairs
and maintenance, provided that Tenant shall pay to Landlord upon billing, the sum of all costs to
Landlord of such additional services plus an administration fee. Charges for any utilities or
service for which Tenant is required to pay from time to time hereunder, shall be deemed Additional
Rent hereunder and shall be billed on a monthly basis.

     6.6 Abatement of Rent When Tenant is Prevented from Using the Premises. In the event
that Tenant is prevented from using, and does not use, the Premises or any portion thereof, as a
result of (i) Landlord’s failure to provide electricity or HVAC to the Premises as required to be
provided in Sections 6.1.1 or 6.1.2 above, but only to the extent such failure is caused by
Landlord’s gross negligence or willful misconduct, and such failure continues for five (5)
consecutive business days after Landlord’s receipt of any such notice from Tenant; or (ii)
Landlord’s failure to provide electricity or HVAC to the Premises as required to be provided in
Sections 6.1.1 or 6.1.2 above for any reason other the negligence or willful misconduct of Tenant,
and such failure continues for thirty (30) consecutive business days after Landlord’s receipt of
any such notice from Tenant, then Tenant’s obligation to pay Base Rent and Tenant’s Share of
increases in Operating Expenses, Tax Expenses and Utilities Costs shall be abated or reduced, as
the case may be, from and after the first (1st) day following such 5 business-day or 30
business-day period, as the case may be, 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. To the extent Tenant
shall be entitled to abatement of Base Rent and Tenant’s Share of increases in Operating Expenses,
Tax Expenses and Utilities Costs because of a damage or destruction pursuant to Article 11 or
a taking pursuant to Article 12, then the Eligibility Period shall not be applicable.

ARTICLE 7

REPAIRS

     7.1 Tenant’s Repairs. Subject to Landlord’s repair obligations in Sections 7.2 and
11.1 below, Tenant shall, at Tenant’s own expense, keep the Premises, including all improvements,
fixtures and furnishings therein, in good order, repair and condition at all times during the Lease
Term, which repair obligations shall include, without limitation, the obligation to promptly and
adequately repair all damage to the Premises and replace or repair all damaged or broken fixtures
and appurtenances; provided however, that, at Landlord’s option, or if Tenant fails to

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make such
repairs, Landlord may, but need not, make such repairs and replacements, and Tenant shall pay
Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established
for the Building) sufficient to reimburse Landlord for all overhead, general conditions, fees and
other costs or expenses arising from Landlord’s involvement with such repairs and replacements
forthwith upon being billed for same.

     7.2 Landlord’s Repairs. Anything contained in Section 7.1 above to the contrary
notwithstanding, and subject to Articles 11 and 12 of this Lease, Landlord shall repair and
maintain the structural portions of the Building, including the basic plumbing, heating,
ventilating, air conditioning and electrical systems serving the Building and not located in the
Premises; provided, however, to the extent such maintenance and repairs are caused by the act,
neglect, fault of or omission of any duty by Tenant, its agents, servants, employees or invitees,
Tenant shall pay to Landlord as additional rent, the reasonable cost of such maintenance and
repairs (but only to the extent such cost is not covered by Landlord’s insurance obtained pursuant
to Section 10.2 of this Lease). Landlord shall not be liable for any failure to make any such
repairs, or to perform any maintenance. There shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant’s business arising from the making
of any repairs, alterations or improvements in or to any portion of the Project, Building or the
Premises or in or to fixtures, appurtenances and equipment therein. Tenant hereby waives and
releases its right to make repairs at Landlord’s expense under Sections 1941 and 1942 of the
California Civil Code; or under any similar law, statute, or ordinance now or hereafter in effect.
Notwithstanding the foregoing, Landlord shall use commercially reasonable efforts to minimize
unreasonable interference with Tenant’s use and occupancy of the Premises in connection with
Landlord’s performance of any such repairs or maintenance as provided in this Section 7.2.

ARTICLE 8

ADDITIONS AND ALTERATIONS

     8.1 Landlord’s Consent to Alterations. Tenant may not make any improvements,
alterations, additions or changes to the Premises (collectively, the “Alterations”) without first
procuring the prior written consent of Landlord to such Alterations, which consent shall be
requested by Tenant not less than thirty (30) days prior to the commencement thereof, and which
consent shall not be unreasonably withheld by Landlord; provided, however, Landlord may withhold
its consent in its sole and absolute discretion with respect to any Alterations which may affect
the structural components of the Building or the Systems and Equipment or which can be seen from
outside the Premises. Tenant shall pay for fees and other costs and expenses of the Alterations,
and shall pay to Landlord a Landlord supervision fee of five percent (5%) of the cost of the
Alterations. Notwithstanding anything to the contrary contained in this Section 8.1, Tenant may
make non-structural alterations, additions or improvements to the interior of the Premises,
including, without limitation, installation of telephone, computer and telecommunication lines and
cables within the interior of the Premises (collectively, the “Acceptable Changes”) without
Landlord’s consent, provided that: (i) Tenant delivers to Landlord written notice of such
Acceptable Changes at least ten (10) days prior to the commencement thereof; (ii) the aggregate
cost of all such Acceptable Changes during any twelve (12) consecutive month period does not exceed
Fifty Thousand Dollars ($50,000.00); (iii) such Acceptable Changes shall be performed by or on
behalf of Tenant in compliance with the other provisions of this Article 8 (including, without
limitation, Section 8.4 below with respect to any Acceptable Changes which includes any Wi-Fi
Network, as defined below); (iv) such Acceptable Changes do not require the issuance of a building
permit or other governmental approval; (v) such Acceptable Changes do not affect any Systems and
Equipment; and (vi) such Acceptable Changes shall be performed by qualified contractors and
subcontractors which normally and regularly perform similar work in comparable buildings in the
vicinity of the Building. The construction of the initial improvements to the Premises shall be
governed by the terms of the Tenant Work Letter and not the terms of this Article 8.

     8.2 Manner of Construction. Landlord may impose, as a condition of its consent to all
Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its
reasonable discretion may deem desirable, including, but not limited to, the requirement that
Tenant utilize for such purposes only contractors, materials, mechanics and materialmen approved by
Landlord; provided, however, Landlord may impose such requirements as Landlord may determine, in
its sole and absolute discretion, with respect to any work affecting the structural components of
the Building or Systems and Equipment (including designating specific contractors to perform such
work). Tenant shall construct such Alterations and perform such repairs in conformance with any
and all applicable rules and regulations of any federal, state, county or municipal code or
ordinance and pursuant to a valid building permit, issued by the city in which the Building is
located, and in conformance with Landlord’s construction rules and regulations. Landlord’s
approval of the plans, specifications and working drawings for Tenant’s Alterations shall create no
responsibility or liability on the part of Landlord for their completeness, design sufficiency, or
compliance with all laws, rules and regulations of governmental agencies or authorities. All work
with respect to any Alterations must be done in a good and workmanlike manner and diligently
prosecuted to completion to the end that the Premises shall at all times be a complete unit except
during the period of work. In performing the work of any such Alterations, Tenant shall have the
work performed in such manner as not to unreasonably obstruct access to the Building or Project or
the common areas for any other tenant of the Project, and as not to obstruct the business of
Landlord or other tenants of the Project, or interfere with the labor force working at the Project.
If Tenant makes any Alterations, Tenant agrees to carry “Builder’s All Risk” insurance in an
amount approved by Landlord covering the construction of such Alterations, and such other insurance
as Landlord may require, it being understood and agreed that all of such Alterations shall be
insured by Tenant pursuant to Article 10 of this Lease immediately upon completion thereof. In
addition, Landlord may, in its discretion, require Tenant to obtain a lien and completion bond or
some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the
lien-free completion of such Alterations and naming Landlord as a co-obligee. Upon completion of
any Alterations, Tenant shall (i) cause a Notice of Completion to be recorded in the office of the
Recorder of the county in which the Project is located in accordance with Section 3093 of the Civil
Code of the State of California or

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any successor statute, (ii) if applicable, deliver to the
management office of the Building a reproducible copy of the “as built” drawings of the
Alterations, and (iii) deliver to Landlord evidence of payment, contractors’ affidavits and full
and final waivers of all liens for labor, services or materials.

     8.3 Landlord’s Property. All Alterations, improvements, fixtures and/or equipment
which may be installed or placed in or about the Premises, and all signs installed in, on or about
the Premises, from time to time, shall be at the sole cost of Tenant and shall be and become the
property of Landlord. Furthermore, Landlord may require that Tenant remove any improvement or
Alteration upon the expiration or early termination of the Lease Term, and repair any damage to the
Premises and Building caused by such removal. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alterations, Landlord may do so and may charge the
cost thereof to Tenant.

     8.4 Wi-Fi Network. Without limiting the generality of the foregoing, in the event
Tenant desires to install wireless intranet, Internet and communications network (“Wi-Fi Network”)
in the Premises for the use by Tenant and its employees, then the same shall be subject to the
provisions of this Section 8.4 (in addition to the other provisions of this Article 8). In the
event Landlord consents to Tenant’s installation of such Wi-Fi Network, Tenant shall, in accordance
with Article 15 below, remove the Wi-Fi Network from the Premises prior to the termination of the
Lease. Tenant shall use the Wi-Fi Network so as not to cause any interference to other tenants in
the Building or to other tenants at the Project or with any other tenant’s communication equipment,
and not to damage the Building or Project or interfere with the normal operation of the Building
or Project, and Tenant hereby agrees to indemnify, defend and hold Landlord harmless from and
against any and all claims, costs, damages, expenses and liabilities (including attorneys’ fees)
arising out of Tenant’s failure to comply with the provisions of this Section 8.4, except to the
extent same is caused by the gross negligence or willful misconduct of Landlord and which is not
covered by the insurance carried by Tenant under this Lease (or which would not be covered by the
insurance required to be carried by Tenant under this Lease). Should any interference occur,
Tenant shall take all necessary steps as soon as reasonably possible and no later than three (3)
calendar days following such occurrence to correct such interference. If such interference
continues after such three (3) day period, Tenant shall immediately cease operating such Wi-Fi
Network until such interference is corrected or remedied to Landlord’s satisfaction. Tenant
acknowledges that Landlord has granted and/or may grant telecommunication rights to other tenants
and occupants of the Building and Project and to telecommunication service providers and in no
event shall Landlord be liable to Tenant for any interference of the same with such Wi-Fi Network.
Landlord makes no representation that the Wi-Fi Network will be able to receive or transmit
communication signals without interference or disturbance. Tenant shall (i) be solely responsible
for any damage caused as a result of the Wi-Fi Network, (ii) promptly pay any tax, license or
permit fees charged pursuant to any laws or regulations in connection with the installation,
maintenance or use of the Wi-Fi Network and comply with all precautions and safeguards recommended
by all governmental authorities, (iii) pay for all necessary repairs, replacements to or
maintenance of the Wi-Fi Network, and (iv) be responsible for any modifications, additions or
repairs to the Building or Project, including without limitation, Building or Project systems or
infrastructure, which are required by reason of the installation, operation or removal of Tenant’s
Wi-Fi Network. Should Landlord be required to retain professionals to research any interference
issues that may arise and confirm Tenant’s compliance with the terms of this Section 8.4, Tenant
shall reimburse Landlord for the costs incurred by Landlord in connection with Landlord’s retention
of such professionals, the research of such interference issues and confirmation of Tenant’s
compliance with the terms of this Section 8.4 within twenty (20) days after the date Landlord
submits to Tenant an invoice for such costs, which costs shall not exceed One Thousand Dollars
($1,000.00) in the aggregate per year (the “Reimbursement Cap”); provided, however, that to the
extent that it is determined that Tenant has failed to perform its obligations under this Section
8.4, the Reimbursement Cap shall not apply, and Tenant shall be responsible for reimbursing
Landlord for all costs Landlord incurs in connection with Landlord’s retention of such
professionals, the research of such interference issues and confirmation of Tenant’s compliance
with the terms of this Section 8.4. This reimbursement obligation is in addition to, and not in
lieu of, any rights or remedies Landlord may have in the event of a breach or default by Tenant
under this Lease.

ARTICLE 9

COVENANT AGAINST LIENS

     Tenant has no authority or power to cause or permit any lien or encumbrance of any kind
whatsoever, whether created by act of Tenant, operation of law or otherwise, to attach to or be
placed upon the Project, Building or Premises, and any and all liens and encumbrances created by
Tenant shall attach to Tenant’s interest only. Landlord shall have the right at all times to post
and keep posted on the Premises any notice which it deems necessary for protection from such liens.
Tenant covenants and agrees not to suffer or permit any lien of mechanics
or materialmen or others to be placed against the Project, the Building or the Premises with
respect to work or services claimed to have been performed for or materials claimed to have been
furnished to Tenant or the Premises, and, in case of any such lien attaching or notice of any lien,
Tenant covenants and agrees to cause it to be released and removed of record within ten (10) days
after filing thereof. Notwithstanding anything to the contrary set forth in this Lease, if any
such lien is not released and removed within such 10-day period, Landlord, at its sole option, may
immediately take all action necessary to release and remove such lien, without any duty to
investigate the validity thereof, and all sums, costs and expenses, including reasonable attorneys’
fees and costs, incurred by Landlord in connection with such lien shall be deemed Additional Rent
under this Lease and shall immediately be due and payable by Tenant.

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ARTICLE 10

INDEMNIFICATION AND INSURANCE

     10.1 Indemnification and Waiver. Subject to and except as expressly provided below in
this Section 10.1: (i) Tenant hereby assumes all risk of damage to property and injury to persons,
in, on, or about the Premises from any cause whatsoever; (ii) Tenant agrees that Landlord, and its
partners and subpartners, and their respective officers, agents, property managers, servants,
employees, and independent contractors (collectively, “Landlord Parties”) shall not be liable for,
and are hereby released from any responsibility for, any damage to property or injury to persons or
resulting from the loss of use thereof, which damage or injury is sustained by Tenant or by other
persons claiming through Tenant; and (iii) Tenant shall indemnify, defend, protect, and hold
harmless the Landlord Parties from any and all loss, cost, damage, expense and liability (including
without limitation court costs and reasonable attorneys’ fees) (collectively, “Claims”) incurred in
connection with or arising from any cause in, on or about the Premises (including, without
limitation, Tenant’s installation, placement and removal of Alterations, improvements, fixtures
and/or equipment in, on or about the Premises), and any acts, omissions or negligence of Tenant or
of any person claiming by, through or under Tenant, or of the contractors, agents, servants,
employees, licensees or invitees of Tenant or any such person, in, on or about the Premises, the
Building and Project. Notwithstanding the provisions of Section 10.1 above to the contrary, the
assumption of risk and release by Tenant set forth in Sections 10.1.1(i) and (ii) above, and
Tenant’s indemnity of Landlord in Section 10.1.1(iii) above, shall not apply to: (A) any Claims to
the extent resulting from the gross negligence or willful misconduct of Landlord or the Landlord
Parties and not insured or required to be insured by Tenant under this Lease; or (B) any loss of or
damage to Landlord’s property to the extent Landlord has waived such loss or damage pursuant to
Section 10.4 below. The provisions of this Section 10.1 shall survive the expiration or sooner
termination of this Lease.

     10.2 Landlord’s Insurance; Tenant’s Compliance with Landlord’s Insurance. Landlord
shall, from and after the date hereof until the expiration of the Lease Term, maintain in effect
the following insurance: (i) physical damage insurance (including a rental loss endorsement)
providing coverage in the event of fire, vandalism, malicious mischief and all other risks normally
covered under “special form” policies in the geographical area of the Building, covering the
Building (excluding, at Landlord’s option, the property required to be insured by Tenant pursuant
to Section 10.3.2 below) in an amount not less than the full replacement value (less commercially
reasonable deductibles) of the Building, together with such other risks as Landlord may from time
to time determine (provided however, that Landlord shall have the right, but not the obligation, to
obtain earthquake and/or flood insurance); and (ii) commercial general liability insurance in the
amount of at least Five Million Dollars ($5,000,000.00), insuring against claims of bodily injury,
personal injury or property damage arising out of Landlord’s operations, contractual liabilities,
or use of the Building and common areas of the Project. Such coverages may be carried under one or
more blanket and/or umbrella insurance policies so long as the coverages required under this Lease
with respect to the Building and Project are not reduced or impaired as a result thereof. Tenant
shall, at Tenant’s expense, comply as to the Premises with all insurance company requirements
pertaining to the use of the Premises. If Tenant’s conduct or use of the Premises causes any
increase in the premium for such insurance policies, then Tenant shall reimburse Landlord for any
such increase. Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.

     10.3 Tenant’s Insurance. Tenant shall maintain the following coverages in the
following amounts.

          10.3.1 Commercial General Liability Insurance covering the insured against claims of bodily
injury, personal injury and property damage arising out of Tenant’s operations, assumed liabilities
or use of the Premises, including a Broad Form Commercial General Liability endorsement covering
the insuring provisions of this Lease and the performance by Tenant of the indemnity agreements set
forth in Section 10.1 of this Lease, (and with owned and non-owned automobile liability coverage,
and liquor liability coverage in the event alcoholic beverages are served on the Premises) for
limits of liability not less than:

	 	 	 
	Bodily Injury and

	 	$4,000,000 each occurrence
	Property Damage Liability

	 	$4,000,000 annual aggregate
	 
	 	 
	Personal Injury Liability

	 	$4,000,000 each occurrence
	 

	 	$4,000,000 annual aggregate
	 

	 	0% Insured’s participation

          10.3.2 Physical Damage Insurance covering (i) all furniture, trade fixtures, equipment,
merchandise and all other items of Tenant’s property on the Premises installed by, for, or at the
expense of Tenant, (ii) the Tenant Improvements, including any Tenant Improvements which Landlord
permits to be installed above the
ceiling of the Premises or below the floor of the Premises, and (iii) all other improvements,
alterations and additions to the Premises, including any improvements, alterations or additions
installed at Tenant’s request above the ceiling of the Premises or below the floor of the Premises.
Such insurance shall be written on a “physical loss or damage” basis under a “special form”
policy, for the full replacement cost value new without deduction for depreciation of the covered
items and in amounts that meet any co-insurance clauses of the policies of insurance and shall
include a vandalism and malicious mischief endorsement, sprinkler leakage coverage and earthquake
sprinkler leakage coverage.

          10.3.3 Workers’ compensation insurance as required by law.

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

          10.3.5 Tenant shall carry comprehensive automobile liability insurance having a combined
single limit of not less than Two Million Dollars ($2,000,000.00) per occurrence and insuring
Tenant against liability for claims arising out of ownership, maintenance or use of any owned,
hired or non-owned automobiles.

          10.3.6 The minimum limits of policies of insurance required of Tenant under this Lease shall
in no event limit the liability of Tenant under this Lease. Such insurance shall: (i) name
Landlord, and any other party it so specifies, as an additional insured; (ii) specifically cover
the liability assumed by Tenant under this Lease, including, but not limited to, Tenant’s
obligations under Section 10.1 of this Lease; (iii) be issued by an insurance company having a
rating of not less than A-X in Best’s Insurance Guide or which is otherwise acceptable to Landlord
and licensed to do business in the state in which the Project is located; (iv) be primary insurance
as to all claims thereunder and provide that any insurance carried by Landlord is excess and is
non-contributing with any insurance requirement of Tenant; (v) provide that said insurance shall
not be canceled or coverage changed unless thirty (30) days’ prior written notice shall have been
given to Landlord and any mortgagee or ground or underlying lessor of Landlord; (vi) contain a
cross-liability endorsement or severability of interest clause acceptable to Landlord; and (vii)
with respect to the insurance required in Sections 10.3.1 and 10.3.2 above, have deductible amounts
not exceeding Five Thousand Dollars ($5,000.00). Tenant shall deliver said policy or policies or
certificates thereof to Landlord on or before the Lease Commencement Date and at least thirty (30)
days before the expiration dates thereof. If Tenant shall fail to procure such insurance, or to
deliver such policies or certificate, within such time periods, Landlord may, at its option, in
addition to all of its other rights and remedies under this Lease, and without regard to any notice
and cure periods set forth in Section 19.1, procure such policies for the account of Tenant, and
the cost thereof shall be paid to Landlord as Additional Rent within ten (10) days after delivery
of bills therefor.

     10.4 Subrogation. Landlord and Tenant agree to have their respective insurance
companies issuing property damage insurance waive any rights of subrogation that such companies may
have against Landlord or Tenant, as the case may be, so long as the insurance carried by Landlord
and Tenant, respectively, is not invalidated thereby. As long as such waivers of subrogation are
contained in their respective insurance policies, Landlord and Tenant hereby waive any right that
either may have against the other on account of any loss or damage to their respective property to
the extent such loss or damage is insurable under policies of insurance for fire and all risk
coverage, theft, public liability, or other similar insurance.

     10.5 Additional Insurance Obligations. Tenant shall carry and maintain during the
entire Lease Term, at Tenant’s sole cost and expense, increased amounts of the insurance required
to be carried by Tenant pursuant to this Article 10, and such other reasonable types of insurance
coverage and in such reasonable amounts covering the Premises and Tenant’s operations therein, as
may be reasonably requested by Landlord.

ARTICLE 11

DAMAGE AND DESTRUCTION

     11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly notify Landlord
of any damage to the Premises resulting from fire or any other casualty. If the Premises or any
common areas of the Building or Project serving or providing access to the Premises shall be
damaged by fire or other casualty, Landlord shall promptly and diligently, subject to reasonable
delays for insurance adjustment or other matters beyond Landlord’s reasonable control, and subject
to all other terms of this Article 11, restore the base, shell, and core of the Premises and such
common areas. Such restoration shall be to substantially the same condition of the base, shell,
and core of the Premises and common areas prior to the casualty, except for modifications required
by zoning and building codes and other laws or by the holder of a mortgage on the Project and/or
the Building, or the lessor of a ground or underlying lease with respect to the Building, or any
other modifications to the common areas deemed desirable by Landlord, provided access to the
Premises and any common restrooms serving the Premises shall not be materially impaired.
Notwithstanding any other provision of this Lease, upon the occurrence of any damage to the
Premises, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Tenant’s insurance required under Section 10.3 of this Lease, and
Landlord shall repair any injury or damage to the tenant improvements and alterations installed in
the Premises and shall return such tenant improvements and alterations to their original condition;
provided that if the cost of such repair by Landlord exceeds the amount of insurance proceeds
received by Landlord from Tenant’s insurance carrier, as assigned by Tenant, the cost of such
repairs shall be paid by Tenant to Landlord prior to Landlord’s repair of the damage. In
connection with such repairs and replacements, Tenant shall, prior to the commencement of
construction, submit to Landlord, for
Landlord’s review and approval, all plans, specifications and working drawings relating
thereto, and Landlord shall select the contractors to perform such improvement work. Landlord
shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to
Tenant’s business resulting in any way from such damage or the repair thereof; provided however,
that during Landlord’s restoration of the Premises, Landlord shall use commercially reasonable
efforts to minimize unreasonable interference with Tenant’s use and occupancy of any undamaged
portions of the Premises, and if such fire or other casualty shall have damaged the Premises or
common areas necessary to Tenant’s occupancy, Landlord shall allow Tenant a proportionate abatement
of Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs to the
extent Landlord is reimbursed from the proceeds of rental interruption insurance purchased by
Landlord as part of Operating Expenses, during the time and to the extent the Premises or any
portion thereof are unfit for occupancy for the purposes permitted under this

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Lease, and not
occupied by Tenant as a result thereof. Notwithstanding anything to the contrary in the foregoing,
if such damage is the result of the gross negligence or willful misconduct of Tenant or or any of
Tenant’s employees, agents, licensees, invitees, subtenants, assignees or any other persons or
entities claiming by, through or under Tenant (collectively, “Tenant Parties”), to the extent
Landlord receives proceeds from any rental interruption insurance maintained by Landlord covering
the Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs which
would have been payable by Tenant during such time, Landlord shall allow Tenant a proportionate
abatement of Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs
during such time so long as Tenant pays to Landlord, within fifteen (15) days after Tenant’s
receipt of Landlord’s written demand therefor, any deductible amounts relating to such rental
interruption insurance and any increases in Landlord’s rental interruption insurance premiums
resulting from such gross negligence or willful misconduct of Tenant or the Tenant Parties.

     11.2 Landlord’s Option to Repair. Within sixty (60) days after Landlord becomes
aware of such damage, Landlord shall notify Tenant in writing (“Landlord’s Damage Notice”) of the
estimated time (the “Estimated Repair Period”), in the reasonable opinion of Landlord’s licensed
contractor, required to substantially complete the work Landlord is required to perform pursuant to
Section 11.1 above (the “Landlord’s Restoration Work”). Notwithstanding the terms of Section 11.1
above Landlord may elect not to rebuild and/or restore the Premises, the Building and/or any other
portion of the Project and instead terminate this Lease by notifying Tenant in writing of such
termination within sixty (60) days after Landlord becomes aware of such damage, such notice to
include a termination date giving Tenant ninety (90) days to vacate the Premises, but Landlord may
so elect only if the Building shall be damaged by fire or other casualty or cause, whether or not
the Premises are affected, and one or more of the following conditions is present: (i) Landlord’s
Restoration Work cannot in the reasonable opinion of Landlord’s licensed contractor as set forth in
Landlord’s Damage Notice, be substantially completed within one hundred eighty (180) days of the
date of damage (when such repairs are made without the payment of overtime or other premiums); (ii)
the holder of any mortgage on the Project and/or the Building or ground or underlying lessor with
respect to the Project and/or the Building shall require that the insurance proceeds or any portion
thereof be used to retire the mortgage debt, or shall terminate the ground or underlying lease, as
the case may be; or (iii) the damage is not fully covered, except for deductible amounts, by
Landlord’s insurance policies. If (A) Landlord does not elect to terminate this Lease pursuant to
Landlord’s termination right as provided above, (B) the damage constitutes a Tenant Damage Event
(as defined below), and (C) the repair of such damage cannot, in the reasonable opinion of
Landlord, as set forth in Landlord’s Damage Notice, be substantially completed within one hundred
eighty (180) days after the date of the damage, then Tenant may elect to terminate this Lease by
delivering written notice thereof to Landlord within fifteen (15) days after Tenant’s receipt of
Landlord’s Damage Notice, which termination shall be effective as of the date which is ninety (90)
days after the date such termination notice is delivered to Landlord. As used herein, a “Tenant
Damage Event” shall mean damage to all or any part of the Premises or any common areas of the
Building providing access to the Premises by fire or other casualty, which damage (x) is not the
result of the negligence or willful misconduct of Tenant or any of Tenant’s employees, agents,
contractors, licensees or invitees, (y) substantially interferes with Tenant’s use of or access to
the Premises and (z) would entitle Tenant to an abatement of Rent pursuant to Section 11.1 above.
In addition, if (1) the Premises or the Building is destroyed or damaged to any substantial extent
during the last twelve (12) months of the Lease Term, (2) Tenant has not theretofore exercised any
option to extend that is still in effect, and does not exercise any such option to extend within
twenty (20) days after the date of Landlord’s Damage Notice, and (3) the repair of Landlord’s
Restoration Work is reasonably expected by Landlord to require more than sixty (60) days to
complete (or thirty (30) days to complete during the last six (6) months of the Lease Term), then
notwithstanding anything contained in this Article 11, (A) Landlord shall have the option to
terminate this Lease, and (B) to the extent that such destruction or damage also constitutes a
Tenant Damage Event, Tenant shall have the option to terminate this Lease, by giving written
termination notice to the other party of the exercise of such option within thirty (30) days after
the date of such damage or destruction, in which case this Lease shall terminate thirty (30) days
after the date such termination notice is delivered by the terminating party. Upon any such
termination of this Lease pursuant to this Section 11.2, Tenant shall pay the Base Rent and
Additional Rent, properly apportioned up to such date of termination, and both parties hereto shall
thereafter be freed and discharged of all further obligations hereunder, except as provided for in
provisions of this Lease which by their terms survive the expiration or earlier termination of the
Lease Term.

     11.3 Waiver of Statutory Provisions. The provisions of this Lease, including this
Article 11, constitute an express agreement between Landlord and Tenant with respect to any and all
damage to, or destruction of, all or any part of the Premises, the Building or any other portion of
the Project, and any statute or regulation of the state in which the Project is located, including,
without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any
rights or obligations concerning damage or destruction in the absence of an express agreement
between the parties, and any other statute or regulation, now or hereafter in effect, shall have no
application to this Lease or any damage or destruction to all or any part of the Premises, the
Building or any other portion of the Project.

ARTICLE 12

CONDEMNATION

     12.1 Permanent Taking. If the whole or any substantial portion of the Premises,
Building or Project shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent street shall be so
taken or condemned, or reconfigured or vacated by such authority in such manner as to require the
use, reconstruction or remodeling of any part of the Premises, Building or Project, or if Landlord
shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation,
Landlord shall have the option to terminate this Lease upon ninety (90) days’ notice, provided such

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notice is given no later than one hundred eighty (180) days after the date of such taking,
condemnation, reconfiguration, vacation, deed or other instrument. If more than twenty-five
percent (25%) of the rentable square feet of the Premises is taken, or if access to the Premises is
substantially impaired, Tenant shall have the option to terminate this Lease upon ninety (90) days’
notice, provided such notice is given no later than one hundred eighty (180) days after the date of
such taking. Landlord shall be entitled to receive the entire award or payment in connection
therewith, except that Tenant shall have the right to file any separate claim available to Tenant
for any taking of Tenant’s personal property and fixtures belonging to Tenant and removable by
Tenant upon expiration of the Lease Term pursuant to the terms of this Lease, and for moving
expenses, so long as such claim does not diminish the award available to Landlord, its ground
lessor with respect to the Project or its mortgagee, and such claim is payable separately to
Tenant. All Rent shall be apportioned as of the date of such termination, or the date of such
taking, whichever shall first occur. If any part of the Premises shall be taken, and this Lease
shall not be so terminated, the Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses
and Utilities Costs shall be proportionately abated. Tenant hereby waives any and all rights it
might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure.

     12.2 Temporary Taking. Notwithstanding anything to the contrary contained in this
Article 12, in the event of a temporary taking of all or any portion of the Premises for a period
of one hundred and eighty (180) days or less, then this Lease shall not terminate but the Base Rent
and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs shall be abated for the
period of such taking in proportion to the ratio that the amount of rentable square feet of the
Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled
to receive the entire award made in connection with any such temporary taking.

ARTICLE 13

COVENANT OF QUIET ENJOYMENT

     Landlord covenants that Tenant, on paying the Rent, charges for services and other payments
herein reserved and on keeping, observing and performing all the other terms, covenants,
conditions, provisions and agreements herein contained on the part of Tenant to be kept, observed
and performed, shall, during the Lease Term, peaceably and quietly have, hold and enjoy the
Premises subject to the terms, covenants, conditions, provisions and agreements hereof without
interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is in
lieu of any other covenant express or implied.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

     14.1 Transfers. Except as provided in Section 14.7 below, Tenant shall not, without
the prior written consent of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit
any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any
assignment or other such foregoing transfer of this Lease or any interest hereunder by operation of
law, sublet the Premises or any part thereof, or permit the use of the Premises by any persons
other than Tenant and its employees (all of the foregoing are hereinafter sometimes referred to
collectively as “Transfers” and any person to whom any Transfer is made or sought to be made is
hereinafter sometimes referred to as a “Transferee”). If Tenant shall desire Landlord’s consent to
any Transfer, Tenant shall notify Landlord in writing, which notice (the “Transfer Notice”) shall
include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30)
days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the “Subject Space”), (iii)
all of the terms of the proposed Transfer, the name and address of the proposed Transferee, and a
copy of all existing and/or proposed documentation pertaining to the proposed Transfer, including
all existing operative documents to be executed to evidence such Transfer or the agreements
incidental or related to such Transfer, (iv) current financial statements of the proposed
Transferee certified by an officer, partner or owner thereof, and (v) such other information as
Landlord may reasonably require. Any Transfer made without Landlord’s prior written consent shall,
at Landlord’s option, be null, void and of no effect, and shall, at Landlord’s option, constitute a
default by Tenant under this Lease. Whether or not Landlord shall grant consent, within thirty
(30) days after written request by Landlord, Tenant shall pay to Landlord Two Thousand Five Hundred
Dollars ($2,500.00) to reimburse Landlord for its review and processing fees, and Tenant shall also
reimburse Landlord for any reasonable legal fees incurred by Landlord in connection with Tenant’s
proposed Transfer.

     14.2 Landlord’s Consent. Landlord shall not unreasonably withhold its consent to any
proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer
Notice. The parties hereby
agree that it shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following apply, without
limitation as to other reasonable grounds for withholding consent:

          14.2.1 The Transferee is of a character or reputation or engaged in a business which is not
consistent with the quality of the Building or Project;

          14.2.2 The Transferee intends to use the Subject Space for purposes which are not permitted
under this Lease;

          14.2.3 The Transferee is either a governmental agency or instrumentality thereof;

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          14.2.4 The Transfer will result in more than a reasonable and safe number of occupants per
floor within the Subject Space;

          14.2.5 The Transferee is not a party of reasonable financial worth and/or financial stability
in light of the responsibilities involved under the Lease on the date consent is requested;

          14.2.6 The proposed Transfer would cause Landlord to be in violation of another lease or
agreement to which Landlord is a party, or would give an occupant of the Project a right to cancel
its lease;

          14.2.7 The terms of the proposed Transfer will allow the Transferee to exercise a right of
renewal, right of expansion, right of first offer, or other similar right held by Tenant (or will
allow the Transferee to occupy space leased by Tenant pursuant to any such right); or

          14.2.8 Either the proposed Transferee, or any person or entity which directly or indirectly,
controls, is controlled by, or is under common control with, the proposed Transferee, (i) occupies
space in the Project at the time of the request for consent and space of comparable size to the
Subject Space is available for lease in the Building on a direct basis from Landlord, (ii) is
negotiating with Landlord to lease space in the Project at such time, or (iii) has negotiated with
Landlord during the twelve (12)-month period immediately preceding the Transfer Notice and space of
comparable size to the Subject Space is available for lease in the Building on a direct basis from
Landlord.

     If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not
exercise any recapture rights Landlord may have under Section 14.4 of this Lease), Tenant may
within six (6) months after Landlord’s consent, but not later than the expiration of said six-month
period, enter into such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord
pursuant to Section 14.1 of this Lease, provided that if there are any changes in the terms and
conditions from those specified in the Transfer Notice (i) such that Landlord would initially have
been entitled to refuse its consent to such Transfer under this Section 14.2, or (ii) which would
cause the proposed Transfer to be more favorable to the Transferee than the terms set forth in
Tenant’s original Transfer Notice, Tenant shall again submit the Transfer to Landlord for its
approval and other action under this Article 14 (including Landlord’s right of recapture, if any,
under Section 14.4 of this Lease).

     14.3 Transfer Premium. Except as provided in Section 14.7 below, if Landlord consents
to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Tenant shall
pay to Landlord one hundred percent (100%) of any “Transfer Premium,” as that term is defined in
this Section 14.3, received by Tenant from such Transferee. “Transfer Premium” shall mean all
rent, additional rent or other consideration payable by such Transferee in excess of the Rent and
Additional Rent payable by Tenant under this Lease on a per rentable square foot basis if less than
all of the Premises is transferred, after deducting the reasonable expenses incurred by Tenant for
(i) any reasonable changes, alterations and improvements to the Premises in connection with the
Transfer, and/or any commercially reasonable tenant improvement allowance, space planning
allowance, moving allowance or other out-of-pocket monetary concessions paid or provided by Tenant
to the Transferee in connection with the Transfer (but only to the extent approved by Landlord),
and (ii) any reasonable brokerage commissions in connection with the Transfer (collectively, the
“Subleasing Costs”). “Transfer Premium” shall also include, but not be limited to, key money and
bonus money paid by Transferee to Tenant in connection with such Transfer, and any payment in
excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures,
inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such
Transfer.

     14.4 Landlord’s Option as to Subject Space. Notwithstanding anything to the contrary
contained in this Article 14, except as provided in Section 14.7 below, Landlord shall have the
option, by giving written notice to Tenant within thirty (30) days after receipt of any Transfer
Notice, to recapture the Subject Space. Such recapture notice shall cancel and terminate this
Lease with respect to the Subject Space as of the date stated in the Transfer Notice as the
effective date of the proposed Transfer until the last day of the term of the Transfer as set forth
in the Transfer Notice. If this Lease shall be canceled with respect to less than the entire
Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square
feet retained by Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon
request of either party, the parties shall execute written confirmation of the same. If Landlord
declines, or fails to elect in a timely manner to recapture the Subject Space under this Section
14.4, then, provided Landlord has consented to the proposed Transfer, Tenant shall be entitled to
proceed to transfer the Subject Space to the proposed Transferee, subject to provisions of the last
paragraph of Section 14.2 of this Lease.

     14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or modified, (ii) such
consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (iii)
Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all
documentation pertaining to the Transfer in form reasonably acceptable to Landlord, and (iv) no
Transfer relating to this Lease or agreement entered into with respect thereto, whether with or
without Landlord’s consent, shall relieve Tenant or any guarantor of the Lease from liability under
this Lease. Landlord or its authorized representatives shall have the right at all reasonable
times to audit the books, records and papers of Tenant in order to establish the amount of the
Transfer Premium, and shall have the right to make copies thereof. If the Transfer Premium
respecting any Transfer shall be found understated, Tenant shall, within thirty (30) days after
demand, pay the deficiency and Landlord’s costs of such audit.

     14.6 Additional Transfers. For purposes of this Lease, except as provided in Section
14.7 below, the term “Transfer” shall also include (i) if Tenant is a partnership, the withdrawal
or change, voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the
partners, or transfer of fifty percent (50%) or more of

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partnership interests, within a twelve
(12)-month period, or the dissolution of the partnership without immediate reconstitution thereof,
and (ii) if Tenant is a closely held corporation (i.e., whose stock is not publicly held and not
traded through an exchange or over the counter), (A) the dissolution, merger, consolidation or
other reorganization of Tenant, (B) the sale or other transfer of more than an aggregate of fifty
percent (50%) of the voting shares of Tenant (other than to immediate family members by reason of
gift or death), within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of more than an aggregate of fifty percent (50%) of the value of the unencumbered assets of
Tenant within a twelve (12) month period.

     14.7 Affiliated Companies/Restructuring of Business Organization. Notwithstanding the
foregoing provisions of this Article 14 to the contrary, the assignment or subletting by Tenant of
all or any portion of this Lease or the Premises to (i) a parent or wholly owned subsidiary of
Tenant, (ii) any person or entity which controls, is controlled by or under common control with
Tenant (control being defined for such purposes as ownership of at least 50% of the equity interest
in, or the power to direct the management of, the relevant entity), (iii) any entity which
purchases all or substantially all of the assets of Tenant, or (iv) any entity into which Tenant is
merged or consolidated (all such persons or entities described in (i), (ii), (iii) and (iv) being
sometimes hereinafter referred to as “Affiliates”) shall not be deemed a Transfer under this
Article 14, and thus shall not be subject to Landlord’s consent in Section 14.2 above,
Landlord’s recapture right in Section 14.4 above, or Landlord’s right to receive any Transfer
Premium pursuant to Section 14.3 above, provided that:

          14.7.1 any such Affiliate was not formed, and such transaction was not entered into, as a
subterfuge to (i) avoid the obligations of this Article 14, or (ii) adversely affect the ability of
Tenant to satisfy its obligations under this Lease;

          14.7.2 Tenant gives Landlord at least five (5) days’ prior notice of any such transaction;

          14.7.3 the Affiliate’s tangible net worth (as determined by Landlord in good faith) is
sufficient for the Affiliate to satisfy its obligations under this Lease over the Lease Term (in
the event of an assignment) or under the sublease over the term of the sublease (in the event of a
sublease);

          14.7.4 the Affiliate (or if the Affiliate is a newly formed entity, the management of the
Affiliate) has proven experience in the operation of a first-class business of a type consistent
with the use of the Building as a first-class office Building;

          14.7.5 any such assignment or sublease shall be subject and subordinate to all of the terms
and provisions of this Lease;

          14.7.6 any such assignee or sublessee shall assume, in a written document delivered to
Landlord upon or prior to the effective date of such assignment or sublease, all the obligations of
Tenant under this Lease with respect to the Subject Space which is the subject of such assignment
or sublease (other than the amount of Base Rent and Tenant’s Share of Operating Expenses, Tax
Expenses and Utilities Costs payable by Tenant with respect to a sublease); provided, however, if
the assignment is the result of a merger or other transaction involving only the transfer of
Tenant’s stock (so long as Tenant remains in effect after such merger or stock transfer), or
otherwise occurs by operation of law, Tenant shall satisfy this requirement by providing Landlord
with copies of the documentation evidencing such merger, transfer of stock or other relevant
occurrence; and

          14.7.7 Tenant shall remain fully liable for all obligations to be performed by Tenant under
this Lease.

ARTICLE 15

SURRENDER; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

     15.1 Surrender of Premises. No act or thing done by Landlord or any agent or employee
of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a
surrender of the Premises unless such intent is specifically acknowledged in a writing signed by
Landlord. The delivery of keys to the Premises to Landlord or any agent or employee of Landlord
shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or
not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be
entitled to the return of such keys at any reasonable time upon request until this Lease shall have
been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether
accepted by
Landlord or not, or a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or subtenancies affecting the
Premises.

     15.2 Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or
upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article
15, quit and surrender possession of the Premises to Landlord in as good order and condition as
when Tenant took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord hereunder excepted.
Upon such expiration or termination, Tenant shall, without expense to Landlord, remove or cause to
be removed from the Premises all telephone, data, and other cabling and wiring (including any
cabling and wiring associated with the Wi-Fi Network, if any) installed or caused to be installed
by Tenant (including any cabling and wiring, installed above the ceiling of the Premises or below
the floor of the Premises), all debris and rubbish, and such items of furniture, equipment,
free-standing cabinet work, and other articles of personal property owned by Tenant or installed or
placed by Tenant at its expense in the Premises, and such similar articles of any other persons
claiming under Tenant, as Landlord may, in its sole discretion, require

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to be removed, and Tenant
shall repair at its own expense all damage to the Premises and Building resulting from such
removal.

ARTICLE 16

HOLDING OVER

     If Tenant holds over after the expiration of the Lease Term hereof, with or without the
express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall
not constitute a renewal hereof or an extension for any further term, and in such case Base Rent
shall be payable at a monthly rate equal to one hundred fifty percent (150%) of the greater of (i)
the Base Rent applicable during the last rental period of the Lease Term under this Lease, and (ii)
the fair market rental rate of the Premises as of the commencement of such holdover period. Such
month-to-month tenancy shall be subject to every other term, covenant and agreement contained
herein. Landlord hereby expressly reserves the right to require Tenant to surrender possession of
the Premises to Landlord as provided in this Lease upon the expiration or other termination of this
Lease. The provisions of this Article 16 shall not be deemed to limit or constitute a waiver of
any other rights or remedies of Landlord provided herein or at law. If Tenant fails to surrender
the Premises upon the termination or expiration of this Lease, in addition to any other liabilities
to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless
from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such
failure, including, without limiting the generality of the foregoing, any claims made by any
succeeding tenant founded upon such failure to surrender, and any lost profits to Landlord
resulting therefrom.

ARTICLE 17

ESTOPPEL CERTIFICATES

     Within ten (10) days following a request in writing by Landlord, Tenant shall execute and
deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall be in the form
as may be reasonably required by any prospective mortgagee or purchaser of the Project (or any
portion thereof), indicating therein any exceptions thereto that may exist at that time, and shall
also contain any other information reasonably requested by Landlord or Landlord’s mortgagee or
prospective mortgagee. Failure of Tenant to timely execute and deliver such estoppel certificate
or other instruments shall constitute an acceptance of the Premises and an acknowledgment by Tenant
that statements included in the estoppel certificate are true and correct, without exception.
Failure by Tenant to so deliver such estoppel certificate shall be a material default of the
provisions of this Lease.

ARTICLE 18

SUBORDINATION

     This Lease is subject and subordinate to all present and future ground or underlying leases of
the Project and to the lien of any mortgages or trust deeds, now or hereafter in force against the
Project, if any, and to all renewals, extensions, modifications, consolidations and replacements
thereof, and to all advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages or trust deeds, or the lessors under such ground
lease or underlying leases, require in writing that this Lease be superior thereto.
Notwithstanding any contrary provision of this Article 18, a condition precedent to the
subordination of this Lease to any future mortgage, deed of trust, ground or underlying lease is
that Landlord shall obtain for the benefit of Tenant a commercially reasonable subordination,
non-disturbance and attornment agreement from the mortgagee, beneficiary or lessor under such
future instrument. Tenant covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage, or if any ground or underlying lease is terminated, to attorn,
without any deductions or set-offs whatsoever, to the purchaser upon any such foreclosure sale, or
to the lessor of such ground or underlying lease, as the case may be, if so requested to do so by
such purchaser or lessor, and to recognize such purchaser or lessor as the lessor under this Lease.
Tenant shall, within ten (10) days of request by Landlord, execute such further commercially
reasonable instruments or assurances as Landlord may reasonably deem necessary to evidence or
confirm the subordination or superiority of this Lease to any such mortgages, trust deeds, ground
leases or underlying leases. Tenant hereby irrevocably authorizes Landlord to execute and deliver
in the name of Tenant any such instrument or instruments if Tenant fails to do so, provided that
such authorization shall in no way relieve Tenant from the obligation of executing such instruments
of subordination or superiority.
Tenant waives the provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease
and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale.

ARTICLE 19

TENANT’S DEFAULTS; LANDLORD’S REMEDIES

     19.1 Events of Default by Tenant. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and expense
and without any reduction of Rent. The occurrence of any of the following shall constitute a
default of this Lease by Tenant:

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          19.1.1 Any failure by Tenant to pay any Rent or any other charge required to be paid under
this Lease, or any part thereof, when due, which failure continues for five (5) days after notice
thereof from Landlord; provided, however, that Tenant shall not be entitled to more than two (2)
notices for monetary defaults during any consecutive twelve (12) month period, and if, after two
(2) such notices, any Rent or other sum is not paid when due, a default and breach of this Lease
shall be considered to have occurred without further notice; provided, further, that any such
notice given pursuant to this Section 19.1.1 shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure Section 1161 or any similar or successor
law; or

          19.1.2 Any failure by Tenant to observe or perform any other provision, covenant or condition
of this Lease to be observed or performed by Tenant where such failure continues for thirty (30)
days after written notice thereof from Landlord to Tenant; provided however, that any such notice
shall be in lieu of, and not in addition to, any notice required under California Code of Civil
Procedure Section 1161 or any similar or successor law; and provided further that if the nature of
such default is such that the same cannot reasonably be cured within a thirty (30)-day period,
Tenant shall not be deemed to be in default if it diligently commences such cure within such period
and thereafter diligently proceeds to rectify and cure said default as soon as possible; or

          19.1.3 Abandonment or vacation of the Premises by Tenant. Abandonment is herein defined to
include, but is not limited to, any absence by Tenant from the Premises for three (3) business days
or longer while in default of any provision of this Lease.

     19.2 Landlord’s Remedies Upon Default. Upon the occurrence of any such default by
Tenant, Landlord shall have, in addition to any other remedies available to Landlord at law or in
equity, the option to pursue any one or more of the following remedies, each and all of which shall
be cumulative and nonexclusive, without any notice or demand whatsoever.

          19.2.1 Terminate this Lease, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which
it may have for possession or arrearages in rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may
recover from Tenant the following:

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

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

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

               (iv) 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, specifically including but not limited to,
brokerage commissions and advertising expenses incurred, and any special concessions made to obtain
a new tenant; and

               (v) At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as
may be permitted from time to time by applicable law.

The term “rent” as used in this Section 19.2 shall be deemed to be and to mean all sums of every
nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to
others. As used in Sections 19.2.1(i) and (ii), above, the “worth at the time of award” shall be
computed by allowing interest at the Interest Rate set forth in Section 4.5 of this Lease. As used
in Section 19.2.1(iii) above, the “worth at the time of award” shall be computed by discounting
such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%).

          19.2.2 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.

          19.2.3 Landlord may, but shall not be obligated to, make any such payment or perform or
otherwise cure any such obligation, provision, covenant or condition on Tenant’s part to be
observed or performed (and may enter the Premises for such purposes). In the event of Tenant’s
failure to perform any of its obligations or covenants under this Lease, and such failure to
perform poses a material risk of injury or harm to persons or damage to or loss of property, then
Landlord shall have the right to cure or otherwise perform such covenant or obligation at any time
after such failure to perform by Tenant, whether or not any such notice or cure period set forth in
Section 19.1 above has expired. Any such actions undertaken by Landlord pursuant to the foregoing
provisions of this Section 19.2.3 shall not be deemed a waiver of Landlord’s rights and remedies as
a result of Tenant’s failure to perform and shall not release Tenant from any of its obligations
under this Lease.

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     19.3 Payment by Tenant. Tenant shall pay to Landlord, within fifteen (15) days after
delivery by Landlord to Tenant of statements therefor: (i) sums equal to expenditures reasonably
made and obligations incurred by Landlord in connection with Landlord’s performance or cure of any
of Tenant’s obligations pursuant to the provisions of Section 19.2.3 above; and (ii) sums equal to
all expenditures made and obligations incurred by Landlord in collecting or attempting to collect
the Rent or in enforcing or attempting to enforce any rights of Landlord under this Lease or
pursuant to law, including, without limitation, all legal fees and other amounts so expended;
provided, however, that to the extent Landlord has applied all or any portion of the Security
Deposit to reimburse Landlord for such amounts, Tenant shall reimburse such applied portion of the
Security Deposit in accordance with Article 20 below. Tenant’s obligations under this Section 19.3
shall survive the expiration or sooner termination of the Lease Term.

     19.4 Sublessees of Tenant. Whether or not Landlord elects to terminate this Lease on
account of any default by Tenant, as set forth in this Article 19, Landlord shall have the right to
terminate any and all subleases, licenses, concessions or other consensual arrangements for
possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole discretion,
succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements. In the
event of Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses,
concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election,
have no further right to or interest in the rent or other consideration receivable thereunder.

     19.5 Waiver of Default. No waiver by Landlord of any violation or breach by Tenant of
any of the terms, provisions and covenants herein contained shall be deemed or construed to
constitute a waiver of any other or later violation or breach by Tenant of the same or any other of
the terms, provisions, and covenants herein contained. Forbearance by Landlord in enforcement of
one or more of the remedies herein provided upon a default by Tenant shall not be deemed or
construed to constitute a waiver of such default. The acceptance of any Rent hereunder by Landlord
following the occurrence of any default, whether or not known to Landlord, shall not be deemed a
waiver of any such default, except only a default in the payment of the Rent so accepted.

     19.6 Efforts to Relet. For the purposes of this Article 19, Tenant’s right to
possession shall not be deemed to have been terminated by efforts of Landlord to relet the
Premises, by its acts of maintenance or preservation with respect to the Premises, or by
appointment of a receiver to protect Landlord’s interests hereunder. The foregoing enumeration is
not exhaustive, but merely illustrative of acts which may be performed by Landlord without
terminating Tenant’s right to possession.

ARTICLE 20

SECURITY DEPOSIT

     Concurrent with Tenant’s execution of this Lease, Landlord shall apply the Retained Existing
Security Deposit as provided in Section 1.2 above and the provisions of the Lease Termination
Agreement toward the security deposit (the “Security Deposit”) required to be provided by Tenant
pursuant to this Lease in the amount set forth in Section 10 of the Summary. The Security Deposit
shall be held by Landlord as security for the faithful performance by Tenant of (i) all the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant during the Lease Term,
(ii) all of the terms and conditions of the Existing Lease (until the Existing Lease is terminated
pursuant to Section 1.3 above) and (iii) all of Tenant’s obligations under the Lease Termination
Agreement. If Tenant defaults with respect to any provisions of this Lease beyond any applicable
notice and cure periods, the Existing Lease or the Lease Termination Agreement, including, but not
limited to, the provisions thereof relating to the payment of Rent, Landlord may, but shall not be
required to, use, apply or retain all or any part of the Security Deposit for the payment of any
Rent or any other sum in default, or for the payment of any amount that Landlord may spend or
become obligated to spend by reason of Tenant’s default, or to compensate Landlord for any other
loss or damage that Landlord may suffer by reason of Tenant’s default. If any portion of the
Security Deposit is so used or applied, Tenant shall, within five (5) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its
original amount, and Tenant’s failure to do so shall be a default under this Lease (and the
Existing Lease until the same is terminated in accordance with Section 1.3 above). If Tenant shall
fully and faithfully perform every provision of this Lease and the Existing Lease to be performed
by it, the Security Deposit, or any balance thereof, shall be returned to Tenant, or, at Landlord’s
option, to the last assignee of Tenant’s interest hereunder, within sixty (60) days following the
expiration of the Lease Term. Tenant shall not be entitled to any interest on the Security
Deposit. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code, and
all other provisions of 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.

ARTICLE 21

COMPLIANCE WITH LAW

     Tenant shall not do anything or suffer anything to be done in or about the Premises which will
in any way conflict with any law, statute, ordinance or other governmental rule, regulation or
requirement now in force or which may hereafter be enacted or promulgated. At its sole cost and
expense, Tenant shall promptly comply with all such governmental measures, other than the making of
structural changes or changes to the Building’s life safety system (collectively the “Excluded
Changes”) except to the extent such Excluded Changes are required due to Tenant’s

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alterations to or
manner of use of the Premises. In addition, Tenant shall fully comply with all present or future
programs intended to manage parking, transportation or traffic in and around the Project, and in
connection therewith, Tenant shall take responsible action for the transportation planning and
management of all employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other transportation-related committees
or entities. The judgment of any court of competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of
said governmental measures, shall be conclusive of that fact as between Landlord and Tenant.

ARTICLE 22

ENTRY BY LANDLORD

     Landlord reserves the right, upon 24 hours’ prior notice to Tenant (except no such notice
shall be required in the case of emergency), to enter the Premises to: (i) inspect them; (ii) show
the Premises to prospective purchasers, mortgagees or, during the last twelve (12) months of the
Lease Term, prospective tenants, or to the ground or underlying lessors; (iii) to post notices of
nonresponsibility; or (iv) alter, improve or repair the Premises or the Building if necessary to
comply with current building codes or other applicable laws, or for structural alterations, repairs
or improvements to the Building, or as Landlord may otherwise reasonably desire or deem necessary.
Notwithstanding anything to the contrary contained in this Article 22, Landlord may enter the
Premises at any time, without notice to Tenant, in emergency situations and/or to perform
janitorial or other services required of Landlord pursuant to this Lease. Any such entries shall
be without the abatement of Rent and shall include the right to take such reasonable steps as
required to accomplish the stated purposes. Tenant hereby waives any claims for damages or for any
injuries or inconvenience to or interference with Tenant’s business, lost profits, any loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. For each of
the above purposes, Landlord shall at all times have a key with which to unlock all the doors in
the Premises, excluding Tenant’s vaults, safes and special security areas designated in advance by
Tenant. In an emergency, Landlord shall have the right to enter without notice and use any means
that Landlord may deem proper to open the doors in and to the Premises. Any entry into the
Premises in the manner hereinbefore described shall not be deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from
any portion of the Premises. Notwithstanding anything to the contrary in this Article 22 to the
contrary, (A) Landlord agrees to use commercially reasonable efforts (except in an emergency) to
minimize interference with Tenant’s business in the Premises in the course of any such entry
permitted under this Article 22, and (B) absent an emergency, or Landlord’s entry to perform its
obligations under this Lease, Landlord shall use commercially reasonable efforts to schedule any
construction work to be performed in the Premises after the business hours set forth in Section
6.1.1 above.

ARTICLE 23

PARKING

     Throughout the Lease Term, Tenant shall have the right to use, on a “first-come, first-serve”
basis, in common with other tenants of the Building and free of parking charges, the number of
unreserved parking spaces set forth in Section 12 of the Summary, which unreserved parking
spaces are located in the common surface parking areas servicing the Building as shall be
designated by Landlord from time to time for unreserved parking for the tenants of the Building.
Tenant’s continued right to use the parking spaces is conditioned upon (i) Tenant abiding by (A)
all rules and regulations which are prescribed by Landlord (and/or any common area association of
the Project having rights over such parking areas) from time to time for the orderly operation and
use of the parking areas where such parking spaces are located, and (B) all recorded covenants,
conditions and restrictions affecting the Building and/or the Real Property, and (ii) upon Tenant’s
cooperation in seeing that Tenant’s employees and visitors also comply with such rules and
regulations, covenants, conditions and restrictions. Landlord (and/or any other owners of Marina
Village) specifically reserve the right to change the size, configuration, design, layout, location
and all other aspects of the Building’s or Project’s parking areas and facilities (including
without limitation, implementing paid visitor parking), and Tenant acknowledges and agrees that
Landlord may, without incurring any liability to Tenant and without any abatement of Rent under
this Lease, from time to time, close-off or restrict access to any or all of the Building’s or
Project’s parking areas. Landlord may delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of control attributed hereby
to Landlord. Any parking tax or other charges imposed by governmental authorities in connection
with the use of such parking shall be paid directly by Tenant or the parking users, or, if directly
imposed against Landlord, Tenant shall reimburse
Landlord for all such taxes and/or charges within ten (10) days after Landlord’s demand
therefor. The parking rights provided to Tenant pursuant to this Article 23 are provided solely
for use by Tenant’s own personnel and such rights may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord’s prior approval, except in connection with an
assignment of this Lease or sublease of the Premises made in accordance with Article 14 above. All
visitor parking by Tenant’s visitors shall be subject to availability, as reasonably determined by
Landlord, parking in such visitor parking areas as may be designated by Landlord (and/or any common
area association of the Project having rights over the Project’s parking facilities) from time to
time, and payment by such visitors of the prevailing visitor parking rate (if any) charged by
Landlord (and/or such common area association) from time to time.

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ARTICLE 24

MISCELLANEOUS PROVISIONS

     24.1 Terms; Captions. The necessary grammatical changes required to make the
provisions hereof apply either to corporations or partnerships or individuals, men or women, as the
case may require, shall in all cases be assumed as though in each case fully expressed. The
captions of Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.

     24.2 Binding Effect. Each of the provisions of this Lease shall extend to and shall,
as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also
of their respective successors or assigns, provided this clause shall not permit any assignment by
Tenant contrary to the provisions of Article 14 of this Lease.

     24.3 No Waiver. No waiver of any provision of this Lease shall be implied by any
failure of a party to enforce any remedy on account of the violation of such provision, even if
such violation shall continue or be repeated subsequently, any waiver by a party of any provision
of this Lease may only be in writing, and no express waiver shall affect any provision other than
the one specified in such waiver and that one only for the time and in the manner specifically
stated. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in
any way alter the length of the Lease Term or of Tenant’s right of possession hereunder or after
the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice
given Tenant prior to the receipt of such monies, it being agreed that after the service of notice
or the commencement of a suit or after final judgment for possession of the Premises, Landlord may
receive and collect any Rent due, and the payment of said Rent shall not waive or affect said
notice, suit or judgment.

     24.4 Modification of Lease. Should any current or prospective mortgagee or ground
lessor for the Project require a modification or modifications of this Lease, which modification or
modifications will not cause an increased cost or expense to Tenant or in any other way materially
and adversely change the rights and obligations of Tenant hereunder, then and in such event, Tenant
agrees that this Lease may be so modified and agrees to execute such commercially reasonable
documents are required therefor and deliver the same to Landlord within ten (10) days following the
request therefor. Should Landlord or any such current or prospective mortgagee or ground lessor
require execution of a short form of Lease for recording, containing, among other customary
provisions, the names of the parties, a description of the Premises and the Lease Term, Tenant
agrees to execute such short form of Lease and to deliver the same to Landlord within ten (10) days
following the request therefor.

     24.5 Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the right
to transfer all or any portion of its interest in the Project, the Building and/or in this Lease,
and Tenant agrees that in the event of any such transfer, Landlord shall transfer to such
transferee any theretofore unapplied Security Deposit held by Landlord, whereupon Landlord
automatically be released from all liability under this Lease and Tenant agrees to look solely to
such transferee for the performance of Landlord’s obligations hereunder after the date of transfer.
The liability of any transferee of Landlord shall be limited to the interest of such transferee in
the Project and such transferee shall be without personal liability under this Lease, and Tenant
hereby expressly waives and releases such personal liability on behalf of itself and all persons
claiming by, through or under Tenant. Tenant further acknowledges that Landlord may assign its
interest in this Lease to a mortgage lender as additional security and agrees that such an
assignment shall not release Landlord from its obligations hereunder and that Tenant shall continue
to look to Landlord for the performance of its obligations hereunder.

     24.6 Prohibition Against Recording. Except as provided in Section 24.4 of 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.

     24.7 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.

     24.8 Tenant’s Signs. Tenant shall be entitled, at its sole cost and expense, to one
(1) identification sign on or near the entry doors of the Premises. Such signs 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. Upon the
expiration or earlier termination of this Lease, Tenant shall be responsible, at its sole cost and
expense, for the removal of such signage and the repair of all damage to the Building caused by
such removal.
Except for such identification signs, Tenant may not install any signs on the exterior or roof
of the Building, the Other Existing Buildings 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.

     24.9 Relationship of Parties. Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship of principal and
agent, partnership, joint venturer or any association between Landlord and Tenant, it being
expressly understood and agreed that neither the method of

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computation of Rent nor any act of the
parties hereto shall be deemed to create any relationship between Landlord and Tenant other than
the relationship of landlord and tenant.

     24.10 Application of Payments. Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant’s designation of such payments,
to satisfy any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole
discretion, may elect.

     24.11 Time of Essence. Time is of the essence of this Lease and each of its
provisions.

     24.12 Partial Invalidity. If any term, provision or condition contained in this Lease
shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application
of such term, provision or condition to persons or circumstances other than those with respect to
which it is invalid or unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the fullest extent possible
permitted by law.

     24.13 No Warranty. In executing and delivering this Lease, Tenant has not relied on
any representation, including, but not limited to, any representation whatsoever as to the amount
of any item comprising Additional Rent or the amount of the Additional Rent in the aggregate or
that Landlord is furnishing the same services to other tenants, at all, on the same level or on the
same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or
more of the Exhibits attached hereto.

     24.14 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any applicable law to
the contrary, the liability of Landlord and the Landlord Parties hereunder (including any successor
landlord) and any recourse by Tenant against Landlord or the Landlord Parties shall be limited
solely and exclusively to an amount which is equal to the interest of Landlord in the Project, and
neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and
Tenant hereby expressly waives and releases such personal liability on behalf of itself and all
persons claiming by, through or under Tenant.

     24.15 Entire Agreement. It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease supersedes and cancels
any and all previous negotiations, arrangements, brochures, agreements and understandings, if any,
between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter
thereof, and none thereof shall be used to interpret or construe this Lease. This Lease and any
side letter or separate agreement executed by Landlord and Tenant in connection with this Lease and
dated of even date herewith contain all of the terms, covenants, conditions, warranties and
agreements of the parties relating in any manner to the rental, use and occupancy of the Premises,
shall be considered to be the only agreement between the parties hereto and their representatives
and agents, and none of the terms, covenants, conditions or provisions of this Lease can be
modified, deleted or added to except in writing signed by the parties hereto. All negotiations and
oral agreements acceptable to both parties have been merged into and are included herein. There
are no other representations or warranties between the parties, and all reliance with respect to
representations is based totally upon the representations and agreements contained in this Lease.

     24.16 Right to Lease. Landlord reserves the absolute right to effect such other
tenancies in the Building, the Other Existing Buildings and/or in any other building and/or any
other portion of the Project as Landlord in the exercise of its sole business judgment shall
determine to best promote the interests of the Project. Tenant does not rely on the fact, nor does
Landlord represent, that any specific tenant or type or number of tenants shall, during the Lease
Term, occupy any space in the Building, the Other Existing Buildings or Project.

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

     24.18 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and for all
those claiming under Tenant all right now or hereafter existing to redeem by order or judgment of
any court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any
termination of this Lease.

     24.19 Notices. All notices, demands, statements or communications (collectively,
“Notices”) given or required to be given by either party to the other hereunder shall be in
writing, shall be sent by United States certified or registered mail, postage prepaid, return
receipt requested, or delivered personally (i) to
Tenant at the appropriate address set forth in Section 5 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord; or (ii) to Landlord at the
addresses set forth in Section 3 of the Summary, or to such other firm or to such other place as
Landlord may from time to time designate in a Notice to Tenant. Any Notice will be deemed given
(A) on the date delivered or rejected if it is mailed as provided in this Section 24.19, or (B)
upon the date personal delivery is made or rejected. If Tenant is notified of the identity and
address of Landlord’s mortgagee or ground or underlying lessor, Tenant shall give to such mortgagee
or ground or underlying lessor written notice of any default by Landlord under the terms of this
Lease by registered or certified mail, and such mortgagee or ground or underlying lessor shall be
given a reasonable opportunity to cure such default prior to Tenant’s exercising any remedy
available to Tenant.

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     24.20 Joint and Several. If there is more than one Tenant, the obligations imposed
upon Tenant under this Lease shall be joint and several.

     24.21 Authority. If Tenant is a corporation or partnership, each individual executing
this Lease on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and
existing entity qualified to do business in the state in which the Project is located and that
Tenant has full right and authority to execute and deliver this Lease and that each person signing
on behalf of Tenant is authorized to do so. Tenant confirms that it is not in violation of any
executive order or similar governmental regulation or law, which prohibits terrorism or
transactions with suspected or confirmed terrorists or terrorist entities or with persons or
organizations that are associated with, or that provide any form of support to, terrorists. Tenant
further confirms that it will comply throughout the Term of this Lease, with all governmental laws,
rules or regulations governing transactions or business dealings with any suspected or confirmed
terrorists or terrorist entities, as identified from time to time by the U.S. Treasury Department’s
Office of Foreign Assets Control or any other applicable governmental entity.

     24.22 Jury Trial; Attorneys’ Fees. IF EITHER PARTY COMMENCES LITIGATION AGAINST THE
OTHER FOR THE SPECIFIC PERFORMANCE OF THIS LEASE, FOR DAMAGES FOR THE BREACH HEREOF OR OTHERWISE
FOR ENFORCEMENT OF ANY REMEDY HEREUNDER, THE PARTIES HERETO AGREE TO AND HEREBY DO WAIVE ANY RIGHT
TO A TRIAL BY JURY. In the event of any such commencement of litigation, the prevailing party
shall be entitled to recover from the other party such costs and reasonable attorneys’ fees as may
have been incurred, including any and all costs incurred in enforcing, perfecting and executing
such judgment.

     24.23 Governing Law. This Lease shall be construed and enforced in accordance with
the laws of the state in which the Project is located.

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

     24.25 Brokers. Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the negotiation of this Lease,
excepting only the real estate brokers or agents specified in Section 11 of the Summary (the
“Brokers”), and that they know of no other real estate broker or agent who is entitled to a
commission in connection with this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, and costs and expenses (including without limitation reasonable
attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be
owing on account of the indemnifying party’s dealings with any real estate broker or agent other
than the Brokers.

     24.26 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.

     24.27 Building Name and Signage. Landlord shall have the right at any time to change
the name(s) of the Building, the Other Existing Buildings and Project and to install, affix and
maintain any and all signs on the exterior and on the interior of the Building, the Other Existing
Buildings and any portion of the Project as Landlord may, in Landlord’s sole discretion, desire.
Tenant shall not use the names of the Building, the Other Existing Buildings or Project or use
pictures or illustrations of the Building, the Other Existing Buildings or Project in advertising
or other publicity, without the prior written consent of Landlord.

     24.28 Building Directory. Landlord shall include Tenant’s name and location in the
Building on one (1) line on the Building directory. The initial cost of such directory signage
shall be paid for by Landlord, but any subsequent charges thereto shall be at Tenant’s cost.

     24.29 Confidentiality. Tenant acknowledges that the content of this Lease and any
related documents are confidential information. Tenant shall keep such confidential information
strictly confidential and shall not disclose such confidential information to any person or entity
other than (i) Tenant’s financial, legal, and space planning consultants, (ii) as required by
applicable law or (iii) to enforce Tenant’s rights against Landlord hereunder.

     24.30 Landlord’s Construction. It is specifically understood and agreed that Landlord
has no obligation and has made no promises to alter, remodel, improve, renovate, repair or decorate
the Premises, the Building, the Other Existing Buildings, the Project, or any part thereof and that
no representations or warranties respecting the condition of the Premises, the Building, the Other
Existing Buildings or the Project have been made by Landlord to Tenant, except as specifically set
forth in this Lease. Tenant acknowledges that prior to and during the Lease Term, Landlord (and/or
any common area association) will be completing construction and/or demolition work pertaining to
various portions of the Building, the Other Existing Buildings, the Premises, and/or the Project,
including without limitation, landscaping and tenant improvements for premises for other tenants
and, at Landlord’s sole election, such other buildings, improvements, landscaping and other
facilities within or as part of the Project as Landlord (and/or such common area association) shall
from time to time desire (collectively, the “Construction”). In connection

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with such Construction,
Landlord may, among other things, erect scaffolding or other necessary structures in the Building
and/or the Other Existing Buildings, limit or eliminate access to portions of the Project,
including portions of the common areas, or perform work in the Building, the Other Existing
Buildings and/or the Project, which work may create noise, dust or leave debris in the Building,
the Other Existing Buildings and/or the Project. Tenant hereby agrees that such Construction and
Landlord’s actions in connection with such Construction shall in no way constitute a constructive
eviction of Tenant nor entitle Tenant to any abatement of Rent. Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect injury to or
interference with Tenant’s business arising from such Construction, 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 such Construction or
Landlord’s actions in connection with such Construction, or for any inconvenience or annoyance
occasioned by such Construction or Landlord’s actions in connection with such Construction.

     IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date
first above written.

	 	 	 	 	 	 	 	 	 
	 	 	“Landlord”:
	 
	 	 	 	 	 	 	 	 
	 	 	LEGACY PARTNERS I ALAMEDA, LLC,
	 	 	a Delaware limited liability company,
	 	 	Owner
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Legacy Partners Commercial, L.P.,
	 	 	 	 	a California limited partnership,
	 	 	 	 	as Property Manager and Agent for Owner
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Legacy Partners Commercial, Inc.,
	 	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Paul Meyer 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Paul Meyer
	 

	 	 	 	 	 	Its:
	 	CFO
	 
	 	 	 	 	 	 	 	 
	 	 	“Tenant”:
	 
	 	 	 	 	 	 	 	 
	 	 	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Kevin Sidow 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Kevin Sidow 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	President 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 	 	 

 

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

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EXHIBIT A

OUTLINE OF FLOOR PLAN OF PREMISES

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EXHIBIT A
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EXHIBIT A-1

SITE PLAN OF PROJECT

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EXHIBIT A-1
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EXHIBIT B

TENANT WORK LETTER

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

SECTION 1

BASE, SHELL AND CORE

     Landlord has previously constructed the base, shell and core (i) of the Premises and (ii) of
the floor(s) of the Building on which the Premises are located (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 Lease Commencement Date. Except for the Allowance set forth
below, 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
Legacy CDS, Dated April 24, 2006 Job. No. ___ [TO BE PROVIDED] (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 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 (collectively, the
“Permits”), and (ii) construct the Tenant Improvements as depicted on the Approved Working
Drawings, in compliance with such Permits and all applicable laws in effect at the time of
construction, and in good workmanlike manner. Landlord shall pay for the cost of the design and
construction of the Tenant Improvements in an amount up to, but not exceeding, Twenty-Three and
00/100 Dollars ($23.00) per rentable square foot of the Premises (i.e., up to Seven Hundred
Twenty-Seven Thousand Seven Hundred Sixty-Six and 00/100 Dollars ($727,766.00), based on 31,642
rentable square feet of the Premises (the “Allowance”). 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 amount equal to the sum of the
Allowance and the Over-Allowance Amount (as such term is defined below.) Tenant shall pay for all
costs in excess of the Allowance (“Over-Allowance Amount”), which

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payment shall be made to Landlord
in cash within ten (10) days after Tenant’s receipt of invoice therefor from Landlord and, in any
event, prior to the date Landlord causes the Contractor to commence the actions described in the
first sentence of this Section 3. In the event that after Tenant pays the Over-Allowance Amount
Tenant requests any changes, change orders or modifications to the Approved Working Drawings (which
Landlord approves pursuant to Section 1 above) which increase the cost to construct the Tenant
Improvements, 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 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. Tenant shall not be entitled to receive in cash or as a credit against any
rental or otherwise, any portion of the Allowance not used to pay for the cost of the design and
construction of the Tenant Improvements. Prior to the commencement of construction of the Tenant
Improvements, Landlord shall provide Tenant with a preliminary cost estimate of the total cost of
the design and construction of the Tenant Improvements.

SECTION 4

READY FOR OCCUPANCY; SUBSTANTIAL COMPLETION OF THE TENANT IMPROVEMENTS

     4.1 Ready for Occupancy; Substantial Completion. For purposes of this Lease,
including for purposes of determining the Lease Commencement Date (as set forth in Section 7.2 of
the Summary), the Premises shall be “Ready for Occupancy” upon Substantial Completion of the
Premises. For purposes of this 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 and any tenant fixtures,
work-stations, built-in furniture, or equipment to be installed by Tenant or under the supervision
of Contractor. Upon Substantial Completion of the Premises, Landlord and Tenant shall conduct a
walk-through of the Premises to determine such punch list items and Landlord shall complete all
such punch list items within thirty (30) days after the date of such walk-through or such longer
period as is reasonably required therefor.

          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 Tenant Work Letter 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 estimated date of Substantial Completion of
the Premises, as set forth in 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 Lease Commencement Date (as set forth in Section 7.2 of the
Summary) shall be deemed to be the date the Lease Commencement Date would have occurred if no
Tenant Delay or 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
Project, the Building and the Premises, at Landlord’s reasonable discretion, Contractor shall allow
Tenant access to the Premises prior to the Substantial Completion of the Premises for the purpose
of Tenant installing overstandard equipment or fixtures (including Tenant’s data and telephone
equipment) 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 Project, the Building and the Premises, or

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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 Rent (until the occurrence of the Lease 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 Lease 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 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 Tenant’s Representative. Tenant has designated Christina Barcelos as its sole
representative with respect to the matters set forth in this Tenant Work Letter, who shall have
full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.

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

     5.4 Time of the Essence in This Tenant Work Letter. Unless otherwise indicated, all
references herein to a “number of days” shall mean and refer to calendar days. In all instances
where Tenant is required to approve or deliver an item, if no written notice of approval is given
or the item is not delivered within the stated time period, at Landlord’s sole option, at the end
of said period the item shall automatically be deemed approved or delivered by Tenant and the next
succeeding time period shall commence.

     5.5 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 19.1 of the Lease or any
default by Tenant under this Tenant Work Letter 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 the Lease, at law or in equity, Landlord shall have the right to
withhold payment of all or any portion of the Allowance and/or Landlord may cause Contractor to
cease 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 5.2
of this Tenant Work Letter), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter 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 Substantial Completion of
the Premises caused by such inaction by Landlord). In addition, if the Lease is terminated prior
to the Lease Commencement Date, for any reason due to a default by Tenant as described in Section
19.1 of the Lease or under this Tenant Work Letter, 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 (including any portion of the Allowance disbursed 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.

     5.6 Termination. Notwithstanding anything in the Lease (including this Tenant Work
Letter) to the contrary, Tenant acknowledges and agrees that Landlord shall have the right to
terminate the Lease by giving Tenant written notice of the exercise of such option (in which event
the Lease shall cease and terminate as of the date of such notice) in the event Landlord is unable
to obtain the Permits for the Tenant Improvements within ninety (90) days from the date of the full
execution and delivery of the Lease by Landlord and Tenant. Upon such termination, the parties
shall be relieved of all further obligations under the Lease except for those obligations under the
Lease which expressly survive the expiration or sooner termination of the Lease.

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EXHIBIT C

AMENDMENT TO LEASE

     This AMENDMENT TO LEASE (“Amendment”) is made and entered into effective as of
___, 20___, by and between LEGACY PARTNERS I ALAMEDA, LLC, a Delaware limited
liability company (“Landlord”) and ST. FRANCIS MEDICAL TECHNOLOGIES, INC., a Delaware corporation
(“Tenant”).

R
E C I T A L S :

     A. Landlord and Tenant entered into that certain Lease dated as of July 26, 2006 (the “Lease”)
pursuant to which Landlord leased to Tenant and Tenant leased from Landlord certain “Premises”, as
described in the Lease, in that certain Building located at 1201 Marina Village Parkway, Alameda,
California 94501.

     B. Except as otherwise set forth herein, all capitalized terms used in this Amendment shall
have the same meaning as such terms have in the Lease.

     C. Landlord and Tenant desire to amend the Lease to confirm the commencement and expiration
dates of the term, as hereinafter provided.

     NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     1. Confirmation of Dates. The parties hereby confirm that (a) the Premises are Ready
for Occupancy, and (b) the term of the Lease commenced as of
___ (the “Lease
Commencement Date”) for a term of five (5) years ending
on ___ (unless sooner
terminated as provided in the Lease.

     2. No Further Modification. Except as set forth in this Amendment, all of the terms
and provisions of the Lease shall remain unmodified and in full force and effect.

     IN WITNESS WHEREOF, this Amendment to Lease has been executed as of the day and year first
above written.

	 	 	 	 	 	 	 	 	 
	 	 	“Landlord”:
	 
	 	 	 	 	 	 	 	 
	 	 	LEGACY PARTNERS I ALAMEDA, LLC,
	 	 	a Delaware limited liability company,
	 	 	Owner
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Legacy Partners Commercial, L.P.,
	 	 	 	 	a California limited partnership,
	 	 	 	 	as Property Manager and Agent for Owner
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Legacy Partners Commercial, Inc.,
	 	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Debra Smith
	 

	 	 	 	 	 	Its:
	 	Executive Vice President
	 
	 	 	 	 	 	 	 	 
	 	 	“Tenant”:
	 
	 	 	 	 	 	 	 	 
	 	 	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	/s/ Kevin Sidow 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	Kevin Sidow  
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	President 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Name:	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	 
	 

	 	 	 	 	 	 	 	 

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EXHIBIT D

RULES AND REGULATIONS

     Tenant shall faithfully observe and comply with the following Rules and Regulations. Landlord
shall not be responsible to Tenant for the nonperformance of any of said Rules and Regulations by
or otherwise with respect to the acts or omissions of any other tenants or occupants of the
Building or Project.

     1. Tenant shall not alter any lock or install any new or additional locks or bolts on any
doors or windows of the Premises without obtaining Landlord’s prior written consent. Tenant shall
bear the cost of any lock changes or repairs required by Tenant. Two keys will be furnished by
Landlord for the Premises, and any additional keys required by Tenant must be obtained from
Landlord at a reasonable cost to be established by Landlord.

     2. All doors opening to public corridors shall be kept closed at all times except for normal
ingress and egress to the Premises, unless electrical hold backs have been installed.

     3. Landlord reserves the right to close and keep locked all entrance and exit doors of the
Building during such hours as are customary for comparable buildings in the vicinity of the
Building. Tenant, its employees and agents must be sure that the doors to the Building are
securely closed and locked when leaving the Premises if it is after the normal hours of business
for the Building. Any tenant, its employees, agents or any other persons entering or leaving the
Building at any time when it is so locked, or any time when it is considered to be after normal
business hours for the Building, may be required to sign the Building register when so doing.
After-hours access by Tenant’s authorized employees may be provided by card-key access or other
procedures adopted by Landlord from time to time; Tenant shall pay for the costs of all access
cards provided to Tenant’s employees and all replacements thereof for lost, stolen or damaged
cards. Access to the Building and/or Project may be refused unless the person seeking access has
proper identification or has a previously arranged pass for such access. Landlord and its agents
shall in no case be liable for damages for any error with regard to the admission to or exclusion
from the Building and/or Project of any person. In case of invasion, mob, riot, public excitement,
or other commotion, Landlord reserves the right to prevent access to the Building and/or Project
during the continuance of same by any means it deems appropriate for the safety and protection of
life and property.

     4. Landlord shall have the right to prescribe the weight, size and position of all safes and
other heavy property brought into the Building. Safes and other heavy objects shall, if considered
necessary by Landlord, stand on supports of such thickness as is necessary to properly distribute
the weight. Landlord will not be responsible for loss of or damage to any such safe or property
in any case. All damage done to any part of the Building, its contents, occupants or visitors by
moving or maintaining any such safe or other property shall be the sole responsibility of Tenant
and any expense of said damage or injury shall be borne by Tenant.

     5. No furniture, freight, packages, supplies, equipment or merchandise will be brought into or
removed from the Building or carried up or down in the elevators, except upon prior notice to
Landlord, and in such manner, in such specific elevator, and between such hours as shall be
designated by Landlord. Tenant shall provide Landlord with not less than 24 hours prior notice of
the need to utilize an elevator for any such purpose, so as to provide Landlord with a reasonable
period to schedule such use and to install such padding or take such other actions or prescribe
such procedures as are appropriate to protect against damage to the elevators or other parts of the
Building.

     6. Landlord shall have the right to control and operate the public portions of the Building
and Project, the public facilities, the heating and air conditioning, and any other facilities
furnished for the common use of tenants, in such manner as is customary for comparable buildings in
the vicinity of the Building.

     7. The requirements of Tenant will be attended to only upon application at the management
office of the Building or at such office location designated by Landlord. Employees of Landlord
shall not perform any work or do anything outside their regular duties unless under special
instructions from Landlord.

     8. Tenant shall not disturb, solicit, or canvass any occupant of the Building or Project and
shall cooperate with Landlord or Landlord’s agents to prevent same.

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

     10. Tenant shall not overload the floor of the Premises. Tenant shall not mark, drive nails
or screws, or drill into the partitions, woodwork or plaster or in any way deface the Premises or
any part thereof without Landlord’s consent first had and obtained; provided, however, Landlord’s
prior consent shall not be required with respect to Tenant’s placement of pictures and other normal
office wall hangings on the interior walls of the Premises (but at the end of the Term, Tenant
shall repair any holes and other damage to the Premises resulting therefrom).

     11. Except for vending machines intended for the sole use of Tenant’s employees and invitees,
no vending machine or machines of any description other than fractional horsepower office machines
shall be installed, maintained or operated upon the Premises without the written consent of
Landlord.

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     12. Tenant shall not use any method of heating or air conditioning other than that which may
be supplied by Landlord, without the prior written consent of Landlord.

     13. Tenant shall not use or keep in or on the Premises, the Building or Project any kerosene,
gasoline or other inflammable or combustible fluid or material. Tenant shall not use, keep or
permit to be used or kept, any foul or noxious gas or substance in or on the Premises, or permit or
allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or
other occupants of the Building or Project by reason of noise, odors, or vibrations, or interfere
in any way with other tenants or those having business therewith.

     14. Tenant shall not bring into or keep within the Project, the Building or the Premises any
animals, birds, bicycles or other vehicles.

     15. No cooking shall be done or permitted by Tenant on the Premises, nor shall the Premises be
used for the storage of merchandise, for lodging or for any improper, objectionable or immoral
purposes. Notwithstanding the foregoing, Underwriters’ laboratory-approved equipment and microwave
ovens may be used in the Premises for heating food and brewing coffee, tea, hot chocolate and
similar beverages, provided that such use is in accordance with all applicable federal, state and
city laws, codes, ordinances, rules and regulations, and does not cause odors which are
objectionable to Landlord and other tenants.

     16. Landlord will approve where and how telephone and telegraph wires are to be introduced to
the Premises. No boring or cutting for wires shall be allowed without the consent of Landlord.
The location of telephone, call boxes and other equipment affixed to the Premises shall be subject
to the approval of Landlord.

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

     18. Tenant, its employees and agents shall not loiter in the entrances or corridors, nor in
any way obstruct the sidewalks, lobby, halls, stairways or elevators, and shall use the same only
as a means of ingress and egress for the Premises.

     19. Tenant shall not waste electricity, water or air conditioning and agrees to cooperate
fully with Landlord to ensure the most effective operation of the Building’s heating and air
conditioning system, and shall refrain from attempting to adjust any controls.

     20. Tenant shall store all its trash and garbage within the interior of the Premises. No
material shall be placed in the trash boxes or receptacles if such material is of such nature that
it may not be disposed of in the ordinary and customary manner of removing and disposing of trash
and garbage in the city in which the Project is located without violation of any law or ordinance
governing such disposal. All trash, garbage and refuse disposal shall be made only through
entry-ways and elevators provided for such purposes at such times as Landlord shall designate.

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

     22. Tenant shall assume any and all responsibility for protecting the Premises from theft,
robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises
closed, when the Premises are not occupied.

     23. 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 without the
prior written consent of Landlord. The sashes, sash doors, skylights, windows, and doors that
reflect or admit light and air into the halls, passageways or other public places in the Building
shall not be covered or obstructed by Tenant, nor shall any bottles, parcels or other articles be
placed on the windowsills. All electrical ceiling fixtures hung in offices or spaces along the
perimeter of the Building must be fluorescent and/or of a quality, type, design and bulb color
approved by Landlord.

     24. The washing and/or detailing of or, the installation of windshields, radios, telephones in
or general work on, automobiles shall not be allowed on the Project.

     25. Food vendors shall be allowed in the Building upon receipt of a written request from the
Tenant. The food vendor shall service only the tenants that have a written request on file in the
management office of the Building. Under no circumstance shall the food vendor display their
products in a public or common area including corridors and elevator lobbies. Any failure to
comply with this rule shall result in immediate permanent withdrawal of the vendor from the
Building.

     26. Tenant must comply with requests by the Landlord concerning the informing of their
employees of items of importance to the Landlord.

     27. Tenant shall comply with any non-smoking ordinance adopted by any applicable governmental
authority, and neither Tenant nor any of its contractors, agents, employees, invitees or visitors
shall smoke in the Premises, in the Building or in any other portion of the Project which is not
designated as an area in which smoking is permitted.

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     28. Landlord may waive any one or more of these Rules and Regulations for the benefit of any
particular tenant or tenants, but no such waiver by Landlord shall be construed as a waiver of such
Rules and Regulations in favor of any other tenant or tenants, nor prevent Landlord from thereafter
enforcing any such Rules or Regulations against any or all tenants of the Building and/or Project.
Landlord reserves the right at any time to change or rescind any one or more of these Rules and
Regulations, or to make such other and further reasonable Rules and Regulations as in Landlord’s
judgment may from time to time be necessary for the management, safety, care and cleanliness of the
Premises, Building and Project, and for the preservation of good order therein, as well as for the
convenience of other occupants and tenants therein. Landlord shall not be responsible to Tenant or
to any other person for the nonobservance of the Rules and Regulations by another tenant or other
person. Tenant shall be deemed to have read these Rules and Regulations and to have agreed to
abide by them as a condition of its occupancy of the Premises.

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EXHIBIT E

FORM OF LEASE TERMINATION AGREEMENT

LEASE TERMINATION AGREEMENT

     THIS LEASE TERMINATION AGREEMENT (“Agreement”) is made and entered into as of July 26, 2006 by
and between LEGACY PARTNERS I ALAMEDA, LLC, a Delaware limited liability company (“Landlord”), and
ST. FRANCIS MEDICAL TECHNOLOGIES, INC., a Delaware corporation (“Tenant”).

R
E C I T A L S :

     A. Alameda Real Estate Investments, a California limited partnership (“Alameda”) and Tenant
entered into that certain Industrial Gross Lease dated as of November 17, 2003 (the “Original
Lease”), as amended by that certain Verification Memorandum dated as of April 2, 2004 (the
“Verification Memorandum”), pursuant to which Alameda leased to Tenant and Tenant leased from
Alameda, certain space (the “Premises”) containing approximately 13,112 rentable square feet
located on the first (1st) floor of that certain building located at 960 Atlantic
Avenue, Alameda, California (the “Building”). The Original Lease and the Verification Memorandum
are collectively referred to herein as the “Lease”.

     B. Landlord has succeeded to Alameda’s interests as landlord under the Lease.

     C. Subject to and in accordance with the terms of this Agreement, Landlord and Tenant desire
to terminate the Lease.

     D. Except as otherwise provided herein, all capitalized terms used herein shall have the same
meanings given such terms in the Lease.

A
G R E E M E N T :

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby agree as follows:

     1. Termination of Lease. Landlord and Tenant hereby agree that subject to the terms
of this Agreement, the Lease shall terminate and be of no further force and effect as of 11:59 p.m.
on that date (the “Termination Date”) which is fifteen (15) days after the commencement of that
certain Lease dated July 26, 2006, by and between Landlord and Tenant for certain premises located
in the building whose address is 1201 Marina Village Parkway, Alameda, California (the “New
Lease”).

     2. Surrender of Premises. On or prior to the Termination Date, Tenant shall vacate
and surrender to Landlord exclusive possession of the Premises in the condition in which the
Premises are otherwise required to be vacated and surrendered by Tenant pursuant to the applicable
provisions of the Lease at the end of the term of the Lease. In the event Tenant fails to vacate
and surrender exclusive possession of the Premises to Landlord on or prior to the Termination Date,
the holdover provisions of Section 22(e)(i) of the Original Lease shall apply; provided, however,
that until the earlier of (i) the date Tenant receives all required approvals from the Food and
Drug Administration (“FDA”) necessary for Tenant’s use of the premises under the New Lease and so
long as Tenant diligently seeks such approvals, files such applications and pays such fees
necessary or required to obtain such approvals, and (ii) the date which is three (3) months after
the Termination Date, Tenant shall pay to Landlord during any such holdover period a monthly rental
equivalent to one hundred percent (100%) of the prevailing monthly rental paid by Tenant as of the
Termination Date. Thereafter, Tenant shall pay to Landlord during any such holdover period a
monthly rental equivalent to one hundred fifty percent (150%) of the prevailing monthly rental paid
by Tenant as of the Termination Date in accordance with Section 22(e)(i) of the Original Lease.

     3. Security Deposit. Notwithstanding anything contained in this Agreement or the
Lease, concurrently with the mutual execution of this Agreement, Landlord shall retain a portion of
the security Deposit currently held by Landlord under the Original Lease, which portion shall equal
the amount of $71,194.50, as the security deposit to be provided by Tenant for the New Lease as set
forth in Article 20 of the New Lease (which portion shall also be held by Landlord as part
of the security Deposit securing the performance by Tenant of its obligations under the Lease prior
to the Termination Date and its obligations under this Agreement). Landlord shall retain the
remainder of the security Deposit held under the Lease (i.e., $162,502.50) as security for
the performance by Tenant of its obligations under the Lease and this Agreement, which remaining
balance shall be refunded to Tenant following the Termination Date subject to and in accordance
with Paragraph 16 of the Original Lease.

     4. Release of Liability. Except for the obligations, duties and rights of the parties
hereunder (including Tenant’s obligation to vacate and surrender exclusive possession of the
Premises to Landlord pursuant to Paragraph 2 hereof), and except as otherwise provided in
Paragraphs 6 and 7 of this Agreement, effective as of the Termination Date:

MARINA VILLAGE

[St. Francis]

EXHIBIT E
-1-

 

          a. the parties shall be fully and unconditionally released and discharged from their
respective obligations arising from or in connection with the provisions of the Lease; and

          b. the parties further agree to mutually release each other and their respective agents,
employees, officers, directors, shareholders, joint venturers and partners from, and this Agreement
shall fully and finally settle, all demands, charges, claims, accounts or causes of action of any
nature, including, without limitation, both known and unknown claims and causes of action which
either party had or now has or hereafter can, shall, or may have against any of the other parties
arising out of or in connection with the Lease.

     5. Waiver of Civil Code Section 1542. With respect to the releases set forth in
Paragraph 4 above, the parties acknowledge that they have been advised by legal counsel and are
familiar with the provisions of California Civil Code Section 1542, which provides as follows:

     “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR.”

THE UNDERSIGNED, BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVE ALL RIGHTS THEY MAY HAVE
THEREUNDER, AS WELL AS ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT PERTAINING TO
THE RELEASES SET FORTH HEREIN.

     The parties represent and warrant to each other that they have executed this Agreement with
full knowledge of any and all rights which they may have by reason of any of the matters described
herein. Each of the parties hereby further assumes the risk of mistake of fact in connection with
the true facts involved in connection with the matters described herein, and with respect to any
facts which are now unknown to them relating thereto.

     6. Representations of Tenant. Tenant represents and warrants to Landlord that (a)
Tenant has not heretofore assigned all or any portion of its interest in the Lease or sublet any
portion of the Premises, (b) no other person, firm or entity has any right, title or interest in
the Lease, and (c) Tenant has the full right, legal power and actual authority to enter into this
Agreement and to terminate the Lease. Notwithstanding the termination of the Lease and the release
of liability, as provided herein, the representations and warranties set forth in this Paragraph 6
shall survive the termination of the Lease and Tenant shall be liable to Landlord for any
inaccuracy or any breach thereof.

     7. Continuing Liability. Notwithstanding the termination of the Lease and the release
of liability provided for herein, Tenant shall remain liable for (a) all of its obligations as
Tenant under the Lease arising prior to the Termination Date, and (b) all of Tenant’s
indemnification and other obligations which expressly survive termination of the Lease, including
the obligation to pay for Tenant’s Percentage Share of any reconciliation of actual Operating
Expenses and Property Taxes over the estimated Operating Expenses and Property Taxes paid for by
Tenant for the current calendar year pursuant to Section 4 of the Original Lease.

     8. Entire Agreement. It is understood and acknowledged that there are no oral
agreements among the parties hereto affecting this Agreement and this Agreement supersedes and
cancels any and all previous negotiations, arrangements, agreements and understandings, if any,
among the parties hereto, relating in any manner to the termination of the Lease and the release of
liability, as provided herein, and none thereof shall be used to interpret or construe this
Agreement. This Agreement contains all of the terms, covenants, conditions, warranties and
agreements of the parties relating in any manner to the termination of the Lease and the release of
liability, as provided herein, shall be considered to be the only agreement among the parties
hereto and their representatives and agents relating in any manner to the termination of the Lease
and the release of liability, and none of the terms, covenants, conditions or provisions of this
Agreement can be modified, deleted or added to except in writing signed by the parties hereto. All
negotiations and oral agreements acceptable to both parties have been merged into and are included
herein. There are no other representations or warranties among the parties, and all reliance with
respect to representations is based totally upon the representations and agreements contained in
this Agreement.

     9. Attorneys’ Fees. Should any dispute arise among the parties hereto or the legal
representatives, successors and assigns concerning any provision of this Agreement or the rights
and duties of any person in relation thereto, the party prevailing in such dispute shall be
entitled, in addition to such other relief that may be granted, to recover reasonable attorneys’
fees and legal costs in connection with such dispute.

     10. Governing Law. This Agreement shall be governed by and construed under the laws
of the State of California.

     11. Counterparts. This Agreement may be executed in any number of original
counterparts. Any such counterpart, when executed, shall constitute an original of this Agreement,
and all such counterparts together shall constitute one and the same Agreement.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

MARINA VILLAGE

[St. Francis]

EXHIBIT E
-2-

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first set
forth above.

	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD”	 	LEGACY PARTNERS I ALAMEDA, LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	LEGACY PARTNERS COMMERCIAL, L.P.,
	 	 	 	 	a California limited partnership,
	 	 	 	 	as Property Manager and Agent for Landlord
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	LEGACY PARTNERS COMMERCIAL, INC.,
	 	 	 	 	 	 	General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	By: 	 	 	 
	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Name:
	 	Debra Smith
	 

	 	 	 	 	 	 	 	Its:
	 	Executive Vice President
	 
	 	 	 	 	 	 	 	 	 	 
	“TENANT”	 	ST. FRANCIS MEDICAL TECHNOLOGIES, INC.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Kevin Sidow 
	 	 	 	 	 
	 

	 	 	 	Name:	 	Kevin Sidow 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	President 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 	 	 
	 	 	 	 	 	 	 

MARINA VILLAGE

[St. Francis]

EXHIBIT E
-3-

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