Document:

EMPLOYMENT AGREEMENT DATED AS OF JUNE 3, 2004

 Exhibit 10.1 
  
 Execution Copy 
  
 EMPLOYMENT AGREEMENT 
  
 This Employment Agreement (“Agreement”), dated as of June 3, 2004, is by and between St. John Knits, Inc., a California corporation
(“Company”), and Richard Cohen, an individual (“Executive”). In consideration of the mutual covenants and agreements set forth herein, the parties hereto agree as follows. 
  
 ARTICLE I 
 EMPLOYMENT 
  
 The Company hereby employs Executive and Executive accepts employment with the Company upon the terms and conditions herein set forth. 
  
 1.1 Employment. 
  
 (a) Subject to the provisions of Article IV of this Agreement, the Company hereby employs Executive, and Executive agrees to serve as the Chief Executive
Officer of the Company and St. John Knits International, Incorporated (“SJKII”) from the period beginning on the date on which Executive commences employment with the Company (which shall be no later than September 1, 2004) (the
“Effective Date”) and ending on the fifth anniversary of the Effective Date (the “Term”); provided, however, that commencing with the fifth anniversary of the Effective Date and on each anniversary thereof (each, an
“Extension Date”), the Term shall be automatically extended for an additional one-year period, unless the Company or Executive provides the other party hereto 90 days prior written notice before the applicable Extension Date that the Term
shall not be so extended. In such positions, Executive shall assume, subject to the powers of the Board of Directors of the Company (the “Company Board”) and the Board of Directors of SJKII (the “Board of Directors”), as
applicable, general and active supervision and management over the business of the Company and SJKII and over their respective officers, assistants, agents and employees. In addition, Executive shall have such duties and authority commensurate with
the position of a chief executive officer of a company of similar size and nature and as the Company Board and the Board of Directors, as applicable, shall otherwise determine from time to time. Executive agrees to devote substantially his full
business time and attention and best efforts to the affairs of SJKII and the Company during the Term, unless this Agreement is terminated sooner in accordance with the provisions hereto. Executive shall report to the Company Board and the Board of
Directors, as applicable, and shall be appointed and serve as a member of the Board of Directors without additional compensation. 
  
 (b) Notwithstanding the foregoing, Executive shall not be precluded from (i) serving on the boards of directors of a reasonable number of trade
associations and/or charitable organizations (subject to the reasonable approval of the Board of Directors), (ii) engaging in charitable activities and community affairs, (iii) serving as a director of Cortiva Group, LLC and (iv) managing his
personal investments and affairs; provided that the activities in clauses (i) through (iv) do not, individually or in the aggregate, materially interfere with the proper performance of his duties and responsibilities to the Company or
adversely affect in any material respect the Company or any of its affiliates. 
  

 (c) Executive’s obligations under this Agreement shall be contingent upon his obtaining, or waiving
his right to obtain, a release of claims (the “Zegna Release”) from Ermenegildo Zegna Corporation (“Zegna”) and entering into, or waiving his right to enter into, a severance agreement with Zegna (the “Zegna Severance
Agreement”), which agreements are acceptable to Executive in his sole discretion. Notwithstanding anything to the contrary in this Agreement, in the event that Executive fails to either (i) obtain the Zegna Release and/or enter into the Zegna
Severance Agreement or (ii) waive Executive’s right to obtain the Zegna Release or enter into the Zegna Severance Agreement on or before June 30, 2004, then this Agreement shall be deemed null and void and of no further force and effect.

  
 ARTICLE II 
 COMPENSATION 
  
 2.1 Annual Salary. During the Term, the Company shall pay Executive at the annual rate of $1,200,000. Beginning with the Company’s fiscal year
2006, Executive’s annual base salary shall be subject to review for increase by the Board of Directors on an annual basis on or around the first day of each fiscal year. Executive’s annual base salary, as in effect from time to time, is
hereinafter referred to as the “Base Rate”. The Base Rate shall be payable in substantially equal monthly installments. 
  
 2.2 Purchased Equity and Stock Options. 
  
 (a) Purchased Equity. On the Effective Date or as soon as practicable thereafter, Executive shall purchase 1,667 shares of common stock of SJKII
(the “Shares”). The purchase price per Share shall be $30.00. 
  
 (b) Stock Options. 
  
 (i) On the
Effective Date or as soon as practicable thereafter, Executive shall be granted an option under an option agreement, in the form attached hereto as Exhibit A (the “Option Agreement”), to purchase (A) 50,000 Shares, at the price of $30.00
per Share, (B) 50,000 Shares, at a price of $40.00 per Share, (C) 50,000 Shares, at a price of $50.00 per Share, and (D) 50,000 Shares, at a price of $60.00 per Share (the “Option”), which shall be subject to the terms and conditions set
forth in the Amended and Restated St. John Knits International, Incorporated 1999 Stock Option Plan (the “Stock Option Plan”) and the Option Agreement. 
  
 (ii) In the event of any conflict or inconsistency between the terms and conditions of the Stock Option Plan
and the Option Agreement, the terms and conditions of the Option Agreement shall control. 
  
 (c) Subscription Agreement. All Shares purchased by Executive as described in Article 2.2(a) and acquired by Executive upon the exercise of an Option shall be subject to the terms and conditions of a
subscription agreement, substantially in the form attached hereto as Exhibit B. 
  
 2.3 Reimbursement of Expenses. During the Term, Executive shall be entitled to receive prompt reimbursement of all reasonable expenses incurred by Executive in performing 

  

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services hereunder, including all expenses of travel, entertainment and living expenses while away from home on business at the request of, or in the service
of, the Company; provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Company. 
  
 2.4 Bonuses. 
  
 (a) Signing Bonus. Upon signing, Executive shall receive a signing bonus in the amount of $300,000 (the “Signing Bonus”);
provided, however, if at any time prior to December 31, 2005, Executive’s employment with the Company is terminated by Executive without Good Reason (as defined in Article 4.1 below) or by the Company for Cause, Executive shall,
within 20 business days after any such termination, repay to the Company the Signing Bonus. Nothing in this paragraph is to be read as guaranteeing Executive’s employment longer than the Term or in any other way. 
  
 (b) Annual Bonus. Executive shall be eligible to receive an annual
bonus (the “Annual Bonus”) with respect to each fiscal year during the Term of up to (i) 50% of the Base Rate in fiscal years 2004 and 2005 and (ii) 100% of the Base Rate during the remainder of the Term, which shall be determined by, and
paid based upon, performance goals to be set by the Board of Directors in consultation with Executive within the first 90 days of each applicable fiscal year; provided, however, that Executive shall be entitled to an Annual Bonus, (x)
with respect to fiscal year 2004, of no less than the product of $300,000 multiplied by a fraction, the numerator of which is the number of days that this Agreement was in effect in fiscal year 2004 and the denominator of which is 365 and (y) with
respect to fiscal year 2005, of no less than $350,000 (the amounts in clauses (x) and (y), the “Minimum Annual Bonus Amounts”). 
  
 2.5 Benefits and Perquisites. 
  
 (a) General Benefits. Except as provided pursuant to Article 2.5(b) below, during the Term, Executive shall be entitled to participate in and be
covered by all health, insurance, pension and other employee plans and benefits currently established for the employees of the Company on at least the same terms as other senior executives of the Company, subject to meeting applicable eligibility
requirements. 
  
 (b) Minimum Benefits. During the Term,
the Company shall provide Executive with the following minimum benefits: 
  
 (i) The Company shall obtain, and pay the premiums on, a whole life policy in the amount of $1,000,000 and a term life policy in the amount of $2,000,000 on the life of Executive, naming Executive’s designated
beneficiary as the beneficiary thereof. 
  
 (ii)
The Company shall obtain, and pay the premiums on, (A) an individual disability insurance policy which provides a monthly disability benefit of $9,500 and (B) a group disability policy which provides for a monthly disability benefit of at least
$15,000. Such policies shall contain terms, conditions and exclusions substantially the same as the policies maintained by Zegna for Executive’s benefit as of April 1, 2004. 
  

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 (iii) The Company shall either contribute an amount to the Company’s 401(k) plan
equal to 100% of Executive’s 401(k) contribution, not to exceed 5% of the annual compensation limit for the year such contribution is made, or make such other arrangement to provide a comparable benefit as is reasonably acceptable to Executive.

  
 (c) Dependent Medical Care. During the Term, the
Company shall (i) pay insurance premiums when due, in an aggregate amount of up to $470,000 per year, for an insurance policy which provides for payment or reimbursement to Executive for any medical, custodial or in-home nursing care or special
education expenses incurred by Executive for Executive’s dependents or (ii) if no insurance policy is available, reimburse Executive, in an aggregate amount of up to $470,000 per year, for any medical, custodial or in-home nursing care or
special education expenses incurred by Executive for Executive’s dependents (the “Dependent Care Coverage”); provided that the Company shall use commercially reasonable efforts to provide such Dependent Care Coverage though an
insurance policy which shall provide, to the maximum extent possible, that such reimbursements shall not constitute taxable income to Executive. 
  
 (d) Perquisites. During the Term, Executive shall be entitled to the perquisites set forth on Exhibit C attached hereto. 
  
 2.6 Vacations and Holidays. During Executive’s employment with
the Company, Executive shall be entitled to an annual vacation leave of four weeks at full pay, or such greater vacation benefits as may be provided for by the Company’s vacation policies applicable to senior executives. Executive shall be
entitled to such holidays as are established by the Company for all employees. 
  
 ARTICLE III 
 CONFIDENTIALITY AND NONDISCLOSURE 
  
 3.1 Confidentiality. Executive will not during Executive’s employment by the Company or thereafter at any time
disclose, directly or indirectly, to any person or entity or use for Executive’s own benefit any trade secrets or confidential information relating to the Company’s business operations, marketing data, business plans, strategies,
employees, negotiations and contracts with other companies, or any other subject matter pertaining to the business of the Company or any of its affiliates, clients, customers, consultants, or licensees, known, learned, or acquired by Executive
during the period of Executive’s employment by the Company (unless generally known to the public or to trade sources other than as a result of Executive’s breach of this Article 3.1 or any breach of other confidentiality obligations by
third parties) (collectively “Confidential Information”), except as may be necessary in the ordinary course of performing Executive’s particular duties as an employee of the Company. Except as required by law, prior to the Effective
Date, (a) Executive will not disclose to anyone, other than Executive’s immediate family and legal or financial advisors, the contents of this Agreement and (b) the Company will not disclose to anyone, other than its affiliates and legal or
financial advisors, the contents of this Agreement. 
  
 3.2
Return of Confidential Material. Executive shall promptly deliver to the Company on termination of this Agreement, whether or not for Cause and whatever the reason, 

  

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or at any time the Company may so request, all memoranda, notes, records, reports, manuals, drawings, blueprints, Confidential Information and any other
documents of a confidential nature belonging to the Company or any of its affiliates, including all copies of such materials which Executive may then possess or have under Executive’s control. Upon termination of this Agreement, Executive shall
not take any document, data, or other material of any nature containing or pertaining to the proprietary information of the Company. 
  
 3.3 Prohibition on Solicitation of Customers. During the term of Executive’s employment with the Company and for a period of one year
thereafter (the “Restricted Period”), Executive shall not, directly or indirectly, either for Executive or for any other person or entity, solicit any person or entity to terminate such person’s or entity’s contractual and/or
business relationship with the Company or any of its affiliates, nor shall Executive interfere with or disrupt or attempt to interfere with or disrupt any such relationship. None of the foregoing shall be deemed a waiver of any and all rights and
remedies the Company may have under applicable law. 
  
 3.4
Prohibition on Solicitation of Employees, Agents or Independent Contractors. During the Restricted Period, Executive will not solicit any of the employees, agents, or independent contractors of the Company or any of its affiliates to leave
the employ of the Company or any of its affiliates for a competitive company or business. However, Executive may solicit any employee, agent or independent contractor who voluntarily terminates his or her employment with the Company or any of its
affiliates after a period of 120 days have elapsed since the termination date of such employee, agent or independent contractor. None of the foregoing shall be deemed a waiver of any and all rights and remedies the Company may have under applicable
law. 
  
 3.5 Right to Injunctive and Equitable Relief.
Executive’s obligations not to disclose or use Confidential Information and to refrain from the solicitations described in this Article III are of a special and unique character which gives them a peculiar value. The Company cannot be
reasonably or adequately compensated for damages in an action at law in the event Executive breaches such obligations. Therefore, Executive expressly agrees that the Company shall be entitled to injunctive and other equitable relief without bond or
other security in the event of such breach in addition to any other rights or remedies which the Company may possess or be entitled to pursue. Furthermore, the obligations of Executive and the rights and remedies of the Company under this Article
III are cumulative and in addition to, and not in lieu of, any obligations, rights, or remedies created by applicable law relating to misappropriation or theft of trade secrets or Confidential Information. 
  
 3.6 Survival of Obligations. Executive agrees that the terms of this
Article III shall survive the Term and the termination of Executive’s employment with the Company. 
  

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 ARTICLE IV 
 TERMINATION 
  
 4.1
Definitions. For purposes of this Article IV, the following definitions shall apply to the terms set forth below: 
  
 (a) Cause. “Cause” shall include the following: 
  

(i) Executive’s conviction of, or plea of guilty or nolo contendere to, (A) a felony under the laws of the United
States or any state thereof or (B) any other crime (excluding a petty misdemeanor) involving theft, fraud, dishonesty or moral turpitude; 
  
 (ii) Executive engages in willful misconduct that results in any material harm to the Company; 
  
 (iii) Executive’s willful failure to substantially
carry out Executive’s duties (except where such failure is a result of Executive’s death or Disability) within 10 days after a written demand for substantial performance approved by a resolution of the Board of Directors is delivered to
Executive by the Board of Directors that specifically identifies the manner in which the Board of Directors believes Executive has not substantially performed Executive’s duties; 
  
 (iv) a material breach of this Agreement by Executive and Executive fails to cure such breach within 30 days
following written notice delivered by the Company; or 
  
 (v) Executive’s material violation of any written Company policy and Executive fails to cure such violation within 10 days following written notice delivered by the Company; provided, however, that a repeat violation of
the same or similar policy shall not be subject to a cure period. 
  
 For purposes of this Article 4.1(a), no act, or failure to act, on the part of Executive shall be considered “willful” to the extent such act, or failure to act, is based upon a directive given pursuant to a resolution duly
adopted by the Board of Directors. 
  
 (b) Good Reason.
“Good Reason” shall mean, without Executive’s prior written consent: 
  
 (i) the assignment to Executive of duties inconsistent with the position and status of Executive as set forth in this Agreement;

  
 (ii) a substantial alteration or diminution
in the nature, status or prestige of Executive’s responsibilities or a diminution in Executive’s title or reporting level from that set forth in this Agreement; provided, however, that, on or after an Equity Acceleration
Event, a change in Executive’s title from that set forth in this Agreement shall not constitute “Good Reason” so long as Executive remains the most senior executive officer of SJKII and the Company or, in the event of the sale of the
assets of 

  

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SJKII and its subsidiaries (determined on a consolidated basis), the businesses of SJKII and the Company; 
  
 (iii) the relocation of the Company’s executive offices
or principal business location to a point more than 50 miles from the location of such offices or business as of the date of this Agreement; 
  
 (iv) a reduction by the Company of (A) Executive’s Base Rate, (B) Executive’s Annual Bonus opportunity as described in Article
2.4(b), (C) the maximum amount of the Dependent Care Coverage or (D) the minimum benefits described in Article 2.5(b) of this Agreement; 
  
 (v) a failure by the Company to obtain from any successor, before the succession takes place, an agreement to assume and perform this
Agreement; 
  
 (vi) a material breach of this
Agreement by the Company (including, without limitation, the Company’s failure to grant the Option or pay the Minimum Annual Bonus Amounts); or 
  
 (vii) if there is no public market for the Shares, Executive is not elected to be a member of the Board of Directors or, if there is a
public market for the Shares, Executive is not nominated to be a member of the Board of Directors so long as such nomination is not prohibited by applicable law. 
  
 provided that any event described in clauses (i) through (vi) above shall constitute Good Reason only if the Company fails to cure
such event within 20 days after receipt from Executive of written notice of the event which constitutes Good Reason; provided, further, that Good Reason shall cease to exist for an event on the 180th day following the later of its
occurrence or Executive’s actual knowledge thereof, unless Executive has given the Company written notice thereof prior to such date. 
  
 (c) Disability. “Disability” shall mean a physical or mental incapacity as a result of which Executive becomes unable to substantially
perform his duties hereunder (reasonable absences because of sickness for up to four consecutive months excepted; provided, however, that any new period of incapacity or absences shall be deemed to be part of a prior period of
incapacity or absences if the prior period terminated within 90 days of the beginning of the new period of incapacity or absence and the incapacity or absence is determined by the Board of Directors, in good faith, to be related to the prior
incapacity or absence). A determination of Disability shall be subject to the certification of a qualified medical doctor agreed to by the Company and Executive or in the event of Executive’s incapacity to designate a doctor, Executive’s
legal representative. In the absence of agreement between the Company and Executive, each party shall nominate a qualified medical doctor and the two doctors so nominated shall select a third doctor, who shall make the determination as to
Disability. 
  
 4.2 Termination by Company. The Company may
terminate Executive’s employment hereunder immediately for Cause. Subject to the other provisions contained in this Agreement, the Company may terminate this Agreement for any reason other than Cause upon 30 days’ written notice to
Executive. The effective date of termination (the “Termination Date”) 

  

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shall be considered to be 30 days subsequent to written notice of termination; however, the Company may elect to have Executive leave the Company
immediately. 
  
 4.3 Termination by Executive. Executive
may terminate his employment hereunder upon 30 days’ written notice to the Company. The Termination Date shall be considered to be 30 days subsequent to written notice of termination; however, the Company may elect to have Executive leave the
Company immediately. 
  
 4.4 Death or Disability of
Executive. Executive’s employment hereunder shall terminate immediately upon the death or Disability of Executive. In such event, the Termination Date shall be the date of death or the date of the determination of Executive’s
Disability in accordance with the provisions of Article 4.1(c), as applicable. 
  
 4.5 Severance Benefits Received Upon Termination. 
  
 (a) Termination by the Company for Cause or by Executive Without Good Reason. If Executive’s employment is terminated by the Company for Cause or by Executive other than for Good Reason, then Executive
shall be entitled to (i) the Base Rate through the Termination Date, (ii) any Annual Bonus earned but unpaid as of the Termination Date for any previously completed fiscal year, (iii) reimbursement for any unreimbursed business expenses properly
incurred by Executive in accordance with Company policy prior to the Termination Date, (iv) credit for any vacation earned during the fiscal year in which the Termination Date occurs but not taken, plus any vacation days rolled over from the prior
fiscal year to the extent allowed by the Company’s policies, and (v) such employee benefits, if any, to which Executive may be entitled under the employee benefit plans of the Company (the amounts described in clauses (i) through (v) hereof
being referred to as the “Accrued Rights”). In addition, subject to Executive’s continued compliance with the provisions of Article III, if Executive’s employment is terminated by Executive other than for Good Reason, then
Executive shall be entitled to continuation of the Dependent Care Coverage until the earlier of (A) the second anniversary of the Termination Date and (B) the date on which Executive becomes employed by a subsequent employer. The Company shall
thereafter have no further obligations to Executive under this Agreement. 
  
 (b) Termination Due to Death or Disability. If Executive’s employment is terminated due to Executive’s death or Disability, then Executive shall be entitled to the Accrued Rights. In addition, subject
to Executive’s continued compliance with the provisions of Article III, if Executive’s employment is terminated due to Executive’s death or Disability, then Executive shall be entitled to (i) continuation of the Dependent Care
Coverage until the later of (x) twelve months following the Termination Date and (y) the expiration of the Term determined as if such termination had not occurred and (ii) a lump sum payment, within 60 days following the beginning of the fiscal year
subsequent to the fiscal year in which the Termination Date occurs, equal to the product of (A) the Annual Bonus that Executive would have actually earned in the fiscal year in which the Termination Date occurs (if Executive had remained employed by
the Company and based upon achievement of the performance goals established for such fiscal year), multiplied by (B) a fraction, the numerator of which is the number of days that Executive was employed during the fiscal year in which the Termination
Date occurs and the denominator 

  

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of which is 365. The Company shall thereafter have no further obligations to Executive under this Agreement. 
  
 (c) Termination by the Company Without Cause or by Executive for Good
Reason. If Executive’s employment is terminated by the Company without Cause or by Executive for Good Reason, then, subject to Executive’s continued compliance with the provisions of Article III, Executive shall be entitled to:

  
 (i) a lump sum payment, within 60 days
following the beginning of the fiscal year subsequent to the fiscal year in which the Termination Date occurs, equal to the product of (A) the Annual Bonus that Executive would have actually earned in the fiscal year in which the Termination Date
occurs (if Executive had remained employed by the Company and based upon achievement of the performance goals established for such fiscal year), multiplied by (B) a fraction, the numerator of which is the number of days that Executive was employed
during the fiscal year in which the Termination Date occurs and the denominator of which is 365; 
  
 (ii) (A) continued payment of the Base Rate for a period of two years following the Termination Date (the “Severance Period”),
payable in equal monthly installments, and (B) an amount equal to the product of (I) two times (II) the Average Bonus (as defined below), payable in equal monthly installments over the Severance Period; provided that the aggregate amount
described in this clause (ii) shall be reduced by the present value of any other cash severance or similar termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates (other than those
expressly provided in this Article 4.5(c)). For purposes of this Agreement, Average Bonus shall mean the average of the Annual Bonuses paid to Executive for the two fiscal years immediately preceding the fiscal year in which the Termination Date
occurs; provided, however, that if the number of completed fiscal years beginning on and after the Effective Date is (x) at least one but less than two, the Average Bonus shall be the Annual Bonus, if any, earned with respect to the
first fiscal year of Executive’s employment and (y) less than one, the Average Bonus shall be the Annual Bonus that Executive would have actually earned in the fiscal year in which the Termination Date occurs (if Executive had remained employed
by the Company and based upon achievement of the performance goals established for such fiscal year); provided, further, that with respect to clauses (x) and (y), if the Annual Bonus in the applicable fiscal year was prorated, such
Annual Bonus shall be multiplied by a fraction, the numerator of which is 365 and the denominator of which is the number of days that Executive was employed during the applicable fiscal year; 
  
 (iii) during the Severance Period, continuation of health
insurance coverage as then in effect for Executive; 
  
 (iv) continuation of the Dependent Care Coverage until the later of (A) the expiration of the Severance Period or (B) the expiration of the Term determined as if such termination had not occurred; and 
  
 (v) the Accrued Rights. 
  

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 (d) Expiration of the Term. If the Company elects not to extend the Term pursuant to Article 1.1,
then, subject to Executive’s continued compliance with the provisions of Article III, Executive shall be entitled to: 
  
 (i) (A) continued payment of the Base Rate for a period of 12 months following the Termination Date (the “Non-Renewal Period”),
payable in equal monthly installments, and (B) an amount equal to the product of (I) one times (II) the Average Bonus, payable in equal monthly installments over the Non-Renewal Period; provided that the aggregate amount described in this
clause (i) shall be reduced by the present value of any other cash severance or similar termination benefits payable to Executive under any other plans, programs or arrangements of the Company or its affiliates (other than those expressly provided
in this Article 4.5(d)); 
  
 (ii) during the
Non-Renewal Period, continuation of (A) health insurance coverage as then in effect for Executive and (B) the Dependent Care Coverage; and 
  
 (iii) the Accrued Rights. 
  
 4.6 Board/Committee Resignation. Upon termination of Executive’s employment for any reason, Executive agrees to resign, as of the Termination
Date and to the extent applicable, from the Board of Directors (and any committees thereof) and the board of directors (and any committees thereof) of any of the Company’s affiliates. 
  
 ARTICLE V 
 GENERAL PROVISIONS 
  
 5.1 Notice. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered by hand with written acknowledgment of
receipt, or when received by the addressee, if mailed by United States registered mail, return receipt requested, postage prepaid, or when received by the addressee, if sent by a national recognized overnight delivery service as follows: 

 

			
	 If to the Company:
	  	St. John Knits, Inc.
	 	  	17622 Armstrong Avenue
	 	  	Irvine, California 92614
	 	  	Attn: Chief Financial Officer
		
	 With copies to:
	  	Alvin Brown, Esq.
	 	  	Simpson Thacher & Bartlett LLP
	 	  	425 Lexington Ave.
	 	  	New York, New York 10017, and
		
	 	  	James P. Kelley
	 	  	Vestar Capital Partners
	 	  	Seventeenth Street Plaza
	 	  	1225 17th Street, Suite 1660
	 	  	Denver, Colorado 80202

  

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	 If to Executive:
	  	Richard Cohen
	 	  	c/o St. John Knits, Inc.
	 	  	17622 Armstrong Avenue
	 	  	Irvine, California 92614
		
	 With a copy to:
	  	Christopher Boies, Esq.
	 	  	Boies, Schiller & Flexner LLP
	 	  	333 Main Street
	 	  	Armonk, New York 10504

  
 or such other address as either party
may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt. 
  
 5.2 No Waivers. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing signed by Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 
  
 5.3 Beneficial Interests. This Agreement shall inure to the benefit of and be enforceable by Executive’s personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts are still payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Executive’s devisee, legatee, or other designee or, if there be no such designee, to Executive’s estate. 
  
 5.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to
conflicts of laws principles thereof. 
  
 5.5 Severability or
Partial Invalidity. The invalidity or unenforceability of any provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 
  
 5.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 
  
 5.7 Legal Fees and Expenses. Should any party institute any action or proceeding to enforce this Agreement or any provision hereof, or for damages
by reason of any alleged breach of this Agreement or of any provision hereof, or for a declaration of rights hereunder, the prevailing party in any such action or proceeding shall be entitled to receive from the other party all costs and expenses,
including reasonable attorneys’ fees, incurred by the prevailing party in connection with such action or proceeding. Within 45 days following the 

  

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Effective Date, the Company shall pay Executive’s reasonable legal fees and expenses incurred in connection with the negotiation of this Agreement and
the negotiation and documentation of the Zegna Release and Zegna Severance Agreement, up to a maximum of $50,000, after presentation of an itemized statement by Executive’s counsel with reasonable detail supporting such fees and expenses.

  
 5.8 Entire Agreement. This Agreement constitutes the
entire agreement of the parties and supersedes all prior written or oral and all contemporaneous oral agreements, understandings, and negotiations between the parties with respect to the subject matter hereof. This Agreement is intended by the
parties as the final expression of their agreement with respect to such terms as are included in this Agreement and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement
constitutes the complete and exclusive statement of its terms and that no extrinsic evidence may be introduced in any judicial proceeding involving this Agreement. 
  
 5.9 Assignment. This Agreement and the rights, duties, and obligations hereunder may not be assigned or delegated by
any party without the prior written consent of the other party and any attempted assignment or delegation without such prior written consent shall be void and be of no effect. Notwithstanding the foregoing provisions of this Section 5.9, the Company
may assign or delegate its rights, duties, and obligations hereunder to any of its affiliates or to any person or entity which succeeds to all or substantially all of the business of the Company through merger, consolidation, reorganization, or
other business combination or by acquisition of all or substantially all of the assets of the Company. 
  
 5.10 Set-Off. The Company’s obligation to pay Executive the amounts provided hereunder shall be subject to set-off, counterclaim or recoupment
of any amounts loaned or advanced by the Company or any of its affiliates to Executive. 
  
 5.11 Indemnity. The Company and Executive shall enter into an indemnification agreement, substantially in the form attached hereto as Exhibit D. 
  
 5.12 Representations. 
  
 (a) Executive hereby represents to the Company that the execution and delivery of this Agreement by Executive and the Company and the
performance by Executive of his duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any employment agreement or other agreement or policy to which Executive is a party or otherwise bound. 
  
 (b) The Company hereby represents to Executive that (i) the
Company is fully authorized and empowered by action of the Board of Directors to enter into this Agreement and (ii) the performance of the Company’s obligations under this Agreement will not violate any agreement between the Company and any
other person, firm or organization. 
  
 5.13 Withholding.
The Company may withhold from any amounts payable under this Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation. 
  

 12 

 5.14 Arbitration. Except as provided in Article 3.5 of this Agreement, any controversy arising out
of or relating to Executive’s employment, this Agreement, its enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of its provisions, shall be resolved by arbitration before the
American Arbitration Association in New York City, New York. Final resolution of any dispute through arbitration may include any remedy or relief which the arbitrator deems just and equitable. Any award or relief granted by the arbitrator hereunder
shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction. The parties agree that they are hereby waiving any rights to trial by jury in any action, proceeding or counterclaim brought by either of
the parties against the other in connection with any matter whatsoever arising out of or in any way connected with this Agreement or Executive’s employment. 
  
 5.15 Survival. The respective rights and obligations of the parties to this Agreement shall survive any termination
of Executive’s employment to the extent necessary to the intended preservation of such rights and obligations. 
  
 5.16 No Mitigation. Except as expressly provided in this Agreement, the Company agrees that any income and other employment benefits received by
Executive from any and all sources other than the Company or any of its affiliates before, during or after the Term shall in no way reduce or otherwise affect the Company’s obligation to make payments and afford benefits to Executive as
provided in this Agreement. 
  
 5.17 Parachute Gross-Up.
The Company will provide a gross-up for any excise tax imposed upon the Executive under Section 4999 of the Internal Revenue Code of 1986, as amended, sufficient to put Executive in the same after-tax position as if such excise tax were not due. The
amount of such gross-up shall be determined by the Company’s external auditors assuming the highest marginal federal and applicable state tax rates, and Executive shall be entitled to continuing indemnification for any additional tax imposed by
taxing authorities relating to such excise tax or gross up. 
  

 13 

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

  

					
	 St. John Knits, Inc.,

	 a California corporation

		
	 By:
	 	 
			
	 	 	 Name:
	 	 
	
	 
	 Richard Cohen

  

 14 

 EXHIBIT A 
  

TIME OPTION AGREEMENT 
  
 THIS AGREEMENT (the “Agreement”), is made effective as of the          day of
                        , 2004 (hereinafter called the “Grant Date”), between ST. JOHN KNITS INTERNATIONAL,
INCORPORATED, a Delaware corporation (hereinafter called the “Company”), and Richard Cohen (hereinafter called the “Participant”): 
  
 R E C I T A L S: 
  
 WHEREAS, the Company has adopted the Amended and Restated St. John Knits International, Incorporated 1999 Stock Option Plan
(the “Plan”), which Plan is incorporated herein by reference and made a part of this Agreement. Capitalized terms not otherwise defined herein shall have the same meanings as in the Plan; 
  
 WHEREAS, the Committee has determined that it would be in the best interests
of the Company and its stockholders to grant the option provided for herein (the “Option”) to the Participant pursuant to the Plan and the terms set forth herein; and 
  
 WHEREAS, simultaneous with the Company’s grant of this Option to the Participant, the Participant acknowledges that
Participant shall, if the Participant has not already, become a party to the Management Stockholders’ Agreement between and among St. John Knits, Inc., the Company, Vestar/Gray Investors LLC, Vestar/SJK Investors LLC (“Vestar”) and
all other members of management of the Company who have received or will receive options to acquire shares of Common Stock (the “Management Stockholders’ Agreement”). 
  
 NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties agree as follows: 
  
 1. Grant of the Option. The Company hereby grants to the Participant
the right and option (the “Option”) to purchase, on the terms and conditions hereinafter set forth, all or any part of an aggregate of 200,000 shares of Common Stock, subject to adjustment as set forth in the Plan. The per share purchase
price of the shares of Common Stock subject to the Option (the “Exercise Price”) shall be (a) $30.00 with respect to 50,000 shares, (b) $40.00 with respect to 50,000 shares, (c) $50.00 with respect to 50,000 shares and (d) $60.00 with
respect to 50,000 shares (each tranche of shares described in clauses (a) through (d), a “Tranche”). The Option is intended to be a non-qualified stock option, and is not intended to be treated as an option that complies with Section 422
of the Internal Revenue Code of 1986, as amended. 
  
 2.
Vesting. At any time, the percentage of the Option which has become vested and exercisable as described in this Section 2 is hereinafter referred to as the “Vested Portion.” 
  

 (a) Time Vesting. Subject to paragraphs (b) and (c) of this Section 2, each Tranche shall vest and
become exercisable with respect to twenty percent (20%) of the shares of Common Stock initially covered by the Tranche on the first anniversary of the Grant Date and shall vest and become exercisable with respect to an additional twenty percent
(20%) of the shares of Common Stock initially covered by the Tranche on each subsequent anniversary of the Grant Date, until the shares subject to the Option are 100% vested. 
  
 (b) Termination of Employment. If the Participant’s employment with the Company or any Subsidiary is terminated
for any reason, the Option shall, to the extent not then vested, be canceled by the Company without consideration and the Vested Portion of the Option shall remain exercisable for the period set forth in Section 3(a); provided,
however, that, in the event of the Participant’s termination of employment by the Company or any Subsidiary without Cause (other than as a result of death or Disability) or by the Participant for Good Reason, the Participant shall be
deemed vested in the portion of the Option that otherwise would have become exercisable on or before the second anniversary of the Participant’s date of termination. For purposes of this agreement, the date of the Participant’s termination
of employment shall be determined under the Employment Agreement, dated as of June 3, 2004, by and between the Participant and St. John Knits, Inc. (or any amendment thereto). 
  
 (c) Change of Control/Acceleration Events. 
  
 (i) Notwithstanding any other provisions of this Agreement to the contrary, in the event of a Partial Acceleration Event (as
defined below), Executive shall be deemed vested in a portion of the Option equal to the excess, if any, of the Vestar Percentage (as defined below) over the Vested Portion of the Option. For purposes of this Agreement, (A) a “Partial
Acceleration Event” shall mean and shall be deemed to have taken place in the event (I) Vestar and its Affiliates (as defined in the Management Stockholders’ Agreement) (collectively, the “Vestar Entities”), pursuant to one or
more than one transaction, other than a Public Offering (as defined in the Management Stockholders’ Agreement), sell, exchange or dispose of shares of Common Stock where the percentage of shares sold, exchanged or disposed of is less than 50%
of the shares of Common Stock held by the Vestar Entities as of June 3, 2004 (the “Vestar Shares”), (II) Executive receives a Tag Notice (as defined in the Management Stockholders’ Agreement) with respect to any transaction that would
otherwise result in a Partial Acceleration Event described in clause (I) of this Section 2(c)(i), but only for purposes of participating in such transaction, or (III) any of the Vestar Entities request that Executive make a drag-along transfer as
permitted by Section 3.6 of the Management Stockholders’ Agreement with respect to any transaction that would otherwise result in a Partial Acceleration Event described in clause (I) of this Section 2(c)(i), but only for purposes of
participating in such transaction, and (B) the “Vestar Percentage” shall mean the percentage of the Vestar Shares sold by the Vestar Entities in connection with a Partial Acceleration Event. 
  
 (ii) Notwithstanding any other provisions of this Agreement to the contrary,
in the event of a change of control or an Equity Acceleration Event (as defined below), the Option shall, to the extent not then vested and not previously canceled, immediately become fully vested and exercisable. For purposes of this Agreement, (A)
a change of control shall be deemed to occur as determined in the sole discretion of the Committee and (B) an “Equity Acceleration 

  

 2 

 
Event” shall mean and shall be deemed to have taken place in the event (I) the Vestar Entities, pursuant to one or more than one transaction, other than
a Public Offering, sell, exchange or dispose of 50% or more of the Vestar Shares, (II) the Company or any of its Subsidiaries sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of the Company
and its Subsidiaries (determined on a consolidated basis) to any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934) (other than to the Company and/or any wholly-owned Subsidiary of the
Company), (III) any other transaction involving the Company or St. John Knits, Inc. occurs and in respect of which the Vestar Entities receive proceeds in such transaction, directly or indirectly, in respect of the disposition of 50% or more of the
Vestar Shares, (IV) Executive receives a Tag Notice (as defined in the Management Stockholders’ Agreement) with respect to any transaction that would otherwise result in a Equity Acceleration Event described in clauses (I), (II) or (III) of
this Section 2(c)(ii), but only for purposes of participating in such transaction, or (V) any of the Vestar Entities request that Executive make a drag-along transfer as permitted by Section 3.6 of the Management Stockholders’ Agreement with
respect to any transaction that would otherwise result in a Equity Acceleration Event described in clauses (I), (II) or (III) of this Section 2(c)(ii), but only for purposes of participating in such transaction. 
  
 3. Exercise of Option. 
  
 (a) Period of Exercise. Subject to the provisions of the Plan and this
Agreement, the Participant may exercise all or any part of the Vested Portion of the Option at any time prior to the earliest to occur of: 
  
 (i) the tenth anniversary of the Grant Date; 
  
 (ii) eighteen months following the date of the Participant’s termination of employment as a result of death or Disability; 
  
 (iii) three years following the date of the Participant’s termination of
employment by the Company or any Subsidiary without Cause (other than as a result of death or Disability) or by the Participant for Good Reason; and 
  
 (iv) the date of the Participant’s termination of employment by the Company or any Subsidiary for Cause or by the Participant without Good Reason.

  
 For purposes of this Agreement: 
  
 “Cause” shall mean “cause” as defined in
any employment agreement entered into by and between the Participant and the Company or any of its Subsidiaries which is in effect as of or after the Grant Date (as the same may be amended in accordance with the terms thereof) or if not defined
therein or if there shall be no such agreement, “Cause” shall mean (i) willful malfeasance or willful misconduct in connection with the performance of his duties as such, or (ii) the commission of (a) any felony or (b) a misdemeanor
involving moral turpitude; 
  

 3 

 “Disability” shall mean “disability” as defined in any employment
agreement entered into by and between the Participant and the Company or any of its Subsidiaries which is in effect as of or after the Grant Date (as the same may be amended in accordance with the terms thereof) or if not defined therein or if there
shall be no such agreement, as defined in the Company long-term disability plan as in effect from time to time, or if there shall be no plan or if not defined therein, the Participant’s becoming physically or mentally incapacitated and
consequent inability for a period of six (6) months in any twelve (12) consecutive month period to perform the Participant’s duties to the Company or any Subsidiary; and 
  
 “Good Reason” shall mean “good reason” as defined in any employment agreement entered
into by and between the Participant and the Company or any of its Subsidiaries which is in effect as of or after the Grant Date (as the same may be amended in accordance with the terms thereof) or if not defined therein or if there shall be no such
agreement, “Good Reason” shall mean: (i) the Company or any Subsidiary has failed to pay the Participant his salary; (ii) the office where the Participant performs his duties is moved more than 30 miles from where the Participant performed
the Participant’s duties on the Grant Date; (iii) a substantial reduction of the Participant’s base salary (other than an across the board reduction similarly affecting other comparable employees of the Company or its Subsidiaries) or (iv)
a substantial diminution of the Participant’s duties, which, in each case, has not been remedied within a reasonable time specified by the Participant that is not less than thirty (30) days after delivery to the Company of written notice
describing the event constituting Good Reason. 
  
 (b) Method
of Exercise. 
  
 (i) Subject to Section 3(a), the Vested
Portion of the Option may be exercised by delivering to the Company at its principal office written notice of intent to so exercise; provided that the Option may be exercised with respect to whole shares of Common Stock only. Such notice
shall specify the number of shares of Common Stock for which the Option is being exercised and the Tranche from which such shares are to come and shall be accompanied by payment in full of the Exercise Price with respect to each Tranche. The payment
of the Exercise Price shall be made in cash or, subject to the consent of the Committee, in shares of Common Stock which have been owned by the Participant for at least six months, such shares to be valued at their Fair Market Value (as such term is
defined in the Management Stockholders’ Agreement) as of the date of exercise. 
  
 (ii) Notwithstanding any other provision of the Plan or this Agreement to the contrary, the Option may not be exercised prior to the completion of any registration or qualification of the Option or the shares of
Common Stock that is required to comply with applicable state and federal securities or any ruling or regulation of any governmental body or national securities exchange that the Committee shall in its sole discretion determine in good faith to be
necessary or advisable. 
  
 (iii) Upon the Company’s
determination that the Option has been validly exercised as to any of the shares of Common Stock, the Company shall issue certificates in the 

  

 4 

 
Participant’s name for such shares. However, the Company shall not be liable to the Participant for damages relating to any delays in issuing the
certificates to him, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in the certificates themselves. 
  
 (iv) In the event of the Participant’s death, the Vested Portion of the Option shall remain exercisable by the Participant’s executor or
administrator, or the person or persons to whom the Participant’s rights under this Agreement shall pass by will or by the laws of descent and distribution as the case may be, to the extent set forth in Section 3(a) (any of the foregoing, a
“Permitted Transferee”). Any heir or legatee of the Participant shall take rights herein granted subject to the terms and conditions hereof. During the Participant’s lifetime, the Option is exercisable only by the Participant.

  
 (v) As a condition to exercising the Option, the Participant
shall become a party to the Management Stockholders’ Agreement. 
  
 4. No Right to Continued Employment. Neither the Plan nor this Agreement shall be construed as giving the Participant the right to be retained in the employ of, or in any consulting relationship to, the Company or any Affiliate.
Further, the Company or an Affiliate may at any time dismiss the Participant or discontinue any consulting relationship, free from any liability or any claim under the Plan or this Agreement, except as otherwise expressly provided herein.

  
 5. Legend on Certificates. To the extent provided by
the Management Stockholders’ Agreement, the certificates representing the shares of Common Stock purchased by exercise of the Option shall contain a legend stating that they are subject to the Management Stockholders’ Agreement and may be
subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares are
listed, and any applicable Federal or state laws, and the Committee may cause an additional legend or legends to be put on any such certificates to make appropriate reference to such other restrictions. 
  
 6. Transferability. The Option may not be assigned, alienated,
pledged, attached, sold or otherwise transferred or encumbered by the Participant otherwise than to a Permitted Transferee, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided that the designation of a beneficiary shall not constitute an assignment, alienation, pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of the Option to
a Permitted Transferee shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and
the acceptance by the Permitted Transferee or Transferees of the terms and conditions hereof. 
  
 7. Withholding. A Participant shall be required to pay to the Company or any Affiliate, and the Company shall have the right and is hereby authorized to withhold, any applicable minimum withholding taxes in
respect of an Option, its exercise or any payment or 

  

 5 

 
transfer under an Option or under the Plan and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the
payment of such minimum withholding taxes. 
  
 8. Securities
Laws; Representations. 
  
 (a) Upon the acquisition of any
shares of Common Stock pursuant to the exercise of the Option, the Participant will make or enter into such written representations, warranties and agreements as the Committee may reasonably request in order to comply with applicable securities laws
or with this Agreement. 
  
 (b) Participant represents and
warrants that Participant, either alone or with a representative advisor, has sufficient knowledge and experience in financial and business matters that Participant is capable of evaluating the merits and risks of this Option grant and, in the event
such Option is exercised, the ownership of such shares of Common Stock. 
  
 9. Notices. Any notice necessary under this Agreement shall be addressed to the Company in care of its Secretary at the principal executive office of the Company and to the Participant at the address appearing in the personnel
records of the Company for the Participant or to either party at such other address as either party hereto may hereafter designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee. 

 
 10. Choice of Law. THE INTERPRETATION, PERFORMANCE AND
ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. 
  
 11. Option Subject to Plan and Management Stockholders’ Agreement. By entering into this Agreement the Participant agrees and acknowledges
that the Participant has received and read a copy of the Plan and the Management Stockholders’ Agreement. The Option is subject to the Plan and the Management Stockholders’ Agreement. The terms and provisions of the Plan and the Management
Stockholders’ Agreement as they may be amended from time to time in accordance with their respective terms are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or
provision of the Plan or the Management Stockholders’ Agreement, the applicable terms and provisions of this Agreement will govern and prevail. In the event of a conflict between any term or provision of the Plan and any term or provision of
the Management Stockholders’ Agreement, the applicable terms and provisions of the Management Stockholders’ Agreement will govern and prevail. 
  
 12. Signature in Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. 
  

 6 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement. 
  

			
	 ST. JOHN KNITS INTERNATIONAL,
 INCORPORATED

		
	 By:
	 	 
		
	 Title:
	 	 

  

	
	 Agreed and acknowledged as of the date
 first above written:

	
	  
	 Richard Cohen

  

 7 

 EXHIBIT B 
  

FORM OF SUBSCRIPTION AGREEMENT 
  
 SUBSCRIPTION AGREEMENT, dated as of
                        , 2004 (this “Agreement”), between St. John Knits International, Incorporated, a
Delaware corporation (the “Parent”), and Richard Cohen (the “Stockholder”). 
  
 WHEREAS, the Stockholder desires to acquire from the Parent, and the Parent desires to issue and sell to the Stockholder, 1,667 shares of common stock,
par value $.01 per share, of the Parent (“Common Stock”); 
  
 WHEREAS, entering into this Agreement is a condition to the sale to the Stockholder of the Common Stock in order that the Stockholder become a party to a Management Stockholders’ Agreement setting forth certain
rights and restrictions with respect to the shares of Common Stock acquired pursuant hereto; 
  
 NOW, THEREFORE, in order to implement the foregoing and in consideration of the mutual representations, warranties, covenants and agreements contained herein, the parties hereto agree as follows: 
  

	1.	Purchase of Common Stock. 

  
 1.1. Purchase of Common Stock; Agreement to be Bound. 
  
 (a) Pursuant to the terms and subject to the conditions set forth herein, the Stockholder hereby purchases and the Parent hereby issues and delivers to
the Stockholder 1,667 shares of Common Stock, at a price per share of $30.00 (the “Purchase Price”). 
  
 (b) By signing this Agreement, (i) the Stockholder hereby agrees to be bound in all respects by the terms of the Management Stockholders’ Agreement,
as amended, attached hereto as Exhibit A (the “Stockholders’ Agreement”) to the same extent as if the Stockholder were exercising an option to purchase Common Stock on the date hereof pursuant to an Option Agreement (as defined
in the Stockholders’ Agreement) and (ii) the Parent hereby agrees that the Stockholder will have all rights and be subject to the obligations of a “Management Investor” to the same extent as if the Stockholder were exercising an
option to purchase Common Stock on the date hereof pursuant to an Option Agreement, except in each case as modified by this Agreement. The Parent and the Stockholder hereby agree that, for purposes of the Stockholders’ Agreement, (i)
“Lapse Date” shall mean the later of (x) the fifth anniversary of the Closing Date and (y) the consummation of a Public Offering and (ii) “Closing Date” shall mean
                        , 2004. 
  

1.2. Representations and Warranties of the Parent. The Parent represents and warrants to the Stockholder as follows: 
  
 (a) The Parent is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware and has full corporate power and authority to execute and deliver this Agreement and the Stockholders’ Agreement and to perform its obligations hereunder and thereunder. The execution,
delivery and performance by the Parent of 

  

 
this Agreement and the Stockholders’ Agreement has been duly authorized by all necessary corporate and legal action by the Parent, and no other
corporate proceeding by the Parent is necessary for the execution, delivery and performance by the Parent of this Agreement or the Stockholders’ Agreement. This Agreement and the Stockholders’ Agreement have been duly executed and
delivered by the Parent and, assuming they are duly executed and delivered by the Stockholder, constitute valid and binding obligations of the Parent, enforceable against the Parent in accordance with their terms. 
  
 (b) The Common Stock to be issued to the Stockholder pursuant to this
Agreement, when issued and delivered in accordance with the terms hereof, will be duly and validly issued and, upon receipt by the Parent of the Purchase Price therefor, will be fully paid and nonassessable with no personal liability attached to the
ownership thereof and will not be subject to any preemptive rights under the Delaware General Corporation Law. 
  
 (c) The execution, delivery and performance by the Parent of this Agreement and the Stockholders’ Agreement will not (i) conflict with the
certificate of incorporation or by-laws of the Parent or any of its subsidiaries or (ii) result in any breach of any terms or conditions of, or constitute a default under, any contract, agreement or instrument to which the Parent or any of its
subsidiaries is a party or by which the Parent or any of its subsidiaries is bound or (iii) conflict with or violate any law, rule, regulation, ordinance, writ, injunction, judgment or decree applicable to the Parent or any of its subsidiaries or by
which any of their assets may be bound or affected. 
  
 (d)
Exhibit B hereto sets forth the number of issued and outstanding shares of each class of Parent’s capital stock as of June 3, 2004, including all shares issuable upon conversion or exercise of any outstanding or issuable option or other
convertible security. 
  
 (e) Between February 1, 2004 and June 3,
2004, there had not occurred any material adverse change to the business, properties or assets, results of operations or consolidated financial position of Parent. 
  

	2.	Representations, Warranties and Covenants of the Stockholder. 

  
 2.1. Residence and Competency; Power; Enforceability; Noncontravention. The Stockholder is competent to and has sufficient capacity to execute and
deliver this Agreement and the Stockholders’ Agreement and to perform his obligations hereunder and thereunder. This Agreement and the Stockholders’ Agreement have been duly executed and delivered by the Stockholder. 
  
 Assuming the due execution and delivery of this Agreement and the
Stockholders’ Agreement by the Parent, this Agreement and the Stockholders’ Agreement constitute valid and binding obligations of the Stockholder, enforceable against the Stockholder in accordance with their terms. 
  
 The execution, delivery and performance of this Agreement and the
Stockholders’ Agreement by the Stockholder will not (i) conflict with or violate any law, rule, regulation, ordinance, writ, injunction, judgment or decree applicable to the Stockholder or by which any of his assets may be bound or affected or
(ii) result in any breach of any terms or conditions of, or 

  

 
constitute a default under, any contract, agreement or instrument to which the Stockholder is a party or by which the Stockholder is bound. 
  
 2.2. Investment Intention; No Resales. The Stockholder hereby
represents and warrants that he is acquiring the Common Stock for investment solely for his own account and not with a view to, or for resale in connection with, the distribution or other disposition thereof. The Stockholder agrees and acknowledges
that he will not, directly or indirectly, offer, transfer, sell, assign, pledge, hypothecate or otherwise dispose of any shares of Common Stock, or solicit any offers to purchase or otherwise acquire or pledge any shares of Common Stock, unless such
offer, transfer, sale, assignment, pledge, hypothecation or other disposition complies with the provisions hereof and of the Stockholders’ Agreement. 
  
 2.3. Common Stock Unregistered. The Stockholder acknowledges and represents that he has been advised by the Parent that: 
  
 (a) the offer and sale of the Common Stock have not been and will not be
registered under the Securities Act; 
  
 (b) the Common Stock must
be held indefinitely and the Stockholder must continue to bear the economic risk of the investment in the Common Stock unless the offer and sale of such Common Stock is subsequently registered under the Securities Act and all applicable state
securities laws or an exemption from such registration is available; 
  
 (c) there is no established market for the Common Stock and it is not anticipated that there will be any public market for the Common Stock in the foreseeable future; 
  
 (d) Rule 144 promulgated under the Securities Act is not presently available with respect to the sale of any securities of
the Parent, and, except as may be set forth in the Stockholders’ Agreement, the Parent has made no covenant to make such Rule available; 
  
 (e) when and if shares of Common Stock may be disposed of without registration under the Securities Act in reliance on Rule 144, such disposition can be
made only in limited amounts in accordance with the terms and conditions of such Rule; 
  
 (f) if the Rule 144 exemption is not available, public offer or sale of Common Stock without registration will require compliance with some other exemption under the Securities Act; 
  
 (g) if any shares of Common Stock are at any time disposed of in accordance
with Rule 144, the Stockholder will deliver to the Parent at or prior to the time of such disposition an executed Form 144 (if required by Rule 144) and such other documentation as the Parent may reasonably require in connection with such sale;

  
 (h) a restrictive legend in the form set forth in the
Stockholders’ Agreement shall be placed on the certificates representing Common Stock; and 
  
 (i) a notation shall be made in the appropriate records of the Parent indicating that the Common Stock is subject to restrictions on transfer and, if the
Parent should at some 

  

 
time in the future engage the services of a securities transfer agent, appropriate stop-transfer instructions will be issued to such transfer agent with
respect to the Common Stock. 
  
 2.4. Additional Investment
Representations. The Stockholder represents and warrants that: 
  
 (a) the Stockholder’s financial situation is such that he can afford to bear the economic risk of holding the Common Stock for an indefinite period of time, has adequate means for providing for his current needs and personal
contingencies, and can afford to suffer a complete loss of his investment in the Common Stock; 
  
 (b) the Stockholder’s knowledge and experience in financial and business matters are such that he is capable of evaluating the merits and risks of the investment in the Common Stock, as contemplated by this
Agreement; 
  
 (c) the Stockholder understands that the Common
Stock is a speculative investment which involves a high degree of risk of loss of his investment therein, there are substantial restrictions on the transferability of the Common Stock and, on the date hereof and for an indefinite period following
the date hereof, there will be no public market for the Common Stock and, accordingly, it may not be possible for the Stockholder to liquidate his investment in case of emergency, if at all; 
  
 (d) the Stockholder understands that the terms of the Stockholders’
Agreement provide that in the event that the Stockholder ceases to be an employee of St. John’s Knits, Inc., a California corporation (the “Company”), the Parent, the Company, Vestar (as defined in the Stockholders’ Agreement)
and their designated affiliates have the right to repurchase the Common Stock at a price which may, in certain circumstances, be less than the fair market value of such stock; 
  
 (e) the Stockholder understands and has taken cognizance of all the risk factors related to the purchase of Common Stock;
and, other than as set forth in this Agreement and the Employment Agreement dated as of June 3, 2004 between St. John Knits, Inc. and the Stockholder, no representations or warranties have been made to the Stockholder or his representatives
concerning the Common Stock or the Parent, its subsidiaries or their prospects or other matters; 
  
 (f) in making his decision to purchase the Common Stock hereby subscribed for, the Stockholder has relied upon independent investigations made by him and,
to the extent believed by the Stockholder to be appropriate, his representatives, including his own professional, financial, tax and other advisors; 
  
 (g) the Stockholder has been given the opportunity to examine all documents and to ask questions of, and to receive answers from, the Parent and its
representatives concerning the Parent and its subsidiaries and the terms and conditions of the purchase of the Common Stock and to obtain any additional information, in each case as the Stockholder or his representatives deems necessary; and

  

 (h) all information which the Stockholder has provided to the Parent and its representatives concerning
the Stockholder and his financial position is complete and correct as of the date of this Agreement. 
  

	3.	Miscellaneous. 

  
 3.1. Binding Effect. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns. 
  
 3.2.
Amendment; Waiver. This Agreement may be amended only by a written instrument signed by the parties hereto. No waiver by either party hereto of any of the provisions hereof shall be effective unless set forth in a writing executed by the
party so waiving. 
  
 3.3. Governing Law. This Agreement
shall be governed by and construed in all respects under the laws of the State of Delaware. Any action to enforce which arises out of or in any way relates to any of the provisions of this Agreement may be brought and prosecuted in such court or
courts located within the State of Delaware as provided by law; and the parties consent to the jurisdiction of such court or courts located within the State of Delaware and to service of process by registered mail, return receipt requested, or by
any other manner provided by Delaware law. 
  
 3.4.
Integration. This Agreement and the documents referred to herein or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to the subject matter hereof and thereof. There are no
restrictions, agreements, promises, representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein and therein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter. 
  
 3.5. Counterparts. This Agreement may be executed in two or more counterparts, and by different parties on separate counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same
instrument. 
  

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

  

			
	ST. JOHN KNITS INTERNATIONAL,
	 INCORPORATED

		
	By:	 	 

			
	 Name:
	 	 
	 Title:
	 	 

  

	
	RICHARD COHEN
	
	 
	 

  

 Exhibit A 
 Management Stockholders’ Agreement 
  
 See attached. 
  

 EXHIBIT C 
  

PERQUISITES 
  

	(1)	Car Allowance. The Company shall pay to Executive a car allowance in a gross amount of $2,269 per month for car payments and $2,000 per year for car insurance.

  

	(2)	Clothing Allowance. The Company shall pay to Executive a clothing allowance of $10,000 per year. 

  

	(3)	Relocation Expenses. 

  
 (a) The Company shall reimburse Executive for all reasonable and customary costs and expenses incurred by Executive that are associated with (i) the
physical move of Executive’s family and belongings to Southern California (e.g., transportation, packing, storing and unpacking of household goods), (ii) the sale of Executive’s home in Pound Ridge, New York (the “Pound Ridge
Home”) and Executive’s purchase of a primary residence in Southern California (e.g., brokers’ commissions, taxes, legal fees, inspection, appraisal and survey charges, title search and insurance charges, and closing costs), and (iii)
up to three trips to Southern California for house hunting and the review of schooling options (e.g., air fare, hotel, car rental, meals). The Company shall reimburse such costs and expenses promptly following Executive’s submission of written
documentation satisfactory to the Company evidencing that Executive has incurred such costs and expenses. 
  
 (b) Following the Effective Date, the Company shall pay to Executive on a monthly basis a housing allowance of up to $15,000 in order to allow Executive
to (I) rent appropriate housing in Southern California or (II) if Executive has purchased a primary residence in Southern California but has not sold the Pound Ridge Home, pay any duplicative costs or expenses related to owning both homes (the
“Housing Allowance”); provided, however, that such Housing Allowance shall terminate upon the earlier to occur of (i) the first anniversary of the Effective Date and (ii) Executive’s purchase of a primary residence in
Southern California and sale of the Pound Ridge Home. The Company shall pay such Housing Allowance to Executive promptly following the end of any relevant month, subject to Executive’s submission of written documentation satisfactory to the
Company evidencing that Executive has incurred such expenses. In addition, the Company shall pay to Executive a gross up for all applicable federal, state and local income taxes payable by the Executive in connection with the payment by the Company
to Executive of any portion of the Housing Allowance that is not deductible by Executive. 
  
 (c) Unless prohibited by law, following the Effective Date and prior to Executive’s sale of the Pound Ridge Home, if requested by Executive, the Company shall loan Executive up to $500,000 to apply towards
Executive’s purchase of a primary residence in Southern California; provided that such loan shall be made at the lowest interest rate at which the Company could make the loan without Executive recognizing interest income. The amount of
such loan shall become due and payable by Executive to the Company within 10 days following the sale of the Pound Ridge Home. 
  

 EXHIBIT D 
  

INDEMNIFICATION AGREEMENT 
  
 This Indemnification Agreement (this “Agreement”) is made as the      day of
                    , 2004, among St. John Knits, Inc., a California corporation (“St. John”), St. John Knits International,
Incorporated, a Delaware corporation (“SJKI”) and Richard Cohen (“Indemnitee”). 
  
 BACKGROUND FACTS 
  
 The Indemnitee currently is serving as a director and/or officer of St. John and/or of SJKI, and the Company (which term as used herein shall refer to, jointly and severally, St. John and SJKI) wishes the Indemnitee to continue in such
capacity. In order to induce the Indemnitee to continue to serve as a director and/or officer for St. John and SJKI and in consideration of Indemnitee’s continued service, St. John and SJKI and the Indemnitee hereby agree as follows:

  
 SECTION 1: DEFINITIONS 
  
 As used in this Agreement: 
  
 1.1 Proceeding. The term “Proceeding” includes any
threatened, pending or completed action, suit or proceeding, any appeal therefrom and any inquiry or investigation, whether conducted by the Company or otherwise, that the Indemnitee in good faith believes might lead to the institution of any such
action, suit or proceeding, whether brought by or in the right of the Company to procure a judgment in its favor or brought by any third party or otherwise and whether civil, criminal, administrative or investigative, in which the Indemnitee is or
may be or may have been involved as a party or otherwise by reason of any action taken by Indemnitee or of any inaction on Indemnitee’s part while acting as a director or officer of the Company, or while acting at the request of the Company as
a director, officer, employee, partner, trustee or agent of any other corporation, partnership, joint venture, trust or other enterprise (as defined in Section 1.3, below), regardless of whether Indemnitee is acting or serving in any such capacity
at the time any Expenses (as defined in Section 1.2, below) are incurred for which indemnification may be provided under this Agreement. 
  
 1.2 Expenses. The term “Expenses” includes expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection with
any Proceeding, including amounts paid in settlement by or on behalf of the Indemnitee, attorneys’ fees and disbursements, and any expenses actually and reasonably incurred by or on behalf of the Indemnitee in connection with establishing a
right to indemnification under this Agreement, but shall not include (i) any judgments and fines and similar penalties against the Indemnitee or (ii) any expenses, amounts paid in settlement, attorneys’ fees or disbursements, judgments, fines
and similar penalties or any other costs whatsoever incurred in connection with any Proceeding insofar as such Proceeding is based on a violation by the Indemnitee of Section 16 of the Securities Exchange Act of 1934, as amended. 
  
 1.3 Other Terms. The term “other enterprise” includes
employee benefit plans; the term “fines” includes any excise tax assessed with respect to any employee benefit plan; the term “serving at the request of the Company” includes any service as a director, officer, employee or agent
of the Company or any of its subsidiaries that imposes duties on, or involves 

  

 
services by such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in
good faith and in a manner such person reasonably believed to be in the interests of the participants and beneficiaries of any employee benefit plan shall be deemed to have acted in a manner “reasonably believed to be in the best
interests” of the Company or any of its subsidiaries as such term is used in this Agreement. 
  
 SECTION 2: GENERAL RIGHT TO INDEMNIFICATION 
  
 The Company shall indemnify the Indemnitee against Expenses, judgments and fines and other amounts actually and reasonably
incurred in connection with any Proceedings to the full extent permitted by the laws of the State of Delaware or California, as the case may be, as from time to time in effect. Without limiting the generality of the foregoing, the Company shall also
indemnify the Indemnitee in accordance with the provisions set forth below. 
  
 SECTION 3: PROCEEDINGS OTHER THAN BY OR IN THE RIGHT OF THE COMPANY 
  
 If the Indemnitee was or is a party or is threatened to be made a party to any Proceeding (other than an action by or in the right of the Company to
procure a judgment in its favor), the Company shall indemnify Indemnitee against all Expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with such Proceeding if Indemnitee acted in good faith and
in a manner Indemnitee reasonably believed to be in the best interests of the Company and, in the case of a criminal proceeding, had no reasonable cause to believe Indemnitee’s conduct was unlawful. The termination of any Proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent shall not, of itself, create a presumption that the Indemnitee did not act in good faith and in a manner the Indemnitee reasonably believed to be in the best
interests of the Company or that the Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful. 
  
 SECTION 4: PROCEEDINGS BY OR IN THE RIGHT OF THE COMPANY 
  
 If the Indemnitee was or is a party or is threatened to be made a party to any Proceeding by or in the right of the Company
to procure a judgment in its favor, the Company shall indemnify Indemnitee against all Expenses relating to the Proceeding if Indemnitee acted in good faith in a manner Indemnitee reasonably believed to be in the best interests of the Company and
its shareholders; however, no indemnification shall be made with respect to any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Company in the performance of Indemnitee’s duty to the Company and its
shareholders unless the court in which such Proceeding is or was pending shall determine upon application that in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for Expenses, and then only to the
extent that the court shall determine. In addition, with respect to the directors and officers of St. John, no indemnification shall be made (i) with respect to amounts paid in settling or otherwise disposing of a pending action without court
approval and (ii) with respect to Expenses incurred in defending a pending action which is settled or otherwise disposed of without court approval, in each case, as required by California law. 
  

 2 

 SECTION 5: INDEMNIFICATION FOR EXPENSES OF SUCCESSFUL PARTY 
  
 Notwithstanding the other provisions of this Agreement, to the extent that
Indemnitee has been successful on the merits in defense of any Proceeding or of any claim, issue or matter forming part of any Proceeding, Indemnitee shall be indemnified against Expenses actually and reasonably incurred by Indemnitee in connection
therewith. 
  
 SECTION 6: ADVERSE
DETERMINATION 
  
 Any indemnification under Sections 3 and 4
hereof shall be paid by the Company in accordance with Section 8 unless (i) a determination is made that indemnification is not proper because the Indemnitee has not met the applicable standard of conduct set forth in Sections 3 and 4, such
determination being made no later than the end of the sixty-day period set forth in Section 8.2 or (ii) with respect to indemnification under Section 4, the Indemnitee shall have been adjudged to be liable to the Company, and the court in which such
Proceeding is or was pending has determined upon application that, in view of all the circumstances of the case, the Indemnitee is not entitled to indemnity. For purposes of a determination described in subsection (i) of this Section 6, (x) with
respect to the directors and officers of St. John, such determination may be made by any of the following: (a) a majority vote of a quorum consisting of directors who are not parties to such Proceeding, (b) if such a quorum of directors is not
obtainable, by independent legal counsel in a written opinion, (c) approval of the shareholders with the shares owned by the Indemnitee not being entitled to vote thereon or (d) the court in which such Proceeding is or was pending, if such is the
case, upon application made by the Company or the Indemnitee or the attorney or other person rendering services in connection with the defense, whether or not such application by the Indemnitee, attorney or other person is opposed by the company and
(y) with respect to the directors and officers of SJKI, such a determination shall be made (a) by a majority vote of the directors who are not parties to such Proceeding, even though less than a quorum, (b) by a committee of such directors
designated by majority vote of such directors, even though less than a quorum, (c) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion or (d) by the stockholders. 
  
 SECTION 7: RELIANCE ON BOOKS, RECORDS AND OTHER
INFORMATION 
  
 The Indemnitee shall be deemed to have acted
in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, or, with respect to any criminal action or proceeding, to have had no reasonable cause to believe Indemnitee’s conduct
was unlawful, if Indemnitee’s action is or was based on the records or books of account of the Company or of any other enterprise with respect to which the Indemnitee may be affected by a Proceeding, including financial statements, or on
information supplied to Indemnitee by officers of the Company or of any such other enterprise in the course of their duties, or on the advice of legal counsel for the Company or for any such other enterprise or on information or records given or
reports made to the Company or to any such other enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or by such other enterprise. The provisions of this Section
shall not be deemed exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met any applicable standard of conduct. 
  

 3 

 SECTION 8: PROCEDURE FOR INDEMNIFICATION 
  
 8.1 Advances. Expenses to which an Indemnitee is entitled to
indemnity under Sections 2, 3 and 4 shall be paid by the Company in advance of any final disposition of the Proceeding upon receipt by the Company of written documentation of the Indemnitee’s obligation to pay such Expenses. Indemnitee hereby
undertakes to repay all amounts so advanced if it shall be determined ultimately that the Indemnitee is not entitled to be indemnified pursuant to this Agreement. 
  
 8.2 Payment Within 60 Days. After the final disposition of any Proceeding, the Indemnitee may send to the Company a
written request for indemnification, accompanied by written documentation of the Indemnitee’s obligation to pay the Expenses, judgments and fines and similar penalties for which indemnification is requested. No later than 60 days following
receipt by the Company of such request, the Company shall pay the Expenses, judgments and fines and similar penalties or reimburse the Indemnitee therefor (as the case may be) unless, during such 60-day period (i) the Company determines that the
indemnification request is not permitted by the laws of the State of Delaware or California in effect as the case may be, or (ii) with respect to indemnification under Sections 3 and 4, the adverse determination described in Section 6 is made.

  
 8.3 Actions to Enforce This Agreement. In any action by
the Indemnitee to enforce this Agreement, the Company shall bear the burden of proving that any applicable standard of conduct has not been met by the Indemnitee. Neither the failure of the Company to have made the determination required pursuant to
Section 6, nor any determination made pursuant to Section 6 create a presumption that the Indemnitee has or has not met any applicable standard of conduct. 
  
 SECTION 9: OTHER RIGHTS 
  
 The rights of the Indemnitee under this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may be entitled under any law
(common or statutory), provision of the Company’s Articles of Incorporation or Bylaws (or comparable organizational documents), vote of shareholders or Board of Directors of the Company or otherwise, both as to action in Indemnitee’s
official capacity and as to act in another capacity while holding such office or while employed by or acting as agent for the Company in any capacity. 
  
 SECTION 10: NOTICE TO THE COMPANY; DEFENSE OF PROCEEDING 
  
 10.1 Notice. The Indemnitee shall, as a condition precedent to Indemnitee’s right to indemnification hereunder,
provide prompt written notice to the Company of any Proceeding in connection with which Indemnitee may assert a right to be indemnified under this Agreement. Such notice shall be deemed to have been provided if mailed by domestic certified mail,
postage prepaid, to St. John Knits, Inc., 17422 Derian Avenue, Irvine, California 92713 (or to such other address as the Company may specify in writing to the Indemnitee). Indemnitee shall give the Company such information and cooperation as it may
reasonably require. 
  

 4 

 10.2 Defense of Proceeding. With respect to any Proceeding: 
  
 (i) the Company shall be entitled to participate in the
Proceeding at its own expense; and 
  
 (ii)
except as otherwise provided below, the Company shall be entitled to assume the defense of such Proceeding to the extent that it may wish. After notice from the Company to the Indemnitee of such assumption, the Company shall not be liable to the
Indemnitee under this Agreement for any Expenses subsequently incurred by Indemnitee in connection with such defense. The Indemnitee shall have the right to employ separate counsel in the Proceeding, but the fees and expenses of such counsel
incurred after such assumption shall be at the expense of the Indemnitee, unless (a) such employment has been authorized in writing by the Company, or (b) the Indemnitee shall have reasonably concluded that there may be a conflict of interest
between the Company and the Indemnitee in the conduct of the defense of the Proceeding. 
  
 The Company shall not be required to indemnify the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its prior written consent. If the Indemnitee does not promptly offer to settle a
Proceeding on a basis that the Board of Directors has approved, the Company shall not be liable to pay any Expenses incurred thereafter in connection with that Proceeding. 
  
 SECTION 11: EXCEPTIONS 
  
 Any other provision herein to the contrary notwithstanding: 
  
 11.1 Claims Initiated by Indemnitee. The Company shall not be obligated to indemnify or advance Expenses to
Indemnitee with respect to Proceedings initiated or brought voluntarily by Indemnitee and not by way of defense, except with respect to Proceedings brought to establish or enforce a right to indemnification under this Agreement or any other statute
or law or otherwise as required under Section 317 of the California Corporation Law or Section 145 of the Delaware General Corporation Law, but such indemnification or advancement of Expenses may be provided by the Company in specific cases if the
Board of Directors has approved the initiation or bringing of such Proceeding. 
  
 11.2 Lack of Good Faith. The Company shall not be obligated to indemnify Indemnitee for any Expenses incurred by the Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or interpret
this Agreement if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such Proceeding was not made in good faith or was frivolous. 
  
 SECTION 12: MISCELLANEOUS 
  
 12.1 Amendments. This Agreement may be amended only by means of a writing signed by both the Company and the
Indemnitee. 
  

 5 

 12.2 Retroactive Effect. This Agreement covers all Proceedings that either now have been or later
may be commenced, including any Proceeding relating to any past act or omission of the Indemnitee that has not yet resulted in commencement or threat of a Proceeding. 
  
 12.3 Savings Clause. Each provision of this Agreement is a separate and distinct agreement, independent of all other
provisions. If this Agreement or any such provision shall be deemed invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired in any way, and the Company
shall nevertheless indemnify the Indemnitee as to Expenses, judgments and fines and similar penalties with respect to any Proceeding to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to
the full extent permitted by applicable law. In the event of any whole or partial invalidation, illegality or unenforceability of this Agreement, there shall be added automatically to this Agreement a provision or provisions as similar to such
invalid, illegal or unenforceable provision, both in terms and effect, as may be possible and be valid, legal and enforceable. 
  
 12.4 Mutual Acknowledgement. Both the Company and Indemnitee acknowledge that in certain instances, federal law or applicable public policy may
prohibit the Company from indemnifying Indemnitee under this Agreement or otherwise. Indemnitee understands and acknowledges that the Company has undertaken or may be required in the future to undertake to the Securities and Exchange Commission to
submit the question of indemnification to a court in certain circumstances for a determination of the Company’s right under public policy to indemnify Indemnitee. 
  
 12.5 Successors and Assigns. This Agreement shall be binding on, and inure to the benefit of, the successors and
assigns of the Company, whether by operation of law or otherwise, and the estate, heirs and personal representatives of the Indemnitee. 
  
 12.6 Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of this State of
California, except as to matters involving the obligation of SJKI or any other corporation incorporated in Delaware, where it shall be governed in all respects by the laws of the State of Delaware. 
  
 12.7 Merger Clause. Except for St. John’s Articles of
Incorporation and Bylaws and SJKI’s Certificate of Incorporation and Bylaws, this Agreement constitutes the entire understanding of the parties and supersedes all prior understandings and agreements, written or oral, between the parties with
respect to the subject matter of this Agreement. 
  
 12.8 No
Duplication of Payments. The Company shall not be liable under this Agreement to make any payment in connection with any claim made against the Indemnitee to the extent that the Indemnitee has otherwise received payment (under any insurance
policy, Bylaw, or otherwise) of the amounts otherwise indemnifiable hereunder. 
  
 12.9 Subrogation. In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Indemnitee, who shall execute all papers
required and shall do everything that may be necessary or appropriate to enable the Company effectively to bring suit to enforce such rights. 
  

 6 

 12.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed
an original, but all of which taken together shall constitute but one and the same instrument. 
  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 
  

			
	ST. JOHN KNITS, INC., a California corporation
		
	By:	 	 

  

			
	 ST. JOHN KNITS INTERNATIONAL,
 INCORPORATED, a Delaware corporation

		
	By:	 	 

  

			
	INDEMNITEE
		
	By:	 	 

  

 7AGREEMENT FOR PURCHASE AND SALE AND LEASE OF PROPERTY

 Exhibit 10.2 
  
 AGREEMENT FOR PURCHASE AND SALE AND LEASE OF PROPERTY 
  
 AND ESCROW INSTRUCTIONS 
  
 BY AND BETWEEN 
  
 ST JOHN KNITS, INC. 
  
 AND 
  
 JOHN R. SAUNDERS
TRUST 
  
 FOR 
  
 17522, 17572, 17622, 17632 ARMSTRONG 
  
 IRVINE, CALIFORNIA 
  

 AGREEMENT FOR PURCHASE AND SALE AND LEASE OF PROPERTY 
 AND ESCROW INSTRUCTIONS 
  
 THIS AGREEMENT FOR PURCHASE AND SALE AND LEASE OF PROPERTY AND ESCROW INSTRUCTIONS (this “Agreement”) is made as of June 11, 2004 (the
“Execution Date”), by and between St. John Knits, Inc., a California corporation (“SELLER”), and JOHN R. SAUNDERS TRUST under declaration of trust dated July 14, 1987 (“BUYER”), based upon the following facts:

  
 R E C I T A L
S 
  
 A. SELLER is the owner of (i) the Real Property (as
hereinafter defined), and (ii) the Personal Property (as hereinafter defined), all as more particularly described below. The Real Property and the Personal Property are referred to collectively in this Agreement as the “Property.”

  
 B. BUYER desires to purchase the Property from SELLER and then
lease the Property back to SELLER and SELLER is willing to sell the Property to BUYER and then lease the Property back from BUYER, all on the terms and conditions set forth in this Agreement. 
  
 NOW, THEREFORE, in consideration of the above-referenced facts, the mutual
promises contained below and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, SELLER and BUYER agree as follows: 
  
 ARTICLE I 
 AGREEMENT AND PURCHASE PRICE 
  
 1.1 Purchase
and Sale of the Property. SELLER hereby agrees to sell, transfer and assign all of its interest in the Property to BUYER, and BUYER hereby agrees to purchase same from SELLER, upon the terms and conditions set forth in this Agreement.

  
 (a) For purposes of this Agreement,
“Real Property” shall mean: 
  
 (i) all
that certain land located at 17522, 17572, 17622 and 17632 Armstrong Avenue, in the City of Irvine (the “City”), County of Orange (the “County”), California, consisting of an aggregate of approximately 9.25 acres (provided that
nothing herein shall be deemed a representation or warranty as to the actual acreage of such land) (collectively, the “Land”), as more particularly described and/or depicted on Exhibit “A” attached hereto; 
  
 (ii) all of SELLER’s right, title and interest in and
to all rights, privileges and easements appurtenant to and for the benefit of the Land, and SELLER’s interest in any rights-of-way and appurtenances used in connection with the use and enjoyment of the Land or the Improvements (as hereinafter
defined); and 
  
 (iii) all buildings, structures
and other improvements located on the Land, including without limitation, the four (4) buildings located on the Land containing an aggregate of approximately 178,372 rentable square feet (provided that nothing herein shall be deemed a representation
or warranty as to the actual rentable square feet of such buildings), together with all driveways, walkways and parking areas on the Land (collectively, the “Improvements”). 
  
 (b) For purposes of this Agreement, “Personal Property” shall mean: 
  
 (i) all the tangible personal property owned by SELLER and
listed on Exhibit “B” attached hereto, if any, and all the Materials (as defined in Section 2.2); and 
  
 (ii) all intangible personal property (other than cash or accounts) owned by SELLER and directly relating to the Real Property, including
all development rights, titles, interests, privileges and appurtenances, to the extent that SELLER has the right and power to transfer/assign the foregoing without material cost to SELLER and without the consent of third parties; but not including
any agreements pertaining to service, maintenance, management or operation of the Property or any business licenses, permits, certificates, guarantees or warranties that relate solely to SELLER’s business operated at the Real Property or that
relate to 

  

 2 

 
matters that are SELLER’s obligation under the Leases (as hereinafter defined), all of which shall remain with SELLER through the expiration of the
Leases, at which time, at BUYER’s option, SELLER shall assign to BUYER, to the extent that SELLER has the right and power to do so without cost to SELLER and without the consent of third parties, all such licenses, permits, certificates,
guarantees and warranties; provided, however, that all licenses, permits and certificates, if any, applicable to the Property or any of the Improvements thereon and that do not relate solely to SELLER’s business operations at the Real Property
shall be assigned to BUYER at the Closing, to the extent that SELLER has the right and power to do so without material cost to SELLER and without the consent of third parties. 
  
 1.2 Purchase Price. The purchase price for the Property to be paid to SELLER by BUYER (the “Purchase
Price”) shall be Twenty-Three Million Nine Hundred Sixty Thousand Dollars ($23,960,000); provided, however, that if BUYER exercises the Second Extension Option as described in Section 4.2, below, the Purchase Price shall automatically increase
by One Hundred Thousand Dollars ($100,000) to Twenty-Four Million Sixty Thousand Dollars ($24,060,000). 
  
 1.3 Terms of Payment. BUYER’s payment of the Purchase Price shall be accomplished as follows: 
  
 (a) Deposit. SELLER acknowledges that BUYER has
previously delivered to SELLER a deposit check in the amount of Two Hundred Thousand ($200,000) (the “Deposit”) made out to Escrow Holder (as defined in Section 4.1). Concurrently with the full execution of this Agreement, SELLER shall
deliver to Escrow Holder the executed Agreement and the Deposit on BUYER’s behalf. Escrow Holder shall immediately cash the Deposit check and upon receipt of the Deposit funds release the $200,000 Deposit funds to SELLER. If BUYER exercises the
First Extension Option pursuant to Section 4.2, below, the term “Deposit” shall be deemed to include the First Extension Deposit delivered by BUYER as described in Section 4.2. If BUYER exercises the Second Extension Option pursuant to
Section 4.2, below, the term “Deposit” shall be deemed to also include the Second Extension Deposit delivered by BUYER as described in Section 4.2. The Deposit shall not bear interest and may be commingled with other funds of SELLER. The
Deposit shall be applied to the Purchase Price if the Closing occurs and otherwise shall be non-refundable and retained by SELLER as liquidated damages if the Closing fails to occur for any reason other than (i) SELLER’s default under this
Agreement beyond applicable notice and cure periods, (ii) the failure of an express condition precedent to the Closing for BUYER’s benefit as set forth in Sections 3.1, 4.4 and 4.7 of this Agreement, or (iii) BUYER’s proper termination of
this Agreement pursuant to Sections 2.1 or 5.3. 
  
 (b) Balance. The balance of the Purchase Price (plus BUYER’s share of closing costs and prorations) shall be deposited by BUYER into the Escrow, by cash (certified or bank cashier’s check made payable to Escrow Holder) or
by wire transfer of immediately available federal funds, prior to the Closing (as defined in Section 4.2), in a time sufficient to allow the Closing to timely occur. 
  
 1.4 Grant Deed. SELLER’s conveyance of the Real Property shall be made by a grant deed substantially in the form
attached hereto as Exhibit “C”, subject to the Permitted Exceptions (as defined in Section 2.1) (the “Grant Deed”). 
  
 1.5 General Assignment. SELLER’s assignment of the Personal Property shall be by a general assignment in the form attached hereto as
Exhibit “D” (the “General Assignment”). 
  
 ARTICLE II 
 BUYER’S INVESTIGATION OF THE PROPERTY 
  
 2.1 Title Reports. BUYER acknowledges receipt of those certain Commitments for Title Insurance, Order Nos.
NCS-93356-SA1, NCS-97901-SA1, NCS-97903-SA1, each dated for reference purposes only as of May 28, 2004, and NCS-97906-SA1, dated for reference purposes only as of June 1, 2004 (collectively, the “Title Reports”) issued by First American
Title Insurance Company (the “Title Company”), purporting to disclose the condition of title to the Real Property, together with complete and legible copies of all documents of record referenced therein as exceptions. BUYER hereby approves
all matters that are disclosed in the Title Reports and all matters shown on the Surveys dated June 2, 2004 and the Survey dated April 13, 2004 prepared by Valley Consultants, Inc./Clarence M. Butler (the “Surveys”), copies 

  

 3 

 
of which have been provided to and approved by BUYER, and the form of Reciprocal Easement Agreement attached hereto as Exhibit F (the
“REA”); provided, however, that SELLER hereby agrees to remove (by endorsement or otherwise) prior to the Closing exceptions 11 and 12 of NCS-93356-SA1, exceptions 10 and 11 of NCS-97901-SA1 and NCS-97903-SA1, and exception 9 of
NCS-97906-SA1. If the Title Company issues any supplements to the Title Reports during the period of the Escrow, BUYER shall have until five (5) business days following delivery of the supplement to disapprove in writing any exception contained
therein and not caused or created by BUYER and not disclosed in the Title Reports or prior supplement thereto or in any of the underlying documents or Surveys. BUYER shall exercise its rights of approval over supplemental matters under this Section
2.1 reasonably and in good faith and shall not disapprove of an exception or matter disclosed by a supplement to the Title Reports that will not materially interfere with BUYER’s use, operation, enjoyment, purchase money financing or
disposition of the Property. If BUYER fails to disapprove an exception in writing within the time period specified above, the exception or matter shall be deemed to have irrevocably waived its right to disapprove such exception or matter pursuant to
the remainder of this Section 2.1. If BUYER disapproves of a supplemental exception as permitted above, SELLER shall have five (5) days after receipt of BUYER’s written disapproval (such period, the “Title Cure Notice Period”) to
inform BUYER in writing whether or not SELLER will cause the disapproved exception(s) or matter(s) to be removed from the Title Reports or insured over on or before the Closing Date. If SELLER does not so inform BUYER that SELLER will cause the
removal of or insure over the disapproved exception(s) or matter(s), and such exception(s) or matter(s) will materially interfere with BUYER’s use, operation, enjoyment, purchase money financing or disposition of the Property, BUYER shall have
the right to terminate this Agreement in writing, on or before five (5) days after the expiration of the Title Cure Notice Period, and SELLER shall promptly return the Deposit to BUYER once BUYER has returned to SELLER all of the Materials, and, if
such termination right is not exercised within such five (5) day period, BUYER shall be deemed to have irrevocably waived its right to terminate this Agreement in relation to the disapproved exception(s) or matter(s). In the event the Title Company
issues any supplement to the Title Reports without sufficient time to permit completion of the approval/objection procedure set forth herein prior to the Closing, then the Closing shall be extended for the amount of time necessary to complete the
above-described approval/objection procedure. BUYER acknowledges that SELLER shall not be obligated to remove any exceptions to title except as provided in this Section 2.1. All conditions, exceptions and matters shown in the Title Reports and
Surveys and any matters in any supplement thereto not disapproved by BUYER or as to which BUYER is deemed to have waived its disapproval or termination right, together with the Leases; the lien of non-delinquent real and personal property taxes and
assessments; and the rights of vendors and holders of security interests on personal property installed upon the Property, and such other exceptions as BUYER may consent to in writing shall be considered to be “Permitted Exceptions”
acceptable to BUYER in all respects. BUYER acknowledges and agrees that nothing in this Agreement shall be construed as a warranty or representation by SELLER concerning SELLER’s title to the Property, and SELLER makes no such warranty or
representation, and BUYER will be relying solely upon the Title Policy (as defined in Section 4.7) and BUYER’s own investigations respecting the condition of title to the Property. 
  
 2.2 Property Investigation. 
  

(a) Continuing Access to Property. Upon the Opening of Escrow (as hereinafter defined), BUYER shall have the right, at
BUYER’s sole expense and risk and subject to SELLER’s reasonable security restrictions, to have its representatives, employees, contractors and agents enter upon the Real Property, at reasonable times after giving at least twenty-four (24)
hours’ oral or written notice to SELLER, to conduct any and all tests, inspections and studies as BUYER may deem necessary and desirable, provided that: (i) such activities shall not impair or interfere with the current use, operation and
maintenance of the Real Property (and in that regard, BUYER acknowledges that SELLER is currently using and occupying the Real Property for conducting its St. John Knits business which includes, among other things, corporate headquarters, offices,
design, research and development, manufacturing, assembly, sales, warehousing and distribution); (ii) at SELLER’s option, any such entry shall be in the company of SELLER’s representative; (iii) BUYER shall be responsible for any damage
caused thereby to any person, property or to the Property; (iv) BUYER shall not contact any federal, state or local governmental agency with respect to any such tests, inspections or studies (except as required by law or court order); (v) BUYER
shall keep any information generated during or as a result of its tests, inspections and studies strictly confidential, unless disclosure is required by law or court 

  

 4 

 
order (in which case BUYER shall notify SELLER of such compulsory disclosure at least seven (7) days prior thereto), and shall not disclose any such
information to any third party, other than BUYER’s employees, agents and consultants who have agreed not to disclose any such information (and BUYER hereby assumes all liability for any disclosure by its employees, agents and consultants in
violation of this provision), without the prior approval of SELLER, which approval shall be given or withheld in SELLER’s sole and absolute discretion; and (vi) if the Closing does not occur, all data, notes, documents and reports (including
all copies thereof) generated during any of the tests, inspections or studies shall be promptly delivered by BUYER to SELLER at no cost to SELLER. Notwithstanding the foregoing, BUYER may not perform any borings or other invasive testing on the Real
Property without SELLER’s prior written consent, which consent shall not be unreasonably withheld, provided that: (A) the proposed scope of the invasive testing will not interfere with ongoing monitoring or remediation activities at the Real
Property; (B) SELLER shall have the right to receive all data generated by such testing (at no cost to SELLER), to meet with BUYER’s consultant upon prior reasonable notice, to receive (at no cost to SELLER) copies of any report provided by
BUYER’s consultant, and to take and analyze such split samples as SELLER may request; and (C) clauses (i) through (vi) above shall apply to any such testing. BUYER shall indemnify, defend and hold harmless SELLER from any and all losses,
damages, costs, liabilities and expenses, including, without limitation, attorneys’ fees, disbursements and court costs incurred by SELLER, due to any act or omission of BUYER or BUYER’s agents, representatives, contractors or
subcontractors during any of their entries on the Property, whether prior to or after the Execution Date. BUYER shall cause to be maintained commercial general liability insurance covering each such entry, which insurance may be obtained by BUYER or
the contractor or other party making such entry. Such insurance shall provide coverage for such entry in the amount of not less than $2,000,000 for injury or death to any number of persons in any one accident or occurrence, shall name SELLER as an
additional insured and shall be issued by an insurance company reasonably acceptable to SELLER. BUYER shall deliver to SELLER certificates of insurance evidencing BUYER’s compliance with the insurance provisions of this Section 2.2(a) prior to
making any entry upon the Real Property. 
  
 (b)
Review of Documents. From and after the Execution Date, SELLER shall make available to BUYER, for BUYER’s review, copies of all non-proprietary, non-confidential, non-privileged written materials and documents directly pertaining to the
Property that are in SELLER’s possession and control, including (if any): all plans, drawings and specifications respecting the Improvements; all environmental studies and reports, soils reports, geotechnical, engineering and architectural
studies, surveys, maps and similar data respecting the Property; books, records and files regarding the Property; service, maintenance, management, leases, occupancy and other agreements pertaining to the operation of the Property; all licenses,
permits, approvals, guarantees, warranties, certificates of occupancy and building inspection approvals respecting the Property; and the most recent tax bills and utility bills respecting the Property (collectively, the “Materials”). If
BUYER learns of a document pertaining to the Property that is not in SELLER’s possession or control, then upon BUYER’s written request for such item SELLER will request a copy of the document from the party holding it, provided BUYER pays
in advance to SELLER all costs to be incurred in obtaining the document. SELLER agrees to reasonably cooperate and use diligent efforts to obtain the cooperation of its consultants, agents and employees in obtaining any additional information
regarding the Property reasonably requested by BUYER; provided, however, that such cooperation shall not require SELLER to incur any out-of-pocket costs. BUYER agrees that the Closing shall not be impeded or delayed, as the result of BUYER’S
obtaining, failure to obtain or delay in obtaining any Materials or other documents, unless caused by a material default by SELLER of its obligations set forth in this Section 2.2(b). 
  
 2.3 Buyer’s Approval of Property. Notwithstanding BUYER’s rights of inspection, investigation and review as
set forth above, BUYER acknowledges and agrees that there are no economic, feasibility, physical, environmental, financing or other contingencies to BUYER’s obligations under this Agreement. Accordingly, if BUYER is dissatisfied with the
results of any of BUYER’s tests, inspections, studies, reviews of documents or the like relating to the Property, BUYER shall nevertheless be obligated to proceed with the Closing pursuant to the terms of this Agreement, and BUYER waives any
right to terminate this Agreement as a result of its due diligence inspection, investigation or review except as specifically set forth in Section 2.1, above. 
  

 5 

 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 SELLER’s Representations and Warranties. SELLER makes the representations and warranties set forth in this Section as of the date of this Agreement. SELLER’s allowing the Closing to occur shall constitute additional
representations and warranties that the representations and warranties set forth in this Section remain true and correct as of the Closing, except as may be disclosed in writing by SELLER to BUYER prior to the Closing. The truth and accuracy of the
representations and warranties made in this Section shall constitute a condition to the Closing solely for BUYER’s benefit. As used herein, the phrase “to SELLER’s actual knowledge” shall mean to the present, personal, subjective
knowledge of Joe Joffrion, in-house legal counsel for SELLER, and Scott Bidinger, facilities manager of SELLER, with no investigation or inquiry and no duty or obligation to investigate or inquire, and shall exclude any matters disclosed by the
Title Reports or any of the Materials. To SELLER’s actual knowledge, Joe Joffrion and Scott Biddinger would be the persons, collectively, most likely to have knowledge regarding the matters represented below were any person to have such
knowledge. 
  
 (a) Authority. SELLER is a
corporation duly formed, validly existing and in good standing under the laws of California, is authorized to do business in the State of California, has duly authorized the execution and performance of this Agreement and such execution and
performance will not violate any term of its charter or other organizational documents or any other agreement to which it is a party. 
  
 (b) Condemnation. To SELLER’s actual knowledge, there is no pending or threatened condemnation against the Property.

  
 (c) No Notice of Violation. SELLER has
not received from any governmental agency any notice of violation by SELLER that is still outstanding that would materially affect the operation, ownership, or use of the Property. 
  
 (d) No Default. To SELLER’s actual knowledge, the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby will not result in any breach of the terms of, conditions of, or constitute a default under, any instrument or obligation by which SELLER is bound, or violate any order, writ, injunction or
decree of any court in any litigation to which SELLER is a party. 
  
 (e) No Litigation. To SELLER’s actual knowledge, there is no pending litigation against the Property and, to SELLER’s actual knowledge, there is no litigation threatened in writing against the
Property. 
  
 (f) Bankruptcy. No petition
in bankruptcy (volunteer or otherwise), assignment for the benefit of creditors, or petition seeking reorganization or arrangement or other action under federal or state bankruptcy laws is pending against or contemplated by SELLER. 
  
 (g) Binding Effect. This Agreement constitutes a
legal, valid and binding obligation of SELLER enforceable against SELLER in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting
the enforcement of creditors’ rights and general equitable principles. 
  
 3.2 BUYER’s Representations and Warranties. BUYER makes the representations and warranties set forth in this Section as of the date of this Agreement. BUYER’s allowing the Closing to occur shall
constitute additional representations and warranties that the representations and warranties set forth in this Section remain true and correct as of the Closing, except as may be disclosed in writing by BUYER to SELLER prior to the Closing. The
truth and accuracy of the representations and warranties made in this Section shall constitute a condition to the Closing solely for SELLER’s benefit. 
  
 (a) No Default. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not
result in any breach of the terms of, conditions of, or constitute a default under, any instrument or obligation by which BUYER is bound, or violate any order, writ, injunction or decree of any court in any litigation to which BUYER is a party.

  

 6 

 (b) Bankruptcy. No petition in bankruptcy (volunteer or otherwise), assignment for
the benefit of creditors, or petition seeking reorganization or arrangement or other action under federal or state bankruptcy laws is pending against or contemplated by BUYER. 
  
 (c) Authority. BUYER is duly formed, validly existing and in good standing under the laws of
California, has duly authorized the execution and performance of this Agreement and such execution and performance will not violate any term of its organizational documents or any other agreement to which BUYER is a party. 
  
 (d) Binding Effect. This Agreement constitutes a
legal, valid and binding obligation of BUYER enforceable against BUYER in accordance with its terms, except as limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting the
enforcement of creditors’ rights and general equitable principles. 
  
 (e) Own Account. BUYER is acquiring the Property for its own account and not with a view to any public sale or distribution thereof and BUYER does not intend to sell, offer for sale or syndicate securities or
fractional interests in BUYER in connection with the purchase of the Property, provided however, nothing herein shall be construed or applied to prohibit or otherwise limit BUYER’s right to dispose of all or any portion of BUYER’s interest
in the Property in compliance with all applicable law and the Leases, after the Closing. BUYER hereby represents that it shall not market or attempt to resell the Property prior to the Closing. 
  
 3.3 Limitation on Enforcement of Rights. The representations and
warranties of SELLER set forth in Section 3.1 and the representations and warranties of BUYER set forth in Section 3.2 shall survive the Closing for a period of twelve (12) months. If either party has actual knowledge (as used herein, the phrase
“actual knowledge” as applied to BUYER shall mean the present, personal, subjective knowledge of John Saunders, with no investigation or inquiry and no duty or obligation to investigate or inquire) of any breach of any representation or
warranty of the other party prior to the Closing and fails to notify that party thereof in reasonable detail and in writing prior to the Closing, the party with knowledge of such breach shall be deemed to have waived any such breach and shall
thereafter be estopped from bringing any action with respect to such breach. However, nothing herein or elsewhere in this Agreement shall limit BUYER’s or SELLER’s rights or obligations under the Leases. 
  
 3.4 “As-Is” Purchase; Environmental Matters; Waiver and
Release. 
  
 (a) As-Is. BUYER
represents, warrants, acknowledges and agrees that, except for the express representations and warranties of SELLER set forth in Section 3.1, SELLER has not made, does not make and specifically negates and disclaims any representations, warranties,
promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to (i) value of the Property; (ii) the suitability of the
Property for any and all activities and uses which BUYER may conduct therefrom or thereon, (iii) the habitability, merchantability, marketability, profitability or fitness for a particular purpose of the Property; (iv) the manner, quality, state of
repair or lack of repair of the Property; (v) the nature, quality or condition of the Property, including, without limitation, the water, soil and geology; (vi) the compliance of or by the Property or its operation with any laws, rules, ordinances
or regulations of any applicable governmental authority or body; (vii) the manner or quality of the construction or materials, if any, incorporated into the Property; (viii) the resources to be derived from the Property or the availability of water
or other resources to the Property; (ix) compliance with any environmental protection, pollution or property use laws, rules, regulations, orders or requirements, including but not limited to, the Federal Water Pollution Control Act, the Federal
Resource Conservation and Recovery Act, the U.S. Environmental Protection Agency Regulations at 40 C.F.R., Part 261, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, the Resources Conservation and
Recovery Act of 1976, the Clean Water Act, the Safe Drinking Water Act, the Hazardous Substances Transportation Act, the Toxic Substance Control Act, and regulations promulgated under any of the foregoing; (x) the presence or absence of hazardous
materials or underground storage tanks at, on, under, or adjacent to the Property; (xi) the content, completeness or accuracy of any materials, documents, title reports or other documents or reports regarding the Property; (xii) the conformity of
any improvements to any plans or specifications for the Property, including any plans and specifications that may have been or may be provided to BUYER; (xiii) the conformity of the 

  

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Property to past, current or future applicable zoning or other requirements; (xiv) deficiency of any undershoring; (xv) the fact that all or any part of the
Property is or may be in any flood plain or flood area; (xvi) deficiency of any drainage; (xvii) the fact that all or a portion of the Property may be located on or near an earthquake fault line or special geological zone; (xviii) the existence of
vested land use, zoning or building entitlements affecting the Property; (xix) any claims, causes of action or demands by adjoining land owners; (xx) the impact of, or ability to amend, any easements or other documents referenced in the Title
Reports or other title reports for the Property; (xxi) the availability of any insurance coverage for any aspect of the Property or any improvement thereon; or (xxii) with respect to any other matter, including any and all such matters referenced,
discussed or disclosed in any documents delivered by SELLER to BUYER, in any public records of any governmental agency or entity or utility company, or in any other documents available to BUYER. BUYER further acknowledges and agrees that having been
given the opportunity to inspect the Property and conduct tests thereon and review information and documentation affecting the Property, BUYER is relying solely on its own investigation of the Property and review of such information and
documentation, and not on any information provided or to be provided by SELLER except for the express representations and warranties of SELLER set forth in Section 3.1. BUYER further acknowledges and agrees that any information made available to
BUYER or provided or to be provided by or on behalf of SELLER with respect to the Property was obtained from a variety of sources and that SELLER has not made any investigation or verification of such information and makes no representations as to
the accuracy or completeness of such information. BUYER fully and irrevocably releases all such sources of information and preparers of information and documentation to the extent such sources or preparers are SELLER or its agents, officers,
directors, shareholders, servants, attorneys, affiliates, successors or assigns (collectively, the “Seller Parties”) from any and all claims that they may now have or hereafter acquire against such sources and preparers of information for
any costs, loss, liability, damage, expense, demand, action or cause of action arising from such information or documentation. SELLER is not liable or bound in any manner by any oral or written statements, representations or information pertaining
to the Property, or the operation thereof, furnished by any of the foregoing entities and individuals or any other individual or entity except for the express representations and warranties of SELLER set forth in Section 3.1. BUYER further
acknowledges and agrees that the sale of the Property as provided for herein is made on an “AS-IS” condition and basis WITH ALL FAULTS, and that SELLER has no obligation to make repairs, replacements or improvements to any portion of the
Property. 
  
 (b) Environmental Matters.
SELLER shall have no indemnification obligations, at law or in equity, expressed or implied, for any costs or liabilities arising out of or related to the presence, discharge, treatment, recycling, storage, use, transportation, generation, disposal,
migration or release of any Hazardous Substances on, in, under or from the Property (including, without limitation, all facilities, improvements, structures and equipment thereon and soil and groundwater thereunder). Any information, reports,
statements, documents or records (collectively “Disclosures”) provided or made to BUYER or its consultants by SELLER, its agents, employees or contractors concerning the environmental or other condition of the Property shall not be
representations or warranties except for the express representations and warranties of SELLER set forth in Section 3.1. BUYER shall not rely on such Disclosures and, instead, shall rely only on its own, and its consultants’ inspection of the
Property. Except for the express representations and warranties of SELLER set forth in Section 3.1, any Disclosures made by SELLER shall be made solely for SELLER’s own benefit to facilitate any assessment process. BUYER agrees that any
demolition, clean-up or remedial measures taken by or on behalf of BUYER with regard to the Property, or the soil or groundwater thereunder, including any measure addressing environmental conditions of the Property, or the soil or the groundwater
thereunder, prior to and after the Closing, shall be in accord with all applicable federal, state and local laws and regulations and done in an environmentally sound manner. BUYER hereby acknowledges receipt of that certain Environmental Site
Assessment prepared by Leighton Consulting, Inc. dated July 15, 2003, as amended by letter dated October 17, 2003 (collectively, the “Phase I”) and the environmental indemnification provisions of the following purchase agreements: (a)
Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between Baxter Healthcare Corporation and SELLER dated March 12, 1996, and (b) Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between
SELLER and Baxter Healthcare Corporation dated January 15, 1996 (collectively, the “Prior Purchase Agreements”). Section 25359.7 of the California Health and Safety Code requires owners of nonresidential property who know or have
reasonable cause to believe that a release of a Hazardous Substance has come to be located on or beneath the real property to provide written 

  

 8 

 
notice of that condition to the buyer of said real property. There is a likelihood that one or more releases of Hazardous Substances may have come to be
located on or beneath the Real Property, including the release(s) of such Hazardous Substances described in the Phase I and the Prior Purchase Agreements. By execution of this Agreement, BUYER (i) acknowledges its receipt of the foregoing notice
pursuant to Section 25359.7 of the California Health and Safety Code and that it is aware of the benefits conferred to BUYER by Section 1542 of the California Civil Code and the risks BUYER assumes by waiving its rights thereunder, (ii) is fully
aware of the matters described in the Phase I, a copy of which BUYER has received and reviewed, and (iii) after receiving the advice of its legal counsel, waives any and all rights or remedies whatsoever, express or implied, which BUYER may have
against SELLER, including remedies for actual damages under Section 25359.7 of the California Health and Safety Code, arising out of or resulting from any unknown, unforeseen or unanticipated presence or releases of hazardous substances or other
Hazardous Substances from, under or on the Real Property. The provisions of this paragraph shall survive the Closing. BUYER hereby releases SELLER from any liability, claim or damage caused by any of the foregoing matters. The provisions of this
Section shall not limit or be deemed to limit any other disclaimers, releases, limitations on liability or indemnities contained in this Agreement 
  
 (c) Waiver and Release. Except for a breach by SELLER of a representation or warranty specifically made by SELLER in this
Agreement, BUYER and anyone claiming by, through or under BUYER hereby fully and irrevocably releases SELLER and the Seller Parties from any and all claims that it may now have or hereafter acquire against SELLER or the Seller Parties, and all
persons, firms, corporations and organizations acting in its or their behalf for any costs, loss, liability, damage, expenses, demand, action or cause of action arising from or related to any defects, errors, omissions or other conditions, latent or
otherwise, including environmental matters, affecting the Property, or any portion thereof, including, without limitation, under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601, et seq., as
amended and/or the provisions of California Health and Safety Code Section 25100, et seq., as amended, or under any other provision of federal, state or local law, which BUYER had, has or may have, based upon the past, present or future
presence, discharge, treatment, recycling, use, migration, storage, generation, release or transportation to or from the Property of any Hazardous Substances or the environmental condition of the Property (including, without limitation, all
facilities, improvements, structures and equipment thereon and soil and groundwater thereon). BUYER acknowledges that unknown, unsuspected and/or undiscoverable Hazardous Substances may hereafter be discovered on or about the Property, and BUYER
knowingly releases SELLER from any and all liability related thereto. This release includes claims of which BUYER is presently unaware or which BUYER does not presently suspect to exist which, if known by BUYER, would materially affect BUYER’s
release of SELLER. BUYER hereby agrees, represents and warrants that the matters related herein are not limited to matters which are known, disclosed, suspected or foreseeable, and BUYER hereby waives any and all rights and benefits which it now
has, or in the future may have, conferred upon BUYER by virtue of the provisions of Section 1542 of the California Civil Code, which provides: 
  
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASES, WHICH
IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. 
  
 BUYER and SELLER specifically acknowledge and agree that each of the foregoing provisions has been specifically negotiated and approved by BUYER and SELLER, that each party has fully read the foregoing, has had an opportunity to discuss all
of the foregoing with legal counsel of its choosing and fully understands the legal and practical effect of the foregoing. BUYER’s representations, warranties and agreements set forth in this Section 3.4 shall survive the Closing. 

 
 ARTICLE IV 
 ESCROW 
  
 4.1 Opening of Escrow. Immediately after execution of this Agreement by SELLER and BUYER, SELLER and BUYER shall open an escrow (the “Escrow”) with First American Title Insurance Company, 2 First American Way, Santa Ana,
California 92707 Attention: Toni Rice-Groetsch (“Escrow Holder”) by delivering a fully executed copy of this Agreement and the 

  

 9 

 
Deposit check to Escrow Holder. Escrow Holder will execute copies of this Agreement and return fully executed copies hereof to BUYER and SELLER, and shall
release the Deposit funds to SELLER when Escrow has opened. Escrow shall be deemed open upon Escrow Holder’s execution hereof (the “Opening of Escrow”). In addition, the parties agree to be bound by Escrow Holder’s standard
escrow general provisions (subject to any revisions thereto mutually agreed upon by the parties). In the event of any discrepancy between this Agreement and such general provisions, the provisions of this Agreement shall prevail. 
  
 4.2 Closing of Escrow; Extension Options. Provided all conditions to
the Closing have been satisfied or waived in writing by the benefited party, the delivery of funds and recordation of documents to be completed by Escrow Holder pursuant to Section 4.6 (the “Closing” or the “close of Escrow”)
shall occur on or before that date which is thirty-five (35) days after the Opening of Escrow (the “Closing Date”); provided, however, that (i) BUYER shall have the right to extend the Closing Date by one (1) period of ten (10) days (the
“First Extension Option”) by delivering to Escrow Holder a non-refundable $100,000 extension fee deposit (the “First Extension Deposit”) in the form of a certified or bank cashier’s check made payable to Escrow Holder (or a
wire transfer of immediately available federal funds), on or before the thirty-fifth (35th) day after the Opening of
Escrow, which First Extension Deposit shall thereupon become part of the Deposit described in Section 1.3(a), above, shall be immediately released by Escrow Holder to SELLER, and shall be held by SELLER and applied or otherwise disposed of as
described in Section 1.3(a); and (ii) if BUYER has made the First Extension Deposit, BUYER shall have the right to extend the Closing Date by one (1) additional period of thirty (30) days (the “Second Extension Option”) by delivering to
Escrow Holder a non-refundable Two Hundred Thousand Dollar ($200,000) extension fee deposit (the “Second Extension Deposit”), in the form of a certified or bank cashier’s check made payable to Escrow Holder (or a wire transfer of
immediately available federal funds) on or before the forty-second (42nd) day after the Opening of Esrow, which
Second Extension Deposit shall thereupon become part of the Deposit described in Section 1.3(a), above, shall be immediately released by Escrow Holder to SELLER, and shall be held by SELLER and applied or otherwise disposed of as described in
Section 1.3(a); and (iii) if the Closing Date is scheduled to occur on or before the 15th day of a month, SELLER
shall have the right to extend the Closing Date, by notice to BUYER and Escrow Holder, to any business day after such 15th day and prior to the end of such month. If the Escrow does not close by the Closing Date for any reason, Escrow Holder shall continue to comply with the instructions contained herein until a written demand for cancellation of the
Escrow has been made by the non-defaulting party or, if neither party is in default, the party for whose benefit any unfulfilled and unwaived condition to the Closing has been created. Escrow Holder shall notify the other party of any such demand
and shall immediately cancel the Escrow without any further instructions from any party and return the Deposit to BUYER if BUYER is entitled thereto or release the Deposit to SELLER if SELLER is entitled thereto. 
  
 4.3 Deliveries by BUYER Prior to the Closing. As a condition to the
Closing for SELLER’s benefit, prior to the Closing BUYER shall deposit or cause to be deposited with Escrow Holder all of the following: 
  
 (a) Prior to the Closing Date, and in a time sufficient to allow the Closing to occur on the Closing Date, in immediately available funds,
the full portion of the Purchase Price, less the Deposit amount released to SELLER pursuant to Section 1.3, and the amount of costs and prorations payable by BUYER pursuant to Section 4.5; 
  
 (b) A counterpart of the 1099 Designation, as described in
Section 4.9, properly executed by BUYER; 
  
 (c)
Two (2) counterparts of each of the Leases, as described in Section 5.6, properly executed by BUYER; 
  
 (d) Two (2) counterparts of each of the Memoranda of Lease, as described in Section 5.6, properly executed by BUYER; 
  
 (e) Two (2) counterparts of each of the SNDA’s, as
described in Section 5.6, properly executed by BUYER and BUYER’s lender; 
  
 (f) All such other documents and instruments as may be reasonably required of BUYER by Escrow Holder to allow the Closing to occur. 
  

 10 

 4.4 Deliveries by SELLER Prior to the Closing. As a condition to the Closing for BUYER’s
benefit, prior to the Closing SELLER shall deposit or cause to be deposited with Escrow Holder all of the following: 
  
 (a) The Grant Deed, as described in Section 1.4, properly executed and acknowledged by SELLER and in recordable form; 
  
 (b) The General Assignment, as described in Section 1.5,
properly executed by SELLER; 
  
 (c) A
certification as to the nonforeign status of SELLER for federal tax withholding purposes, completed and executed by SELLER, and a Withholding Exemption Certificate on California Franchise Tax Board Form 593-W, properly executed by SELLER 

 
 (d) A counterpart of the 1099 Designation, as described
in Section 4.9, properly executed by SELLER; 
  
 (e) Two (2) counterparts of each of the Leases, as described in Section 5.6, properly executed by SELLER; 
  
 (f) Two (2) counterparts of each of the Memoranda of Lease, as described in Section 5.6, properly executed by SELLER; 
  
 (g) Two (2) counterparts of each of the SNDA’s, as
described in Section 5.6, properly executed by SELLER; 
  
 (h) A copy of the REA, executed by SELLER; and 
  
 (i) All such other documents and instruments as may be reasonably required of SELLER by Escrow Holder to allow the Closing to occur. 
  
 In addition, upon the Closing SELLER shall deliver directly to BUYER outside of the Escrow copies of all of the Materials requested by
Buyer, to the extent not previously delivered to BUYER (all of which may be delivered to Buyer at the Property). 
  
 4.5 Costs and Prorations. 
  
 (a) Escrow and Title Fees. BUYER and SELLER shall each pay one-half of the Escrow Holder’s fee. SELLER shall pay all recording
and filing costs, the documentary transfer taxes and the cost of performing any of SELLER’s other obligations pursuant to this Agreement. SELLER shall pay the premium for issuance of a CLTA owner’s policy of title insurance in the amount
of the Purchase Price and the cost of performing any of SELLER’s other obligations pursuant to this Agreement. BUYER shall pay the excess cost of having the Title Policy, as described in Section 4.7, issued with extended coverage over the cost
of a standard coverage CLTA policy, the cost of any title endorsements requested by BUYER, the cost of any survey of the Real Property required by BUYER or the Title Company, and the cost of performing any of BUYER’s other obligations pursuant
to this Agreement. All other costs or expenses not otherwise provided for in this Agreement shall be apportioned or allocated on an accrual basis between BUYER and SELLER in the manner customary in the County. 
  
 (b) No Prorations. BUYER and SELLER acknowledge and
agree that, because SELLER is leasing back the Property from BUYER pursuant to the Leases, and since the Leases require SELLER, as tenant, to pay property taxes and assessments (as more fully described in the Leases), no prorations of property
taxes, utility payments or payments under any contracts shall be prorated at Closing. 
  
 (c) Survival. The provisions of this Section 4.5 shall survive the Closing. 
  
 4.6 Recordation of Documents and Delivery of Purchase Price and
Documents. When all required funds and instruments have been deposited into the Escrow by the appropriate parties and when all other conditions to Closing have been fulfilled, Escrow Holder shall cause the REA and, thereafter, the Grant Deed
and, thereafter (in the following order): the Memoranda of Lease and the SNDA’s, to be recorded in the Official Records of the County, and deliver (i) to SELLER, the Purchase Price (less prorations provided for herein and charges payable by

  

 11 

 
SELLER hereunder), a conformed copy of the recorded Grant Deed, Memoranda of Lease and SNDA’s, a counterpart of the 1099 Designation, a counterpart of
each of the Leases and a photocopy or electronic copy of the Title Policy, and (ii) to BUYER, a conformed copy of the recorded REA, Grant Deed, Memoranda of Lease and SNDA’s, a counterpart of the 1099 Designation, the General Assignment, a
counterpart of each of the Leases, the certificates described in Section 4.4(d) and a photocopy or electronic copy of the Title Policy, with the original Title Policy to follow as soon as reasonably practicable. SELLER shall retain possession of the
Property at Closing pursuant to the Leases. 
  
 4.7 Title
Policy. It shall be a condition to the Closing that the Title Company be irrevocably prepared or committed to deliver to BUYER a CLTA (or a standard coverage form ALTA) Owner’s Policy of Title Insurance dated as of Closing, insuring BUYER
in an amount equal to the Purchase Price and showing title vested in BUYER subject only to the Title Company’s standard printed exclusions and exceptions and the Permitted Exceptions (the “Title Policy”). BUYER may at its sole cost
and expense arrange with the Title Company to have the Title Policy issued in such modified form (such as ALTA Extended Coverage) and with such endorsements as BUYER may desire, provided that such arrangements shall not constitute a condition to, or
impede or delay, the Closing. In that regard, if BUYER desires or the Title Company requires one or more surveys of the Property or updated/re-certifications of the Surveys previously delivered by SELLER to BUYER, BUYER must obtain same at its
expense (and deliver to SELLER and the Title Company a copy of same) within twenty (20) days after the Opening of Escrow. 
  
 4.8 Termination. If BUYER or SELLER elects to terminate this Agreement as permitted pursuant to this Agreement, such terminating party shall send
written notice thereof to the other party and may send written demand to Escrow Holder for cancellation of the Escrow. Upon receipt of such demand, Escrow Holder shall return all funds deposited into Escrow to the party entitled and any documents
held by Escrow Holder to the party depositing same. If this Agreement is terminated by BUYER as provided in Sections 2.1 or 5.3, or if the Closing fails to occur due to a failure of an express condition precedent in favor of BUYER as provided in
Sections 3.1. 4.4 and 4.7, then BUYER shall return to SELLER all originals and copies of any Materials, studies, reports and other documents previously supplied to BUYER by SELLER, as well as the items required to be delivered to SELLER by BUYER as
described in Section 2.1, whereupon SELLER shall return the Deposit funds previously released to SELLER, and the parties shall have no further obligations to the other under this Agreement (except for any indemnity and other obligations that
specifically survive the termination of this Agreement. If the Escrow shall fail to close by reason of the default of SELLER under this Agreement, SELLER shall be liable for all escrow cancellation charges. In the event that the Escrow shall fail to
close for any other reason, BUYER shall be liable for all escrow cancellation charges. 
  
 4.9 IRS Form 1099-B. For purposes of complying with Section 6045 of the Code, as amended by Section 1521 of the Code, Escrow Holder shall be deemed the “person responsible for closing the
transaction,” and shall be responsible for obtaining the information necessary to file with the Internal Revenue Service the appropriate Form 1099. In connection therewith, SELLER, BUYER and Escrow Holder shall execute a written designation
(the “1099 Designation”) in reasonable form prepared by Escrow Holder. 
  
 ARTICLE V 
 OTHER AGREEMENTS OF SELLER AND BUYER 
  
 5.1 Operation of Property. Until the Closing or termination of this
Agreement, SELLER shall operate the Property in the ordinary course of business and shall maintain the Property consistent with existing practices. Prior to the Closing, SELLER shall not make any material alterations to the Property or permanently
remove any of the Property without the prior written consent of BUYER, which shall not be unreasonably withheld. If, as to approval under this Section, BUYER fails to notify SELLER of its approval or disapproval (with specificity as to the basis for
such disapproval) within five (5) business days after the date SELLER gives written notice of any proposed alteration or removal, BUYER shall be deemed to have approved such proposed alteration or removal. Nothing contained herein shall restrict the
right of SELLER to enter into any service agreements or operational contracts or extend or renew any service agreement or operational contracts or to do or perform any activity, work or alteration that would be permitted of SELLER as
“Tenant” under the Leases. Until the Closing or termination of this Agreement, SELLER agrees, subject to Section 5.3, at its sole cost and 

  

 12 

 
expense, to (i) keep all existing insurance policies covering the Property or any portion thereof in full force and effect, (ii) keep in full force and
effect and renew, as necessary, all necessary licenses and permits relating to the Property, and (iii) continue to operate, manage and maintain the Property in such condition so that, to the extent reasonably possible, the Property shall be in the
condition on the Closing as required by this Agreement, reasonable wear and tear, damage by casualty or condemnation, and matters that are outside SELLER’s reasonable control excepted. 
  
 5.2 Further Documents and Acts. Each of the parties hereto agrees to
cooperate in good faith with each other, and to execute and deliver such further documents and perform such other acts as may be reasonably necessary or appropriate to consummate and carry into effect the transactions contemplated under this
Agreement. 
  
 5.3 Damage and Destruction; Condemnation.
SELLER shall notify BUYER immediately of the occurrence of any damage to or destruction of the Property, or the institution or maintenance of any condemnation or similar proceedings with respect to the Property. In the event of any damage to or
destruction of the Property, Property for which the cost to repair exceeds One Hundred Thousand Dollars ($100,000), or which is not fully covered by insurance (subject to customary deductibles) and SELLER does not agree, within seven (7) days after
the occurrence of any such damage or destruction, to repair or restore the Property to its preexisting condition and diligently complete such repair or restoration, or in the event any condemnation or similar proceedings are instituted or maintained
with respect to a material portion of the Property prior to the Closing, or if BUYER’s purchase money lender refuses to fund the purchase money loan because SELLER is unable to repair or restore the Property prior to the Closing Date to its
condition prior to such damage or destruction, BUYER at its option either (i) may terminate this Agreement and receive the Deposit (unless the damage was caused by BUYER or its agents, employees or contractors), or (ii) may consummate the
transaction contemplated by this Agreement. In all other events of damage, destruction or condemnation, or in the event that BUYER elects to consummate the purchase pursuant to clause (ii) immediately above, all insurance or condemnation proceeds
collected in connection with such damage or destruction or proceedings together with the deductible (excluding business interruption, rental loss and similar proceeds attributable to periods prior to the Closing Date, and excluding insurance and
deductibles attributable to items that BUYER is not obligated to repair under the Leases) shall be delivered to BUYER upon the Closing, and BUYER shall promptly repair the Property in accordance with the terms of the Leases. All entitlement to all
additional insurance or condemnation proceeds arising out of such damage or destruction or proceedings (excluding business interruption, rental loss and similar proceeds attributable to periods prior to the Closing Date, and excluding insurance
attributable to items that BUYER is not obligated to repair under the Leases) shall be assigned by SELLER to BUYER upon the Closing. Notwithstanding the foregoing, if any damage, destruction or condemnation occurs prior to the Closing that would, if
the same had occurred during the term of the Leases, give SELLER or BUYER the right to terminate one or more of the Leases, then either SELLER or BUYER may terminate this Agreement, in which case BUYER shall be entitled to a return of the Deposit.

  
 5.4 Mutual Notification of Change in Conditions. Each
party shall promptly notify the other of any material change in any condition with respect to the Property or of any event or circumstance which makes any representation or warranty of such party under Article III untrue or misleading, or any
covenant of such party under this Agreement incapable or less likely of being performed, it being understood that such party’s obligation to provide notice to the other party shall in no way relieve such party of any liability for a breach by
such party of any of such party’s representations, warranties or covenants under this Agreement. 
  
 5.5 Assignment. BUYER shall not have the right to assign this Agreement to any person or entity without the prior written consent of SELLER, which
consent may be withheld by SELLER in its sole and absolute discretion; provided, however, that SELLER shall not unreasonably withhold its consent to an assignment of this Agreement to (i) an entity controlling, controlled by or under common control
with BUYER, or (ii) any partnership in which BUYER is a general partner, or (iii) a limited liability company in which BUYER is a managing member (an “Affiliate”). Any assignment of this Agreement to which SELLER consents shall be on a
form reasonably satisfactory to SELLER and shall not relieve the original named BUYER from any of its obligations hereunder. Any purported assignment of this Agreement in violation of this Section shall be null and void and shall constitute an
uncurable default under this Agreement. 
  

 13 

 5.6 SELLER’S Leaseback; SNDA’s. SELLER shall lease back the Property from BUYER
immediately upon the Closing pursuant to the four (4) lease agreements attached hereto as Exhibits “E-1” through “E-4” and incorporated herein by this reference (collectively, the “Leases”). The Leases have been
fully approved by BUYER and SELLER and shall be executed and delivered by BUYER and SELLER at Closing. Upon the Closing, BUYER shall deliver to Escrow as provided in Section 4.3 commercially reasonable subordination, non-disturbance and attornment
agreements for each of the Leases (the “SNDA’s”), each in recordable form and a Memorandum of Lease for each of the Leases (the “Memoranda of Lease”), each in recordable form, which SNDA’s and Memoranda of Lease shall
be in form and substance as more fully described in the Leases, each properly executed by BUYER and each lender or other third party that is granted or obtains a lien or encumbrance on the Property to which any of the Leases is or may become
subordinate. Prior to the Closing, SELLER shall execute counterparts of the SNDA’s and Memoranda of Lease and deliver same to Escrow as provided in Section 4.3. Escrow Holder shall cause the SNDA’s and Memoranda of Lease to recorded
against the Property upon the Closing. 
  
 ARTICLE VI 

REMEDIES 
  
 6.1 Time of Essence. Time is of the essence of every provision of this Agreement of which time is an element. 
  
 6.2 Remedies for SELLER’s Defaults. If the sale of the Property
does not occur due to SELLER’s default under this Agreement which is not cured within five (5) business days after notice of such default from BUYER to SELLER, BUYER may, as its sole remedy, either (a) receive the return of the Deposit and all
other funds delivered by or on behalf of BUYER to SELLER or Escrow Holder, which return shall operate to terminate this Agreement and release SELLER from any and all liability hereunder, or (b) enforce specific performance of SELLER’s
obligations in accordance with the terms of this Agreement during which time the Deposit shall continue to be held by SELLER pending resolution of the specific performance action and BUYER shall be entitled to enforce its rights under Section 7.2.
BUYER expressly waives its rights to seek damages if SELLER defaults hereunder. In situations involving failure of the Closing due to SELLER’s default as hereinabove described, BUYER shall be deemed to have elected clause (a) above if BUYER
fails to file suit for specific performance against SELLER in a court having jurisdiction in the County, on or before forty-five (45) days following the date upon which the Closing was to have occurred. 
  
 6.3 BUYER’s Failure. IF BUYER FAILS TO PERFORM ITS OBLIGATIONS TO
PURCHASE THE PROPERTY PURSUANT TO THIS AGREEMENT FOR ANY REASON OTHER THAN SELLER’S PRIOR UNCURED DEFAULT HEREUNDER, THEN ESCROW COMPANY SHALL DELIVER THE DEPOSIT TO SELLER, OR IF IN SELLER’S POSSESSION, SELLER SHALL RETAIN, AS FULL
COMPENSATION AND AS LIQUIDATED DAMAGES UNDER AND IN CONNECTION WITH THIS AGREEMENT, WITHOUT THE NECESSITY OF GIVING NOTICE TO BUYER, WITHOUT FURTHER INSTRUCTIONS FROM BUYER, AND NOTWITHSTANDING CONFLICTING INSTRUCTIONS FROM BUYER OR CONTRARY
INSTRUCTIONS CONTAINED IN ESCROW COMPANY’S GENERAL PROVISIONS. SELLER SHALL BE ENTITLED TO TERMINATE THIS AGREEMENT AND RECOVER AND RETAIN THE DEPOSIT PLUS ALL COSTS OF ENFORCING AND DEFENDING SELLER’S RIGHTS UNDER THIS SECTION AS
LIQUIDATED DAMAGES AND NOT AS A PENALTY, IN FULL SATISFACTION OF CLAIMS AGAINST BUYER HEREUNDER. BUYER AND SELLER HEREBY ACKNOWLEDGE AND AGREE THAT IN THE EVENT OF A DEFAULT OR BREACH BY BUYER IN THE PERFORMANCE OF BUYER’S OBLIGATIONS
HEREUNDER, PRIOR TO CLOSING, SELLER’S DAMAGES WOULD BE EXTREMELY DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT THE DEPOSIT IS THE PARTIES’ BEST AND MOST ACCURATE ESTIMATE OF THE DAMAGES SELLER WOULD 

  

 14 

 
SUFFER IN THE EVENT THE TRANSACTION PROVIDED FOR IN THIS AGREEMENT FAILS TO BE CONSUMMATED, AND THUS SUCH ESTIMATE IS REASONABLE UNDER THE CIRCUMSTANCES
EXISTING ON THE DATE OF THIS AGREEMENT. NOTHING HEREIN CONTAINED, HOWEVER, SHALL BE DEEMED TO IN ANY WAY SATISFY, DISCHARGE, OR TERMINATE BUYER’S AGREEMENTS HEREIN TO INDEMNIFY SELLER ENTITIES AND THE PROPERTY AND TO HOLD SELLER ENTITIES AND
THE PROPERTY HARMLESS, AS SPECIFICALLY STATED IN THIS AGREEMENT, AND SELLER’S RIGHTS AND REMEDIES ARISING OUT OF SUCH INDEMNITY AND HOLD HARMLESS AGREEMENTS SHALL SURVIVE AND SHALL BE IN ADDITION TO THIS LIQUIDATED DAMAGES PROVISION.
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IF BUYER BRINGS AN ACTION AGAINST SELLER FOR AN ALLEGED DEFAULT BY SELLER OF ITS OBLIGATIONS UNDER THIS AGREEMENT, DISPUTES SELLER’S RIGHT TO RECEIVE OR RETAIN THE DEPOSIT,
AND/OR RECORDS A LIS PENDENS OR OTHERWISE ENJOINS OR RESTRICTS SELLER’S ABILITY TO SELL AND TRANSFER THE PROPERTY (EACH, A “BUYER’S ACTION”), SELLER SHALL NOT BE RESTRICTED BY THE PROVISIONS OF THIS SECTION FROM BRINGING AN
ACTION AGAINST BUYER SEEKING EXPUNGEMENT OR RELIEF FROM THAT LIS PENDENS, INJUNCTION OR OTHER RESTRAINT, AND/OR RECOVERING FEES, COSTS OR EXPENSES (INCLUDING ATTORNEYS’ FEES) WHICH SELLER MAY SUFFER OR INCUR AS A RESULT OF BUYER’S ACTION
SHOULD SELLER BE THE PREVAILING PARTY IN THAT ACTION; AND THE AMOUNT OF ANY SUCH FEES, COSTS OR EXPENSES AWARDED TO SELLER SHALL BE IN ADDITION TO THE LIQUIDATED DAMAGES SET FORTH HEREIN. 
  
 BUYER’S INITIALS:      _________________________ 
  
 SELLER’S INITIALS:     _________________________

  
 ARTICLE VII 
 MISCELLANEOUS PROVISIONS 
  
 7.1 Waiver and Consent. Each provision of this Agreement to be performed by either party shall be deemed both a covenant and a condition and shall
be a material consideration for the other party’s performance hereunder, and any breach thereof by either party shall be deemed a material default hereunder. Either party may specifically and expressly waive in writing any portion of this
Agreement or any breach thereof, but no such waiver shall constitute a further or continuing waiver of any preceding or succeeding breach of the same or any other provision. No waiver or consent shall be implied from silence or any failure of a
party to act, except as otherwise specified in this Agreement. 
  
 7.2 Attorneys’ Fees. In the event any action or proceeding is instituted between SELLER, BUYER or Escrow Holder in connection with this Agreement, then as between BUYER and SELLER the prevailing party shall be entitled to
recover from the losing party all of its costs and expenses, including, without limitation, court costs, costs of appeals, attorneys’ fees and disbursements actually and reasonably incurred. 
  
 7.3 Broker’s Commissions. Except for CB Richard Ellis
(SELLER’s broker), to whom SELLER shall pay a commission if, and only if, the Closing occurs, pursuant to a separate written agreement, and except for ESDI, Inc. (BUYER’s broker), to whom SELLER shall pay a commission equal to 4% of the
Purchase Price if, and only if, the Closing occurs, pursuant to a separate written agreement, SELLER represents and warrants to BUYER and BUYER represents and warrants to SELLER that no other broker or finder has been engaged by SELLER or BUYER,
respectively, in connection with any of the transactions contemplated by this Agreement, and that no broker or finder is in any way connected with any of such transactions. In the event of any claim for broker’s or finder’s fees or
commissions in connection with the negotiation, execution or consummation of this Agreement or the transactions contemplated hereby, BUYER shall indemnify, hold harmless and defend SELLER from and against such claim if it shall be based upon any
statement or representation or agreement made by BUYER, and SELLER shall indemnify, hold harmless and defend BUYER from and against such claim if 

  

 15 

 
it shall be based upon any statement, representation or agreement made by SELLER. The provisions of this Section 7.3 shall survive the Closing 
  
 7.4 Notices. Any notice, demand, approval, consent, or other
communication required or permitted hereunder or by law shall be validly given or made only if in writing, properly sent by mail, courier or telecopy, and addressed to the party for whom intended, as follows: 
  

			
	 If to SELLER:
	  	St. John Knits, Inc.
	 	  	2722 Michelson Drive
	 	  	Irvine, California 92612
	 	  	Attention: Joe Joffrion, Esq.
	 	  	 Telephone: (949) 399-8212

	 	  	Facsimile: (949) 437-8170
		
	 With a copy to:
	  	Hewitt & O’Neil LLP
	 	  	19900 MacArthur Blvd., Suite 1050
	 	  	Irvine, CA 92612
	 	  	Attention: Dean Dunn-Rankin, Esq.
	 	  	Telephone: (949) 798-0500
	 	  	Facsimile: (949) 798-0511
		
	 If to BUYER:
	  	c/o John Saunders, Trustee
	 	  	4525A MacArthur Blvd.
	 	  	Newport Beach, California 92130
	 	  	Telephone: (949) 251-0444
	 	  	Facsimile: (949) 251-0888
		
	 With a copy to:
	  	Dean Roeper, Esq.
	 	  	11455 El Camino Real, Suite 200
	 	  	San Diego, California 92130
	 	  	Telephone: (858) 794-2900
	 	  	Facsimile: (858) 794-2909
		
	 If to Escrow Holder:
	  	First American Title Insurance Company
	 	  	2 First American Way
	 	  	Santa Ana, California 92707
	 	  	Attention: Toni Rice-Groetsch
	 	  	Telephone: (714) 800-4840
	 	  	Facsimile: (714) 800-4751

  
 Any party may from time to time, by
written notice to the other, designate a different address which shall be substituted for that specified above. Each such notice, demand, approval, consent, or other communication shall be deemed effective and given (i) five (5) business days after
deposit in the United States mail, if sent by certified mail with postage prepaid, return receipt requested, or (ii) upon receipt if delivered or sent in any other way. BUYER and SELLER hereby agree that notices may be given hereunder by the
parties’ respective counsel and that, if any communication is to be given hereunder by BUYER’s or SELLER’s counsel, such counsel may communicate directly with all principals as required to comply with the provisions of this Section.

  
 7.5 Gender and Number. In this Agreement (unless the
context requires otherwise), the masculine, feminine and neuter genders and the singular and the plural shall be deemed to include one another, as appropriate. 
  

7.6 Entire Agreement. This Agreement and its exhibits constitute the entire agreement between the parties hereto pertaining to the subject
matter hereof, and the final, complete and exclusive expression of the terms and conditions thereof. All prior agreements, representations, negotiations and understandings of the parties hereto, oral or written, express or implied, are hereby
superseded by and merged into this Agreement, including, without limitation, any and all letters of intent or letters of understanding between the parties and/or their brokers or agents. 
  

 16 

 7.7 Captions; Exhibits. The captions used herein are for convenience only and are not a part of
this Agreement and do not in any way limit or amplify the terms and provisions hereof. All uses of the words “Article(s)” and “Section(s)” in this Agreement are references to articles and sections of this Agreement, unless
otherwise specified. All of the Exhibits attached to this Agreement are incorporated herein and made a part hereof by this reference. 
  
 7.8 Governing Law. This Agreement shall be governed by and construed under the laws of the State of California. 
  
 7.9 Invalidity of Provision. If any provision of this Agreement as
applied to either party or to any circumstance shall be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the same shall in no way affect (to the maximum extent permissible by law) any other provision of this
Agreement, the application of any such provision under circumstances different from those adjudicated by the court, or the validity or enforceability of this Agreement as a whole. 
  
 7.10 Amendments. No addition to or modification of any provision contained in this Agreement shall be effective
unless fully set forth in a writing signed by both BUYER and SELLER. 
  
 7.11 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument. 
  
 7.12 Survival of Covenants. All covenants set forth in this Agreement
and not required by this Agreement to be performed prior to the Closing shall survive the Closing. 
  
 7.13 Successors and Assigns. This Agreement shall be binding upon, and shall inure to the benefit of, the successors (by merger or dissolution) and
permitted assigns of the parties. Except to the extent specifically described in this Section, there are no third party beneficiaries to this Agreement. 
  
 7.14 Objective Construction. This Agreement reflects the negotiated agreement of the parties. Accordingly, this Agreement shall be construed as if
both parties jointly prepared this Agreement and no presumption against one party or the other shall govern the interpretation or construction of any of the terms of this Agreement. 
  
 7.15 Marketing; Back-up Offers. SELLER shall have the right to market the Property for sale or Leases and negotiate
and accept back-up offers at all times prior to the Closing. 
  
 7.16 1031 Exchange. The parties acknowledge and agree that either party may elect to assign their interest in this Agreement to an exchange facilitator by means of one or more escrows for the purpose of completing an exchange of such
Property in a transaction which will qualify for treatment as a tax deferred exchange pursuant to the provisions of Section 1031 of the Internal Revenue Code of 1986 and applicable state revenue and taxation code sections (a “1031
Exchange”). Each party agrees to reasonably cooperate with any party so electing in implementing any such assignment and 1031 Exchange, provided that such cooperation shall not entail any additional expense to the non-electing party, cause such
party to take title to any other property or cause such party exposure to any liability or loss of rights or benefits contemplated by this Agreement, and the electing party shall indemnify, defend and hold the non-electing party harmless from any
liability, damage, loss, cost or other expense including, without limitation, reasonable attorneys’ fees and costs, resulting or arising from the implementation of any such assignment and 1031 Exchange. No such assignment by any party shall
relieve such party from any of its obligations hereunder, nor shall such party’s ability to consummate a tax deferred exchange be a condition to the performance of such party’s obligations under this Agreement. 
  
 7.17 Confidentiality. Each party shall, and shall cause its
affiliates, to (i) treat and hold as such any Confidential Information (as hereinafter defined) it, or its affiliates, receives from the other party during the course of this Agreement, whether from its investigations of the Property or otherwise,
with at least the same degree of care and security as it treats its own confidential information, but in no event less than a reasonable degree of care, (ii) not use for personal benefit, disclose to third-parties or otherwise use for the direct or
indirect benefit of any other person any of the Confidential Information and limit the disclosure of and access to the 

  

 17 

 
Confidential Information to only those employees, representatives and agents of such party who are required to have access to such Confidential Information
for the purpose of evaluating the transactions contemplated by this Agreement, except as may be necessary in connection with the performance of this Agreement, (iii) not use any Confidential Information in any manner, whether directly or indirectly,
competitive with the business of the Seller, and (iv) if this Agreement is terminated for any reason, return to the Seller all tangible embodiments (and all copies) of the Confidential Information which are in its, or its affiliates’,
possession. All Confidential Information shall be deemed to be the property of the party so providing the Confidential Information. This Section shall survive the Closing or the earlier termination of this Agreement. “Confidential
Information” means any information concerning the Property or the business and affairs of either party, including, without limitation, all financial, marketing, and technical information regarding either party or the Property (including all
Materials), as well as the details of the transactions contemplated by this Agreement. Notwithstanding the foregoing, the following will not constitute Confidential Information for purposes of this Agreement: (i) information which is or becomes
generally available to the public other than as a result of a disclosure or other act by a party or its representatives; (ii) information which can be shown by a party to have been already known to such party on a non-confidential basis prior to
being furnished such information by the other party; and (iii) information which becomes available to a party on a non-confidential basis from a source other than the other party or its representatives if such source was not subject to any
prohibition against transmitting the information to such party. 
  
 7.18 Press Releases and Public Announcements. No party shall issue any press release or make any public announcement relating to the subject matter of this Agreement without the prior written approval of the other party in its sole
and absolute discretion, except to the extent necessary to comply with any applicable federal or state securities laws (and then only after providing advance notice to the other party, along with a copy of the proposed press release). 
  
 7.19 Report on Status. On the 25th day after the Opening of Escrow, BUYER shall notify SELLER of the then-current status of BUYER’s purchase money financing for the Property,
which notice shall include the expected dates for completion of loan documentation and funding, the actions BUYER has taken from and after the Opening of Escrow to obtain such financing and any outstanding issues that may reasonably be expected to
delay the Closing beyond the then-scheduled Closing Date. Neither the foregoing notice obligation nor anything else in this Agreement is intended to provide BUYER with a financing contingency, the parties specifically agreeing that BUYER’s
obtaining financing is not a contingency or a condition to the Closing or to any of BUYER’s other obligations under this Agreement. 
  

 18 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written, and such
date shall be considered for all purposes to be the date of this Agreement. 
  

			
	SELLER:
	
	St. John Knits, Inc., a California corporation
		
	By:	 	 
	 Name: 
	 	 
	 Title:
	 	 
	
	BUYER:
	
	JOHN R. SAUNDERS TRUST dated July 14, 1987
		
	By:	 	 
	 Name: 
	 	 John R. Saunders, Trustee

  
 The undersigned Escrow Holder
hereby certifies that Escrow opened as of June     , 2004 as Escrow No.
                            . The undersigned Escrow Holder agrees to act as Escrow Holder pursuant to
the terms of this Agreement. 
  

			
	FIRST AMERICAN TITLE INSURANCE COMPANY
		
	By:	 	 
	 Name: 
	 	 
	 Title:
	 	 

  

 19 

 LIST OF EXHIBITS 
  

			
	 EXHIBIT A
	  	DESCRIPTION OF LAND
		
	 EXHIBIT B
	  	LIST OF TANGIBLE PERSONAL PROPERTY
		
	 EXHIBIT C
	  	GRANT DEED
		
	 EXHIBIT D
	  	GENERAL ASSIGNMENT
		
	 EXHIBIT E
	  	LEASE AGREEMENTS
		
	 EXHIBIT F
	  	FORM OF REA

  

 20 

 EXHIBIT “A” 
  
 DESCRIPTION OF LAND 
  

 A-1 

 EXHIBIT “B” 
  
 LIST OF TANGIBLE PERSONAL PROPERTY 
  
 NONE. 
  

 A-2 

 EXHIBIT “C” 
  
 GRANT DEED 
  
 RECORDING REQUESTED BY: 
  
 First American Title Insurance Company 
  
 WHEN
RECORDED, MAIL TO: 
  
 MAIL TAX STATEMENTS TO ADDRESS ABOVE 
  
                                       
                                        
                                        
                                        
                                        
                                        
                    
 (Space Above For
Recorder’s Use) 
  
 [Statement Of Tax Due and Request that Stamps not be Made
Part of the Permanent Record to be filed separate from the Grant Deed.] 
  
 GRANT DEED 
  
 FOR A VALUABLE CONSIDERATION, receipt of
which is hereby acknowledged, St. John Knits, Inc., a California corporation, hereby GRANTS to John Saunders Trust, under declaration of trust dated
                            , the real property in the County of Orange, State of California described
in Exhibit “1” attached hereto. 
  
 SUBJECT TO: 
  
 1. Current Taxes and Assessments. 
  
 2. All covenants, conditions, restrictions, reservations, rights, rights-of-way, easements
and matters of record or apparent, or that would be disclosed by a diligent inspection or ALTA survey of the real property. 
  
 IN WITNESS WHEREOF, the undersigned has executed this document as of the day and year indicted. 
  

									
	 DATED:
                        , 2004
	 	 	 	 GRANTOR:

			
	 	 	 	 	 St. John Knits, Inc., a California corporation

					
	 	 	 	 	 	 	By:	 	 
	 	 	 	 	 	 	 Name:
	 	 
	 	 	 	 	 	 	 Title:
	 	 

  

			
	 STATE OF                            
	 	)
	 	 	)
	 COUNTY OF                        
	 	)

  
 On
                                        
                 before me,
                                        
    , a notary public in and for said State, personally appeared
                                        
                            , personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. 
  
 WITNESS my hand and official seal. 
  

									
					
	Signature	 	 	 	 	 	 	 	(Seal)

  

 3 

 EXHIBIT “D” 
  
 GENERAL ASSIGNMENT 
  
 For valuable consideration, receipt of which is acknowledged, St. John Knits, Inc., a California corporation (“SELLER”), grants, sells, transfers and assigns to
John Saunders Trust, under declaration of trust dated                          (“BUYER”), to the extent that
SELLER has the right and power to transfer/assign the foregoing without cost to SELLER and without the consent of third parties, and all the Materials (as defined in Section 2.2 of that certain Agreement for Purchase and Sale of Property and Escrow
Instructions by and between SELLER and BUYER dated as of June     , 2004 (the “Purchase Agreement”)); and all intangible personal property (other than cash or accounts) owned by SELLER and directly relating to
the Real Property described in the Purchase Agreement, as more fully described in and subject to the terms of Section 1.1(b)(ii) of the Purchase Agreement. 
  
 The foregoing property transferred hereby is transferred “AS IS”, “WHERE IS” and “WITH ALL FAULTS”, and without any express or implied
representation or warranty whatsoever. 
  
 IN WITNESS WHEREOF, SELLER has executed
this General Assignment as of                     , 2004. 
  

			
	St. John Knits, Inc., a California corporation
		
	By:	 	 
	 Name:
	 	 
	 Title:
	 	 

  

 4 

 Exhibit E-1 
  
 LEASE AGREEMENT 
 (Single Tenant Net) 
  
 This Lease Agreement (this
“Lease”) is made this                      day of
                    , 2004, by and between ST. JOHN KNITS, INC., a California corporation (“Tenant”), and JS SJK L.P., a California
limited liability company (“Landlord”), based upon the following facts: 
  
 RECITALS 
  
 A. Pursuant to
that certain Purchase Agreement dated June 11, 2004, between Tenant, as Seller, and Landlord, as Buyer (the “Purchase Agreement”), Landlord has purchased that certain real property more particularly described on Exhibit
“A” attached hereto (the “Land”) located at 17522 Armstrong in the City of Irvine, County of Orange, State of California, together with a building containing approximately 99,567 square feet of floor area, including tenant
improvements (the “Building”), an exterior surface parking area (the “Parking Area”) and related exterior improvements, including, but not limited to, lighting, access rights and landscaping (the “Exterior
Improvements”). The Land, the Building, the Parking Area and the Exterior Improvements are collectively called the “Premises.” 
  
 B. Landlord desires to lease the Premises to Tenant, and Tenant desires to lease the Premises from Landlord on the terms and conditions set forth herein.

  
 NOW THEREFORE, in consideration of the foregoing recitals (and
those in the Purchase Agreement, all of which are incorporated herein by this reference) and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 
  
 ARTICLE ONE: BASIC TERMS 
  
 Section 1.1 Lease Term: The term of this Lease (the “Term”)
shall commence on the date (the “Commencement Date”) immediately following the Closing Date (as that term is defined in the Purchase Agreement) and expire on the last day of the 180th full calendar month thereafter (if the Commencement
Date is not the first day of a calendar month, the last month of the initial Term shall include such additional days as may be required to cause the initial Term to end on the last day of a calendar month). The initial Term may be extended by Tenant
for three (3) additional 60-month periods and one (1) additional 59-month period in accordance with Section 2.3. 
  
 Section 1.2 Permitted Uses: (See Article Five) General office, administrative, research and development, warehouse, distribution, manufacturing,
assembly, retail and commercial uses as permitted by then existing law; provided, however, that Landlord’s prior written approval shall be required for any change in use that requires a variance or other change in then-current zoning.

  
 Section 1.3 Vehicle Access and Parking: Subject to the
terms of this Lease, Tenant shall be entitled to the exclusive use of the Premises and every part thereof, including, without limitation, all entranceways and driveways serving the Premises and the Parking Area for vehicle parking purposes and
ingress and egress to and from the Premises; provided, however, the parties acknowledge that the Premises is subject to all matters of record as of the date hereof, including, without limitation, the terms of that certain Reciprocal Driveway
Easement Agreement (the “REA”) recorded prior to or concurrently with the closing under the Purchase Agreement as specified therein (whereby the Premises is entitled to and encumbered by certain ingress and egress rights with certain
adjacent premises as specified in the REA). All parking spaces shall be available to Tenant throughout the Term, 24 hours per day, free of charge. 
  
 Section 1.4 Rent and Other Charges Payable by Tenant: 
  
 (a) BASE RENT: For the initial 15-year Term, base rent (“Base Rent”) for the Premises shall be Sixty-Nine Thousand Six Hundred
Ninety-Seven Dollars ($69,697) per month, subject to increase as set forth below. If Tenant exercises an option to extend the Term of this Lease pursuant to Section 2.3, monthly Base Rent for the first year of the applicable Option Term shall be
determined as set forth in Section 2.3, and the same shall be subject to increase as set forth in Section 1.4(c), below (i.e., at the start of the 31st full calendar month following the commencement of the applicable Option Term). 

 
 (b) OTHER PERIODIC PAYMENTS: (i) Property Taxes (See
Section 4.2); (ii) Utilities (See Section 4.3); (iii) Insurance Premiums (See Section 4.4) 
  
 (c) BASE RENT INCREASES: The monthly Base Rent shall be increased during the initial Term at the commencement of the 31st, 61st, 91st, 121st and 151st full calendar months following the Commencement Date
(and, if Tenant exercises an option to extend, at the 

  

 1 

 
commencement of the 31st
full calendar month following the commencement of the applicable Option Term) (each such date is hereinafter called a “Rental Adjustment Date”) in accordance with the increase in the United States Department of Labor, Bureau of Labor
Statistics, Consumer Price Index for All Urban Consumers (all items for the Los Angeles – Riverside – Anaheim area, 1982-1984 = 100) (the “Index”) as follows: The monthly Base Rent in effect immediately before each Rental
Adjustment Date (the “Comparison Base Rent”) shall be increased by the percentage that the Index has increased from the date on which payment of the Comparison Base Rent began (the “Comparison Date”) through the end of the month
in which the applicable Rental Adjustment Date occurs (each such period a “Rental Adjustment Period”); provided, however, that such increase for any Rental Adjustment Period shall be no less than 2.5% per annum, but no more than 4% per
annum (except that such 4% annual cap shall be increased to a 5% annual cap at the end of the 10th full Lease year,
that is, for the adjustments commencing with the adjustment at the start of the 151st month of the Term) on a
compounded, cumulative basis. A numerical example of such Base Rent increase mechanism is provided in Exhibit “B” attached hereto. Landlord shall notify Tenant of each increase by a written statement. Tenant shall pay the new Base
Rent from the applicable Rental Adjustment Date until the next Rental Adjustment Date. Landlord’s notice may be given not more than three (3) months after the applicable Rental Adjustment Date of the increase, and Tenant shall pay Landlord the
accrued rental adjustment for the months elapsed between the effective date of the increase and Landlord’s notice of such increase within ten (10) days after Landlord’s notice. If the format or components of the Index are materially
changed after the Commencement Date, Landlord shall substitute an index which is published by the Bureau of Labor Statistics or similar agency and which is most nearly equivalent to the Index in effect on the Commencement Date. The substitute index
shall be used to calculate the increase in the Base Rent unless Tenant objects to such index in writing within fifteen (15) days after receipt of Landlord’s notice. If Tenant objects, Landlord and Tenant shall submit the selection of the
substitute index for binding arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) (except the arbitrators shall determine the substitute index rather than the Option Rent). The costs of arbitration shall be borne equally by Landlord
and Tenant. 
  
 Section 1.5. Addresses for Notices and
Payments: 
  
 Address of Landlord: c/o Optima
Asset Management, 1600 Dove Street, Suite 480, Newport Beach, CA 92660 
  
 Address of Tenant: 2722 Michelson Drive, Irvine, California 92612 Attention: CFO 
  
 Section 1.6. Security Deposit. Tenant shall deposit with Landlord upon execution hereof an amount equal to the first two months’ Base Rent as
security for Tenant’s faithful performance of its obligations under the Lease (the “Security Deposit”). If a Default (as defined in Section 10.1) by Tenant occurs under this Lease, then during the continuance of such Default Landlord
may use, apply or retain all or any portion of the Security Deposit for the payment of any amount due Landlord or to reimburse or compensate Landlord for any liability, expense, loss or damage that Landlord has suffered or incurred by reason
thereof. If Landlord uses or applies all or any portion of the Security Deposit in accordance with the foregoing requirements, Tenant shall within ten (10) days after written request therefor deposit monies with Landlord sufficient to restore said
Security Deposit to the full amount required by the Lease. The Security Deposit shall not bear interest and may be commingled with other funds of Landlord. Provided a Tenant Default is not then continuing under this Lease, the Security Deposit shall
be returned to Tenant, without interest, within thirty (30) days after the expiration of Term. 
  
 ARTICLE TWO: LEASE TERM 
  
 Section 2.1 Lease of Premises For Lease Term. Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord for the Lease Term. The Lease Term is for the period stated in Section 1.1 above and shall begin and
end on the dates specified in Section 1.1 above, unless the beginning or end of the Lease Term is changed under any provision of this Lease. The “Commencement Date” shall be the date specified in Section 1.1 above for the beginning of the
Lease Term. 
  
 Section 2.2 Possession; Waiver of Distraint
The parties acknowledge that Tenant is currently occupying the Premises and that Landlord shall be deemed to have delivered possession of the Premises to Tenant on the Commencement Date. Title to all of Tenant’s FF&E (as defined in Section
6.6, below) shall remain in Tenant and Tenant alone shall be entitled to claim depreciation therefor. Landlord hereby waives, releases and relinquishes any and all rights of distraint, levy, attachment or recourse to the FF&E. Although the
foregoing waiver, release and relinquishment shall be self-operative without the necessity for any further instrument or document, Landlord hereby agrees to furnish Tenant or any vendor or other supplier under any conditional sale, chattel mortgage
or other security arrangement, any consignor, and holder of reserved title or any holder of a security interest, upon written request from time to time, waivers reasonably satisfactory to Tenant of Landlord’s right to distraint, levy,
attachment or recourse with respect thereto and exempting the same from distraint, levy, attachment or recourse. 
  

 2 

 Section 2.3 Options to Extend Term. 
  
 (a) Option Right. Landlord hereby grants to Tenant four (4) options to extend the Term as to the
entire Premises for a period of 60 months each, except that the last option shall be for a period of 59 months (each of the foregoing option terms is referred to hereinafter as an “Option Term”), which options shall be exercisable by
written notice delivered by Tenant to Landlord as provided below. Upon the exercise of any such option to extend, the then-existing Term shall be extended for a period of 60 months (59 months for the last option) on the same terms and conditions as
set forth in this Lease, except that monthly Base Rent for the first year of the Option Term shall be determined as set forth below. 
  
 (b) Option Rent. The annual Base Rent payable by Tenant for the first year of any Option Term shall be equal to 95% of the
“Fair Market Rental Rate,” as that term is defined in Section 2.3(e), below, but in no event shall the annual Base Rent payable by Tenant for the first year of any Option Term be less than the annual Base Rent in effect immediately prior
to the start of such Option Term. The Base Rent payable throughout the Option Term, including during the first year, is referred to hereinafter as the “Option Rent.” The monthly Option Rent determined for the first year of an Option Term
shall subject to increase at the start of the 31st full calendar month during such Option Term in accordance with
the Base Rent increase procedures set forth in Section 1.4(c). 
  
 (c) Exercise of Option. The options contained in this Section 2.3 shall be exercised by Tenant, if at all, only in the following manner: (i) Tenant shall deliver written notice (the “Option Interest
Notice”) to Landlord not more than 12 months or less than 9 months prior to the expiration of the initial Term or the immediately preceding Option Term, as the case may be, stating that Tenant is interested in exercising its option for the
Premises; (ii) Landlord, after receipt of the Option Interest Notice, shall deliver notice (the “Option Rent Notice”) to Tenant not less than 30 days after Tenant’s Option Interest Notice, setting forth Landlord’s determination
of the Option Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall, on or before the later of (A) the date occurring 6 months prior to the expiration of the initial Term or immediately preceding Option Term, as applicable, and (B)
the date occurring thirty (30) days after Tenant’s receipt of the Option Rent Notice, exercise the option by delivering written notice thereof to Landlord and upon, and concurrent with, such exercise, Tenant may, at its option, object to the
Option Rent contained in the Option Rent Notice, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. Additionally, if Tenant has not previously delivered the Option
Interest Notice, Tenant may nonetheless irrevocably exercise the option by delivering written notice thereof to Landlord at any time on or before the date occurring 6 months prior to the expiration of the initial Term, or immediately preceding
Option Term, as applicable, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. 
  
 (d) Determination of Fair Market Rental Rate. If Tenant timely and appropriately objects to the Fair
Market Rental Rate, Landlord and Tenant shall attempt to agree upon the Fair Market Rental Rate, using reasonable good-faith efforts. If Landlord and Tenant fail to reach agreement on or before the date which is five (5) months prior to the
expiration of the Term or the immediately preceding Option Term, as applicable (each such date, an “Outside Agreement Date”), then each party shall make a separate determination of the Fair Market Rental Rate within five (5) business days
after the applicable Outside Agreement Date, and such determinations shall be exchanged with each other in sealed envelopes at a meeting held within two (2) business days after such 5-business day period. If neither party accepts the other’s
determination of the Fair Market Rental Rate, and if Tenant at that time fails to rescind its option to renew (which Tenant shall have the right to do by notice to Landlord given prior to submittal to arbitration), then such determinations of the
Fair Market Rental Rate shall be submitted to arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) below. 
  
 (i) Landlord and Tenant shall each appoint one arbitrator who shall be a real estate broker who shall have been active over the five (5)
year period ending on the date of such appointment in the leasing of commercial industrial properties in the Irvine area in which the Premises is located. The determination of the arbitrators shall be limited solely to the issue of whether
Landlord’s or Tenant’s submitted Fair Market Rental Rate is the closest to the actual Fair Market Rental Rate, as determined by the arbitrators, taking into account the requirements of this Lease. Each such arbitrator shall be appointed
within fifteen (15) days after the applicable Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions. The arbitrators
so selected by Landlord and Tenant shall be deemed “Advocate Arbitrators.” 
  
 (ii) The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of
the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral Arbitrator”) who shall be qualified under the same criteria set forth in Section 2.3(d)(i) for qualification of
the two Advocate Arbitrators except that neither the Landlord or Tenant or either parties’ Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or 

  

 3 

 
subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord’s counsel and
Tenant’s counsel. 
  
 (iii) The three (3)
arbitrators shall within thirty (30) days of the appointment of the Neutral Arbitrator reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Fair Market Rental Rate, and shall notify Landlord and Tenant
thereof. Whichever Fair Market Rental Rate is selected by the arbitrators shall become the then applicable Fair Market Rental Rate. The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and Tenant. 
  
 (iv) If either Landlord or Tenant fails to appoint an
Advocate Arbitrator within fifteen (15) days after the applicable Outside Agreement Date, then either party may petition the presiding judge of the Superior Court of Orange County to appoint such Advocate Arbitrator subject to the criteria in
Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator. 
  
 (v) If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either
party may petition the presiding judge of the Superior Court of Los Angeles County to appoint the Neutral Arbitrator, subject to the criteria in Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having
jurisdiction over the parties to appoint such arbitrator (or if no judge having jurisdiction is willing to act, the Judicial Arbitration and Mediation Service located closest to the Premises). The cost of the arbitration shall be paid by Landlord
and Tenant equally. 
  
 (e) Fair Market Rental
Rate. The “Fair Market Rental Rate” shall be equal to the annual Base Rent, at which tenants, as of the commencement of the applicable Option Term, are, pursuant to brokered transactions completed within the twelve (12) month period
prior to the exercise of the applicable option, leasing non-renewal, non-equity, non-affiliated space for a comparable use (based on the use to which Tenant is then putting the Premises) that is comparable in size, location and quality to the
Premises, for a similar lease term, in an arms length transaction, which comparable space is located in the Irvine area (“Comparable Transactions”), taking into consideration all monetary and non-monetary concessions, if any, being granted
such tenants in connection with such Comparable Transactions and the financial condition and credit history of Tenant and the other tenants in such Comparable Transactions, and taking into account the fact that rental increases during the Option
Term are already provided for in this Lease, but excluding the value of any improvements installed or paid for by Tenant. 
  
 Section 2.4 Holding Over. Tenant shall vacate the Premises upon the expiration or earlier termination of this Lease. If Tenant does not vacate the
Premises upon the expiration or earlier termination of the Lease, as the same may be extended as provided above, and Landlord thereafter accepts rent from Tenant, Tenant’s occupancy of the Premises shall be a “month-to-month” tenancy,
subject to all of the terms of this Lease applicable to a month-to-month tenancy except that the monthly Base Rent shall be increased for the first 60 days of holdover to 110% of the monthly Base Rent in effect at the end of the Term and thereafter
to 125% of the monthly Base Rent in effect at the end of the Term (in each case prorated on a daily basis for holdovers of partial months). 
  
 ARTICLE THREE: BASE RENT 
  
 Section 3.1 Time and Manner of Payment. Upon the Commencement Date, Tenant shall pay Landlord the Base Rent in the amount stated in Section 1.4
above for the first month of the Lease Term, prorated for any partial month. On the first day of the second month of the Lease Term and each month thereafter, Tenant shall pay Landlord the Base Rent, in advance, without offset, deduction or prior
demand except as otherwise provided herein. Base Rent shall be payable at Landlord’s address or at such other place as Landlord may designate in writing. 
  

Section 3.2 Late Charge. If Tenant fails to pay any installment of Base Rent or any other payment for which Tenant is obligated to pay Landlord
under this Lease within five (5) business days following written notice of such failure, then Tenant shall pay to Landlord as additional rent a late charge equal to three percent (3%) of the amount due to compensate Landlord for the extra costs
incurred as a result of such late payment. The parties agree that such late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. 
  
 ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT 
  
 Section 4.1 Additional Rent. All charges payable by Tenant under this
Lease other than Base Rent are called “Additional Rent”. Unless this Lease provides otherwise, Tenant shall pay all Additional Rent then due on the later of (i) fifteen (15) days after receipt of Landlord’s invoice or statement
therefor, or (ii) the next monthly installment of Base Rent. The term “rent” shall mean Base Rent and Additional Rent. 
  

 4 

 Section 4.2 Property Taxes. 
  
 (a) Real Property Taxes. Tenant shall pay all real property taxes on the Premises during the Term.
Subject to Section 4.2(d) below, such payment shall be made prior to the penalty date for such taxes. At Landlord’s request, Tenant shall furnish Landlord with satisfactory evidence that the real property taxes have been paid. Landlord shall
reimburse Tenant for any real property taxes paid by Tenant covering any period of time after the Term. If Tenant fails to pay the real property taxes when due, or if Tenant fails to timely furnish Landlord with satisfactory evidence that the real
property taxes have been paid as set forth above, Landlord may, after fifteen (15) days prior notice to Tenant and Tenant’s failure to pay the real property taxes and furnish Landlord with satisfactory evidence of such payment within such
15-day period, pay the taxes and Tenant shall reimburse Landlord for the amount of such tax payment as Additional Rent. 
  
 (b) Definition of Real Property Tax. “Real property tax” means: (i) any fee, license fee, license tax, business license
fee, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Premises; and (ii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Premises by any
governmental agency. “Real property tax” does not, however, include Landlord’s federal or state income, franchise, inheritance or estate taxes, any tax on Landlord’s right to receive, or the receipt of, rent or income from the
Premises or against Landlord’s business of leasing the Premises, all of which excluded taxes shall be the responsibility of Landlord. All real property taxes and assessments shall be paid over the longest installment period generally available
(i.e., available to taxpayers upon whom such assessments are imposed without penalty or default) unless Tenant elects to pay same over a shorter installment period. 
  
 (c) Personal Property Taxes. Tenant shall pay in a timely manner all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to Tenant. Tenant shall try to have its personal property taxed separately from the Premises. 
  
 (d) Tenant’s Right to Contest Taxes. Tenant may attempt to have the assessed valuation of all or
part of the Premises or Tenant’s personal property reduced or may initiate proceedings to contest the real property taxes or personal property taxes or may seek to obtain one or more real property tax or personal property tax credits in
connection with the Premises or its operations at the Premises. If requested by Tenant, Landlord shall cooperate with Tenant in such matters. If required by law, Landlord shall join in any proceedings brought by Tenant. However, Tenant shall pay all
costs of the proceedings. If Tenant does not pay real property taxes when due and contests such taxes, Tenant shall not be in default under this Lease for nonpayment of such taxes if Tenant posts bond from an admitted surety in the amount necessary
to protect the Premises from the lien of the unpaid taxes; provided, however, that if applicable law or Landlord’s lender requires that the taxes being contested by Tenant be paid (under protest) during such contest, then Tenant shall make such
payment (under protest). The amount of such bond shall be sufficient to pay the real property taxes plus a reasonable estimate of the interest, costs, charges and penalties which may accrue if Tenant’s action is unsuccessful. The bond made
shall be applied to the real property taxes due, as determined at such proceedings (or upon Tenant’s earlier payment of taxes under protest or otherwise), with any excess being disbursed to Tenant. Upon the final determination of any proceeding
or contest, Tenant shall immediately pay the taxes due, together with all costs, charges, interest and penalties incidental to the proceedings. If Tenant’s contest of taxes results in a reimbursement by one or more taxing authorities of some or
all of the tax payments previously made by Tenant under this Lease, or a credit to Tenant against future tax payments, Tenant shall be entitled to the full amount of such reimbursement or credit. 
  
 Section 4.3 Utilities. Tenant shall pay before delinquency, directly
to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services used at the Premises or supplied to the Premises at Tenant’s request. In case of a
failure or interruption in utilities or services to the Premises, Landlord shall fully cooperate with Tenant (and no out-of-pocket cost to Landlord unless the failure or interruption was caused by Landlord’s negligence or willful misconduct) to
have the interrupted utilities/services restored. 
  
 Section 4.4
Indemnity and Insurance. 
  
 (a)
Tenant’s Indemnity. Tenant shall indemnify, defend (with attorneys reasonably satisfactory to Landlord), and hold Landlord and its representatives, agents, owners, employees and contractors (collectively, “Landlord Parties”)
harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of the use of the Premises by Tenant or Tenant Parties (as defined in Section 5.3(a)) or from the conduct of
Tenant’s business, or from any activity, work, or thing done or permitted by Tenant or Tenant Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Landlord or Landlord Parties; or 

  

 5 

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Landlord: 
  

	 	(i)	notifies Tenant of the claim or liability in writing within sixty (60) days after the Landlord receives written notice of the claim or liability; 

  

	 	(ii)	permits Tenant to defend or settle against the claim or liability, so long as Landlord is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Tenant in any defense of settlement against the claim or liability. 

  
 (b) Landlord’s Indemnity. Landlord shall indemnify, defend (with attorneys reasonably
satisfactory to Tenant), and hold Tenant and Tenant Parties harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of any activity, work, or thing done by Landlord
or Landlord Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Tenant or Tenant Parties; or 

  

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Tenant: 
  

	 	(i)	notifies Landlord of the claim or liability in writing within sixty (60) days after the Tenant receives written notice of the claim or liability; 

  

	 	(ii)	permits Landlord to defend or settle against the claim or liability, so long as Tenant is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Landlord in any defense of settlement against the claim or liability. 

  
 (c) Liability Insurance. Tenant, at Tenant’s own cost and expense, will provide and keep in full
force and effect during the term of this Lease, commercial general liability insurance with limits of not less than Two Million Dollars ($2,000,000) covering bodily injury to persons, including death and loss of or damage to real and personal
property. Such insurance may be provided under Tenant’s blanket public liability insurance policy. During the term of the Lease, Landlord and Landlord’s lender (“Landlord’s Lender”) shall be named as an additional insured
under such insurance. A certificate evidencing such insurance coverage shall be delivered to Landlord not less than fifteen (15) days after the commencement of the Term hereof. Such certificate of insurance will provide for at least ten (10) days
advance notice in the event of cancellation or material modification of its terms. 
  
 (d) Mutual Waiver of Claims. Landlord and Tenant do each herewith and hereby release and relieve the other, and waive their claim
of recovery for loss or damage to property arising out of or incident to fire, lightning or other insurable perils, to the extent covered by insurance maintained by Landlord or Tenant (or the insurance required to be maintained hereunder), whether
or not such loss or damage is due to the negligence of Landlord or Tenant, Landlord Parties or Tenant Parties, or their agents, employees, guests, licensees, invitees or contractors. 
  
 (e) Mutual Waiver of Subrogation. Each of Landlord and Tenant shall use their commercially reasonable
best efforts to have their respective insurance carriers to waive all rights of subrogation against the other party hereto to the extent of Landlord’s or Tenant’s undertaking set forth in Section 4.4(a) or 4.4(b) and Section 4.4(d).

  
 (f) Property Insurance. Tenant shall,
at Tenant’s expense, procure and maintain at all times during the term of this Lease a policy or policies of insurance covering loss or damage to the Premises and the tenant improvements in the Premises (exclusive of Tenant’s trade
fixtures, equipment and other personal property) in the amount of the full replacement value thereof including cost associated with “civil or ordinance of law”, without depreciation or deduction (and such insurance may provide for a
commercially reasonable deductible, the parties hereby agreeing that Tenant’s deductibles in place as of the date of execution of the Purchase Agreement are commercially reasonable), providing protection against all perils included in a Causes
of Loss - Special Form (commonly known as “All-Risk”) policy and, if the Premises are in a flood zone, flood insurance. All insurance shall provide for payment of loss thereunder to 

  

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Landlord, Landlord’s Lender and Tenant as their respective interests may appear. Such insurance policies may be carried under blanket policies covering
other properties of Tenant and/or its affiliates so long as such blanket policies provide insurance at all times for the Premises as required by this Lease, and shall provide that such policies may not be canceled without at least ten (10) days
prior written notice to Landlord. All policies of insurance required to be carried by Tenant or Landlord under this Lease shall be maintained with insurance companies qualified to do business in California holding a General Policyholders Rating of
“B+” and a Financial Rating of “VII” or better, as set forth in the most current issue of Best’s Insurance Guide or a BBB financial strength rating by Standard and Poor’s. 
  
 (g) Workers Compensation Insurance. Tenant shall at
all times carry workers compensation insurance as required by law. 
  
 (h) Earthquake and Flood. If required by Landlord’s lender because the Probable Magnitude of Loss on the Premises exceeds 20% of the full replacement cost of the Premises, then Tenant shall obtain and
maintain earthquake insurance coverage on the Premises (with such deductibles as Tenant may deem reasonable) to the extent such coverage is commercially available. If required by Landlord’s lender because the Premises are in a flood zone,
Tenant shall maintain flood insurance on the Premises (with such deductibles as Tenant may deem reasonable). 
  
 (i) Landlord’s Insurance. Within fifteen (15) days after written notice from Tenant to Landlord given from time to time during
the Term, Landlord shall notify Tenant of the insurance premium cost (the “Cost Notice”) to Landlord to obtain (i) commercial general liability insurance with limits specified by Tenant covering Landlord (and Tenant as an additional
insured) against bodily injury to persons, including death and loss of or damage to real and personal property, and/or (ii) rental loss insurance covering the Base Rent and additional rental payable under this Lease over a one (1) year period.
Within fifteen (15) days after receiving the Cost Notice, Tenant may elect to direct Landlord to obtain some or all of such insurance at Tenant’s cost (and in that regard, Tenant shall reimburse Landlord within thirty (30) days after receipt of
Landlord’s statement or invoice for the insurance premium cost of obtaining same, which statement or invoice shall be accompanied by reasonable evidence of the amounts owing). A certificate evidencing such insurance coverage shall be delivered
to Tenant not less than fifteen (15) days after Tenant’s election to have Landlord obtain such insurance, which certificate of insurance will provide for at least ten (10) days advance notice in the event of cancellation. If Tenant elects to
have Landlord obtain such insurance, Tenant may thereafter notify Landlord that Tenant no longer desires Landlord to maintain such insurance at Tenant’s cost, in which case Tenant shall not be obligated to reimburse Landlord for insurance
premiums applicable to time periods beyond the expiration date of the applicable policy(ies) obtained by Landlord at Tenant’s request as provided above. 
  
 ARTICLE FIVE: USE OF PREMISES 
  
 Section 5.1 Permitted Uses. Tenant may use the Premises for some or all of the Permitted Uses set forth in Section 1.6 above. 
  
 Section 5.2 Manner of Use. Tenant shall not use the Premises in any
way which constitutes a violation of any law, ordinance, or governmental regulation or order regulating the manner of use by Tenant of the Premises or which constitutes a public nuisance; provided, however, that (A) Tenant’s violation of, or
failure to comply with, applicable laws regulating Tenant’s employment practices shall not be considered a default under this Section 5.2 unless a governmental entity brings or threatens in writing to bring action against Landlord as a result
of such violation or failure; (B) Tenant shall not be deemed in default under this Section 5.2 to the extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of
its obligations under other specific provisions of this Lease; and (C) Tenant’s obligations with respect to Hazardous Materials shall be governed exclusively by Section 5.3. Tenant shall have no obligation to comply with applicable laws to the
extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of its obligations under other specific provisions of the Lease. Tenant shall have the right to contest
by appropriate legal proceedings the validity of any law, ordinance, order, rule, regulation or requirement of the nature herein described. 
  
 Section 5.3 Hazardous Materials. 
  
 (a) Use. Except as (i) used by Tenant to carry out its obligations under the terms of this Lease or (ii) used in connection with
Tenant’s intended use of the Premises, Tenant shall not generate, release, store, treat, or dispose of Hazardous Materials on the Premises without the prior written consent of Landlord. With regard to Hazardous Materials that Tenant proposes to
use on the Premises for purposes other than those identified in (i) or (ii) above, Landlord shall, taking into account such factors as Landlord may reasonably determine to be relevant, promptly grant or withhold consent to the proposed use of
Hazardous Materials. Landlord’s consent shall not be unreasonably withheld. Notwithstanding (i) above, all use by Tenant, Tenant’s subsidiaries and affiliates (“Tenant Affiliates”), Tenant Venturers (as defined in Section 9.5) or
Tenant’s representatives, agents, employees, business invitees, consultants, contractors and 

  

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subtenants (collectively, and including Tenant Affiliates and Tenant Venturers, “Tenant Parties”) of Hazardous Materials on the Premises shall be
carried out in strict compliance with applicable federal, state, and local laws, ordinances, and regulations. 
  
 (b) Indemnification. Tenant shall indemnify, defend, and hold harmless Landlord from any and all claims of liability asserted
against Landlord and Landlord Parties by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage to or loss of use of
property, or cleanup activities (remedial or removal) arising out of or relating to the release, or threat of release, of a Hazardous Material existing at or emanating from the Premises, to the extent caused by Tenant or Tenant Parties during or
prior to the Term of this Lease, or to the extent caused by any third party other than Landlord or Landlord Parties during the Term (provided, however, that Tenant shall have no indemnification obligations, and no liability under this Lease, with
respect to the migration of any Hazardous Material on or under the Premises from adjacent properties). Other than those matters for which Tenant is obligated to indemnify Landlord, Landlord shall indemnify, defend, and hold harmless Tenant from and
against any and all claims of liability asserted against Tenant by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage
to or loss of use of property, or cleanup activities (remedial or removal) arising out of or relating to the release or threat of release of any Hazardous Material existing at or emanating from the Premises to the extent caused by Landlord or
Landlord Parties during or after the Term of this Lease or to the extent caused by any third party other than Tenant or Tenant Parties with respect to the migration of any Hazardous Material on or under the Premises from adjacent properties. Neither
party shall be required to indemnify, defend or hold harmless the other for any Hazardous Material existing at or emanating from the Premises prior to the Term of this Lease due to the acts or omissions of a third party; provided, however, that
Landlord and Tenant each shall have the right (and each party shall reasonably cooperate with the other in that regard) to enforce for its own benefit the terms of the environmental indemnification/remediation provisions set forth in or implemented
pursuant to (a) Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between Baxter Healthcare Corporation and Tenant dated March 12, 1996, and (b) Agreement for Purchase and Sale of Real Property and Joint Escrow
Instructions between Baxter Healthcare Corporation and Tenant dated January 15, 1996 (collectively, the “Environmental Indemnity Agreements”) covering certain existing Hazardous Material contamination and remediation currently taking place
at the Premises. 
  
 (c) Investigation and
Remediation. Tenant shall promptly, at Tenant’s expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises pertaining to or involving any
Hazardous Materials for which Tenant is required to indemnify Landlord as described above. Landlord shall cooperate (at no out-of-pocket cost to Landlord) in any such activities at the request of Tenant. Landlord shall promptly, at Landlord’s
expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises, pertaining to or involving any Hazardous Materials for which Landlord is required to
indemnify Tenant as described above. Tenant shall cooperate (at no out-of-pocket cost to Tenant) in any such activities at the request of Landlord, including allowing Landlord and Landlord’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Landlord’s investigative and remedial responsibilities. 
  
 (d) Definition. For purposes of this Section 5.3, the term “Hazardous Materials” shall mean any dangerous waste,
hazardous waste, or hazardous substances as defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 as amended (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act as amended (42 U.S.C.
§ 6901 et seq.), or similar state statutes, as amended. 
  
 Section 5.4 Landlord’s Access. Subject to the security requirements of Tenant and governmental security regulations, Landlord may enter the Premises at all reasonable times to show the Premises to potential buyers, investors or
(during the last 6 months of the Term) tenants, to inspect the Premises, or to discharge Landlord’s obligations as permitted or required under this Lease; provided, however, any such entry into the Premises by Landlord shall be performed in a
manner so as not to interfere with Tenant’s use of, or ingress or egress to, the Premises and, at Tenant’s election, shall be in the company of a representative of Tenant. Landlord shall give Tenant at least 48 hours’ prior notice of
such entry, except in the case of an emergency. Any work performed in connection with such entry shall be performed in a good and workmanlike manner and with due diligence so as not to interfere with Tenant’s use of the Premises. No work shall
result in a diminution of Tenant’s floor area, and Landlord shall not store any materials in the Premises. After completion of any such work, Landlord shall restore the Premises as closely as possible to the condition existing immediately prior
to the commencement of such work. Any proprietary information obtained by Landlord as a result of such entry shall be kept strictly confidential. 
  
 Section 5.5 Quiet Enjoyment. So long as this Lease is not terminated following a default by Tenant, Landlord covenants that Tenant shall have the
right to occupy and enjoy the Premises for the full Lease Term on all the terms and provisions of this Lease. 
  

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 ARTICLE SIX: 
 CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS 
  
 Section 6.1 Existing Conditions. Tenant shall accept the Premises subject to all recorded matters, laws, ordinances, and governmental regulations; provided, however, that Tenant shall have the right to approve
in advance any restrictions or encumbrances hereafter placed against the Premises which decrease Tenant’s rights or increase Tenant’s obligations under this Lease, and Landlord shall not place any such restrictions or encumbrances against
the Premises without such prior approval by Tenant. 
  
 Section
6.2 Landlord’s Obligations. Without limitation on the provisions of Sections 5.2, 5.3, 6.3(b), 6.3(c), Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord shall maintain and repair (and replace, as necessary)
throughout the Term of this Lease, at Landlord’s expense, all structural elements of the Premises, including without limitation the foundation, structural columns, footings, exterior walls, slab and structural portions of the roof, as well as
subterranean elements of the Land (including sinkholes) and re-asphalting (if necessary) of the Parking Area (as opposed to slurry sealing, which shall be Tenant’s responsibility), except to the extent that the need for such maintenance and
repairs are caused by the negligence or willful misconduct by Tenant or Tenant Parties, in which case Tenant shall be responsible for such maintenance and repairs except to the extent the same are covered by insurance maintained by Landlord. If
Landlord fails to maintain or repair the Premises as required by this Section 6.2 or fails to discharge its obligations under any other provisions of this Lease, Tenant may, without limitation on its other rights or remedies, upon ten (10) business
days’ prior notice to Landlord (and Landlord’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance to completion), perform such maintenance or
repair or other obligation on behalf of Landlord. In such case, Landlord shall reimburse Tenant for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after Tenant’s statement or invoice therefore
plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Landlord shall be done in a good and workmanlike manner, by reputable, licensed
and insured contractors, using quality materials and workmanship commensurate with the condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Landlord shall be solely responsible for compliance with all Applicable
Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality Management District, requirements of the local building
authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  
 Section 6.3 Tenant’s Obligations. 
  
 (a) General. Except for Landlord’s obligations under Section 6.2, 6.3(b), 6.3(c) or as provided elsewhere in this Lease,
Tenant shall at Tenant’s expense keep all portions of the Premises in good order, condition and repair, including the landscaping, irrigation, Parking Area (including ingress and egress, slurry surfacing, striping, lighting and directional
signs), the roof membrane, gutters, drains, HVAC, telecommunications, electrical, mechanical, plumbing, fire sprinklers. If Tenant fails to maintain or repair the Premises as required by this Section 6.3, Landlord may, without limitation on its
other rights or remedies, upon ten (10) business days’ prior notice to Tenant (and Tenant’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance
to completion), enter the Premises and perform such maintenance or repair on behalf of Tenant. In such case, Tenant shall reimburse Landlord for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after
Landlord’s statement or invoice therefore plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Tenant shall be done in a good
and workman like manner, by reputable, licensed and insured contractors, using quality materials and workmanship commensurate with the first class condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Tenant shall
be solely responsible for compliance with all Applicable Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality
Management District, requirements of the local building authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  

(b) Capital Expenditures to Comply With New Laws. If applicable laws, covenants or restrictions of record, building codes,
regulations and ordinances (“Applicable Requirements”) in effect on the Commencement Date are changed, or if new Applicable Requirements are enacted after the Commencement Date, so as to require during the Term of this Lease the
construction of an addition to or an alteration of the Building or Premises or other physical modification of the Building or Premises (“Capital Expenditure”), Landlord and Tenant shall allocate the cost of such work as follows: If such
Capital Expenditure is required as a result of the specific and unique use of the Premises by Tenant as compared with uses by tenants in general, Tenant shall be fully responsible for the cost thereof, provided, however that if such 

  

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Capital Expenditure is required during the last two (2) years of this Lease and the cost thereof exceeds six (6) months’ Base Rent, Tenant may instead
terminate this Lease unless Landlord notifies Tenant, in writing, within ten (10) days after receipt of Tenant’s termination notice that Landlord has elected to pay the difference between the actual cost thereof and the amount equal to six (6)
months’ Base Rent. If Tenant elects termination, Tenant shall deliver to Landlord written notice specifying a termination date at least sixty (60) days thereafter. If such Capital Expenditure is not the result of the specific and unique use of
the Premises by Tenant (for example, but not limited to, governmentally mandated seismic modifications), then Landlord shall promptly make the Capital Expenditure and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall
only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost thereof by a fraction, the numerator of which is one,
and the denominator of which is the number of months of the useful life of such Capital Expenditure as such useful life is determined by general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the
right to prepay its obligation at any time; provided, however, that if such Capital Expenditure is required during the last year of this Lease and if Landlord or Tenant reasonably determines that it is not economically feasible to pay its share
thereof, Landlord or Tenant shall have the option to terminate this Lease upon ninety (90) days prior written notice to the other unless the other party commits, in writing, within ten (10) business days after receipt of the termination notice, that
it will pay for such Capital Expenditure (however, if Landlord seeks to terminate under the preceding clause, Tenant may exercise its option to extend the Term, if available, within thirty (30) days of Landlord’s notice to prevent such
termination). If Landlord does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Tenant may, without limitation on any other rights or remedies, advance such funds and deduct same (together with interest at 5%
above the then existing Bank of America, Los Angeles, “prime rate”) from Rent until Landlord’s share of such costs have been fully paid. If the balance of the Rent due and payable for the remainder of this Lease is not sufficient to
fully reimburse Tenant on an offset basis, Tenant shall have the right, in addition to any other rights and remedies, to terminate this Lease upon thirty (30) days written notice to Landlord. It is the intent of the parties that the above provisions
shall apply only to newly enacted or new changes to Applicable Requirements after the Commencement Date. If, for example, Tenant elects to make modifications to the Premises which trigger the requirement that additional modifications be made to
comply with ADA requirements existing on the Commencement Date, such additional modifications would not be the result of newly enacted or new changes to Applicable Requirements and thus would be the responsibility of Tenant. 
  
 (c) Replacement of Basic Elements. Subject to the
later provisions hereof, Tenant’s obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in as good operating order and condition as on the
Commencement Date, ordinary wear and tear, casualty and condemnation excepted. As used herein, the term “Basic Elements” shall mean all of the Building’s basic systems and equipment, including, without limitation, (i) HVAC equipment,
(ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof membrane, covering and drains, (vi) electrical systems, (vii) plumbing systems,
(viii) mechanical systems, if any, and (ix) life-safety systems. If any of the Basic Elements require repair but cannot be repaired other than at a cost which in is excess of 25% of the cost of replacing such Basic Element, then such Basic Element
shall be replaced by Landlord, and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is
due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is the number of months of the useful life of such replacement as such useful life as
determined in accordance with general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the right to prepay its obligation at any time. 
  
 Section 6.4 Alterations, Additions, and Improvements. Tenant shall not make any alterations, additions, or
improvements to the Premises (“Alterations”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, except that Landlord’s consent shall not be required for non-structural Alterations
(including, without limitation, painting, carpeting, moving low voltage communications cables and any other non-structural Alterations) which cost in the aggregate for any one project less than One Hundred Thousand Dollars ($100,000) and which do
not materially adversely affect the Building systems or the Building structure. All Alterations shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations. All Alterations done by Tenant shall be done in a
good and workmanlike manner by duly licensed and insured contractors and in compliance with all laws. Tenant shall give Landlord at least ten (10) days prior written notice of the expected work commencement date of any Alterations which require
Landlord’s consent. 
  
 Section 6.5 Condition upon
Termination. Upon termination of this Lease, Tenant shall surrender the Premises to Landlord, broom clean and in substantially the same condition as on the Commencement Date (or, if Tenant has extended the Term, in the same condition as on the
commencement of the most recent Option Term, as applicable), except for (i) ordinary wear and tear, (ii) damage due to casualty or condemnation, (iii) damage or matters which are Landlord’s 

  

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obligation to repair under this Lease, and (iv) Alterations which Landlord is not entitled to require Tenant to remove as described below (all or some of
which Tenant may elect to leave at the Premises or shall be entitled to remove at the end of the Term). In addition, Tenant shall remove from the Premises within 30 days after expiration of the Term (and shall continue to be liable for rent until
such items are removed and possession of the Premises is restored to Landlord as required herein) all of Tenant’s furniture, trade fixtures, machinery and equipment, furnishings, signs, inventory and any and all other items of personal property
including, without limitation, any materials or equipment that Tenant has installed for use in connection with Tenant’s business processes (such as intercom systems, security systems, computer equipment, table or floor lamps, microwave ovens,
refrigerators, stand-alone heaters or fans, knitting machines and equipment, teleconferencing systems, telecommunication equipment, electrical devices and the like (collectively, the “FF&E”). Notwithstanding the foregoing, in no event
shall Tenant remove any of the following materials or equipment (which shall be deemed Landlord’s property) without replacing the same with materials or equipment of equal or better quality: power wiring or power panels; inset or recessed
lighting or lighting fixtures; wall coverings; drapes, blinds or other window coverings; carpets or other floor coverings; heaters, air conditioners and other heating or air conditioning equipment that are not portable; plumbing or sanitary
equipment; or fencing or security gates. Landlord may require Tenant to remove Alterations installed by Tenant during the Term if, and only if, Landlord’s consent was required for such Alterations during the Term and Landlord informed Tenant in
writing at the time of such consent that Landlord would require removal of same at the end of the Term. All Alterations, if any, which Landlord is permitted to require Tenant to remove hereunder but which Landlord does not require Tenant to remove
(and which Tenant does not otherwise elect to remove) shall become Landlord’s property and shall be surrendered to Landlord upon the expiration or earlier termination of the Lease. Tenant shall repair, at Tenant’s expense, any damage to
the Premises caused by Tenant’s removal of Alterations and FF&E; provided, however, that Tenant shall not be required to repaint the Premises or patch immaterial wall or floor penetrations. 
  
 ARTICLE SEVEN: DAMAGE OR DESTRUCTION 
  
 Section 7.1 Landlord’s Obligation to Rebuild. If the Premises or
any portion thereof is damaged or destroyed by fire or other casualty (a “Casualty”), Tenant shall as soon as reasonably practicable thereafter give notice thereof to Landlord, and Landlord shall thereafter repair the Premises as set forth
in Section 7.5 unless Landlord or Tenant has the right to terminate this Lease as hereinafter provided and Landlord or Tenant elects to so terminate. 
  
 Section 7.2 Landlord’s Right to Terminate. Landlord shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) insurance proceeds (together with any additional amounts Tenant elects, at its option, to contribute) are not available to Landlord to pay the cost to repair the Premises, (ii) Landlord’s independent architect determines that the
Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to,
Hazardous Materials not caused by Landlord, earthquake faults and other similar dangers) within 360 days after the date of such Casualty, or (iii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term
and an independent architect selected by Landlord and reasonably approved by Tenant (“Landlord’s Architect”) determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) such damage will require
more than sixty (60) days to repair. If Landlord elects to terminate this Lease following a Casualty pursuant to this Section 7.2, Landlord shall give Tenant written notice of its election to terminate within thirty (30) days after Landlord has
knowledge of such Casualty, and this Lease shall terminate effective as of the date of such notice; provided, however, that Tenant may nevertheless elect to continue this Lease in full force and effect, in which case Tenant shall repair any damage
to the Premises and shall pay the cost of such repairs, except that Landlord shall deliver to Tenant on a commercially reasonable construction draw basis any insurance proceeds received by Landlord or Landlord’s Lender for the damage repaired
by Tenant. Tenant shall give Landlord written notice of such election within ten (10) days after receiving Landlord’s termination notice. 
  
 Section 7.3 Tenant’s Right to Terminate. Tenant shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) Landlord’s Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that the Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar
condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to, Hazardous Materials, earthquake faults and other similar dangers) within 360 days after the date
of such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises, or (ii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term and Landlord’s
Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that such damage will require more than sixty (60) days to repair, or (iii) the Premises are not actually repaired by Landlord to a
substantially similar condition as existed prior to such Casualty within 380 days following such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises. If Tenant elects to terminate this Lease
following a Casualty pursuant to this Section 7.3, Tenant shall give Landlord written notice of its election to terminate within thirty (30) days after receipt of 

  

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Landlord’s Architect’s determination (or within 30 days of the applicable restoration period should Landlord fail to complete repairs during such
period), and this Lease shall terminate as of the date of such notice of election to terminate. 
  
 Section 7.4 Effect of Termination. If this Lease is terminated following a Casualty pursuant to Section 7.2 or Section 7.3, Landlord shall, subject
to the rights of its lenders, be entitled to receive and retain all the insurance proceeds resulting from or attributable to such Casualty, except that any insurance proceeds payable under policies obtained by Tenant which specifically insure
Tenant’s personal property or removable Alterations or any other improvements that Tenant was entitled to remove at the end of the Term shall be paid to Tenant. If neither Landlord nor Tenant elect to terminate this Lease in accordance with the
terms and conditions set forth herein, this Lease will continue in full force and effect, and Landlord shall, as soon as reasonably practicable following notice of the Casualty and receipt of the amounts set forth in clause (i) of Section 7.2,
commence the process of obtaining necessary permits and approvals for the repair of the Premises, and shall commence such repair and prosecute the same diligently to completion as soon thereafter as is practicable. 
  
 Section 7.5 Scope of Obligation to Repair. Landlord’s obligation,
should it elect or be obligated to repair the Premises following a Casualty, shall be limited to the Premises insured by Tenant under this Lease. The reasonable determination in good faith by Landlord’s Architect of or relating to the estimated
time period required for repair or the interference with or suitability of the Premises for Tenant’s use or occupancy shall be conclusively presumed correct for purposes of this Article Seven. 
  
 Section 7.6 Temporary Reduction of Rent. If the Premises is destroyed
or damaged and Landlord or Tenant repairs or restores the Premises pursuant to the provisions of this Article Seven, all Rent payable during the period of such damage, repair and/or restoration shall be reduced according to the degree to which
Tenant’s use of the Premises is impaired until the Premises are again ready for Tenant’s business operations; provided, however, that the foregoing Rent abatement shall apply only to the extent of proceeds received by Landlord from rental
loss or rental interruption insurance unless the Casualty is caused by Landlord’s negligence or Landlord is in violation of Landlord’s obligations to repair or restore the Premises following the Casualty. 
  
 Section 7.7 Waiver. Tenant waives the protection of any statute, code
or judicial decision which grants a Tenant the right to terminate a lease in the event of the substantial or total destruction of the leased Premises. Tenant agrees that the provisions of this Article Seven shall govern the rights and obligations of
Landlord and Tenant in the event of any damage or destruction to the Premises by a Casualty. 
  
 ARTICLE EIGHT: CONDEMNATION 
  
 If
all or a material portion of the Premises is taken by any lawful authority by exercise of the right of eminent domain (including any portion of the Premises which substantially interferes with Tenant’s ingress to or egress from the Premises)
and cannot be restored so as not to materially interfere with Tenant’s use of the Premises, or sold under threat of a taking, either Tenant or Landlord may terminate this Lease effective as of the earlier of (i) the date possession is required
to be surrendered to the authority, or (ii) the date actual possession is delivered to the authority. In addition, in the event (i) title to a portion of the Premises is taken or sold under threat of a taking and (ii) Landlord elects to restore the
Premises in such a way as to alter the Premises materially or in such a way as to materially interfere with Tenant’s use of the Premises, Tenant may terminate this Lease, by written notice to Landlord, effective on the date of vesting of title.
If Tenant has not elected to terminate this Lease as provided above, then Landlord shall promptly, after receipt of the condemnation award, proceed to restore the Premises to substantially its condition prior to the taking, and a proportionate
allowance shall be made to Tenant for the rent corresponding to the time during which, and to the part of the Premises of which, or access or reasonable use of which, Tenant is deprived on account of the taking and restoration. In the event of a
taking, Landlord shall be entitled to the entire amount of any award for Landlord’s interest in the Premises. Notwithstanding the foregoing sentence, Tenant may assert a claim against the taking authority, but not against Landlord, for the
taking of Tenant’s leasehold interest, options, personal property, fixtures and any other rights of property of Tenant, or for relocation or business interruption expenses recoverable from the taking authority. 
  
 ARTICLE NINE: ASSIGNMENT AND SUBLETTING 
  
 Section 9.1 Landlord’s Consent Required. No portion of the
Premises or of Tenant’s interest in this Lease may be acquired by any other person or entity, whether by sale, assignment, mortgage, sublease, transfer, operation of law, or act of Tenant (collectively, a “Transfer”), without
Landlord’s prior written consent (except as provided in Section 9.2 below), which consent shall not be unreasonably withheld, conditioned or delayed, as described in Section 9.4 below. 
  

 12 

 Section 9.2 Tenant Affiliate. Tenant may effect a Transfer, without Landlord’s consent, to
any entity which controls, is controlled by or is under common control with Tenant, or to any entity resulting from the merger of or consolidation with Tenant or acquiring all or substantially all of the assets of Tenant, or to any entity in which
Tenant or its parent or affiliate maintains at least a 25% ownership interest (“Tenant’s Affiliate”). 
  
 Section 9.3 No Release of Tenant. No Transfer permitted by this Article Nine, whether with or without Landlord’s consent, shall release Tenant
or change Tenant’s primary liability to pay the rent and to perform all other obligations of Tenant under this Lease. Landlord’s acceptance of rent from any other person is not a waiver of any provision of this Article Nine. Consent to one
Transfer is not a consent to any subsequent Transfer. 
  
 Section
9.4 Landlord’s Consent. Tenant’s request for consent to any Transfer described in Section 9.1 shall set forth in writing the details of the proposed Transfer including the name, business of the prospective transferee, the
prospective transferee’s financial statements and the basic leasing details of the proposed Transfer (e.g., the term of and the rent and security deposit). Landlord shall have the right to withhold consent, if reasonable, or to grant consent,
within ten (10) days after receipt of such request (failing which, Landlord’s consent shall be deemed to have been given). If Landlord does not consent, Landlord shall provide detailed reasons for its disapproval. The parties hereby agree that
the only reasonable reasons under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer are where one or more of the following apply: (i) the transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Premises; or (ii) the transferee intends to use the subject space for purposes which are not permitted under this Lease or (iii) the transferee, in Landlord’s reasonable judgment, does
not have sufficient financial resources to discharge its obligations under the Lease on an ongoing basis. 
  
 Section 9.5 Permitted Occupants. Provided Tenant complies with the Permitted Occupant Conditions (as defined below), then, notwithstanding anything
to the contrary set forth in this Lease, Tenant shall have the right to allow employees of one or more entities with whom Tenant has a business relationship (“Tenant Venturers”) to use designated portions of the Premises without execution
and approval by Landlord of a separate sublease for such use. The “Permitted Occupant Conditions” shall mean all of the following: (a) the permitted occupants shall only be employees of a Tenant Venturer, (b) such occupants shall use, in
the aggregate at any one time, no more than 5,000 square feet of the Premises, (c) such use shall be on a temporary basis, and, in any event, no such occupant shall have the right to use the Premises for more than six (6) consecutive months, (d)
Tenant shall provide Landlord with prior written notice of the intended presence on the Premises of any such occupants, (e) the Tenant Venturer employing such permitted occupants shall provide Landlord with satisfactory evidence of insurance
covering the activities of their respective employees within the Premises, and (f) such right to use the Premises shall at all times be subordinate to the Lease. 
  
 ARTICLE TEN: DEFAULTS; REMEDIES 
  
 Section 10.1 Tenant Defaults. Tenant shall be in material default (“Default”) under this Lease: 
  
 (a) If Tenant fails to pay rent or any other charge within
five (5) business days after the date due and such failure continues for five (5) business days after written notice of such failure; or 
  
 (b) If Tenant fails to perform any of Tenant’s non-monetary obligations under this Lease for a period of thirty (30) days after
written notice from Landlord; provided that if more than thirty (30) days are required to complete such performance, Tenant shall not be in default if Tenant commences such performance within the thirty (30)-day period and thereafter diligently
pursues its completion; or 
  
 (c) If a
“Default” occurs and is continuing under Section 10.1 of any of the other leases between Landlord and Tenant entered into concurrently with this Lease for adjacent premises located at 17572, 17622 and 17632 Armstrong Avenue, Irvine,
California (the “Other Leases”), unless Landlord hereunder is not at that time the landlord of the Other Lease under which the Default occurred. 
  
 Section 10.2 Remedies. During the continuance of a Default by Tenant as described in Section 10.1, Landlord may, at any time thereafter, upon
statutory notice to Tenant: 
  
 1. Terminate
Tenant’s right to possession of the Premises. No act by Landlord other than giving notice of termination to Tenant pursuant to this Section 10.2.1. or the other termination rights granted by Landlord hereunder shall terminate this Lease. Acts
of maintenance, efforts to relet the Premises, or the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest under this Lease shall not constitute a termination of Tenant’s right to possession. On
termination, Landlord has the right to recover from Tenant: 
  
 (a) The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; 
  

 13 

 (b) The worth, at the time of the award, of the amount by which the unpaid rent that
would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; 
  
 (c) The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; and 
  
 (d) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s Default. 
  
 “The worth, at the time of the award,” as used in subsections a, b and c, above, is
to be computed by utilizing a discount rate of ten percent (10%) per annum and calculating the present value of the applicable rent to be paid over the applicable period. 
  
 2. Utilize the remedy described in California Civil Code section 1951.4 (which says landlord may continue
the lease in effect after a tenant’s breach and abandonment and recover rent as it becomes due, if tenant has the right to sublet or assign subject to reasonable limitations). If an abandonment of the Premises by Tenant occurs or if Landlord
elects to reenter as provided above or shall take possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then if Landlord does not elect to terminate this Lease as provided above, Landlord may from time to
time, without terminating this Lease, either recover all rent as it becomes due or relet the Premises or any part thereof for the Term on terms and conditions as Landlord in its commercially reasonable discretion may deem advisable. If Landlord
elects to so relet, then rentals received by Landlord from that reletting shall be applied: first, to the payment of any indebtedness other than rent due under this Lease from Tenant to Landlord; second, to the payment of any reasonable cost of such
reletting; third, to the payment of the reasonable cost of any alterations and repairs to the Premises that are Tenant’s obligation under this Lease; fourth, to the payment of rent due and unpaid under this Lease; and the residue, if any, shall
be held by Landlord and applied to payment of future rent as the same may become due and payable under this Lease. Should that portion of such rentals received from such reletting during any month, which is applied to the payment of rent under this
Lease, be less than the rent payable during that month by Tenant under this Lease, then Tenant shall pay such deficiency to Landlord immediately upon demand therefor by Landlord. Such deficiency shall be calculated and paid monthly. 
  
 3. Landlord may, during the continuance of a Default by
Tenant, cure the Default at Tenant’s cost provided Tenant is given notice and time to cure the Default and Landlord provides an additional notice that Landlord intends to cure Tenant’s Default under this Section 10.2(3). If Landlord cures
Tenant’s Default after such notice by paying any sum or doing any act that was Tenant’s obligation under this Lease, the amount paid by Landlord (or the reasonable cost incurred by Landlord in performing the act) shall be due immediately
from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the rate of ten percent (10%) per annum from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with
interest on it, shall be Additional Rent. 
  
 Section 10.3
Cumulative Remedies; Mitigation. Landlord’s exercise of any right or remedy shall not prevent it from exercising any other right or remedy. Landlord shall use commercially reasonable efforts to mitigate damages in the event of a Default
by Tenant under this Lease. In no event shall Landlord or Landlord Parties or Tenant or Tenant Parties be liable to the other for any consequential, punitive or other so-called “special” damages under this Lease. 
  
 Section 10.4 Landlord’s Defaults. 
  
 (a) General. Notwithstanding anything to the contrary
set forth in this Lease, Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if (i) in the event a failure by Landlord is with respect to the payment of money, Landlord fails
to pay such unpaid amounts within five (5) business days of written notice from Tenant that the same was not paid when due; or (ii) in the event a failure by Landlord is other than (i) above, Landlord fails to perform such obligation within a
reasonable time period with the expenditure of diligent efforts, but in no event more than thirty (30) days after the receipt of written notice from Tenant specifying Landlord’s failure to perform; provided, however, if the nature of
Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if Landlord commences such performance within such thirty (30) day period and thereafter
diligently pursue the same to completion. Upon any such default by Landlord under this Lease, Tenant may exercise any of its rights provided in this Lease or at law or in equity. Any notice provided by Tenant pursuant to this Section 10.4(a) shall
not be effective unless it is substantially 

  

 14 

 
concurrently delivered to the last known address of Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were
previously provided to Tenant). In no event shall Tenant be entitled to terminate this Lease as a result of a default of Landlord unless the default materially and adversely impacts Tenant’s ability to use a material portion of the Premises for
its business operations and Tenant has first given written notice of intent to terminate to Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were previously provided to Tenant) offering such Lender an
additional 30 days beyond the notice and cure period granted to Landlord under this Lease, if any, in which to cure Landlord’s default. 
  
 (b) Abatement of Rent. In the event that Tenant is prevented from using the Premises or any material portion thereof (meaning that
Tenant is unable to use that portion of the Premises in the normal course of its business) as a result of (i) any repair, maintenance or alteration negligently performed by Landlord, or which Landlord failed to perform, as required by this Lease; or
(ii) the presence of, or cleanup or remediation activities in connection with, Hazardous Materials brought on the Premises by Landlord or a Landlord Party; or (iii) cessation of utilities or services caused by Landlord’s negligence or willful
misconduct (any such set of circumstances as set forth in items (i) through (iii), above, to be known as an “Abatement Event”), then Tenant shall give Landlord written notice of such Abatement Event, and if such Abatement Event continues
for two (2) consecutive business days after such notice, or occurs for ten (10) non-consecutive business days in a twelve (12) month period (in either of such events, the “Eligibility Period”), then the Base Rent and Additional Rent shall
be abated or reduced, as the case may be, after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using the Premises, or a portion thereof, in the proportion that the floor area of the portion of the
Premises that Tenant is prevented from using (“Unusable Area”), bears to the total floor area of the Premises. If Landlord has not cured such Abatement Event within one hundred eighty (180) days after receipt of written notice from Tenant,
Tenant shall have the right to terminate this Lease during the first ten (10) business days of each calendar month following the end of such 180-day period until such time as Landlord has cured the Abatement Event, which right may be exercised only
by delivery of thirty (30) days’ notice to Landlord and Landlord’s Lender (provided such Lender’s name and notice address were previously provided to Tenant) (the “Abatement Event Termination Notice”) during such ten (10)
business-day period, and shall be effective as of a date set forth in the Abatement Event Termination Notice (the “Abatement Event Termination Date”), which Abatement Event Termination Date shall not be less than thirty (30) days, and not
more than one (1) year, following the delivery of the Abatement Event Termination Notice. Tenant’s Abatement Event Termination Notice shall be null and void (but only in connection with the first notice sent by Tenant with respect to each
separate Abatement Event) if Landlord or Landlord’s Lender(s) cures such Abatement Event within such thirty (30) day period following receipt of the Abatement Event Termination Notice. 
  
 ARTICLE ELEVEN: LENDERS 
  
 Section 11.1 Subordination, Non-Disturbance and Attornment. Landlord
shall deliver to Tenant concurrently with the closing under the Purchase Agreement fully executed commercially reasonable non-disturbance agreement(s) (“SNDA’s”) in favor of Tenant from all existing ground lessors, mortgage holders or
lien holders of Landlord, including Landlord’s Lender (and such delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the SNDA’s are delivered, rent,
payable retroactively from the Commencement Date, shall be paid immediately), and, thereafter, Landlord shall deliver SNDA’s from all such parties who later come into existence with respect to the Premises or any portion thereof at any time
prior to the expiration of the Term. Such commercially reasonable SNDA’s shall not modify the provisions of this Lease, shall include the obligation of any such ground lessor, mortgage holder, lien holder or successor landlord, upon taking
title to the Premises, and so long as a Default by Tenant is not continuing, to not disturb Tenant’s right of possession of the Premises in accordance with the Lease, to recognize and accept all of Tenant’s rights under the Lease,
including the right to offset certain amounts against Rent due hereunder, and to assume all of Landlord’s continuing obligations under this Lease as set forth herein. Subject to Tenant’s receipt of the SNDA’s described above, this
Lease shall be subject and subordinate to all present and future ground or underlying leases of the Premises and to the lien of any mortgage, trust deed or other encumbrances now or hereafter in force against the Building or Premises or any part
thereof, 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,
trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto. Subject to Tenant’s receipt of the SNDA’s described above, Tenant covenants and agrees
in the event any proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to attorn to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or
deed in lieu thereof (or to the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease. Subject to Tenant’s
receipt of the SNDA’s described herein, 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. 
  

 15 

 Section 11.2 Estoppel Certificates. Within ten (10) business days following a request in writing
by Landlord or Tenant, Tenant or Landlord, as the case may be, shall execute, acknowledge and deliver to the requesting party (the “Requesting Party”) an estoppel certificate in such commercially reasonable form as may be required by the
Requesting Party, indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information regarding the status of the Lease reasonably requested by the Requesting Party. Any such certificate may be relied
upon by any prospective mortgagee or purchaser of all or any portion of the Premises or by any assignee, sublessee or leasehold mortgagee, as the case may be. Landlord or Tenant, as the case may be, shall execute and deliver whatever other
instruments may be reasonably required for such purposes. 
  
 ARTICLE TWELVE: LEGAL COSTS 
  
 In the event of any
arbitration or suit under this Lease, reasonable attorneys’ fees and costs shall be awarded by a court or arbitrator to the prevailing party (as determined by the trier of fact) and are to be included in any judgment or award. In addition, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred in enforcing any judgment arising from a suit or arbitration under this Lease including but not limited to post judgment motions, contempt proceedings,
garnishment, levy and debtor and third party examinations, discovery and bankruptcy litigation, without regard to schedule or rule of court purporting to restrict such award. This post judgment or award of attorneys’ fees and costs provision
shall be severable from any other provisions of this Lease and shall survive any judgment/award on such suit or arbitration and is not to be deemed merged into the judgment/award or terminated with the Lease. For the purpose of this provision, the
term “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of legal counsel (including external counsel and, to the extent fulfilling functions of an attorney at law, excluding de
minimis administrative activities of, in-house counsel) to the parties hereto, which include printing, photocopying, duplicating, mail, overnight mail, messenger, court filing fees, cost of discovery, fees billed for law clerks, paralegals,
investigators and other persons not admitted to the bar but performing services under the supervision or direction of an attorney. For the purpose of determining in-house counsel fees, the same shall be considered as those fees normally applicable
to a partner in a law firm with like experience in such field. 
  
 ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS 
  
 Section
13.1 Landlord’s Liability. Any Landlord who transfers in a bona fide transaction its title or interest is relieved of all liability with respect to the obligations of Landlord under this Lease to be performed on or after the date
of transfer and after receipt by Tenant of the written assumption of all of Landlord’s obligations under this Lease by the transferee; provided, however, that the foregoing shall not relieve a transferring Landlord of responsibility for
defaults by such transferring Landlord existing prior to the date of such transfer. However, each Landlord shall deliver to its transferee all funds (including the Security Deposit) that Tenant previously paid to or deposited with Landlord if such
funds have not yet been applied or returned under the term of this Lease. Notwithstanding any term or provision herein to the contrary, the liability of Landlord for the performance of its duties and obligations under this Lease is limited to
Landlord’s interest in the Premises and the rents, profits, sale/financing proceeds and insurance proceeds therefrom, and in the assets of Landlord, but Landlord’s partners, shareholders, officers or other principals shall have no personal
liability under this Lease. 
  
 Section 13.2 Severability.
A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this Lease, which shall remain in full force and
effect. 
  
 Section 13.3 Interpretation. The captions of
the Articles or Sections of this Lease are to assist the parties in the reading this Lease and are not a part of the terms or provisions of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the
plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. 
  
 Section 13.4 Incorporation of Prior Agreements. This Lease is the only agreement between the parties pertaining to the lease of the Premises and no
other agreements are effective. All amendments to this Lease shall be in writing and signed by all parties. Any other attempted amendment shall be void. 
  
 Section 13.5 Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be delivered to the Premises and the address for notice set forth in Article One. Notices to Landlord shall be delivered to the address for notice set forth in Article One. All
notices shall be effective upon delivery. Either party may change its notice address upon written notice to the other party. 
  

 16 

 Section 13.6 Waivers. All waivers must be in writing and signed by the waiving party.
Landlord’s failure to enforce any provision of this Lease or its acceptance of rent shall not be a waiver and shall not prevent Landlord from enforcing that provision or any other provision of this Lease in the future. No statement on a payment
check from Tenant or in a letter accompanying a payment check shall be binding on Landlord, Landlord may, with or without notice to Tenant, negotiate such check without being bound to the conditions of such statement. 
  
 Section 13.7 Memorandum of Lease. Landlord shall deliver to Tenant
concurrently with the execution of this Lease a properly executed and notarized memorandum of this Lease to be recorded against the Premises in the form attached hereto as Exhibit “C” (the “Memorandum of Lease”) (and such
delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the Memorandum of Lease is delivered, rent, payable retroactively from the Commencement Date, shall be
paid immediately). Tenant shall pay any transfer costs or recording fees in connection therewith. 
  
 Section 13.8 Binding Effect; Choice of Law. This Lease binds any party who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant’s successor unless the rights or interests of Tenant’s successor are acquired in accordance with the terms of this Lease. The laws of the State of California, without regard to
conflicts of law, shall govern this Lease. Each of the parties voluntarily submits to the jurisdiction of the courts of the State of California, and to exclusive venue in Orange County, California. 
  
 Section 13.9 Authority. Each person signing this Lease on behalf of
Landlord and Tenant represents and warrants that he has full authority to do so and that this Lease binds the entity on whose behalf he or she is signing. 
  
 Section 13.10 Force Majeure. If Landlord or Tenant cannot perform any of its obligations due to events beyond such party’s control (other than
the payment of money), the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond a party’s control include, but are not limited to, acts of God, war, civil
commotion, terrorism, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, governmental regulation or restriction and weather conditions. 
  
 Section 13.11 Execution of Lease. This Lease may be executed in counterparts and, when all counterpart documents are
executed, the counterparts shall constitute a single binding instrument. This Lease shall not be deemed to be an offer to lease and shall not be binding upon either party until executed and delivered by both parties. 
  
 Section 13.12 Survival. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease. 
  
 Section 13.13 Duty To Act Reasonably. Except as specifically set forth in this Lease to the contrary, any time the consent of Landlord or Tenant is required, such consent shall not be unreasonably withheld, conditioned or delayed.
Whenever the Lease grants Landlord or Tenant the right to take action or exercise discretion, or grants Tenant or Landlord the right to make allocations or other determinations, Landlord and Tenant shall act reasonably and in good faith. 

 
 Section 13.14 No Brokers. Landlord and Tenant each represent and
warrant to the other that they have employed no broker and/or finder in connection with this Lease, or any other documents or matters relating to the Premises. In the event any claim, demand, or cause of action for brokerage and/or finder’s
fees is asserted against a party to this Lease who did not request such services, the party through whom the broker or finder is making the claim shall protect, indemnify, defend and hold harmless the other party from and against any and all claims,
demands and causes of action. 
  
 FOURTEEN: OTHER AGREEMENTS OF
LANDLORD AND TENANT 
  
 Section 14.1 Signs. Tenant shall
have the exclusive right to use, install and maintain exterior Building signs and/or monument signs at the Premises identifying its business provided such signs shall comply with all applicable local and state laws, rules, and regulations.

  
 Section 14.2 Confidentiality Landlord acknowledges that
the contents of this Lease and any related documents are confidential information. Landlord shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than
Landlord’s partners, administrators, consultants, financial, legal, and space planning consultants or a prospective or current purchaser, mortgagee, or ground or underlying lessor of the Building or the Project, and except as required by
applicable law or in connection with a dispute or litigation hereunder or as required by a subpoena. Any press releases or announcements made in connection with the contents of this Lease and/or any related documents shall be subject to the prior
approval of Tenant. 
  
 Section 14.3 Telecommunication
Equipment. At any time during the Lease term, Tenant may, upon notice to Landlord, install, at Tenant’s sole cost and expense, 

  

 17 

 
telecommunication equipment upon the roof of the Building, without the payment of any additional charge, and Tenant shall have exclusive use of the roof of
the Building. Tenant and Tenant’s service providers may use existing ducts and conduits as reasonably necessary to connect telephone and other communications services to the Premises, without any additional charge or fee. Tenant may also
install, maintain, replace, remove or use, without any additional charge or fee therefor, any communications or computer wires and cables in or serving the Premises. Notwithstanding the foregoing, any damage resulting to the roof or any other
portion of the Premises from Tenant’s or Tenant’s service providers’ installation of such telecommunication equipment shall be the sole responsibility of Tenant. 
  

 18 

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

  

					
	 “LANDLORD”

	
	 JS SJK L.P., a California limited liability company

			
	 By:
	 	 	 	 
			
	 	 	 Its:
	 	 
	
	 “TENANT”

	
	 ST. JOHN KNITS, INC.

			
	 By:
	 	 	 	 
			
	 	 	 Its:
	 	 

  

 19 

 Exhibit “A” 
  
 Legal Description 
  
 [to be attached] 
  

 20 

 Exhibit B 
  

Base Rent Increase Examples 
  
 Example 1 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in effect at end of month in which Rental Adjustment Date occurs (normally, 30 months
after the Comparison Date): 110 
  
 New Monthly Base Rent to be paid until next
Rental Adjustment Date (ignoring floor or cap addressed below): $41,250 (110/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor
does not apply. 
  
 New Monthly Base Rent to be paid until next Rental
Adjustment Date: $41,250. 
  
 Example 2 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison
Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the
Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in
effect at end of month in which Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 120 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $45,000 (120/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month
Rental Adjustment Period): $41,363.25. Cap now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is capped at $41,363.25. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor does not apply. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $41,363.25.

  

 21 

 Example 3 
  

Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the
“Comparison Date”): 100 
  
 Index in effect at end of month in which
Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 105 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $39,375 (105/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30
month Rental Adjustment Period): $39,887.88. Floor now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is $39,887.88. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $39,887.88. 
  

 22 

 Exhibit C 
  

Form of Memorandum of Lease 
  

			
	 RECORDING REQUESTED BY
 AND WHEN RECORDED MAIL TO:
  
 Dean Dunn-Rankin, Esq.
 Hewitt & O’Neil LLP
 19900 MacArthur Blvd, Suite 1050
 Irvine, CA 92612
	  	 
	 	  	(SPACE ABOVE THIS LINE FOR RECORDER’S USE)

  
 MEMORANDUM 

 
 THIS MEMORANDUM OF LEASE (this “Memorandum”), dated as of the
                     day of
                                    , 2004, is made by and
between ST. JOHN KNITS, INC., a California corporation (“Tenant”) and JS SJK L.P., a California limited liability company (“Landlord”). 
  
 R E C I T A L S 
  
 A. Landlord is the fee simple title owner of that certain property commonly known as
                                    , legally described on
Exhibit A attached hereto and made a part hereof (the “Premises”). 
  
 B. Landlord and Tenant have entered into that certain Lease Agreement dated as of
                                    , 2004 (the
“Lease”), pursuant to which Landlord has agreed to lease to Tenant the Premises upon the terms and conditions set forth in the Lease. 
  
 C. Landlord and Tenant desire to set forth certain terms and provisions contained in the Lease in this Memorandum for recording purposes. 
  
 NOW, THEREFORE, for and in consideration of the rents reserved and the
covenants and conditions set forth in the Lease, Landlord and Tenant do hereby covenant, promise and agree as follows: 
  
 1. Definitions. Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed to them in the
Lease. 
  
 2. Grant of Lease. Pursuant to the Lease and
this Memorandum, Landlord demises and leases to Tenant and Tenant leases from Landlord the Premises upon the terms and conditions set forth in the Lease. 
  
 3. Commencement Date. The Term of the Lease shall commence on the date specified in the Lease. 
  
 4. Expiration Date. The Term of the Lease shall expire, unless sooner
terminated or unless extended or renewed as provided therein, at the end of the first full month occurring one hundred eighty (180) months after the Commencement Date. 
  

 23 

 5. Rent. The Rent due and payable from Tenant to Landlord for the Term of the Lease and any
extension term shall be determined and shall be payable pursuant to the terms and provisions of the Lease. 
  
 6. Options to Extend. Tenant has three (3) options to extend the Term of the Lease for consecutive terms of sixty (60) months each and one (1)
additional option to extend the Term of the Lease for a term of fifty-nine (59) months, subject to and on the terms and conditions set forth in the Lease. 
  
 IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date first written above. 
  

									
	 LANDLORD:
	 	 	 	 TENANT:

	 JS SJK L.P., a California limited liability company
	 	 	 	 St. John Knits, Inc.

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

  

 24 

			
	 STATE OF ____________
	 	 )

	 	 	 )

	 COUNTY OF __________
	 	 )

  
 I, the undersigned, a
notary public in and for said County, in the State aforesaid, DO HEREBY CERTIFY that
                                       
                                        
                                      personally known to me
to be the
                                       
                          of
                                     
                                        
                    a
                                       
              corporation, personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and severally
acknowledged that as such                             , signed and delivered the said
instrument, pursuant to authority, given by the Board of Directors of said corporation as                         
free and voluntary act, and as the free and voluntary act and deed of said corporation, for the uses and purposes therein set forth. 
  
 GIVEN under my hand and official seal this                 
day of
                                       
 , 20     . 
  

	
	
	 
	Notary Public
	
	 My commission
expires:                                      
       

  

 25 

 EXHIBIT A 
  

LEGAL DESCRIPTION OF PREMISES 
  

 26 

 Exhibit E-2 
  
 LEASE AGREEMENT 
 (Single Tenant Net) 
  
 This Lease Agreement (this
“Lease”) is made this                      day of
                    , 2004, by and between ST. JOHN KNITS, INC., a California corporation (“Tenant”), and JS SJK L.P., a California
limited liability company (“Landlord”), based upon the following facts: 
  
 RECITALS 
  
 A. Pursuant to
that certain Purchase Agreement dated June 11, 2004, between Tenant, as Seller, and Landlord, as Buyer (the “Purchase Agreement”), Landlord has purchased that certain real property more particularly described on Exhibit
“A” attached hereto (the “Land”) located at 17572 Armstrong in the City of Irvine, County of Orange, State of California, together with a building containing approximately 20,500 square feet of floor area, including tenant
improvements (the “Building”), an exterior surface parking area (the “Parking Area”) and related exterior improvements, including, but not limited to, lighting, access rights and landscaping (the “Exterior
Improvements”). The Land, the Building, the Parking Area and the Exterior Improvements are collectively called the “Premises.” 
  
 B. Landlord desires to lease the Premises to Tenant, and Tenant desires to lease the Premises from Landlord on the terms and conditions set forth herein.

  
 NOW THEREFORE, in consideration of the foregoing recitals (and
those in the Purchase Agreement, all of which are incorporated herein by this reference) and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 
  
 ARTICLE ONE: BASIC TERMS 
  
 Section 1.1 Lease Term. The term of this Lease (the “Term”)
shall commence on the date (the “Commencement Date”) immediately following the Closing Date (as that term is defined in the Purchase Agreement) and expire on the last day of the 180th full calendar month thereafter (if the Commencement
Date is not the first day of a calendar month, the last month of the initial Term shall include such additional days as may be required to cause the initial Term to end on the last day of a calendar month). The initial Term may be extended by Tenant
for three (3) additional 60-month periods and one (1) additional 59-month period in accordance with Section 2.3. 
  
 Section 1.2 Permitted Uses: (See Article Five) General office, administrative, research and development, warehouse, distribution, manufacturing,
assembly, retail and commercial uses as permitted by then existing law; provided, however, that Landlord’s prior written approval shall be required for any change in use that requires a variance or other change in then-current zoning.

  
 Section 1.3 Vehicle Access and Parking: Subject to the
terms of this Lease, Tenant shall be entitled to the exclusive use of the Premises and every part thereof, including, without limitation, all entranceways and driveways serving the Premises and the Parking Area for vehicle parking purposes and
ingress and egress to and from the Premises; provided, however, the parties acknowledge that the Premises is subject to all matters of record as of the date hereof, including, without limitation, the terms of that certain Reciprocal Driveway
Easement Agreement (the “REA”) recorded prior to or concurrently with the closing under the Purchase Agreement as specified therein (whereby the Premises is entitled to and encumbered by certain ingress and egress rights with certain
adjacent premises as specified in the REA). All parking spaces shall be available to Tenant throughout the Term, 24 hours per day, free of charge. 
  
 Section 1.4 Rent and Other Charges Payable by Tenant: 
  
 (a) BASE RENT: For the initial 15-year Term, base rent (“Base Rent”) for the Premises shall be Thirteen Thousand Three Hundred
Twenty-Five Dollars ($13,325) per month, subject to increase as set forth below. If Tenant exercises an option to extend the Term of this Lease pursuant to Section 2.3, monthly Base Rent for the first year of the applicable Option Term shall be
determined as set forth in Section 2.3, and the same shall be subject to increase as set forth in Section 1.4(c), below (i.e., at the start of the 31st full calendar month following the commencement of the applicable Option Term). 

 
 (b) OTHER PERIODIC PAYMENTS: (i) Property Taxes (See
Section 4.2); (ii) Utilities (See Section 4.3); (iii) Insurance Premiums (See Section 4.4) 
  
 (c) BASE RENT INCREASES: The monthly Base Rent shall be increased during the initial Term at the commencement of the 31st, 61st, 91st, 121st and 151st full calendar months following the Commencement Date
(and, if Tenant exercises an option to extend, at the 

  

 1 

 
commencement of the 31st
full calendar month following the commencement of the applicable Option Term) (each such date is hereinafter called a “Rental Adjustment Date”) in accordance with the increase in the United States Department of Labor, Bureau of Labor
Statistics, Consumer Price Index for All Urban Consumers (all items for the Los Angeles – Riverside – Anaheim area, 1982-1984 = 100) (the “Index”) as follows: The monthly Base Rent in effect immediately before each Rental
Adjustment Date (the “Comparison Base Rent”) shall be increased by the percentage that the Index has increased from the date on which payment of the Comparison Base Rent began (the “Comparison Date”) through the end of the month
in which the applicable Rental Adjustment Date occurs (each such period a “Rental Adjustment Period”); provided, however, that such increase for any Rental Adjustment Period shall be no less than 2.5% per annum, but no more than 4% per
annum (except that such 4% annual cap shall be increased to a 5% annual cap at the end of the 10th full Lease year,
that is, for the adjustments commencing with the adjustment at the start of the 151st month of the Term) on a
compounded, cumulative basis. A numerical example of such Base Rent increase mechanism is provided in Exhibit “B” attached hereto. Landlord shall notify Tenant of each increase by a written statement. Tenant shall pay the new Base
Rent from the applicable Rental Adjustment Date until the next Rental Adjustment Date. Landlord’s notice may be given not more than three (3) months after the applicable Rental Adjustment Date of the increase, and Tenant shall pay Landlord the
accrued rental adjustment for the months elapsed between the effective date of the increase and Landlord’s notice of such increase within ten (10) days after Landlord’s notice. If the format or components of the Index are materially
changed after the Commencement Date, Landlord shall substitute an index which is published by the Bureau of Labor Statistics or similar agency and which is most nearly equivalent to the Index in effect on the Commencement Date. The substitute index
shall be used to calculate the increase in the Base Rent unless Tenant objects to such index in writing within fifteen (15) days after receipt of Landlord’s notice. If Tenant objects, Landlord and Tenant shall submit the selection of the
substitute index for binding arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) (except the arbitrators shall determine the substitute index rather than the Option Rent). The costs of arbitration shall be borne equally by Landlord
and Tenant. 
  
 Section 1.5. Addresses for Notices and
Payments: 
  
 Address of Landlord: c/o Optima
Asset Management, 1600 Dove Street, Suite 480, Newport Beach, CA 92660 
  
 Address of Tenant: 2722 Michelson Drive, Irvine, California 92612 Attention: CFO 
  
 Section 1.6. Security Deposit. Tenant shall deposit with Landlord upon execution hereof an amount equal to the first two months’ Base Rent as
security for Tenant’s faithful performance of its obligations under the Lease (the “Security Deposit”). If a Default (as defined in Section 10.1) by Tenant occurs under this Lease, then during the continuance of such Default Landlord
may use, apply or retain all or any portion of the Security Deposit for the payment of any amount due Landlord or to reimburse or compensate Landlord for any liability, expense, loss or damage that Landlord has suffered or incurred by reason
thereof. If Landlord uses or applies all or any portion of the Security Deposit in accordance with the foregoing requirements, Tenant shall within ten (10) days after written request therefor deposit monies with Landlord sufficient to restore said
Security Deposit to the full amount required by the Lease. The Security Deposit shall not bear interest and may be commingled with other funds of Landlord. Provided a Tenant Default is not then continuing under this Lease, the Security Deposit shall
be returned to Tenant, without interest, within thirty (30) days after the expiration of Term. 
  
 ARTICLE TWO: LEASE TERM 
  
 Section 2.1 Lease of Premises For Lease Term. Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord for the Lease Term. The Lease Term is for the period stated in Section 1.1 above and shall begin and
end on the dates specified in Section 1.1 above, unless the beginning or end of the Lease Term is changed under any provision of this Lease. The “Commencement Date” shall be the date specified in Section 1.1 above for the beginning of the
Lease Term. 
  
 Section 2.2 Possession; Waiver of
Distraint. The parties acknowledge that Tenant is currently occupying the Premises and that Landlord shall be deemed to have delivered possession of the Premises to Tenant on the Commencement Date. Title to all of Tenant’s FF&E (as
defined in Section 6.6, below) shall remain in Tenant and Tenant alone shall be entitled to claim depreciation therefor. Landlord hereby waives, releases and relinquishes any and all rights of distraint, levy, attachment or recourse to the FF&E.
Although the foregoing waiver, release and relinquishment shall be self-operative without the necessity for any further instrument or document, Landlord hereby agrees to furnish Tenant or any vendor or other supplier under any conditional sale,
chattel mortgage or other security arrangement, any consignor, and holder of reserved title or any holder of a security interest, upon written request from time to time, waivers reasonably satisfactory to Tenant of Landlord’s right to
distraint, levy, attachment or recourse with respect thereto and exempting the same from distraint, levy, attachment or recourse. 
  

 2 

 Section 2.3 Options to Extend Term. 
  
 (a) Option Right. Landlord hereby grants to Tenant four (4) options to extend the Term as to the
entire Premises for a period of 60 months each, except that the last option shall be for a period of 59 months (each of the foregoing option terms is referred to hereinafter as an “Option Term”), which options shall be exercisable by
written notice delivered by Tenant to Landlord as provided below. Upon the exercise of any such option to extend, the then-existing Term shall be extended for a period of 60 months (59 months for the last option) on the same terms and conditions as
set forth in this Lease, except that monthly Base Rent for the first year of the Option Term shall be determined as set forth below. 
  
 (b) Option Rent. The annual Base Rent payable by Tenant for the first year of any Option Term shall be equal to 95% of the
“Fair Market Rental Rate,” as that term is defined in Section 2.3(e), below, but in no event shall the annual Base Rent payable by Tenant for the first year of any Option Term be less than the annual Base Rent in effect immediately prior
to the start of such Option Term. The Base Rent payable throughout the Option Term, including during the first year, is referred to hereinafter as the “Option Rent.” The monthly Option Rent determined for the first year of an Option Term
shall subject to increase at the start of the 31st full calendar month during such Option Term in accordance with
the Base Rent increase procedures set forth in Section 1.4(c). 
  
 (c) Exercise of Option. The options contained in this Section 2.3 shall be exercised by Tenant, if at all, only in the following manner: (i) Tenant shall deliver written notice (the “Option Interest
Notice”) to Landlord not more than 12 months or less than 9 months prior to the expiration of the initial Term or the immediately preceding Option Term, as the case may be, stating that Tenant is interested in exercising its option for the
Premises; (ii) Landlord, after receipt of the Option Interest Notice, shall deliver notice (the “Option Rent Notice”) to Tenant not less than 30 days after Tenant’s Option Interest Notice, setting forth Landlord’s determination
of the Option Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall, on or before the later of (A) the date occurring 6 months prior to the expiration of the initial Term or immediately preceding Option Term, as applicable, and (B)
the date occurring thirty (30) days after Tenant’s receipt of the Option Rent Notice, exercise the option by delivering written notice thereof to Landlord and upon, and concurrent with, such exercise, Tenant may, at its option, object to the
Option Rent contained in the Option Rent Notice, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. Additionally, if Tenant has not previously delivered the Option
Interest Notice, Tenant may nonetheless irrevocably exercise the option by delivering written notice thereof to Landlord at any time on or before the date occurring 6 months prior to the expiration of the initial Term, or immediately preceding
Option Term, as applicable, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. 
  
 (d) Determination of Fair Market Rental Rate. If Tenant timely and appropriately objects to the Fair
Market Rental Rate, Landlord and Tenant shall attempt to agree upon the Fair Market Rental Rate, using reasonable good-faith efforts. If Landlord and Tenant fail to reach agreement on or before the date which is five (5) months prior to the
expiration of the Term or the immediately preceding Option Term, as applicable (each such date, an “Outside Agreement Date”), then each party shall make a separate determination of the Fair Market Rental Rate within five (5) business days
after the applicable Outside Agreement Date, and such determinations shall be exchanged with each other in sealed envelopes at a meeting held within two (2) business days after such 5-business day period. If neither party accepts the other’s
determination of the Fair Market Rental Rate, and if Tenant at that time fails to rescind its option to renew (which Tenant shall have the right to do by notice to Landlord given prior to submittal to arbitration), then such determinations of the
Fair Market Rental Rate shall be submitted to arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) below. 
  
 (i) Landlord and Tenant shall each appoint one arbitrator who shall be a real estate broker who shall have been active over the five (5)
year period ending on the date of such appointment in the leasing of commercial industrial properties in the Irvine area in which the Premises is located. The determination of the arbitrators shall be limited solely to the issue of whether
Landlord’s or Tenant’s submitted Fair Market Rental Rate is the closest to the actual Fair Market Rental Rate, as determined by the arbitrators, taking into account the requirements of this Lease. Each such arbitrator shall be appointed
within fifteen (15) days after the applicable Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions. The arbitrators
so selected by Landlord and Tenant shall be deemed “Advocate Arbitrators.” 
  
 (ii) The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of
the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral Arbitrator”) who shall be qualified under the same criteria set forth in Section 2.3(d)(i) for qualification of
the two Advocate Arbitrators except that neither the Landlord or Tenant or either parties’ Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or 

  

 3 

 
subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord’s counsel and
Tenant’s counsel. 
  
 (iii) The three (3)
arbitrators shall within thirty (30) days of the appointment of the Neutral Arbitrator reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Fair Market Rental Rate, and shall notify Landlord and Tenant
thereof. Whichever Fair Market Rental Rate is selected by the arbitrators shall become the then applicable Fair Market Rental Rate. The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and Tenant. 
  
 (iv) If either Landlord or Tenant fails to appoint an
Advocate Arbitrator within fifteen (15) days after the applicable Outside Agreement Date, then either party may petition the presiding judge of the Superior Court of Orange County to appoint such Advocate Arbitrator subject to the criteria in
Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator. 
  
 (v) If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either
party may petition the presiding judge of the Superior Court of Los Angeles County to appoint the Neutral Arbitrator, subject to the criteria in Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having
jurisdiction over the parties to appoint such arbitrator (or if no judge having jurisdiction is willing to act, the Judicial Arbitration and Mediation Service located closest to the Premises). The cost of the arbitration shall be paid by Landlord
and Tenant equally. 
  
 (e) Fair Market Rental
Rate. The “Fair Market Rental Rate” shall be equal to the annual Base Rent, at which tenants, as of the commencement of the applicable Option Term, are, pursuant to brokered transactions completed within the twelve (12) month period
prior to the exercise of the applicable option, leasing non-renewal, non-equity, non-affiliated space for a comparable use (based on the use to which Tenant is then putting the Premises) that is comparable in size, location and quality to the
Premises, for a similar lease term, in an arms length transaction, which comparable space is located in the Irvine area (“Comparable Transactions”), taking into consideration all monetary and non-monetary concessions, if any, being granted
such tenants in connection with such Comparable Transactions and the financial condition and credit history of Tenant and the other tenants in such Comparable Transactions, and taking into account the fact that rental increases during the Option
Term are already provided for in this Lease, but excluding the value of any improvements installed or paid for by Tenant. 
  
 Section 2.4 Holding Over. Tenant shall vacate the Premises upon the expiration or earlier termination of this Lease. If Tenant does not vacate the
Premises upon the expiration or earlier termination of the Lease, as the same may be extended as provided above, and Landlord thereafter accepts rent from Tenant, Tenant’s occupancy of the Premises shall be a “month-to-month” tenancy,
subject to all of the terms of this Lease applicable to a month-to-month tenancy except that the monthly Base Rent shall be increased for the first 60 days of holdover to 110% of the monthly Base Rent in effect at the end of the Term and thereafter
to 125% of the monthly Base Rent in effect at the end of the Term (in each case prorated on a daily basis for holdovers of partial months). 
  
 ARTICLE THREE: BASE RENT 
  
 Section 3.1 Time and Manner of Payment. Upon the Commencement Date, Tenant shall pay Landlord the Base Rent in the amount stated in Section 1.4
above for the first month of the Lease Term, prorated for any partial month. On the first day of the second month of the Lease Term and each month thereafter, Tenant shall pay Landlord the Base Rent, in advance, without offset, deduction or prior
demand except as otherwise provided herein. Base Rent shall be payable at Landlord’s address or at such other place as Landlord may designate in writing. 
  

Section 3.2 Late Charge. If Tenant fails to pay any installment of Base Rent or any other payment for which Tenant is obligated to pay Landlord
under this Lease within five (5) business days following written notice of such failure, then Tenant shall pay to Landlord as additional rent a late charge equal to three percent (3%) of the amount due to compensate Landlord for the extra costs
incurred as a result of such late payment. The parties agree that such late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. 
  
 ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT 
  
 Section 4.1 Additional Rent. All charges payable by Tenant under this
Lease other than Base Rent are called “Additional Rent”. Unless this Lease provides otherwise, Tenant shall pay all Additional Rent then due on the later of (i) fifteen (15) days after receipt of Landlord’s invoice or statement
therefor, or (ii) the next monthly installment of Base Rent. The term “rent” shall mean Base Rent and Additional Rent. 
  

 4 

 Section 4.2 Property Taxes. 
  
 (a) Real Property Taxes. Tenant shall pay all real property taxes on the Premises during the Term.
Subject to Section 4.2(d) below, such payment shall be made prior to the penalty date for such taxes. At Landlord’s request, Tenant shall furnish Landlord with satisfactory evidence that the real property taxes have been paid. Landlord shall
reimburse Tenant for any real property taxes paid by Tenant covering any period of time after the Term. If Tenant fails to pay the real property taxes when due, or if Tenant fails to timely furnish Landlord with satisfactory evidence that the real
property taxes have been paid as set forth above, Landlord may, after fifteen (15) days prior notice to Tenant and Tenant’s failure to pay the real property taxes and furnish Landlord with satisfactory evidence of such payment within such
15-day period, pay the taxes and Tenant shall reimburse Landlord for the amount of such tax payment as Additional Rent. 
  
 (b) Definition of Real Property Tax. “Real property tax” means: (i) any fee, license fee, license tax, business license
fee, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Premises; and (ii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Premises by any
governmental agency. “Real property tax” does not, however, include Landlord’s federal or state income, franchise, inheritance or estate taxes, any tax on Landlord’s right to receive, or the receipt of, rent or income from the
Premises or against Landlord’s business of leasing the Premises, all of which excluded taxes shall be the responsibility of Landlord. All real property taxes and assessments shall be paid over the longest installment period generally available
(i.e., available to taxpayers upon whom such assessments are imposed without penalty or default) unless Tenant elects to pay same over a shorter installment period. 
  
 (c) Personal Property Taxes. Tenant shall pay in a timely manner all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to Tenant. Tenant shall try to have its personal property taxed separately from the Premises. 
  
 (d) Tenant’s Right to Contest Taxes. Tenant may attempt to have the assessed valuation of all or
part of the Premises or Tenant’s personal property reduced or may initiate proceedings to contest the real property taxes or personal property taxes or may seek to obtain one or more real property tax or personal property tax credits in
connection with the Premises or its operations at the Premises. If requested by Tenant, Landlord shall cooperate with Tenant in such matters. If required by law, Landlord shall join in any proceedings brought by Tenant. However, Tenant shall pay all
costs of the proceedings. If Tenant does not pay real property taxes when due and contests such taxes, Tenant shall not be in default under this Lease for nonpayment of such taxes if Tenant posts bond from an admitted surety in the amount necessary
to protect the Premises from the lien of the unpaid taxes; provided, however, that if applicable law or Landlord’s lender requires that the taxes being contested by Tenant be paid (under protest) during such contest, then Tenant shall make such
payment (under protest). The amount of such bond shall be sufficient to pay the real property taxes plus a reasonable estimate of the interest, costs, charges and penalties which may accrue if Tenant’s action is unsuccessful. The bond made
shall be applied to the real property taxes due, as determined at such proceedings (or upon Tenant’s earlier payment of taxes under protest or otherwise), with any excess being disbursed to Tenant. Upon the final determination of any proceeding
or contest, Tenant shall immediately pay the taxes due, together with all costs, charges, interest and penalties incidental to the proceedings. If Tenant’s contest of taxes results in a reimbursement by one or more taxing authorities of some or
all of the tax payments previously made by Tenant under this Lease, or a credit to Tenant against future tax payments, Tenant shall be entitled to the full amount of such reimbursement or credit. 
  
 Section 4.3 Utilities. Tenant shall pay before delinquency, directly
to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services used at the Premises or supplied to the Premises at Tenant’s request. In case of a
failure or interruption in utilities or services to the Premises, Landlord shall fully cooperate with Tenant (and no out-of-pocket cost to Landlord unless the failure or interruption was caused by Landlord’s negligence or willful misconduct) to
have the interrupted utilities/services restored. 
  
 Section 4.4
Indemnity and Insurance. 
  
 (a)
Tenant’s Indemnity. Tenant shall indemnify, defend (with attorneys reasonably satisfactory to Landlord), and hold Landlord and its representatives, agents, owners, employees and contractors (collectively, “Landlord Parties”)
harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of the use of the Premises by Tenant or Tenant Parties (as defined in Section 5.3(a)) or from the conduct of
Tenant’s business, or from any activity, work, or thing done or permitted by Tenant or Tenant Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Landlord or Landlord Parties; or 

  

 5 

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Landlord: 
  

	 	(i)	notifies Tenant of the claim or liability in writing within sixty (60) days after the Landlord receives written notice of the claim or liability; 

  

	 	(ii)	permits Tenant to defend or settle against the claim or liability, so long as Landlord is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Tenant in any defense of settlement against the claim or liability. 

  
 (b) Landlord’s Indemnity. Landlord shall indemnify, defend (with attorneys reasonably
satisfactory to Tenant), and hold Tenant and Tenant Parties harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of any activity, work, or thing done by Landlord
or Landlord Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Tenant or Tenant Parties; or 

  

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Tenant: 
  

	 	(i)	notifies Landlord of the claim or liability in writing within sixty (60) days after the Tenant receives written notice of the claim or liability; 

  

	 	(ii)	permits Landlord to defend or settle against the claim or liability, so long as Tenant is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Landlord in any defense of settlement against the claim or liability. 

  
 (c) Liability Insurance. Tenant, at Tenant’s own cost and expense, will provide and keep in full
force and effect during the term of this Lease, commercial general liability insurance with limits of not less than Two Million Dollars ($2,000,000) covering bodily injury to persons, including death and loss of or damage to real and personal
property. Such insurance may be provided under Tenant’s blanket public liability insurance policy. During the term of the Lease, Landlord and Landlord’s lender (“Landlord’s Lender”) shall be named as an additional insured
under such insurance. A certificate evidencing such insurance coverage shall be delivered to Landlord not less than fifteen (15) days after the commencement of the Term hereof. Such certificate of insurance will provide for at least ten (10) days
advance notice in the event of cancellation or material modification of its terms. 
  
 (d) Mutual Waiver of Claims. Landlord and Tenant do each herewith and hereby release and relieve the other, and waive their claim
of recovery for loss or damage to property arising out of or incident to fire, lightning or other insurable perils, to the extent covered by insurance maintained by Landlord or Tenant (or the insurance required to be maintained hereunder), whether
or not such loss or damage is due to the negligence of Landlord or Tenant, Landlord Parties or Tenant Parties, or their agents, employees, guests, licensees, invitees or contractors. 
  
 (e) Mutual Waiver of Subrogation. Each of Landlord and Tenant shall use their commercially reasonable
best efforts to have their respective insurance carriers to waive all rights of subrogation against the other party hereto to the extent of Landlord’s or Tenant’s undertaking set forth in Section 4.4(a) or 4.4(b) and Section 4.4(d).

  
 (f) Property Insurance. Tenant shall,
at Tenant’s expense, procure and maintain at all times during the term of this Lease a policy or policies of insurance covering loss or damage to the Premises and the tenant improvements in the Premises (exclusive of Tenant’s trade
fixtures, equipment and other personal property) in the amount of the full replacement value thereof including cost associated with “civil or ordinance of law”, without depreciation or deduction (and such insurance may provide for a
commercially reasonable deductible, the parties hereby agreeing that Tenant’s deductibles in place as of the date of execution of the Purchase Agreement are commercially reasonable), providing protection against all perils included in a Causes
of Loss - Special Form (commonly known as “All-Risk”) policy and, if the Premises are in a flood zone, flood insurance. All insurance shall provide for payment of loss thereunder to 

  

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Landlord, Landlord’s Lender and Tenant as their respective interests may appear. Such insurance policies may be carried under blanket policies covering
other properties of Tenant and/or its affiliates so long as such blanket policies provide insurance at all times for the Premises as required by this Lease, and shall provide that such policies may not be canceled without at least ten (10) days
prior written notice to Landlord. All policies of insurance required to be carried by Tenant or Landlord under this Lease shall be maintained with insurance companies qualified to do business in California holding a General Policyholders Rating of
“B+” and a Financial Rating of “VII” or better, as set forth in the most current issue of Best’s Insurance Guide or a BBB financial strength rating by Standard and Poor’s. 
  
 (g) Workers Compensation Insurance. Tenant shall at
all times carry workers compensation insurance as required by law. 
  
 (h) Earthquake and Flood. If required by Landlord’s lender because the Probable Magnitude of Loss on the Premises exceeds 20% of the full replacement cost of the Premises, then Tenant shall obtain and
maintain earthquake insurance coverage on the Premises (with such deductibles as Tenant may deem reasonable) to the extent such coverage is commercially available. If required by Landlord’s lender because the Premises are in a flood zone,
Tenant shall maintain flood insurance on the Premises (with such deductibles as Tenant may deem reasonable). 
  
 (i) Landlord’s Insurance. Within fifteen (15) days after written notice from Tenant to Landlord given from time to time during
the Term, Landlord shall notify Tenant of the insurance premium cost (the “Cost Notice”) to Landlord to obtain (i) commercial general liability insurance with limits specified by Tenant covering Landlord (and Tenant as an additional
insured) against bodily injury to persons, including death and loss of or damage to real and personal property, and/or (ii) rental loss insurance covering the Base Rent and additional rental payable under this Lease over a one (1) year period.
Within fifteen (15) days after receiving the Cost Notice, Tenant may elect to direct Landlord to obtain some or all of such insurance at Tenant’s cost (and in that regard, Tenant shall reimburse Landlord within thirty (30) days after receipt of
Landlord’s statement or invoice for the insurance premium cost of obtaining same, which statement or invoice shall be accompanied by reasonable evidence of the amounts owing). A certificate evidencing such insurance coverage shall be delivered
to Tenant not less than fifteen (15) days after Tenant’s election to have Landlord obtain such insurance, which certificate of insurance will provide for at least ten (10) days advance notice in the event of cancellation. If Tenant elects to
have Landlord obtain such insurance, Tenant may thereafter notify Landlord that Tenant no longer desires Landlord to maintain such insurance at Tenant’s cost, in which case Tenant shall not be obligated to reimburse Landlord for insurance
premiums applicable to time periods beyond the expiration date of the applicable policy(ies) obtained by Landlord at Tenant’s request as provided above. 
  
 ARTICLE FIVE: USE OF PREMISES 
  
 Section 5.1 Permitted Uses. Tenant may use the Premises for some or all of the Permitted Uses set forth in Section 1.6 above. 
  
 Section 5.2 Manner of Use. Tenant shall not use the Premises in any
way which constitutes a violation of any law, ordinance, or governmental regulation or order regulating the manner of use by Tenant of the Premises or which constitutes a public nuisance; provided, however, that (A) Tenant’s violation of, or
failure to comply with, applicable laws regulating Tenant’s employment practices shall not be considered a default under this Section 5.2 unless a governmental entity brings or threatens in writing to bring action against Landlord as a result
of such violation or failure; (B) Tenant shall not be deemed in default under this Section 5.2 to the extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of
its obligations under other specific provisions of this Lease; and (C) Tenant’s obligations with respect to Hazardous Materials shall be governed exclusively by Section 5.3. Tenant shall have no obligation to comply with applicable laws to the
extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of its obligations under other specific provisions of the Lease. Tenant shall have the right to contest
by appropriate legal proceedings the validity of any law, ordinance, order, rule, regulation or requirement of the nature herein described. 
  
 Section 5.3 Hazardous Materials. 
  
 (a) Use. Except as (i) used by Tenant to carry out its obligations under the terms of this Lease or (ii) used in connection with
Tenant’s intended use of the Premises, Tenant shall not generate, release, store, treat, or dispose of Hazardous Materials on the Premises without the prior written consent of Landlord. With regard to Hazardous Materials that Tenant proposes to
use on the Premises for purposes other than those identified in (i) or (ii) above, Landlord shall, taking into account such factors as Landlord may reasonably determine to be relevant, promptly grant or withhold consent to the proposed use of
Hazardous Materials. Landlord’s consent shall not be unreasonably withheld. Notwithstanding (i) above, all use by Tenant, Tenant’s subsidiaries and affiliates (“Tenant Affiliates”), Tenant Venturers (as defined in Section 9.5) or
Tenant’s representatives, agents, employees, business invitees, consultants, contractors and 

  

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subtenants (collectively, and including Tenant Affiliates and Tenant Venturers, “Tenant Parties”) of Hazardous Materials on the Premises shall be
carried out in strict compliance with applicable federal, state, and local laws, ordinances, and regulations. 
  
 (b) Indemnification. Tenant shall indemnify, defend, and hold harmless Landlord from any and all claims of liability asserted
against Landlord and Landlord Parties by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage to or loss of use of
property, or cleanup activities (remedial or removal) arising out of or relating to the release, or threat of release, of a Hazardous Material existing at or emanating from the Premises, to the extent caused by Tenant or Tenant Parties during or
prior to the Term of this Lease, or to the extent caused by any third party other than Landlord or Landlord Parties during the Term (provided, however, that Tenant shall have no indemnification obligations, and no liability under this Lease, with
respect to the migration of any Hazardous Material on or under the Premises from adjacent properties). Other than those matters for which Tenant is obligated to indemnify Landlord, Landlord shall indemnify, defend, and hold harmless Tenant from and
against any and all claims of liability asserted against Tenant by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage
to or loss of use of property, or cleanup activities (remedial or removal) arising out of or relating to the release or threat of release of any Hazardous Material existing at or emanating from the Premises to the extent caused by Landlord or
Landlord Parties during or after the Term of this Lease or to the extent caused by any third party other than Tenant or Tenant Parties with respect to the migration of any Hazardous Material on or under the Premises from adjacent properties. Neither
party shall be required to indemnify, defend or hold harmless the other for any Hazardous Material existing at or emanating from the Premises prior to the Term of this Lease due to the acts or omissions of a third party; provided, however, that
Landlord and Tenant each shall have the right (and each party shall reasonably cooperate with the other in that regard) to enforce for its own benefit the terms of the environmental indemnification/remediation provisions set forth in or implemented
pursuant to (a) Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between Baxter Healthcare Corporation and Tenant dated March 12, 1996, and (b) Agreement for Purchase and Sale of Real Property and Joint Escrow
Instructions between Baxter Healthcare Corporation and Tenant dated January 15, 1996 (collectively, the “Environmental Indemnity Agreements”) covering certain existing Hazardous Material contamination and remediation currently taking place
at the Premises. 
  
 (c) Investigation and
Remediation. Tenant shall promptly, at Tenant’s expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises pertaining to or involving any
Hazardous Materials for which Tenant is required to indemnify Landlord as described above. Landlord shall cooperate (at no out-of-pocket cost to Landlord) in any such activities at the request of Tenant. Landlord shall promptly, at Landlord’s
expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises, pertaining to or involving any Hazardous Materials for which Landlord is required to
indemnify Tenant as described above. Tenant shall cooperate (at no out-of-pocket cost to Tenant) in any such activities at the request of Landlord, including allowing Landlord and Landlord’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Landlord’s investigative and remedial responsibilities. 
  
 (d) Definition. For purposes of this Section 5.3, the term “Hazardous Materials” shall mean any dangerous waste,
hazardous waste, or hazardous substances as defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 as amended (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act as amended (42 U.S.C.
§ 6901 et seq.), or similar state statutes, as amended. 
  
 Section 5.4 Landlord’s Access. Subject to the security requirements of Tenant and governmental security regulations, Landlord may enter the Premises at all reasonable times to show the Premises to potential buyers, investors or
(during the last 6 months of the Term) tenants, to inspect the Premises, or to discharge Landlord’s obligations as permitted or required under this Lease; provided, however, any such entry into the Premises by Landlord shall be performed in a
manner so as not to interfere with Tenant’s use of, or ingress or egress to, the Premises and, at Tenant’s election, shall be in the company of a representative of Tenant. Landlord shall give Tenant at least 48 hours’ prior notice of
such entry, except in the case of an emergency. Any work performed in connection with such entry shall be performed in a good and workmanlike manner and with due diligence so as not to interfere with Tenant’s use of the Premises. No work shall
result in a diminution of Tenant’s floor area, and Landlord shall not store any materials in the Premises. After completion of any such work, Landlord shall restore the Premises as closely as possible to the condition existing immediately prior
to the commencement of such work. Any proprietary information obtained by Landlord as a result of such entry shall be kept strictly confidential. 
  
 Section 5.5 Quiet Enjoyment. So long as this Lease is not terminated following a default by Tenant, Landlord covenants that Tenant shall have the
right to occupy and enjoy the Premises for the full Lease Term on all the terms and provisions of this Lease. 
  

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 ARTICLE SIX: 
 CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS 
  
 Section 6.1 Existing Conditions. Tenant shall accept the Premises subject to all recorded matters, laws, ordinances, and governmental regulations; provided, however, that Tenant shall have the right to approve
in advance any restrictions or encumbrances hereafter placed against the Premises which decrease Tenant’s rights or increase Tenant’s obligations under this Lease, and Landlord shall not place any such restrictions or encumbrances against
the Premises without such prior approval by Tenant. 
  
 Section
6.2 Landlord’s Obligations. Without limitation on the provisions of Sections 5.2, 5.3, 6.3(b), 6.3(c), Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord shall maintain and repair (and replace, as necessary)
throughout the Term of this Lease, at Landlord’s expense, all structural elements of the Premises, including without limitation the foundation, structural columns, footings, exterior walls, slab and structural portions of the roof, as well as
subterranean elements of the Land (including sinkholes) and re-asphalting (if necessary) of the Parking Area (as opposed to slurry sealing, which shall be Tenant’s responsibility), except to the extent that the need for such maintenance and
repairs are caused by the negligence or willful misconduct by Tenant or Tenant Parties, in which case Tenant shall be responsible for such maintenance and repairs except to the extent the same are covered by insurance maintained by Landlord. If
Landlord fails to maintain or repair the Premises as required by this Section 6.2 or fails to discharge its obligations under any other provisions of this Lease, Tenant may, without limitation on its other rights or remedies, upon ten (10) business
days’ prior notice to Landlord (and Landlord’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance to completion), perform such maintenance or
repair or other obligation on behalf of Landlord. In such case, Landlord shall reimburse Tenant for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after Tenant’s statement or invoice therefore
plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Landlord shall be done in a good and workmanlike manner, by reputable, licensed
and insured contractors, using quality materials and workmanship commensurate with the condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Landlord shall be solely responsible for compliance with all Applicable
Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality Management District, requirements of the local building
authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  
 Section 6.3 Tenant’s Obligations. 
  
 (a) General. Except for Landlord’s obligations under Section 6.2, 6.3(b), 6.3(c) or as provided elsewhere in this Lease,
Tenant shall at Tenant’s expense keep all portions of the Premises in good order, condition and repair, including the landscaping, irrigation, Parking Area (including ingress and egress, slurry surfacing, striping, lighting and directional
signs), the roof membrane, gutters, drains, HVAC, telecommunications, electrical, mechanical, plumbing, fire sprinklers. If Tenant fails to maintain or repair the Premises as required by this Section 6.3, Landlord may, without limitation on its
other rights or remedies, upon ten (10) business days’ prior notice to Tenant (and Tenant’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance
to completion), enter the Premises and perform such maintenance or repair on behalf of Tenant. In such case, Tenant shall reimburse Landlord for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after
Landlord’s statement or invoice therefore plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Tenant shall be done in a good
and workman like manner, by reputable, licensed and insured contractors, using quality materials and workmanship commensurate with the first class condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Tenant shall
be solely responsible for compliance with all Applicable Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality
Management District, requirements of the local building authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  

(b) Capital Expenditures to Comply With New Laws. If applicable laws, covenants or restrictions of record, building codes,
regulations and ordinances (“Applicable Requirements”) in effect on the Commencement Date are changed, or if new Applicable Requirements are enacted after the Commencement Date, so as to require during the Term of this Lease the
construction of an addition to or an alteration of the Building or Premises or other physical modification of the Building or Premises (“Capital Expenditure”), Landlord and Tenant shall allocate the cost of such work as follows: If such
Capital Expenditure is required as a result of the specific and unique use of the Premises by Tenant as compared with uses by tenants in general, Tenant shall be fully responsible for the cost thereof, provided, however that if such 

  

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Capital Expenditure is required during the last two (2) years of this Lease and the cost thereof exceeds six (6) months’ Base Rent, Tenant may instead
terminate this Lease unless Landlord notifies Tenant, in writing, within ten (10) days after receipt of Tenant’s termination notice that Landlord has elected to pay the difference between the actual cost thereof and the amount equal to six (6)
months’ Base Rent. If Tenant elects termination, Tenant shall deliver to Landlord written notice specifying a termination date at least sixty (60) days thereafter. If such Capital Expenditure is not the result of the specific and unique use of
the Premises by Tenant (for example, but not limited to, governmentally mandated seismic modifications), then Landlord shall promptly make the Capital Expenditure and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall
only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost thereof by a fraction, the numerator of which is one,
and the denominator of which is the number of months of the useful life of such Capital Expenditure as such useful life is determined by general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the
right to prepay its obligation at any time; provided, however, that if such Capital Expenditure is required during the last year of this Lease and if Landlord or Tenant reasonably determines that it is not economically feasible to pay its share
thereof, Landlord or Tenant shall have the option to terminate this Lease upon ninety (90) days prior written notice to the other unless the other party commits, in writing, within ten (10) business days after receipt of the termination notice, that
it will pay for such Capital Expenditure (however, if Landlord seeks to terminate under the preceding clause, Tenant may exercise its option to extend the Term, if available, within thirty (30) days of Landlord’s notice to prevent such
termination). If Landlord does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Tenant may, without limitation on any other rights or remedies, advance such funds and deduct same (together with interest at 5%
above the then existing Bank of America, Los Angeles, “prime rate”) from Rent until Landlord’s share of such costs have been fully paid. If the balance of the Rent due and payable for the remainder of this Lease is not sufficient to
fully reimburse Tenant on an offset basis, Tenant shall have the right, in addition to any other rights and remedies, to terminate this Lease upon thirty (30) days written notice to Landlord. It is the intent of the parties that the above provisions
shall apply only to newly enacted or new changes to Applicable Requirements after the Commencement Date. If, for example, Tenant elects to make modifications to the Premises which trigger the requirement that additional modifications be made to
comply with ADA requirements existing on the Commencement Date, such additional modifications would not be the result of newly enacted or new changes to Applicable Requirements and thus would be the responsibility of Tenant. 
  
 (c) Replacement of Basic Elements. Subject to the
later provisions hereof, Tenant’s obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in as good operating order and condition as on the
Commencement Date, ordinary wear and tear, casualty and condemnation excepted. As used herein, the term “Basic Elements” shall mean all of the Building’s basic systems and equipment, including, without limitation, (i) HVAC equipment,
(ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof membrane, covering and drains, (vi) electrical systems, (vii) plumbing systems,
(viii) mechanical systems, if any, and (ix) life-safety systems. If any of the Basic Elements require repair but cannot be repaired other than at a cost which in is excess of 25% of the cost of replacing such Basic Element, then such Basic Element
shall be replaced by Landlord, and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is
due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is the number of months of the useful life of such replacement as such useful life as
determined in accordance with general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the right to prepay its obligation at any time. 
  
 Section 6.4 Alterations, Additions, and Improvements. Tenant shall not make any alterations, additions, or
improvements to the Premises (“Alterations”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, except that Landlord’s consent shall not be required for non-structural Alterations
(including, without limitation, painting, carpeting, moving low voltage communications cables and any other non-structural Alterations) which cost in the aggregate for any one project less than One Hundred Thousand Dollars ($100,000) and which do
not materially adversely affect the Building systems or the Building structure. All Alterations shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations. All Alterations done by Tenant shall be done in a
good and workmanlike manner by duly licensed and insured contractors and in compliance with all laws. Tenant shall give Landlord at least ten (10) days prior written notice of the expected work commencement date of any Alterations which require
Landlord’s consent. 
  
 Section 6.5 Condition upon
Termination. Upon termination of this Lease, Tenant shall surrender the Premises to Landlord, broom clean and in substantially the same condition as on the Commencement Date (or, if Tenant has extended the Term, in the same condition as on the
commencement of the most recent Option Term, as applicable), except for (i) ordinary wear and tear, (ii) damage due to casualty or condemnation, (iii) damage or matters which are Landlord’s 

  

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obligation to repair under this Lease, and (iv) Alterations which Landlord is not entitled to require Tenant to remove as described below (all or some of
which Tenant may elect to leave at the Premises or shall be entitled to remove at the end of the Term). In addition, Tenant shall remove from the Premises within 30 days after expiration of the Term (and shall continue to be liable for rent until
such items are removed and possession of the Premises is restored to Landlord as required herein) all of Tenant’s furniture, trade fixtures, machinery and equipment, furnishings, signs, inventory and any and all other items of personal property
including, without limitation, any materials or equipment that Tenant has installed for use in connection with Tenant’s business processes (such as intercom systems, security systems, computer equipment, table or floor lamps, microwave ovens,
refrigerators, stand-alone heaters or fans, knitting machines and equipment, teleconferencing systems, telecommunication equipment, electrical devices and the like (collectively, the “FF&E”). Notwithstanding the foregoing, in no event
shall Tenant remove any of the following materials or equipment (which shall be deemed Landlord’s property) without replacing the same with materials or equipment of equal or better quality: power wiring or power panels; inset or recessed
lighting or lighting fixtures; wall coverings; drapes, blinds or other window coverings; carpets or other floor coverings; heaters, air conditioners and other heating or air conditioning equipment that are not portable; plumbing or sanitary
equipment; or fencing or security gates. Landlord may require Tenant to remove Alterations installed by Tenant during the Term if, and only if, Landlord’s consent was required for such Alterations during the Term and Landlord informed Tenant in
writing at the time of such consent that Landlord would require removal of same at the end of the Term. All Alterations, if any, which Landlord is permitted to require Tenant to remove hereunder but which Landlord does not require Tenant to remove
(and which Tenant does not otherwise elect to remove) shall become Landlord’s property and shall be surrendered to Landlord upon the expiration or earlier termination of the Lease. Tenant shall repair, at Tenant’s expense, any damage to
the Premises caused by Tenant’s removal of Alterations and FF&E; provided, however, that Tenant shall not be required to repaint the Premises or patch immaterial wall or floor penetrations. 
  
 ARTICLE SEVEN: DAMAGE OR DESTRUCTION 
  
 Section 7.1 Landlord’s Obligation to Rebuild. If the Premises or
any portion thereof is damaged or destroyed by fire or other casualty (a “Casualty”), Tenant shall as soon as reasonably practicable thereafter give notice thereof to Landlord, and Landlord shall thereafter repair the Premises as set forth
in Section 7.5 unless Landlord or Tenant has the right to terminate this Lease as hereinafter provided and Landlord or Tenant elects to so terminate. 
  
 Section 7.2 Landlord’s Right to Terminate. Landlord shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) insurance proceeds (together with any additional amounts Tenant elects, at its option, to contribute) are not available to Landlord to pay the cost to repair the Premises, (ii) Landlord’s independent architect determines that the
Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to,
Hazardous Materials not caused by Landlord, earthquake faults and other similar dangers) within 360 days after the date of such Casualty, or (iii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term
and an independent architect selected by Landlord and reasonably approved by Tenant (“Landlord’s Architect”) determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) such damage will require
more than sixty (60) days to repair. If Landlord elects to terminate this Lease following a Casualty pursuant to this Section 7.2, Landlord shall give Tenant written notice of its election to terminate within thirty (30) days after Landlord has
knowledge of such Casualty, and this Lease shall terminate effective as of the date of such notice; provided, however, that Tenant may nevertheless elect to continue this Lease in full force and effect, in which case Tenant shall repair any damage
to the Premises and shall pay the cost of such repairs, except that Landlord shall deliver to Tenant on a commercially reasonable construction draw basis any insurance proceeds received by Landlord or Landlord’s Lender for the damage repaired
by Tenant. Tenant shall give Landlord written notice of such election within ten (10) days after receiving Landlord’s termination notice. 
  
 Section 7.3 Tenant’s Right to Terminate. Tenant shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) Landlord’s Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that the Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar
condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to, Hazardous Materials, earthquake faults and other similar dangers) within 360 days after the date
of such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises, or (ii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term and Landlord’s
Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that such damage will require more than sixty (60) days to repair, or (iii) the Premises are not actually repaired by Landlord to a
substantially similar condition as existed prior to such Casualty within 380 days following such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises. If Tenant elects to terminate this Lease
following a Casualty pursuant to this Section 7.3, Tenant shall give Landlord written notice of its election to terminate within thirty (30) days after receipt of 

  

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Landlord’s Architect’s determination (or within 30 days of the applicable restoration period should Landlord fail to complete repairs during such
period), and this Lease shall terminate as of the date of such notice of election to terminate. 
  
 Section 7.4 Effect of Termination. If this Lease is terminated following a Casualty pursuant to Section 7.2 or Section 7.3, Landlord shall, subject
to the rights of its lenders, be entitled to receive and retain all the insurance proceeds resulting from or attributable to such Casualty, except that any insurance proceeds payable under policies obtained by Tenant which specifically insure
Tenant’s personal property or removable Alterations or any other improvements that Tenant was entitled to remove at the end of the Term shall be paid to Tenant. If neither Landlord nor Tenant elect to terminate this Lease in accordance with the
terms and conditions set forth herein, this Lease will continue in full force and effect, and Landlord shall, as soon as reasonably practicable following notice of the Casualty and receipt of the amounts set forth in clause (i) of Section 7.2,
commence the process of obtaining necessary permits and approvals for the repair of the Premises, and shall commence such repair and prosecute the same diligently to completion as soon thereafter as is practicable. 
  
 Section 7.5 Scope of Obligation to Repair. Landlord’s obligation,
should it elect or be obligated to repair the Premises following a Casualty, shall be limited to the Premises insured by Tenant under this Lease. The reasonable determination in good faith by Landlord’s Architect of or relating to the estimated
time period required for repair or the interference with or suitability of the Premises for Tenant’s use or occupancy shall be conclusively presumed correct for purposes of this Article Seven. 
  
 Section 7.6 Temporary Reduction of Rent. If the Premises is destroyed
or damaged and Landlord or Tenant repairs or restores the Premises pursuant to the provisions of this Article Seven, all Rent payable during the period of such damage, repair and/or restoration shall be reduced according to the degree to which
Tenant’s use of the Premises is impaired until the Premises are again ready for Tenant’s business operations; provided, however, that the foregoing Rent abatement shall apply only to the extent of proceeds received by Landlord from rental
loss or rental interruption insurance unless the Casualty is caused by Landlord’s negligence or Landlord is in violation of Landlord’s obligations to repair or restore the Premises following the Casualty. 
  
 Section 7.7 Waiver. Tenant waives the protection of any statute, code
or judicial decision which grants a Tenant the right to terminate a lease in the event of the substantial or total destruction of the leased Premises. Tenant agrees that the provisions of this Article Seven shall govern the rights and obligations of
Landlord and Tenant in the event of any damage or destruction to the Premises by a Casualty. 
  
 ARTICLE EIGHT: CONDEMNATION 
  
 If
all or a material portion of the Premises is taken by any lawful authority by exercise of the right of eminent domain (including any portion of the Premises which substantially interferes with Tenant’s ingress to or egress from the Premises)
and cannot be restored so as not to materially interfere with Tenant’s use of the Premises, or sold under threat of a taking, either Tenant or Landlord may terminate this Lease effective as of the earlier of (i) the date possession is required
to be surrendered to the authority, or (ii) the date actual possession is delivered to the authority. In addition, in the event (i) title to a portion of the Premises is taken or sold under threat of a taking and (ii) Landlord elects to restore the
Premises in such a way as to alter the Premises materially or in such a way as to materially interfere with Tenant’s use of the Premises, Tenant may terminate this Lease, by written notice to Landlord, effective on the date of vesting of title.
If Tenant has not elected to terminate this Lease as provided above, then Landlord shall promptly, after receipt of the condemnation award, proceed to restore the Premises to substantially its condition prior to the taking, and a proportionate
allowance shall be made to Tenant for the rent corresponding to the time during which, and to the part of the Premises of which, or access or reasonable use of which, Tenant is deprived on account of the taking and restoration. In the event of a
taking, Landlord shall be entitled to the entire amount of any award for Landlord’s interest in the Premises. Notwithstanding the foregoing sentence, Tenant may assert a claim against the taking authority, but not against Landlord, for the
taking of Tenant’s leasehold interest, options, personal property, fixtures and any other rights of property of Tenant, or for relocation or business interruption expenses recoverable from the taking authority. 
  
 ARTICLE NINE: ASSIGNMENT AND SUBLETTING 
  
 Section 9.1 Landlord’s Consent Required. No portion of the
Premises or of Tenant’s interest in this Lease may be acquired by any other person or entity, whether by sale, assignment, mortgage, sublease, transfer, operation of law, or act of Tenant (collectively, a “Transfer”), without
Landlord’s prior written consent (except as provided in Section 9.2 below), which consent shall not be unreasonably withheld, conditioned or delayed, as described in Section 9.4 below. 
  

 12 

 Section 9.2 Tenant Affiliate. Tenant may effect a Transfer, without Landlord’s consent, to
any entity which controls, is controlled by or is under common control with Tenant, or to any entity resulting from the merger of or consolidation with Tenant or acquiring all or substantially all of the assets of Tenant, or to any entity in which
Tenant or its parent or affiliate maintains at least a 25% ownership interest (“Tenant’s Affiliate”). 
  
 Section 9.3 No Release of Tenant. No Transfer permitted by this Article Nine, whether with or without Landlord’s consent, shall release Tenant
or change Tenant’s primary liability to pay the rent and to perform all other obligations of Tenant under this Lease. Landlord’s acceptance of rent from any other person is not a waiver of any provision of this Article Nine. Consent to one
Transfer is not a consent to any subsequent Transfer. 
  
 Section
9.4 Landlord’s Consent. Tenant’s request for consent to any Transfer described in Section 9.1 shall set forth in writing the details of the proposed Transfer including the name, business of the prospective transferee, the
prospective transferee’s financial statements and the basic leasing details of the proposed Transfer (e.g., the term of and the rent and security deposit). Landlord shall have the right to withhold consent, if reasonable, or to grant consent,
within ten (10) days after receipt of such request (failing which, Landlord’s consent shall be deemed to have been given). If Landlord does not consent, Landlord shall provide detailed reasons for its disapproval. The parties hereby agree that
the only reasonable reasons under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer are where one or more of the following apply: (i) the transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Premises; or (ii) the transferee intends to use the subject space for purposes which are not permitted under this Lease or (iii) the transferee, in Landlord’s reasonable judgment, does
not have sufficient financial resources to discharge its obligations under the Lease on an ongoing basis. 
  
 Section 9.5 Permitted Occupants. Provided Tenant complies with the Permitted Occupant Conditions (as defined below), then, notwithstanding anything
to the contrary set forth in this Lease, Tenant shall have the right to allow employees of one or more entities with whom Tenant has a business relationship (“Tenant Venturers”) to use designated portions of the Premises without execution
and approval by Landlord of a separate sublease for such use. The “Permitted Occupant Conditions” shall mean all of the following: (a) the permitted occupants shall only be employees of a Tenant Venturer, (b) such occupants shall use, in
the aggregate at any one time, no more than 5,000 square feet of the Premises, (c) such use shall be on a temporary basis, and, in any event, no such occupant shall have the right to use the Premises for more than six (6) consecutive months, (d)
Tenant shall provide Landlord with prior written notice of the intended presence on the Premises of any such occupants, (e) the Tenant Venturer employing such permitted occupants shall provide Landlord with satisfactory evidence of insurance
covering the activities of their respective employees within the Premises, and (f) such right to use the Premises shall at all times be subordinate to the Lease. 
  
 ARTICLE TEN: DEFAULTS; REMEDIES 
  
 Section 10.1 Tenant Defaults. Tenant shall be in material default (“Default”) under this Lease: 
  
 (a) If Tenant fails to pay rent or any other charge within
five (5) business days after the date due and such failure continues for five (5) business days after written notice of such failure; or 
  
 (b) If Tenant fails to perform any of Tenant’s non-monetary obligations under this Lease for a period of thirty (30) days after
written notice from Landlord; provided that if more than thirty (30) days are required to complete such performance, Tenant shall not be in default if Tenant commences such performance within the thirty (30)-day period and thereafter diligently
pursues its completion; or 
  
 (c) If a
“Default” occurs and is continuing under Section 10.1 of any of the other leases between Landlord and Tenant entered into concurrently with this Lease for adjacent premises located at 17522, 17622 and 17632 Armstrong Avenue, Irvine,
California (the “Other Leases”), unless Landlord hereunder is not at that time the landlord of the Other Lease under which the Default occurred. 
  
 Section 10.2 Remedies. During the continuance of a Default by Tenant as described in Section 10.1, Landlord may, at any time thereafter, upon
statutory notice to Tenant: 
  
 1. Terminate
Tenant’s right to possession of the Premises. No act by Landlord other than giving notice of termination to Tenant pursuant to this Section 10.2.1. or the other termination rights granted by Landlord hereunder shall terminate this Lease. Acts
of maintenance, efforts to relet the Premises, or the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest under this Lease shall not constitute a termination of Tenant’s right to possession. On
termination, Landlord has the right to recover from Tenant: 
  
 (a) The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; 
  

 13 

 (b) The worth, at the time of the award, of the amount by which the unpaid rent that
would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; 
  
 (c) The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; and 
  
 (d) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s Default. 
  
 “The worth, at the time of the award,” as used in subsections a, b and c, above, is
to be computed by utilizing a discount rate of ten percent (10%) per annum and calculating the present value of the applicable rent to be paid over the applicable period. 
  
 2. Utilize the remedy described in California Civil Code section 1951.4 (which says landlord may continue
the lease in effect after a tenant’s breach and abandonment and recover rent as it becomes due, if tenant has the right to sublet or assign subject to reasonable limitations). If an abandonment of the Premises by Tenant occurs or if Landlord
elects to reenter as provided above or shall take possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then if Landlord does not elect to terminate this Lease as provided above, Landlord may from time to
time, without terminating this Lease, either recover all rent as it becomes due or relet the Premises or any part thereof for the Term on terms and conditions as Landlord in its commercially reasonable discretion may deem advisable. If Landlord
elects to so relet, then rentals received by Landlord from that reletting shall be applied: first, to the payment of any indebtedness other than rent due under this Lease from Tenant to Landlord; second, to the payment of any reasonable cost of such
reletting; third, to the payment of the reasonable cost of any alterations and repairs to the Premises that are Tenant’s obligation under this Lease; fourth, to the payment of rent due and unpaid under this Lease; and the residue, if any, shall
be held by Landlord and applied to payment of future rent as the same may become due and payable under this Lease. Should that portion of such rentals received from such reletting during any month, which is applied to the payment of rent under this
Lease, be less than the rent payable during that month by Tenant under this Lease, then Tenant shall pay such deficiency to Landlord immediately upon demand therefor by Landlord. Such deficiency shall be calculated and paid monthly. 
  
 3. Landlord may, during the continuance of a Default by
Tenant, cure the Default at Tenant’s cost provided Tenant is given notice and time to cure the Default and Landlord provides an additional notice that Landlord intends to cure Tenant’s Default under this Section 10.2(3). If Landlord cures
Tenant’s Default after such notice by paying any sum or doing any act that was Tenant’s obligation under this Lease, the amount paid by Landlord (or the reasonable cost incurred by Landlord in performing the act) shall be due immediately
from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the rate of ten percent (10%) per annum from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with
interest on it, shall be Additional Rent. 
  
 Section 10.3
Cumulative Remedies; Mitigation. Landlord’s exercise of any right or remedy shall not prevent it from exercising any other right or remedy. Landlord shall use commercially reasonable efforts to mitigate damages in the event of a Default
by Tenant under this Lease. In no event shall Landlord or Landlord Parties or Tenant or Tenant Parties be liable to the other for any consequential, punitive or other so-called “special” damages under this Lease. 
  
 Section 10.4 Landlord’s Defaults. 
  
 (a) General. Notwithstanding anything to the contrary
set forth in this Lease, Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if (i) in the event a failure by Landlord is with respect to the payment of money, Landlord fails
to pay such unpaid amounts within five (5) business days of written notice from Tenant that the same was not paid when due; or (ii) in the event a failure by Landlord is other than (i) above, Landlord fails to perform such obligation within a
reasonable time period with the expenditure of diligent efforts, but in no event more than thirty (30) days after the receipt of written notice from Tenant specifying Landlord’s failure to perform; provided, however, if the nature of
Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if Landlord commences such performance within such thirty (30) day period and thereafter
diligently pursue the same to completion. Upon any such default by Landlord under this Lease, Tenant may exercise any of its rights provided in this Lease or at law or in equity. Any notice provided by Tenant pursuant to this Section 10.4(a) shall
not be effective unless it is substantially 

  

 14 

 
concurrently delivered to the last known address of Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were
previously provided to Tenant). In no event shall Tenant be entitled to terminate this Lease as a result of a default of Landlord unless the default materially and adversely impacts Tenant’s ability to use a material portion of the Premises for
its business operations and Tenant has first given written notice of intent to terminate to Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were previously provided to Tenant) offering such Lender an
additional 30 days beyond the notice and cure period granted to Landlord under this Lease, if any, in which to cure Landlord’s default. 
  
 (b) Abatement of Rent. In the event that Tenant is prevented from using the Premises or any material portion thereof (meaning that
Tenant is unable to use that portion of the Premises in the normal course of its business) as a result of (i) any repair, maintenance or alteration negligently performed by Landlord, or which Landlord failed to perform, as required by this Lease; or
(ii) the presence of, or cleanup or remediation activities in connection with, Hazardous Materials brought on the Premises by Landlord or a Landlord Party; or (iii) cessation of utilities or services caused by Landlord’s negligence or willful
misconduct (any such set of circumstances as set forth in items (i) through (iii), above, to be known as an “Abatement Event”), then Tenant shall give Landlord written notice of such Abatement Event, and if such Abatement Event continues
for two (2) consecutive business days after such notice, or occurs for ten (10) non-consecutive business days in a twelve (12) month period (in either of such events, the “Eligibility Period”), then the Base Rent and Additional Rent shall
be abated or reduced, as the case may be, after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using the Premises, or a portion thereof, in the proportion that the floor area of the portion of the
Premises that Tenant is prevented from using (“Unusable Area”), bears to the total floor area of the Premises. If Landlord has not cured such Abatement Event within one hundred eighty (180) days after receipt of written notice from Tenant,
Tenant shall have the right to terminate this Lease during the first ten (10) business days of each calendar month following the end of such 180-day period until such time as Landlord has cured the Abatement Event, which right may be exercised only
by delivery of thirty (30) days’ notice to Landlord and Landlord’s Lender (provided such Lender’s name and notice address were previously provided to Tenant) (the “Abatement Event Termination Notice”) during such ten (10)
business-day period, and shall be effective as of a date set forth in the Abatement Event Termination Notice (the “Abatement Event Termination Date”), which Abatement Event Termination Date shall not be less than thirty (30) days, and not
more than one (1) year, following the delivery of the Abatement Event Termination Notice. Tenant’s Abatement Event Termination Notice shall be null and void (but only in connection with the first notice sent by Tenant with respect to each
separate Abatement Event) if Landlord or Landlord’s Lender(s) cures such Abatement Event within such thirty (30) day period following receipt of the Abatement Event Termination Notice. 
  
 ARTICLE ELEVEN: LENDERS 
  
 Section 11.1 Subordination, Non-Disturbance and Attornment. Landlord
shall deliver to Tenant concurrently with the closing under the Purchase Agreement fully executed commercially reasonable non-disturbance agreement(s) (“SNDA’s”) in favor of Tenant from all existing ground lessors, mortgage holders or
lien holders of Landlord, including Landlord’s Lender (and such delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the SNDA’s are delivered, rent,
payable retroactively from the Commencement Date, shall be paid immediately), and, thereafter, Landlord shall deliver SNDA’s from all such parties who later come into existence with respect to the Premises or any portion thereof at any time
prior to the expiration of the Term. Such commercially reasonable SNDA’s shall not modify the provisions of this Lease, shall include the obligation of any such ground lessor, mortgage holder, lien holder or successor landlord, upon taking
title to the Premises, and so long as a Default by Tenant is not continuing, to not disturb Tenant’s right of possession of the Premises in accordance with the Lease, to recognize and accept all of Tenant’s rights under the Lease,
including the right to offset certain amounts against Rent due hereunder, and to assume all of Landlord’s continuing obligations under this Lease as set forth herein. Subject to Tenant’s receipt of the SNDA’s described above, this
Lease shall be subject and subordinate to all present and future ground or underlying leases of the Premises and to the lien of any mortgage, trust deed or other encumbrances now or hereafter in force against the Building or Premises or any part
thereof, 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,
trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto. Subject to Tenant’s receipt of the SNDA’s described above, Tenant covenants and agrees
in the event any proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to attorn to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or
deed in lieu thereof (or to the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease. Subject to Tenant’s
receipt of the SNDA’s described herein, 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. 
  

 15 

 Section 11.2 Estoppel Certificates. Within ten (10) business days following a request in writing
by Landlord or Tenant, Tenant or Landlord, as the case may be, shall execute, acknowledge and deliver to the requesting party (the “Requesting Party”) an estoppel certificate in such commercially reasonable form as may be required by the
Requesting Party, indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information regarding the status of the Lease reasonably requested by the Requesting Party. Any such certificate may be relied
upon by any prospective mortgagee or purchaser of all or any portion of the Premises or by any assignee, sublessee or leasehold mortgagee, as the case may be. Landlord or Tenant, as the case may be, shall execute and deliver whatever other
instruments may be reasonably required for such purposes. 
  
 ARTICLE TWELVE: LEGAL COSTS 
  
 In the event of any
arbitration or suit under this Lease, reasonable attorneys’ fees and costs shall be awarded by a court or arbitrator to the prevailing party (as determined by the trier of fact) and are to be included in any judgment or award. In addition, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred in enforcing any judgment arising from a suit or arbitration under this Lease including but not limited to post judgment motions, contempt proceedings,
garnishment, levy and debtor and third party examinations, discovery and bankruptcy litigation, without regard to schedule or rule of court purporting to restrict such award. This post judgment or award of attorneys’ fees and costs provision
shall be severable from any other provisions of this Lease and shall survive any judgment/award on such suit or arbitration and is not to be deemed merged into the judgment/award or terminated with the Lease. For the purpose of this provision, the
term “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of legal counsel (including external counsel and, to the extent fulfilling functions of an attorney at law, excluding de
minimis administrative activities of, in-house counsel) to the parties hereto, which include printing, photocopying, duplicating, mail, overnight mail, messenger, court filing fees, cost of discovery, fees billed for law clerks, paralegals,
investigators and other persons not admitted to the bar but performing services under the supervision or direction of an attorney. For the purpose of determining in-house counsel fees, the same shall be considered as those fees normally applicable
to a partner in a law firm with like experience in such field. 
  
 ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS 
  
 Section
13.1 Landlord’s Liability. Any Landlord who transfers in a bona fide transaction its title or interest is relieved of all liability with respect to the obligations of Landlord under this Lease to be performed on or after the date
of transfer and after receipt by Tenant of the written assumption of all of Landlord’s obligations under this Lease by the transferee; provided, however, that the foregoing shall not relieve a transferring Landlord of responsibility for
defaults by such transferring Landlord existing prior to the date of such transfer. However, each Landlord shall deliver to its transferee all funds (including the Security Deposit) that Tenant previously paid to or deposited with Landlord if such
funds have not yet been applied or returned under the term of this Lease. Notwithstanding any term or provision herein to the contrary, the liability of Landlord for the performance of its duties and obligations under this Lease is limited to
Landlord’s interest in the Premises and the rents, profits, sale/financing proceeds and insurance proceeds therefrom, and in the assets of Landlord, but Landlord’s partners, shareholders, officers or other principals shall have no personal
liability under this Lease. 
  
 Section 13.2 Severability.
A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this Lease, which shall remain in full force and
effect. 
  
 Section 13.3 Interpretation. The captions of
the Articles or Sections of this Lease are to assist the parties in the reading this Lease and are not a part of the terms or provisions of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the
plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. 
  
 Section 13.4 Incorporation of Prior Agreements. This Lease is the only agreement between the parties pertaining to the lease of the Premises and no
other agreements are effective. All amendments to this Lease shall be in writing and signed by all parties. Any other attempted amendment shall be void. 
  
 Section 13.5 Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be delivered to the Premises and the address for notice set forth in Article One. Notices to Landlord shall be delivered to the address for notice set forth in Article One. All
notices shall be effective upon delivery. Either party may change its notice address upon written notice to the other party. 
  

 16 

 Section 13.6 Waivers. All waivers must be in writing and signed by the waiving party.
Landlord’s failure to enforce any provision of this Lease or its acceptance of rent shall not be a waiver and shall not prevent Landlord from enforcing that provision or any other provision of this Lease in the future. No statement on a payment
check from Tenant or in a letter accompanying a payment check shall be binding on Landlord, Landlord may, with or without notice to Tenant, negotiate such check without being bound to the conditions of such statement. 
  
 Section 13.7 Memorandum of Lease. Landlord shall deliver to Tenant
concurrently with the execution of this Lease a properly executed and notarized memorandum of this Lease to be recorded against the Premises in the form attached hereto as Exhibit “C” (the “Memorandum of Lease”) (and such
delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the Memorandum of Lease is delivered, rent, payable retroactively from the Commencement Date, shall be
paid immediately). Tenant shall pay any transfer costs or recording fees in connection therewith. 
  
 Section 13.8 Binding Effect; Choice of Law. This Lease binds any party who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant’s successor unless the rights or interests of Tenant’s successor are acquired in accordance with the terms of this Lease. The laws of the State of California, without regard to
conflicts of law, shall govern this Lease. Each of the parties voluntarily submits to the jurisdiction of the courts of the State of California, and to exclusive venue in Orange County, California. 
  
 Section 13.9 Authority. Each person signing this Lease on behalf of
Landlord and Tenant represents and warrants that he has full authority to do so and that this Lease binds the entity on whose behalf he or she is signing. 
  
 Section 13.10 Force Majeure. If Landlord or Tenant cannot perform any of its obligations due to events beyond such party’s control (other than
the payment of money), the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond a party’s control include, but are not limited to, acts of God, war, civil
commotion, terrorism, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, governmental regulation or restriction and weather conditions. 
  
 Section 13.11 Execution of Lease. This Lease may be executed in counterparts and, when all counterpart documents are
executed, the counterparts shall constitute a single binding instrument. This Lease shall not be deemed to be an offer to lease and shall not be binding upon either party until executed and delivered by both parties. 
  
 Section 13.12 Survival. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease. 
  
 Section 13.13 Duty To Act Reasonably. Except as specifically set forth in this Lease to the contrary, any time the consent of Landlord or Tenant is required, such consent shall not be unreasonably withheld, conditioned or delayed.
Whenever the Lease grants Landlord or Tenant the right to take action or exercise discretion, or grants Tenant or Landlord the right to make allocations or other determinations, Landlord and Tenant shall act reasonably and in good faith. 

 
 Section 13.14 No Brokers. Landlord and Tenant each represent and
warrant to the other that they have employed no broker and/or finder in connection with this Lease, or any other documents or matters relating to the Premises. In the event any claim, demand, or cause of action for brokerage and/or finder’s
fees is asserted against a party to this Lease who did not request such services, the party through whom the broker or finder is making the claim shall protect, indemnify, defend and hold harmless the other party from and against any and all claims,
demands and causes of action. 
  
 FOURTEEN: OTHER AGREEMENTS OF
LANDLORD AND TENANT 
  
 Section 14.1 Signs. Tenant shall
have the exclusive right to use, install and maintain exterior Building signs and/or monument signs at the Premises identifying its business provided such signs shall comply with all applicable local and state laws, rules, and regulations.

  
 Section 14.2 Confidentiality Landlord acknowledges that
the contents of this Lease and any related documents are confidential information. Landlord shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than
Landlord’s partners, administrators, consultants, financial, legal, and space planning consultants or a prospective or current purchaser, mortgagee, or ground or underlying lessor of the Building or the Project, and except as required by
applicable law or in connection with a dispute or litigation hereunder or as required by a subpoena. Any press releases or announcements made in connection with the contents of this Lease and/or any related documents shall be subject to the prior
approval of Tenant. 
  
 Section 14.3 Telecommunication
Equipment. At any time during the Lease term, Tenant may, upon notice to Landlord, install, at Tenant’s sole cost and expense, 

  

 17 

 
telecommunication equipment upon the roof of the Building, without the payment of any additional charge, and Tenant shall have exclusive use of the roof of
the Building. Tenant and Tenant’s service providers may use existing ducts and conduits as reasonably necessary to connect telephone and other communications services to the Premises, without any additional charge or fee. Tenant may also
install, maintain, replace, remove or use, without any additional charge or fee therefor, any communications or computer wires and cables in or serving the Premises. Notwithstanding the foregoing, any damage resulting to the roof or any other
portion of the Premises from Tenant’s or Tenant’s service providers’ installation of such telecommunication equipment shall be the sole responsibility of Tenant. 
  

 18 

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

  

					
	 “LANDLORD”

	
	 JS SJK L.P., a California limited liability company

		
	 By:
	 	 
			
	 	 	 Its:
	 	 
	
	 “TENANT”

	
	 ST. JOHN KNITS, INC.

		
	 By:
	 	 
			
	 	 	 Its:
	 	 

  

 19 

 Exhibit “A” 
  
 Legal Description 
  
 [to be attached] 
  

 20 

 Exhibit B 
  

Base Rent Increase Examples 
  
 Example 1 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in effect at end of month in which Rental Adjustment Date occurs (normally, 30 months
after the Comparison Date): 110 
  
 New Monthly Base Rent to be paid until next
Rental Adjustment Date (ignoring floor or cap addressed below): $41,250 (110/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor
does not apply. 
  
 New Monthly Base Rent to be paid until next Rental
Adjustment Date: $41,250. 
  
 Example 2 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison
Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the
Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in
effect at end of month in which Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 120 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $45,000 (120/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month
Rental Adjustment Period): $41,363.25. Cap now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is capped at $41,363.25. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor does not apply. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $41,363.25.

  

 21 

 Example 3 
  

Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the
“Comparison Date”): 100 
  
 Index in effect at end of month in which
Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 105 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $39,375 (105/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30
month Rental Adjustment Period): $39,887.88. Floor now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is $39,887.88. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $39,887.88. 
  

 22 

 Exhibit C 
  

Form of Memorandum of Lease 
  

			
	 RECORDING REQUESTED BY
 AND WHEN RECORDED MAIL
TO:
	  	 
		
	 Dean Dunn-Rankin, Esq.
 Hewitt & O’Neil
LLP
 19900 MacArthur Blvd, Suite 1050
 Irvine, CA
92612
	  	 
	 	  	(SPACE ABOVE THIS LINE FOR RECORDER’S USE)

  
 MEMORANDUM 

 
 THIS MEMORANDUM OF LEASE (this “Memorandum”), dated as of the
             day of                     , 2004, is made by and between ST.
JOHN KNITS, INC., a California corporation (“Tenant”) and JS SJK L.P., a California limited liability company (“Landlord”). 
  
 R E C I T A L S 
  
 A. Landlord is the fee simple title owner of that certain property commonly known as
                    , legally described on Exhibit A attached hereto and made a part hereof (the “Premises”). 
  
 B. Landlord and Tenant have entered into that certain Lease Agreement dated
as of                     , 2004 (the “Lease”), pursuant to which Landlord has agreed to lease to Tenant the Premises upon the terms
and conditions set forth in the Lease. 
  
 C. Landlord and Tenant
desire to set forth certain terms and provisions contained in the Lease in this Memorandum for recording purposes. 
  
 NOW, THEREFORE, for and in consideration of the rents reserved and the covenants and conditions set forth in the Lease, Landlord and Tenant do hereby
covenant, promise and agree as follows: 
  
 1. Definitions.
Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed to them in the Lease. 
  
 2. Grant of Lease. Pursuant to the Lease and this Memorandum, Landlord demises and leases to Tenant and Tenant leases from Landlord the Premises
upon the terms and conditions set forth in the Lease. 
  
 3.
Commencement Date. The Term of the Lease shall commence on the date specified in the Lease. 
  
 4. Expiration Date. The Term of the Lease shall expire, unless sooner terminated or unless extended or renewed as provided therein, at the end of
the first full month occurring one hundred eighty (180) months after the Commencement Date. 
  

 23 

 5. Rent. The Rent due and payable from Tenant to Landlord for the Term of the Lease and any
extension term shall be determined and shall be payable pursuant to the terms and provisions of the Lease. 
  
 6. Options to Extend. Tenant has three (3) options to extend the Term of the Lease for consecutive terms of sixty (60) months each and one (1)
additional option to extend the Term of the Lease for a term of fifty-nine (59) months, subject to and on the terms and conditions set forth in the Lease. 
  
 IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date first written above. 
  

									
	 LANDLORD:
	 	 	 	 TENANT:

	 JS SJK L.P., a California limited liability company
	 	 	 	 St. John Knits, Inc.

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

  

 24 

			
	STATE OF                   	  	)
	 	  	)
	COUNTY OF             	  	)

  
 I, the undersigned, a
notary public in and for said County, in the State aforesaid, DO HEREBY CERTIFY that
                                       
                                      personally known to me
to be the
                                       
          of
                                     
                                        a
                                     corporation,
personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and severally acknowledged that as such
                        , signed and delivered the said instrument, pursuant to authority, given by the Board of
Directors of said corporation as                      free and voluntary act, and as the free and voluntary act and deed of said
corporation, for the uses and purposes therein set forth. 
  
 GIVEN under my hand and official seal this              day of
                    , 20    . 
  

			
	 
	Notary Public
		
	My commission expires: 	 	 

  

 25 

 EXHIBIT A 
  

LEGAL DESCRIPTION OF PREMISES 
  

 26 

 Exhibit E-3 
  
 LEASE AGREEMENT 
 (Single Tenant Net) 
  
 This Lease Agreement (this
“Lease”) is made this                      day of
                    , 2004, by and between ST. JOHN KNITS, INC., a California corporation (“Tenant”), and JS SJK L.P., a California
limited liability company (“Landlord”), based upon the following facts: 
  
 RECITALS 
  
 A. Pursuant to
that certain Purchase Agreement dated June 11, 2004, between Tenant, as Seller, and Landlord, as Buyer (the “Purchase Agreement”), Landlord has purchased that certain real property more particularly described on Exhibit
“A” attached hereto (the “Land”) located at 17622 Armstrong in the City of Irvine, County of Orange, State of California, together with a building containing approximately 26,195 square feet of floor area, including tenant
improvements (the “Building”), an exterior surface parking area (the “Parking Area”) and related exterior improvements, including, but not limited to, lighting, access rights and landscaping (the “Exterior
Improvements”). The Land, the Building, the Parking Area and the Exterior Improvements are collectively called the “Premises.” 
  
 B. Landlord desires to lease the Premises to Tenant, and Tenant desires to lease the Premises from Landlord on the terms and conditions set forth herein.

  
 NOW THEREFORE, in consideration of the foregoing recitals (and
those in the Purchase Agreement, all of which are incorporated herein by this reference) and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 
  
 ARTICLE ONE: BASIC TERMS 
  
 Section 1.1 Lease Term. The term of this Lease (the “Term”)
shall commence on the date (the “Commencement Date”) immediately following the Closing Date (as that term is defined in the Purchase Agreement) and expire on the last day of the 180th full calendar month thereafter (if the Commencement
Date is not the first day of a calendar month, the last month of the initial Term shall include such additional days as may be required to cause the initial Term to end on the last day of a calendar month). The initial Term may be extended by Tenant
for three (3) additional 60-month periods and one (1) additional 59-month period in accordance with Section 2.3. 
  
 Section 1.2 Permitted Uses: (See Article Five) General office, administrative, research and development, warehouse, distribution, manufacturing,
assembly, retail and commercial uses as permitted by then existing law; provided, however, that Landlord’s prior written approval shall be required for any change in use that requires a variance or other change in then-current zoning.

  
 Section 1.3 Vehicle Access and Parking: Subject to the
terms of this Lease, Tenant shall be entitled to the exclusive use of the Premises and every part thereof, including, without limitation, all entranceways and driveways serving the Premises and the Parking Area for vehicle parking purposes and
ingress and egress to and from the Premises; provided, however, the parties acknowledge that the Premises is subject to all matters of record as of the date hereof, including, without limitation, the terms of that certain Reciprocal Driveway
Easement Agreement (the “REA”) recorded prior to or concurrently with the closing under the Purchase Agreement as specified therein (whereby the Premises is entitled to and encumbered by certain ingress and egress rights with certain
adjacent premises as specified in the REA). All parking spaces shall be available to Tenant throughout the Term, 24 hours per day, free of charge. 
  
 Section 1.4 Rent and Other Charges Payable by Tenant: 
  
 (a) BASE RENT: For the initial 15-year Term, base rent (“Base Rent”) for the Premises shall be Thirty-Nine Thousand Two Hundred
Ninety-Three Dollars ($39,293) per month, subject to increase as set forth below. If Tenant exercises an option to extend the Term of this Lease pursuant to Section 2.3, monthly Base Rent for the first year of the applicable Option Term shall be
determined as set forth in Section 2.3, and the same shall be subject to increase as set forth in Section 1.4(c), below (i.e., at the start of the 31st full calendar month following the commencement of the applicable Option Term). 

 
 (b) OTHER PERIODIC PAYMENTS: (i) Property Taxes (See
Section 4.2); (ii) Utilities (See Section 4.3); (iii) Insurance Premiums (See Section 4.4) 
  
 (c) BASE RENT INCREASES: The monthly Base Rent shall be increased during the initial Term at the commencement of the 31st, 61st, 91st, 121st and 151st full calendar months following the Commencement Date
(and, if Tenant exercises an option to extend, at the 

  

 1 

 
commencement of the 31st
full calendar month following the commencement of the applicable Option Term) (each such date is hereinafter called a “Rental Adjustment Date”) in accordance with the increase in the United States Department of Labor, Bureau of Labor
Statistics, Consumer Price Index for All Urban Consumers (all items for the Los Angeles – Riverside – Anaheim area, 1982-1984 = 100) (the “Index”) as follows: The monthly Base Rent in effect immediately before each Rental
Adjustment Date (the “Comparison Base Rent”) shall be increased by the percentage that the Index has increased from the date on which payment of the Comparison Base Rent began (the “Comparison Date”) through the end of the month
in which the applicable Rental Adjustment Date occurs (each such period a “Rental Adjustment Period”); provided, however, that such increase for any Rental Adjustment Period shall be no less than 2.5% per annum, but no more than 4% per
annum (except that such 4% annual cap shall be increased to a 5% annual cap at the end of the 10th full Lease year,
that is, for the adjustments commencing with the adjustment at the start of the 151st month of the Term) on a
compounded, cumulative basis. A numerical example of such Base Rent increase mechanism is provided in Exhibit “B” attached hereto. Landlord shall notify Tenant of each increase by a written statement. Tenant shall pay the new Base
Rent from the applicable Rental Adjustment Date until the next Rental Adjustment Date. Landlord’s notice may be given not more than three (3) months after the applicable Rental Adjustment Date of the increase, and Tenant shall pay Landlord the
accrued rental adjustment for the months elapsed between the effective date of the increase and Landlord’s notice of such increase within ten (10) days after Landlord’s notice. If the format or components of the Index are materially
changed after the Commencement Date, Landlord shall substitute an index which is published by the Bureau of Labor Statistics or similar agency and which is most nearly equivalent to the Index in effect on the Commencement Date. The substitute index
shall be used to calculate the increase in the Base Rent unless Tenant objects to such index in writing within fifteen (15) days after receipt of Landlord’s notice. If Tenant objects, Landlord and Tenant shall submit the selection of the
substitute index for binding arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) (except the arbitrators shall determine the substitute index rather than the Option Rent). The costs of arbitration shall be borne equally by Landlord
and Tenant. 
  
 Section 1.5. Addresses for Notices and
Payments: 
  
 Address of Landlord: c/o Optima
Asset Management, 1600 Dove Street, Suite 480, Newport Beach, CA 92660 
  
 Address of Tenant: 2722 Michelson Drive, Irvine, California 92612 Attention: CFO 
  
 Section 1.6. Security Deposit. Tenant shall deposit with Landlord upon execution hereof an amount equal to the first two months’ Base Rent as
security for Tenant’s faithful performance of its obligations under the Lease (the “Security Deposit”). If a Default (as defined in Section 10.1) by Tenant occurs under this Lease, then during the continuance of such Default Landlord
may use, apply or retain all or any portion of the Security Deposit for the payment of any amount due Landlord or to reimburse or compensate Landlord for any liability, expense, loss or damage that Landlord has suffered or incurred by reason
thereof. If Landlord uses or applies all or any portion of the Security Deposit in accordance with the foregoing requirements, Tenant shall within ten (10) days after written request therefor deposit monies with Landlord sufficient to restore said
Security Deposit to the full amount required by the Lease. The Security Deposit shall not bear interest and may be commingled with other funds of Landlord. Provided a Tenant Default is not then continuing under this Lease, the Security Deposit shall
be returned to Tenant, without interest, within thirty (30) days after the expiration of Term. 
  
 ARTICLE TWO: LEASE TERM 
  
 Section 2.1 Lease of Premises For Lease Term. Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord for the Lease Term. The Lease Term is for the period stated in Section 1.1 above and shall begin and
end on the dates specified in Section 1.1 above, unless the beginning or end of the Lease Term is changed under any provision of this Lease. The “Commencement Date” shall be the date specified in Section 1.1 above for the beginning of the
Lease Term. 
  
 Section 2.2 Possession; Waiver of
Distraint. The parties acknowledge that Tenant is currently occupying the Premises and that Landlord shall be deemed to have delivered possession of the Premises to Tenant on the Commencement Date. Title to all of Tenant’s FF&E (as
defined in Section 6.6, below) shall remain in Tenant and Tenant alone shall be entitled to claim depreciation therefor. Landlord hereby waives, releases and relinquishes any and all rights of distraint, levy, attachment or recourse to the FF&E.
Although the foregoing waiver, release and relinquishment shall be self-operative without the necessity for any further instrument or document, Landlord hereby agrees to furnish Tenant or any vendor or other supplier under any conditional sale,
chattel mortgage or other security arrangement, any consignor, and holder of reserved title or any holder of a security interest, upon written request from time to time, waivers reasonably satisfactory to Tenant of Landlord’s right to
distraint, levy, attachment or recourse with respect thereto and exempting the same from distraint, levy, attachment or recourse. 
  

 2 

 Section 2.3 Options to Extend Term. 
  
 (a) Option Right. Landlord hereby grants to Tenant four (4) options to extend the Term as to the
entire Premises for a period of 60 months each, except that the last option shall be for a period of 59 months (each of the foregoing option terms is referred to hereinafter as an “Option Term”), which options shall be exercisable by
written notice delivered by Tenant to Landlord as provided below. Upon the exercise of any such option to extend, the then-existing Term shall be extended for a period of 60 months (59 months for the last option) on the same terms and conditions as
set forth in this Lease, except that monthly Base Rent for the first year of the Option Term shall be determined as set forth below. 
  
 (b) Option Rent. The annual Base Rent payable by Tenant for the first year of any Option Term shall be equal to 95% of the
“Fair Market Rental Rate,” as that term is defined in Section 2.3(e), below, but in no event shall the annual Base Rent payable by Tenant for the first year of any Option Term be less than the annual Base Rent in effect immediately prior
to the start of such Option Term. The Base Rent payable throughout the Option Term, including during the first year, is referred to hereinafter as the “Option Rent.” The monthly Option Rent determined for the first year of an Option Term
shall subject to increase at the start of the 31st full calendar month during such Option Term in accordance with
the Base Rent increase procedures set forth in Section 1.4(c). 
  
 (c) Exercise of Option. The options contained in this Section 2.3 shall be exercised by Tenant, if at all, only in the following manner: (i) Tenant shall deliver written notice (the “Option Interest
Notice”) to Landlord not more than 12 months or less than 9 months prior to the expiration of the initial Term or the immediately preceding Option Term, as the case may be, stating that Tenant is interested in exercising its option for the
Premises; (ii) Landlord, after receipt of the Option Interest Notice, shall deliver notice (the “Option Rent Notice”) to Tenant not less than 30 days after Tenant’s Option Interest Notice, setting forth Landlord’s determination
of the Option Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall, on or before the later of (A) the date occurring 6 months prior to the expiration of the initial Term or immediately preceding Option Term, as applicable, and (B)
the date occurring thirty (30) days after Tenant’s receipt of the Option Rent Notice, exercise the option by delivering written notice thereof to Landlord and upon, and concurrent with, such exercise, Tenant may, at its option, object to the
Option Rent contained in the Option Rent Notice, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. Additionally, if Tenant has not previously delivered the Option
Interest Notice, Tenant may nonetheless irrevocably exercise the option by delivering written notice thereof to Landlord at any time on or before the date occurring 6 months prior to the expiration of the initial Term, or immediately preceding
Option Term, as applicable, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. 
  
 (d) Determination of Fair Market Rental Rate. If Tenant timely and appropriately objects to the Fair
Market Rental Rate, Landlord and Tenant shall attempt to agree upon the Fair Market Rental Rate, using reasonable good-faith efforts. If Landlord and Tenant fail to reach agreement on or before the date which is five (5) months prior to the
expiration of the Term or the immediately preceding Option Term, as applicable (each such date, an “Outside Agreement Date”), then each party shall make a separate determination of the Fair Market Rental Rate within five (5) business days
after the applicable Outside Agreement Date, and such determinations shall be exchanged with each other in sealed envelopes at a meeting held within two (2) business days after such 5-business day period. If neither party accepts the other’s
determination of the Fair Market Rental Rate, and if Tenant at that time fails to rescind its option to renew (which Tenant shall have the right to do by notice to Landlord given prior to submittal to arbitration), then such determinations of the
Fair Market Rental Rate shall be submitted to arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) below. 
  
 (i) Landlord and Tenant shall each appoint one arbitrator who shall be a real estate broker who shall have been active over the five (5)
year period ending on the date of such appointment in the leasing of commercial industrial properties in the Irvine area in which the Premises is located. The determination of the arbitrators shall be limited solely to the issue of whether
Landlord’s or Tenant’s submitted Fair Market Rental Rate is the closest to the actual Fair Market Rental Rate, as determined by the arbitrators, taking into account the requirements of this Lease. Each such arbitrator shall be appointed
within fifteen (15) days after the applicable Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions. The arbitrators
so selected by Landlord and Tenant shall be deemed “Advocate Arbitrators.” 
  
 (ii) The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of
the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral Arbitrator”) who shall be qualified under the same criteria set forth in Section 2.3(d)(i) for qualification of
the two Advocate Arbitrators except that neither the Landlord or Tenant or either parties’ Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or 

  

 3 

 
subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord’s counsel and
Tenant’s counsel. 
  
 (iii) The three (3)
arbitrators shall within thirty (30) days of the appointment of the Neutral Arbitrator reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Fair Market Rental Rate, and shall notify Landlord and Tenant
thereof. Whichever Fair Market Rental Rate is selected by the arbitrators shall become the then applicable Fair Market Rental Rate. The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and Tenant. 
  
 (iv) If either Landlord or Tenant fails to appoint an
Advocate Arbitrator within fifteen (15) days after the applicable Outside Agreement Date, then either party may petition the presiding judge of the Superior Court of Orange County to appoint such Advocate Arbitrator subject to the criteria in
Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator. 
  
 (v) If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either
party may petition the presiding judge of the Superior Court of Los Angeles County to appoint the Neutral Arbitrator, subject to the criteria in Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having
jurisdiction over the parties to appoint such arbitrator (or if no judge having jurisdiction is willing to act, the Judicial Arbitration and Mediation Service located closest to the Premises). The cost of the arbitration shall be paid by Landlord
and Tenant equally. 
  
 (e) Fair Market Rental
Rate. The “Fair Market Rental Rate” shall be equal to the annual Base Rent, at which tenants, as of the commencement of the applicable Option Term, are, pursuant to brokered transactions completed within the twelve (12) month period
prior to the exercise of the applicable option, leasing non-renewal, non-equity, non-affiliated space for a comparable use (based on the use to which Tenant is then putting the Premises) that is comparable in size, location and quality to the
Premises, for a similar lease term, in an arms length transaction, which comparable space is located in the Irvine area (“Comparable Transactions”), taking into consideration all monetary and non-monetary concessions, if any, being granted
such tenants in connection with such Comparable Transactions and the financial condition and credit history of Tenant and the other tenants in such Comparable Transactions, and taking into account the fact that rental increases during the Option
Term are already provided for in this Lease, but excluding the value of any improvements installed or paid for by Tenant. 
  
 Section 2.4 Holding Over. Tenant shall vacate the Premises upon the expiration or earlier termination of this Lease. If Tenant does not vacate the
Premises upon the expiration or earlier termination of the Lease, as the same may be extended as provided above, and Landlord thereafter accepts rent from Tenant, Tenant’s occupancy of the Premises shall be a “month-to-month” tenancy,
subject to all of the terms of this Lease applicable to a month-to-month tenancy except that the monthly Base Rent shall be increased for the first 60 days of holdover to 110% of the monthly Base Rent in effect at the end of the Term and thereafter
to 125% of the monthly Base Rent in effect at the end of the Term (in each case prorated on a daily basis for holdovers of partial months). 
  
 ARTICLE THREE: BASE RENT 
  
 Section 3.1 Time and Manner of Payment. Upon the Commencement Date, Tenant shall pay Landlord the Base Rent in the amount stated in Section 1.4
above for the first month of the Lease Term, prorated for any partial month. On the first day of the second month of the Lease Term and each month thereafter, Tenant shall pay Landlord the Base Rent, in advance, without offset, deduction or prior
demand except as otherwise provided herein. Base Rent shall be payable at Landlord’s address or at such other place as Landlord may designate in writing. 
  

Section 3.2 Late Charge. If Tenant fails to pay any installment of Base Rent or any other payment for which Tenant is obligated to pay Landlord
under this Lease within five (5) business days following written notice of such failure, then Tenant shall pay to Landlord as additional rent a late charge equal to three percent (3%) of the amount due to compensate Landlord for the extra costs
incurred as a result of such late payment. The parties agree that such late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. 
  
 ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT 
  
 Section 4.1 Additional Rent. All charges payable by Tenant under this
Lease other than Base Rent are called “Additional Rent”. Unless this Lease provides otherwise, Tenant shall pay all Additional Rent then due on the later of (i) fifteen (15) days after receipt of Landlord’s invoice or statement
therefor, or (ii) the next monthly installment of Base Rent. The term “rent” shall mean Base Rent and Additional Rent. 
  

 4 

 Section 4.2 Property Taxes. 
  
 (a) Real Property Taxes. Tenant shall pay all real property taxes on the Premises during the Term.
Subject to Section 4.2(d) below, such payment shall be made prior to the penalty date for such taxes. At Landlord’s request, Tenant shall furnish Landlord with satisfactory evidence that the real property taxes have been paid. Landlord shall
reimburse Tenant for any real property taxes paid by Tenant covering any period of time after the Term. If Tenant fails to pay the real property taxes when due, or if Tenant fails to timely furnish Landlord with satisfactory evidence that the real
property taxes have been paid as set forth above, Landlord may, after fifteen (15) days prior notice to Tenant and Tenant’s failure to pay the real property taxes and furnish Landlord with satisfactory evidence of such payment within such
15-day period, pay the taxes and Tenant shall reimburse Landlord for the amount of such tax payment as Additional Rent. 
  
 (b) Definition of Real Property Tax. “Real property tax” means: (i) any fee, license fee, license tax, business license
fee, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Premises; and (ii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Premises by any
governmental agency. “Real property tax” does not, however, include Landlord’s federal or state income, franchise, inheritance or estate taxes, any tax on Landlord’s right to receive, or the receipt of, rent or income from the
Premises or against Landlord’s business of leasing the Premises, all of which excluded taxes shall be the responsibility of Landlord. All real property taxes and assessments shall be paid over the longest installment period generally available
(i.e., available to taxpayers upon whom such assessments are imposed without penalty or default) unless Tenant elects to pay same over a shorter installment period. 
  
 (c) Personal Property Taxes. Tenant shall pay in a timely manner all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to Tenant. Tenant shall try to have its personal property taxed separately from the Premises. 
  
 (d) Tenant’s Right to Contest Taxes. Tenant may attempt to have the assessed valuation of all or
part of the Premises or Tenant’s personal property reduced or may initiate proceedings to contest the real property taxes or personal property taxes or may seek to obtain one or more real property tax or personal property tax credits in
connection with the Premises or its operations at the Premises. If requested by Tenant, Landlord shall cooperate with Tenant in such matters. If required by law, Landlord shall join in any proceedings brought by Tenant. However, Tenant shall pay all
costs of the proceedings. If Tenant does not pay real property taxes when due and contests such taxes, Tenant shall not be in default under this Lease for nonpayment of such taxes if Tenant posts bond from an admitted surety in the amount necessary
to protect the Premises from the lien of the unpaid taxes; provided, however, that if applicable law or Landlord’s lender requires that the taxes being contested by Tenant be paid (under protest) during such contest, then Tenant shall make such
payment (under protest). The amount of such bond shall be sufficient to pay the real property taxes plus a reasonable estimate of the interest, costs, charges and penalties which may accrue if Tenant’s action is unsuccessful. The bond made
shall be applied to the real property taxes due, as determined at such proceedings (or upon Tenant’s earlier payment of taxes under protest or otherwise), with any excess being disbursed to Tenant. Upon the final determination of any proceeding
or contest, Tenant shall immediately pay the taxes due, together with all costs, charges, interest and penalties incidental to the proceedings. If Tenant’s contest of taxes results in a reimbursement by one or more taxing authorities of some or
all of the tax payments previously made by Tenant under this Lease, or a credit to Tenant against future tax payments, Tenant shall be entitled to the full amount of such reimbursement or credit. 
  
 Section 4.3 Utilities. Tenant shall pay before delinquency, directly
to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services used at the Premises or supplied to the Premises at Tenant’s request. In case of a
failure or interruption in utilities or services to the Premises, Landlord shall fully cooperate with Tenant (and no out-of-pocket cost to Landlord unless the failure or interruption was caused by Landlord’s negligence or willful misconduct) to
have the interrupted utilities/services restored. 
  
 Section 4.4
Indemnity and Insurance. 
  
 (a)
Tenant’s Indemnity. Tenant shall indemnify, defend (with attorneys reasonably satisfactory to Landlord), and hold Landlord and its representatives, agents, owners, employees and contractors (collectively, “Landlord Parties”)
harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of the use of the Premises by Tenant or Tenant Parties (as defined in Section 5.3(a)) or from the conduct of
Tenant’s business, or from any activity, work, or thing done or permitted by Tenant or Tenant Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Landlord or Landlord Parties; or 

  

 5 

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Landlord: 
  

	 	(i)	notifies Tenant of the claim or liability in writing within sixty (60) days after the Landlord receives written notice of the claim or liability; 

  

	 	(ii)	permits Tenant to defend or settle against the claim or liability, so long as Landlord is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Tenant in any defense of settlement against the claim or liability. 

  
 (b) Landlord’s Indemnity. Landlord shall indemnify, defend (with attorneys reasonably
satisfactory to Tenant), and hold Tenant and Tenant Parties harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of any activity, work, or thing done by Landlord
or Landlord Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Tenant or Tenant Parties; or 

  

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Tenant: 
  

	 	(i)	notifies Landlord of the claim or liability in writing within sixty (60) days after the Tenant receives written notice of the claim or liability; 

  

	 	(ii)	permits Landlord to defend or settle against the claim or liability, so long as Tenant is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Landlord in any defense of settlement against the claim or liability. 

  
 (c) Liability Insurance. Tenant, at Tenant’s own cost and expense, will provide and keep in full
force and effect during the term of this Lease, commercial general liability insurance with limits of not less than Two Million Dollars ($2,000,000) covering bodily injury to persons, including death and loss of or damage to real and personal
property. Such insurance may be provided under Tenant’s blanket public liability insurance policy. During the term of the Lease, Landlord and Landlord’s lender (“Landlord’s Lender”) shall be named as an additional insured
under such insurance. A certificate evidencing such insurance coverage shall be delivered to Landlord not less than fifteen (15) days after the commencement of the Term hereof. Such certificate of insurance will provide for at least ten (10) days
advance notice in the event of cancellation or material modification of its terms. 
  
 (d) Mutual Waiver of Claims. Landlord and Tenant do each herewith and hereby release and relieve the other, and waive their claim
of recovery for loss or damage to property arising out of or incident to fire, lightning or other insurable perils, to the extent covered by insurance maintained by Landlord or Tenant (or the insurance required to be maintained hereunder), whether
or not such loss or damage is due to the negligence of Landlord or Tenant, Landlord Parties or Tenant Parties, or their agents, employees, guests, licensees, invitees or contractors. 
  
 (e) Mutual Waiver of Subrogation. Each of Landlord and Tenant shall use their commercially reasonable
best efforts to have their respective insurance carriers to waive all rights of subrogation against the other party hereto to the extent of Landlord’s or Tenant’s undertaking set forth in Section 4.4(a) or 4.4(b) and Section 4.4(d).

  
 (f) Property Insurance. Tenant shall,
at Tenant’s expense, procure and maintain at all times during the term of this Lease a policy or policies of insurance covering loss or damage to the Premises and the tenant improvements in the Premises (exclusive of Tenant’s trade
fixtures, equipment and other personal property) in the amount of the full replacement value thereof including cost associated with “civil or ordinance of law”, without depreciation or deduction (and such insurance may provide for a
commercially reasonable deductible, the parties hereby agreeing that Tenant’s deductibles in place as of the date of execution of the Purchase Agreement are commercially reasonable), providing protection against all perils included in a Causes
of Loss—Special Form (commonly known as “All-Risk”) policy and, if the Premises are in a flood zone, flood insurance. All insurance shall provide for payment of loss thereunder to 

  

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Landlord, Landlord’s Lender and Tenant as their respective interests may appear. Such insurance policies may be carried under blanket policies covering
other properties of Tenant and/or its affiliates so long as such blanket policies provide insurance at all times for the Premises as required by this Lease, and shall provide that such policies may not be canceled without at least ten (10) days
prior written notice to Landlord. All policies of insurance required to be carried by Tenant or Landlord under this Lease shall be maintained with insurance companies qualified to do business in California holding a General Policyholders Rating of
“B+” and a Financial Rating of “VII” or better, as set forth in the most current issue of Best’s Insurance Guide or a BBB financial strength rating by Standard and Poor’s. 
  
 (g) Workers Compensation Insurance. Tenant shall at
all times carry workers compensation insurance as required by law. 
  
 (h) Earthquake and Flood. If required by Landlord’s lender because the Probable Magnitude of Loss on the Premises exceeds 20% of the full replacement cost of the Premises, then Tenant shall obtain and
maintain earthquake insurance coverage on the Premises (with such deductibles as Tenant may deem reasonable) to the extent such coverage is commercially available. If required by Landlord’s lender because the Premises are in a flood zone,
Tenant shall maintain flood insurance on the Premises (with such deductibles as Tenant may deem reasonable). 
  
 (i) Landlord’s Insurance. Within fifteen (15) days after written notice from Tenant to Landlord given from time to time during
the Term, Landlord shall notify Tenant of the insurance premium cost (the “Cost Notice”) to Landlord to obtain (i) commercial general liability insurance with limits specified by Tenant covering Landlord (and Tenant as an additional
insured) against bodily injury to persons, including death and loss of or damage to real and personal property, and/or (ii) rental loss insurance covering the Base Rent and additional rental payable under this Lease over a one (1) year period.
Within fifteen (15) days after receiving the Cost Notice, Tenant may elect to direct Landlord to obtain some or all of such insurance at Tenant’s cost (and in that regard, Tenant shall reimburse Landlord within thirty (30) days after receipt of
Landlord’s statement or invoice for the insurance premium cost of obtaining same, which statement or invoice shall be accompanied by reasonable evidence of the amounts owing). A certificate evidencing such insurance coverage shall be delivered
to Tenant not less than fifteen (15) days after Tenant’s election to have Landlord obtain such insurance, which certificate of insurance will provide for at least ten (10) days advance notice in the event of cancellation. If Tenant elects to
have Landlord obtain such insurance, Tenant may thereafter notify Landlord that Tenant no longer desires Landlord to maintain such insurance at Tenant’s cost, in which case Tenant shall not be obligated to reimburse Landlord for insurance
premiums applicable to time periods beyond the expiration date of the applicable policy(ies) obtained by Landlord at Tenant’s request as provided above. 
  
 ARTICLE FIVE: USE OF PREMISES 
  
 Section 5.1 Permitted Uses. Tenant may use the Premises for some or all of the Permitted Uses set forth in Section 1.6 above. 
  
 Section 5.2 Manner of Use. Tenant shall not use the Premises in any
way which constitutes a violation of any law, ordinance, or governmental regulation or order regulating the manner of use by Tenant of the Premises or which constitutes a public nuisance; provided, however, that (A) Tenant’s violation of, or
failure to comply with, applicable laws regulating Tenant’s employment practices shall not be considered a default under this Section 5.2 unless a governmental entity brings or threatens in writing to bring action against Landlord as a result
of such violation or failure; (B) Tenant shall not be deemed in default under this Section 5.2 to the extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of
its obligations under other specific provisions of this Lease; and (C) Tenant’s obligations with respect to Hazardous Materials shall be governed exclusively by Section 5.3. Tenant shall have no obligation to comply with applicable laws to the
extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of its obligations under other specific provisions of the Lease. Tenant shall have the right to contest
by appropriate legal proceedings the validity of any law, ordinance, order, rule, regulation or requirement of the nature herein described. 
  
 Section 5.3 Hazardous Materials. 
  
 (a) Use. Except as (i) used by Tenant to carry out its obligations under the terms of this Lease or (ii) used in connection with
Tenant’s intended use of the Premises, Tenant shall not generate, release, store, treat, or dispose of Hazardous Materials on the Premises without the prior written consent of Landlord. With regard to Hazardous Materials that Tenant proposes to
use on the Premises for purposes other than those identified in (i) or (ii) above, Landlord shall, taking into account such factors as Landlord may reasonably determine to be relevant, promptly grant or withhold consent to the proposed use of
Hazardous Materials. Landlord’s consent shall not be unreasonably withheld. Notwithstanding (i) above, all use by Tenant, Tenant’s subsidiaries and affiliates (“Tenant Affiliates”), Tenant Venturers (as defined in Section 9.5) or
Tenant’s representatives, agents, employees, business invitees, consultants, contractors and 

  

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subtenants (collectively, and including Tenant Affiliates and Tenant Venturers, “Tenant Parties”) of Hazardous Materials on the Premises shall be
carried out in strict compliance with applicable federal, state, and local laws, ordinances, and regulations. 
  
 (b) Indemnification. Tenant shall indemnify, defend, and hold harmless Landlord from any and all claims of liability asserted
against Landlord and Landlord Parties by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage to or loss of use of
property, or cleanup activities (remedial or removal) arising out of or relating to the release, or threat of release, of a Hazardous Material existing at or emanating from the Premises, to the extent caused by Tenant or Tenant Parties during or
prior to the Term of this Lease, or to the extent caused by any third party other than Landlord or Landlord Parties during the Term (provided, however, that Tenant shall have no indemnification obligations, and no liability under this Lease, with
respect to the migration of any Hazardous Material on or under the Premises from adjacent properties). Other than those matters for which Tenant is obligated to indemnify Landlord, Landlord shall indemnify, defend, and hold harmless Tenant from and
against any and all claims of liability asserted against Tenant by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage
to or loss of use of property, or cleanup activities (remedial or removal) arising out of or relating to the release or threat of release of any Hazardous Material existing at or emanating from the Premises to the extent caused by Landlord or
Landlord Parties during or after the Term of this Lease or to the extent caused by any third party other than Tenant or Tenant Parties with respect to the migration of any Hazardous Material on or under the Premises from adjacent properties. Neither
party shall be required to indemnify, defend or hold harmless the other for any Hazardous Material existing at or emanating from the Premises prior to the Term of this Lease due to the acts or omissions of a third party; provided, however, that
Landlord and Tenant each shall have the right (and each party shall reasonably cooperate with the other in that regard) to enforce for its own benefit the terms of the environmental indemnification/remediation provisions set forth in or implemented
pursuant to (a) Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between Baxter Healthcare Corporation and Tenant dated March 12, 1996, and (b) Agreement for Purchase and Sale of Real Property and Joint Escrow
Instructions between Baxter Healthcare Corporation and Tenant dated January 15, 1996 (collectively, the “Environmental Indemnity Agreements”) covering certain existing Hazardous Material contamination and remediation currently taking place
at the Premises. 
  
 (c) Investigation and
Remediation. Tenant shall promptly, at Tenant’s expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises pertaining to or involving any
Hazardous Materials for which Tenant is required to indemnify Landlord as described above. Landlord shall cooperate (at no out-of-pocket cost to Landlord) in any such activities at the request of Tenant. Landlord shall promptly, at Landlord’s
expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises, pertaining to or involving any Hazardous Materials for which Landlord is required to
indemnify Tenant as described above. Tenant shall cooperate (at no out-of-pocket cost to Tenant) in any such activities at the request of Landlord, including allowing Landlord and Landlord’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Landlord’s investigative and remedial responsibilities. 
  
 (d) Definition. For purposes of this Section 5.3, the term “Hazardous Materials” shall mean any dangerous waste,
hazardous waste, or hazardous substances as defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 as amended (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act as amended (42 U.S.C.
§ 6901 et seq.), or similar state statutes, as amended. 
  
 Section 5.4 Landlord’s Access. Subject to the security requirements of Tenant and governmental security regulations, Landlord may enter the Premises at all reasonable times to show the Premises to potential buyers, investors or
(during the last 6 months of the Term) tenants, to inspect the Premises, or to discharge Landlord’s obligations as permitted or required under this Lease; provided, however, any such entry into the Premises by Landlord shall be performed in a
manner so as not to interfere with Tenant’s use of, or ingress or egress to, the Premises and, at Tenant’s election, shall be in the company of a representative of Tenant. Landlord shall give Tenant at least 48 hours’ prior notice of
such entry, except in the case of an emergency. Any work performed in connection with such entry shall be performed in a good and workmanlike manner and with due diligence so as not to interfere with Tenant’s use of the Premises. No work shall
result in a diminution of Tenant’s floor area, and Landlord shall not store any materials in the Premises. After completion of any such work, Landlord shall restore the Premises as closely as possible to the condition existing immediately prior
to the commencement of such work. Any proprietary information obtained by Landlord as a result of such entry shall be kept strictly confidential. 
  
 Section 5.5 Quiet Enjoyment. So long as this Lease is not terminated following a default by Tenant, Landlord covenants that Tenant shall have the
right to occupy and enjoy the Premises for the full Lease Term on all the terms and provisions of this Lease. 
  

 8 

 ARTICLE SIX: 
 CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS 
  
 Section 6.1 Existing Conditions. Tenant shall accept the Premises subject to all recorded matters, laws, ordinances, and governmental regulations; provided, however, that Tenant shall have the right to approve
in advance any restrictions or encumbrances hereafter placed against the Premises which decrease Tenant’s rights or increase Tenant’s obligations under this Lease, and Landlord shall not place any such restrictions or encumbrances against
the Premises without such prior approval by Tenant. 
  
 Section
6.2 Landlord’s Obligations. Without limitation on the provisions of Sections 5.2, 5.3, 6.3(b), 6.3(c), Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord shall maintain and repair (and replace, as necessary)
throughout the Term of this Lease, at Landlord’s expense, all structural elements of the Premises, including without limitation the foundation, structural columns, footings, exterior walls, slab and structural portions of the roof, as well as
subterranean elements of the Land (including sinkholes) and re-asphalting (if necessary) of the Parking Area (as opposed to slurry sealing, which shall be Tenant’s responsibility), except to the extent that the need for such maintenance and
repairs are caused by the negligence or willful misconduct by Tenant or Tenant Parties, in which case Tenant shall be responsible for such maintenance and repairs except to the extent the same are covered by insurance maintained by Landlord. If
Landlord fails to maintain or repair the Premises as required by this Section 6.2 or fails to discharge its obligations under any other provisions of this Lease, Tenant may, without limitation on its other rights or remedies, upon ten (10) business
days’ prior notice to Landlord (and Landlord’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance to completion), perform such maintenance or
repair or other obligation on behalf of Landlord. In such case, Landlord shall reimburse Tenant for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after Tenant’s statement or invoice therefore
plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Landlord shall be done in a good and workmanlike manner, by reputable, licensed
and insured contractors, using quality materials and workmanship commensurate with the condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Landlord shall be solely responsible for compliance with all Applicable
Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality Management District, requirements of the local building
authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  
 Section 6.3 Tenant’s Obligations. 
  
 (a) General. Except for Landlord’s obligations under Section 6.2, 6.3(b), 6.3(c) or as provided elsewhere in this Lease,
Tenant shall at Tenant’s expense keep all portions of the Premises in good order, condition and repair, including the landscaping, irrigation, Parking Area (including ingress and egress, slurry surfacing, striping, lighting and directional
signs), the roof membrane, gutters, drains, HVAC, telecommunications, electrical, mechanical, plumbing, fire sprinklers. If Tenant fails to maintain or repair the Premises as required by this Section 6.3, Landlord may, without limitation on its
other rights or remedies, upon ten (10) business days’ prior notice to Tenant (and Tenant’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance
to completion), enter the Premises and perform such maintenance or repair on behalf of Tenant. In such case, Tenant shall reimburse Landlord for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after
Landlord’s statement or invoice therefore plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Tenant shall be done in a good
and workman like manner, by reputable, licensed and insured contractors, using quality materials and workmanship commensurate with the first class condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Tenant shall
be solely responsible for compliance with all Applicable Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality
Management District, requirements of the local building authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  

(b) Capital Expenditures to Comply With New Laws. If applicable laws, covenants or restrictions of record, building codes,
regulations and ordinances (“Applicable Requirements”) in effect on the Commencement Date are changed, or if new Applicable Requirements are enacted after the Commencement Date, so as to require during the Term of this Lease the
construction of an addition to or an alteration of the Building or Premises or other physical modification of the Building or Premises (“Capital Expenditure”), Landlord and Tenant shall allocate the cost of such work as follows: If such
Capital Expenditure is required as a result of the specific and unique use of the Premises by Tenant as compared with uses by tenants in general, Tenant shall be fully responsible for the cost thereof, provided, however that if such 

  

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Capital Expenditure is required during the last two (2) years of this Lease and the cost thereof exceeds six (6) months’ Base Rent, Tenant may instead
terminate this Lease unless Landlord notifies Tenant, in writing, within ten (10) days after receipt of Tenant’s termination notice that Landlord has elected to pay the difference between the actual cost thereof and the amount equal to six (6)
months’ Base Rent. If Tenant elects termination, Tenant shall deliver to Landlord written notice specifying a termination date at least sixty (60) days thereafter. If such Capital Expenditure is not the result of the specific and unique use of
the Premises by Tenant (for example, but not limited to, governmentally mandated seismic modifications), then Landlord shall promptly make the Capital Expenditure and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall
only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost thereof by a fraction, the numerator of which is one,
and the denominator of which is the number of months of the useful life of such Capital Expenditure as such useful life is determined by general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the
right to prepay its obligation at any time; provided, however, that if such Capital Expenditure is required during the last year of this Lease and if Landlord or Tenant reasonably determines that it is not economically feasible to pay its share
thereof, Landlord or Tenant shall have the option to terminate this Lease upon ninety (90) days prior written notice to the other unless the other party commits, in writing, within ten (10) business days after receipt of the termination notice, that
it will pay for such Capital Expenditure (however, if Landlord seeks to terminate under the preceding clause, Tenant may exercise its option to extend the Term, if available, within thirty (30) days of Landlord’s notice to prevent such
termination). If Landlord does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Tenant may, without limitation on any other rights or remedies, advance such funds and deduct same (together with interest at 5%
above the then existing Bank of America, Los Angeles, “prime rate”) from Rent until Landlord’s share of such costs have been fully paid. If the balance of the Rent due and payable for the remainder of this Lease is not sufficient to
fully reimburse Tenant on an offset basis, Tenant shall have the right, in addition to any other rights and remedies, to terminate this Lease upon thirty (30) days written notice to Landlord. It is the intent of the parties that the above provisions
shall apply only to newly enacted or new changes to Applicable Requirements after the Commencement Date. If, for example, Tenant elects to make modifications to the Premises which trigger the requirement that additional modifications be made to
comply with ADA requirements existing on the Commencement Date, such additional modifications would not be the result of newly enacted or new changes to Applicable Requirements and thus would be the responsibility of Tenant. 
  
 (c) Replacement of Basic Elements. Subject to the
later provisions hereof, Tenant’s obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in as good operating order and condition as on the
Commencement Date, ordinary wear and tear, casualty and condemnation excepted. As used herein, the term “Basic Elements” shall mean all of the Building’s basic systems and equipment, including, without limitation, (i) HVAC equipment,
(ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof membrane, covering and drains, (vi) electrical systems, (vii) plumbing systems,
(viii) mechanical systems, if any, and (ix) life-safety systems. If any of the Basic Elements require repair but cannot be repaired other than at a cost which in is excess of 25% of the cost of replacing such Basic Element, then such Basic Element
shall be replaced by Landlord, and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is
due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is the number of months of the useful life of such replacement as such useful life as
determined in accordance with general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the right to prepay its obligation at any time. 
  
 Section 6.4 Alterations, Additions, and Improvements. Tenant shall not make any alterations, additions, or
improvements to the Premises (“Alterations”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, except that Landlord’s consent shall not be required for non-structural Alterations
(including, without limitation, painting, carpeting, moving low voltage communications cables and any other non-structural Alterations) which cost in the aggregate for any one project less than One Hundred Thousand Dollars ($100,000) and which do
not materially adversely affect the Building systems or the Building structure. All Alterations shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations. All Alterations done by Tenant shall be done in a
good and workmanlike manner by duly licensed and insured contractors and in compliance with all laws. Tenant shall give Landlord at least ten (10) days prior written notice of the expected work commencement date of any Alterations which require
Landlord’s consent. 
  
 Section 6.5 Condition upon
Termination. Upon termination of this Lease, Tenant shall surrender the Premises to Landlord, broom clean and in substantially the same condition as on the Commencement Date (or, if Tenant has extended the Term, in the same condition as on the
commencement of the most recent Option Term, as applicable), except for (i) ordinary wear and tear, (ii) damage due to casualty or condemnation, (iii) damage or matters which are Landlord’s 

  

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obligation to repair under this Lease, and (iv) Alterations which Landlord is not entitled to require Tenant to remove as described below (all or some of
which Tenant may elect to leave at the Premises or shall be entitled to remove at the end of the Term). In addition, Tenant shall remove from the Premises within 30 days after expiration of the Term (and shall continue to be liable for rent until
such items are removed and possession of the Premises is restored to Landlord as required herein) all of Tenant’s furniture, trade fixtures, machinery and equipment, furnishings, signs, inventory and any and all other items of personal property
including, without limitation, any materials or equipment that Tenant has installed for use in connection with Tenant’s business processes (such as intercom systems, security systems, computer equipment, table or floor lamps, microwave ovens,
refrigerators, stand-alone heaters or fans, knitting machines and equipment, teleconferencing systems, telecommunication equipment, electrical devices and the like (collectively, the “FF&E”). Notwithstanding the foregoing, in no event
shall Tenant remove any of the following materials or equipment (which shall be deemed Landlord’s property) without replacing the same with materials or equipment of equal or better quality: power wiring or power panels; inset or recessed
lighting or lighting fixtures; wall coverings; drapes, blinds or other window coverings; carpets or other floor coverings; heaters, air conditioners and other heating or air conditioning equipment that are not portable; plumbing or sanitary
equipment; or fencing or security gates. Landlord may require Tenant to remove Alterations installed by Tenant during the Term if, and only if, Landlord’s consent was required for such Alterations during the Term and Landlord informed Tenant in
writing at the time of such consent that Landlord would require removal of same at the end of the Term. All Alterations, if any, which Landlord is permitted to require Tenant to remove hereunder but which Landlord does not require Tenant to remove
(and which Tenant does not otherwise elect to remove) shall become Landlord’s property and shall be surrendered to Landlord upon the expiration or earlier termination of the Lease. Tenant shall repair, at Tenant’s expense, any damage to
the Premises caused by Tenant’s removal of Alterations and FF&E; provided, however, that Tenant shall not be required to repaint the Premises or patch immaterial wall or floor penetrations. 
  
 ARTICLE SEVEN: DAMAGE OR DESTRUCTION 
  
 Section 7.1 Landlord’s Obligation to Rebuild. If the Premises or
any portion thereof is damaged or destroyed by fire or other casualty (a “Casualty”), Tenant shall as soon as reasonably practicable thereafter give notice thereof to Landlord, and Landlord shall thereafter repair the Premises as set forth
in Section 7.5 unless Landlord or Tenant has the right to terminate this Lease as hereinafter provided and Landlord or Tenant elects to so terminate. 
  
 Section 7.2 Landlord’s Right to Terminate. Landlord shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) insurance proceeds (together with any additional amounts Tenant elects, at its option, to contribute) are not available to Landlord to pay the cost to repair the Premises, (ii) Landlord’s independent architect determines that the
Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to,
Hazardous Materials not caused by Landlord, earthquake faults and other similar dangers) within 360 days after the date of such Casualty, or (iii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term
and an independent architect selected by Landlord and reasonably approved by Tenant (“Landlord’s Architect”) determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) such damage will require
more than sixty (60) days to repair. If Landlord elects to terminate this Lease following a Casualty pursuant to this Section 7.2, Landlord shall give Tenant written notice of its election to terminate within thirty (30) days after Landlord has
knowledge of such Casualty, and this Lease shall terminate effective as of the date of such notice; provided, however, that Tenant may nevertheless elect to continue this Lease in full force and effect, in which case Tenant shall repair any damage
to the Premises and shall pay the cost of such repairs, except that Landlord shall deliver to Tenant on a commercially reasonable construction draw basis any insurance proceeds received by Landlord or Landlord’s Lender for the damage repaired
by Tenant. Tenant shall give Landlord written notice of such election within ten (10) days after receiving Landlord’s termination notice. 
  
 Section 7.3 Tenant’s Right to Terminate. Tenant shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) Landlord’s Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that the Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar
condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to, Hazardous Materials, earthquake faults and other similar dangers) within 360 days after the date
of such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises, or (ii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term and Landlord’s
Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that such damage will require more than sixty (60) days to repair, or (iii) the Premises are not actually repaired by Landlord to a
substantially similar condition as existed prior to such Casualty within 380 days following such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises. If Tenant elects to terminate this Lease
following a Casualty pursuant to this Section 7.3, Tenant shall give Landlord written notice of its election to terminate within thirty (30) days after receipt of 

  

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Landlord’s Architect’s determination (or within 30 days of the applicable restoration period should Landlord fail to complete repairs during such
period), and this Lease shall terminate as of the date of such notice of election to terminate. 
  
 Section 7.4 Effect of Termination. If this Lease is terminated following a Casualty pursuant to Section 7.2 or Section 7.3, Landlord shall, subject
to the rights of its lenders, be entitled to receive and retain all the insurance proceeds resulting from or attributable to such Casualty, except that any insurance proceeds payable under policies obtained by Tenant which specifically insure
Tenant’s personal property or removable Alterations or any other improvements that Tenant was entitled to remove at the end of the Term shall be paid to Tenant. If neither Landlord nor Tenant elect to terminate this Lease in accordance with the
terms and conditions set forth herein, this Lease will continue in full force and effect, and Landlord shall, as soon as reasonably practicable following notice of the Casualty and receipt of the amounts set forth in clause (i) of Section 7.2,
commence the process of obtaining necessary permits and approvals for the repair of the Premises, and shall commence such repair and prosecute the same diligently to completion as soon thereafter as is practicable. 
  
 Section 7.5 Scope of Obligation to Repair. Landlord’s obligation,
should it elect or be obligated to repair the Premises following a Casualty, shall be limited to the Premises insured by Tenant under this Lease. The reasonable determination in good faith by Landlord’s Architect of or relating to the estimated
time period required for repair or the interference with or suitability of the Premises for Tenant’s use or occupancy shall be conclusively presumed correct for purposes of this Article Seven. 
  
 Section 7.6 Temporary Reduction of Rent. If the Premises is destroyed
or damaged and Landlord or Tenant repairs or restores the Premises pursuant to the provisions of this Article Seven, all Rent payable during the period of such damage, repair and/or restoration shall be reduced according to the degree to which
Tenant’s use of the Premises is impaired until the Premises are again ready for Tenant’s business operations; provided, however, that the foregoing Rent abatement shall apply only to the extent of proceeds received by Landlord from rental
loss or rental interruption insurance unless the Casualty is caused by Landlord’s negligence or Landlord is in violation of Landlord’s obligations to repair or restore the Premises following the Casualty. 
  
 Section 7.7 Waiver. Tenant waives the protection of any statute, code
or judicial decision which grants a Tenant the right to terminate a lease in the event of the substantial or total destruction of the leased Premises. Tenant agrees that the provisions of this Article Seven shall govern the rights and obligations of
Landlord and Tenant in the event of any damage or destruction to the Premises by a Casualty. 
  
 ARTICLE EIGHT: CONDEMNATION 
  
 If
all or a material portion of the Premises is taken by any lawful authority by exercise of the right of eminent domain (including any portion of the Premises which substantially interferes with Tenant’s ingress to or egress from the Premises)
and cannot be restored so as not to materially interfere with Tenant’s use of the Premises, or sold under threat of a taking, either Tenant or Landlord may terminate this Lease effective as of the earlier of (i) the date possession is required
to be surrendered to the authority, or (ii) the date actual possession is delivered to the authority. In addition, in the event (i) title to a portion of the Premises is taken or sold under threat of a taking and (ii) Landlord elects to restore the
Premises in such a way as to alter the Premises materially or in such a way as to materially interfere with Tenant’s use of the Premises, Tenant may terminate this Lease, by written notice to Landlord, effective on the date of vesting of title.
If Tenant has not elected to terminate this Lease as provided above, then Landlord shall promptly, after receipt of the condemnation award, proceed to restore the Premises to substantially its condition prior to the taking, and a proportionate
allowance shall be made to Tenant for the rent corresponding to the time during which, and to the part of the Premises of which, or access or reasonable use of which, Tenant is deprived on account of the taking and restoration. In the event of a
taking, Landlord shall be entitled to the entire amount of any award for Landlord’s interest in the Premises. Notwithstanding the foregoing sentence, Tenant may assert a claim against the taking authority, but not against Landlord, for the
taking of Tenant’s leasehold interest, options, personal property, fixtures and any other rights of property of Tenant, or for relocation or business interruption expenses recoverable from the taking authority. 
  
 ARTICLE NINE: ASSIGNMENT AND SUBLETTING 
  
 Section 9.1 Landlord’s Consent Required. No portion of the
Premises or of Tenant’s interest in this Lease may be acquired by any other person or entity, whether by sale, assignment, mortgage, sublease, transfer, operation of law, or act of Tenant (collectively, a “Transfer”), without
Landlord’s prior written consent (except as provided in Section 9.2 below), which consent shall not be unreasonably withheld, conditioned or delayed, as described in Section 9.4 below. 
  

 12 

 Section 9.2 Tenant Affiliate. Tenant may effect a Transfer, without Landlord’s consent, to
any entity which controls, is controlled by or is under common control with Tenant, or to any entity resulting from the merger of or consolidation with Tenant or acquiring all or substantially all of the assets of Tenant, or to any entity in which
Tenant or its parent or affiliate maintains at least a 25% ownership interest (“Tenant’s Affiliate”). 
  
 Section 9.3 No Release of Tenant. No Transfer permitted by this Article Nine, whether with or without Landlord’s consent, shall release Tenant
or change Tenant’s primary liability to pay the rent and to perform all other obligations of Tenant under this Lease. Landlord’s acceptance of rent from any other person is not a waiver of any provision of this Article Nine. Consent to one
Transfer is not a consent to any subsequent Transfer. 
  
 Section
9.4 Landlord’s Consent. Tenant’s request for consent to any Transfer described in Section 9.1 shall set forth in writing the details of the proposed Transfer including the name, business of the prospective transferee, the
prospective transferee’s financial statements and the basic leasing details of the proposed Transfer (e.g., the term of and the rent and security deposit). Landlord shall have the right to withhold consent, if reasonable, or to grant consent,
within ten (10) days after receipt of such request (failing which, Landlord’s consent shall be deemed to have been given). If Landlord does not consent, Landlord shall provide detailed reasons for its disapproval. The parties hereby agree that
the only reasonable reasons under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer are where one or more of the following apply: (i) the transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Premises; or (ii) the transferee intends to use the subject space for purposes which are not permitted under this Lease or (iii) the transferee, in Landlord’s reasonable judgment, does
not have sufficient financial resources to discharge its obligations under the Lease on an ongoing basis. 
  
 Section 9.5 Permitted Occupants. Provided Tenant complies with the Permitted Occupant Conditions (as defined below), then, notwithstanding anything
to the contrary set forth in this Lease, Tenant shall have the right to allow employees of one or more entities with whom Tenant has a business relationship (“Tenant Venturers”) to use designated portions of the Premises without execution
and approval by Landlord of a separate sublease for such use. The “Permitted Occupant Conditions” shall mean all of the following: (a) the permitted occupants shall only be employees of a Tenant Venturer, (b) such occupants shall use, in
the aggregate at any one time, no more than 5,000 square feet of the Premises, (c) such use shall be on a temporary basis, and, in any event, no such occupant shall have the right to use the Premises for more than six (6) consecutive months, (d)
Tenant shall provide Landlord with prior written notice of the intended presence on the Premises of any such occupants, (e) the Tenant Venturer employing such permitted occupants shall provide Landlord with satisfactory evidence of insurance
covering the activities of their respective employees within the Premises, and (f) such right to use the Premises shall at all times be subordinate to the Lease. 
  
 ARTICLE TEN: DEFAULTS; REMEDIES 
  
 Section 10.1 Tenant Defaults. Tenant shall be in material default (“Default”) under this Lease: 
  
 (a) If Tenant fails to pay rent or any other charge within
five (5) business days after the date due and such failure continues for five (5) business days after written notice of such failure; or 
  
 (b) If Tenant fails to perform any of Tenant’s non-monetary obligations under this Lease for a period of thirty (30) days after
written notice from Landlord; provided that if more than thirty (30) days are required to complete such performance, Tenant shall not be in default if Tenant commences such performance within the thirty (30)-day period and thereafter diligently
pursues its completion; or 
  
 (c) If a
“Default” occurs and is continuing under Section 10.1 of any of the other leases between Landlord and Tenant entered into concurrently with this Lease for adjacent premises located at 17572, 17522 and 17632 Armstrong Avenue, Irvine,
California (the “Other Leases”), unless Landlord hereunder is not at that time the landlord of the Other Lease under which the Default occurred. 
  
 Section 10.2 Remedies. During the continuance of a Default by Tenant as described in Section 10.1, Landlord may, at any time thereafter, upon
statutory notice to Tenant: 
  
 1. Terminate
Tenant’s right to possession of the Premises. No act by Landlord other than giving notice of termination to Tenant pursuant to this Section 10.2.1. or the other termination rights granted by Landlord hereunder shall terminate this Lease. Acts
of maintenance, efforts to relet the Premises, or the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest under this Lease shall not constitute a termination of Tenant’s right to possession. On
termination, Landlord has the right to recover from Tenant: 
  
 (a) The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; 
  

 13 

 (b) The worth, at the time of the award, of the amount by which the unpaid rent that
would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; 
  
 (c) The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; and 
  
 (d) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s Default. 
  
 “The worth, at the time of the award,” as used in subsections a, b and c, above, is
to be computed by utilizing a discount rate of ten percent (10%) per annum and calculating the present value of the applicable rent to be paid over the applicable period. 
  
 2. Utilize the remedy described in California Civil Code section 1951.4 (which says landlord may continue
the lease in effect after a tenant’s breach and abandonment and recover rent as it becomes due, if tenant has the right to sublet or assign subject to reasonable limitations). If an abandonment of the Premises by Tenant occurs or if Landlord
elects to reenter as provided above or shall take possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then if Landlord does not elect to terminate this Lease as provided above, Landlord may from time to
time, without terminating this Lease, either recover all rent as it becomes due or relet the Premises or any part thereof for the Term on terms and conditions as Landlord in its commercially reasonable discretion may deem advisable. If Landlord
elects to so relet, then rentals received by Landlord from that reletting shall be applied: first, to the payment of any indebtedness other than rent due under this Lease from Tenant to Landlord; second, to the payment of any reasonable cost of such
reletting; third, to the payment of the reasonable cost of any alterations and repairs to the Premises that are Tenant’s obligation under this Lease; fourth, to the payment of rent due and unpaid under this Lease; and the residue, if any, shall
be held by Landlord and applied to payment of future rent as the same may become due and payable under this Lease. Should that portion of such rentals received from such reletting during any month, which is applied to the payment of rent under this
Lease, be less than the rent payable during that month by Tenant under this Lease, then Tenant shall pay such deficiency to Landlord immediately upon demand therefor by Landlord. Such deficiency shall be calculated and paid monthly. 
  
 3. Landlord may, during the continuance of a Default by
Tenant, cure the Default at Tenant’s cost provided Tenant is given notice and time to cure the Default and Landlord provides an additional notice that Landlord intends to cure Tenant’s Default under this Section 10.2(3). If Landlord cures
Tenant’s Default after such notice by paying any sum or doing any act that was Tenant’s obligation under this Lease, the amount paid by Landlord (or the reasonable cost incurred by Landlord in performing the act) shall be due immediately
from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the rate of ten percent (10%) per annum from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with
interest on it, shall be Additional Rent. 
  
 Section 10.3
Cumulative Remedies; Mitigation. Landlord’s exercise of any right or remedy shall not prevent it from exercising any other right or remedy. Landlord shall use commercially reasonable efforts to mitigate damages in the event of a Default
by Tenant under this Lease. In no event shall Landlord or Landlord Parties or Tenant or Tenant Parties be liable to the other for any consequential, punitive or other so-called “special” damages under this Lease. 
  
 Section 10.4 Landlord’s Defaults. 
  
 (a) General. Notwithstanding anything to the contrary
set forth in this Lease, Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if (i) in the event a failure by Landlord is with respect to the payment of money, Landlord fails
to pay such unpaid amounts within five (5) business days of written notice from Tenant that the same was not paid when due; or (ii) in the event a failure by Landlord is other than (i) above, Landlord fails to perform such obligation within a
reasonable time period with the expenditure of diligent efforts, but in no event more than thirty (30) days after the receipt of written notice from Tenant specifying Landlord’s failure to perform; provided, however, if the nature of
Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if Landlord commences such performance within such thirty (30) day period and thereafter
diligently pursue the same to completion. Upon any such default by Landlord under this Lease, Tenant may exercise any of its rights provided in this Lease or at law or in equity. Any notice provided by Tenant pursuant to this Section 10.4(a) shall
not be effective unless it is substantially 

  

 14 

 
concurrently delivered to the last known address of Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were
previously provided to Tenant). In no event shall Tenant be entitled to terminate this Lease as a result of a default of Landlord unless the default materially and adversely impacts Tenant’s ability to use a material portion of the Premises for
its business operations and Tenant has first given written notice of intent to terminate to Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were previously provided to Tenant) offering such Lender an
additional 30 days beyond the notice and cure period granted to Landlord under this Lease, if any, in which to cure Landlord’s default. 
  
 (b) Abatement of Rent. In the event that Tenant is prevented from using the Premises or any material portion thereof (meaning that
Tenant is unable to use that portion of the Premises in the normal course of its business) as a result of (i) any repair, maintenance or alteration negligently performed by Landlord, or which Landlord failed to perform, as required by this Lease; or
(ii) the presence of, or cleanup or remediation activities in connection with, Hazardous Materials brought on the Premises by Landlord or a Landlord Party; or (iii) cessation of utilities or services caused by Landlord’s negligence or willful
misconduct (any such set of circumstances as set forth in items (i) through (iii), above, to be known as an “Abatement Event”), then Tenant shall give Landlord written notice of such Abatement Event, and if such Abatement Event continues
for two (2) consecutive business days after such notice, or occurs for ten (10) non-consecutive business days in a twelve (12) month period (in either of such events, the “Eligibility Period”), then the Base Rent and Additional Rent shall
be abated or reduced, as the case may be, after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using the Premises, or a portion thereof, in the proportion that the floor area of the portion of the
Premises that Tenant is prevented from using (“Unusable Area”), bears to the total floor area of the Premises. If Landlord has not cured such Abatement Event within one hundred eighty (180) days after receipt of written notice from Tenant,
Tenant shall have the right to terminate this Lease during the first ten (10) business days of each calendar month following the end of such 180-day period until such time as Landlord has cured the Abatement Event, which right may be exercised only
by delivery of thirty (30) days’ notice to Landlord and Landlord’s Lender (provided such Lender’s name and notice address were previously provided to Tenant) (the “Abatement Event Termination Notice”) during such ten (10)
business-day period, and shall be effective as of a date set forth in the Abatement Event Termination Notice (the “Abatement Event Termination Date”), which Abatement Event Termination Date shall not be less than thirty (30) days, and not
more than one (1) year, following the delivery of the Abatement Event Termination Notice. Tenant’s Abatement Event Termination Notice shall be null and void (but only in connection with the first notice sent by Tenant with respect to each
separate Abatement Event) if Landlord or Landlord’s Lender(s) cures such Abatement Event within such thirty (30) day period following receipt of the Abatement Event Termination Notice. 
  
 ARTICLE ELEVEN: LENDERS 
  
 Section 11.1 Subordination, Non-Disturbance and Attornment. Landlord
shall deliver to Tenant concurrently with the closing under the Purchase Agreement fully executed commercially reasonable non-disturbance agreement(s) (“SNDA’s”) in favor of Tenant from all existing ground lessors, mortgage holders or
lien holders of Landlord, including Landlord’s Lender (and such delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the SNDA’s are delivered, rent,
payable retroactively from the Commencement Date, shall be paid immediately), and, thereafter, Landlord shall deliver SNDA’s from all such parties who later come into existence with respect to the Premises or any portion thereof at any time
prior to the expiration of the Term. Such commercially reasonable SNDA’s shall not modify the provisions of this Lease, shall include the obligation of any such ground lessor, mortgage holder, lien holder or successor landlord, upon taking
title to the Premises, and so long as a Default by Tenant is not continuing, to not disturb Tenant’s right of possession of the Premises in accordance with the Lease, to recognize and accept all of Tenant’s rights under the Lease,
including the right to offset certain amounts against Rent due hereunder, and to assume all of Landlord’s continuing obligations under this Lease as set forth herein. Subject to Tenant’s receipt of the SNDA’s described above, this
Lease shall be subject and subordinate to all present and future ground or underlying leases of the Premises and to the lien of any mortgage, trust deed or other encumbrances now or hereafter in force against the Building or Premises or any part
thereof, 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,
trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto. Subject to Tenant’s receipt of the SNDA’s described above, Tenant covenants and agrees
in the event any proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to attorn to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or
deed in lieu thereof (or to the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease. Subject to Tenant’s
receipt of the SNDA’s described herein, 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. 
  

 15 

 Section 11.2 Estoppel Certificates. Within ten (10) business days following a request in writing
by Landlord or Tenant, Tenant or Landlord, as the case may be, shall execute, acknowledge and deliver to the requesting party (the “Requesting Party”) an estoppel certificate in such commercially reasonable form as may be required by the
Requesting Party, indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information regarding the status of the Lease reasonably requested by the Requesting Party. Any such certificate may be relied
upon by any prospective mortgagee or purchaser of all or any portion of the Premises or by any assignee, sublessee or leasehold mortgagee, as the case may be. Landlord or Tenant, as the case may be, shall execute and deliver whatever other
instruments may be reasonably required for such purposes. 
  
 ARTICLE TWELVE: LEGAL COSTS 
  
 In the event of any
arbitration or suit under this Lease, reasonable attorneys’ fees and costs shall be awarded by a court or arbitrator to the prevailing party (as determined by the trier of fact) and are to be included in any judgment or award. In addition, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred in enforcing any judgment arising from a suit or arbitration under this Lease including but not limited to post judgment motions, contempt proceedings,
garnishment, levy and debtor and third party examinations, discovery and bankruptcy litigation, without regard to schedule or rule of court purporting to restrict such award. This post judgment or award of attorneys’ fees and costs provision
shall be severable from any other provisions of this Lease and shall survive any judgment/award on such suit or arbitration and is not to be deemed merged into the judgment/award or terminated with the Lease. For the purpose of this provision, the
term “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of legal counsel (including external counsel and, to the extent fulfilling functions of an attorney at law, excluding de
minimis administrative activities of, in-house counsel) to the parties hereto, which include printing, photocopying, duplicating, mail, overnight mail, messenger, court filing fees, cost of discovery, fees billed for law clerks, paralegals,
investigators and other persons not admitted to the bar but performing services under the supervision or direction of an attorney. For the purpose of determining in-house counsel fees, the same shall be considered as those fees normally applicable
to a partner in a law firm with like experience in such field. 
  
 ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS 
  
 Section
13.1 Landlord’s Liability. Any Landlord who transfers in a bona fide transaction its title or interest is relieved of all liability with respect to the obligations of Landlord under this Lease to be performed on or after the date
of transfer and after receipt by Tenant of the written assumption of all of Landlord’s obligations under this Lease by the transferee; provided, however, that the foregoing shall not relieve a transferring Landlord of responsibility for
defaults by such transferring Landlord existing prior to the date of such transfer. However, each Landlord shall deliver to its transferee all funds (including the Security Deposit) that Tenant previously paid to or deposited with Landlord if such
funds have not yet been applied or returned under the term of this Lease. Notwithstanding any term or provision herein to the contrary, the liability of Landlord for the performance of its duties and obligations under this Lease is limited to
Landlord’s interest in the Premises and the rents, profits, sale/financing proceeds and insurance proceeds therefrom, and in the assets of Landlord, but Landlord’s partners, shareholders, officers or other principals shall have no personal
liability under this Lease. 
  
 Section 13.2 Severability.
A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this Lease, which shall remain in full force and
effect. 
  
 Section 13.3 Interpretation. The captions of
the Articles or Sections of this Lease are to assist the parties in the reading this Lease and are not a part of the terms or provisions of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the
plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. 
  
 Section 13.4 Incorporation of Prior Agreements. This Lease is the only agreement between the parties pertaining to the lease of the Premises and no
other agreements are effective. All amendments to this Lease shall be in writing and signed by all parties. Any other attempted amendment shall be void. 
  
 Section 13.5 Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be delivered to the Premises and the address for notice set forth in Article One. Notices to Landlord shall be delivered to the address for notice set forth in Article One. All
notices shall be effective upon delivery. Either party may change its notice address upon written notice to the other party. 
  

 16 

 Section 13.6 Waivers. All waivers must be in writing and signed by the waiving party.
Landlord’s failure to enforce any provision of this Lease or its acceptance of rent shall not be a waiver and shall not prevent Landlord from enforcing that provision or any other provision of this Lease in the future. No statement on a payment
check from Tenant or in a letter accompanying a payment check shall be binding on Landlord, Landlord may, with or without notice to Tenant, negotiate such check without being bound to the conditions of such statement. 
  
 Section 13.7 Memorandum of Lease. Landlord shall deliver to Tenant
concurrently with the execution of this Lease a properly executed and notarized memorandum of this Lease to be recorded against the Premises in the form attached hereto as Exhibit “C” (the “Memorandum of Lease”) (and such
delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the Memorandum of Lease is delivered, rent, payable retroactively from the Commencement Date, shall be
paid immediately). Tenant shall pay any transfer costs or recording fees in connection therewith. 
  
 Section 13.8 Binding Effect; Choice of Law. This Lease binds any party who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant’s successor unless the rights or interests of Tenant’s successor are acquired in accordance with the terms of this Lease. The laws of the State of California, without regard to
conflicts of law, shall govern this Lease. Each of the parties voluntarily submits to the jurisdiction of the courts of the State of California, and to exclusive venue in Orange County, California. 
  
 Section 13.9 Authority. Each person signing this Lease on behalf of
Landlord and Tenant represents and warrants that he has full authority to do so and that this Lease binds the entity on whose behalf he or she is signing. 
  
 Section 13.10 Force Majeure. If Landlord or Tenant cannot perform any of its obligations due to events beyond such party’s control (other than
the payment of money), the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond a party’s control include, but are not limited to, acts of God, war, civil
commotion, terrorism, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, governmental regulation or restriction and weather conditions. 
  
 Section 13.11 Execution of Lease. This Lease may be executed in counterparts and, when all counterpart documents are
executed, the counterparts shall constitute a single binding instrument. This Lease shall not be deemed to be an offer to lease and shall not be binding upon either party until executed and delivered by both parties. 
  
 Section 13.12 Survival. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease. 
  
 Section 13.13 Duty To Act Reasonably. Except as specifically set forth in this Lease to the contrary, any time the consent of Landlord or Tenant is required, such consent shall not be unreasonably withheld, conditioned or delayed.
Whenever the Lease grants Landlord or Tenant the right to take action or exercise discretion, or grants Tenant or Landlord the right to make allocations or other determinations, Landlord and Tenant shall act reasonably and in good faith. 

 
 Section 13.14 No Brokers. Landlord and Tenant each represent and
warrant to the other that they have employed no broker and/or finder in connection with this Lease, or any other documents or matters relating to the Premises. In the event any claim, demand, or cause of action for brokerage and/or finder’s
fees is asserted against a party to this Lease who did not request such services, the party through whom the broker or finder is making the claim shall protect, indemnify, defend and hold harmless the other party from and against any and all claims,
demands and causes of action. 
  
 FOURTEEN: OTHER AGREEMENTS OF
LANDLORD AND TENANT 
  
 Section 14.1 Signs. Tenant shall
have the exclusive right to use, install and maintain exterior Building signs and/or monument signs at the Premises identifying its business provided such signs shall comply with all applicable local and state laws, rules, and regulations.

  
 Section 14.2 Confidentiality Landlord acknowledges that
the contents of this Lease and any related documents are confidential information. Landlord shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than
Landlord’s partners, administrators, consultants, financial, legal, and space planning consultants or a prospective or current purchaser, mortgagee, or ground or underlying lessor of the Building or the Project, and except as required by
applicable law or in connection with a dispute or litigation hereunder or as required by a subpoena. Any press releases or announcements made in connection with the contents of this Lease and/or any related documents shall be subject to the prior
approval of Tenant. 
  
 Section 14.3 Telecommunication
Equipment. At any time during the Lease term, Tenant may, upon notice to Landlord, install, at Tenant’s sole cost and expense, 

  

 17 

 
telecommunication equipment upon the roof of the Building, without the payment of any additional charge, and Tenant shall have exclusive use of the roof of
the Building. Tenant and Tenant’s service providers may use existing ducts and conduits as reasonably necessary to connect telephone and other communications services to the Premises, without any additional charge or fee. Tenant may also
install, maintain, replace, remove or use, without any additional charge or fee therefor, any communications or computer wires and cables in or serving the Premises. Notwithstanding the foregoing, any damage resulting to the roof or any other
portion of the Premises from Tenant’s or Tenant’s service providers’ installation of such telecommunication equipment shall be the sole responsibility of Tenant. 
  

 18 

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

  

					
	 “LANDLORD”

	
	 JS SJK L.P., a California limited liability company

		
	 By:
	 	 
			
	 	 	 Its:
	 	 

  

					
	 “TENANT”

	
	 ST. JOHN KNITS, INC.

		
	 By:
	 	 
			
	 	 	 Its:
	 	 

  

 19 

 Exhibit “A” 
  
 Legal Description 
  
 [to be attached] 
  

 20 

 Exhibit B 
  

Base Rent Increase Examples 
  
 Example 1 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in effect at end of month in which Rental Adjustment Date occurs (normally, 30 months
after the Comparison Date): 110 
  
 New Monthly Base Rent to be paid until next
Rental Adjustment Date (ignoring floor or cap addressed below): $41,250 (110/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor
does not apply. 
  
 New Monthly Base Rent to be paid until next Rental
Adjustment Date: $41,250. 
  
 Example 2 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison
Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the
Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in
effect at end of month in which Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 120 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $45,000 (120/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month
Rental Adjustment Period): $41,363.25. Cap now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is capped at $41,363.25. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor does not apply. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $41,363.25.

  

 21 

 Example 3 
  

Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the
“Comparison Date”): 100 
  
 Index in effect at end of month in which
Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 105 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $39,375 (105/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30
month Rental Adjustment Period): $39,887.88. Floor now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is $39,887.88. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $39,887.88. 
  

 22 

 Exhibit C 
  

Form of Memorandum of Lease 
  

			
	 RECORDING REQUESTED BY
 AND WHEN RECORDED MAIL
TO:
	 	 
		
	 Dean Dunn-Rankin, Esq.
 Hewitt & O’Neil
LLP
 19900 MacArthur Blvd, Suite 1050
 Irvine, CA
92612
	 	 
	 	 	(SPACE ABOVE THIS LINE FOR RECORDER’S USE)

  
 MEMORANDUM 

 
 THIS MEMORANDUM OF LEASE (this “Memorandum”), dated as of the
             day of                     , 2004, is made by and between ST.
JOHN KNITS, INC., a California corporation (“Tenant”) and JS SJK L.P., a California limited liability company (“Landlord”). 
  
 R E C I T A L S 
  
 A. Landlord is the fee simple title owner of that certain property commonly known as
                    , legally described on Exhibit A attached hereto and made a part hereof (the “Premises”). 
  
 B. Landlord and Tenant have entered into that certain Lease Agreement dated
as of                     , 2004 (the “Lease”), pursuant to which Landlord has agreed to lease to Tenant the Premises upon the terms
and conditions set forth in the Lease. 
  
 C. Landlord and Tenant
desire to set forth certain terms and provisions contained in the Lease in this Memorandum for recording purposes. 
  
 NOW, THEREFORE, for and in consideration of the rents reserved and the covenants and conditions set forth in the Lease, Landlord and Tenant do hereby
covenant, promise and agree as follows: 
  
 1. Definitions.
Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed to them in the Lease. 
  
 2. Grant of Lease. Pursuant to the Lease and this Memorandum, Landlord demises and leases to Tenant and Tenant leases from Landlord the Premises
upon the terms and conditions set forth in the Lease. 
  
 3.
Commencement Date. The Term of the Lease shall commence on the date specified in the Lease. 
  
 4. Expiration Date. The Term of the Lease shall expire, unless sooner terminated or unless extended or renewed as provided therein, at the end of
the first full month occurring one hundred eighty (180) months after the Commencement Date. 
  

 23 

 5. Rent. The Rent due and payable from Tenant to Landlord for the Term of the Lease and any
extension term shall be determined and shall be payable pursuant to the terms and provisions of the Lease. 
  
 6. Options to Extend. Tenant has three (3) options to extend the Term of the Lease for consecutive terms of sixty (60) months each and one (1)
additional option to extend the Term of the Lease for a term of fifty-nine (59) months, subject to and on the terms and conditions set forth in the Lease. 
  
 IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date first written above. 
  

									
	 LANDLORD:
 JS SJK L.P., a California limited liability company
	 	 	 	 TENANT:
 St. John Knits, Inc.

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

  

 24 

					
	 STATE OF                     
	 	 )
	  	 
	 	 	 )
	  	 
	 COUNTY OF                 
	 	 )
	  	 

  
 I, the undersigned, a
notary public in and for said County, in the State aforesaid, DO HEREBY CERTIFY that
                                       
                                         
personally known to me to be the
                                       
  of
                                        
                 a
                                       
  corporation, personally known to me to be the same person whose name is subscribed to the foregoing instrument, appeared before me this day in person and severally acknowledged that as such
                    , signed and delivered the said instrument, pursuant to authority, given by the Board of Directors of said
corporation as                      free and voluntary act, and as the free and voluntary act and deed of said corporation, for the
uses and purposes therein set forth. 
  
 GIVEN under my hand and
official seal this              day of                     ,
20    . 
  

	
	
	 
	Notary Public
	
	 My commission
expires:                                      
                 

  

 25 

 EXHIBIT A 
  

LEGAL DESCRIPTION OF PREMISES 
  

 26 

 Exhibit E-4 
  
 LEASE AGREEMENT 
 (Single Tenant Net) 
  
 This Lease Agreement (this
“Lease”) is made this                      day of
                    , 2004, by and between ST. JOHN KNITS, INC., a California corporation (“Tenant”), and JS SJK L.P., a California
limited liability company (“Landlord”), based upon the following facts: 
  
 RECITALS 
  
 A. Pursuant to
that certain Purchase Agreement dated June     , 2004, between Tenant, as Seller, and Landlord, as Buyer (the “Purchase Agreement”), Landlord has purchased that certain real property more particularly described
on Exhibit “A” attached hereto (the “Land”) located at 17632 Armstrong in the City of Irvine, County of Orange, State of California, together with a building containing approximately 32,110 square feet of floor area,
including tenant improvements (the “Building”), an exterior surface parking area (the “Parking Area”) and related exterior improvements, including, but not limited to, lighting, access rights and landscaping (the “Exterior
Improvements”). The Land, the Building, the Parking Area and the Exterior Improvements are collectively called the “Premises.” 
  
 B. Landlord desires to lease the Premises to Tenant, and Tenant desires to lease the Premises from Landlord on the terms and conditions set forth herein.

  
 NOW THEREFORE, in consideration of the foregoing recitals (and
those in the Purchase Agreement, all of which are incorporated herein by this reference) and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows: 
  
 ARTICLE ONE: BASIC TERMS 
  
 Section 1.1 Lease Term. The term of this Lease (the “Term”)
shall commence on the date (the “Commencement Date”) immediately following the Closing Date (as that term is defined in the Purchase Agreement) and expire on the last day of the 180th full calendar month thereafter (if the Commencement
Date is not the first day of a calendar month, the last month of the initial Term shall include such additional days as may be required to cause the initial Term to end on the last day of a calendar month). The initial Term may be extended by Tenant
for three (3) additional 60-month periods and one (1) additional 59-month period in accordance with Section 2.3. 
  
 Section 1.2 Permitted Uses: (See Article Five) General office, administrative, research and development, warehouse, distribution, manufacturing,
assembly, retail and commercial uses as permitted by then existing law; provided, however, that Landlord’s prior written approval shall be required for any change in use that requires a variance or other change in then-current zoning.

  
 Section 1.3 Vehicle Access and Parking: Subject to the
terms of this Lease, Tenant shall be entitled to the exclusive use of the Premises and every part thereof, including, without limitation, all entranceways and driveways serving the Premises and the Parking Area for vehicle parking purposes and
ingress and egress to and from the Premises; provided, however, the parties acknowledge that the Premises is subject to all matters of record as of the date hereof, including, without limitation, the terms of that certain Reciprocal Driveway
Easement Agreement (the “REA”) recorded prior to or concurrently with the closing under the Purchase Agreement as specified therein (whereby the Premises is entitled to and encumbered by certain ingress and egress rights with certain
adjacent premises as specified in the REA). All parking spaces shall be available to Tenant throughout the Term, 24 hours per day, free of charge. 
  
 Section 1.4 Rent and Other Charges Payable by Tenant: 
  
 (a) BASE RENT: For the initial 15-year Term, base rent (“Base Rent”) for the Premises shall be Twenty Thousand Eight Hundred
Seventy-Two Dollars ($20,872) per month, subject to increase as set forth below. If Tenant exercises an option to extend the Term of this Lease pursuant to Section 2.3, monthly Base Rent for the first year of the applicable Option Term shall be
determined as set forth in Section 2.3, and the same shall be subject to increase as set forth in Section 1.4(c), below (i.e., at the start of the 31st full calendar month following the commencement of the applicable Option Term). 

 
 (b) OTHER PERIODIC PAYMENTS: (i) Property Taxes (See
Section 4.2); (ii) Utilities (See Section 4.3); (iii) Insurance Premiums (See Section 4.4) 
  
 (c) BASE RENT INCREASES: The monthly Base Rent shall be increased during the initial Term at the commencement of the 31st, 61st, 91st, 121st and 151st full calendar months following the Commencement Date
(and, if Tenant exercises an option to extend, at the 

  

 1 

 
commencement of the 31st
full calendar month following the commencement of the applicable Option Term) (each such date is hereinafter called a “Rental Adjustment Date”) in accordance with the increase in the United States Department of Labor, Bureau of Labor
Statistics, Consumer Price Index for All Urban Consumers (all items for the Los Angeles – Riverside – Anaheim area, 1982-1984 = 100) (the “Index”) as follows: The monthly Base Rent in effect immediately before each Rental
Adjustment Date (the “Comparison Base Rent”) shall be increased by the percentage that the Index has increased from the date on which payment of the Comparison Base Rent began (the “Comparison Date”) through the end of the month
in which the applicable Rental Adjustment Date occurs (each such period a “Rental Adjustment Period”); provided, however, that such increase for any Rental Adjustment Period shall be no less than 2.5% per annum, but no more than 4% per
annum (except that such 4% annual cap shall be increased to a 5% annual cap at the end of the 10th full Lease year,
that is, for the adjustments commencing with the adjustment at the start of the 151st month of the Term) on a
compounded, cumulative basis. A numerical example of such Base Rent increase mechanism is provided in Exhibit “B” attached hereto. Landlord shall notify Tenant of each increase by a written statement. Tenant shall pay the new Base
Rent from the applicable Rental Adjustment Date until the next Rental Adjustment Date. Landlord’s notice may be given not more than three (3) months after the applicable Rental Adjustment Date of the increase, and Tenant shall pay Landlord the
accrued rental adjustment for the months elapsed between the effective date of the increase and Landlord’s notice of such increase within ten (10) days after Landlord’s notice. If the format or components of the Index are materially
changed after the Commencement Date, Landlord shall substitute an index which is published by the Bureau of Labor Statistics or similar agency and which is most nearly equivalent to the Index in effect on the Commencement Date. The substitute index
shall be used to calculate the increase in the Base Rent unless Tenant objects to such index in writing within fifteen (15) days after receipt of Landlord’s notice. If Tenant objects, Landlord and Tenant shall submit the selection of the
substitute index for binding arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) (except the arbitrators shall determine the substitute index rather than the Option Rent). The costs of arbitration shall be borne equally by Landlord
and Tenant. 
  
 Section 1.5. Addresses for Notices and
Payments: 
  
 Address of Landlord: c/o Optima
Asset Management, 1600 Dove Street, Suite 480, Newport Beach, CA 92660 
  
 Address of Tenant: 2722 Michelson Drive, Irvine, California 92612 Attention: CFO 
  
 Section 1.6. Security Deposit. Tenant shall deposit with Landlord upon execution hereof an amount equal to the first two months’ Base Rent as
security for Tenant’s faithful performance of its obligations under the Lease (the “Security Deposit”). If a Default (as defined in Section 10.1) by Tenant occurs under this Lease, then during the continuance of such Default Landlord
may use, apply or retain all or any portion of the Security Deposit for the payment of any amount due Landlord or to reimburse or compensate Landlord for any liability, expense, loss or damage that Landlord has suffered or incurred by reason
thereof. If Landlord uses or applies all or any portion of the Security Deposit in accordance with the foregoing requirements, Tenant shall within ten (10) days after written request therefor deposit monies with Landlord sufficient to restore said
Security Deposit to the full amount required by the Lease. The Security Deposit shall not bear interest and may be commingled with other funds of Landlord. Provided a Tenant Default is not then continuing under this Lease, the Security Deposit shall
be returned to Tenant, without interest, within thirty (30) days after the expiration of Term. 
  
 ARTICLE TWO: LEASE TERM 
  
 Section 2.1 Lease of Premises For Lease Term. Landlord leases the Premises to Tenant and Tenant leases the Premises from Landlord for the Lease Term. The Lease Term is for the period stated in Section 1.1 above and shall begin and
end on the dates specified in Section 1.1 above, unless the beginning or end of the Lease Term is changed under any provision of this Lease. The “Commencement Date” shall be the date specified in Section 1.1 above for the beginning of the
Lease Term. 
  
 Section 2.2 Possession; Waiver of Distraint
The parties acknowledge that Tenant is currently occupying the Premises and that Landlord shall be deemed to have delivered possession of the Premises to Tenant on the Commencement Date. Title to all of Tenant’s FF&E (as defined in
Section 6.6, below) shall remain in Tenant and Tenant alone shall be entitled to claim depreciation therefor. Landlord hereby waives, releases and relinquishes any and all rights of distraint, levy, attachment or recourse to the FF&E. Although
the foregoing waiver, release and relinquishment shall be self-operative without the necessity for any further instrument or document, Landlord hereby agrees to furnish Tenant or any vendor or other supplier under any conditional sale, chattel
mortgage or other security arrangement, any consignor, and holder of reserved title or any holder of a security interest, upon written request from time to time, waivers reasonably satisfactory to Tenant of Landlord’s right to distraint, levy,
attachment or recourse with respect thereto and exempting the same from distraint, levy, attachment or recourse. 
  

 2 

 Section 2.3 Options to Extend Term. 
  
 (a) Option Right. Landlord hereby grants to Tenant four (4) options to extend the Term as to the
entire Premises for a period of 60 months each, except that the last option shall be for a period of 59 months (each of the foregoing option terms is referred to hereinafter as an “Option Term”), which options shall be exercisable by
written notice delivered by Tenant to Landlord as provided below. Upon the exercise of any such option to extend, the then-existing Term shall be extended for a period of 60 months (59 months for the last option) on the same terms and conditions as
set forth in this Lease, except that monthly Base Rent for the first year of the Option Term shall be determined as set forth below. 
  
 (b) Option Rent. The annual Base Rent payable by Tenant for the first year of any Option Term shall be equal to 95% of the
“Fair Market Rental Rate,” as that term is defined in Section 2.3(e), below, but in no event shall the annual Base Rent payable by Tenant for the first year of any Option Term be less than the annual Base Rent in effect immediately prior
to the start of such Option Term. The Base Rent payable throughout the Option Term, including during the first year, is referred to hereinafter as the “Option Rent.” The monthly Option Rent determined for the first year of an Option Term
shall subject to increase at the start of the 31st full calendar month during such Option Term in accordance with
the Base Rent increase procedures set forth in Section 1.4(c). 
  
 (c) Exercise of Option. The options contained in this Section 2.3 shall be exercised by Tenant, if at all, only in the following manner: (i) Tenant shall deliver written notice (the “Option Interest
Notice”) to Landlord not more than 12 months or less than 9 months prior to the expiration of the initial Term or the immediately preceding Option Term, as the case may be, stating that Tenant is interested in exercising its option for the
Premises; (ii) Landlord, after receipt of the Option Interest Notice, shall deliver notice (the “Option Rent Notice”) to Tenant not less than 30 days after Tenant’s Option Interest Notice, setting forth Landlord’s determination
of the Option Rent; and (iii) if Tenant wishes to exercise such option, Tenant shall, on or before the later of (A) the date occurring 6 months prior to the expiration of the initial Term or immediately preceding Option Term, as applicable, and (B)
the date occurring thirty (30) days after Tenant’s receipt of the Option Rent Notice, exercise the option by delivering written notice thereof to Landlord and upon, and concurrent with, such exercise, Tenant may, at its option, object to the
Option Rent contained in the Option Rent Notice, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. Additionally, if Tenant has not previously delivered the Option
Interest Notice, Tenant may nonetheless irrevocably exercise the option by delivering written notice thereof to Landlord at any time on or before the date occurring 6 months prior to the expiration of the initial Term, or immediately preceding
Option Term, as applicable, in which case the parties shall follow the procedure, and the Option Rent shall be determined, as set forth in Section 2.3(d) below. 
  
 (d) Determination of Fair Market Rental Rate. If Tenant timely and appropriately objects to the Fair
Market Rental Rate, Landlord and Tenant shall attempt to agree upon the Fair Market Rental Rate, using reasonable good-faith efforts. If Landlord and Tenant fail to reach agreement on or before the date which is five (5) months prior to the
expiration of the Term or the immediately preceding Option Term, as applicable (each such date, an “Outside Agreement Date”), then each party shall make a separate determination of the Fair Market Rental Rate within five (5) business days
after the applicable Outside Agreement Date, and such determinations shall be exchanged with each other in sealed envelopes at a meeting held within two (2) business days after such 5-business day period. If neither party accepts the other’s
determination of the Fair Market Rental Rate, and if Tenant at that time fails to rescind its option to renew (which Tenant shall have the right to do by notice to Landlord given prior to submittal to arbitration), then such determinations of the
Fair Market Rental Rate shall be submitted to arbitration in accordance with Sections 2.3(d)(i) through 2.3(d)(v) below. 
  
 (i) Landlord and Tenant shall each appoint one arbitrator who shall be a real estate broker who shall have been active over the five (5)
year period ending on the date of such appointment in the leasing of commercial industrial properties in the Irvine area in which the Premises is located. The determination of the arbitrators shall be limited solely to the issue of whether
Landlord’s or Tenant’s submitted Fair Market Rental Rate is the closest to the actual Fair Market Rental Rate, as determined by the arbitrators, taking into account the requirements of this Lease. Each such arbitrator shall be appointed
within fifteen (15) days after the applicable Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions. The arbitrators
so selected by Landlord and Tenant shall be deemed “Advocate Arbitrators.” 
  
 (ii) The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of
the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral Arbitrator”) who shall be qualified under the same criteria set forth in Section 2.3(d)(i) for qualification of
the two Advocate Arbitrators except that neither the Landlord or Tenant or either parties’ Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or 

  

 3 

 
subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord’s counsel and
Tenant’s counsel. 
  
 (iii) The three (3)
arbitrators shall within thirty (30) days of the appointment of the Neutral Arbitrator reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Fair Market Rental Rate, and shall notify Landlord and Tenant
thereof. Whichever Fair Market Rental Rate is selected by the arbitrators shall become the then applicable Fair Market Rental Rate. The decision of the majority of the three (3) arbitrators shall be binding upon Landlord and Tenant. 
  
 (iv) If either Landlord or Tenant fails to appoint an
Advocate Arbitrator within fifteen (15) days after the applicable Outside Agreement Date, then either party may petition the presiding judge of the Superior Court of Orange County to appoint such Advocate Arbitrator subject to the criteria in
Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such Advocate Arbitrator. 
  
 (v) If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either
party may petition the presiding judge of the Superior Court of Los Angeles County to appoint the Neutral Arbitrator, subject to the criteria in Section 2.3(d)(i), or if he or she refuses to act, either party may petition any judge having
jurisdiction over the parties to appoint such arbitrator (or if no judge having jurisdiction is willing to act, the Judicial Arbitration and Mediation Service located closest to the Premises). The cost of the arbitration shall be paid by Landlord
and Tenant equally. 
  
 (e) Fair Market Rental
Rate. The “Fair Market Rental Rate” shall be equal to the annual Base Rent, at which tenants, as of the commencement of the applicable Option Term, are, pursuant to brokered transactions completed within the twelve (12) month period
prior to the exercise of the applicable option, leasing non-renewal, non-equity, non-affiliated space for a comparable use (based on the use to which Tenant is then putting the Premises) that is comparable in size, location and quality to the
Premises, for a similar lease term, in an arms length transaction, which comparable space is located in the Irvine area (“Comparable Transactions”), taking into consideration all monetary and non-monetary concessions, if any, being granted
such tenants in connection with such Comparable Transactions and the financial condition and credit history of Tenant and the other tenants in such Comparable Transactions, and taking into account the fact that rental increases during the Option
Term are already provided for in this Lease, but excluding the value of any improvements installed or paid for by Tenant. 
  
 Section 2.4 Holding Over. Tenant shall vacate the Premises upon the expiration or earlier termination of this Lease. If Tenant does not vacate the
Premises upon the expiration or earlier termination of the Lease, as the same may be extended as provided above, and Landlord thereafter accepts rent from Tenant, Tenant’s occupancy of the Premises shall be a “month-to-month” tenancy,
subject to all of the terms of this Lease applicable to a month-to-month tenancy except that the monthly Base Rent shall be increased for the first 60 days of holdover to 110% of the monthly Base Rent in effect at the end of the Term and thereafter
to 125% of the monthly Base Rent in effect at the end of the Term (in each case prorated on a daily basis for holdovers of partial months). 
  
 ARTICLE THREE: BASE RENT 
  
 Section 3.1 Time and Manner of Payment. Upon the Commencement Date, Tenant shall pay Landlord the Base Rent in the amount stated in Section 1.4
above for the first month of the Lease Term, prorated for any partial month. On the first day of the second month of the Lease Term and each month thereafter, Tenant shall pay Landlord the Base Rent, in advance, without offset, deduction or prior
demand except as otherwise provided herein. Base Rent shall be payable at Landlord’s address or at such other place as Landlord may designate in writing. 
  

Section 3.2 Late Charge. If Tenant fails to pay any installment of Base Rent or any other payment for which Tenant is obligated to pay Landlord
under this Lease within five (5) business days following written notice of such failure, then Tenant shall pay to Landlord as additional rent a late charge equal to three percent (3%) of the amount due to compensate Landlord for the extra costs
incurred as a result of such late payment. The parties agree that such late charge represents a fair and reasonable estimate of the costs that Landlord will incur by reason of late payment by Tenant. 
  
 ARTICLE FOUR: OTHER CHARGES PAYABLE BY TENANT 
  
 Section 4.1 Additional Rent. All charges payable by Tenant under this
Lease other than Base Rent are called “Additional Rent”. Unless this Lease provides otherwise, Tenant shall pay all Additional Rent then due on the later of (i) fifteen (15) days after receipt of Landlord’s invoice or statement
therefor, or (ii) the next monthly installment of Base Rent. The term “rent” shall mean Base Rent and Additional Rent. 
  

 4 

 Section 4.2 Property Taxes. 
  
 (a) Real Property Taxes. Tenant shall pay all real property taxes on the Premises during the Term.
Subject to Section 4.2(d) below, such payment shall be made prior to the penalty date for such taxes. At Landlord’s request, Tenant shall furnish Landlord with satisfactory evidence that the real property taxes have been paid. Landlord shall
reimburse Tenant for any real property taxes paid by Tenant covering any period of time after the Term. If Tenant fails to pay the real property taxes when due, or if Tenant fails to timely furnish Landlord with satisfactory evidence that the real
property taxes have been paid as set forth above, Landlord may, after fifteen (15) days prior notice to Tenant and Tenant’s failure to pay the real property taxes and furnish Landlord with satisfactory evidence of such payment within such
15-day period, pay the taxes and Tenant shall reimburse Landlord for the amount of such tax payment as Additional Rent. 
  
 (b) Definition of Real Property Tax. “Real property tax” means: (i) any fee, license fee, license tax, business license
fee, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Premises; and (ii) any tax or charge for fire protection, streets, sidewalks, road maintenance, refuse or other services provided to the Premises by any
governmental agency. “Real property tax” does not, however, include Landlord’s federal or state income, franchise, inheritance or estate taxes, any tax on Landlord’s right to receive, or the receipt of, rent or income from the
Premises or against Landlord’s business of leasing the Premises, all of which excluded taxes shall be the responsibility of Landlord. All real property taxes and assessments shall be paid over the longest installment period generally available
(i.e., available to taxpayers upon whom such assessments are imposed without penalty or default) unless Tenant elects to pay same over a shorter installment period. 
  
 (c) Personal Property Taxes. Tenant shall pay in a timely manner all taxes charged against trade
fixtures, furnishings, equipment or any other personal property belonging to Tenant. Tenant shall try to have its personal property taxed separately from the Premises. 
  
 (d) Tenant’s Right to Contest Taxes. Tenant may attempt to have the assessed valuation of all or
part of the Premises or Tenant’s personal property reduced or may initiate proceedings to contest the real property taxes or personal property taxes or may seek to obtain one or more real property tax or personal property tax credits in
connection with the Premises or its operations at the Premises. If requested by Tenant, Landlord shall cooperate with Tenant in such matters. If required by law, Landlord shall join in any proceedings brought by Tenant. However, Tenant shall pay all
costs of the proceedings. If Tenant does not pay real property taxes when due and contests such taxes, Tenant shall not be in default under this Lease for nonpayment of such taxes if Tenant posts bond from an admitted surety in the amount necessary
to protect the Premises from the lien of the unpaid taxes; provided, however, that if applicable law or Landlord’s lender requires that the taxes being contested by Tenant be paid (under protest) during such contest, then Tenant shall make such
payment (under protest). The amount of such bond shall be sufficient to pay the real property taxes plus a reasonable estimate of the interest, costs, charges and penalties which may accrue if Tenant’s action is unsuccessful. The bond made
shall be applied to the real property taxes due, as determined at such proceedings (or upon Tenant’s earlier payment of taxes under protest or otherwise), with any excess being disbursed to Tenant. Upon the final determination of any proceeding
or contest, Tenant shall immediately pay the taxes due, together with all costs, charges, interest and penalties incidental to the proceedings. If Tenant’s contest of taxes results in a reimbursement by one or more taxing authorities of some or
all of the tax payments previously made by Tenant under this Lease, or a credit to Tenant against future tax payments, Tenant shall be entitled to the full amount of such reimbursement or credit. 
  
 Section 4.3 Utilities. Tenant shall pay before delinquency, directly
to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal and other utilities and services used at the Premises or supplied to the Premises at Tenant’s request. In case of a
failure or interruption in utilities or services to the Premises, Landlord shall fully cooperate with Tenant (and no out-of-pocket cost to Landlord unless the failure or interruption was caused by Landlord’s negligence or willful misconduct) to
have the interrupted utilities/services restored. 
  
 Section 4.4
Indemnity and Insurance. 
  
 (a)
Tenant’s Indemnity. Tenant shall indemnify, defend (with attorneys reasonably satisfactory to Landlord), and hold Landlord and its representatives, agents, owners, employees and contractors (collectively, “Landlord Parties”)
harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of the use of the Premises by Tenant or Tenant Parties (as defined in Section 5.3(a)) or from the conduct of
Tenant’s business, or from any activity, work, or thing done or permitted by Tenant or Tenant Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Landlord or Landlord Parties; or 

  

 5 

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Landlord: 
  

	 	(i)	notifies Tenant of the claim or liability in writing within sixty (60) days after the Landlord receives written notice of the claim or liability; 

  

	 	(ii)	permits Tenant to defend or settle against the claim or liability, so long as Landlord is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Tenant in any defense of settlement against the claim or liability. 

  
 (b) Landlord’s Indemnity. Landlord shall indemnify, defend (with attorneys reasonably
satisfactory to Tenant), and hold Tenant and Tenant Parties harmless from and against any and all claims or liability for bodily injury to or death of any person or damage to any property arising out of any activity, work, or thing done by Landlord
or Landlord Parties in or about the Premises, except: 
  

	 	(i)	claims and liabilities occasioned in whole or in part by the negligent acts or omissions of Tenant or Tenant Parties; or 

  

	 	(ii)	claims and liabilities for property damage addressed in Section 4.4(d) entitled “Mutual Waiver of Claims.” 

  
 Such indemnity shall include all reasonable costs, attorney’s fees and expenses incurred
in the defense of any such claim or any action or proceeding brought thereon. This indemnity will be applicable to a claim only if Tenant: 
  

	 	(i)	notifies Landlord of the claim or liability in writing within sixty (60) days after the Tenant receives written notice of the claim or liability; 

  

	 	(ii)	permits Landlord to defend or settle against the claim or liability, so long as Tenant is released from any and all liability as a result of any such settlement; and

  

	 	(iii)	cooperates with Landlord in any defense of settlement against the claim or liability. 

  
 (c) Liability Insurance. Tenant, at Tenant’s own cost and expense, will provide and keep in full
force and effect during the term of this Lease, commercial general liability insurance with limits of not less than Two Million Dollars ($2,000,000) covering bodily injury to persons, including death and loss of or damage to real and personal
property. Such insurance may be provided under Tenant’s blanket public liability insurance policy. During the term of the Lease, Landlord and Landlord’s lender (“Landlord’s Lender”) shall be named as an additional insured
under such insurance. A certificate evidencing such insurance coverage shall be delivered to Landlord not less than fifteen (15) days after the commencement of the Term hereof. Such certificate of insurance will provide for at least ten (10) days
advance notice in the event of cancellation or material modification of its terms. 
  
 (d) Mutual Waiver of Claims. Landlord and Tenant do each herewith and hereby release and relieve the other, and waive their claim
of recovery for loss or damage to property arising out of or incident to fire, lightning or other insurable perils, to the extent covered by insurance maintained by Landlord or Tenant (or the insurance required to be maintained hereunder), whether
or not such loss or damage is due to the negligence of Landlord or Tenant, Landlord Parties or Tenant Parties, or their agents, employees, guests, licensees, invitees or contractors. 
  
 (e) Mutual Waiver of Subrogation. Each of Landlord and Tenant shall use their commercially reasonable
best efforts to have their respective insurance carriers to waive all rights of subrogation against the other party hereto to the extent of Landlord’s or Tenant’s undertaking set forth in Section 4.4(a) or 4.4(b) and Section 4.4(d).

  
 (f) Property Insurance. Tenant shall,
at Tenant’s expense, procure and maintain at all times during the term of this Lease a policy or policies of insurance covering loss or damage to the Premises and the tenant improvements in the Premises (exclusive of Tenant’s trade
fixtures, equipment and other personal property) in the amount of the full replacement value thereof including cost associated with “civil or ordinance of law”, without depreciation or deduction (and such insurance may provide for a
commercially reasonable deductible, the parties hereby agreeing that Tenant’s deductibles in place as of the date of execution of the Purchase Agreement are commercially reasonable), providing protection against all perils included in a Causes
of Loss - Special Form (commonly known as “All-Risk”) policy and, if the Premises are in a flood zone, flood insurance. All insurance shall provide for payment of loss thereunder to 

  

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Landlord, Landlord’s Lender and Tenant as their respective interests may appear. Such insurance policies may be carried under blanket policies covering
other properties of Tenant and/or its affiliates so long as such blanket policies provide insurance at all times for the Premises as required by this Lease, and shall provide that such policies may not be canceled without at least ten (10) days
prior written notice to Landlord. All policies of insurance required to be carried by Tenant or Landlord under this Lease shall be maintained with insurance companies qualified to do business in California holding a General Policyholders Rating of
“B+” and a Financial Rating of “VII” or better, as set forth in the most current issue of Best’s Insurance Guide or a BBB financial strength rating by Standard and Poor’s. 
  
 (g) Workers Compensation Insurance. Tenant shall at
all times carry workers compensation insurance as required by law. 
  
 (h) Earthquake and Flood. If required by Landlord’s lender because the Probable Magnitude of Loss on the Premises exceeds 20% of the full replacement cost of the Premises, then Tenant shall obtain and
maintain earthquake insurance coverage on the Premises (with such deductibles as Tenant may deem reasonable) to the extent such coverage is commercially available. If required by Landlord’s lender because the Premises are in a flood zone,
Tenant shall maintain flood insurance on the Premises (with such deductibles as Tenant may deem reasonable). 
  
 (i) Landlord’s Insurance. Within fifteen (15) days after written notice from Tenant to Landlord given from time to time during
the Term, Landlord shall notify Tenant of the insurance premium cost (the “Cost Notice”) to Landlord to obtain (i) commercial general liability insurance with limits specified by Tenant covering Landlord (and Tenant as an additional
insured) against bodily injury to persons, including death and loss of or damage to real and personal property, and/or (ii) rental loss insurance covering the Base Rent and additional rental payable under this Lease over a one (1) year period.
Within fifteen (15) days after receiving the Cost Notice, Tenant may elect to direct Landlord to obtain some or all of such insurance at Tenant’s cost (and in that regard, Tenant shall reimburse Landlord within thirty (30) days after receipt of
Landlord’s statement or invoice for the insurance premium cost of obtaining same, which statement or invoice shall be accompanied by reasonable evidence of the amounts owing). A certificate evidencing such insurance coverage shall be delivered
to Tenant not less than fifteen (15) days after Tenant’s election to have Landlord obtain such insurance, which certificate of insurance will provide for at least ten (10) days advance notice in the event of cancellation. If Tenant elects to
have Landlord obtain such insurance, Tenant may thereafter notify Landlord that Tenant no longer desires Landlord to maintain such insurance at Tenant’s cost, in which case Tenant shall not be obligated to reimburse Landlord for insurance
premiums applicable to time periods beyond the expiration date of the applicable policy(ies) obtained by Landlord at Tenant’s request as provided above. 
  
 ARTICLE FIVE: USE OF PREMISES 
  
 Section 5.1 Permitted Uses. Tenant may use the Premises for some or all of the Permitted Uses set forth in Section 1.6 above. 
  
 Section 5.2 Manner of Use. Tenant shall not use the Premises in any
way which constitutes a violation of any law, ordinance, or governmental regulation or order regulating the manner of use by Tenant of the Premises or which constitutes a public nuisance; provided, however, that (A) Tenant’s violation of, or
failure to comply with, applicable laws regulating Tenant’s employment practices shall not be considered a default under this Section 5.2 unless a governmental entity brings or threatens in writing to bring action against Landlord as a result
of such violation or failure; (B) Tenant shall not be deemed in default under this Section 5.2 to the extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of
its obligations under other specific provisions of this Lease; and (C) Tenant’s obligations with respect to Hazardous Materials shall be governed exclusively by Section 5.3. Tenant shall have no obligation to comply with applicable laws to the
extent that the particular violation or compliance in question would be remedied or performed, as the case may be, by Landlord’s discharge of its obligations under other specific provisions of the Lease. Tenant shall have the right to contest
by appropriate legal proceedings the validity of any law, ordinance, order, rule, regulation or requirement of the nature herein described. 
  
 Section 5.3 Hazardous Materials. 
  
 (a) Use. Except as (i) used by Tenant to carry out its obligations under the terms of this Lease or (ii) used in connection with
Tenant’s intended use of the Premises, Tenant shall not generate, release, store, treat, or dispose of Hazardous Materials on the Premises without the prior written consent of Landlord. With regard to Hazardous Materials that Tenant proposes to
use on the Premises for purposes other than those identified in (i) or (ii) above, Landlord shall, taking into account such factors as Landlord may reasonably determine to be relevant, promptly grant or withhold consent to the proposed use of
Hazardous Materials. Landlord’s consent shall not be unreasonably withheld. Notwithstanding (i) above, all use by Tenant, Tenant’s subsidiaries and affiliates (“Tenant Affiliates”), Tenant Venturers (as defined in Section 9.5) or
Tenant’s representatives, agents, employees, business invitees, consultants, contractors and 

  

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subtenants (collectively, and including Tenant Affiliates and Tenant Venturers, “Tenant Parties”) of Hazardous Materials on the Premises shall be
carried out in strict compliance with applicable federal, state, and local laws, ordinances, and regulations. 
  
 (b) Indemnification. Tenant shall indemnify, defend, and hold harmless Landlord from any and all claims of liability asserted
against Landlord and Landlord Parties by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage to or loss of use of
property, or cleanup activities (remedial or removal) arising out of or relating to the release, or threat of release, of a Hazardous Material existing at or emanating from the Premises, to the extent caused by Tenant or Tenant Parties during or
prior to the Term of this Lease, or to the extent caused by any third party other than Landlord or Landlord Parties during the Term (provided, however, that Tenant shall have no indemnification obligations, and no liability under this Lease, with
respect to the migration of any Hazardous Material on or under the Premises from adjacent properties). Other than those matters for which Tenant is obligated to indemnify Landlord, Landlord shall indemnify, defend, and hold harmless Tenant from and
against any and all claims of liability asserted against Tenant by a third party, including without limitation any agency or instrumentality of the federal, state, or local government, for bodily injury, including death of a person, physical damage
to or loss of use of property, or cleanup activities (remedial or removal) arising out of or relating to the release or threat of release of any Hazardous Material existing at or emanating from the Premises to the extent caused by Landlord or
Landlord Parties during or after the Term of this Lease or to the extent caused by any third party other than Tenant or Tenant Parties with respect to the migration of any Hazardous Material on or under the Premises from adjacent properties. Neither
party shall be required to indemnify, defend or hold harmless the other for any Hazardous Material existing at or emanating from the Premises prior to the Term of this Lease due to the acts or omissions of a third party; provided, however, that
Landlord and Tenant each shall have the right (and each party shall reasonably cooperate with the other in that regard) to enforce for its own benefit the terms of the environmental indemnification/remediation provisions set forth in or implemented
pursuant to (a) Agreement for Purchase and Sale of Real Property and Joint Escrow Instructions between Baxter Healthcare Corporation and Tenant dated March 12, 1996, and (b) Agreement for Purchase and Sale of Real Property and Joint Escrow
Instructions between Baxter Healthcare Corporation and Tenant dated January 15, 1996 (collectively, the “Environmental Indemnity Agreements”) covering certain existing Hazardous Material contamination and remediation currently taking place
at the Premises. 
  
 (c) Investigation and
Remediation. Tenant shall promptly, at Tenant’s expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises pertaining to or involving any
Hazardous Materials for which Tenant is required to indemnify Landlord as described above. Landlord shall cooperate (at no out-of-pocket cost to Landlord) in any such activities at the request of Tenant. Landlord shall promptly, at Landlord’s
expense, take all investigatory and/or remedial action required by governmental entities having jurisdiction for the cleanup of any contamination of the Premises, pertaining to or involving any Hazardous Materials for which Landlord is required to
indemnify Tenant as described above. Tenant shall cooperate (at no out-of-pocket cost to Tenant) in any such activities at the request of Landlord, including allowing Landlord and Landlord’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Landlord’s investigative and remedial responsibilities. 
  
 (d) Definition. For purposes of this Section 5.3, the term “Hazardous Materials” shall mean any dangerous waste,
hazardous waste, or hazardous substances as defined in the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 as amended (42 U.S.C. § 9601 et seq.), the Resource Conservation and Recovery Act as amended (42 U.S.C.
§ 6901 et seq.), or similar state statutes, as amended. 
  
 Section 5.4 Landlord’s Access. Subject to the security requirements of Tenant and governmental security regulations, Landlord may enter the Premises at all reasonable times to show the Premises to potential buyers, investors or
(during the last 6 months of the Term) tenants, to inspect the Premises, or to discharge Landlord’s obligations as permitted or required under this Lease; provided, however, any such entry into the Premises by Landlord shall be performed in a
manner so as not to interfere with Tenant’s use of, or ingress or egress to, the Premises and, at Tenant’s election, shall be in the company of a representative of Tenant. Landlord shall give Tenant at least 48 hours’ prior notice of
such entry, except in the case of an emergency. Any work performed in connection with such entry shall be performed in a good and workmanlike manner and with due diligence so as not to interfere with Tenant’s use of the Premises. No work shall
result in a diminution of Tenant’s floor area, and Landlord shall not store any materials in the Premises. After completion of any such work, Landlord shall restore the Premises as closely as possible to the condition existing immediately prior
to the commencement of such work. Any proprietary information obtained by Landlord as a result of such entry shall be kept strictly confidential. 
  
 Section 5.5 Quiet Enjoyment. So long as this Lease is not terminated following a default by Tenant, Landlord covenants that Tenant shall have the
right to occupy and enjoy the Premises for the full Lease Term on all the terms and provisions of this Lease. 
  

 8 

 ARTICLE SIX: 
 CONDITION OF PREMISES; MAINTENANCE, REPAIRS AND ALTERATIONS 
  
 Section 6.1 Existing Conditions. Tenant shall accept the Premises subject to all recorded matters, laws, ordinances, and governmental regulations; provided, however, that Tenant shall have the right to approve
in advance any restrictions or encumbrances hereafter placed against the Premises which decrease Tenant’s rights or increase Tenant’s obligations under this Lease, and Landlord shall not place any such restrictions or encumbrances against
the Premises without such prior approval by Tenant. 
  
 Section
6.2 Landlord’s Obligations. Without limitation on the provisions of Sections 5.2, 5.3, 6.3(b), 6.3(c), Article Seven (Damage or Destruction) and Article Eight (Condemnation), Landlord shall maintain and repair (and replace, as necessary)
throughout the Term of this Lease, at Landlord’s expense, all structural elements of the Premises, including without limitation the foundation, structural columns, footings, exterior walls, slab and structural portions of the roof, as well as
subterranean elements of the Land (including sinkholes) and re-asphalting (if necessary) of the Parking Area (as opposed to slurry sealing, which shall be Tenant’s responsibility), except to the extent that the need for such maintenance and
repairs are caused by the negligence or willful misconduct by Tenant or Tenant Parties, in which case Tenant shall be responsible for such maintenance and repairs except to the extent the same are covered by insurance maintained by Landlord. If
Landlord fails to maintain or repair the Premises as required by this Section 6.2 or fails to discharge its obligations under any other provisions of this Lease, Tenant may, without limitation on its other rights or remedies, upon ten (10) business
days’ prior notice to Landlord (and Landlord’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance to completion), perform such maintenance or
repair or other obligation on behalf of Landlord. In such case, Landlord shall reimburse Tenant for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after Tenant’s statement or invoice therefore
plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Landlord shall be done in a good and workmanlike manner, by reputable, licensed
and insured contractors, using quality materials and workmanship commensurate with the condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Landlord shall be solely responsible for compliance with all Applicable
Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality Management District, requirements of the local building
authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  
 Section 6.3 Tenant’s Obligations. 
  
 (a) General. Except for Landlord’s obligations under Section 6.2, 6.3(b), 6.3(c) or as provided elsewhere in this Lease,
Tenant shall at Tenant’s expense keep all portions of the Premises in good order, condition and repair, including the landscaping, irrigation, Parking Area (including ingress and egress, slurry surfacing, striping, lighting and directional
signs), the roof membrane, gutters, drains, HVAC, telecommunications, electrical, mechanical, plumbing, fire sprinklers. If Tenant fails to maintain or repair the Premises as required by this Section 6.3, Landlord may, without limitation on its
other rights or remedies, upon ten (10) business days’ prior notice to Tenant (and Tenant’s failure to commence the maintenance or repair in question within such time and thereafter diligently pursue such repair, replacement or maintenance
to completion), enter the Premises and perform such maintenance or repair on behalf of Tenant. In such case, Tenant shall reimburse Landlord for all reasonable costs incurred in performing such maintenance or repair within thirty (30) days after
Landlord’s statement or invoice therefore plus an administrative charge of 10% of such invoice amount, which statement or invoice shall be accompanied by reasonable evidence of the amounts owed. All work done by Tenant shall be done in a good
and workman like manner, by reputable, licensed and insured contractors, using quality materials and workmanship commensurate with the first class condition of the Premises. In performing such work, but subject to Section 6.3(b) below, Tenant shall
be solely responsible for compliance with all Applicable Requirements as defined below, as well as alterations, additions and requirements of the Americans With Disabilities Act, OSHA, and similar State and local requirements, the local Air Quality
Management District, requirements of the local building authorities, fire officials, insurance underwriters and all other public entities having jurisdiction. 
  

(b) Capital Expenditures to Comply With New Laws. If applicable laws, covenants or restrictions of record, building codes,
regulations and ordinances (“Applicable Requirements”) in effect on the Commencement Date are changed, or if new Applicable Requirements are enacted after the Commencement Date, so as to require during the Term of this Lease the
construction of an addition to or an alteration of the Building or Premises or other physical modification of the Building or Premises (“Capital Expenditure”), Landlord and Tenant shall allocate the cost of such work as follows: If such
Capital Expenditure is required as a result of the specific and unique use of the Premises by Tenant as compared with uses by tenants in general, Tenant shall be fully responsible for the cost thereof, provided, however that if such 

  

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Capital Expenditure is required during the last two (2) years of this Lease and the cost thereof exceeds six (6) months’ Base Rent, Tenant may instead
terminate this Lease unless Landlord notifies Tenant, in writing, within ten (10) days after receipt of Tenant’s termination notice that Landlord has elected to pay the difference between the actual cost thereof and the amount equal to six (6)
months’ Base Rent. If Tenant elects termination, Tenant shall deliver to Landlord written notice specifying a termination date at least sixty (60) days thereafter. If such Capital Expenditure is not the result of the specific and unique use of
the Premises by Tenant (for example, but not limited to, governmentally mandated seismic modifications), then Landlord shall promptly make the Capital Expenditure and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall
only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost thereof by a fraction, the numerator of which is one,
and the denominator of which is the number of months of the useful life of such Capital Expenditure as such useful life is determined by general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the
right to prepay its obligation at any time; provided, however, that if such Capital Expenditure is required during the last year of this Lease and if Landlord or Tenant reasonably determines that it is not economically feasible to pay its share
thereof, Landlord or Tenant shall have the option to terminate this Lease upon ninety (90) days prior written notice to the other unless the other party commits, in writing, within ten (10) business days after receipt of the termination notice, that
it will pay for such Capital Expenditure (however, if Landlord seeks to terminate under the preceding clause, Tenant may exercise its option to extend the Term, if available, within thirty (30) days of Landlord’s notice to prevent such
termination). If Landlord does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Tenant may, without limitation on any other rights or remedies, advance such funds and deduct same (together with interest at 5%
above the then existing Bank of America, Los Angeles, “prime rate”) from Rent until Landlord’s share of such costs have been fully paid. If the balance of the Rent due and payable for the remainder of this Lease is not sufficient to
fully reimburse Tenant on an offset basis, Tenant shall have the right, in addition to any other rights and remedies, to terminate this Lease upon thirty (30) days written notice to Landlord. It is the intent of the parties that the above provisions
shall apply only to newly enacted or new changes to Applicable Requirements after the Commencement Date. If, for example, Tenant elects to make modifications to the Premises which trigger the requirement that additional modifications be made to
comply with ADA requirements existing on the Commencement Date, such additional modifications would not be the result of newly enacted or new changes to Applicable Requirements and thus would be the responsibility of Tenant. 
  
 (c) Replacement of Basic Elements. Subject to the
later provisions hereof, Tenant’s obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in as good operating order and condition as on the
Commencement Date, ordinary wear and tear, casualty and condemnation excepted. As used herein, the term “Basic Elements” shall mean all of the Building’s basic systems and equipment, including, without limitation, (i) HVAC equipment,
(ii) boiler, and pressure vessels, (iii) fire extinguishing systems, including fire alarm and/or smoke detection, (iv) landscaping and irrigation systems, (v) roof membrane, covering and drains, (vi) electrical systems, (vii) plumbing systems,
(viii) mechanical systems, if any, and (ix) life-safety systems. If any of the Basic Elements require repair but cannot be repaired other than at a cost which in is excess of 25% of the cost of replacing such Basic Element, then such Basic Element
shall be replaced by Landlord, and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall only be obligated to pay, each month during the remainder of the then existing Term of this Lease, on the date on which Base Rent is
due, an amount equal to the product of multiplying the cost of such replacement by a fraction, the numerator of which is one, and the denominator of which is the number of months of the useful life of such replacement as such useful life as
determined in accordance with general accepted real estate accounting practices (in no event less than 10 years), with Tenant reserving the right to prepay its obligation at any time. 
  
 Section 6.4 Alterations, Additions, and Improvements. Tenant shall not make any alterations, additions, or
improvements to the Premises (“Alterations”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, except that Landlord’s consent shall not be required for non-structural Alterations
(including, without limitation, painting, carpeting, moving low voltage communications cables and any other non-structural Alterations) which cost in the aggregate for any one project less than One Hundred Thousand Dollars ($100,000) and which do
not materially adversely affect the Building systems or the Building structure. All Alterations shall be done in a good and workmanlike manner, in conformity with all applicable laws and regulations. All Alterations done by Tenant shall be done in a
good and workmanlike manner by duly licensed and insured contractors and in compliance with all laws. Tenant shall give Landlord at least ten (10) days prior written notice of the expected work commencement date of any Alterations which require
Landlord’s consent. 
  
 Section 6.5 Condition upon
Termination. Upon termination of this Lease, Tenant shall surrender the Premises to Landlord, broom clean and in substantially the same condition as on the Commencement Date (or, if Tenant has extended the Term, in the same condition as on the
commencement of the most recent Option Term, as applicable), except for (i) ordinary wear and tear, (ii) damage due to casualty or condemnation, (iii) damage or matters which are Landlord’s 

  

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obligation to repair under this Lease, and (iv) Alterations which Landlord is not entitled to require Tenant to remove as described below (all or some of
which Tenant may elect to leave at the Premises or shall be entitled to remove at the end of the Term). In addition, Tenant shall remove from the Premises within 30 days after expiration of the Term (and shall continue to be liable for rent until
such items are removed and possession of the Premises is restored to Landlord as required herein) all of Tenant’s furniture, trade fixtures, machinery and equipment, furnishings, signs, inventory and any and all other items of personal property
including, without limitation, any materials or equipment that Tenant has installed for use in connection with Tenant’s business processes (such as intercom systems, security systems, computer equipment, table or floor lamps, microwave ovens,
refrigerators, stand-alone heaters or fans, knitting machines and equipment, teleconferencing systems, telecommunication equipment, electrical devices and the like (collectively, the “FF&E”). Notwithstanding the foregoing, in no event
shall Tenant remove any of the following materials or equipment (which shall be deemed Landlord’s property) without replacing the same with materials or equipment of equal or better quality: power wiring or power panels; inset or recessed
lighting or lighting fixtures; wall coverings; drapes, blinds or other window coverings; carpets or other floor coverings; heaters, air conditioners and other heating or air conditioning equipment that are not portable; plumbing or sanitary
equipment; or fencing or security gates. Landlord may require Tenant to remove Alterations installed by Tenant during the Term if, and only if, Landlord’s consent was required for such Alterations during the Term and Landlord informed Tenant in
writing at the time of such consent that Landlord would require removal of same at the end of the Term. All Alterations, if any, which Landlord is permitted to require Tenant to remove hereunder but which Landlord does not require Tenant to remove
(and which Tenant does not otherwise elect to remove) shall become Landlord’s property and shall be surrendered to Landlord upon the expiration or earlier termination of the Lease. Tenant shall repair, at Tenant’s expense, any damage to
the Premises caused by Tenant’s removal of Alterations and FF&E; provided, however, that Tenant shall not be required to repaint the Premises or patch immaterial wall or floor penetrations. 
  
 ARTICLE SEVEN: DAMAGE OR DESTRUCTION 
  
 Section 7.1 Landlord’s Obligation to Rebuild. If the Premises or
any portion thereof is damaged or destroyed by fire or other casualty (a “Casualty”), Tenant shall as soon as reasonably practicable thereafter give notice thereof to Landlord, and Landlord shall thereafter repair the Premises as set forth
in Section 7.5 unless Landlord or Tenant has the right to terminate this Lease as hereinafter provided and Landlord or Tenant elects to so terminate. 
  
 Section 7.2 Landlord’s Right to Terminate. Landlord shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) insurance proceeds (together with any additional amounts Tenant elects, at its option, to contribute) are not available to Landlord to pay the cost to repair the Premises, (ii) Landlord’s independent architect determines that the
Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to,
Hazardous Materials not caused by Landlord, earthquake faults and other similar dangers) within 360 days after the date of such Casualty, or (iii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term
and an independent architect selected by Landlord and reasonably approved by Tenant (“Landlord’s Architect”) determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) such damage will require
more than sixty (60) days to repair. If Landlord elects to terminate this Lease following a Casualty pursuant to this Section 7.2, Landlord shall give Tenant written notice of its election to terminate within thirty (30) days after Landlord has
knowledge of such Casualty, and this Lease shall terminate effective as of the date of such notice; provided, however, that Tenant may nevertheless elect to continue this Lease in full force and effect, in which case Tenant shall repair any damage
to the Premises and shall pay the cost of such repairs, except that Landlord shall deliver to Tenant on a commercially reasonable construction draw basis any insurance proceeds received by Landlord or Landlord’s Lender for the damage repaired
by Tenant. Tenant shall give Landlord written notice of such election within ten (10) days after receiving Landlord’s termination notice. 
  
 Section 7.3 Tenant’s Right to Terminate. Tenant shall have the right to terminate this Lease following a Casualty if any of the following
occurs: (i) Landlord’s Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that the Premises cannot, with reasonable diligence, be repaired by Landlord to a substantially similar
condition as existed prior to such Casualty (or cannot be safely repaired because of the presence of hazardous factors, including, but not limited to, Hazardous Materials, earthquake faults and other similar dangers) within 360 days after the date
of such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises, or (ii) the Premises is destroyed or materially damaged during the last twelve (12) months of the Lease Term and Landlord’s
Architect determines (which determination shall be made and forwarded to Tenant promptly after such Casualty) that such damage will require more than sixty (60) days to repair, or (iii) the Premises are not actually repaired by Landlord to a
substantially similar condition as existed prior to such Casualty within 380 days following such Casualty and the Casualty materially adversely impacts Tenant’s use of a material portion of the Premises. If Tenant elects to terminate this Lease
following a Casualty pursuant to this Section 7.3, Tenant shall give Landlord written notice of its election to terminate within thirty (30) days after receipt of 

  

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Landlord’s Architect’s determination (or within 30 days of the applicable restoration period should Landlord fail to complete repairs during such
period), and this Lease shall terminate as of the date of such notice of election to terminate. 
  
 Section 7.4 Effect of Termination. If this Lease is terminated following a Casualty pursuant to Section 7.2 or Section 7.3, Landlord shall, subject
to the rights of its lenders, be entitled to receive and retain all the insurance proceeds resulting from or attributable to such Casualty, except that any insurance proceeds payable under policies obtained by Tenant which specifically insure
Tenant’s personal property or removable Alterations or any other improvements that Tenant was entitled to remove at the end of the Term shall be paid to Tenant. If neither Landlord nor Tenant elect to terminate this Lease in accordance with the
terms and conditions set forth herein, this Lease will continue in full force and effect, and Landlord shall, as soon as reasonably practicable following notice of the Casualty and receipt of the amounts set forth in clause (i) of Section 7.2,
commence the process of obtaining necessary permits and approvals for the repair of the Premises, and shall commence such repair and prosecute the same diligently to completion as soon thereafter as is practicable. 
  
 Section 7.5 Scope of Obligation to Repair. Landlord’s obligation,
should it elect or be obligated to repair the Premises following a Casualty, shall be limited to the Premises insured by Tenant under this Lease. The reasonable determination in good faith by Landlord’s Architect of or relating to the estimated
time period required for repair or the interference with or suitability of the Premises for Tenant’s use or occupancy shall be conclusively presumed correct for purposes of this Article Seven. 
  
 Section 7.6 Temporary Reduction of Rent. If the Premises is destroyed
or damaged and Landlord or Tenant repairs or restores the Premises pursuant to the provisions of this Article Seven, all Rent payable during the period of such damage, repair and/or restoration shall be reduced according to the degree to which
Tenant’s use of the Premises is impaired until the Premises are again ready for Tenant’s business operations; provided, however, that the foregoing Rent abatement shall apply only to the extent of proceeds received by Landlord from rental
loss or rental interruption insurance unless the Casualty is caused by Landlord’s negligence or Landlord is in violation of Landlord’s obligations to repair or restore the Premises following the Casualty. 
  
 Section 7.7 Waiver. Tenant waives the protection of any statute, code
or judicial decision which grants a Tenant the right to terminate a lease in the event of the substantial or total destruction of the leased Premises. Tenant agrees that the provisions of this Article Seven shall govern the rights and obligations of
Landlord and Tenant in the event of any damage or destruction to the Premises by a Casualty. 
  
 ARTICLE EIGHT: CONDEMNATION 
  
 If
all or a material portion of the Premises is taken by any lawful authority by exercise of the right of eminent domain (including any portion of the Premises which substantially interferes with Tenant’s ingress to or egress from the Premises)
and cannot be restored so as not to materially interfere with Tenant’s use of the Premises, or sold under threat of a taking, either Tenant or Landlord may terminate this Lease effective as of the earlier of (i) the date possession is required
to be surrendered to the authority, or (ii) the date actual possession is delivered to the authority. In addition, in the event (i) title to a portion of the Premises is taken or sold under threat of a taking and (ii) Landlord elects to restore the
Premises in such a way as to alter the Premises materially or in such a way as to materially interfere with Tenant’s use of the Premises, Tenant may terminate this Lease, by written notice to Landlord, effective on the date of vesting of title.
If Tenant has not elected to terminate this Lease as provided above, then Landlord shall promptly, after receipt of the condemnation award, proceed to restore the Premises to substantially its condition prior to the taking, and a proportionate
allowance shall be made to Tenant for the rent corresponding to the time during which, and to the part of the Premises of which, or access or reasonable use of which, Tenant is deprived on account of the taking and restoration. In the event of a
taking, Landlord shall be entitled to the entire amount of any award for Landlord’s interest in the Premises. Notwithstanding the foregoing sentence, Tenant may assert a claim against the taking authority, but not against Landlord, for the
taking of Tenant’s leasehold interest, options, personal property, fixtures and any other rights of property of Tenant, or for relocation or business interruption expenses recoverable from the taking authority. 
  
 ARTICLE NINE: ASSIGNMENT AND SUBLETTING 
  
 Section 9.1 Landlord’s Consent Required. No portion of the
Premises or of Tenant’s interest in this Lease may be acquired by any other person or entity, whether by sale, assignment, mortgage, sublease, transfer, operation of law, or act of Tenant (collectively, a “Transfer”), without
Landlord’s prior written consent (except as provided in Section 9.2 below), which consent shall not be unreasonably withheld, conditioned or delayed, as described in Section 9.4 below. 
  

 12 

 Section 9.2 Tenant Affiliate. Tenant may effect a Transfer, without Landlord’s consent, to
any entity which controls, is controlled by or is under common control with Tenant, or to any entity resulting from the merger of or consolidation with Tenant or acquiring all or substantially all of the assets of Tenant, or to any entity in which
Tenant or its parent or affiliate maintains at least a 25% ownership interest (“Tenant’s Affiliate”). 
  
 Section 9.3 No Release of Tenant. No Transfer permitted by this Article Nine, whether with or without Landlord’s consent, shall release Tenant
or change Tenant’s primary liability to pay the rent and to perform all other obligations of Tenant under this Lease. Landlord’s acceptance of rent from any other person is not a waiver of any provision of this Article Nine. Consent to one
Transfer is not a consent to any subsequent Transfer. 
  
 Section
9.4 Landlord’s Consent. Tenant’s request for consent to any Transfer described in Section 9.1 shall set forth in writing the details of the proposed Transfer including the name, business of the prospective transferee, the
prospective transferee’s financial statements and the basic leasing details of the proposed Transfer (e.g., the term of and the rent and security deposit). Landlord shall have the right to withhold consent, if reasonable, or to grant consent,
within ten (10) days after receipt of such request (failing which, Landlord’s consent shall be deemed to have been given). If Landlord does not consent, Landlord shall provide detailed reasons for its disapproval. The parties hereby agree that
the only reasonable reasons under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer are where one or more of the following apply: (i) the transferee is of a character or reputation or engaged in a
business which is not consistent with the quality of the Premises; or (ii) the transferee intends to use the subject space for purposes which are not permitted under this Lease or (iii) the transferee, in Landlord’s reasonable judgment, does
not have sufficient financial resources to discharge its obligations under the Lease on an ongoing basis. 
  
 Section 9.5 Permitted Occupants. Provided Tenant complies with the Permitted Occupant Conditions (as defined below), then, notwithstanding anything
to the contrary set forth in this Lease, Tenant shall have the right to allow employees of one or more entities with whom Tenant has a business relationship (“Tenant Venturers”) to use designated portions of the Premises without execution
and approval by Landlord of a separate sublease for such use. The “Permitted Occupant Conditions” shall mean all of the following: (a) the permitted occupants shall only be employees of a Tenant Venturer, (b) such occupants shall use, in
the aggregate at any one time, no more than 5,000 square feet of the Premises, (c) such use shall be on a temporary basis, and, in any event, no such occupant shall have the right to use the Premises for more than six (6) consecutive months, (d)
Tenant shall provide Landlord with prior written notice of the intended presence on the Premises of any such occupants, (e) the Tenant Venturer employing such permitted occupants shall provide Landlord with satisfactory evidence of insurance
covering the activities of their respective employees within the Premises, and (f) such right to use the Premises shall at all times be subordinate to the Lease. 
  
 ARTICLE TEN: DEFAULTS; REMEDIES 
  
 Section 10.1 Tenant Defaults. Tenant shall be in material default (“Default”) under this Lease: 
  
 (a) If Tenant fails to pay rent or any other charge within
five (5) business days after the date due and such failure continues for five (5) business days after written notice of such failure; or 
  
 (b) If Tenant fails to perform any of Tenant’s non-monetary obligations under this Lease for a period of thirty (30) days after
written notice from Landlord; provided that if more than thirty (30) days are required to complete such performance, Tenant shall not be in default if Tenant commences such performance within the thirty (30)-day period and thereafter diligently
pursues its completion; or 
  
 (c) If a
“Default” occurs and is continuing under Section 10.1 of any of the other leases between Landlord and Tenant entered into concurrently with this Lease for adjacent premises located at 17572, 17622 and 17522 Armstrong Avenue, Irvine,
California (the “Other Leases”), unless Landlord hereunder is not at that time the landlord of the Other Lease under which the Default occurred. 
  
 Section 10.2 Remedies. During the continuance of a Default by Tenant as described in Section 10.1, Landlord may, at any time thereafter, upon
statutory notice to Tenant: 
  
 1. Terminate
Tenant’s right to possession of the Premises. No act by Landlord other than giving notice of termination to Tenant pursuant to this Section 10.2.1. or the other termination rights granted by Landlord hereunder shall terminate this Lease. Acts
of maintenance, efforts to relet the Premises, or the appointment of a receiver on Landlord’s initiative to protect Landlord’s interest under this Lease shall not constitute a termination of Tenant’s right to possession. On
termination, Landlord has the right to recover from Tenant: 
  
 (a) The worth, at the time of the award, of the unpaid rent that had been earned at the time of termination of this Lease; 
  

 13 

 (b) The worth, at the time of the award, of the amount by which the unpaid rent that
would have been earned after the date of termination of this Lease until the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; 
  
 (c) The worth, at the time of the award, of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of the loss of rent that Tenant proves could have been reasonably avoided; and 
  
 (d) Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s Default. 
  
 “The worth, at the time of the award,” as used in subsections a, b and c, above, is
to be computed by utilizing a discount rate of ten percent (10%) per annum and calculating the present value of the applicable rent to be paid over the applicable period. 
  
 2. Utilize the remedy described in California Civil Code section 1951.4 (which says landlord may continue
the lease in effect after a tenant’s breach and abandonment and recover rent as it becomes due, if tenant has the right to sublet or assign subject to reasonable limitations). If an abandonment of the Premises by Tenant occurs or if Landlord
elects to reenter as provided above or shall take possession of the Premises pursuant to legal proceeding or pursuant to any notice provided by law, then if Landlord does not elect to terminate this Lease as provided above, Landlord may from time to
time, without terminating this Lease, either recover all rent as it becomes due or relet the Premises or any part thereof for the Term on terms and conditions as Landlord in its commercially reasonable discretion may deem advisable. If Landlord
elects to so relet, then rentals received by Landlord from that reletting shall be applied: first, to the payment of any indebtedness other than rent due under this Lease from Tenant to Landlord; second, to the payment of any reasonable cost of such
reletting; third, to the payment of the reasonable cost of any alterations and repairs to the Premises that are Tenant’s obligation under this Lease; fourth, to the payment of rent due and unpaid under this Lease; and the residue, if any, shall
be held by Landlord and applied to payment of future rent as the same may become due and payable under this Lease. Should that portion of such rentals received from such reletting during any month, which is applied to the payment of rent under this
Lease, be less than the rent payable during that month by Tenant under this Lease, then Tenant shall pay such deficiency to Landlord immediately upon demand therefor by Landlord. Such deficiency shall be calculated and paid monthly. 
  
 3. Landlord may, during the continuance of a Default by
Tenant, cure the Default at Tenant’s cost provided Tenant is given notice and time to cure the Default and Landlord provides an additional notice that Landlord intends to cure Tenant’s Default under this Section 10.2(3). If Landlord cures
Tenant’s Default after such notice by paying any sum or doing any act that was Tenant’s obligation under this Lease, the amount paid by Landlord (or the reasonable cost incurred by Landlord in performing the act) shall be due immediately
from Tenant to Landlord at the time the sum is paid, and if paid at a later date shall bear interest at the rate of ten percent (10%) per annum from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant. The sum, together with
interest on it, shall be Additional Rent. 
  
 Section 10.3
Cumulative Remedies; Mitigation. Landlord’s exercise of any right or remedy shall not prevent it from exercising any other right or remedy. Landlord shall use commercially reasonable efforts to mitigate damages in the event of a Default
by Tenant under this Lease. In no event shall Landlord or Landlord Parties or Tenant or Tenant Parties be liable to the other for any consequential, punitive or other so-called “special” damages under this Lease. 
  
 Section 10.4 Landlord’s Defaults. 
  
 (a) General. Notwithstanding anything to the contrary
set forth in this Lease, Landlord shall be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease if (i) in the event a failure by Landlord is with respect to the payment of money, Landlord fails
to pay such unpaid amounts within five (5) business days of written notice from Tenant that the same was not paid when due; or (ii) in the event a failure by Landlord is other than (i) above, Landlord fails to perform such obligation within a
reasonable time period with the expenditure of diligent efforts, but in no event more than thirty (30) days after the receipt of written notice from Tenant specifying Landlord’s failure to perform; provided, however, if the nature of
Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default under this Lease if Landlord commences such performance within such thirty (30) day period and thereafter
diligently pursue the same to completion. Upon any such default by Landlord under this Lease, Tenant may exercise any of its rights provided in this Lease or at law or in equity. Any notice provided by Tenant pursuant to this Section 10.4(a) shall
not be effective unless it is substantially 

  

 14 

 
concurrently delivered to the last known address of Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were
previously provided to Tenant). In no event shall Tenant be entitled to terminate this Lease as a result of a default of Landlord unless the default materially and adversely impacts Tenant’s ability to use a material portion of the Premises for
its business operations and Tenant has first given written notice of intent to terminate to Landlord’s Lender (provided that the name and notice address of Landlord’s Lender were previously provided to Tenant) offering such Lender an
additional 30 days beyond the notice and cure period granted to Landlord under this Lease, if any, in which to cure Landlord’s default. 
  
 (b) Abatement of Rent. In the event that Tenant is prevented from using the Premises or any material portion thereof (meaning that
Tenant is unable to use that portion of the Premises in the normal course of its business) as a result of (i) any repair, maintenance or alteration negligently performed by Landlord, or which Landlord failed to perform, as required by this Lease; or
(ii) the presence of, or cleanup or remediation activities in connection with, Hazardous Materials brought on the Premises by Landlord or a Landlord Party; or (iii) cessation of utilities or services caused by Landlord’s negligence or willful
misconduct (any such set of circumstances as set forth in items (i) through (iii), above, to be known as an “Abatement Event”), then Tenant shall give Landlord written notice of such Abatement Event, and if such Abatement Event continues
for two (2) consecutive business days after such notice, or occurs for ten (10) non-consecutive business days in a twelve (12) month period (in either of such events, the “Eligibility Period”), then the Base Rent and Additional Rent shall
be abated or reduced, as the case may be, after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using the Premises, or a portion thereof, in the proportion that the floor area of the portion of the
Premises that Tenant is prevented from using (“Unusable Area”), bears to the total floor area of the Premises. If Landlord has not cured such Abatement Event within one hundred eighty (180) days after receipt of written notice from Tenant,
Tenant shall have the right to terminate this Lease during the first ten (10) business days of each calendar month following the end of such 180-day period until such time as Landlord has cured the Abatement Event, which right may be exercised only
by delivery of thirty (30) days’ notice to Landlord and Landlord’s Lender (provided such Lender’s name and notice address were previously provided to Tenant) (the “Abatement Event Termination Notice”) during such ten (10)
business-day period, and shall be effective as of a date set forth in the Abatement Event Termination Notice (the “Abatement Event Termination Date”), which Abatement Event Termination Date shall not be less than thirty (30) days, and not
more than one (1) year, following the delivery of the Abatement Event Termination Notice. Tenant’s Abatement Event Termination Notice shall be null and void (but only in connection with the first notice sent by Tenant with respect to each
separate Abatement Event) if Landlord or Landlord’s Lender(s) cures such Abatement Event within such thirty (30) day period following receipt of the Abatement Event Termination Notice. 
  
 ARTICLE ELEVEN: LENDERS 
  
 Section 11.1 Subordination, Non-Disturbance and Attornment. Landlord
shall deliver to Tenant concurrently with the closing under the Purchase Agreement fully executed commercially reasonable non-disturbance agreement(s) (“SNDA’s”) in favor of Tenant from all existing ground lessors, mortgage holders or
lien holders of Landlord, including Landlord’s Lender (and such delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the SNDA’s are delivered, rent,
payable retroactively from the Commencement Date, shall be paid immediately), and, thereafter, Landlord shall deliver SNDA’s from all such parties who later come into existence with respect to the Premises or any portion thereof at any time
prior to the expiration of the Term. Such commercially reasonable SNDA’s shall not modify the provisions of this Lease, shall include the obligation of any such ground lessor, mortgage holder, lien holder or successor landlord, upon taking
title to the Premises, and so long as a Default by Tenant is not continuing, to not disturb Tenant’s right of possession of the Premises in accordance with the Lease, to recognize and accept all of Tenant’s rights under the Lease,
including the right to offset certain amounts against Rent due hereunder, and to assume all of Landlord’s continuing obligations under this Lease as set forth herein. Subject to Tenant’s receipt of the SNDA’s described above, this
Lease shall be subject and subordinate to all present and future ground or underlying leases of the Premises and to the lien of any mortgage, trust deed or other encumbrances now or hereafter in force against the Building or Premises or any part
thereof, 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,
trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto. Subject to Tenant’s receipt of the SNDA’s described above, Tenant covenants and agrees
in the event any proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to attorn to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or
deed in lieu thereof (or to the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease. Subject to Tenant’s
receipt of the SNDA’s described herein, 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. 
  

 15 

 Section 11.2 Estoppel Certificates. Within ten (10) business days following a request in writing
by Landlord or Tenant, Tenant or Landlord, as the case may be, shall execute, acknowledge and deliver to the requesting party (the “Requesting Party”) an estoppel certificate in such commercially reasonable form as may be required by the
Requesting Party, indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information regarding the status of the Lease reasonably requested by the Requesting Party. Any such certificate may be relied
upon by any prospective mortgagee or purchaser of all or any portion of the Premises or by any assignee, sublessee or leasehold mortgagee, as the case may be. Landlord or Tenant, as the case may be, shall execute and deliver whatever other
instruments may be reasonably required for such purposes. 
  
 ARTICLE TWELVE: LEGAL COSTS 
  
 In the event of any
arbitration or suit under this Lease, reasonable attorneys’ fees and costs shall be awarded by a court or arbitrator to the prevailing party (as determined by the trier of fact) and are to be included in any judgment or award. In addition, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and costs incurred in enforcing any judgment arising from a suit or arbitration under this Lease including but not limited to post judgment motions, contempt proceedings,
garnishment, levy and debtor and third party examinations, discovery and bankruptcy litigation, without regard to schedule or rule of court purporting to restrict such award. This post judgment or award of attorneys’ fees and costs provision
shall be severable from any other provisions of this Lease and shall survive any judgment/award on such suit or arbitration and is not to be deemed merged into the judgment/award or terminated with the Lease. For the purpose of this provision, the
term “attorneys’ fees” or “attorneys’ fees and costs” shall mean the fees and expenses of legal counsel (including external counsel and, to the extent fulfilling functions of an attorney at law, excluding de
minimis administrative activities of, in-house counsel) to the parties hereto, which include printing, photocopying, duplicating, mail, overnight mail, messenger, court filing fees, cost of discovery, fees billed for law clerks, paralegals,
investigators and other persons not admitted to the bar but performing services under the supervision or direction of an attorney. For the purpose of determining in-house counsel fees, the same shall be considered as those fees normally applicable
to a partner in a law firm with like experience in such field. 
  
 ARTICLE THIRTEEN: MISCELLANEOUS PROVISIONS 
  
 Section
13.1 Landlord’s Liability. Any Landlord who transfers in a bona fide transaction its title or interest is relieved of all liability with respect to the obligations of Landlord under this Lease to be performed on or after the date
of transfer and after receipt by Tenant of the written assumption of all of Landlord’s obligations under this Lease by the transferee; provided, however, that the foregoing shall not relieve a transferring Landlord of responsibility for
defaults by such transferring Landlord existing prior to the date of such transfer. However, each Landlord shall deliver to its transferee all funds (including the Security Deposit) that Tenant previously paid to or deposited with Landlord if such
funds have not yet been applied or returned under the term of this Lease. Notwithstanding any term or provision herein to the contrary, the liability of Landlord for the performance of its duties and obligations under this Lease is limited to
Landlord’s interest in the Premises and the rents, profits, sale/financing proceeds and insurance proceeds therefrom, and in the assets of Landlord, but Landlord’s partners, shareholders, officers or other principals shall have no personal
liability under this Lease. 
  
 Section 13.2 Severability.
A determination by a court of competent jurisdiction that any provision of this Lease or any part thereof is illegal or unenforceable shall not cancel or invalidate the remainder of such provision or this Lease, which shall remain in full force and
effect. 
  
 Section 13.3 Interpretation. The captions of
the Articles or Sections of this Lease are to assist the parties in the reading this Lease and are not a part of the terms or provisions of this Lease. Whenever required by the context of this Lease, the singular shall include the plural and the
plural shall include the singular. The masculine, feminine and neuter genders shall each include the other. 
  
 Section 13.4 Incorporation of Prior Agreements. This Lease is the only agreement between the parties pertaining to the lease of the Premises and no
other agreements are effective. All amendments to this Lease shall be in writing and signed by all parties. Any other attempted amendment shall be void. 
  
 Section 13.5 Notices. All notices required or permitted under this Lease shall be in writing and shall be personally delivered or sent by certified
mail, return receipt requested, postage prepaid. Notices to Tenant shall be delivered to the Premises and the address for notice set forth in Article One. Notices to Landlord shall be delivered to the address for notice set forth in Article One. All
notices shall be effective upon delivery. Either party may change its notice address upon written notice to the other party. 
  

 16 

 Section 13.6 Waivers. All waivers must be in writing and signed by the waiving party.
Landlord’s failure to enforce any provision of this Lease or its acceptance of rent shall not be a waiver and shall not prevent Landlord from enforcing that provision or any other provision of this Lease in the future. No statement on a payment
check from Tenant or in a letter accompanying a payment check shall be binding on Landlord, Landlord may, with or without notice to Tenant, negotiate such check without being bound to the conditions of such statement. 
  
 Section 13.7 Memorandum of Lease. Landlord shall deliver to Tenant
concurrently with the execution of this Lease a properly executed and notarized memorandum of this Lease to be recorded against the Premises in the form attached hereto as Exhibit “C” (the “Memorandum of Lease”) (and such
delivery shall be a condition precedent to Tenant’s obligation to commence payment of rent under this Lease; provided, however, that once the Memorandum of Lease is delivered, rent, payable retroactively from the Commencement Date, shall be
paid immediately). Tenant shall pay any transfer costs or recording fees in connection therewith. 
  
 Section 13.8 Binding Effect; Choice of Law. This Lease binds any party who legally acquires any rights or interest in this Lease from Landlord or
Tenant. However, Landlord shall have no obligation to Tenant’s successor unless the rights or interests of Tenant’s successor are acquired in accordance with the terms of this Lease. The laws of the State of California, without regard to
conflicts of law, shall govern this Lease. Each of the parties voluntarily submits to the jurisdiction of the courts of the State of California, and to exclusive venue in Orange County, California. 
  
 Section 13.9 Authority. Each person signing this Lease on behalf of
Landlord and Tenant represents and warrants that he has full authority to do so and that this Lease binds the entity on whose behalf he or she is signing. 
  
 Section 13.10 Force Majeure. If Landlord or Tenant cannot perform any of its obligations due to events beyond such party’s control (other than
the payment of money), the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond a party’s control include, but are not limited to, acts of God, war, civil
commotion, terrorism, labor disputes, strikes, fire, flood or other casualty, shortages of labor or material, governmental regulation or restriction and weather conditions. 
  
 Section 13.11 Execution of Lease. This Lease may be executed in counterparts and, when all counterpart documents are
executed, the counterparts shall constitute a single binding instrument. This Lease shall not be deemed to be an offer to lease and shall not be binding upon either party until executed and delivered by both parties. 
  
 Section 13.12 Survival. All representations and warranties of Landlord
and Tenant shall survive the termination of this Lease. 
  
 Section 13.13 Duty To Act Reasonably. Except as specifically set forth in this Lease to the contrary, any time the consent of Landlord or Tenant is required, such consent shall not be unreasonably withheld, conditioned or delayed.
Whenever the Lease grants Landlord or Tenant the right to take action or exercise discretion, or grants Tenant or Landlord the right to make allocations or other determinations, Landlord and Tenant shall act reasonably and in good faith. 

 
 Section 13.14 No Brokers. Landlord and Tenant each represent and
warrant to the other that they have employed no broker and/or finder in connection with this Lease, or any other documents or matters relating to the Premises. In the event any claim, demand, or cause of action for brokerage and/or finder’s
fees is asserted against a party to this Lease who did not request such services, the party through whom the broker or finder is making the claim shall protect, indemnify, defend and hold harmless the other party from and against any and all claims,
demands and causes of action. 
  
 FOURTEEN: OTHER AGREEMENTS OF
LANDLORD AND TENANT 
  
 Section 14.1 Signs. Tenant shall
have the exclusive right to use, install and maintain exterior Building signs and/or monument signs at the Premises identifying its business provided such signs shall comply with all applicable local and state laws, rules, and regulations.

  
 Section 14.2 Confidentiality Landlord acknowledges that
the contents of this Lease and any related documents are confidential information. Landlord shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than
Landlord’s partners, administrators, consultants, financial, legal, and space planning consultants or a prospective or current purchaser, mortgagee, or ground or underlying lessor of the Building or the Project, and except as required by
applicable law or in connection with a dispute or litigation hereunder or as required by a subpoena. Any press releases or announcements made in connection with the contents of this Lease and/or any related documents shall be subject to the prior
approval of Tenant. 
  
 Section 14.3 Telecommunication
Equipment. At any time during the Lease term, Tenant may, upon notice to Landlord, install, at Tenant’s sole cost and expense, 

  

 17 

 
telecommunication equipment upon the roof of the Building, without the payment of any additional charge, and Tenant shall have exclusive use of the roof of
the Building. Tenant and Tenant’s service providers may use existing ducts and conduits as reasonably necessary to connect telephone and other communications services to the Premises, without any additional charge or fee. Tenant may also
install, maintain, replace, remove or use, without any additional charge or fee therefor, any communications or computer wires and cables in or serving the Premises. Notwithstanding the foregoing, any damage resulting to the roof or any other
portion of the Premises from Tenant’s or Tenant’s service providers’ installation of such telecommunication equipment shall be the sole responsibility of Tenant. 
  

 18 

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

  

					
	“LANDLORD”
	
	 JS SJK L.P., a California limited liability
 company

			
	By:	 	 	 	 
			
	 	 	 Its:
	 	 

  

					
	“TENANT”
	
	 ST. JOHN KNITS, INC.

			
	By:	 	 	 	 
			
	 	 	 Its:
	 	 

  

 19 

 Exhibit “A” 
  
 Legal Description 
  
 [to be attached] 
  

 20 

 Exhibit B 
  

Base Rent Increase Examples 
  
 Example 1 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in effect at end of month in which Rental Adjustment Date occurs (normally, 30 months
after the Comparison Date): 110 
  
 New Monthly Base Rent to be paid until next
Rental Adjustment Date (ignoring floor or cap addressed below): $41,250 (110/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor
does not apply. 
  
 New Monthly Base Rent to be paid until next Rental
Adjustment Date: $41,250. 
  
 Example 2 
  
 Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison
Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the
Comparison Base Rent began (the “Comparison Date”): 100 
  
 Index in
effect at end of month in which Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 120 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $45,000 (120/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month
Rental Adjustment Period): $41,363.25. Cap now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is capped at $41,363.25. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $39,887.88. Floor does not apply. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $41,363.25.

  

 21 

 Example 3 
  

Monthly Base Rent in effect immediately prior to Rental Adjustment Date (“Comparison Base Rent”): $37,500 
  
 Index in effect on the date on which payment of the Comparison Base Rent began (the
“Comparison Date”): 100 
  
 Index in effect at end of month in which
Rental Adjustment Date occurs (normally, 30 months after the Comparison Date): 105 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date (ignoring floor or cap addressed below): $39,375 (105/100 * $37,500) 
  
 4% annual, cumulatively compounded, cap on monthly Base Rent increase (assuming a 30 month Rental Adjustment Period): $41,363.25. Cap does not apply. 
  
 2.5% annual, cumulatively compounded, floor on monthly Base Rent increase (assuming a 30
month Rental Adjustment Period): $39,887.88. Floor now applies, so new Monthly Base Rent to be paid until next Rental Adjustment Date is $39,887.88. 
  
 New Monthly Base Rent to be paid until next Rental Adjustment Date: $39,887.88. 
  

 22 

 Exhibit C 
  

Form of Memorandum of Lease 
  

			
	 RECORDING REQUESTED BY
 AND WHEN RECORDED MAIL
TO:
  
 Dean Dunn-Rankin, Esq.
 Hewitt & O’Neil LLP
 19900 MacArthur Blvd, Suite 1050
 Irvine, CA 92612
	  	 
	 	  	(SPACE ABOVE THIS LINE FOR RECORDER’S USE)

  
 MEMORANDUM 

 
 THIS MEMORANDUM OF LEASE (this “Memorandum”), dated as of the
             day of                     , 2004, is made by and between ST.
JOHN KNITS, INC., a California corporation (“Tenant”) and JS SJK L.P., a California limited liability company (“Landlord”). 
  
 R E C I T A L S 
  
 A. Landlord is the fee simple title owner of that certain property commonly known as
                    , legally described on Exhibit A attached hereto and made a part hereof (the “Premises”). 
  
 B. Landlord and Tenant have entered into that certain Lease Agreement dated
as of                     , 2004 (the “Lease”), pursuant to which Landlord has agreed to lease to Tenant the Premises upon the terms
and conditions set forth in the Lease. 
  
 C. Landlord and Tenant
desire to set forth certain terms and provisions contained in the Lease in this Memorandum for recording purposes. 
  
 NOW, THEREFORE, for and in consideration of the rents reserved and the covenants and conditions set forth in the Lease, Landlord and Tenant do hereby
covenant, promise and agree as follows: 
  
 1. Definitions.
Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed to them in the Lease. 
  
 2. Grant of Lease. Pursuant to the Lease and this Memorandum, Landlord demises and leases to Tenant and Tenant leases from Landlord the Premises
upon the terms and conditions set forth in the Lease. 
  
 3.
Commencement Date. The Term of the Lease shall commence on the date specified in the Lease. 
  
 4. Expiration Date. The Term of the Lease shall expire, unless sooner terminated or unless extended or renewed as provided therein, at the end of
the first full month occurring one hundred eighty (180) months after the Commencement Date. 
  

 23 

 5. Rent. The Rent due and payable from Tenant to Landlord for the Term of the Lease and any
extension term shall be determined and shall be payable pursuant to the terms and provisions of the Lease. 
  
 6. Options to Extend. Tenant has three (3) options to extend the Term of the Lease for consecutive terms of sixty (60) months each and one (1)
additional option to extend the Term of the Lease for a term of fifty-nine (59) months, subject to and on the terms and conditions set forth in the Lease. 
  
 IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date first written above. 
  

									
	 LANDLORD:
	 	 	 	 TENANT:

	 JS SJK L.P., a California limited
 liability company
	 	 	 	 St. John Knits, Inc.

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

  

 24 

			
	 STATE OF ________
	  	)
	 	  	)
	 COUNTY OF _______
	  	)

  
 I, the undersigned, a
notary public in and for said County, in the State aforesaid, DO HEREBY CERTIFY that
                                        
                                        
                             personally known to me to be the
                                        
of
                                        
                                        
                             a
                                        
                         corporation, personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and severally acknowledged that as such
                                , signed and delivered the said instrument,
pursuant to authority, given by the Board of Directors of said corporation as
                                 free and voluntary act, and as the free
and voluntary act and deed of said corporation, for the uses and purposes therein set forth. 
  
 GIVEN under my hand and official seal this              day of
                    , 20    . 
  

	
	
	 
	Notary Public
	
	 My commission expires:
                                       
 

  

 25 

 EXHIBIT A 
  

LEGAL DESCRIPTION OF PREMISES 
  

 26 

 EXHIBIT “F” 
  
 FORM OF REA 
  
 [to be attached]

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