Document:

exv10w32

 

Exhibit 10.32

Contract with Eligible Medicare Advantage (MA) Organization Pursuant to

Sections 1851 through 1859 of the Social Security Act for the Operation

of a Medicare Advantage Coordinated Care Plan(s)

CONTRACT
(#                     )

Between

Centers for Medicare & Medicaid Services (hereinafter referred to as CMS)

and

(hereinafter referred to as the MA Organization)

CMS and the MA Organization, an entity which has been determined to be an eligible Medicare
Advantage Organization by the Administrator of the Centers for Medicare & Medicaid Services under
42 CFR 422.503, agree to the following for the purposes of sections 1851 through 1859 of the Social
Security Act (hereinafter referred to as the Act):

(NOTE: Citations indicated in brackets are placed in the text of this contract to note the
regulatory authority for certain contract provisions. All references to Part 422 are to 42 CFR Part
422.)

You must check off AND initial each required Addendum type to reflect the coverage
offered under the H (or R) number associated with this contract

	 	 	 	 	 
	Addendum Type	Initials
	 

	 	Part D Addendum	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Employer-Only MA-PD Addendum (800 Series)	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Employer-Only MA Only Addendum (800 Series)	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Variances/Waivers (Provided directly to
Demonstration Organizations by CMS)	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Regional Preferred Provider Organization Addendum (Provided
directly to RPPOs by CMS)	 	 
	 

	 	 	 	 

 

 

Article I

Term of Contract

The term of this contract shall be from the date of signature by CMS’ authorized representative
through December 31, 2007, after which this contract may be renewed for successive one-year periods
in accordance with 42 CFR 422.505(c) and as discussed in Paragraph A in Article VII below.
[422.505]

This contract governs the respective rights and obligations of the parties as of the effective date
set forth above, and supersedes any prior agreements between the MA Organization and CMS as of such
date. MA organizations offering Part D also must execute an Addendum to the Medicare Managed Care
Contract Pursuant to Sections 1860D-1 through 1860D-42 of the Social Security Act for the Operation
of a Voluntary Medicare Prescription Drug Plan (hereafter the “Part D Addendum”). For MA
Organizations offering MA-PD plans, the Part D Addendum governs the rights and obligations of the
parties relating to the provision of Part D benefits, in accordance with its terms, as of its
effective date.

Article II

Coordinated Care Plan

A. The Medicare Advantage Organization agrees to operate one or more coordinated care plans
as defined in 42 CFR 422.4(a)(1)(iii)), including at least one MA-PD plan as required under 42
CFR 422.4(c), as described in its final Plan Benefit Package (PBP) bid submission (benefit and
price bid) proposal as approved by CMS and as attested to in the Medicare Advantage
Attestation of Benefit Plan and Price, and in compliance with the requirements of this contract
and applicable Federal statutes, regulations, and policies.

B. Except as provided in paragraph (C) of this Article, this contract is deemed to incorporate any
changes that are required by statute to be implemented during the term of the contract and any
regulations or policies implementing or interpreting such statutory
provisions.

C. CMS will not implement, other than at the beginning of a calendar year, requirements under
42 CFR Part 422 that impose a new significant cost or burden on MA organizations or plans,
unless a different effective date is required by statute. [422.521]

Article III

Functions To Be Performed By Medicare Advantage Organization

A. PROVISION OF BENEFITS

1. The MA Organization agrees to provide enrollees in each of its MA plans the basic benefits as
required under §422.101 and, to the extent applicable, supplemental benefits under §422.102 and as
established in the MA Organization’s final benefit and price bid proposal as approved by CMS and
listed in the MA Organization Plan Attestation of Benefit Plan and Price, which is attached to this
contract. The MA Organization agrees to provide access to such benefits as

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required under subpart C in a manner consistent with professionally recognized standards of health
care and according to the access standards stated in §422.112.

2. The MA Organization agrees to provide post-hospital extended care services, should an MA
enrollee elect such coverage, through a skilled nursing home facility according to the requirements
of section 1852(1) of the Act and §422.133. A skilled nursing home facility is a facility in which
an MA enrollee resided at the time of admission to the hospital, a facility that provides services
through a continuing care retirement community, a facility in which the spouse of the enrollee is
residing at the time of the enrollee’s discharge from the hospital, or hospital, or wherever the
enrollee resides immediately before admission for extended care services. [422.133; 422.504(a)(3)]

B. ENROLLMENT REQUIREMENTS

1. The MA Organization agrees to accept new enrollments, make enrollments effective, process
voluntary disenrollments, and limit involuntary disenrollments, as provided in subpart B of
part 422,

2. The MA Organization shall comply with the provisions of §422.110 concerning prohibitions
against discrimination in beneficiary enrollment, other than in enrolling eligible beneficiaries in
a
CMA-approved special needs plan that exclusively enrolls special needs individuals as consistent
with §§422.2,422.4(a)(l)(iv) and 422.52.
[422.504(a)(2)]

C. BENEFICIARY PROTECTIONS

1. The MA Organization agrees to comply with all requirements in subpart M of part 422,
governing coverage determinations, grievances, and appeals. [422.504(a)(7)]

2. The MA Organization agrees to comply with the confidentiality and enrollee record accuracy
requirements in §422.118.

3. Beneficiary Financial Protections. The MA Organization agrees to comply with the
following
requirements:

     (a) Each MA Organization must adopt and maintain arrangements satisfactory to CMS to
protect its enrollees from incurring liability for payment of any fees that are the legal
obligation
of the MA Organization, To meet this requirement the MA Organization must—

     (i) Ensure that all contractual or other written arrangements with providers prohibit the
Organization’s providers from holding any beneficiary enrollee liable for payment of any fees that
are the legal obligation of the MA Organization; and

     (ii) Indemnify the beneficiary enrollee for payment of any fees that are the legal obligation
of the MA Organization for services furnished by providers that do not contract, or that have not
otherwise entered into an agreement with the MA Organization, to provide services to the
organization’s beneficiary enrollees.
[422.504(g)(1)]

     (b) The MA Organization must provide for continuation of enrollee health care benefits-

     (i) For all enrollees, for the duration of the contract period for which CMS payments have
been made; and

     (ii) For enrollees who are hospitalized on the date its contract with CMS terminates, or, in
the event of the MA Organization’s insolvency, through the date of discharge. [422.504(g)(2)]

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     (c) In meeting the requirements of this section (C), other than the provider contract requirements
specified in paragraph (C)(3)(a) of this Article, the MA Organization may use—

     (i) Contractual
arrangements;

     (ii) Insurance acceptable to CMS;

     (iii) Financial reserves acceptable to CMS; or

     (iv)
Any other arrangement acceptable to CMS. [422.504(g)(3)]

D. PROVIDER PROTECTIONS

1. The MA Organization agrees to comply with all applicable provider requirements in 42 CFR
Part 422 Subpart E, including provider certification requirements, anti-discrimination
requirements, provider participation and consultation requirements, the prohibition on
interference with provider advice, limits on provider indemnification, rules governing payments
to providers, and limits on physician incentive plans.
[422.504(a)(6)]

2. Prompt Payment.

     (a) The MA Organization must pay 95 percent of “clean claims” within 30 days of receipt
if they are claims for covered services that are not furnished under a written agreement
between
the organization and the provider.

     (i) The MA Organization must pay interest on clean claims that are not paid within 30 days
in accordance with sections 1816(c)(2) and 1842(c)(2) of the Act.

     (ii) All other claims from non-contracted providers must be paid or denied within 60
calendar days from the date of the request [422.520(a)]

     (b) Contracts or other written agreements between the MA Organization and its providers
must contain a prompt payment provision, the terms of which are developed and agreed to by
both the MA Organization and the relevant provider. [422.520(b)]

     (c) If CMS determines, after giving notice and opportunity for hearing, that the MA
Organization has failed to make payments in accordance with subparagraph (2)(a) of this
section,
CMS may provide—

     (i) For direct payment of the sums owed to providers; and

(ii) For appropriate reduction in the amounts that would otherwise be paid to the MA
Organization, to reflect the amounts of the direct payments and the cost of making those
payments. [422.520(c)]

E. QUALITY IMPROVEMENT PROGRAM

1. The MA Organization agrees to operate, for each plan that it offers, an ongoing quality
improvement program as stated in accordance with Section 1852(e) of the Social Security Act
and 42 CFR 422.152.

2. Chronic Care Improvement Program

     (a) Each MA organization (other than MA private-fee-for-service plans) must have a
chronic care improvement program and must establish criteria for participation in the program.
The CCIP must have a method for identifying enrollees with multiple or sufficiently severe
chronic conditions who meet the criteria for participation in the program and a mechanism for
monitoring enrollees’ participation in the program.

     (b) Plans have flexibility to choose the design of their program; however, in addition to
meeting the requirements specified above, the CCIP selected must be relevant to the plan’s MA

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population. MA organizations are required to submit annual reports on their CCIP program to CMS.

3. Performance Measurement and Reporting: The MA Organization shall measure performance
under its MA plans using standard measures required by CMS, and report (at the organization
level) its performance to CMS. The standard measures required by CMS during the term of this
contract will be uniform data collection and reporting instruments, to include the Health Plan and
Employer Data Information Set (HEDIS), Consumer Assessment of Health Plan Satisfaction
(CAHPS) survey, and Health Outcomes Survey (HOS). These measures will address clinical
areas, including effectiveness of care, enrollee perception of care and use of services; and non-clinical areas including access to and availability of services, appeals and grievances, and
organizational characteristics. [422.152(b)(1), (e)]

4. Utilization Review:

     (a) An MA Organization for an MA coordinated care plan must use written protocols for
utilization review and policies and procedures must reflect current standards of medical
practice
in processing requests for initial or continued authorization of services and have in effect

mechanisms to detect both underutilization and over utilization of
services. [422.152(b)]

     (b) For MA regional preferred provider organizations (RPPOs) and MA local preferred
provider organizations (PPOs) that are offered by an organization that is not licensed or
organized under State law as an HMOs, if the MA Organization uses written protocols for
utilization review, those policies and procedures must reflect current standards of medical
practice in processing requests for initial or continued authorization of services and include
mechanisms to evaluate utilization of services and to inform enrollees and providers of
services
of the results of the evaluation. [422.152(e)]

5. Information Systems:

     (a) The MA Organization must:

     (i) Maintain a health information system that collects, analyzes and integrates the data
necessary to implement its quality improvement program;

     (ii) Ensure that the information entered into the system (particularly that received from
providers) is reliable and complete;

     (iii) Make
all collected information available to CMS. [422.152(f)(1)]

6. External Review

The MA Organization will comply with any requests by Quality Improvement Organizations to review
the MA Organization’s medical records in connection with appeals of discharges from hospitals,
skilled nursing facilities, and home health agencies.

F. COMPLIANCE PLAN

The MA Organization agrees to implement a compliance plan in accordance with the
requirements of §422.503(b)(4)(vi). [422.503(b)(4)(vi)]

G. COMPLIANCE DEEMED ON THE BASIS OF ACCREDITATION

CMS may deem the MA Organization to have met the quality improvement requirements of §1852(e) of
the Act and §422.152, the confidentiality and accuracy of
enrollee records requirements of §1852(h)
of the Act and §422.118, the anti-discrimination requirements of §1852(b) of the Act and §422.110,
the access to services requirements of §1852(d) of the Act and §422.112, and the advance directives
requirements of §1852(i) of the Act and §422.128, the

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provider participation requirements of § 1852(j) of the Act and 42 CFR Part 422, Subpart F, and the
applicable requirements described in §423.165, if the MA Organization is fully accredited (and
periodically reaccredited) by a private, national accreditation organization approved by CMS and
the accreditation organization used the standards approved by CMS for the purposes of assessing the
MA Organization’s compliance with Medicare requirements. The provisions of §422.156 shall govern
the MA Organization’s use of deemed status to meet MA program requirements.

H. PROGRAM INTEGRITY

1. The MA Organization agrees to provide notice based on best knowledge, information, and
belief to CMS of any integrity items related to payments from governmental entities, both federal
and state, for healthcare or prescription drug services. These items include any investigations,
legal actions or matters subject to arbitration brought involving the MA Organization (or MA
Organization’s firm if applicable) and its subcontractors (excluding contracted network
providers), including any key management or executive staff, or any major shareholders (5% or
more), by a government agency (state or federal) on matters relating to payments from
governmental entities, both federal and state, for healthcare and/or prescription drug services. In
providing the notice, the sponsor shall keep the government informed of when the integrity item
is initiated and when it is closed. Notice should be provided of the details concerning any
resolution and monetary payments as well as any settlement agreements or corporate integrity
agreements.

2. The MA Organization agrees to provide notice based on best knowledge, information, and
belief to CMS in the event the MA Organization or any of its subcontractors is criminally
convicted or has a civil judgment entered against it for fraudulent activities or is sanctioned
under any Federal program involving the provision of health care or prescription drug services.

I. MARKETING

1. The MA Organization may not distribute any marketing materials, as defined in 42 CFR
422.80(b) and in the Marketing Materials Guidelines for Medicare Advantage-Prescription Drug
Plans and Prescription Drug Plans (Medicare Marketing Guidelines), unless they have been filed
with and not disapproved by CMS in accordance with §422.80. The file and use process set out
at §422.80(a)(2) must be used, unless the MA organization notifies CMS that it will not use this
process.

2. CMS and the MA Organization shall agree upon language setting forth the benefits,
exclusions and other language of the Plan. The MA Organization bears full responsibility for the
accuracy of its marketing materials. CMS, in its sole discretion, may order the MA Organization
to print and distribute the agreed upon marketing materials, in a format approved by CMS. The
MA Organization must disclose the information to each enrollee electing a plan as outlined in 42
CFR 422.111.

3. The MA Organization agrees that any advertising material, including that labeled promotional
material, marketing materials, or supplemental literature, shall be truthful and not misleading.
All marketing materials must include the Contract number. All membership identification cards
must include the Contract number on the front of the card.

4. The MA Organization must comply with the Medicare Marketing Guidelines, as well as all
applicable statutes and regulations, including and without limitation Section 1851(h) of the Act

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and 42 CFR §§422.80, 422.111 and 423.50. Failure to comply may result in sanctions as provided
in 42 CFR Part 422 Subpart O.

Article IV

CMS Payment to MA Organization

A. The MA Organization agrees to develop its annual benefit and price bid proposal and submit
to CMS all required information on premiums, benefits, and cost sharing, as required under 42
CFR Part 422 Subpart F. [422.504(a)(10)]

B. Methodology. CMS agrees to pay the MA Organization under this contract in accordance
with the provisions of section 1853 of the Act and 42 CFR
Part 422 Subpart G. [422.504(a)(9)]

C. Attestation of payment data (Attachments A, B, and C).

As a condition for receiving a monthly payment under paragraph B of this article, and 42 CFR Part
422 Subpart G, the MA Organization agrees that its chief executive officer (CEO), chief financial
officer (CFO), or an individual delegated with the authority to sign on behalf of one of these
officers, and who reports directly to such officer, must request payment under the contract on the
forms attached hereto as Attachment A (enrollment attestation) and Attachment B (risk adjustment
data) which attest to (based on best knowledge, information and belief, as of the date specified on
the attestation form) the accuracy, completeness, and truthfulness of the data identified on these
attachments. The Medicare Advantage Plan Attestation of Benefit Plan and Price must be signed and
attached to the executed version of this contract.

1. Attachment A requires that the CEO, CFO, or
an individual delegated with the authority to sign on behalf of one of these officers, and who
reports directly to such officer, must attest based on best knowledge, information, and belief that
each enrollee for whom the MA Organization is requesting payment is validiy enrolled, or was
validly enrolled during the period for which payment is requested, in an MA plan offered by the MA
Organization. The MA Organization shall submit completed enrollment attestation forms to CMS, or
its contractor, on a monthly basis. (NOTE: The forms included as attachments to this contract are
for reference only. CMS will provide instructions for the completion and submission of the forms in
separate documents. MA Organizations should not take any action on the forms until appropriate CMS
instructions become available.)

2. Attachment B requires that the CEO, CFO, or an individual delegated with the authority to sign
on behalf of one of these officers, and who reports directly to such officer, must attest to (based
on best knowledge, information and belief, as of the date specified on the attestation form) that
the risk adjustment data it submits to CMS under §422.310 are accurate, complete, and truthful. The
MA Organization shall make annual attestations to this effect for risk adjustment data on
Attachment B and according to a schedule to be published by CMS. If such risk adjustment data are
generated by a related entity, contractor, or subcontractor of an MA Organization, such entity,
contractor, or subcontractor must similarly attest to (based on best knowledge, information, and belief, as of the date specified on the attestation form) the accuracy, completeness, and
truthfulness of the data. [422.504(1)]

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3. The Medicare Advantage Plan Attestation of Benefit Plan and Price (which is attached hereto)
requires that the CEO, CFO, or an individual delegated with the authority to sign on behalf of one
of these officers, and who reports directly to such officer, must attest (based on best knowledge,
information and belief, as of the date specified on the attestation form) that the information and
documentation comprising the bid submission proposal is accurate, complete, and truthful and fully
conforms to the Bid Form and Plan Benefit Package requirements; and that the benefits described in
the CMS-approved proposal bid submission agree with the benefit package the MA Organization will
offer during the period covered by the proposal bid submission. This document is being sent
separately to the MA Organization and must be signed and attached to the executed version of this
contract, and is incorporated herein by reference. [422.502(1)]

Article V

MA Organization Relationship with Related Entities, Contractors, and Subcontractors

A. Notwithstanding any relationship(s) that the MA Organization may have with related
entities, contractors, or subcontractors, the MA Organization maintains full responsibility for
adhering to and otherwise fully complying with all terms and conditions of its contract with
CMS. [422.504(i)(1)]

B. The MA Organization agrees to require all related entities, contractors, or subcontractors to
agree that—

     (1) HHS, the Comptroller General, or their designees have the right to inspect, evaluate,
and audit any pertinent contracts, books, documents, papers, and records of the related
entity(s),
contractor(s), or subcontractor(s) involving transactions related to this contract; and

     (2) HHS, the Comptroller General, or their designees have the right to inspect, evaluate,
and audit any pertinent information for any particular contract period for 10 years from the
final
date of the contract period or from the date of completion of any audit, whichever is later.

[422.504(i)(2)]

C. The MA Organization agrees that all contracts or written arrangements into which the MA
Organization enters with providers, related entities, contractors, or subcontractors (first tier
and
downstream entities) shall contain the following elements:

     (1) Enrollee protection provisions that provide—

     (a) Consistent with Article III(C), arrangements that prohibit providers from holding an
enrollee liable for payment of any fees that are the legal obligation of the MA Organization;
and

     (b) Consistent with Article III(C), provision for the continuation of benefits.

     (2) Accountability provisions that indicate that the MA Organization may only delegate
activities or functions to a provider, related entity, contractor, or subcontractor in a
manner
consistent with requirements set forth at paragraph D of this article.

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     (3) A provision requiring that any services or other activity performed by a related entity,
contractor or subcontractor in accordance with a contract or written agreement between the related
entity, contractor, or subcontractor and the MA Organization will be consistent and comply with the
MA Organization’s contractual obligations to CMS. [422.504(i)(3)]

D. If any of the MA Organization’s activities or responsibilities under this contract with CMS is
delegated to other parties, the following requirements apply to any related entity, contractor,
subcontractor, or provider:

     (1) Written arrangements must specify delegated activities and reporting responsibilities.

     (2) Written arrangements must either provide for revocation of the delegation activities
and reporting requirements or specify other remedies in instances where CMS or the MA
Organization determine that such parties have not performed satisfactorily.

     (3) Written arrangements must specify that the performance of the parties is monitored by
the MA Organization on an ongoing basis.

     (4) Written arrangements must specify that either—

     (a) The credentials of medical professionals affiliated with the party or parties will be
either reviewed by the MA Organization; or

     (b) The credentialing process will be reviewed and approved by the MA Organization
and the MA Organization must audit the credentialing process on an ongoing basis.

     (5) All contracts or written arrangements must specify that the related entity, contractor,
or subcontractor must comply with all applicable Medicare laws, regulations, and CMS
instructions.[422.504(i)(4)]

E. If the MA Organization delegates selection of the providers, contractors, or subcontractors to
another organization, the MA Organization’s written arrangements with that organization must
state that the MA Organization retains the right to approve, suspend, or terminate any such
arrangement. [422.504(i)(5)]

F. As of the date of this contract and throughout its term, the MA Organization

     (1) Agrees that any physician incentive plan it operates meets the requirements of
§422.208, and

     (2) Has assured that all physicians and physician groups that the MA Organization’s
physician incentive plan places at substantial financial risk have adequate stop-loss
protection in
accordance with §422.208(f). [422.208]

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Article VI

Records Requirements

A. MAINTENANCE OF RECORDS

1. The MA Organization agrees to maintain for 10 years books, records, documents, and other
evidence of accounting procedures and practices that—

     (a) Are sufficient to do the following:

     (i) Accommodate periodic auditing of the financial records (including data related to Medicare
utilization, costs, and computation of the benefit and price bid) of the MA Organization.

     (ii) Enable CMS to inspect or otherwise evaluate the quality, appropriateness and timeliness
of services performed under the contract, and the facilities of the
MA Organization.

     (iii) Enable CMS to audit and inspect any books and records of the MA Organization that
pertain to the ability of the organization to bear the risk of potential financial losses, or to
services performed or determinations of amounts payable under the contract.

     (iv) Properly reflect all direct and indirect costs claimed to have been incurred and used in
the preparation of the benefit and price bid proposal.

     (v) Establish component rates of the benefit and price bid for determining additional and
supplementary benefits.

     (vi) Determine the rates utilized in setting premiums for State insurance agency purposes and
for other government and private purchasers; and

     (b) Include at least records of the following:

     (i) Ownership and operation of the MA Organization’s financial, medical, and other
record keeping systems.

     (ii) Financial statements for the current contract period and six prior periods.

     (iii) Federal income tax or informational returns for the current contract period and six
prior periods.

     (iv) Asset acquisition, lease, sale, or other action.

     (v) Agreements,
contracts (including, but not limited to, with related or unrelated prescription drug benefit managers) and subcontracts.

     (vi) Franchise, marketing, and management agreements.

     (vii) Schedules of charges for the MA Organization’s fee-for-service patients.

     (viii) Matters pertaining to costs of operations.

     (ix) Amounts of income received, by source and payment.

     (x) Cash flow statements.

     (xi) Any financial reports filed with other Federal programs or State authorities.[422.504(d)]

2. Access to facilities and records. The MA Organization
agrees to the following:

     (a) The Department of Health and Human Services (HHS), the Comptroller General, or their
designee may evaluate, through inspection or other means—

     (i) The quality, appropriateness, and timeliness of services furnished to Medicare
enrollees under the contract;

     (ii) The facilities of the MA Organization; and

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     (iii) The enrollment and disenrollment records for the current contract period and ten prior
periods.

     (b) HHS, the Comptroller General, or their designees may audit, evaluate, or inspect any
books, contracts, medical records, documents, papers, patient care documentation, and other
records of the MA Organization, related entity, contractor, subcontractor, or its transferee
that pertain to any aspect of services performed, reconciliation of benefit liabilities, and
determination of amounts payable under the contract, or as the Secretary may deem necessary to
enforce the contract.

     (c) The MA Organization agrees to make available, for the purposes specified in section
(A) of this article, its premises, physical facilities and equipment, records relating to its
Medicare enrollees, and any additional relevant information that CMS may require, in a manner that
meets CMS record maintenance requirements.

     (d) HHS, the Comptroller General, or their designee’s right to inspect, evaluate, and audit
extends through 10 years from the final date of the contract period or completion of audit,
whichever is later unless-

     (i) CMS determines there is a special need to retain a particular record or group of records
for a longer period and notifies the MA Organization at least 30 days before the normal disposition
date;

     (ii) There has been a termination, dispute, or fraud or similar fault by the MA
Organization, in which case the retention may be extended to 10 years from the date of any
resulting final resolution of the termination, dispute, or fraud or similar fault; or

     (iii) HHS, the Comptroller General, or their designee determines that there is a reasonable
possibility of fraud, in which case they may inspect, evaluate, and audit the MA Organization at
any time. [422.504(e)]

B. REPORTING REQUIREMENTS

1. The MA Organization shall have an effective procedure to develop, compile, evaluate, and
report to CMS, to its enrollees, and to the general public, at the times and in the manner that
CMS requires, and while safeguarding the confidentiality of the doctor-patient relationship,
statistics and other information as described in the remainder of this section (B). [422.516(a)]

2. The MA Organization agrees to submit to CMS certified financial information that must
include the following:

     (a) Such information as CMS may require demonstrating that the organization has a
fiscally sound operation, including:

     (i) The cost of its operations;

     (ii) A description, submitted to CMS annually and within 120 days of the end of the fiscal
year, of significant business transactions (as defined in §422.500) between the MA Organization and
a party in interest showing that the costs of the transactions listed in paragraph (2)(a)(v) of
this section do not exceed the costs that would be incurred if these transactions were with someone
who is not a party in interest; or

     (iii) If they do exceed, a justification that the higher costs are consistent with
prudent management and fiscal soundness requirements.

     (iv) A combined financial statement for the MA Organization and a party in interest if either
of the following conditions is met:

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     (aa) Thirty-five percent or more of the costs of operation of the MA Organization go to a
party in interest.

     (bb) Thirty-five percent or more of the revenue of a party in interest is from the MA
Organization. [422.516(b)]

     (v) Requirements for combined financial statements.

     (aa) The combined financial statements required by paragraph (2)(a)(iv) must display in
separate columns the financial information for the MA Organization and each of the parties in
interest.

     (bb) Inter-entity transactions must be eliminated in the consolidated column.

     (cc) The statements must have been examined by an independent auditor in accordance with
generally accepted accounting principles and must include appropriate opinions and notes.

     (dd) Upon written request from the MA Organization showing good cause, CMS may waive the
requirement that the organization’s combined financial statement include the financial information
required in paragraph (2)(a)(v) with respect to a particular entity. [422.516(c)]

     (vi) A description of any loans or other special financial arrangements the MA
Organization makes with contractors, subcontractors, and related entities.

     (b) Such information as CMS may require pertaining to the disclosure of ownership and
control of the MA Organization. [422.504(f)(1)(ii)]

     (c) Patterns of utilization of the MA Organization’s services.

3. The MA Organization agrees to participate in surveys required by CMS and to submit to CMS all
information that is necessary for CMS to administer and evaluate the program and to simultaneously
establish and facilitate a process for current and prospective beneficiaries to exercise choice in
obtaining Medicare services. This information includes, but is not limited to:

     (a) The benefits covered under the MA plan;

     (b) The MA monthly basic beneficiary premium and MA monthly supplemental
beneficiary premium, if any, for the plan.

     (c) The service area and continuation area, if any, of each plan and the enrollment
capacity of each plan;

     (d) Plan quality and performance indicators for the benefits under the plan including —

     (i) Disenrollment rates for Medicare enrollees electing to receive benefits through the
plan for the previous 2 years;

     (ii) Information on Medicare enrollee satisfaction;

     (iii) The patterns of utilization of plan services;

     (iv) The availability, accessibility, and acceptability of the plan’s services;

     (v) Information on health outcomes and other performance measures required by CMS;

     (vi) The recent record regarding compliance of the plan with requirements of this part, as
determined by CMS; and

     (vii) Other information determined by CMS to be necessary to assist beneficiaries in
making an informed choice among MA plans and traditional Medicare;

     (e) Information about beneficiary appeals and their disposition;

     (f) Information regarding all formal actions, reviews, findings, or other similar actions by
States, other regulatory bodies, or any other certifying or accrediting organization;

     (g) Any other information deemed necessary by CMS for the administration or evaluation
of the Medicare program. [422.504(f)(2)]

12

 

4. The MA Organization agrees to provide to its enrollees and upon request, to any individual
eligible to elect an MA plan, all informational requirements under §422.64 and, upon an
enrollee’s, request, the financial disclosure information required under §422.516. [422.504(f)(3)]

5. Reporting and disclosure under ERISA.

     (a) For any employees’ health benefits plan that includes an MA Organization in its
offerings, the MA Organization must furnish, upon request, the information the plan needs to
fulfill its reporting and disclosure obligations (with respect to the MA Organization) under
the Employee Retirement Income Security Act of 1974 (ERISA).

     (b) The MA Organization must furnish the information to the employer or the employer’s
designee, or to the plan administrator, as the term “administrator” is defined in ERISA.
[422.516(d)]

6. Electronic communication. The MA Organization must have the capacity to communicate
with CMS electronically. [422.504(b)]

7. Risk Adjustment data. The MA Organization agrees to comply with the requirements
in §422.310 for submitting risk adjustment data to CMS. [422.504(a)(8)]

Article VII

Renewal of the MA Contract

A. Renewal of contract: In accordance with §422.505, following the initial contract period,
this contract is renewable annually only if-

     (1) The MA Organization has not provided CMS with a notice of intention not to renew;
[422.506(a)]

     (2) CMS and the MA Organization reach agreement on the bid under 42 CFR Part 422,
Subpart F; and [422.505(d)]

     (3) CMS informs the MA Organization that it authorizes a renewal.

B. Nonrenewal of contract

     (1) Nonrenewal by the Organization.

     (a) In accordance with §422.506, the MA Organization may elect not to renew its
contract with CMS as of the end of the term of the contract for any reason, provided it meets
the time frames for doing so set forth in subparagraphs (b) and (c) of this paragraph.

     (b) If the MA Organization does not intend to renew its contract, it must notify—

     (i) CMS, in writing, by the first Monday in June of the year in which the contract would
end, pursuant to §422.506

     (ii) Each Medicare enrollee, at least 90 days before the date on which the nonrenewal is
effective. This notice must include a written description of all alternatives available for
obtaining Medicare services within the service area including alternative MA plans, Medigap
options, and original Medicare and prescription drug plans and must receive CMS approval prior to
issuance.

     (iii) The general public, at least 90 days before the end of the current calendar year, by
publishing a CMS-approved notice in one or more newspapers of general circulation in each community
located in the MA Organization’s service area.

13

 

     (c) CMS may accept a nonrenewal notice submitted after the applicable annual non-
renewal notice deadline if —

     (i) The MA Organization notifies its Medicare enrollees and the public in accordance
with subparagraph (l)(b)(ii) and (l)(b)(iii) of this section; and

     (ii) Acceptance is not inconsistent with the effective and efficient administration of the
Medicare program.

     (d) If the MA Organization does not renew a contract under subparagraph (1), CMS will
not enter into a contract with the Organization for 2 years from the date of contract
separation unless there are special circumstances that warrant special consideration, as determined by
CMS. [422.506(a)]

     (2) CMS decision not to renew.

     (a) CMS may elect not to authorize renewal of a contract for any of the following
reasons:

     (i) The MA Organization’s level of enrollment, growth in enrollment, or insufficient number of
contracted providers is determined by CMS to threaten the viability of the organization under the
MA program and or be an indicator of beneficiary dissatisfaction with the MA plan(s) offered by the
organization.

     (ii) For any of the reasons listed in §422.510(a) [Article VIII, section (B)(l)(a) of this
contract], which would also permit CMS to terminate the contract.

     (iii) The MA Organization has committed any of the acts in §422.752(a) that would support the
imposition of intermediate sanctions or civil money penalties under 42 CFR Part 422 Subpart O.

     (iv) The MA Organization did not submit a benefit and price bid or the benefit and price bid
was not acceptable [422.505(d)]

     (b) Notice. CMS shall provide notice of its decision whether to authorize renewal of
the contract as follows:

     (i) To the MA Organization by May 1 of the contract year, except in the event of
(2)(a)(iv) above, for which notice will be sent by September 1.

     (ii) To the MA Organization’s Medicare enrollees by mail at least 90 days before the end of
the current calendar year.

     (iii) To the general public at least 90 days before the end of the current calendar year, by
publishing a notice in one or more newspapers of general circulation in each community or county
located in the MA Organization’s service area.

     (c) Notice of appeal rights. CMS shall give the MA Organization written notice of its
right to reconsideration of the decision not to renew in accordance with § 422.644. [422.506(b)]

14

 

Article VIII

Modification or Termination of the Contract

A. Modification or Termination of Contract by Mutual Consent

1. This contract may be modified or terminated at any time by written mutual consent.

     (a) If the contract is modified by written mutual consent, the MA Organization must
notify its Medicare enrollees of any changes that CMS determines are appropriate for
notification within time frames specified by CMS. [422.508(a)(2)]

     (b) If the contract is terminated by written mutual consent, except as provided in section
(A)(2) of this Article, the MA Organization must provide notice to its Medicare enrollees and
the general public as provided in section B(2)(b)(ii) and B(2)(b)(iii) of this Article.
[422.508(a)(1)]

2. If this contract is terminated by written mutual consent and replaced the day following such
termination by a new MA contract, the MA Organization is not required to provide the notice
specified in section B of this article. [422.508(b)]

B. Termination of the Contract by CMS or the MA Organization

1. Termination by CMS.

     (a) CMS may terminate a contract for any of the following reasons:

     (i) The MA Organization has failed substantially to carry out the terms of its contract with
CMS.

     (ii) The MA Organization is carrying out its contract with CMS in a manner that is
inconsistent with the effective and efficient implementation of 42 CFR Part 422.

     (iii) CMS determines that the MA Organization no longer meets the requirements of 42 CFR Part
422 for being a contracting organization.

     (iv) There is credible evidence that the MA Organization committed or participated in false,
fraudulent or abusive activities affecting the Medicare program, including submission of false or
fraudulent data.

     (v) The MA Organization experiences financial difficulties so severe that its ability to make
necessary health services available is impaired to the point of posing an imminent and serious risk
to the health of its enrollees, or otherwise fails to make services available to the extent that
such a risk to health exists.

     (vi) The MA Organization substantially fails to comply with the requirements in 42 CFR Part
422 Subpart M relating to grievances and appeals.

     (vii) The MA Organization fails to provide CMS with valid risk adjustment data as
required under §422.310 and 423.329(b)(3).

     (viii) The MA Organization fails to implement an acceptable quality improvement program
as required under 42 CFR Part 422 Subpart D.

     (ix) The MA Organization substantially fails to comply with the prompt payment
requirements in §422.520.

     (x) The MA Organization substantially fails to comply with the service access
requirements in §422.112.

     (xi) The MA Organization fails to comply with the requirements of §422.208 regarding physician
incentive plans.

15

 

     (xii) The MA Organization substantially fails to comply with the marketing requirements in
422.80.

     (b) Notice. If CMS decides to terminate a contract for reasons other than the
grounds specified in section (B)(l)(a) above, it will give notice of the termination as
follows:

     (i) CMS will notify the MA Organization in writing 90 days before the intended date of the
termination.

     (ii) The MA Organization will notify its Medicare enrollees of the termination by mail at
least 30 days before the effective date of the termination.

     (iii) The MA Organization will notify the general public of the termination at least 30 days
before the effective date of the termination by publishing a notice in one or more newspapers of
general circulation in each community or county located in the MA Organization’s service area.

     (c) Immediate termination of contract by CMS.

     (i) For terminations based on violations prescribed in paragraph (B)(l)(a)(v) of this article,
CMS will notify the MA Organization in writing that its contract has been terminated effective the
date of the termination decision by CMS. If termination is effective in the middle of a month, CMS
has the right to recover the prorated share of the capitation payments made to the MA Organization
covering the period of the month following the contract termination.

     (ii) CMS will notify the MA Organization’s Medicare enrollees in writing of CMS’ decision to
terminate the MA Organization’s contract. This notice will occur no later than 30 days after CMS
notifies the plan of its decision to terminate this contract. CMS will simultaneously inform the
Medicare enrollees of alternative options for obtaining Medicare services, including alternative MA
Organizations in a similar geographic area and original Medicare.

     (iii) CMS will notify the general public of the termination no later than 30 days after
notifying the MA Organization of CMS’ decision to terminate this contract. This notice will be
published in one or more newspapers of general circulation in each community or county located in
the MA Organization’s service area.

     (d) Corrective action plan

     (i) General. Before terminating a contract for reasons other than the grounds
specified in section (B)(l)(a)(v) of this article, CMS will provide the MA Organization with
reasonable opportunity, not to exceed time frames specified at 42 CFR Part 422 Subpart N, to
develop and receive CMS approval of a corrective action plan to correct the deficiencies that are
the basis of the proposed termination.

     (ii) Exception. If a contract is terminated under section (B)(l)(a)(v) of this
article, the MA Organization will not have the opportunity to submit a corrective action plan.

     (e) Appeal rights. If CMS decides to terminate this contract, it will send written
notice to the MA Organization informing it of its termination appeal rights in accordance with 42 CFR
Part 422 Subpart N. [422.510]

2. Termination by the MA Organization

     (a) Cause for termination. The MA Organization may terminate this contract if CMS
fails to substantially carry out the terms of the contract.

     (b) Notice. The MA Organization must give advance notice as follows:

     (i) To CMS, at least 90 days before the intended date of termination. This notice must
specify the reasons why the MA Organization is requesting contract termination.

16

 

     (ii) To its Medicare enrollees, at least 60 days before the termination effective date. This
notice must include a written description of alternatives available for obtaining Medicare services
within the service area, including alternative MA and MA-PD plans, PDP plans, Medigap options, and
original Medicare and must receive CMS approval.

     (iii) To the general public at least 60 days before the termination effective date by
publishing a CMS-approved notice in one or more newspapers of general circulation in each community
or county located in the MA Organization’s geographic area.

     (c) Effective date of termination. The effective date of the termination
will be determined by CMS and will be at least 90 days after the date CMS receives the MA
Organization’s notice of intent to terminate.

     (d) CMS’ liability. CMS’ liability for payment to the MA Organization ends as of the
first day of the month after the last month for which the contract is in effect, but CMS shall make
payments for amounts owed prior to termination but not yet paid.

     (e) Effect of termination by the organization. CMS will not enter into an agreement
with the MA Organization for a period of two years from the date the Organization has terminated
this contract, unless there are circumstances that warrant special consideration, as determined by
CMS. [422.512]

Article IX

Requirements of Other Laws and Regulations

A. The MA Organization agrees to comply with—

     (1) Federal laws and regulations designed to prevent or ameliorate fraud, waste, and
abuse, including, but not limited to, applicable provisions of Federal criminal law, the False
Claims Act (31 USC 3729 et seq.), and the anti-kickback statute (section 1128B(b) of the Act):
and

     (2) HIPAA administrative simplification rules at 45 CFR parts 160, 162, and 164.
[422.504(h)]

B. The MA Organization maintains ultimate responsibility for adhering to and otherwise fully
complying with all terms and conditions of its contract with CMS, notwithstanding any
relationship(s) that the MA organization may have with related entities, contractors, or
subcontractors. [422.504(i)]

C. In the event that any provision of this contract conflicts with the provisions of any statute or
regulation applicable to an MA Organization, the provisions of the statute or regulation shall
have full force and effect.

17

 

Article X

Severability

The MA Organization agrees that, upon CMS’ request, this contract will be amended to exclude any MA
plan or State-licensed entity specified by CMS, and a separate contract for any such excluded plan
or entity will be deemed to be in place when such a request is made. [422.504(k)]

Article XI

Miscellaneous

A. Definitions. Terms not otherwise defined in this contract shall have the meaning given to
such terms in 42 CFR Part 422.

B. Alteration to Original Contract Terms. The MA Organization agrees that it has not altered in
any way the terms of this contract presented for signature by CMS. The MA Organization
agrees that any alterations to the original text the MA Organization may make to this contract
shall not be binding on the parties.

C. Approval to Begin Marketing and Enrollment. The MA Organization agrees that it must
complete CMS operational requirements prior to receiving CMS approval to begin Part C
marketing and enrollment activities. Such activities include, but are not limited to, establishing
and successfully testing connectivity with CMS systems to process enrollment applications (or
contracting with an entity qualified to perform such functions on the MA Organization’s
Sponsor’s behalf) and successfully demonstrating capability to submit accurate and timely price
comparison data. To establish and successfully test connectivity, the MA Organization must,
1) establish and test physical connectivity to the CMS data center, 2) acquire user identifications
and passwords, 3) receive, store, and maintain data necessary to perform enrollments and send and
receive transactions to and from CMS, and 4) check and receive transaction status information.

D. Incorporation of Applicable Addenda. All addenda checked off and initialed on the cover
sheet of this contract by the MA Organization are hereby incorporated by reference.

18

 

In witness whereof, the parties hereby execute this contract.

FOR THE MA ORGANIZATION

	 	 	 	 	 
	 

Printed Name

	 	 

Title
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Signature

	 	Date	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	Organization

	 	Address	 	 

FOR THE CENTERS FOR MEDICARE & MEDICAID SERVICES

	 	 	 	 	 
	 

David A. Lewis

	 	 

Date
	 	 
	Acting Director
	 	 	 	 
	Medicare Advantage Group
	 	 	 	 
	Center for Beneficiary Choices
	 	 	 	 

19

 

ADDENDUM TO MEDICARE MANAGED CARE CONTRACT PURSUANT TO

SECTIONS 1860D-1 THROUGH 1860D-42 OF THE SOCIAL SECURITY ACT

FOR THE OPERATION OF A VOLUNTARY MEDICARE PRESCRIPTION

DRUG PLAN

The Centers for Medicare & Medicaid Services (hereinafter referred to as “CMS”) and
                                                            , a Medicare
managed care organization (hereinafter referred to as the MA-PD Sponsor) agree to amend the
contract (INSERT “H” OR “R” NUMBER) governing the MA-PD Sponsor’s operation of a Part C plan
described in Section 1851(a)(2)(A) of the Social Security Act (hereinafter referred to as “the
Act”) or a Medicare cost plan to include this addendum under which the MA-PD Sponsor shall operate
a Voluntary Medicare Prescription Drug Plan pursuant to sections 1860D-1 through 1860D-42 (with the
exception of section 1860D-22 and 1860D-31) of the Act.

This addendum is made pursuant to Subpart L of 42 CFR Part 417 (in the case of cost plan sponsors
offering a Part D benefit) and Subpart K of 42 CFR Part 422 (in the case of an MA-PD Sponsor
offering a Part C plan).

NOTE: For purposes of this addendum, unless otherwise noted, reference to an “MA-PD Sponsor” or
“MA-PD Plan” is deemed to include a cost plan sponsor or a MA private fee-for-service contractor
offering a Part D benefit.

 

Article I

Medicare Voluntary Prescription Drug Benefit

	A.	 	The MA-PD Sponsor agrees to operate one or more Medicare Voluntary Prescription
Drug Plans as described in its application and related materials, including but not
limited to all the attestations contained therein and all supplemental guidance, for
Medicare approval and in compliance with the provisions of this addendum, which
incorporates in its entirety the Solicitation For Applications for New Medicare
Advantage Prescription Drug Plan (MA-PD) Sponsors, released on January 24, 2006
[applicable to Medicare Part C contractors] or the Solicitation for Applications for
New Cost Plan Sponsors, released on January 24, 2006 [applicable to Medicare cost
plan contractors] (hereinafter collectively referred to as “the addendum”). The MA-
PD Sponsor also agrees to operate in accordance with the regulations at 42 CFR
§423.1 through 42 CFR §423.910 (with the exception of Subparts Q, R, and S),
sections 1860D-1 through 1860D-42 (with the exception of sections 1860D-22(a) and
1860D-31) of the Social Security Act, and the applicable solicitation identified above,
as well as all other applicable Federal statutes, regulations, and policies. This
addendum is deemed to incorporate any changes that are required by statute to be
implemented during the term of this addendum and any regulations or policies
implementing or interpreting such statutory provisions.

	B.	 	CMS agrees to perform its obligations to the MA-PD Sponsor consistent with the
regulations at 42 CFR §423.1 through 42 CFR §423.910 (with the exception of
Subparts Q, R, and S), sections 1860D-1 through 1860D-42 (with the exception of
sections 1860D-22(a) and 1860D-31) of the Social Security Act, and the applicable
solicitation, as well as all other applicable Federal statutes, regulations, and policies.

	C.	 	CMS agrees that it will not implement, other than at the beginning of a calendar year,
regulations under 42 CFR Part 423 that impose new, significant regulatory
requirements on the MA-PD Sponsor. This provision does not apply to new
requirements mandated by statute.

	D.	 	This addendum is in no way intended to supersede or modify 42 CFR, Parts 417, 422
or 423. Failure to reference a regulatory requirement in this addendum does not
affect the applicability of such requirements to the MA-PD Sponsor and CMS.

Article II

Functions to be Performed by the MA-PD Sponsor

	A.	 	ENROLLMENT

	 	1.	 	MA-PD Sponsor agrees to enroll in its MA-PD plan only Part D-eligible
beneficiaries as they are defined in 42 CFR §423.30(a) and who have elected to enroll in
MA-PD Sponsor’s Part C or Section 1876 benefit.

2

 

	 	2.	 	If the MA-PD Sponsor is a cost plan sponsor, the MA-PD Sponsor acknowledges that its
Section 1876 plan enrollees are not required to elect enrollment in its Part D plan.

	B.	 	PRESCRIPTION DRUG BENEFIT

	 	1.	 	MA-PD Sponsor agrees to provide the required prescription drug coverage as defined
under 42 CFR §423.100 and, to the extent applicable, supplemental benefits as defined in
42 CFR §423.100 and in accordance with Subpart C of 42 CFR Part 423. MA-PD Sponsor also
agrees to provide Part D benefits as described in the MA-PD Sponsor’s Part D bid(s)
approved each year by CMS (and in the Attestation of Benefit Plan and Price, attached
hereto).
	 
	 	2.	 	MA-PD Sponsor agrees to calculate and collect beneficiary Part D premiums in
accordance with 42 CFR §§423.286 and 423.293.
	 
	 	3.	 	If the MA-PD Sponsors is a cost plans sponsor, it acknowledge that its Part D benefit
is offered as an optional supplemental service in accordance with 42 CFR
§417.440(b)(2)(ii).

	C.	 	DISSEMINATION OF PLAN INFORMATION

	 	1.	 	MA-PD Sponsor agrees to provide the information required in 42 CFR §423.48.
	 
	 	2.	 	MA-PD Sponsor agrees to disclose information related to Part D benefits to
beneficiaries in the manner and the form specified by CMS under 42 CFR §§423.128 and
423.50 and in the “Marketing Materials Guidelines for Medicare Advantage-Prescription Drug
Plans (MA-PDs) and Prescription Drug Plans (PDPs).”
	 
	 	3.	 	MA-PD Sponsor certifies that all materials it submits to CMS under the File and Use
Certification authority described in the Marketing Materials Guidelines are accurate,
truthful, not misleading, and consistent with CMS marketing guidelines.

	D.	 	QUALITY ASSURANCE/UTILIZATION MANAGEMENT
	 
	 	 	MA-PD Sponsor agrees to operate quality assurance, cost, and utilization management,
medication therapy management programs, and support electronic prescribing in accordance
with Subpart D of 42 CFR Part 423.
	 
	E.	 	APPEALS AND GRIEVANCES
	 
	 	 	MA-PD Sponsor agrees to comply with all requirements in Subpart M of 42 CFR Part 423 governing
coverage determinations, grievances and appeals, and formulary exceptions. MA-PD Sponsor
acknowledges that these requirements are separate and distinct from the appeals and grievances
requirements applicable to the MA-PD Sponsor through the operation of its Part C or cost plan
benefits.

3

 

	F.	 	PAYMENT TO MA-PD SPONSOR

	 	1.	 	MA-PD Sponsor and CMS agree that payment paid for Part D services under the
addendum will be governed by the rules in Subpart G of 42 CFR Part 423.
	 
	 	2.	 	If the MA-PD Sponsor is participating in the Part D Reinsurance Payment
Demonstration, described in 70 FR 9360 (Feb. 25, 2005), it affirms that it will not seek
payment under the demonstration for services provided to employer group enrollees.

	G.	 	BID SUBMISSION AND REVIEW
	 
	 	 	If the MA-PD Sponsor intends to participate in the Part D program for the future year, MA-PD
Sponsor agrees to submit a future year’s Part D bid, including all required information on
premiums, benefits, and cost-sharing, by the applicable due date, as provided in Subpart F of
42 CFR Part 423 so that CMS and the MA-PD Sponsor may conduct negotiations regarding the terms
and conditions of the proposed bid and benefit plan renewal. MA-PD Sponsor acknowledges that
failure to submit a timely bid under this section may affect the sponsor’s ability to offer a
Part C plan, pursuant to the provisions of 42 CFR §422.4(c).

	H.	 	COORDINATION WITH OTHER PRESCRIPTION DRUG COVERAGE

	 	1.	 	MA-PD Sponsor agrees to comply with the coordination requirements with State Pharmacy
Assistance Programs (SPAPs) and plans that provide other prescription drug coverage as
described in Subpart J of 42 CFR Part 423.
	 
	 	2.	 	MA-PD Sponsor agrees to comply with Medicare Secondary Payer procedures as stated
in 42 CFR §423.462.

	I.	 	SERVICE AREA AND PHARMACY ACCESS

	 	1.	 	The MA-PD Sponsor agrees to provide Part D benefits in the service area for which it
has been approved by CMS to offer Part C or cost plan benefits utilizing a pharmacy
network and formulary approved by CMS that meet the requirements of 42 CFR §423.120.
	 
	 	2.	 	The MA-PD Sponsor agrees to ensure adequate access to Part D-covered drugs at
out-of-network pharmacies according to 42 CFR §423.124.
	 
	 	3.	 	MA-PD Sponsor agrees to provide benefits by means of point-of-service systems to
adjudicate prescription drug claims in a timely and efficient manner in compliance with
CMS standards, except when necessary to provide access in underserved areas, I/T/U
pharmacies (as defined in 42 CFR §423.100), and long-term care pharmacies (as defined in
42 CFR §423.100).

4

 

	 	4.	 	MA-PD Sponsor agrees to contract with any pharmacy that meets the MA-PD Sponsor’s
reasonable and relevant standard terms and conditions. If MA-PD Sponsor has demonstrated
that it historically fills 98% or more of its enrollees’ prescriptions at pharmacies owned
and operated by the MA-PD Sponsor (or presents compelling circumstances that prevent the
sponsor from meeting the 98% standard or demonstrates that its Part D plan design will
enable the sponsor to meet the 98% standard during the contract year), this provision does
not apply to MA-PD Sponsor’s plan.
	 
	 	5.	 	The provisions of 42 CFR §423.120(a) concerning the TRICARE retail pharmacy access
standard do not apply to MA-PD Sponsor if the Sponsor has demonstrated to CMS that it
historically fills more than 50% of its enrollees’ prescriptions at pharmacies owned and
operated by the MA-PD Sponsor. MA-PD Sponsors excused from meeting the TRICARE standard are
required to demonstrate retail pharmacy access that meets the requirements of 42 CFR
§422.112 for a Part C contractor and 42 CFR §417.416(e)for a cost plan contractor.

	J.	 	COMPLIANCE PLAN/PROGRAM INTEGRITY
	 
	 	 	MA-PD Sponsor agrees that it will develop and implement a compliance plan that applies to its
Part D-related operations, consistent with 42 CFR §423.504(b)(4)(vi).

	K.	 	LOW-INCOME SUBSIDY
	 
	 	 	MA-PD Sponsor agrees that it will participate in the administration of subsidies for low-income
individuals according to Subpart P of 42 CFR Part 423.

	L.	 	BENEFICIARY FINANCIAL PROTECTIONS
	 
	 	 	The MA-PD Sponsor agrees to afford its enrollees protection from liability for payment of fees
that are the obligation of the MA-PD Sponsor in accordance with 42 CFR §423.505(g).

	M.	 	RELATIONSHIP WITH RELATED ENTITIES, CONTRACTORS, AND SUBCONTRACTORS

	 	1.	 	The MA-PD Sponsor agrees that it maintains ultimate responsibility for adhering to
and otherwise fully complying with all terms and conditions of this addendum.
	 
	 	2.	 	The MA-PD Sponsor shall ensure that any contracts or agreements with subcontractors
or agents performing functions on the MA-PD Sponsor’s behalf related to the operation of
the Part D benefit are in compliance with 42 CFR §423.505(i).

5

 

	N.	 	CERTIFICATION OF DATA THAT DETERMINE PAYMENT

MA-PD Sponsor must provide certifications in accordance with 42 CFR §423.505(k).

Article III

Record Retention and Reporting Requirements

	A.	 	MAINTENANCE OF RECORDS
	 
	 	 	MA-PD Sponsor agrees to maintain records and provide access in accordance with 42 CFR
§§423.504(d) and 505(d) and (e).

	B.	 	GENERAL REPORTING REQUIREMENTS
	 
	 	 	The MA-PD Sponsor agrees to submit to information to CMS according to 42 CFR §§423.505(f),
423.514, and the “Final Medicare Part D Reporting Requirements,” a document issued by CMS
and subject to modification each program year.

	C.	 	CMS LICENSE FOR USE OF PLAN FORMULARY

PDP Sponsor agrees to submit to CMS each plan’s formulary information, including any
changes to its formularies, and hereby grants to the Government[, and any person or entity
who might receive the formulary from the Government,] a non-exclusive license to use all or
any portion of the formulary for any purpose related to the administration of the Part D
program, including without limitation publicly distributing, displaying, publishing or
reconfiguration of the information in any medium, including www.medicare.gov, and
by any electronic, print or other means of distribution.

Article IV

HIPAA Transactions/Privacy/Security

	A.	 	MA-PD Sponsor agrees to comply with the confidentiality and enrollee record
accuracy requirements specified in 42 CFR §423.136.
	 
	B.	 	MA-PD Sponsor agrees to enter into a business associate agreement with the entity
with which CMS has contracted to track Medicare beneficiaries’ true out-of-pocket
costs.

6

 

Article V

Addendum Term and Renewal

	A.	 	TERM OF ADDENDUM
	 
	 	 	This addendum is effective from the date of CMS’ authorized representative’s signature through
December 31, 2007. This addendum shall be renewable for successive one-year periods thereafter
according to 42 CFR §423.506. MA-PD Sponsor shall not conduct Part D-related marketing
activities prior to October 1, 2006 and shall not process enrollment applications prior to
November 15, 2006. MA-PD Sponsor shall begin delivering Part D benefit services on January 1,
2007.

	B.	 	QUALIFICATION TO RENEW ADDENDUM

	 	1.	 	In accordance with 42 CFR §423.507, the MA-PD Sponsor will be determined
qualified to renew this addendum annually only if—

	 	(a)	 	CMS informs the MA-PD Sponsor that it is qualified to renew its
addendum; and
	 
	 	(b)	 	The MA-PD Sponsor has not provided CMS with a notice of intention not
to renew in accordance with Article VII of this addendum.

	 	2.	 	Although MA-PD Sponsor may be determined qualified to renew its addendum
under this Article, if the MA-PD Sponsor and CMS cannot reach agreement on
the Part D bid under Subpart F of 42 CFR Part 423, no renewal takes place, and
the failure to reach agreement is not subject to the appeals provisions in Subpart N
of 42 CFR Parts 422 or 423. (Refer to Article XI for consequences of non
renewal on the Part C contract and the ability to enter into a Part C contract.)

Article VI

Nonrenewal of Addendum

	A.	 	NONRENEWAL BY THE MA-PD SPONSOR

	 	1.	 	MA-PD Sponsor may non-renew this addendum in accordance with 42 CFR
423.507(a).
	 
	 	2.	 	If the MA-PD Sponsor non-renews this addendum under this Article, CMS cannot enter
into a Part D addendum with the organization for 2 years unless there are special
circumstances that warrant special consideration, as determined by CMS.

	B.	 	NONRENEWAL BY CMS
	 
	 	 	CMS may non-renew this addendum under the rules of 42 CFR 423.507(b). (Refer to Article X for
consequences of non-renewal on the Part C contract and the ability to enter into a Part C
contract.)

7

 

Article VII

Modification or Termination of Addendum by Mutual Consent

This addendum may be modified or terminated at any time by written mutual consent in accordance
with 42 CFR 423.508. (Refer to Article X for consequences of non-renewal on the Part C contract
and the ability to enter into a Part C contract.)

Article VIII

Termination of Addendum by CMS

CMS may terminate this addendum in accordance with 42 CFR 423.509. (Refer to Article X for
consequences of non-renewal on the Part C contract and the ability to enter into a Part C
contract.)

Article IX

Termination of Addendum by the MA-PD Sponsor

	A.	 	The MA-PD Sponsor may terminate this addendum only in accordance with 42 CFR
423.510.
	 
	B.	 	CMS will not enter into a Part D addendum with an organization that has terminated
its addendum within the preceding 2 years unless there are circumstances that warrant
special consideration, as determined by CMS.
	 
	C.	 	If the addendum is terminated under section A of this Article, the MA-PD Sponsor
must ensure the timely transfer of any data or files. (Refer to Article X for
consequences of non-renewal on the Part C contract and the ability to enter into a Part
C contract.)

Article X

Relationship Between Addendum and Part C Contract or 1876 Cost Contract

	A.	 	MA-PD Sponsor acknowledges that, if it is a Medicare Part C contractor, the termination or
nonrenewal of this addendum by either party may require CMS to terminate or non-renew the
Sponsor’s Part C contract in the event that such nonrenewal or termination prevents the MA-PD
Sponsor from meeting the requirements of 42 CFR §422.4(c), in which case the Sponsor must
provide the notices specified in this contract, as well as the notices specified under Subpart
K of 42 CFR Part 422. MA-PD Sponsor also acknowledges that Article X.B. of this addendum may
prevent the sponsor from entering into a Part C contract for two years following an addendum
termination or non-renewal where such non-renewal or termination prevents the MA-PD Sponsor
from meeting the requirements of 42 CFR §422.4(c).

8

 

	B.	 	The termination of this addendum by either party shall not, by itself, relieve the
parties from their obligations under the Part C or cost plan contracts to which this
document is an addendum.
	 
	C.	 	In the event that the MA-PD Sponsor’s Part C or cost plan contract (as applicable) is
terminated or nonrenewed by either party, the provisions of this addendum shall also
terminate. In such an event, the MA-PD Sponsor and CMS shall provide notice to
enrollees and the public as described in this contract as well as 42 CFR Part 422,
Subpart K or 42 CFR Part 417, Subpart K, as applicable.

Article XI

Intermediate Sanctions

The MA-PD Sponsor shall be subject to sanctions and civil monetary penalties, consistent
with Subpart O of 42 CFR Part 423.

Article XII

Severability

Severability of the addendum shall be in accordance with 42 CFR §423.504(e).

Article XIII

Miscellaneous

	A.	 	DEFINITIONS: Terms not otherwise defined in this addendum shall have the
meaning given such terms at 42 CFR Part 423 or, as applicable, 42 CFR Part 422 or
Part 417.
	 
	B.	 	ALTERATION TO ORIGINAL ADDENDUM TERMS: The MA-PD Sponsor
agrees that it has not altered in any way the terms of the MA-PD addendum presented
for signature by CMS. MA-PD Sponsor agrees that any alterations to the original text
the MA-PD Sponsor may make to this addendum shall not be binding on the parties.
	 
	C.	 	ADDITIONAL CONTRACT TERMS: The MA-PD Sponsor agree to include in this
addendum other terms and conditions in accordance with 42 CFR §423.505(j).
	 
	D.	 	CMS APPROVAL TO BEGIN MARKETING AND ENROLLMENT ACTIVITIES:
The MA-PD Sponsor agrees that it must complete CMS operational requirements
related to its Part D benefit prior to receiving CMS approval to begin MA-PD plan
marketing activities relating to its Part D benefit. Such activities include, but are not
limited to, establishing and successfully testing connectivity with CMS systems to
process enrollment applications (or contracting with an entity qualified to perform

9

 

such functions on MA-PD Sponsor’s behalf) and successfully demonstrating the capability to submit
accurate and timely price comparison data. To establish and successfully test connectivity, the PDP
Sponsor must, 1) establish and test physical connectivity to the CMS data center, 2) acquire user
identifications and passwords, 3) receive, store, and maintain data necessary to perform
enrollments and send and receive transactions to and from CMS, and 4) check and receive transaction
status information.

10

 

PART C/D BENEFIT PLAN(S) DESCRIPTION

TO BE ATTACHED TO MA CONTRACT

SECTION 1876/PART D OPTIONAL SUPPLEMENTAL BENEFIT PLAN

DESCRIPTION TO BE ATTACHED TO SECTION 1876 CONTRACT

11

 

ATTACHMENT A

ATTESTATION
OF ENROLLMENT INFORMATION

 RELATING TO CMS PAYMENT 

TO A MEDICARE ADVANTAGE ORGANIZATION

     Pursuant to the contract(s) between the Centers for Medicare & Medicaid Services (CMS) and
(INSERT NAME OF MA ORGANIZATION), hereafter referred to as the MA Organization, governing
the operation of the following Medicare Advantage plans (INSERT PLAN IDENTIFICATION NUMBERS
HERE), the MA Organization hereby requests payment under the contract, and in doing so, makes
the following attestation concerning CMS payments to the MA Organization. The MA Organization
acknowledges that the information described below directly affects the calculation of CMS payments
to the MA Organization and that misrepresentations to CMS about the accuracy of such information
may result in Federal civil action and/or criminal prosecution. This attestation shall not be
considered a waiver of the MA Organization’s right to seek payment adjustments from CMS based on
information or data which does not become available until after the date the MA Organization
submits this attestation.

     1. The MA Organization has reported to CMS for the month of (INDICATE MONTH AND YEAR)
all new enrollments, disenrollments, and changes in enrollees’ institutional status with respect to
the above-stated MA plans. Based on best knowledge, information, and belief as of the date
indicated below, all information submitted to CMS in this report is accurate, complete, and
truthful.

     2. The MA Organization has reviewed the CMS monthly membership report and reply listing for
the month of (INDICATE MONTH AND YEAR) for the above-stated MA plans and has reported to
CMS any discrepancies between the report and the MA Organization’s records. For those portions of
the monthly membership report and the reply listing to which the MA Organization raises no
objection, the MA Organization, through the certifying CEO/CFO, will be deemed to have attested,
based on best knowledge, information, and belief as of the date indicated below, to their accuracy,
completeness, and truthfulness.

	 	 	 	 	 
	 

	 	 

(INDICATE TITLE [CEO, CFO, or delegate])
	 	 
	 
	 	 	 	 
	 

	 	on behalf of	 	 
	 
	 	 	 	 
	 

	 	 

(INDICATE MA ORGANIZATION)
	 	 
	 
	 	 	 	 
	 

	 	 

DATE
	 	 

20

 

ATTACHMENT B

ATTESTATION OF RISK ADJUSTMENT DATA INFORMATION RELATING TO

CMS PAYMENT TO A MEDICARE ADVANTAGE ORGANIZATION

     Pursuant to the contract(s) between the Centers for Medicare & Medicaid Services (CMS) and
(INSERT NAME OF MA ORGANIZATION), hereafter referred to as the MA Organization, governing
the operation of the following Medicare Advantage plans (INSERT PLAN IDENTIFICATION NUMBERS
HERE), the MA Organization hereby requests payment under the contract, and in doing so, makes
the following attestation concerning CMS payments to the MA Organization. The MA Organization
acknowledges that the information described below directly affects the calculation of CMS payments
to the MA Organization or additional benefit obligations of the MA Organization and that
misrepresentations to CMS about the accuracy of such information may result in Federal civil action
and/or criminal prosecution.

     The MA Organization has reported to CMS during the
period of (INDICATE DATES) all
(INDICATE TYPE OF DATA — INPATIENT HOSPITAL, OUTPATIENT
HOSPITAL, OR PHYSICIAN) risk
adjustment data available to the MA Organization with respect to the above-stated MA plans. Based
on best knowledge, information, and belief as of the date indicated below, all information
submitted to CMS in this report is accurate, complete, and truthful.

	 	 	 	 	 
	 

	 	 

(INDICATE TITLE [CEO, CFO, or delegate])
	 	 
	 
	 	 	 	 
	 

	 	on behalf of	 	 
	 
	 	 	 	 
	 

	 	 

(INDICATE MA ORGANIZATION)
	 	 
	 
	 	 	 	 
	 

	 	 

DATE
	 	 

21

 

[SAMPLE — DO NOT USE -
THIS DOCUMENT WILL BE SENT DIRECTLY TO THE MAO THROUGH HPMS]

ATTACHMENT C - Medicare Advantage Plan Attestation of Benefit Plan and Price

<Legal Entity Name>

<Contract#>

Date: <XX/XX/XXXX>

I attest that the following plan numbers as established in the final Plan Benefit
Package (PBP) will be operated by the above-stated organization and made available to
eligible Medicare beneficiaries in the approved service area during program year 2007.

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Plan	 	Segment	 	 	 	 	 	 	 	Transaction	 	MA	 	PartD	 	CMS	 	Effective Date
	ID	 	ID	 	Version	 	Plan Name	 	Plan Type	 	Type	 	Premium	 	Premium	 	Approval	 	Date
	<xxx>

	 	<x>
	 	<x>
	 	<Plan Name>
	 	<Plan Type>
	 	<Transaction Type>
	 	$<Plan Premium>
	 	$<Plan D Premium>
	 	<xx/xx/xx>
	 	<xx/xx/xx>
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	<xxx>

	 	<x>
	 	<x>
	 	<Plan Name>
	 	<Plan Type>
	 	<Transaction
Type>
	 	$<Plan Premium>
	 	$<Plan D Premium>
	 	<xx/xx/xx>
	 	<xx/xx/xx>
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	<xxx>

	 	<x>
	 	<x>
	 	<Plan Name>
	 	<Plan Type>
	 	<Transaction
Type>
	 	$<Plan Premium>
	 	$<Plan D Premium>
	 	<xx/xx/xx>
	 	<xx/xx/xx>

	 	 	 	 	 	 	 
	 

CEO

	 	 	 	 

CFO
	 	 
	 
	<Name of CFO>
<Title>

	 	Date
	 	<Name of CFO>
<Title>
	 	Date
	<Address 1>

	 	 	 	<Address 1>	 	 
	<Address 2>

	 	 	 	<Address 2>	 	 
	<City, State Zip>

	 	 	 	<City, State Zip>	 	 
	<Phone #>

	 	 	 	<Phone #>	 	 

22exv10w34

 

EXHIBIT
10.34

PACIFIC TOWERS ASSOCIATES

OFFICE LEASE

ARCO CENTER

LONG BEACH, CALIFORNIA

	 	 	 
	LANDLORD:

	 	PACIFIC TOWERS ASSOCIATES,

a California Limited Partnership
	 
	 	 
	TENANT:

	 	MOLINA HEALTHCARE, INC.,

a California corporation

					
	 	 	 	 	 
	Dated for reference purposes as of: July 10, 2002
	 	
	 	 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page	 
	 
	 	 	 	 	 	 
	1.
	 	PREMISES	 	 	3	 
	 
	 	 	 	 	 	 
	2.
	 	TERM	 	 	3	 
	 
	 	 	 	 	 	 
	3.
	 	RENT	 	 	3	 
	 
	 	 	 	 	 	 
	4.
	 	ADDITIONAL RENT FOR INCREASED OPERATING EXPENSES AND TAXES	 	 	4	 
	 
	 	 	 	 	 	 
	5.
	 	LATE CHARGES	 	 	9	 
	 
	 	 	 	 	 	 
	6.
	 	LANDLORD’S WORK	 	 	9	 
	 
	 	 	 	 	 	 
	7.
	 	CONDUCT OF BUSINESS BY TENANT	 	 	10	 
	 
	 	 	 	 	 	 
	8.
	 	ALTERATIONS AND TENANT’S PROPERTY	 	 	10	 
	 
	 	 	 	 	 	 
	9.
	 	REPAIRS	 	 	11	 
	 
	 	 	 	 	 	 
	10.
	 	LIENS	 	 	12	 
	 
	 	 	 	 	 	 
	11.
	 	COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS	 	 	12	 
	 
	 	 	 	 	 	 
	12.
	 	SUBORDINATION	 	 	13	 
	 
	 	 	 	 	 	 
	13.
	 	INABILITY TO PERFORM	 	 	14	 
	 
	 	 	 	 	 	 
	14.
	 	DESTRUCTION	 	 	14	 
	 
	 	 	 	 	 	 
	15.
	 	EMINENT DOMAIN	 	 	15	 
	 
	 	 	 	 	 	 
	16.
	 	ASSIGNMENT	 	 	16	 
	 
	 	 	 	 	 	 
	17.
	 	UTILITIES	 	 	17	 
	 
	 	 	 	 	 	 
	18.
	 	DEFAULT	 	 	19	 
	 
	 	 	 	 	 	 
	19.
	 	INDEMNITY	 	 	20	 
	 
	 	 	 	 	 	 
	20.
	 	TENANT’S INSURANCE	 	 	21	 
	 
	 	 	 	 	 	 
	21.
	 	LIMITATION OF LANDLORD’S LIABILITY	 	 	22	 
	 
	 	 	 	 	 	 
	22.
	 	ACCESS TO PREMISES	 	 	22	 
	 
	 	 	 	 	 	 
	23.
	 	NOTICES	 	 	23	 
	 
	 	 	 	 	 	 
	24.
	 	NO WAIVER	 	 	23	 
	 
	 	 	 	 	 	 
	25.
	 	CERTIFICATES	 	 	23	 
	 
	 	 	 	 	 	 
	26.
	 	RULES AND REGULATIONS	 	 	24	 
	 
	 	 	 	 	 	 
	27.
	 	TAX ON TENANT’S PERSONAL PROPERTY AND BUILDING NON-STANDARD WORK	 	 	24	 
	 
	 	 	 	 	 	 
	28.
	 	SECURITY DEPOSIT	 	 	24	 
	 
	 	 	 	 	 	 
	29.
	 	AUTHORITY	 	 	25	 
	 
	 	 	 	 	 	 
	30.
	 	MISCELLANEOUS	 	 	25	 
	 
	 	 	 	 	 	 
	 
	 	ADDENDUM	 	 	 	 
	 
	 	EXHIBIT A — FLOOR PLAN	 	 	 	 
	 
	 	EXHIBIT B — WORKLETTER	 	 	 	 
	 
	 	EXHIBIT C — RULES AND REGULATIONS	 	 	 	 
	 
	 	EXHIBIT D — PARKING AGREEMENT	 	 	 	 
	 
	 	EXHIBIT E  — NON-DISTURBANCE AGREEMENT	 	 	 	 

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

1

 

ARCO CENTER OFFICE LEASE

Basic Lease Information

	 	 	 	 	 
	Lease Date	 	July 10, 2002
	 
	 	 	 	 
	Tenant	 	Molina Healthcare, Inc., a California corporation
	 
	 	 	 	 
	 

	 	Address
	 	Attn: Mr. C. Joseph Heinz
	 
	 	 	 	 
	 

	 	 	 	One Golden Shore, Long Beach, CA 90802
	 
	 	 	 	 
	 

	 	Telephone
	 	(562) 435-3666
	 
	 	 	 	 
	 

	 	 	 	with a copy to:
	 
	 	 	 	 
	 

	 	 	 	eRealty Commercial, Attn: Mr. Damian McKinney
	 
	 	 	 	 
	 

	 	 	 	12780 High Bluff Drive, Suite 100, San Diego, CA 92130
	 
	 	 	 	 
	 

	 	Telephone
	 	(858) 350-5580
	 
	 	 	 	 
	Landlord	 	Pacific Towers Associates, a California Limited Partnership
	 
	 	 	 	 
	 

	 	Address
	 	200 Oceangate, Suite 310
	 
	 	 	 	 
	 

	 	 	 	Long Beach, California 90802
	 
	 	 	 	 
	 

	 	Contact Person
	 	Building Manager
	 
	 	 	 	 
	 

	 	Telephone
	 	(562) 435-8200
	 
	 	 	 	 
	Building	 	Arco Center, Long Beach, California
	 
	 	 	 	 
	Building Rentable Area	 	459,636 rentable square feet
	 
	 	 	 	 
	Premises
	 	 	 	 
	 
	 	 	 	 
	 

	 	Tower Designation
	 	200 Oceangate, Long Beach, California
	 
	 	 	 	 
	 

	 	Suite
	 	200, 600 & 700
	 
	 	 	 	 
	 

	 	Floor(s)
	 	2nd, 6th & 7th
	 
	 	 	 	 
	 

	 	Rentable Square Footage
	 	49,456 rentable square feet
	 
	 	 	 	 
	 

	 	 	 	See Article 1 for expansion into 8th Floor
	 
	 	 	 	 
	Term
	 	 	 	 
	 
	 	 	 	 
	 

	 	Commencement Date
	 	See Article 2
	 
	 	 	 	 
	 

	 	Expiration Date
	 	See Article 2
	 
	 	 	 	 
	Monthly Base Rental	 	See Article 3
	 
	 	 	 	 
	 
	 	 	 	 
	Tenant’s Share (of
increased operating
expenses and taxes)	 	Calculated in accordance with Article 4
	 
	 	 	 	 
	Base Tax Amount	 	 
	 

	 	 	 	The greater of $55,000,000 or the assessed value of the
Building as finally determined by the County of Los
Angeles for the 2002-2003 fiscal tax year, after all
appeals and other challenges thereto have been exhausted.
	 
	 	 	 	 
	Base Expense Year	 	Calendar year 2003
	 
	 	 	 	 
	Use	 	General office use consistent with Class A office building
	 
	 	 	 	 
	Security Deposit	 	See Article 28
	 
	 	 	 	 
	Parking	 	See Paragraph 5 of Addendum
	 
	 	 	 	 
	Broker	 	CB Richard Ellis and eRealty Commercial

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

2

 

ARCO CENTER

OFFICE LEASE

     This Lease is made and entered into this 10th day of July, 2002, by and between PACIFIC
TOWERS ASSOCIATES, a California limited partnership (herein called “Landlord”) and MOLINA
HEALTHCARE, INC., a California corporation (herein called “Tenant”).

WITNESSETH:

Landlord and Tenant hereby covenant and agree as follows:

1. PREMISES

     1.1 Upon and subject to the terms, covenants and conditions hereinafter set forth, Landlord hereby
leases to Tenant and Tenant hereby hires from Landlord those premises (herein called the
“Premises”) located in the building (herein called the “Building”) and on the floors specified in
the Basic Lease Information attached hereto and comprising the area substantially as shown on the
floor plan or plans attached hereto as Exhibit A.

     Commencing on the earlier of (i) one year after the Commencement Date or (ii) the date that Tenant
commences its business operations therein, the Premises shall be expanded to include the entire
8th Floor of 200 Oceangate, containing 16,575 rentable square feet, and at which time
the Premises shall contain a total of 66,031 rentable square feet. Landlord shall deliver
possession of the entire 8th Floor Premises to Tenant for the purpose of constructing
its Tenant Improvements therein at least four (4) months prior to said one year anniversary of the
Commencement Date, but Landlord may be delayed in delivering the 8th Floor by said date
as a result of the occupancy by the current tenant and subtenants. To the extent Landlord is so
delayed in delivering the entire 8th Floor Premises, the time period in (i) above shall
be extended by the number of days of delay; provided, however, in the event the entire
8th Floor Premises is not delivered within 420 days following the Commencement Date,
Tenant may elect, by written notice to Landlord prior to the date said 8th Floor
Premises are delivered, not to expand into said 8th Floor Premises.

     The term “Building” includes the entire complex consisting of two office buildings and a parking
garage currently known as the Arco Center and the land and improvements surrounding the complex and
designated from time to time by Landlord as land or common areas appurtenant to the complex
together with utilities, facilities, drives, walkways and other amenities appurtenant to or
servicing the complex. Each office building is designated herein by its address of 200 Oceangate or
300 Oceangate.

     1.2 As used in this Lease, the term “rentable area” shall be computed by Landlord in accordance
with its modified standards of the Building Owners and Managers Association (BOMA). In all events,
the rentable area of a floor shall be computed by measuring to the inside surface of the exterior
glass building surface and no deductions shall be made for columns, projections, and penetrations
necessary to the Building. The rentable area of an office on a floor shall be computed by
multiplying the usable area of the office by the quotient of the division of the rentable area of
the floor by the usable area of the floor.

2. TERM

     2.1 The Premises are leased for a term (herein called the “Term”) to commence and expire on the
following dates: The Commencement Date of the Term shall be the later of November 1, 2002 or four
(4) months after Landlord has delivered possession of Floors 2, 6 and 7 to Tenant. Landlord shall
deliver possession of Floors 2, 6 and 7 to Tenant at such time as this Lease has been fully
executed. If Landlord does not deliver possession of any portion of the Premises to Tenant at such
time as this Lease is fully executed, then Tenant shall not be obligated to pay Monthly Base Rental
or Additional Rent with respect to the entire floor(s) related thereto until four (4) months after
the delivery of possession of said entire full floor. The expiration date of the Term shall be the
10th anniversary of the Commencement Date, unless the Term shall sooner terminate as
hereinafter provided

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

3

 

     2.2 The dates upon which the Term shall commence and expire are herein called the “Commencement
Date” and the “Expiration Date,” respectively.

     2.3 Notwithstanding anything to the contrary herein contained, in the event that Landlord shall not
have delivered possession of Floors 2, 6 and 7 to Tenant on or before August 1, 2002, or 14 days
after this Lease is fully executed, whichever occurs later, Tenant shall have the right, by written
notice to Landlord delivered before possession is so delivered, to terminate this Lease and both
parties hereto shall thereupon be released from all obligations hereunder.

3. RENT

     3.1 Tenant shall pay to Landlord throughout the Term, the Monthly Base Rental specified below
(herein called the “Monthly Base Rental”), which sum shall be payable by Tenant on or before the
first day of each month, in advance, at the address specified for Landlord in the Basic Lease
Information, or such other place as Landlord shall designate, without any notice or prior demand
therefor and without any deductions or set-off whatsoever. If the Commencement Date should occur on
a day other than the first day of a calendar month, or the Expiration Date should occur on a day
other than the last day of a calendar month, then the Monthly Base Rental for such fractional month
shall be prorated upon a daily basis based upon a thirty (30) day month. Upon Tenant’s execution of
this Lease, Tenant shall deliver to Landlord the Monthly Base Rental for the first full month of
the Term.

     The Monthly Base Rental for the Premises shall be based on its then rentable square footage and
shall be as follows:

	 	 	 
	Lease Term Months	 	 
	Commencing on the Commencement Date	 	Monthly Base Rental
	 
	 	 
	Months 1 — 30

	 	$1.55 per rentable square foot of Premises
	Months 31 — 60

	 	$1.75 per rentable square foot of Premises
	Months 61 — 90

	 	$1.95 per rentable square foot of Premises
	Months 91 — 120

	 	$2.15 per rentable square foot of Premises

     3.2 In addition to the Monthly Base Rental, Tenant shall pay to Landlord all charges and other
amounts required under this Lease (herein called “Additional Rent”), including, without limitation,
additional rent resulting from increased operating expenses and taxes pursuant to the provisions of
Article 4 hereof. All such Additional Rent shall be payable to Landlord at the place where the
Monthly Base Rental is payable, shall be considered “rent” for all legal purposes and Landlord
shall have the same remedies for a default in the payment of Additional Rent as for a default in
the payment of Monthly Base Rental.

4. ADDITIONAL RENT FOR INCREASED OPERATING EXPENSES AND TAXES

     4.1 For purposes of this Article 4, the following terms shall have the meanings hereinafter set
forth:

          (a) “Tenant’s Share” shall mean the percentage figure computed by dividing the rentable area of the
Premises, as the same may increase or decrease from time to time, by the total rentable area of the
office space in the Building. In the event that the total rentable area of the office space of the
Building is changed by Landlord in its commercially reasonable discretion, Landlord shall give
Tenant at least six months advance notice of any such change and shall provide Tenant with the
formulas and basis of such change. Tenant’s Share may, at Landlord’s election and upon said six
months prior notice to Tenant, be appropriately adjusted, and, as to the Tax Year or Expense Year
(as said terms are hereinafter defined) in which such adjustment occurs, Tenant’s Share shall be
determined on the basis of the number of days during such Tax Year and Expense Year at each such
percentage.

          (b) “Tax Year” shall mean each twelve (12) month consecutive period commencing January 1st of each
year during the Term, including any partial years during which the Lease may commence or end;

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

4

 

provided that Landlord, upon notice to Tenant, may change the Tax Year from time to time to any
other twelve (12) month consecutive period and, in the event of any such change, Tenant’s Share of
Excess Taxes (as hereinafter defined) shall be equitably adjusted for the Tax Years involved in any
such change.

          (c) “Real Estate Taxes” shall mean all taxes, assessments and charges levied upon or with respect
to the Building or any personal property of Landlord used in the operation thereof, or Landlord’s
interest in the Building or such personal property. Real Estate Taxes shall include, without
limitation, all general real property taxes and general and special assessments, charges, fees or
assessments for transit, housing, police, fire, improvement districts, or other governmental
services or purported benefits to the Building, service payments in lieu of taxes, and any tax, fee
or excise on the act of entering into this Lease or any other lease of space in the Building, or on
the use or occupancy of the Building or any part thereof, or on the rent payable under any lease or
in connection with the business of renting space in the Building, that are now or hereafter levied
or assessed against Landlord by the United States of America, the State of California, or any
political subdivision, public corporation, district or other political or public entity, and shall
also include any other tax, fee or other excise, however described, that may be levied or assessed
as a substitute for, or as an addition to, in whole or in part, any other Real Estate Taxes,
whether or not now customary or in the contemplation of the parties on the date of this Lease. Real
Estate Taxes shall not include franchise, transfer, inheritance or capital stock taxes or income
taxes measured by the net income of Landlord from all sources, unless, due to a change in the
method of taxation, any of such taxes is levied or assessed against Landlord as a substitute for,
or as an addition to, in whole or in part, any other tax that would otherwise constitute a Real
Estate Tax. Real Estate Taxes shall also include reasonable legal fees, costs and disbursements
incurred in connection with proceedings to contest, determine or reduce Real Estate Taxes.

     Notwithstanding the foregoing, the following percentage of increases in Real Estate Taxes which
Landlord may incur solely as a result of a sale, refinance, or transfer of ownership of the
Building during the initial Lease Term shall be excluded during the applicable months of the
initial Term from the total amount upon which Tenant’s Share is based:

	 	 	 	 	 
	Months of Lease Term	 	 
	Commencing with the	 	Percentage of increased Real Estate
	Commencement Date	 	Taxes which are excluded
	 
	 	 	 	 
	Months 1-60
	 	 	100	%
	Months 61-end of initial Lease Term
	 	 	0	%

          (d) “Excess Taxes” with respect to any Tax Year shall mean the amount, if any, by which Real
Estates Taxes for such Tax Year exceed the Base Tax Amount set forth in the Basic Lease
Information.

          (e) “Expense Year” shall mean each twelve (12) month consecutive period commencing January 1st of
each year during the Term, including any partial years during which the Lease may commence or end;
provided that Landlord, upon notice to Tenant, may change the Expense Year from time to time to any
other twelve (12) month consecutive period, and, in the event of any such change, Tenant’s Share of
Excess Expenses (as hereinafter defined) shall be equitably adjusted for the Expense Years involved
in any such change.

          (f) “Expenses” shall mean all reasonable costs and expenses paid or incurred by Landlord in
connection with the management, operation, maintenance and repair of the Building, including,
without limitation, (i) the cost of air conditioning, electricity, steam, heating, mechanical,
ventilating, escalator and elevator systems and all other utilities and the cost of supplies and
equipment and maintenance and service contracts in connection therewith, (ii) the cost of repairs
and general maintenance cleaning, (iii) the cost of fire, extended coverage, boiler, sprinkler,
public liability, property damage, rental interruption, earthquake and other insurance together
with any deductibles charged to or paid by Landlord, (iv) wages, salaries and other labor costs,
including taxes, insurance, retirement, medical and other employee benefits, (v) management fees
(which for off-site management services shall not exceed 5% of scheduled Building gross annual
revenue for a 95% occupied Building), consulting fees, legal fees and accounting fees, of all
independent contractors engaged by Landlord or reasonably charged by Landlord if Landlord performs
management services in connection with the Building, (vi) the cost of supplying, replacing and
cleaning employee uniforms, (vii) the fair market rental value of Landlord’s and the property
manager’s offices in the

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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Building, (viii) the cost of any capital improvements made to the Building as a labor-saving device
or to effect other economies in the operation or maintenance of the Building, or that are required
under a governmental law or regulation that was not applicable to the Building at the time that
permits for the construction thereof were obtained, such cost to be amortized over such period as
is similar to the period used by other comparable office buildings in the Long Beach area, together
with interest on the unamortized balance at the rate of ten percent (10%) per annum, and (ix) any
other commercially reasonable expenses of any other kind whatsoever reasonably incurred in
managing, operating, maintaining, and repairing the Building. For purposes of computing Tenant’s
Additional Rent pursuant to this Article 4, Expenses for the entire Building that are not, in
Landlord’s sole discretion, allocable or chargeable solely to either the office or retail space of
the Building shall be allocated between and charged to the office and retail space of the Building
on an equitable basis as determined by Landlord. To the extent the Building is less than 95%
occupied, Expenses shall be adjusted to reflect a ninety-five percent (95%) occupancy of the
Building during any period in which the Building is not at least ninety-five percent (95%)
occupied.

          (g) The following are specifically excluded from the definition of Expenses:

     (i) Any ground lease rental;

     (ii) Costs of items considered capital repairs, replacements, improvements and equipment under
generally accepted accounting principles consistently applied or otherwise (“Capital Items”),
except for (1) the annual amortization (amortized over the useful life) of costs, including
financing costs, if any, incurred by Landlord after the Commencement Date for any capital
improvements installed or paid for by Landlord and required by any new (or change in) laws, rules
or regulations of any governmental or quasi-governmental authority which are enacted after the
Commencement Date; and (2) the annual amortization (amortized over the useful life) of costs,
including financing costs, if any, or any equipment, device or capital improvement purchased or
incurred in connection with normal Building maintenance and repair or as a labor-saving measure or
to affect other economics in the operation or maintenance of the Building;

     (iii) Rentals for items (except when needed in connection with normal repairs and maintenance)
which if purchased, rather than rented, would constitute a Capital Item which is specifically
excluded under Subsection (ii) above (excluding, however, equipment not affixed to the Building);

     (iv) Costs incurred by Landlord for the repair of damage to the Building, to the extent that
Landlord is reimbursed by insurance proceeds, and the cost of earthquake repairs in excess of
$250,000 per earthquake (which for this purpose an earthquake is defined collectively as the
initial earthquake and the aftershocks related thereto);

     (v) Costs, including permit, license and inspection costs, incurred with respect to the
installation of tenants’ or other occupants’ improvements in the Building or incurred in renovating
or otherwise improving, decorating, painting or redecorating vacant space for tenants or other
occupants of the Building;

     (vi) Depreciation;

     (vii) Marketing costs including without limitation leasing commissions, attorneys’ fees in
connection with the negotiation and preparation of letters, deal memos, letters of intent, leases,
subleases and/or assignments, space planning costs and other costs and expenses incurred in
connection with lease, sublease and/or assignment negotiations and transactions with present or
prospective tenants or other occupants of the Building;

     (viii) Expenses in connection with services or other benefits which are not offered to Tenant or
for which Tenant is charged for directly but which are provided to another tenant or occupant of
the Building;

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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     (ix) Costs incurred by Landlord due to violation by Landlord or any tenant of the terms and
conditions of any lease of space in the Building;

     (x) Overhead and profit increment paid to Landlord or to subsidiaries or affiliates of Landlord for
goods and/or services in the Building to the extent the same exceeds the costs of such goods and/or
services rendered for comparable buildings;

     (xi) Interest, principal, points and fees on debts or amortization on any mortgage or mortgages or
any other debt instrument encumbering the Building or the Land (except as permitted in subsection
(ii) above);

     (xii) Landlord’s general corporate overhead and general and administrative expenses except to the
extent reasonably allocated to the Building and to the extent the cost does not exceed the costs of
such services at comparable buildings;

     (xiii) Any compensation paid to clerks, attendants or other persons in commercial concessions
operated by Landlord;

     (xiv) Advertising and promotional expenditures and costs of signs in or on the Building that are
for the sole purpose of identifying the owner of the Building or other tenant’s signs;

     (xv) The cost of any electric power used by any tenant in the Building in excess of the
Building-standard amount to the extent Landlord is reimbursed therefor, or electric power costs for
which any tenant directly contracts with the local public service company or of which any tenant is
separately metered or sub-metered and pays Landlord directly;

     (xvi) Costs incurred in connection with upgrading the Building to comply with the interpretation,
as of the Commencement Date, of disability, life, fire and safety codes, ordinances, statutes or
other laws in effect prior to the Commencement Date, including without limitation, the Americans
With Disabilities Act, and including penalties or damages incurred due to such non-compliance;

     (xvii) Tax penalties incurred as a result of Landlord’s negligence, inability or unwillingness to
make payments and/or to file any tax or informational returns when due;

     (xviii) Costs arising from the negligence or fault of Landlord, or from the negligence or fault of
other tenants if such cost is reimbursed to Landlord;

     (xix) Any and all costs arising from the release of hazardous materials or substances in or about
the Building in violation of applicable law including, without limitation, hazardous substances in
the ground water or soil, not placed in the Building by Tenant;

     (xx) Costs arising from Landlord’s charitable or political contributions;

     (xxi) Costs arising during the contractual warranty period from construction defects in the base,
shell or core of the Building or improvements installed by Landlord;

     (xxii) Costs in connection with the initial construction of the Building arising from any mandatory
or voluntary special assessment on the Building by any transit district authority or any other
governmental entity having the authority to impose such assessment;

     (xxiii) Costs for sculpture, paintings or other objects of art unless of a commercially reasonably
nature and in a commercially reasonably amount;

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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     (xxiv) Costs (including in connection therewith all attorneys’ fees and costs of settlement
judgments and payments in lieu thereof) arising from claims, disputes, or potential disputes in
connection with potential or actual claims, litigation or arbitration pertaining to the Landlord
and/or the Building and/or the Land;

     (xxv) Costs associated with the operation of the business of the partnership or entity which
constitutes Landlord as the same are distinguished from the costs of operation of the Building,
including partnership accounting and legal matters, costs of defending any lawsuits with any
mortgagee (except as the actions of Tenant may be in issue), costs of selling, syndicating,
financing, mortgaging or hypothecating any of Landlord’s interest in the Building, costs of any
disputes between Landlord and its employees (if any) not engaged in Building operation, disputes of
Landlord with Building management, or outside fees paid in connection with disputes with other
tenants;

     (xxvi) Costs of any “tap fees” or any sewer or water connection fees for the benefit of any
particular tenant in the Building;

     (xxvii) Any entertainment, dining or travel expenses of Landlord for any purpose not related to the
operation or management of the Building;

     (xxviii) Any “validated” parking for any entity;

     (xxix) Any “finders fees,” brokerage commissions, job placement costs or job advertising cost,
other than with respect to the Building management, maintenance, and other staff;

     (xxx) Any “above-standard” cleaning related to private parties/events and specific tenant
requirements in excess of service provided to Tenant, including related trash collection, removal,
hauling and dumping;

          (h) “Excess Expenses” with respect to any Expense Year shall mean the amount, if any, by which
Expenses for such Expense Year exceed the amount of Expenses for the Base Expense Year set forth in
the Basic Lease Information.

     4.2 Tenant shall pay to Landlord as Additional Rent one twelfth (1/12th) of Tenant’s Share of the
Excess Taxes of each Tax Year on or before the first day of each month during such Tax Year, in
advance, in an amount estimated by Landlord and billed by Landlord to Tenant; provided that
Landlord shall have the right initially to determine monthly estimates and to revise such estimates
from time to time. With reasonable promptness after Landlord has received the tax bills for any Tax
Year, Landlord shall furnish Tenant with a statement (herein called “Landlord’s Tax Statement”)
setting forth the amount of Real Estate Taxes for such Tax Year, and Tenant’s Share, if any, of
Excess Taxes. If the actual Excess Taxes for such Tax Year exceed the estimated Excess Taxes paid
by Tenant for such Tax Year, Tenant shall pay to Landlord the difference between the amount paid by
Tenant and the actual Excess Taxes within thirty (30) days after the receipt of Landlord’s Tax
Statement, and if the total amount paid by Tenant for any such Tax Year shall exceed the actual
Excess Taxes for such Tax Year, such excess shall be credited against the next installment of
Excess Taxes due from Tenant to Landlord hereunder.

     4.3 Tenant shall pay to Landlord as Additional Rent one-twelfth (l/12th) of Tenant’s Share of the
Excess Expenses for each Expense Year on or before the first day of each month of such Expense
Year, in advance, in an amount estimated by Landlord and billed by Landlord to Tenant; provided
that Landlord shall have the right initially to determine monthly estimates and to revise such
estimates from time to time. With reasonable promptness after the expiration of each Expense Year,
Landlord shall furnish Tenant with a statement (herein called “Landlord’s Expense Statement”),
setting forth in reasonable detail the Expenses for the Expense Year, and Tenant’s Share, it any,
of Excess Expenses. If the actual Excess Expenses for such Expense Year exceed the estimated Excess
Expenses paid by Tenant for such Expense Year, Tenant shall pay to Landlord the difference between
the amount paid by Tenant and the actual Excess Expenses within thirty (30) days after the receipt
of Landlord’s Expense Statement, and if the total amount paid by Tenant for any such Expense Year
shall exceed the actual Excess

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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Expenses for such Expense Year, such excess shall be credited against the next installment of the
estimated Excess Expenses due from Tenant to Landlord hereunder.

     4.4 If the Expiration Date of the Term shall occur on a date other than the end of a Tax Year or
Expense Year, Tenant’s Share of Excess Taxes, if any, and Excess Expenses, if any, for the Tax Year
and the Expense Year in which the Expiration Date falls shall be in the proportion that the number
of days from and including the first day of the Tax Year or Expense Year in which the Expiration
Date occurs to and including the Expiration Date bears to 365; provided, however, Landlord may,
pending the determination of the amount, if any, of Excess Taxes and Excess Expenses for such
partial Tax Year and Expense Year, furnish Tenant with statements of estimated Excess Taxes,
estimated Excess Expenses, and Tenant’s Share of each thereof for such partial Tax Year and Expense
Year. Within thirty (30) days after receipt of such estimated statement, Tenant shall remit to
Landlord, as Additional Rent, the amount of Tenant’s Share of such Excess Taxes and Excess
Expenses. After such Excess Taxes and such Excess Expenses have been finally determined and
Landlord’s Tax Statement and Landlord’s Expense Statement have been furnished to Tenant pursuant to
Articles 4.2 and 4.3 hereof, if there shall have been an underpayment of Tenant’s Share of Excess
Taxes or Excess Expenses, Tenant shall remit the amount of such underpayment to Landlord within
thirty (30) days of receipt of such statements, and if there shall have been an overpayment,
Landlord shall remit the amount of any such overpayment to Tenant, but only if Tenant has provided
Landlord with a valid forwarding address, within thirty (30) days of the issuance of such
statements.

     4.5 Landlord shall maintain adequate records of Expenses and Real Estate Taxes in accordance with
accounting principles similar to those used by landlords of similar buildings in the Long Beach
area. Any statements provided by Landlord in connection with Tenant’s Share thereof shall be final
and binding on Tenant unless Tenant, within one year of its receipt thereof, shall contest any item
therein by giving written notice to Landlord, specifying each item contested and the reasons
therefor. In such event, Landlord and Tenant shall endeavor in good faith to promptly resolve any
disagreement set forth in Tenant’s notice provided that Tenant shall not withhold payment of any
contested or disputed item.

5. LATE CHARGES

Tenant hereby acknowledges that late payment by Tenant to Landlord of any Monthly Base Rental,
Additional Rent, or other sums due hereunder will cause Landlord to incur costs not contemplated by
this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include,
but are not limited to, processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or deed of trust covering the Building. Accordingly, if any
installment of Monthly Base Rental, Additional Rent, or any other sum due from Tenant shall not be
received by Landlord or Landlord’s designated agent within three (3) days after such amount shall
be due, then, so long as Landlord has delivered written notice to Tenant specifying the payment
amount not received and Tenant fails to pay such amount within five (5) days of receipt of said
written notice, Tenant shall pay to Landlord a late charge equal to five percent (5%) of such
overdue amount. The foregoing written notice shall only be required two (2) times per calendar
year. The parties hereby agree that such late charge represents a fair and reasonable estimate of
the costs Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge
by Landlord shall in no event constitute a waiver of Tenant’s default with respect to such overdue
amount, nor prevent Landlord from exercising any of the other rights and remedies granted
hereunder. Notwithstanding any other provision in this Lease, Tenant shall have thirty (30) days
from receipt of any invoice for payment of Additional Rent prior to incurring any late charges
under this Article 5.

6. LANDLORD’S WORK

     6.1 Except as set forth in the Workletter attached to this Lease as Exhibit B, Landlord is
performing no work in connection with its delivery of the Premises to Tenant and Tenant is
accepting the Premises in its “AS-IS condition.

     6.2 The manner in which the common areas are maintained and operated and the expenditures therefor
shall be at the reasonable discretion of Landlord, but such common areas shall be maintained and
operated consistent with Class “A” buildings in Long Beach, and the use of such areas and
facilities shall be subject to such reasonable rules and regulations as Landlord shall make from
time to time. The term “common areas” as used herein shall mean

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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the pedestrian sidewalks, malls, truckways, loading docks, hallways, lobbies, corridors, delivery
areas, parking areas, elevators and escalators and stairs not contained in the leased areas, public
bathrooms and comfort stations and all other areas or improvements that may be provided by Landlord
for the convenience and use of the tenants of the Building and their respective sub-tenants,
agents, employees, customers, invitees and any other licensees of Landlord. Landlord reserves the
rights, from time to time, to utilize portions of the common areas for entertainment, displays,
product shows, the leasing of kiosks or such other uses that, in Landlord’s judgment, do not
unreasonably interfere with Tenant’s use and enjoyment of the Premises.

     6.3 The purpose of attached Exhibit A is to show the approximate location of the Premises in the
Building and Landlord hereby reserves the right, at any time and from time to time, to make
alterations or additions to the Building and the common areas. Landlord also reserves the right at
any time and from time to time to construct other improvements in the Building (including within
the common areas) and to enlarge same and make alterations therein or additions thereto.

     6.4 Notwithstanding anything in this Lease to the contrary, Landlord shall maintain the common
areas and the Building in substantially the same physical condition as exists on the Commencement
Date and so as to not permanently and unreasonably interfere with Tenant’s use and enjoyment
thereof.

7. CONDUCT OF BUSINESS BY TENANT

     7.1 Tenant shall use and occupy the Premises during the Term of this Lease solely for the use
specified in the Basic Lease Information and for no other use or uses without the prior written
consent of Landlord.

     7.2 Tenant shall not use or occupy, or permit the use or occupancy of, the Premises or any part
thereof for any use other than the use specifically set forth in Article 7.1 hereof, or in any
manner that, in Landlord’s sole judgment, would adversely affect or interfere with any services
required to be furnished by Landlord to Tenant or to any other tenant or occupant of the Building,
or with proper and economical rendition of any such service, or with the use or enjoyment of any
part of the Building by any other tenant or occupant.

8. ALTERATIONS AND TENANT’S PROPERTY

     8.1 Tenant shall make no changes or alterations in or to the Premises of any nature without
Landlord’s prior written approval, except for the following: provided Landlord has been given
advance written notice, Tenant may make changes or alterations costing less than $50,000 per full
floor but only if (i) they are of a non-structural nature, (ii) they do not affect or involve
Building systems, (ii) they do not involve demolition or construction of walls, and (iv) they do
not involve any electrical, mechanical, plumbing or fire/life-safety work. Prior to commencing any
work in the Premises, Tenant shall submit to Landlord complete drawings, plans and specifications
(herein collectively referred to as “Tenant’s Plan”) for the improvements and installations to be
made by Tenant (herein collectively referred to as “Tenant’s Work”). Tenant’s Plan shall be fully
detailed and shall show complete dimensions, shall not be in conflict with Landlord’s basic plans
for the Building, shall not require any changes in the structure of the Building or result in
Landlord incurring any cost or having to perform any work in connection therewith, and shall not be
in violation of any laws, orders, rules or regulations of any governmental department or bureau
having jurisdiction over the Premises.

          After submission to Landlord of Tenant’s Plan, Landlord shall either approve same or shall set
forth in writing the particulars in which Landlord does not approve same, in which latter case
Tenant shall, within 5 days after Landlord’s notification, return to Landlord appropriate
corrections thereto. Such corrections shall be subject to Landlord’s approval. Tenant shall pay to
Landlord, promptly upon being billed and as Additional Rent, any charges or expenses Landlord may
incur in reviewing Tenant’s Plan. Tenant agrees that any review or approval by Landlord of Tenant’s
Plan is solely for Landlord’s benefit, and without any representation or warranty whatsoever to
Tenant with respect to the adequacy, correctness or efficiency thereof or otherwise.

          Tenant further agrees that if Tenant makes any changes in Tenant’s Plan subsequent to its approval
by Landlord and if Landlord consents to such changes, Tenant shall pay to Landlord all costs and
expenses incurred by Landlord and caused by such changes; it being understood and agreed, however,
that Landlord shall have the right

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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to refuse to consent to any such changes. Any charges payable under this Section 8.1 shall be paid
by Tenant from time to time upon demand as Additional Rent, whether or not the Lease Term shall
have commenced.

          Following compliance by Tenant with its obligations under the foregoing sections of this article,
Tenant shall timely commence Tenant’s Work in order to complete same within a reasonable period of
time. Tenant’s Work shall be diligently pursued and shall be performed in a good and workmanlike
manner.

          Tenant agrees that in the performance of Tenant’s Work (i) neither Tenant nor its agents or
employees shall interfere with any work being done by Landlord and its agents and employees, (ii)
that Tenant shall comply with any reasonable work schedule, rules and regulations imposed by
Landlord, its agents and employees, (iii) that the labor employed by Tenant shall be harmonious and
compatible with the labor employed by Landlord in the Building, it being agreed that if in
Landlord’s judgment the labor is incompatible Tenant shall forthwith upon Landlord’s demand
withdraw such labor from the Premises, (iv) that Tenant shall procure and deliver to Landlord
worker’s compensation, public liability, property damage and such other insurance policies, in such
amounts as shall be reasonably acceptable to Landlord in connection with Tenant’s Work, and shall
upon Landlord’s request cause Landlord to be named as an insured thereunder, (v) that Tenant shall
hold Landlord harmless from and against any costs Landlord may incur in connection with or as a
result of Tenant’s Work and all claims arising from or in connection with any act or omission of
Tenant or its agents or employees, (vi) that Tenant’s Work shall be performed in accordance with
the approved Tenant’s Plan and in compliance with the laws, orders, rules and regulations of any
governmental department or bureau having jurisdiction over the Premises, and (vii) that Tenant
shall promptly pay for Tenant’s Work in full and shall not permit any lien to attach to the
Premises or the Building. As a condition precedent to any such written consent of Landlord, Tenant
shall deliver to Landlord written and unconditional waivers of mechanics’ and materialmen’s liens
upon the Building for all work, labor and services to be performed and material to be furnished in
connection with the proposed alterations.

          With respect to any changes or alterations that requires Landlord’s approval (with the exception of
the initial improvement of the Premises) Tenant shall pay to Landlord upon demand, as compensation
to Landlord for its services in overseeing the work performed pursuant to this Paragraph 8.1, and
regardless of whether the work is performed by Landlord’s or Tenant’s contractor, an administrative
fee equal to 5% of the first $100,000 of the cost of the work and 2.5% of the cost of the work in
excess of $100,000, calculated on a per project basis. In addition to the foregoing, with respect
to all changes or alterations, Tenant shall reimburse Landlord for all direct expenses actually
incurred in connection therewith, including but not limited to after hours access control,
additional janitorial, after hours engineering, etc.

     8.2 All appurtenances, fixtures, improvements, additions and other property attached to or
installed in the Premises, whether by Landlord or by or on behalf of Tenant, and whether at
Landlord’s expense or Tenant’s expense, or at the joint expense of Landlord and Tenant, shall be
and remain the property of Landlord. Any trade fixtures, furnishings and personal property placed
in the Premises by Tenant, whether the properly of Tenant or leased by Tenant, are herein sometimes
called “Tenant’s Property.” Any replacements of any property of Landlord, whether made at Tenant’s
expense or otherwise, shall be and remain the property of Landlord.

     8.3 Any of Tenant’s Property remaining on the Premises at the expiration of the Term shall be
removed by Tenant at Tenant’s cost and expense, and Tenant shall, at its cost and expense, repair
any damage to the Premises or the Building caused by such removal. Any of Tenant’s Property not
removed from the Premises prior to the expiration of the Term shall, at Landlord’s option, become
the property of Landlord or Landlord may remove such Tenant’s Property, and Tenant shall pay to
Landlord, Landlord’s cost of removal and of any repairs in connection therewith within ten (10)
days after the receipt of a bill therefor. Tenant’s obligation to pay any such costs shall survive
any termination of this Lease.

9. REPAIRS

     9.1 Except to the extent Landlord is obligated to do so pursuant to Paragraph 9.2 hereof, Tenant
shall, when and if needed or whenever requested by Landlord to do so, at Tenant’s sole cost and
expense, maintain and make repairs to the Premises and every part thereof and keep, maintain and
preserve the Premises in first class condition and repair, normal wear and tear excepted. Any such
maintenance and repair shall be performed by

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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Landlord’s contractor, or by such contractor or contractors as Tenant may choose from an approved
list to be submitted to Landlord following Tenant’s request. All costs and expenses incurred in
such maintenance and repair shall be paid by Tenant as Additional Rent within ten (10) days after
billing by Landlord or such contractor or contractors. Landlord shall not be liable for and, except
as provided in Article 14 hereof, there shall be no abatement of Rent with respect to any injury to
or interference with Tenant’s business arising from any repairs, maintenance, alteration or
improvement in or to any portion of the Building, including the Premises, or in or to the fixtures,
appurtenances and equipment therein. Tenant hereby waives and releases its right to make repairs at
Landlord’s expense under Sections 1941 and 1942 of the California Civil Code or under any similar
law, statute or ordinance now or hereafter in effect.

     9.2 Notwithstanding anything contained in subparagraph 9.1 to the contrary, (except for Tenant’s
cabling wherever located, Tenant’s light fixtures, Tenant’s trade fixtures and other non-standard
Building items, supplemental HVAC units, and items within the inside perimeter of the Premises
which are below the ceiling tiles and above the slab; all of which shall be maintained by Tenant at
its sole cost and expense) Landlord shall replace, repair and maintain all aspects of the Building,
the Building structure, the Building plumbing, heating, ventilating, air-conditioning and
electrical systems installed or furnished by Landlord, and the common areas in a manner consistent
with other Class “A” office buildings in Long Beach, unless such maintenance or repairs are caused
in part or in whole by the act, neglect, fault or omission of any duty by Tenant, its agents,
servants, employees or invitees, in which case Landlord shall cause the necessary maintenance or
repair to be performed and Tenant shall pay to Landlord on demand as Additional Rent, the
reasonable cost of such maintenance and repairs.

     9.3 All repairs and replacements made by or on behalf of Tenant or any person claiming through or
under Tenant shall be made and performed (a) at Tenant’s cost and expense and at such time and in
such manner as Landlord may designate, (b) by contractors or mechanics approved by Landlord, (c) so
that same shall be at least equal in quality, value, and utility to the original work or
installation, and (d) in accordance with the Rules and Regulations for the Building adopted by
Landlord from time to time and in accordance with all applicable laws and regulations of
governmental authorities having jurisdiction over the Premises. If Landlord gives Tenant notice of
the necessity of any repairs or replacements required to be made by Tenant under Articles 9.1 and
9.2 above and Tenant fails to commence diligently to effect the same within 10 days thereafter,
Landlord may proceed to make such repairs or replacements and the expenses incurred by Landlord in
connection therewith shall be due and payable from Tenant upon demand as Additional Rent; provided
that Landlord’s making any such repairs or replacements shall not be deemed a waiver of Tenant’s
default in failing to make the same.

10. LIENS

     Tenant shall keep the Premises free from any liens arising out of any work performed, material
furnished or obligations incurred by or for Tenant or any person or entity claiming through or
under Tenant. In the event that Tenant shall not, within ten (10) days following the imposition of
any such lien, cause same to be released of record by payment or posting of a proper bond, Landlord
shall have, in addition to all other remedies provided herein and by law, the right but not the
obligation to cause same to be released by such means as it shall deem proper, including payment of
the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it
in connection therewith shall be considered Additional Rent and shall be payable to it by Tenant on
demand. Any such action by Landlord shall not in any event be deemed a waiver of Tenant’s default
with respect thereto. Landlord shall have the right at all times to post and keep posted on the
Premises any notices permitted or required by law, or that Landlord shall deem proper, for the
protection of Landlord, the Premises, the Building, and any other party having an interest therein,
from mechanics’ and materialmen’s liens, and Tenant shall give to Landlord at least ten (10)
business days’ prior notice of commencement of any construction on the Premises.

11. COMPLIANCE WITH LAWS AND INSURANCE REQUIREMENTS

     11.1 Tenant, at Tenant’s cost and expense, shall comply with all laws, orders and regulations of
federal, state, county and municipal authorities, and with all directions, pursuant to law, of all
public officers, that shall impose any duty upon Landlord or Tenant with respect to the Premises,
except that (i) Tenant shall not be required to make any structural Alterations in order to comply
unless such Alterations shall be necessitated or occasioned, in whole or in part, by the acts,
omissions or negligence of Tenant or any person claiming through or under Tenant, or

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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any of their servants, employees, contractors, agents, visitors or licensees, by Tenant’s Work, or
by use or occupancy or manner of use of occupancy of the Premises by Tenant or any such person, and
(ii) Landlord shall keep and maintain the Premises elevator signage and controls as well as the
restrooms within the Premises in compliance with applicable laws pertaining to the disabled. All
costs incurred by Landlord in connection therewith shall be treated as an Expense to the extent
such costs comply with the requirements of Article 4 hereof. Any work or installations made or
performed by or on behalf of Tenant or any person claiming through or under Tenant pursuant to the
provisions of this Article 11 shall be made in conformity with, and subject to the provisions of,
Article 9 hereof.

     11.2 Tenant shall not do anything, or permit anything to be done, in or about the Premises which
shall (a) invalidate or be in conflict with the provisions of any fire or other insurance policies
covering the Building or any property located therein, or (b) result in a refusal by fire insurance
companies of good standing to insure the Building or any such property in amounts reasonably
satisfactory to Landlord, or (c) subject Landlord to any liability or responsibility for injury to
any person or property by reason of any business operation being conducted in the Premises, or (d)
cause any increase in the fire insurance rates applicable to the Building or property located
therein at the beginning of the Term or at any time thereafter. Tenant, at Tenant’s expense, shall
comply with all rules, orders, regulations or requirements of the American Insurance Association
(formerly the National Board of Fire Underwriters) and with any similar body that shall hereafter
perform the function of such Association.

12. SUBORDINATION

     Within 30 days following the full execution of this Lease, Landlord shall supply Tenant with a
non-disturbance agreement from the current mortgagee of the Building on the mortgagee’s standard
form, a copy of which is attached hereto as Exhibit E. In addition, as a condition to any future
subordination by Tenant, Landlord shall supply Tenant with a non-disturbance agreement from the
applicable mortgagee or lienholder containing substantially the same protections for Tenant as are
contained in the form attached as Exhibit E. Provided Landlord has complied with the aforesaid
condition, Tenant agrees to execute and return any requested subordination agreements within 14
business days of Landlord’s demand.

     Provided Landlord has complied with its obligations under the foregoing paragraph, then, without
the necessity of any additional document being executed by Tenant for the purpose of effecting a
subordination, Tenant agrees that at Landlord’s option, this Lease and Tenant’s tenancy hereunder
are and shall be automatically subject and subordinate at all times to (a) all ground leases or
underlying leases that may now exist or hereafter be executed affecting the Building, (b) the lien
of any mortgage, deed or trust or similar security instrument that may now exist or hereafter be
executed in any amount for which the Building, ground leases or underlying leases, or Landlord’s
interest or estate in any of said items is specified as security, and (c) all renewals,
modifications, consolidations, replacements and extensions of any of the foregoing. Notwithstanding
the foregoing, upon 30 days prior written notice from Landlord to Tenant, Landlord shall have the
right to subordinate or cause to be subordinated any such ground leases or underlying leases or any
such liens to this Lease. In the event that any ground lease or underlying lease is terminated for
any reason or any mortgage or deed of trust is foreclosed or a conveyance in lieu of foreclosure is
made for any reason, Tenant shall, notwithstanding any subordination of this Lease to any ground
lease, underlying lease or lien, attorn to and become the tenant of the successor in interest to
Landlord at the option of such successor in interest. Upon such attornment this Lease shall
continue in full force and effect as a direct Lease between the successor landlord and Tenant upon
all of the terms, conditions and covenants as are set forth in this Lease, except that, unless
otherwise agreed to in the applicable non-disturbance agreement, the successor landlord shall not
(a) be liable for any previous act or omission of Landlord; (b) be subject to any offset not
expressly provided for in this Lease, which theretofore shall have accrued to Tenant against
Landlord; or (c) be bound by any previous modification of this Lease or by any previous prepayment
of more than one month’s Monthly Base Rental or Additional Rent, unless such modification or
prepayment shall have been expressly approved in writing by the lessor of the superior lease or the
holder of the superior mortgage through or by reason of which the successor Landlord shall have
succeeded to the rights of Landlord under this Lease. Tenant covenants and agrees to execute and
deliver, upon demand by Landlord and in the form requested by Landlord, any additional documents
evidencing the priority or subordination of this Lease with respect to any such ground leases or
underlying leases or the lien of any such mortgage or deed of trust. Notwithstanding anything in
this Lease to the contrary, Tenant’s Monthly Base Rental and Share of Increased Expenses shall not
increase by way of Landlord entering into a ground lease relating to the Building or land
underlying the Building.

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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13. INABILITY TO PERFORM

     If Landlord is unable to furnish or is delayed in furnishing any utility or service required to be
furnished by Landlord under the provisions of Article 17 or of any other Article of this Lease or
of any collateral instrument, or is unable to perform or make or is delayed in performing or making
any installations, decorations, repairs, alterations, additions or improvements, whether required
to be performed or made under this Lease or under any collateral instrument, or is unable to
fulfill or is delayed in fulfilling any of Landlord’s other obligations under this Lease or any
collateral instrument, no such inability or delay shall constitute an actual or constructive
eviction, in whole or in part, or entitle Tenant to any abatement or diminution of Monthly Base
Rental or Additional Rent, or relieve Tenant from any of its obligations under this Lease, or
impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant
or by reason of injury to or interruption of Tenant’s business, or otherwise; provided, however if
such inability or occurrence renders the Premises unusable, was not the result of Tenant’s
negligent act or intentional misconduct, and is not remedied within 30 days from the date of the
inability or occurrence, Tenant’s Monthly Base Rental shall thereafter be abated to the extent and
for the period of time that the Premises continue to be unusable. Tenant hereby waives and releases
its right to terminate this Lease under Section 1932(1) of the California Civil Code or under any
similar law, statute or ordinance now or hereafter in effect.

14. DESTRUCTION

     14.1 If the Premises shall be damaged by fire or other casualty insured against by Landlord’s fire
and extended coverage insurance policy covering the Building, Landlord, at Landlord’s expense,
shall repair such damage; provided, however, that Landlord shall have no obligation to repair any
damage to or to replace Tenant’s Property, Tenant’s Work or any other property or effects of
Tenant. Except as otherwise provided in this Article 14, if the entire Premises shall be rendered
untenantable by reason of any such damage, the Monthly Base Rental and Additional Rent shall abate
for the period from the date of such damage to the date when such damage to the Premises shall have
been repaired, and if only a part of the Premises shall be rendered untenantable, the Monthly Base
Rental and Additional Rent shall abate for such period in the proportion that the rentable area of
the part of the Premises so rendered untenantable bears to the total rentable area of the Premises;
provided, however, if, prior to the date when all of such damage shall have been repaired, any part
of the Premises so damaged shall be rendered tenantable or shall be used or occupied by Tenant or
any person or persons claiming through or under Tenant, then the amount by which the Monthly Base
Rental and Additional Rent shall abate shall be equitably apportioned for the period from the date
of any such use or occupancy to the date when all such damage shall have been repaired.

     14.2 Notwithstanding the provisions of Article 14.1 hereof, if, prior to or during the Term (a) the
Premises shall be totally damaged or rendered wholly untenantable by fire or other casualty, and if
Landlord shall determine, in its sole discretion, not to restore the Premises, or (b) the Building
shall be so damaged by fire or other casualty that, in Landlord’s opinion, substantial alteration,
demolition or reconstruction of the Building shall be required (whether or not the Premises shall
have been damaged or rendered untenantable), then, in any of such events, Landlord, at Landlord’s
option, may give to Tenant, within ninety (90) days after such fire or other casualty, a thirty
(30) days’ notice of termination of this Lease and, in the event such notice is given, this Lease
and the Term shall terminate upon the expiration of such thirty (30) days with the same effect as
if the date of expiration of such thirty (30) days were the Expiration Date; and the Rent and
Additional Rent shall be apportioned as of such date and any prepaid portion of Rent or Additional
Rent for any period after such date shall be refunded by Landlord to Tenant.

     14.3 Landlord shall attempt to obtain and maintain, throughout the Term, in Landlord’s property
insurance policies, provisions to the effect that such policies shall not be invalidated should the
insured waive, in writing, prior to loss, any or all right of recovery against any party for loss
occurring to the Building. In the event that at any time Landlord’s property insurance carriers
shall exact an additional premium for the inclusion of such or similar provisions, Landlord shall
give Tenant notice thereof. In such event, if Tenant agrees in writing to reimburse Landlord for
such additional premium for the remainder of the Term, Landlord shall require the inclusion of such
or similar provisions by Landlord’s property insurance carriers. Tenant and Landlord, as long as
such or similar provisions are included in Landlord’s property insurance policies then in force,
hereby waive any right of recovery against each other for any loss occasioned by fire or other
casualty that is covered by insurance. In the event that at

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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any time Landlord’s property insurance carriers shall not include such or similar provisions in
Landlord’s property insurance policies, the waiver by Landlord, as set forth in the foregoing
sentence shall be deemed of no further force or effect.

     14.4 Except to the extent expressly provided in Article 14.3 hereof, nothing contained in this
Lease shall relieve Tenant of any liability to Landlord or to its insurance carriers which Tenant
may have under law or under the provisions of this Lease in connection with any damage to the
Premises or the Building by fire or other casualty.

     14.5 Notwithstanding the provisions of Article 14.1 hereof, if any such damage is due to the fault
or neglect of Tenant, any person claiming through or under Tenant, or any of their servants,
employees, agents, contractors, visitors or licensees, then there shall be no abatement of Monthly
Base Rental or Additional Rent by reason of such damage, and Tenant shall be liable to Landlord for
any insurance deductible payable in connection therewith, unless Landlord is reimbursed for such
abatement of Monthly Base Rental or Additional Rent or deductibles pursuant to any rental insurance
policies or other insurance policies that Landlord may, in its sole discretion, elect to carry.

     14.6 The provisions of this Lease, including this Article 14, constitute an express agreement
between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any
part of the Premises or any other portion of the Building, and any statute or regulation of the
State of California, including, without limitations, Sections 1932(2) and 1933(4) of the California
Civil Code, with respect to any rights or obligations, concerning damage or destruction in the
absence of any express agreement between the parties, and any other statute or regulation, now or
hereafter in effect, shall have no application to this Lease or to any damage or destruction to all
or any part of the Premises or the Building.

     14.7 Notwithstanding anything in this Lease to the contrary, in the event any such damage to the
Premises was not caused by Tenant’s negligence or intentional misconduct, and the repairs that
Landlord is required to make so as to render the Premises usable will not be substantially
completed within two hundred and seventy (270) days from the date the damage occurred, Tenant shall
have the right to terminate this Lease upon thirty (30) days prior written notice to Landlord,
provided such notice is given to Landlord within 30 days from the date Tenant is informed by
Landlord in writing that such repairs will not be substantially completed within said 270 day
period.

15. EMINENT DOMAIN

     15.1 If all of the Premises is condemned or taken in any manner for public or quasi-public use,
including but not limited to a conveyance or assignment in lieu of a condemnation or taking, this
Lease shall automatically terminate as of the earlier of the date of the vesting of title or the
date of dispossession of Tenant as a result of such condemnation or other taking. If a part of the
Premises is so condemned or taken, this Lease shall automatically terminate as to the portion of
the Premises so taken as of the earlier of the date of the vesting of title or the date of
dispossession of Tenant as a result of such condemnation or taking. If such portion of the Building
is condemned or otherwise taken so as to require, in the opinion of Landlord, a substantial
alteration or reconstruction of the remaining portions thereof, this Lease may be terminated by
Landlord, as of the earlier of the date of the vesting of title or the date of dispossession of
Tenant as a result of such condemnation or taking, by written notice to Tenant within sixty (60)
days following notice to Landlord of the date on which said vesting or dispossession will occur. If
such portion of the Premises is taken so as to render the remaining portion untenantable and
unusable by Tenant, or greater than 20% of the Premises is condemned and Landlord does not make
other reasonably comparable space available to Tenant at the same time Tenant’s right to use the
condemned portion of the Premises is lost, this Lease may be terminated by Tenant as of the earlier
of the date of the vesting of title or the date of dispossession of Tenant as a result of such
condemnation or taking, by written notice to Landlord within sixty (60) days following notice to
Tenant of the date on which said vesting or dispossession will occur.

     15.2 Landlord shall be entitled to the entire award in any condemnation proceeding or other
proceeding for taking for public or quasi-public use, including, without limitation, any award made
for the value of the leasehold estate created by this Lease; provided, however any bonus value
attributable to the leasehold estate created hereby shall be divided equally between Landlord and
Tenant. No award for any partial or entire taking shall be

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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apportioned, and Tenant hereby assigns to Landlord any award that may be made in such condemnation
or other taking, together with any and all rights of Tenant now or hereafter arising in or to same
or any part thereof; provided, however, that nothing contained herein shall be deemed to give
Landlord any interest in or to require Tenant to assign to Landlord any award made to Tenant
specifically for its relocation expenses or the taking of personal property and fixtures belonging
to Tenant.

     15.3 In the event of a partial condemnation or other taking that does not result in a termination
of this Lease as to the entire Premises, the Monthly Base Rental and Additional Rent shall abate in
proportion to the portion of the Premises taken by such condemnation or other taking.

     15.4 If all or any portion of the Premises is condemned or otherwise taken for public or
quasi-public use for a limited period of time, this Lease shall remain in full force and effect and
Tenant shall continue to perform all of the terms, conditions and covenants of this Lease;
provided, however, the Monthly Base Rental and Additional Rent shall abate during such limited
period in proportion to the portion of the Premises that is rendered untenantable and unusable as a
result of such condemnation or other taking. Landlord shall be entitled to receive the entire award
made in connection with any such temporary condemnation or other taking.

16. ASSIGNMENT

     16.1 Tenant shall not directly or indirectly, voluntarily or by operation of law, sell, assign,
encumber, pledge or otherwise transfer or hypothecate all or any part of the Premises or Tenant’s
leasehold estate hereunder (collectively, “Assignment”), or permit the Premises or any portion
thereof to be occupied by anyone other than Tenant or sublet the Premises (collectively,
“Sublease”) without Landlord’s prior written consent in each instance, and which consent shall not
be unreasonably withheld or delayed; provided, however, Landlord shall have the right at its
option, to recapture and terminate this Lease with respect to (i) the entire Premises in the event
of a proposed Assignment of this Lease or (ii) any space Tenant is proposing to Sublease to an
existing tenant in the Building that Landlord has been negotiating to take additional space during
the prior six months, or (iii) any space Tenant is proposing to Sublease if Tenant’s occupancy in
the Building will be less than 49,000 rentable square feet as a result of said Sublease.

     16.2 Notwithstanding the foregoing, but provided that the subtenant or assignee is of good
character and business reputation, will use the Premises for a use permitted by this Lease, and
will not potentially overburden the Building facilities or require an increased level of services,
Tenant shall have the right to Assign this Lease or Sublease any portion of the Premises to (i)
Tenant’s parent company or any wholly-owned subsidiary thereof, (ii) any entity “doing business
with Tenant”, (iii) any entity controlled by (meaning more than a 25% ownership interest in such
entity) any controlling principals of Tenant (meaning principals with at least 25% ownership
interest in Tenant) or (iv) an entity acquiring all of Tenant’s assets and business; provided in
(i), (iii) and (iv) above that the acquiring entity’s net worth is equal to or greater than Tenant
as of the Commencement Date, and provided that (ii) above shall only apply to Subleases which in
the aggregate, at any one time, cover less than 20% of the Premises (collectively, “Affiliate”) by
notifying Landlord in writing at least 30 days in advance thereof, but without having to obtain
Landlord’s prior written consent thereto. For purposes of this paragraph, the term entity “doing
business with Tenant” shall mean: (i) Tenant has entered into a significant business relationship
with the entity; (ii) Tenant has delivered to Landlord a copy of the written documentation
illustrating the significant business relationship with the entity; and (iii) Landlord has been
given the opportunity to meet with Tenant and the entity to fully understand the extent of the
business relationship between Tenant and the entity. In the event the significant business
relationship is terminated or expires, such entity shall be deemed a Sublessee or Assignee, as
appropriate, and shall be required to vacate the Premises or be subject to Landlord’s right to
consent thereto in accordance with the Section 16.3 below. Any such transfer shall not be deemed an
Assignment or Sublease for purposes of this Lease so long as the “Affiliate” relationship between
the two entities continues. Any profits attributable to a transfer to an Affiliate shall be
retained by Tenant.

     16.3 If Tenant desires at any time to enter into an Assignment of this Lease or a Sublease of the
Premises or any portion thereof, it shall first give written notice to Landlord of its desire to do
so, which notice shall contain (a) the name of the proposed assignee or subtenant, (b) the nature
of the proposed assignee’s or subtenant’s business to be carried on in the Premises, (c) the
portion(s) (including all) of the Premises to be subject to such

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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Assignment or Sublease and the other terms and conditions of the proposed Assignment or Sublease,
and (d) such financial information as Landlord may reasonably request concerning the proposed
assignee or subtenant. Each such notice shall be given to Landlord together with a non-refundable
deposit of One Thousand Dollars ($1,000) as reasonable consideration for Landlord’s considering and
processing the request for consent.

     16.4 Landlord shall not be obligated to consent to any proposed Assignment or Sublease if it has
reasonable objections thereto, including but not limited to if the subtenant or assignee does not
meet Landlord’s financial requirements, or if the subtenant or assignee is not of good character
and business reputation, will use the Premises for a use not permitted by this Lease, or will
potentially overburden the Building facilities or require an increased level of services. In
addition, Tenant shall not be permitted to Sublease any portion of the Premises or Assign this
Lease to any then existing tenant of the Building or to any other party which Landlord has been in
active lease negotiations during the prior six months.

     16.5 At any time within fifteen (15) days after Landlord’s receipt of the notice specified in
Article 16.3 hereof, Landlord shall by written notice to Tenant elect either to (a) consent to the
Sublease or Assignment, or (b) disapprove the Sublease or Assignment with reasonable basis
therefor, or (c) recapture the space or Premises if permitted to do so as set forth above. If
Landlord consents to the Sublease or Assignment, Tenant may thereafter within ninety (90) days
after Landlord’s consent, but not later than the expiration of said ninety (90) days, enter into
such Assignment or Sublease of the Premises or portion thereof, upon the terms and conditions set
forth in the notice furnished by Tenant to Landlord pursuant to Article 16.3 hereof.

     16.6 No consent by Landlord to any Assignment or Sublease by Tenant shall relieve Tenant of any
obligation to be performed by Tenant under this Lease, whether arising before or after the
Assignment or Sublease. The consent by Landlord to any Assignment or Sublease shall not relieve
Tenant from the obligation to obtain Landlord’s express written consent to any other Assignment or
Sublease. Any Assignment or Sublease that is not in compliance with this Article 16 shall be void
and, at the option of Landlord, shall constitute a material default by Tenant under this Lease. The
acceptance of Rent or Additional Rent by Landlord from a proposed assignee or sublessee shall not
constitute the consent to such Assignment or Sublease by Landlord.

     16.7 Each assignee, sublessee, or other transferee, other than Landlord, shall assume, as provided
in this Article 16.7, all obligations of Tenant under this Lease and shall be and remain liable
jointly and severally with Tenant for the payment of Monthly Base Rental and Additional Rent, and
for the performance of all the terms, covenants, conditions and agreements herein contained on
Tenant’s part to be performed for the Term; provided, however, that the assignee, subleases,
mortgagee, pledges or other transferee shall be liable to Landlord for Monthly Base rental and
Additional Rent only in the amount set forth in the Assignment or Sublease. No Assignment shall be
binding on Landlord unless the assignee or Tenant shall deliver to Landlord a counterpart of the
Assignment and an instrument in recordable form that contains a covenant of assumption by the
assignee satisfactory in substance and form to Landlord, consistent with the requirements of this
Article 16.7, but the failure or refusal of the assignee to execute such instrument of assumption
shall not release or discharge the assignee from its liability as set forth above.

     16.8 Any net profits attributable to any Assignment or Sublease shall be shared equally by Tenant
and Landlord. Net profits shall be determined by subtracting from the rent and other consideration
to be paid by the subtenant or assignee, the Monthly Base Rental and Additional Rent due to
Landlord for the applicable period; provided however that Tenant shall be entitled to
reimbursement, out of such net profits, for any reasonable amount expended by Tenant for subleasing
brokers commissions, abated rent, and costs of demising or otherwise improving the space for the
particular subtenant or assignee.

     16.9 In no event shall this Lease be assigned or assignable by operation of law or by voluntary or
involuntary bankruptcy proceedings or otherwise, and in no event shall this Lease or any rights or
privileges hereunder be an asset of Tenant under any bankruptcy, insolvency, reorganization or
other debtor relief proceedings.

17. UTILITIES

     17.1 Tenant shall have access to and use of the Premises (including Building elevator usage, access
to the parking garage, and use of electricity and water) 365 days per year, 24 hours per day,
subject to Articles 17.2,

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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17.3 and 17.4 hereof. Landlord shall furnish to the Premises during the period from 8:00 a.m. to
6:00 p.m., Monday through Friday, except for New Year’s Day, Washington’s Birthday, Memorial Day,
Independence Day, Labor Day, Thanksgiving, Christmas and such other holidays as are generally
recognized in the area where the Building is located, and subject to reasonable rules and
regulations from time to time established by Landlord, heating, air conditioning and ventilation in
amounts required, in Landlord’s reasonable judgment, for the use and occupancy of the Premises.
Heating, air conditioning and ventilation shall also be provided in accordance with Building
procedures from 8:00 a.m. to 12:00 noon on Saturdays, holidays excepted. Landlord shall also
provide janitorial service five days per week (excluding holidays) generally consistent with that
furnished in other first-class office buildings in the area in which the Building is located, and
window washing as determined by Landlord. Anything contained herein to the contrary
notwithstanding, Tenant shall not permit the electrical current for the lighting devices located
upon the Premises, including, without limitation, building standard lighting fixtures, non-building
standard lighting fixtures and task lighting, to at any time exceed an average of 2.2 watts per
Gross Square Foot of Conditioned Floor Area (as said term is defined in the California
Administrative Code, Title 24, Part 6, Division T-20, Chapter 2, Subchapter 4) of the Premises, or
such higher amount as is generally permitted in first class office buildings in Long Beach.

     17.2 Landlord may impose a reasonable charge and establish reasonable rules and regulations
consistent with first class office buildings in Long Beach for the use of any heating, air
conditioning, ventilation or electric current by Tenant at any time other than during the hours set
forth in Article 17.1, and for the usage of any additional or unusual janitorial services required
because of any non-building standard improvements in the Premises, the carelessness of Tenant, the
nature of Tenant’s business and the removal of any refuse and rubbish from the Premises except for
discarded material placed in wastepaper baskets and left for emptying as an incident to Landlord’s
normal cleaning of the Premises. To the extent Landlord incurs additional janitorial costs,
Landlord shall not be required to provide janitorial services for portions of the Premises used for
preparing or consuming food or beverages, for storage, as a mail room or as a lavatory other than
the lavatory rooms shown on Exhibit A attached hereto.

     17.3 Landlord shall not be liable for any interruption in or failure to furnish any services or
utilities when such interruption or failure is caused by acts of God, accidents, breakage, repairs,
strikes, lockouts, other labor disputes, the making of repairs, alterations or improvements to the
Premises or the Building, the inability to obtain an adequate supply of fuel, steam, water,
electricity, labor or other supplies or by any other condition beyond Landlord’s reasonable
control, including, without limitation, any governmental energy conservation program, and Tenant
shall not be entitled to any damages resulting from such failure nor shall such failure relieve
Tenant of the obligation to pay the full Monthly Base Rental and Additional Rent reserved
hereunder, except as otherwise provided in Article 13, or constitute or be construed as a
constructive or other eviction of Tenant. In the event any governmental entity promulgates or
revises any statute, ordinance or building, fire or other code or imposes mandatory or voluntary
controls or guidelines on Landlord or the Building or any part thereof, relating to the use or
conservation of energy, water, gas, light or electricity or the reduction of automobile or other
emissions or the provision of any other utility or service provided with respect to this Lease or
in the event Landlord is required or elects to make alterations to any part of the Building in
order to comply with such mandatory or voluntary controls or guidelines, Landlord may, in its sole
discretion, comply with such mandatory or voluntary controls or guidelines or make such alterations
to the Building. Such compliance and the making of such alterations shall in no event entitle
Tenant to any damages, relieve Tenant of the obligation to pay the full Monthly Base Rental and
Additional Rent reserved hereunder or constitute or be construed as a constructive or other
eviction of Tenant.

     17.4 If Tenant shall consumes electricity in excess of that typically consumed by normal office
usage, Landlord shall have the right to install an electric current meter in the Premises to
measure the amount of electric current consumed on the Premises. The cost of any such meter and
separate conduit, wiring or panel requirements and the installation, maintenance and repair thereof
shall be paid for by Tenant and Tenant agrees to reimburse Landlord promptly upon demand therefor
by Landlord for all such excess electric current as shown by said meter, at the rates charged for
such services by the city in which the Building is located or the local public utility furnishing
the same, plus any additional expense incurred in keeping the account of the electric current so
consumed. If the temperature otherwise maintained in any portion of the Premises by the heating,
air conditioning or ventilation systems is affected as a result of (a) any lights, machines or
equipment (including without limitation electronic data processing machines) used by Tenant in the
Premises, (b) the occupancy of the Premises by more than one person per one hundred seventy-five
(175) square feet of rentable area therein, or (c) an electrical load in excess of three (3)

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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watts per square foot of rentable area of the Premises, Landlord shall have the right to install
any machinery and equipment that Landlord reasonably deems necessary to restore temperature
balance, including, without limitation, modifications to the standard air conditioning equipment,
and the cost thereof, including the cost of installation (including design and engineering) and any
additional cost of operation and maintenance incurred thereby, shall be paid by Tenant to Landlord
as Additional Rent hereunder upon demand by Landlord.

     17.5 Tenant shall also be separately billed for all electricity and other utilities consumed by
non-Building Standard HVAC equipment, which usage shall be metered by submeters installed at
Tenant’s sole cost and expense.

18. DEFAULT

     18.1 The occurrence of any of the following shall constitute an event of default on the part of
Tenant:

          (a) Failure to pay any installment of Monthly Base Rental or Additional Rent when due and payable
hereunder; such failure continuing for three (3) days after written notice of such failure;

          (b) Failure to perform any obligations, agreements or covenants under this Lease other than those
matters specified in subparagraph (a) of this Article 18.1, such failure continuing for five (5)
days after written notice of such failure or such longer period as may be reasonably necessary to
cure such failure;

          (c) Abandonment (without payment of Rent) of the Premises for a continuous period in excess of five
(5) business days. Tenant waives any right to notice Tenant may have under Section 1951.3 of the
Civil Code of the State of California, the terms of this subparagraph (c) being deemed such notice
to Tenant as required by said Section 1951.3;

          (d) A general assignment by Tenant for the benefit of creditors;

          (e) The filing of any voluntary petition in bankruptcy by Tenant, or the filing of an involuntary
petition by Tenant’s creditors, which involuntary petition remains undischarged for a period of ten
(10) business days;

          (f) The employment of a receiver to take possession of substantially all of Tenant’s assets or the
Premises, if such receivership remains undissolved for a period often (10) business days after
creation thereof;

          (g) The attachment, execution or other judicial seizure of all or substantially all of Tenant’s
assets or the Premises, if such attachment or other seizure remains undismissed or undischarged for
a period of ten (10) business days after the levy thereof; and

          (h) The admission by Tenant in writing of its inability to pay its debts as they become due, the
filing by Tenant of a petition seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute, law or regulation,
the filing by Tenant of any answer admitting or failing timely to contest a material allegation of
a petition filed against Tenant in any such proceeding or, if within ten (10) days after the
commencement of any proceeding against Tenant seeking any reorganization, or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any present or future
statute, law or regulation, such proceeding shall not have been dismissed.

     18.2 Upon the occurrence of any event of default by Tenant which is not cured by Tenant within the
grace periods specified in Article 18.1 hereof, Landlord shall have the following rights and
remedies in addition to all other rights or remedies available to Landlord in law or equity:

          (a) The rights and remedies provided by California Civil Code Section 1951.2, including but not
limited to the right to terminate Tenant’s right to possession of the Premises and to recover the
worth at the time of award of the amount by which the unpaid Monthly Base Rental and Additional
Rent for the balance of the Term after the time of award exceeds the amount of rental loss for the
same period that the Tenant proves could be

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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reasonably avoided. The “worth at the time of award” of the amounts referred to in Paragraphs (1)
and (2) of subdivision (a) of Section 1951.2 shall be computed by allowing interest at the maximum
lawful rate. The “worth at the time of award” of the amount referred to in Paragraph (3) of
subdivision (a) of Section 1951.2 shall be computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%);

          (b) The rights and remedies provided by California Civil Code Section 1951.4, that allows Landlord
to continue this Lease in effect and to enforce all of its rights and remedies under this Lease,
including the right to recover Monthly Base Rental and Additional Rent as they become due, for so
long as Landlord does not terminate Tenant’s right to possession; provided, however, if Landlord
elects to exercise its remedies described in this subsection (b) and Landlord does not terminate
this Lease, and if Tenant requests Landlord’s consent to an Assignment of this Lease or a Sublease
of the Premises at such time as Tenant is in default, Landlord shall not unreasonably withhold its
consent to such assignment or sublease. Acts of maintenance or preservation, efforts to relet the
Premises or the appointment of a receiver upon the Landlord’s initiative to protect its interest
under this Lease shall not constitute a termination of Tenant’s right to possession;

          (c) The right to terminate this Lease by giving notice to Tenant in accordance with applicable law;

          (d) The right and power, as attorney-in-fact for Tenant, to enter the Premises and remove therefrom
all persons and property, to store such property in a public warehouse or elsewhere at the cost of
and for the account of Tenant, and to sell such property and apply the proceeds therefrom pursuant
to applicable California law. Landlord, as attorney-in-fact for Tenant, may from time to time
sublet the Premises or any part thereof for such term or terms (which may extend beyond the Term)
and at such rent and at such other terms as Landlord in its sole discretion may deem advisable,
with the right to make alterations and repairs to the Premises. Upon each such subletting, (i)
Tenant shall be immediately liable for payment to Landlord of, in addition to indebtedness other
than Monthly Base rental and Additional Rent due hereunder, the cost of such subletting and such
alterations and repairs incurred by Landlord in the amount, if any, by which the Monthly Base
Rental and Additional Rent for the period of such subletting (to the extent such period does not
exceed the Term) exceeds the amount to be paid as Monthly Base Rental and Additional Rent for the
Premises for such period, or (ii) at the option of Landlord, rents received from such subletting
shall be applied, first, to payment of any indebtedness other than Monthly Base Rental and
Additional Rent due hereunder from Tenant to Landlord; second, to the payment of any costs of such
subletting and of such alterations and repairs; third, to payment of Monthly Base Rental and
Additional Rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and
applied in payment of future Monthly Base Rental and Additional Rent as the same become due
hereunder. If Tenant has been credited with any rent to be received by such subletting under clause
(i) and such rent shall not be promptly paid to Landlord by the subtenant(s), or if such rentals
received from such subletting under clause (ii) during any month are less than those to be paid
during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord. Such
deficiency shall be calculated and paid monthly. For all purposes set forth in this Article
18.2(d), Landlord is hereby irrevocably appointed attorney-in-fact for Tenant, with power of
substitution. No taking possession of the Premises by Landlord, as attorney-in-fact for Tenant,
shall be construed as an election on its part to terminate this Lease unless a written notice of
such intention is given to Tenant. Notwithstanding any such subletting without termination,
Landlord may at any time thereafter elect to terminate this Lease for such previous breach;

          (e) The right to have a receiver appointed for Tenant, upon application by Landlord, to take
possession of the Premises and to apply any rental collected from the Premises and to exercise all
other rights and remedies granted to Landlord as attorney-in-fact for Tenant pursuant to Article
18.2(d) hereof; and

          (f) The right, without notice, to remedy default for Tenant’s account and at Tenant’s expense,
without thereby waiving any other rights or remedies of Landlord with respect to such default.

19. INDEMNITY

     19.1 Tenant agrees to indemnify, defend and hold Landlord harmless from any and all loss, cost,
liability, damage and expense including, without limitation, penalties, fines and reasonable
counsel fees, incurred in

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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connection with or arising from any act or omission of Tenant in or about the Premises, including,
without limiting the generality of the foregoing, (a) any default by Tenant in the observance or
performance of any of the items, covenants or conditions of this Lease on Tenant’s part to be
observed or performed, or (b) the use or occupancy or manner of use or occupancy of the Premises by
Tenant or any person claiming through or under Tenant, or (c) the condition of the Premises for
which Tenant is responsible or any occurrence or happening on the Premises, or (d) any acts,
omissions or negligence of Tenant or any person claiming through or under Tenant, or of the
contractors, agents, servants, employees, visitors or licensees of Tenant or any such person, in or
about the Premises or the Building, either prior to, during, or after the expiration of, the Term
including, without limitation, any acts, omissions or negligence in the making or performing of any
alterations.

     19.2 Tenant further agrees that Tenant shall not cause or permit any Hazardous Materials, as
hereinafter defined, to be brought upon, kept or used in or about the Premises by Tenant, its
agents, employees, contractors or invitees. If Tenant breaches the obligations stated in the
preceding sentence, then Tenant shall indemnify, defend and hold Landlord harmless from and against
any and all claims, judgments, damages, penalties, fines, costs, liabilities or losses (including,
without limitation, diminution in value of the Premises and the Building generally, damages for the
loss or restriction on use of space or of any amenity of the Building generally, damages from any
adverse impact on marketing of space in the Building, and sums paid in settlement of claims,
reasonable attorneys’ fees, reasonable consultant fees and reasonable expert fees) which arise
during or after the Term as a result of such breach. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with any investigation of site
conditions and any cleanup, remedial, removal or restoration work required by any governmental
authority because of Hazardous Material present in the soil or ground water or under the Premises
or the Building generally. As used herein (i) “Environmental Laws” means the Clean Air Act, the
Resource Conservation Recovery Act of 1976, the Hazardous Material Transportation Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act, the Occupational Safety and Health
Act, the Consumer Product Safety Act, the Clean Water Act, the Federal Water Pollution Control Act,
the National Environmental Policy Act, as each of the foregoing shall be amended from time to time,
and any similar or successor laws, federal, state or local, or any rules or regulations promulgated
thereunder; and (ii) “Hazardous Materials” means and includes asbestos, oil, petroleum products and
their by-products; hazardous substances; hazardous wastes and toxic substances, as those terms are
used in Environmental Laws; or any substances or materials listed as hazardous or toxic by the
United States Department of Transportation, or by the Environmental Protection Agency or any
successor agency under any Environmental Laws but excluding immaterial quantities of substances
customarily and prudently used in the normal course of general office use, so long as any such use
is lawful and not otherwise disturbing to the use and enjoyment of the Building by other tenants.

20. TENANT’S INSURANCE

     Tenant shall procure at its sole cost and expense and keep in effect from the date of this Lease
until the end of the Term, Commercial General Liability insurance applying to the use and occupancy
of the Premises or the Building, or any part of either, or any areas adjacent thereto, and the
business operated by Tenant, or any other occupant, on the Premises. Such insurance shall include
Broad Form Contractual liability insurance coverage insuring all of Tenant’s indemnity obligations
under this Lease. Such coverage shall have a minimum combined single limit of liability of at least
Two Million Dollars ($2,000,000.00), and a general aggregate limit of liability of at least Five
Million Dollars ($5,000,000.00). All such policies shall be written to apply to all bodily injury,
property damage, personal injury and other covered losses, however occasioned, occurring during the
policy term, shall be endorsed to add Landlord as an additional insured, to provide that such
coverage shall be primary and that any insurance maintained by Landlord shall be excess insurance
only. Such coverage shall also contain endorsements: (i) deleting any employee exclusion on
personal injury coverage; (ii) including employees as additional insureds; (iii) deleting any
liquor liability exclusion; (iv) providing coverage for fire legal liability in an amount of not
less than $300,000; and (v) providing for coverage of employer’s automobile non-ownership
liability. All such insurance shall provide for severability of interests; shall provide that an
act or omission of one of the named insureds shall not reduce or avoid coverage for all claims
based on acts, omissions, injury and damage, which claims occurred or arose (or the onset of which
occurred or arose) in whole or in part during the policy period. Tenant shall also maintain (i)
Workers’ Compensation insurance in accordance with California law, (ii) employers liability
insurance with a limit no less than $1,000,000 per employee and $1,000,000 per occurrence, and
(iii) replacement cost fire and extended

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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coverage insurance, with vandalism and malicious mischief, sprinkler leakage and earthquake
sprinkler leakage endorsements, in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, of all of Tenant’s personal property,
fixtures, equipment and tenant improvements. All coverages described in this Section shall be
endorsed to waive the insurer’s right of subrogation against Landlord and to provide Landlord with
30 days’ notice of cancellation or change in terms, and with 10 day’s notice of cancellation for
non-payment of premium. If at any time during the Term, the amount or coverage of insurance which
Tenant is required to carry under this Section is, in Landlord’s reasonable judgment, materially
less than the amount or type of insurance coverage typically carried by owners or lessees of
properties located in Los Angeles/Long Beach, California, which are similar to and operated for
similar purposes as the Building, Landlord shall have the right to require Tenant to increase the
amount or change the types of insurance coverage required under this Section.

     All insurance policies required to be carried under this Lease shall (i) be written by companies
rated A-VII or better in “Best’s Insurance Guide” and authorized to do business in California, and
(ii) name any parties designated by Landlord as additional insureds. Tenant shall deliver to
Landlord on or before the Commencement Date, and thereafter at least thirty (30) days before the
expiration dates of expiring policies, certified copies of its insurance policies, or a certificate
evidencing the same issued by the insurer thereunder, showing that all premiums have been paid for
the full policy period; and, in the event Tenant shall fail to procure such insurance, or to
deliver such policies or certificates, Landlord may, at its option and in addition to Landlord’s
other remedies in the event of a default by Tenant hereunder, procure the same for the account of
Tenant, and the cost thereof shall be paid to Landlord upon demand as Additional Rent.

21. LIMITATION OF LANDLORD’S LIABILITY

     Unless caused by the gross negligence or intentional misconduct of Landlord, Landlord shall not be
responsible for or liable to Tenant for any loss or damage that may be occasioned by or through the
acts or omissions of persons occupying adjoining premises or any part of the Building or for any
loss or damage resulting to Tenant or its property from burst, stopped or leaking water, gas, sewer
or steam pipes or for any damage or loss of property within the Premises from any causes
whatsoever, including theft.

22. ACCESS TO PREMISES

     Landlord reserves and shall have the right to enter the Premises at all reasonable times to supply
any service to be provided by Landlord to Tenant hereunder, or in the event of an emergency. In
addition, upon 24 hours notice and subject to Tenant’s representative having the right to be
present, Landlord shall have the right to enter the Premises to show the Premises to prospective
purchasers, mortgagees or tenants, to post notices of non-responsibility, to inspect the same and
to alter, improve or repair the Premises and any portion of the Building, without abatement of Rent
or Additional Rent, and may for that purpose erect, use and maintain scaffolding, pipes, conduits
and other necessary structures in and through the Premises where reasonably required by the
character of the work to be performed, provided that the entrance to the Premises shall not be
blocked thereby, and further provided that the business of Tenant shall not be interfered with
unreasonably. Tenant hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant’s business, any loss of occupancy or quiet enjoyment of the Premises or
any other loss occasioned thereby, for each of the aforesaid purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and about the Premises,
excluding Tenant’s vaults and safes, or special security areas (designated in advance), and
Landlord shall have the right to use any and all means that Landlord may deem necessary or proper
to open said doors in an emergency. In order to obtain entry to any portion of the Premises, and
any entry to the Premises or portions thereof obtained by Landlord by any of said means, or
otherwise, shall not under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or an eviction, actual or constructive, of Tenant from
the Premises or any portion thereof. Landlord shall also have the right at any time, without same
constituting an actual or constructive eviction and without incurring any liability to Tenant
therefor, to change the arrangement and/or location of entrances or passageways, doors and
doorways, and corridors, elevators, stairs, toilets and other public parts of the Building.

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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23. NOTICES

     Except as otherwise expressly provided in this Lease, any bills, statements, notices, demands,
requests or other communications given or required to be given under this Lease shall be effective
only if rendered or given in writing, sent by registered or certified mail or delivered personally,
(or if given by Landlord, by regular first-class U.S. mail) (a) to Tenant (i) at Tenant’s address
set forth in the Basic Lease Information, if sent prior to Tenant’s taking possession of the
Premises, or (ii) at the Building if sent subsequent to Tenant’s taking possession of the Premises,
or (iii) at any place where Tenant or any agent or employee of Tenant may be found if sent
subsequent to Tenant’s vacating, deserting, abandoning or surrendering the Premises, or (b) to
Landlord at Landlord’s address set forth in the Basic Lease Information, or (c) to such other
address as either Landlord or Tenant may designate as its new address for such purpose by notice
given to the other in accordance with the provisions of this Article 23. Any such bill, statement,
notice, demand, request or other communication shall be deemed to have been rendered or given two
(2) days after the date when it shall have been mailed as provided in this Article 23 or upon the
date personal delivery is made. If Tenant is notified of the identity and address of Landlord’s
mortgagee or ground or underlying lessor, Tenant shall give to such mortgagee or ground or
underlying lessor notice of any default by Landlord under the terms of this Lease in writing sent
by registered or certified mail, and such mortgagee or ground or underlying lessor shall be given a
reasonable opportunity to cure such default prior to Tenant exercising any remedy available to it.

24. NO WAIVER

     No failure by Landlord to insist upon the strict performance of any obligation of Tenant under this
Lease or to exercise any right, power or remedy consequent upon a breach thereof, no acceptance of
full or partial Monthly Base Rental or Additional Rent during the continuance of any such breach,
and no acceptance of the keys to or possession of the Premises prior to the termination of the Term
by any employee of Landlord shall constitute a waiver of any such breach or of such term, covenant
or condition or operate as a surrender of this Lease. No payment by Tenant or receipt by Landlord
of a lesser amount than the aggregate of all Monthly Base Rental and Additional Rent then due under
this Lease shall be deemed to be other than on account of the first items of such Monthly Base
Rental and Additional Rent then accruing or becoming due, unless Landlord elects otherwise; and no
endorsement or statement on any check and no letter accompanying any check or other payment of
Monthly Base Rental or Additional Rent in any such lesser amount and no acceptance of any such
check or other such payment by Landlord shall constitute an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord’s right to recover the balance of
such Monthly Base Rental or Additional Rent or to pursue any other legal remedy.

25. CERTIFICATES

     Tenant, at any time and from time to time, within ten (10) days from receipt of written notice from
Landlord, shall execute, acknowledge and deliver to Landlord and, at Landlord’s request, to any
prospective purchaser, ground or underlying lessor or mortgagee of any part of the Building, a
certificate of Tenant stating: (a that Tenant has accepted the Premises (or, it Tenant has not done
so, that Tenant has not accepted the Premises and specifying the reasons therefor), (b) the
Commencement and Expiration Dates of this Lease, (c) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that same is in full force and effect as
modified and stating the modifications), (d) whether or not there are then existing any defenses
against the enforcement of any of the obligations of Tenant under this Lease (and, if so,
specifying same), (e) whether or not there are then existing any defaults by Landlord in the
performance of its obligations under this Lease (and, if so, specifying same), (f) the dates, if
any, to which the Monthly Base Rental and Additional Rent and other charges under this Lease have
been paid, and (g) any other information that may reasonably be required by any of such persons. It
is intended that any such certificate of Tenant delivered pursuant to this Article 25 may be relied
upon by Landlord and any prospective purchaser, ground or underlying lessor or mortgagee of any
part of the Building.

     At Tenant’s request, and within the same time period specified above, Landlord shall execute and
deliver to Tenant a certificate of Landlord, confirming such matters with respect to this Lease as
may be reasonably requested by Tenant.

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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26. RULES AND REGULATIONS

     Tenant shall faithfully observe and comply with the rules and regulations attached to this Lease as
Exhibit C and all modifications thereof and additions thereto from time to time put into effect by
Landlord. Landlord shall not be responsible for the nonperformance by any other tenant or occupant
of the Building of any said rules and regulations. In the event of an express and direct conflict
between the terms, covenants, agreements and conditions of this Lease and the terms, covenants,
agreements and conditions of such rules and regulations, as modified and amended from time to time
by Landlord, this Lease shall control.

27. TAX ON TENANT’S PERSONAL PROPERTY AND BUILDING NON-STANDARD WORK

     27.1 At least ten (10) days’ prior to delinquency, Tenant shall pay all taxes levied or assessed
upon Tenant’s equipment, furniture, fixtures and other personal property located in or about the
Premises. If the assessed value of Landlord’s property is increased by the inclusion therein of a
value placed upon Tenant’s equipment, furniture, fixtures or other personal property, Tenant shall
pay to Landlord, upon written demand, the taxes so levied against Landlord, or the portion thereof
resulting from said increase in assessment.

     27.2 Tenant shall pay to Landlord, upon written demand, such portion of all real estate taxes
levied or assessed against Landlord that are attributable to the value of the tenant improvements
placed in the Premises in excess of the value of the Building Standard Work for the Premises. If
the assessing authority allocated a specific value to said Building Non-Standard Work, the amount
payable by Tenant shall be the tax attributable to such specific value. If the assessing authority
does not allocate a specific value to said Building Non-Standard Work, the amount payable by Tenant
pursuant to this Article 27.2 shall be an amount equal to the total tax assessed against
improvements that include said Tenant improvements multiplied by a fraction, the numerator of which
is the cost of said Building Non-Standard Work in excess of the cost of the Building Standard Work
for the Premises and the denominator of which is the total cost of the improvements covered by
assessment.

     27.3 The portion of real estate taxes payable by Tenant pursuant to Article 27.1 and 27.2 hereof
and by other tenants of the Building pursuant to similar provisions in their leases shall be
excluded from Real Estate Taxes for purposes of computing the Additional Rent to be paid under
Article 4 hereof.

28. SECURITY DEPOSIT

     Upon the full execution of this Lease, no security deposit shall be required of Tenant. However, in
the event (i) Tenant ever becomes more than 30 days delinquent in the payment of Monthly Base
Rental or Additional Rent or (ii) Tenant’s annual “net income”, as shown on any annual audited
financial statement of Tenant, is less than $9,500,000.00, or (iii) Tenant’s ratio of “current
assets” to “current liabilities”, as shown on any annual audited financial statement of Tenant, is
less than 1.3:1, Tenant shall deliver to Landlord within 5 days of Landlord’s request, a cash
amount equal to 2 month’s Monthly Base Rental then payable hereunder, to be held by Landlord as
security for the faithful performance of all terms, covenants and conditions of this Lease. The
amount of any security deposit delivered to Landlord shall be increased from time to time so as to
always equal 2 month’s Monthly Base Rental. In connection therewith, Tenant shall deliver to
Landlord, within 30 days of the close of each year, Tenant’s annual financial statements prepared
by Tenant’s independent accounting firm, certified as true and correct by Tenant’s Chief Financial
Officer, and disclosing Tenant’s current financial condition and “net worth”.

     Tenant shall also pay such reasonable additional security deposit that Landlord may require for the
issuance of each “key card” Landlord may issue to Tenant.

     Tenant agrees that Landlord may, without waiving any of Landlord’s other rights and remedies under
this Lease upon the occurrence of any of the events of default described in Article 18 hereof,
apply the security deposit to remedy any failure by Tenant to pay Monthly Base Rental or Additional
Rent, to repair or maintain the Premises, or to perform any other terms, covenants or conditions
contained herein. If Tenant has kept and performed all terms, covenants and conditions of this
Lease during the Term, Landlord will within thirty (30) days following the termination hereof
return said sum to Tenant or the last permitted assignee of Tenant’s interest hereunder at the
expiration of the Term. Should Landlord use any portion of the security deposit to cure any default
by Tenant hereunder, Tenant shall forthwith upon demand replenish the security deposit to the
original amount. Landlord shall

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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not be required to keep the security deposit separate from its general funds, and Tenant shall not
be entitled to interest on any such security deposit.

29. AUTHORITY

     If Tenant signs as a corporation or a partnership, each of the persons executing this Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duly authorized and existing
entity, that Tenant has and is qualified to do business in California, that Tenant has full right
and authority to enter into this Lease, and that each and both of the persons signing on behalf of
Tenant are authorized to do so. Upon Landlord’s request, Tenant shall provide Landlord with
evidence reasonably satisfactory to Landlord confirming the foregoing covenants and warranties.

30. MISCELLANEOUS

     30.1 The words “Landlord” and “Tenant” as used herein shall include the plural as well as the
singular. The words used in the neuter gender include the masculine and feminine. If there is more
than one person or entity comprising Tenant, the obligations under this Lease imposed on Tenant
shall be joint and several. The captions preceding the articles of this Lease have been inserted
solely as a matter of convenience and such captions in no way define or limit the scope or intent
of any provision of this Lease.

     30.2 The terms, covenants and conditions contained in this Lease shall bind and inure to the
benefit of Landlord and Tenant and, except as otherwise provided herein, their respective personal
representatives and successors and assigns; provided, however, upon the sale, assignment or
transfer by the Landlord named herein (or by any subsequent landlord) of its interest in the
Building, including any transfer by operation of law, the Landlord (or subsequent landlord) shall
be relieved from all subsequent obligations or liabilities under this Lease, and all obligations
subsequent to such sale, assignment or transfer (but not any obligations or liabilities that have
accrued prior to the date of such sale, assignment or transfer) shall be binding upon the grantee,
assignee or other transferee, who, by accepting such interest, shall be deemed to have assumed such
subsequent obligations and liabilities.

     30.3 If any provision of this Lease or the application thereof to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such
provision to persons or circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid and enforceable to
the fullest extent permitted by law.

     30.4 This Lease shall be construed and enforced in accordance with the laws of the State of
California.

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

     30.6 This instrument, including the Exhibits hereto, which are made a part of this Lease, contains
the entire agreement between the parties and all prior negotiations and agreements are merged
herein. Neither Landlord nor Landlord’s agents have made any representations or warranties with
respect to the Premises, the Building or this Lease except as expressly set forth herein, and no
rights, easements or licenses are or shall be acquired by Tenant by implication or otherwise unless
expressly set forth herein.

     30.7 The review, approval, inspection or examination by Landlord of any item to be reviewed,
approved, inspected or examined by Landlord under the terms of this Lease or the exhibits attached
hereto shall not constitute the assumption of any responsibility by Landlord for either the
accuracy or sufficiency of any such item or the quality or suitability of such item for its
intended use. Any such review, approval, inspection or examination by Landlord is for the sole
purpose of protecting Landlord’s interests in the Building and under this Lease, and no third
parties, including, without limitation, Tenant or any person or entity claiming through or under
Tenant, or the contractors, agents, servants, employees, visitors or licensees of Tenant or any
such person or entity, shall have any rights hereunder.

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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     30.8 In the event that either Landlord or Tenant fails to perform any of its obligations under this
Lease or in the event a dispute arises concerning the meaning or interpretation of any provision of
this Lease, the defaulting party or the party not prevailing in such dispute, as the case may be,
shall pay any and all costs and expenses incurred by the other party in enforcing or establishing
its rights hereunder, including, without limitation, court costs and reasonable counsel fees.

     30.9 Upon the expiration or sooner termination of the Term, Tenant will quietly and peacefully
surrender to Landlord the Premises in the condition in which they are required to be kept as
provided in Article 9 hereof, ordinary wear and tear and the provisions of Article 14 excepted.

     30.10 Upon Tenant paying the Monthly Base Rental and Additional Rent and performing all of Tenant’s
obligations under this Lease, Tenant may peacefully and quietly enjoy the Premises during the Term
as against all persons or entities lawfully claiming by or through Landlord; subject, however, to
the provisions of this Lease and to any mortgages or ground or underlying leases referred to in
Article 12 hereof.

     30.11 Tenant covenants and agrees that no diminution of light, air or view by any structure that
may hereafter be erected (whether or not by Landlord) shall entitle Tenant to any reduction of
Monthly Base Rental or Additional Rent under this Lease, result in any liability of Landlord to
Tenant, or in any other way affect this Lease or Tenant’s obligations hereunder.

     30.12 Any holding over after the expiration of the Term with the consent of Landlord shall be
construed to be a tenancy from month to month at one hundred seventy-five percent (175%) of the
Monthly Base Rental herein specified (prorated on a monthly basis), unless Landlord shall specify a
different rent in its sole discretion, together with an amount estimated by Landlord for the
monthly Additional Rent payable under this Lease, and shall otherwise be on the terms and
conditions herein specified so far as applicable. Any holding over without Landlord’s consent shall
constitute a default by Tenant and entitle Landlord to reenter the Premises and pursue its remedies
as provided in Article 18 hereof.

     30.13 Neither this Lease nor any term or provision hereof may be changed, waived, discharged or
terminated orally, and no breach thereof shall be waived, altered or modified, except by a written
instrument signed by the party against which the enforcement of the change, waiver, discharge or
termination is sought. No waiver of any breach shall affect or alter this Lease, but each and every
term, covenant and condition of this Lease shall continue in full force and effect with respect to
any other then existing or subsequent breach thereof.

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

     30.15 Tenant shall look only to Landlord’s estate in the Building for the satisfaction of Tenant’s
remedies or for the collection of a judgment (or other judicial process) requiring the payment of
money by Landlord in the event of any default by Landlord hereunder, and no other property or
assets of Landlord or its partners or principals, disclosed or undisclosed, shall be subject to
levy, execution or other enforcement procedure for the satisfaction of Tenant’s remedies under or
with respect to this Lease, the relationship of Landlord and Tenant hereunder or Tenant’s use or
occupancy of the Premises.

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

26

 

     30.16 If Tenant shall request Landlord’s consent and Landlord shall fail or refuse to give such
consent, Tenant shall not be entitled to any damages for any withholding by Landlord of its
consent, it being intended that Tenant’s sole remedy shall be an action for specific performance or
injunction, and that such remedy shall be available only in those cases where Landlord has
expressly agreed in writing not to unreasonably withhold its consent or where as a matter of law
Landlord may not unreasonably withhold its consent.

	 	 	 	 	 	 	 	 	 	 	 
	PACIFIC TOWERS ASSOCIATES, a California Limited 

Partnership	 	 	 	MOLINA HEALTHCARE, INC., a
California corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	SIC — Long Beach, a California Limited
Partnership, General Partner of
Pacific Towers Associates
	 	 	 	By:
	 	/s/ Illegible  

Its:
EVP	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	The Swig Company, a California
Corporation, General Partner of SIC —
Long Beach
	 	 	 	By:
	 	/s/ C. Joseph Heinz  

Its:
AVP/CAO	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Kennard P. Perry  

Title: VICE PRESIDENT	 	 	 	If Tenant is a corporation, this Lease must be executed
by (1) the Chairman, President, or Vice-President
and (2) the Secretary, any Assistant Secretary, the Chief Financial Officer or any Assistant Treasurer.	 	 
	 

	 	 
	 	 	 		 	 

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

27

 

PACIFIC TOWERS ASSOCIATES LEASE ADDENDUM

TENANT: MOLINA HEALTHCARE, INC.,

a California corporation

     THIS ADDENDUM is attached to and is a part of the Standard Form Office Lease (“Lease”) dated July
10th 2002, between Pacific Towers Associates and the aforenamed Tenant. Any conflict
between the terms of the printed form Lease and this Addendum shall be resolved in favor of the
provisions of this Addendum. For purposes of this Addendum, the term “Building” refers to the
entire ARCO Center, Long Beach California, as designated and defined in Paragraph 1.1 of the Lease,
and each building therein is designated by its address of 200 Oceangate or 300 Oceangate.

1. TENANT’S RIGHT TO REDUCE SIZE OF PREMISES. Provided Tenant is not then in default under the
Lease and the Lease is in full force and effect, effective at the conclusion of the sixth
(6th) year of the initial Lease Term, Tenant shall have a one (1) time option to give
back to Landlord a portion of the Premises consisting of the lesser of (i) 20% of the Premises then
leased by Tenant or (ii) one (1) full floor. In addition, Tenant shall not be able to give back any
space below the 6th Floor. Tenant shall be responsible for any and all costs associated
with demising the proposed Premises to be given back, including but not limited to the construction
of corridors and any other applicable code compliance items, and as may be needed in order for the
space given back and Tenant’s remaining space to be leaseable by Landlord and comply with
applicable building, life safety and other codes, laws, and regulations. Tenant shall propose the
location of any space to be given back and Landlord shall reasonably approve said location. All
space to be given back shall be contiguous.

     In the event Tenant does give back space, Tenant shall be required to pay to Landlord (in addition
to any demising and other costs outlined above) a termination fee equal to the sum of (i) the
unamortized portion (using an interest rate of 10% per annum) of the Tenant Improvement Allowance
applicable to the space, assuming the Tenant Improvement Allowance was being amortized over the
initial Lease Term, and (ii) the unamortized portion (using an interest rate of 10% per annum) of a
pro-rata portion of all brokerage commissions paid in connection with the space assuming they were
being amortized over the initial Lease Term therefor, and (iii) the rent differential of the
overall effective Monthly Base Rental rate for the space for the initial Lease Term versus the
effective Monthly Base Rental rate Tenant has paid up to the termination date. Tenant shall pay
said termination fee within 30 days following its notice of contraction as set forth below.

     If Tenant decides to exercise the contraction option set forth in this Paragraph 1, Tenant must
provide Landlord with written notice thereof no later than twelve (12) months prior to the
effective date therefor. Upon Tenant’s surrender of the Premises pursuant to this option, Tenant’s
parking privileges shall be reduced accordingly by the parking ratio of 4.5 per 1,000 rentable
square feet.

2. TENANT’S OPTION TO EXTEND LEASE TERM. Provided Tenant is not then in default under the Lease and
the Lease is in full force and effect, and further provided that Tenant has not assigned its
interest in this Lease or subleased any portion of the Premises and is then leasing a minimum of
40,000 rentable square feet in the Building, Tenant shall have the option to extend the term of
this Lease for all space it is then leasing in the Building for two consecutive five-year periods,
commencing at the expiration of the initial term. In order to exercise said options, written notice
thereof (“Renewal Option Notice”) must be delivered to and received by Landlord not more than
twenty four (24) months and not less than fifteen (15) months prior to the then expiration date of
the term, with time being of the essence with respect to such notice. In the event one or both such
options are exercised, Tenant’s occupancy shall continue on all the same terms and conditions
contained herein, but (i) with no options to further extend the term, (ii) the Monthly Base Rental
shall be increased to reflect the then Fair Market Rental for the Premises, as determined below;
but in no event shall said Monthly Base Rental be less than that payable by Tenant upon the
expiration of the Lease term then in effect, (iii) Landlord shall have no obligation to perform or
pay for any tenant improvement work in connection with the extension of the term, (iv) there shall
be no abatement of rent or parking charges, and (v) there shall be no rights of expansion, rights
of first refusal, rights of first negotiation, rights of contraction or rights of early
termination.

          a. Procedure for Determining Fair Market Rental. “Fair Market Rental” shall be defined as
the

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

rate being charged non-equity tenants for comparable space in comparable office buildings in the
surrounding Downtown Long Beach area during the proposed extension period, based on highest and
best use and taking into consideration when evaluating comparables: location, tenant improvements
provided or to be provided, rental abatements and other forms of rental concessions, lease term,
and any other relevant factors. Fair Market Rental for the extension term shall be determined by
Landlord by written notice given to Tenant not later than ninety (90) days prior to the
commencement date of the extension term, subject to Tenant’s right of arbitration set forth below.
Failure on the part of Tenant to demand arbitration within thirty (30) days after receipt of notice
from Landlord of Landlord’s determination of Fair Market Rental shall bind Tenant to the Fair
Market Rental as determined by Landlord. Should Tenant elect to arbitrate and should the
arbitration not have been concluded as of the commencement date of the extension term, Tenant shall
pay as Rent the Fair Market Rental as determined by Landlord. If the Fair Market Rental as
determined by arbitration is greater or less than Landlord’s determination, any adjustment required
to correct the amount previously paid shall be paid by the appropriate party within ten (10) days
after such determination of the Fair Market Rental.

          b. Arbitration Procedure. If Tenant disputes the amount claimed by Landlord as Fair Market
Rental, Tenant may require that the dispute be submitted to binding arbitration. The judgment or
the award rendered in any such arbitration may be entered in any court having jurisdiction and
shall be final and binding between the parties. The arbitration shall be conducted and determined
in the City of Long Beach and County of Los Angeles in accordance with the then prevailing rules of
the American Arbitration Association or its successor for arbitration of commercial disputes except
that the procedures mandated by such rules shall be modified as follows:

               (i) Tenant shall make demand for arbitration in writing within thirty (30) days after receipt of
Landlord’s determination of Fair Market Rental specifying the name and address of the person to act
as the arbitrator on Tenant’s behalf. The arbitrator selected by Tenant shall be qualified as a
real estate broker with at least seven (7) years experience with office leasing in Long Beach,
California, Failure on the part of Tenant to make a timely and proper demand for such arbitration
shall constitute a waiver of the right thereto. Within ten (10) business days after receipt of the
demand for arbitration, Landlord shall give notice to Tenant of the name and address of the person
selected by Landlord to act as arbitrator on its behalf who shall be similarly qualified.

               (ii) When the two (2) arbitrators are chosen, they shall meet within ten (10) business days after
the second arbitrator is appointed and, if within ten (10) business days after such first meeting
the two arbitrators shall be unable to agree promptly upon a determination of Fair Market Rental,
they shall appoint a third arbitrator, who shall be a competent and impartial person who satisfies
the qualifications set forth above. In the event they are unable to agree upon such appointment
within five (5) business days after expiration of such ten (10) business day period, the third
arbitrator shall be selected by the parties themselves, if they can agree thereon, within a further
period of ten (10) business days. If the parties do not so agree, either party, on behalf of both,
may request appointment of such a qualified person by the then Presiding Judge of the Los Angeles
County Superior Court, and the other party shall not raise any question as to such Judge’s full
power and jurisdiction to entertain the application for and make the appointment. The three (3)
arbitrators shall decide the dispute by following the procedure set forth below.

               (iii) In the event a third arbitrator is selected, the arbitrators selected by each of the parties
shall state in writing his determination of the Fair Market Rental supported by the reasons
therefor with counterpart copies to each party. The arbitrators shall arrange for a hearing at
which the proposed determinations of the two arbitrators shall be simultaneously exchanged and at
which hearing testimony may be presented and which shall be conducted in accordance with the rules
of the American Arbitration Association. The role of the third arbitrator shall be to determine the
Fair Market Rental based on the proposed determinations submitted by the two arbitrators. The third
arbitrator shall be required to select which of the two determinations most closely determines the
Fair Market Rental and his decision shall be final and binding upon the parties.

               (iv) The arbitrators appointed by Landlord and Tenant shall have the right to consult with experts
and competent authorities in order to obtain factual information or evidence pertaining to a
determination of Fair Market Rental, but any such consultation shall be made in the presence of
both parties and with full right on their part to cross-examine. The arbitrators shall have no
power to modify the provisions of this Lease.

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

               (v) In the event of a failure, refusal or inability of any arbitrator to act, his successor shall
be appointed by the party who appointed him and in the case of the third arbitrator, his successor
shall be appointed in the same manner as provided for appointment of the third arbitrator. Any
decision in which the arbitrator appointed by Landlord and the arbitrator appointed by Tenant
concur shall be binding and conclusive upon the parties. Each party shall pay the fee and expenses
of its respective arbitrator and both shall share the fee and expenses of the third arbitrator, if
any. The attorneys’ fees and expenses of counsel for the respective parties and of witnesses shall
be paid by the respective party engaging such counsel or calling such witnesses.

3. TENANT’S RIGHT OF FIRST NEGOTIATION. Provided that Tenant has not assigned its interest in this
Lease or subleased any portion of the Premises, and further provided that Tenant is not in default
under this Lease; then, subject to continued occupancy by the existing tenant or occupant and/or
the rights of other existing tenants, Landlord agrees that at such time as other office space
becomes vacant and available for lease on Floors 3, 4, 5, 9 or 10 in 200 Oceangate during the
initial term or any extensions thereof, Landlord shall advise Tenant of the availability thereof.
Tenant shall have fifteen (15) business days after its receipt of Landlord’s notice within which to
notify Landlord that it desires to lease such space. Landlord shall thereafter notify Tenant of the
rental and other terms and conditions Landlord is seeking with respect to such space, which (i)
with respect to the first 16,575 rentable square feet of space leased by Tenant during the initial
36 months of the Term, shall be at the same Monthly Base Rental and Additional Rental as applies to
the initial Premises leased hereunder and with the same per square foot Tenant Improvement
Allowance as applies to the initial Premises leased hereunder, prorated to the extent the initial
term applicable to the offered space is less than 10 full years, and (ii) with respect to all other
space offered under this paragraph, shall be at the then prevailing fair market rental rate for
such space in the Building, as determined by Landlord in accordance with the definition of fair
market rental rate set forth in Paragraph 2a above, and which shall be for a term that is
coterminous with the remainder of the Premises, but in no event less than 3 years. Tenant shall
then have fifteen (15) business days within which to accept or reject in writing any proposals
submitted by Landlord, and, unless a binding written agreement to lease such space is reached
within such fifteen (15) business day period, Tenant’s right of first negotiation with respect to
such space shall terminate and be of no further force or effect, and Landlord shall be entitled to
pursue negotiations with any other party on any terms and at any rent Landlord deems appropriate
and which may differ from what was offered to Tenant This right of first negotiation is intended
solely to allow the parties an opportunity to negotiate for such space and is not intended to
restrict the rights of either party in the event a final and binding agreement does not result
within fifteen (15) business days as a result of negotiations initiated pursuant to this Paragraph.
In addition to and in amplification of the foregoing, this Paragraph shall not apply and Tenant
shall have no right of first negotiation with respect to any space in which the then current tenant
or occupant is negotiating an extension or renewal of its lease.

4. PARKING. Tenant shall be provided with a parking ratio of four and one-half (4.5) parking passes
per 1,000 square feet of rentable square footage of Tenant’s initial Premises and 8th
Floor Premises. Said parking passes shall include single reserved, single unreserved and tandem
parking, with the allocation as follows: 40% tandem, 8% reserved, and 52% unreserved.
Landlord shall provide Tenant with additional parking on a month-to-month basis, as needed and as
available.

     Beginning at the Commencement Date of the Lease term and throughout the first five (5) years of the
initial lease term, the monthly parking costs for parking allocated in connection with the
2nd, 6th, 7th and 8th Floor Premises then leased by
Tenant shall be in accordance with the following schedule: $70.00 per non reserved parking pass per
month; $125.00 per reserved parking pass per month; $45.00 per tandem parking pass per month.
Thereafter, the rates shall be the then prevailing ARCO Center rates in accordance with Exhibit D
of the Lease.

     Parking ratios and rates for all parking allocated in connection with any expansion of the
2nd, 6th, 7th and 8th Floor Premises leased hereunder
shall be in the ratio of 4 passes per 1,000 rentable square feet of expansion premises, for the
first 16,575 rentable square feet of expansion premises, and thereafter in the ratio of three
passes per 1,000 rentable square feet of expansion premises, and shall be at the prevailing ARCO
Center rates. The allocation of such passes to the categories of parking shall be subject to
Landlord’s reasonable discretion with respect to the first 16,575 rentable square feet of expansion
premises and shall thereafter be in compliance with ARCO Center standards.

     Notwithstanding anything to the contrary, Landlord reserves the right to fulfill all or a portion
of Tenant’s

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

parking allocation with staffed valet parking.

5. SIGNAGE. From and after the Commencement Date and throughout the term, Tenant shall have the
right to install one sign at its sole cost and expense on the existing can sign on the concrete
wall signage area in front of 200 Oceangate, identifying Tenant and in a size, style and location
that is acceptable to Landlord. In addition, in the event and during such time as Tenant (but not
any Subtenant or Assignee (as defined in Article 16 of the Lease) of Molina Healthcare, Inc.) is
contractually committed to both leasing and personally occupying at least five full floors in 200
Oceangate, Tenant, at Tenant’s cost and expense, shall have the right to install one sign on the
top of the exterior facade of 200 Oceangate, identifying Tenant and in a size, style and location
that is acceptable to Landlord. All signage is subject to all municipal codes, the approval of all
applicable governmental agencies, and Landlord’s review and approval, which approval shall not be
unreasonably withheld, conditioned or delayed. All signage rights related to the top of the
exterior facade of 200 Oceangate granted to Tenant under this Paragraph are non-assignable with the
exception that Tenant may assign such rights in accordance with Article 16.2 and Tenant may assign
such rights to an Assignee who is to both leasing and personally occupying at least five full
floors in 200 Oceangate, who is of good reputation and whose business is of an institutional
nature, whose identification on the Building will not, in Landlord’s good faith determination,
result in a loss of reputation or value to the Building, conflict with any rights given to other
tenant’s or be objectionable to other tenants of the Building or Landlord’s lender, or otherwise be
objectionable to Landlord. All access to signage on the Building facade shall be coordinated with
the Building Manager through the office of the Building. At the expiration of this Lease, all
signage shall be removed and all damage related thereto shall be restored at Tenant’s sole cost and
to Landlord’s satisfaction.

     During any period that Tenant has the right to install signage of the top of the exterior facade of
200 Oceangate, Landlord agrees that no other companies competing with Tenant and providing health
maintenance services shall be granted the right by Landlord to install their signage on the
exterior facades of either 200 Oceangate or 300 Oceangate. Within 10 business days of Landlord’s
written request, Tenant shall inform Landlord in writing as to whether any particular company
identified by Landlord falls within the parameters of the foregoing sentence.

6. INSTALLATION OF ROOF ANTENNA. Subject to Landlord’s prior approval which shall not be
unreasonably withheld, conditioned or delayed, at any point during the term or extension thereof,
Tenant shall have the right to install and use in connection with Tenant’s business operations, on
the roof of 200 Oceangate, at no monthly rental charge, a roof mounted antenna and/or satellite
dish in an area not to exceed 6 feet in diameter, provided there is room on the roof at that time.
Landlord will guarantee that there is roof space available up to one year from the Commencement
Date, although Landlord does not guarantee the availability of any exact location or that the
available location will be suitable for Tenant’s equipment. Tenant shall conform with all
applicable laws and ordinances and with Landlord’s reasonable rules and regulations with regard to
use, installation and maintenance of the device requested by Tenant. All access to the roof shall
be arranged and coordinated with the Building Manager through the office of the Building. Tenant’s
roof top equipment shall not interfere with any equipment in the Building or with any equipment
that exists on the roof at the time of installation and any existing equipment at that time shall
not be relocated in order to accommodate Tenant. All permits, application fees, and all
installation, repair, and maintenance costs associated with the aforementioned shall be the
responsibility of Tenant. Tenant shall be responsible for repair and maintenance of the roof where
the equipment has been installed, as well as all damage to other portions caused by the
installation, maintenance or removal of such equipment. The rights of Tenant as set forth in this
Paragraph are personal to Molina Healthcare, Inc., and Molina Healthcare, Inc. shall not have the
right to transfer, assign, or license the roof rights granted hereunder.

7. TERMINATION RIGHT. Landlord and Tenant are executing this Lease prior to the finalization of the
Workletter (Exhibit B) and the execution and delivery of a non-disturbance agreement from
Landlord’s current lender. Landlord and Tenant shall diligently pursue the finalization of the
Workletter and non-disturbance agreement but in the event (i) the Workletter has not been finalized
and executed by Landlord and Tenant within 30 days following the full execution of this Lease, or
(ii) the non-disturbance agreement referred to in the first sentence of Article 12 of this Lease
has not been fully executed within 30 days following the full execution of this Lease, Tenant may
terminate this Lease prior to the execution of said Workletter and non-disturbance agreement by
written notice to Landlord. In addition, in the event the Workletter and non-disturbance agreement
have not been fully executed within 45 days following the full execution of this Lease, Landlord
may terminate this Lease prior to the execution of said Workletter and non-disturbance agreement by
written notice to Tenant.

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

Except as set forth in this Addendum, the Lease shall remain unamended and in full force and
effect.

PACIFIC TOWERS ASSOCIATES, a California Limited Partnership

	 	 	 	 	 
	By:

	 	SIC — Long Beach, a California Limited Partnership,
General Partner of Pacific Towers Associates
	 	 
	 
	 	 	 	 
	By:

	 	The Swig Company, a California Corporation,
General Partner of SIC — Long Beach	 	 
	 
	 	 	 	 
	By:

	 	/s/ Kennard P. Perry	 	 
	 

	 	 	 	 
	 

	 	Title: VICE PRESIDENT	 	 
	 
	 	 	 	 
	MOLINA HEALTHCARE, INC.,

a California corporation	 	 
	 
	 	 	 	 
	By:

	 	/s/ C. Joseph Heinz	 	 
	 

	 	 	 	 
	 

	 	Its: AVP/CAO	 	 

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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A1

PACIFIC TOWERS ASSOCIATES

STANDARD FORM OFFICE LEASE

EXHIBIT A

FLOOR PLAN

200 TOWER — 2ND FLOOR

 

 

A1

PACIFIC TOWERS ASSOCIATES

STANDARD FORM OFFICE LEASE

EXHIBIT A

FLOOR PLAN

200 TOWER — 6TH FLOOR

 

 

A1

PACIFIC TOWERS ASSOCIATES

STANDARD FORM OFFICE LEASE

EXHIBIT A

FLOOR PLAN

200 TOWER — 7TH FLOOR

 

 

C1

PACIFIC TOWERS ASSOCIATES

OFFICE LEASE

EXHIBIT C

RULES AND REGULATIONS

     1. BUILDING RULES AND REGULATIONS

          (a The sidewalks, halls, passages, exits, entrances, elevators, shopping areas, escalators and
stairways of the Building (“common areas”) shall not be obstructed by Tenant or used by it for any
purpose other than for ingress to and egress from the Premises. The common areas are not for the
use of the general public, and Landlord shall in all cases retain the right to control and prevent
access thereto by all persons whose presence in the judgment of Landlord would be prejudicial to
the safety, character, reputation and interests of the Building and its tenants. Tenant shall not
go upon the roof of the Building.

          (b No sign, placard, picture, name, advertisement or notice visible from the exterior of the
Premises shall be inscribed, painted, affixed or otherwise displayed by Tenant on any part of the
Building. Landlord will furnish to Tenant general Building Standard guidelines relating to signs
inside the Building, in both the main lobby and on the office floors. Tenant agrees to conform to
such guidelines. All Building Standard approved signs shall be ordered and installed by Landlord at
the expense of Tenant.

          (c The Premises shall not be used for the storage of merchandise held for sale to the general
public or for lodging. No cooking shall be done or permitted by Tenant on the Premises, except that
use by Tenant of Underwriters’ Laboratory approved equipment for brewing coffee, tea, hot chocolate
and similar beverages shall be permitted, provided that such use is in accordance with all
applicable federal, state and city laws, codes, ordinances, rules and regulations.

          (d Tenant shall not employ any person or persons other than the janitor of Landlord for the purpose
of cleaning the Premises, unless otherwise agreed to by Landlord in writing. No person or persons
other than those approved by Landlord shall be permitted to enter the Building for the purpose of
cleaning the Premises or any portion of the Building. Tenant shall not cause any unnecessary labor
by reason of Tenant’s carelessness or indifference in the preservation of good order and
cleanliness. Janitorial service will not be furnished on nights when rooms are occupied after 9:30
P.M. unless, by agreement in writing, service is extended to a later hour for specifically
designated rooms.

          (e Landlord will furnish Tenant with two (2) keys to the Premises free of charge. No additional
locking devices shall be installed without the prior written consent of Landlord. Landlord may
impose a reasonable charge for any additional lock or any bolt installed on any door of the
Premises without the prior consent of Landlord. Tenant shall in each case furnish Landlord with a
key for any such lock. Tenant, upon the termination of its tenancy, shall deliver to Landlord all
keys to doors in the Premises.

          (f The freight elevator shall be available for use by Tenant, subject to such reasonable scheduling
as Landlord shall deem appropriate. The persons employed by Tenant to move equipment or other items
in or out of the Building must be acceptable to Landlord. Landlord shall have the right to
prescribe the weight, size and position of all equipment, materials, supplies, furniture or other
property brought into the Building. Heavy objects shall, if considered necessary by Landlord, stand
on wood strips of such thickness as is necessary to properly distribute the weight of such objects,
Landlord will not be responsible for loss of or damage to any such property from any cause, and all
damage done to the Building by moving or maintaining Tenant’s property shall be repaired at the
expense of Tenant.

          (g Tenant shall not use or keep in the Premises or the Building any kerosene, gasoline or flammable
or combustible fluid or materials or use any method of heating or air conditioning other than that
supplied

 
					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
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C2

by Landlord. Tenant shall not use, keep or permit or suffer the Premises to be occupied or used in
a manner offensive or objectionable to Landlord or other occupants of the Building by reason of
noise, odors, and/or vibrations, or interfere in any way with other tenants or those having
business in the Building.

          (h Landlord reserves the right to exclude from the Building between the hours of 6 P.M. and 8 A.M.
and at all hours on Saturdays, Sundays, and legal holidays all persons who do not present a pass to
the Building signed by Landlord. Landlord will furnish passes to persons for whom Tenant requests
same in writing. Tenant shall be responsible for all persons for whom it requests passes and shall
be liable to Landlord for all acts of such persons. Landlord shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Building of any person. In the
case of invasion, mob, riot, public excitement or other circumstances rendering such action
advisable in Landlord’s opinion, Landlord reserves the right to prevent access to the Building
during the continuance of same by such action as Landlord may deem appropriate, including closing
doors.

          (i The directory of the Building will be provided for the display of the name and location of
tenants and a reasonable number of the principal officers and employees of tenants, and Landlord
reserves the right to exclude any other names therefrom. Any additional name that Tenant shall
desire to place upon the directory must first be approved by Landlord and, if so approved, a charge
will be made therefor.

          (j No curtains, draperies, blinds, shutters, shades, screens or other coverings, hangings or
decorations shall be attached to, hung or placed in, or used in connection with any window of the
Building without the prior written consent of Landlord. In any event, with the prior written
consent of Landlord, such items shall be installed on the office side of Landlord’s standard window
covering and shall in no way be visible from the exterior of the Building.

          (k Tenant shall not obtain for use in the Premises ice, drinking water, food, beverage, towel or
other similar services, except at such reasonable hours and under such reasonable regulations as
may be established by Landlord.

          (l Tenant shall see that the doors of the Premises are closed and locked and that all water
faucets, water apparatus, equipment, and utilities are shut off before Tenant or Tenant’s employees
leave the Premises, so as to prevent waste or damage, and for any default or carelessness in this
regard Tenant shall make good all injuries sustained by other tenants or occupants of the Building
or Landlord. On multiple-tenancy floors, all tenants shall keep the doors to the Building corridors
closed at all times except for ingress and egress.

          (m The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any
purpose other than for which they were constructed. No foreign substance of any kind whatsoever
shall be deposited therein, and any damage resulting to same from Tenant’s misuse thereof shall be
paid by Tenant.

          (n Except with the prior consent of Landlord, Tenant shall not sell, or permit the sale from the
Premises of, or use or permit the use of any sidewalk or area adjacent to the Premises for the sale
of, newspapers, magazines, periodicals, theater tickets or any other goods, merchandise or service,
nor shall the Premises be used for manufacturing of any kind, or for any business or activity other
than that specifically provided for in Tenant’s lease.

          (o Tenant shall not install any radio or television antenna, satellite dish, communication
equipment, loudspeaker, or other device on the roof or exterior walls of the Building.

          (p Tenant shall not use in any space, or in the common areas of the Building, any hand trucks
except those equipped with rubber tires and side guards or such other material handling equipment
as Landlord may approve. No bicycle or vehicle of any kind shall be brought by Tenant into the
Building or kept in or about the Premises.

          (q Tenant shall store all its trash and garbage within the Premises until removal of same to such
location in the Building as may be designated from time to time by Landlord, No material shall be
placed in the Building trash boxes or receptacles if such material is of such nature that it may
not be disposed of in the ordinary

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

C3

and customary manner of removing and disposing of trash and garbage in the City of Long Beach
without being in violation of any law or ordinance governing such disposal.

          (r All loading and unloading of merchandise, supplies, materials, garbage and refuse shall be made
only through such entryways and elevators and at such time as Landlord shall designate. In its use
of the loading areas, Tenant shall not obstruct or permit the obstruction of said loading areas,
and at no time shall Tenant park vehicles therein except for loading and unloading.

          (s Canvassing, soliciting, peddling or distribution of handbills or any other written material in
the Building is prohibited.

          (t Tenant shall immediately, upon request from Landlord (which request need not be in writing),
reduce its lighting and other electricity usage in the Premises for temporary periods designated by
Landlord, when required in Landlord’s judgment to prevent overloads of the mechanical or electrical
systems of the Building.

          (u Landlord reserves the right to select the name of the Building and to make such change or
changes of name as it may deem appropriate from time to time, and Tenant shall not refer to the
Building by any name other than: (1) the name selected by Landlord (as same may be changed from
time to time), or (2) the postal address approved by the United States Post Office. Tenant shall
not use the name of the Building in any respect other than as an address of its operation in the
Building without the prior written consent of Landlord.

          (v The requirements of Tenant will be attended to only upon application by telephone or writing or
in person at the office of the Building. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instructions from Landlord.

          (w Landlord may waive any one or more of these Rules and Regulations for the benefit of any
particular tenant or tenants, but no such waiver by Landlord shall be construed as a waiver of
these Rules and Regulations in favor of any other tenant or tenants, nor prevent Landlord from
thereafter enforcing any such Rules and Regulations against any or all of the tenants of the
Building.

          (x Wherever the word “Tenant” occurs in these Rules and Regulations, it is understood and agreed
that it shall include Tenant’s assigns, agents, contractors, employees and visitors. Wherever the
word “Landlord” occurs in these Rules and Regulations, it is understood and agreed that it shall
include Landlord’s assigns, agents, contractors, employees and visitors.

          (y These Rules and Regulations are in addition to and shall not be construed in any way to modify,
alter or amend, in whole or part, the terms, covenants, agreements and conditions of any lease of
premises in the Building.

          (z Landlord reserves the right to make such other and reasonable rules and regulations as in its
judgment may from time to time be needed for the safety, care and cleanliness of the Building, and
for the preservation of good order therein.

     2. PARKING RULES AND REGULATIONS

     Tenant and its agents, employees, invitees and other authorized users (collectively “Authorized
Users”) shall strictly comply at all times with the following rules and regulations in their use of
the Arco Center parking facilities.

          (a Tenant and its Authorized Users shall not park vehicles in any parking areas designated by
Landlord as areas for parking by visitors to the Building.

          (b Tenant and Authorized Users shall not leave vehicles in the Building parking areas overnight nor
park any vehicles in the Building parking areas other than automobiles, motorcycles, motor driven
or

					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

C4

non-motor driven bicycles or four-wheeled trucks; said non-authorized vehicles shall be subject to
towing at Tenant’s expense. Landlord may, in its sole discretion, designate separate areas for
bicycles and motorcycles.

          (c Cars must be parked entirely within the stall lines painted on the floor.

          (d All directional signs and arrows must be observed.

          (e The speed limit shall be 5 miles per hour.

          (f Parking is prohibited, unless a floor parking attendant approved by Landlord directs otherwise:

               (i In areas not striped for parking;

               (ii In aisles;

               (iii Where “No Parking” or “Handicap” signs are posted;

               (iv On ramps;

               (v In crosshatched areas; or

               (vi In such other areas as may be designated by Landlord.

          (g Parking stickers or any other device or form of identification supplied by Landlord shall remain
the property of Landlord. Such parking identification device must be displayed as requested and may
not be mutilated in any manner. The serial number of the parking identification device may not be
obliterated. Devices are not transferable, and any device in the possession of an unauthorized
holder will be void. There will be a nominal non-refundable fee for the issuance of each magnetic
parking card and a minimum replacement charge of $35.00 for loss of any magnetic parking card or
other parking identification device. Tenant acknowledges that Tenant shall not be entitled a
greater number of parking stickers or other devices or forms of identification than parking
privileges allotted to Tenant.

          (h Garage managers or attendants are not authorized to make or allow any exceptions to these Rules
and Regulations.

          (i Every Authorized User is requested to park and lock his own car. All responsibility for damage
or theft to cars is assumed by Authorized Users, and in no event will any claim be made against
Landlord, the garage attendants or managers with respect thereto. Tenant shall repair or cause to
be repaired at its sole cost and expense any and all damage to the Building parking facility or any
part thereof caused by Tenant or its Authorized Users.

          (j Loss or theft of parking identification devices from automobiles must be reported to the garage
manager immediately. Any parking identification devices found on any unauthorized car will be
confiscated and the illegal holder will be subject to prosecution. Lost or stolen devices
previously reported and then found must be reported to the garage manager immediately.

          (k Spaces are for the express purpose of one automobile per space unless a parking attendant
approved by Landlord directs otherwise. Washing, waxing, cleaning or servicing of any vehicle by
the Authorized Users and/or his agents is prohibited.

          (l Landlord reserves the right to refuse the issuance of monthly stickers or other parking
identification devices to any Tenant or Authorized User who willfully refuses to comply with these
Rules and Regulations or any city, state or federal ordinance, law or agreement.

 
					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

 C5

          (m Authorized Users shall not load or unload in areas other than those designated by Landlord for
such activities.

          (n Authorized Users and unauthorized users parked in prohibited areas are subject to towing at
their own expense.

          (o Landlord reserves the right to revoke parking privileges for vehicles creating or causing a
nuisance, as such shall be determined by Landlord in Landlord’s sole discretion.

 
					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

C6

PACIFIC TOWERS ASSOCIATES

OFFICE LEASE

EXHIBIT D

PARKING AGREEMENT

THIS CONTRACT LIMITS OUR LIABILITY — READ IT

The undersigned, as Landlord and Tenant respectively, are executing, simultaneously with this
Parking Agreement, a written Lease covering Premises as described in the Lease and hereby attach
this Parking Agreement to said Lease as Exhibit D thereto.

     Landlord shall make available to Tenant the right to park in the Building (on a non-reserved,
self-parking basis or on such other basis as may be determined by Landlord) throughout the Term of
this Lease up to at least the number of parking spaces specified in the Basic Lease Information.
Tenant must specify in writing to Landlord no later than the commencement of the Term of this Lease
the number of parking spaces desired by Tenant during the Term of this Lease. Tenant shall pay to
Landlord at the beginning of the Lease Term the monthly amount specified in the Basic Lease
Information per parking space, and thereafter the then current fair market rental as defined below.
In the event that Tenant, at any time, is not utilizing its full parking allowance, Landlord shall
have the right to make such unused spaces available to other tenants of the Building and Tenant’s
allowance of parking spaces shall be reduced accordingly. Landlord may individually contract with
Tenant or Tenant’s employees for the parking spaces referred to above. The “fair market rental” for
parking in the Building shall be that rent which is reasonably determined by Landlord to be the
then current fair market rental rate for such spaces giving consideration to the parking charges
for similar space in buildings within the same community boundaries as the Building. All parking by
Tenant and its agents, employees, and invitees, shall be in accordance with the Parking Rules and
Regulations, which are contained in Exhibit C to the Lease, IN NO EVENT WILL LANDLORD OR ITS AGENTS
BE RESPONSIBLE FOR ANY FIRE, THEFT, DAMAGE OR LOSS TO ANY VEHICLE OR ITS CONTENTS.

	 	 	 	 	 	 	 	 	 	 	 	 
	PACIFIC TOWERS ASSOCIATES, a California 

Limited Partnership	 	MOLINA HEALTHCARE, INC., a California 

corporation	 	 	 	 
	 
	By:
	 	SIC — Long Beach, a California Limited	 	By: 	/s/
C.
Joseph
Heinz	 	 	 	 
	 
	 	Partnership, General Partner of Pacific Towers Associates	 	 	Its:  	AVP/CAO	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:
	 	 The Swig Company, a California Corporation, General 	 	By:	/s/ Illegible	 	 	 	 
		 	Partner of SIC - Long Beach
	 		Its:	EVP	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	By: 

	 	/s/
Kennard
P.Perry	 	
 If Tenant is a corporation, this Lease must be executed by
(1) the Chairman,

President, or Vice-President and (2) the Secretary, any
Assistant Secretary,

the Chief Financial Officer or any Assistant Treasurer.
	 	 	 	 
	 
	 	Title:  	 VICE PRESIDENT	 	 	 	 	 
	 
	 	  	 	 	 	 	 	 
	 
	 	  	 	 	 	 	 	 

 
					
	 	 	 	 	 
	Initials /s/ Illegible                                   
	 	 	 	Initials /s/ Illegible                                   
	07/17/02	 	 	 	 

 

 

FIRST AMENDMENT TO OFFICE LEASE

     This First Amendment to Office Lease is entered into as of the 5th day of November 2002,
by and between PACIFIC TOWERS ASSOCIATES, a California Limited Partnership, as “Landlord”, and
MOLINA HEALTHCARE, INC., a California corporation, as “Tenant”.

RECITALS

     WHEREAS, Landlord and Tenant entered into that certain Office Lease (“Lease”) dated July 10, 2002
for premises (“Premises”) commonly known as Suites 200, 600 and 700, Arco Center, 200 Oceangate,
Long Beach, California; and

     WHEREAS, Landlord and Tenant now desire to amend the Lease in connection with certain details
pertaining to the Tenant Improvement Allowance and the improvement obligations of Tenant, and to
confirm the satisfaction of certain obligations under the Lease.

     NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

     1. Additional Tenant Improvement Allowance. Paragraph 10(b) of the Tenant Improvement
Workletter is hereby amended by increasing the Tenant Improvement Allowance (i) by the sum of
$26,000 for each full Floor of the Premises initially leased by Tenant (Floors 2, 6 and 7) and (ii)
with respect to the 8th Floor, when leased by Tenant pursuant to the second paragraph of
Article 1.1 of the Lease, by the sum of $26,000. In the event Tenant is obligated to pay back to
Landlord, as part of a termination fee pursuant to Paragraph 1 of the Lease Addendum or otherwise,
a portion of the Tenant Improvement Allowance, said Tenant Improvement Allowance shall include the
increased amounts as set forth above.

     In return for said increased Tenant Improvement Allowance, Tenant agrees that Tenant shall complete
the following work on the 2nd, 6th and 7th Floors (and on the
8th Floor if that Floor is leased by Tenant pursuant to the second paragraph of Article
1.1 of the Lease) of 200 Oceangate, in accordance with ARCO Center Building Standards and using
current ARCO Center Building Standard materials and finishes, at its sole cost and expense.

Elevator Lobby

Install soffit and recessed lighting, refinish elevator lobby walls, refinish elevator.

doors/jambs and casings.

Reconstruct walls around new elevator lobby doors per ADA requirements.

Install new elevator lobby carpet consistent with other refurbished ADA compliant.

elevator lobbies in the Building.

Replace elevator lobby fire doors and associated hardware (ADA compliant).

Corridors

Replace bathroom doors from corridor and associated hardware (ADA compliant).

Replace storage room door and hardware (ADA compliant).

Paint stairwell doors (the side inside the tenant suite only; not the side in the stairwell).

Replace all VAV boxes (including controls) and thermostats; together with all associated high

and low pressure ducts from the main trunk loop.

Replace electric strip heaters for supplemental heat for northwest perimeter zones.

1

 

     All work shall be completed in conjunction with Tenant’s initial occupancy of the applicable Floor.

     2. Delivery and Acceptance of Possession of Premises. In accordance with the terms and
conditions of the Lease, Tenant confirms that the Lease has been fully executed by both Landlord
and Tenant, that Tenant has received a copy of the fully executed lease, and that possession of
Floors 2, 6 and 7 was delivered to Tenant on August 5, 2002. In addition, Landlord and Tenant
hereby confirm (i) that the Workletter, as referred to in the Lease, has been fully executed, (ii)
that the non-disturbance agreement, as referred to in the Lease, has been fully executed, (iii)
that no default exists on the part of Landlord or Tenant under the Lease, and (iv) that the Lease
is in full force and effect and that the Termination Right, as set forth in Paragraph 7 of the
Lease Addendum, has expired and is no longer applicable.

     Except as set forth in this First Amendment to Lease, the Lease shall remain unamended and in full
force and effect.

PACIFIC TOWERS ASSOCIATES, a California Limited Partnership

	 	 	 	 	 
	 	 	 
	By:  	SIC — Long Beach, a California Limited Partnership,	 	 
	 	General Partner of Pacific Towers Associates 	 	 
	 	 	 
	By:  	The Swig Company, a California Corporation,
 	 	 
	 	General Partner of SIC —  Long Beach 	 	 
	 	 	 
	By:  	/s/ Kennard P. Perry
 	 	 
	 	Title: VICE PRESIDENT 	 	 
	 	 	 	 
	MOLINA HEALTHCARE, INC., a California corporation

 	 	 
	By:  	/s/ Illegible
 	 	 
	 	Its: Executive Vice President 	 	 
	 	 	 
	By:  	/s/
C. Joseph Heinz
 	 	 
	 	Its:      Associate V.P./ CAO 	 	 
	 	 	 	 

2

 

	 	 	 	 	 

RECORDING REQUESTED BY

AND WHEN RECORDED RETURN TO:

Gibson, Dunn & Crutcher

333 South Grand Avenue

Los Angeles, CA 90071

Attention: Jesse Sharf

SUBORDINATION, NON-DISTURBANCE AND

ATTORNMENT AGREEMENT

	NOTICE:	 	 THE SUBORDINATION PROVIDED FOR IN THIS AGREEMENT RESULTS IN YOUR LEASEHOLD ESTATE IN THE
PROPERTY BECOMING SUBJECT TO AND OF LOWER PRIORITY THAN THE SECURITY INTEREST IN THE PROPERTY
CREATED BY SOME OTHER OR LATER INSTRUMENT.

     WHEREAS, RED RIVER LIMITED PARTNERSHIP, a Delaware limited partnership, successor in interest to
Teacher Retirement System of Texas, a public pension fund created under the laws of the state of
Texas (“Lienholder”), is the holder and owner of that certain Second Amended and Restated
Promissory Note executed by Pacific Towers Associates, a California limited partnership
(“Landlord”), effective January 1, 2001 (“Note”), which is secured by a Deed of
Trust and Fixture Filing of even date therewith, filed for record in the official records of Los
Angeles County, California, as thereafter amended from time to time (“Deed of Trust”),
which covers, among other property, certain property and improvements in Los Angeles County,
California, more particularly described in Exhibit A attached hereto and in the Deed of
Trust (“Building Site”); and

     WHEREAS, Landlord’s predecessor in interest entered into a Lease Agreement dated as of July 15,
2002 (said lease, as amended with the prior written approval of Lienholder, being herein referred
to as “Lease”) with Molina Healthcare Inc., a California corporation (“Tenant”) covering a
portion of the improvements on the Building Site (“Leased Premises”); and

     WHEREAS, Lienholder and Tenant desire that the Lease remain in effect notwithstanding any
foreclosure or other proceedings for enforcement of the Deed of Trust or foreclosure of any other
lien securing the Note and held by Lienholder on all or any portion of the Building Site;

     WHEREAS, Lienholder requires that the Deed of Trust be and unconditionally remain a lien on the
Building Site, prior and superior to all rights of Tenant under the lease;

     NOW, THEREFORE, in consideration of the premises and good and valuable considerations each to the
other paid, the parties hereto agree as follows:

WITNESSETH

     Section 1. Lienholder agrees, for the benefit of Landlord, Tenant and Lienholder, that
notwithstanding any foreclosure by Lienholder under the Deed of Trust or foreclosure by Lienholder
under any other lien, assignment of leases, assignment of rents or other instrument securing the
Note now owned and held by Lienholder covering all or any Portion of the Building Site, and
notwithstanding any exercise by Lienholder of any prior rights of Lienholder with respect to the
Building Site. Tenants right of possession of the Leased Premises shall not be disturbed or
affected by Lienholder so long as no default by Tenant exists under the terms of the Lease (after
notice and an opportunity to cure, if any, as provided in the Lease) as would enable Landlord to
terminate the Lease or would cause termination of the Lease or would entitle Landlord to dispossess
Tenant under the Lease. Except as herein expressly provided to the contrary and subject to the
further terms and provisions hereof, in the event of foreclosure under the Deed of Trust or any
other lien or instrument in favor of

 

 

Lienholder or exercise of any other prior rights of Lienholder with respect to the Building Site,
or in the event of a deed in lieu of foreclosure under the Deed of Trust, Lienholder or the
purchaser at such foreclosure sale, shall be deemed to have assumed and agreed to perform the
duties of Landlord under the Lease during such period, if any, as Lienholder or such purchaser is
collecting or entitled to collect rent from Tenant thereunder, except that the person acquiring the
interests of Lienholder and Landlord, or of either of them, as a result of any such action or
proceeding, shall not be (a) liable for, nor subject to, any offsets or defenses or defaults
arising prior to the date of Leinholder’s acquisition of title except to the extent: (i)
such offsets, defenses or defaults continue after the date of Lienholder’s acquisition of title but
only to the extent of liabilities arising after the date of Lienholder’s acquisition of title (by
example, failure to continue to provide janitorial or other building services after the date of
Lienholder’s acquisition of title), or (ii) such offsets, defenses or defaults arise out
of acts or omissions by Lienholder occurring from and after the date of Lienholder’s
acquisition of title; (b) bound by any rent or additional rent which Tenant might have paid for
more than one month in advance of the due dates under the terms of the Lease; (c) liable for any
security deposit which Tenant might have paid pursuant to the Lease unless such security deposit
has been paid over to Lienholder or such purchaser and if not paid over to the Lienholder or such
purchaser, Tenant shall have rent abated at the end of Term to receive a credit for said Security
Deposit; or (d) bound by any amendment or modification of the Lease made without Lienholder’s prior
written consent.

     Section 2.

          (a) Landlord and Tenant declare and acknowledge that each hereby intentionally waives, relinquishes
and subordinates the priority and superiority of the Lease, the leasehold interests and estates
created thereby, and the rights, privileges and powers of the Landlord and Tenant thereunder, in
favor of the Deed of Trust, and that each understands that in reliance upon, and in consideration
of, this waiver, relinquishment and subordination, Lienholder is making the loan referred to
hereinabove, which would not be made but in said reliance upon this waiver, relinquishment and
subordination.

          (b) It is expressly understood and agreed that this Agreement shall supersede, to the extent
inconsistent herewith, the provisions of the Lease relating to the subordination of the Lease and
the leasehold interests and estates created thereby to the lien or charge of the Deed of Trust.

          (c) Tenant further agrees with Lienholder that a foreclosure, acceptance of a deed in lieu of
foreclosure or other action or proceeding under the Deed of Trust, or under any other deed of trust
affecting the Building Site which is subordinate to the Deed of Trust, shall not terminate the
Lease and Tenant shall not be relieved of the Tenant’s obligations thereunder, unless Lienholder or
any purchaser at foreclosure under the Deed of Trust, or any other proceedings for enforcement of
the Deed of Trust, elects to terminate the Lease pursuant to any right to do so under Section 1
above. So long as the Lease remains in effect as above provided, Tenant shall be bound to perform
all of its obligations under the Lease for the term thereof, and Lienholder in possession or any
purchaser or purchasers at any sale under the Deed of Trust shall have all rights of Landlord under
the Lease (including without limitation, any extensions or renewals thereof that may be effected in
accordance with any option therefor in the Lease) and Tenant shall be deemed to have attorned to
Lienholder or such purchaser or purchasers (including without limitation, Lien—holder if it be the
purchaser) as such landlord, and for the duration of possession by such purchaser or by Lienholder,
then, subject to the limitations on liability set forth in the Lease, Tenant shall have the same
rights against such Lienholder in possession or purchaser or purchasers as it has against Landlord
under the Lease, except as otherwise provided in Section 1 above. The attornment of Tenant provided
for in the immediately preceding sentence hereof is to be effective and self-operative without the
execution of any further instruments by Lienholder or a purchaser or purchasers succeeding to the
interest of Landlord under the Lease, but Tenant agrees to execute and acknowledge such documents
as Lienholder or a purchaser or purchasers succeeding to the interest of Landlord under the Lease
or of Lienholder under the Lease may reasonably request to evidence Tenant’s attornment hereunder.

          (d) Tenant will make no payments or prepayments of rent more than one (1) month in advance of the
time when the same becomes due under the lease.

     Section 3. Notwithstanding any provisions of the Lease to the contrary, after any
foreclosure (or any deed in lieu of foreclosure) of any first lien mortgage or deed of
trust, the purchaser in foreclosure (or

 

 

otherwise) shall have no personal liability for the obligations of the landlord, and the tenant
shall have the right to enforce any monetary judgment against the successor to the landlords
interest under the Lease only against such successor’s interest in the real property and
improvements.

     Section 4. The provisions hereof shall inure to the benefit of and be binding upon the
undersigned parties and their respective successors and assigns.

     Section 5. This agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute one and the same
instrument.

     EXECUTED in multiple counterparts, each of which shall have the force and effect of an original, as
of the ___day of ___, 2002.

	 	 	 	 	 
	 	“Lienholder”

RED RIVER LIMITED PARTNERSHIP, a

Delaware limited partnership

 	 
	 	By:  	/s/ Illegible
 	 
	 	 	Name:  	Illegible 	 
	 	 	Title:  	Illegible 	 
	 

	 	 	 	 	 
	 	“Tenant”

MOLINA HEALTHCARE INC., a California corporation

 	 
	 	By:  	/s/ Joseph M. Molina MD
 	 
	 	 	Name:  	JOSEPH M. MOLINA MD 	 
	 	 	Title:  	CHAIRMAN 	 
	 
	 	 	 
	 	By:  	/s/
C. Joseph Heinz
 	 
	 	 	Name:  	C. Joseph Heinz  	 
	 	 	Title:  	ASSOCIATIVE V.P./CAO 	 
	 

	 	 	 	 	 
	 	“Landlord”

PACIFIC TOWERS ASSOCIATES, a

California limited partnership

 	 
	 	By:  	SIC—Long Beach, a California limited
 	 
	 	 	partnership, which is a general partner of 	 
	 	 	Pacific Towers Associates 	 
	 
	 	 	 
	 	By:  	The Swig Company, a California
 	 
	 	 	corporation, which is the sole 	 
	 	 	general partner of
SIC —  Long Beach 	 
	 
	 	 	 
	 	By:  	/s/ Jeanne Myerson	 
	 	 	Jeanne Myerson

President 	 

 

 

	 	 	 	 	 

EXHIBIT A TO

SUBORDINATION, NON-DISTURBANCE AND

ATTORNMENT AGREEMENT

Description of the Land

     Parcels 2 and 3, located in the City of Long Beach, County of Los Angeles, State of California, as
shown on Parcel Map No. 5196, filed in Book 71, Page 14 of Parcel Maps, in the Office of the County
Recorder of said County.

     EXCEPT therefrom, all oil, gas, hydrocarbon substances and minerals of every kind and character
lying more than 500 feet below the surface of said land, together with the right to drill into,
through and to use and occupy all parts of said land lying more than 500 feet below the surface
thereof for any and all purposes incidental to the exploration for and production of oil, gas,
hydrocarbon substances or minerals from said or other land or any portion of said land within 500
feet of the surface for any purpose or purposes whatsoever as, reserved by various Deeds of Record,
among them, being the Deed recorded July 19, 1965, in Book D—2981, at Page 153, as Instrument No.
885, Official Records.

 

 

	 	 	 	 	 	 	 
	State of California

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss.
	County of Los Angeles

	 	 	)	 	 	 

On August 19, 2002 before me,                     Lydia Leyn                                        

          Date                                             Name and Title “Notary Public”

personally appeared  C. Joseph Heinz           þ personally known to me o proved to

                                      Name(s) of Signer(s)

me on the basis of satisfactory evidence to be the person(s) whose names(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
persons(s), or the entity upon behalf of which the person(s), acted, executed the instrument.

WITNESS my hand and official seal.

					
	/s/ Lydia Leyn

 

Signature of Notary Public
	 	 
	 	(Seal of Notary) 

	 	 	 	 	 
	State of California

	 	)	 	 	 
	 

	 	)	 	ss.	 
	County of Los Angeles

	 	)	 	 	 

On August 19, 2002 before me,                     Lydia Leyn                                        

          Date                                             Name and Title “Notary Public”

personally
appeared   Joseph M.Molina,MD          þ personally known to me o proved to

                                      Name(s) of Signer(s)

me on the basis of satisfactory evidence to be the person(s) whose names(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 persons(s),
or the entity upon behalf of which the person(s), acted, executed the instrument.

WITNESS my hand and official seal.

					
	/s/ Lydia Leyn

 

Signature of Notary Public
	 	 
	 	(Seal of Notary)

 

 

 

 

State of Maryland

County of Carroll

     On this 22nd day of August, 2002, before me, the undersigned officer, personally
appeared Rinse A. Brink, known to me (or satisfactorily proven) to be the person(s) whose name(s)
is/are subscribed to within the instrument and acknowledged that he/she/they executed the same for
the purpose therein contained.

					
	 	 	 	As Witness,my hand and notarial seal. 	 
	 	 	 	 	 
	 	 	 	/s/ Debra Jarrell-Crabbs 	 
	 	 	 	 Debra Jarrell-Crabbs 	 
	 	 	 	 	 
	[Notary Seal] 	 	 	Notary Public 	 
	 	 	 	My commission expires 10/27/04 	 

 

 

ARCO CENTER

NOTICE OF DELIVERY OF POSSESSION

Molina Healthcare, Inc.

Attn: Mr. C. Joseph Heinz

One Golden Shore Drive

Long Beach, CA 90802

                         Re:    Lease between Pacific Towers Associates and Molina

                                   Healthcare, Inc., dated July 10, 2002, Arco Center, Long 

                                   Beach, CA

Dear Mr. Heinz:

In accordance with the terms and conditions of the above references lease (“Lease”), this letter
will confirm that the Lease has now been fully executed by both the Landlord and the Tenant, that
you have received a copy of the fully executed lease, and that possession of Floors 2, 6 and 7 has
been delivered to Molina Healthcare, Inc. as of this date, August 5, 2002.

Please confirm the foregoing and return a copy of this letter to the undersigned.

Cory J. Kristoff, CPM®, RPA

General Manager

Pacific Towers Associates

The Swig Company

200 Oceangate, Suite 310

Long Beach, CA 90802

Tenant hereby confirms the foregoing and acknowledges that possession of Floors 2, 6 and 7 has been
delivered to Tenant as of the date set forth above.

	 	 	 	 	 
	MOLINA HEALTHCARE, INC.

 	 	 
	By:  	 	 	 

cc: eRealty Commercial

     Attn: Damian McKinney

     12780 High Bluff Drive, Suite 100

     San Diego, Ca 92130

 

 

SECOND AMENDMENT TO OFFICE LEASE

     This Second Amendment to Office Lease is entered into as of the 5th day of December
2002, by and between PACIFIC TOWERS ASSOCIATES, a California Limited Partnership, as “Landlord”,
and MOLINA HEALTHCARE, INC., a California corporation, as “Tenant”.

RECITALS

     WHEREAS, Landlord and Tenant entered into that certain Office Lease (“Lease”) dated July 10, 2002,
as amended by that certain First Amendment to Office Lease dated November 5, 2002, for premises
(“Premises”) commonly known as Suites 200, 600 and 700, Area Center, 200 Oceangate, Long Beach,
California; and

     WHEREAS,
Landlord and Tenant now desire to amend the Lease in connection with (i) Tenant’s
Expansion onto the 3rd and 4th Floors, and (ii) Tenant’s “must take” space.

     NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

1. Expansion of Premises to Include Entire 3rd and 4th Floors.
Subject to the terms and conditions contained herein, the Premises are hereby expanded to include
the entire 3rd and 4th Floors of 200 Oceangate, comprising a total expansion
of 33,150 rentable square feet (the “Expansion Premises”). The Expansion Premises are leased to
Tenant for a term (“Expansion Premises Lease Term”) commencing 120 days after the date Landlord
delivers possession thereof to Tenant, or upon Tenant commencing business operations therein,
whichever occurs first, and expiring on December 4, 2012.

2. Monthly Base Rental for Expansion Premises. Beginning on the first day of the Expansion
Premises Lease Term and continuing throughout the Expansion Premises Lease Term, the Monthly Base
Rental for the Expansion Premises shall be the same per rentable square foot Monthly Base Rental
(with the same increases) as is then applicable to the Premises originally leased by Tenant under
the Lease.

3. Tenant Improvement Allowance. In connection with Tenant’s leasing of the Expansion
Premises, Landlord shall provide the same $20.00 per usable square foot Tenant Improvement
Allowance that Landlord is providing in connection with the initial Premises leased under the
Lease. Said Tenant Improvement Allowance for the Expansion Premises shall be delivered to Tenant on
the same terms and conditions as provided for the original Premises, as set forth in the
Workletter, but any reference therein to the Commencement Date shall mean the commencement date of
the Lease term for the Expansion Premises.

4. Additional Tenant Improvement Allowance. In addition to the Tenant Improvement Allowance
set forth above, Landlord shall provide, with respect to the 3rd and 4th
Floors, the same $26,000 per floor additional Tenant Improvement Allowance that was provided to
Tenant pursuant to the First Amendment to Office Lease. Said additional Tenant Improvement
Allowance shall be delivered to Tenant on the same terms and conditions, and with Tenant having the
same improvement obligations on the applicable Floor, as set forth in said First Amendment to
Office Lease, but said $26,000 per Floor amount shall be reduced by $6,000 with respect to the
3rd floor to reflect the fact that on the 3rd Floor the elevator lobby fire
doors, related walls and associated hardware are already in place and are ADA code compliant.

5. Additional Terms and Condition. Except as set forth in this Second Amendment to Office
Lease, the 3rd and 4th Floors shall be leased to Tenant on the same terms and
conditions as the original Premises; provided however, (i) parking provided in connection with the
leasing of the 3rd and 4th Floors shall be in the ratio of 4.5/1,000 rentable
square feet for the 3rd Floor and 4.0/1,000 rentable square feet

1

 

for the 4th Floor, and (ii) on the 3rd and 4th Floors, as well as
on the “Must Take” Floor (as defined below) the total connected electrical load shall not exceed 6
watts per usable square foot, determined on a Floor by Floor basis. Landlord shall supply
electrical current as is needed to meet said connected electrical load of up to 6 watts per usable
square foot of 3rd and 4th Floor Premises, as well as on the “Must Take”
Floor, in accordance with the terms and conditions of the Lease.

6. Amendments Pertaining to 8th Floor “Must Take” Floor.

     Landlord and Tenant agree that the “must take” Floor that Tenant is currently obligated to take
pursuant to Article 1.1 of the Lease shall be modified so that Landlord can deliver either the
5th Floor or the 8th Floor, and that the delivery date therefor shall be
sometime in the calendar year 2005. Landlord shall give Tenant at least 120 days prior written
notice of the approximate intended delivery date and shall provide Tenant with updates as to the
exact delivery date, as such information becomes available to Landlord.

     Accordingly, the second paragraph of Article 1.1 of the Lease is hereby deleted in its entirety and
is replaced with the following:

     “Commencing on the earlier of (i) four months following the date that Landlord delivers possession
thereof to Tenant, or (ii) the date that Tenant commences business operations therein, the Premises
shall be further expanded to include the entire 5th Floor or 8th Floor(at
Landlord’s election) of 200 Oceangate, containing, in either case, 16,575 rentable square feet. The
target date for Landlord’s delivery of possession is sometime in the calendar year 2005, (with
Landlord giving Tenant at least 120 days prior written notice of the approximate intended delivery
date) but Landlord may be delayed in delivering the Floor by said date as a result of the occupancy
by the current tenants and subtenants, but in no event shall the delay extend beyond December 31,
2006. To the extent Landlord is so delayed beyond December 31, 2005 in delivering the entire
5th or 8th Floor Premises. Tenant may elect, by written notice to Landlord
prior to March 31, 2007 or such earlier date as possession of said 5th or 8th
Floor Premises are delivered, not to expand into said 5th or 8th Floor
Premises.”

     In connection with the foregoing, the reference to the 8th Floor in the Basic Lease
Information, the references to the 8th Floor in Paragraph 10 of the Tenant Improvement
Workletter, and the references to the 8th Floor in the First Amendment to Office Lease
are hereby amended by replacing the words “8th Floor” with the words “5th
Floor or 8th Floor, depending on which Floor Tenant expands into pursuant to the second
paragraph of Article 1.1 of the Lease, as amended by the Second Amendment to Office Lease”.

     7. Amendments in Parking Provisions. As a result of the amendments made to the Lease
pursuant to this Second Amendment to Office Lease, Paragraph 4 of the Lease Addendum is hereby
deleted in its entirety and is replaced with the following.

     “4. PARKING. Tenant shall be provided with a parking ratio of four and one-half (4.5) parking
passes per 1,000 square feet of rentable square footage of the 2nd, 3rd,
6th and 7th Floor Premises and in the ratio of four (4) parking passes per
1,000 rentable square feet with respect to the 4th Floor Premises. Said parking passes
shall include single unreserved and tandem parking, with the allocation as follows: 40% tandem and
60% single unreserved. Landlord shall provide Tenant with additional parking on a month-to-month
basis, as needed and as available, and at prevailing ARCO Center rates.

     From December 5, 2002 through December 4, 2007, the monthly parking costs for parking allocated in
connection with the 2nd, 3rd, 6th, and 7th Floor
Premises then leased by Tenant shall be in accordance with the following schedule: $70.00 per
single unreserved parking pass per month and $45.00 per tandem parking pass per

2

 

month. Thereafter, the rates shall be the then prevailing ARCO Center rates in accordance with
Exhibit D of the Lease.

     The monthly parking costs for parking allocated in connection with the 4th Floor
Premises shall be the then prevailing ARCO Center rates in accordance with Exhibit D of the Lease.

     Parking ratios and rates for all parking allocated in connection with any expansion beyond the
2nd, 3rd, 4th, 6th, and 7th Floor Premises
leased hereunder shall be in the ratio and at rates as are negotiated between Landlord and Tenant;
provided, however, in no event shall the parking ratio be less than 3.0 passes per 1,000 rentable
square feet of expansion space. Landlord shall use its reasonable efforts to provide 3.5 passes per
1,000 rentable square feet of expansion space if and to the extent Landlord and the Building is not
adversely affected thereby and Landlord does not incur any additional cost, loss of revenue or loss
of parking for anticipated Building needs, including but not limited to the needs of existing or
future tenants, or visitors, as a result thereof. Under no circumstances shall Tenant have any
right to dispute any determination of Landlord in connection with the quantity of parking passes
provided.

     Notwithstanding anything to the contrary, Landlord reserves the right to fulfill all or a portion
of Tenant’s parking allocation with staffed valet parking.

     Except as set forth in this Second Amendment to Lease, the Lease as previously amended shall remain
unamended and in full force and effect.

     PACIFIC TOWERS ASSOCIATES, a California Limited Partnership

	 	 	 	 	 
	By:  	SIC — Long
Beach, a California Limited Partnership,

General Partner of Pacific Towers Associates
 	 	 
	By:  	The Swig Company,
a California Corporation,

General Partner of SIC — Long Beach
 	 	 

	 	 	 	 	 
	By:  	/s/
Kennard P. Perry
 	 	 
	 	Title:      VICE PRESIDENT 	 	 

MOLINA HEALTHCARE, INC., a California corporation

	 	 	 	 	 
	By:  	      /s/ Illegible
 	 	 
	 	Its:      Executive V.P. 	 	 
	 	 	 
	By:  	/s/
C. Joseph Heinz
 	 	 
	 	Its:      Associate V.P./CAO 	 	 
	 	 	 	 

3

 

	 	 	 	 	 
	 

	 	The
Swig Company
	 	Ph
(415) 291.1100
	 

	 	220
Montgomery Street	 	Fx
(415) 291.8373
	November 16, 2004

	 	San
Francisco	 	 
	 

	 	California
94104	 	 

Mr. C. Joseph Heinz

Associate Vice President / Chief Administrative Officer

Molina Healthcare, Inc.

One Golden Shore

Long Beach, CA 90802

          Re:    ARCO Center, 200 Oceangate               Via Personal Delivery

                    Must Take Space, 5th Floor

Dear Joe,

Pursuant to the Lease Agreement dated July 10, 2002, paragraph 1.1 and the Second Amendment to
Lease dated December 5, 2002, paragraph 6, pertaining to the “Must Take Floor”, the Landlord will
deliver to Molina Healthcare the entire 5th floor in the 200 Oceangate tower consisting
of 16,575 rentable square feet. The approximate intended delivery date is April 1, 2005 with rent
commencing on the earlier of (i) four months following the date that Landlord delivers possession,
or (ii) the date that Tenant commences business operations therein.

	 	 	 	 	 
	Sincerely,

 	 	 
	/s/ Cory J. Kristoff
 	 	 
	Cory J. Kristoff, CPM®, RPA 	 	 

200 Oceangate, LLC,

a Delaware limited liability company

	 	 	 	 	 
	By:  	      Pacific
Towers Associates, A California Lin
 	 	 
	 	Its:      Sole Member 	 	 
	 	 	 
	By:  	      SIC —
Long Beach, A California Lin
 	 	 
	 	Its:      General Partner
 	 	 
	 	 	 
	By:  	      The Swig
Company,
a California corporation
 	 	 
	 	Its: General Partner 	 	 

	 	 	 	 	 
	By:  	/s/ Kennard P. Perry
 	 	 
	 	Name:  	Kennard P. Perry 	 	 
	 	Its:       Chief Investment Officer / Head of Asset Management 	 	 

cc: Damian McKinney / e Realty

 

 

	 	 	 	 	 
	 

	 	The
Swig Company	 	Ph
(415) 291.1100
	 

	 	220
Montgomery Street
	 	Fx
(415) 291.8373
	

	 	San
Francisco	 	 
	November 16, 2004

	 	California
94104	 	 

Mr. C. Joseph Heinz

Associate Vice President / Chief Administrative Officer

Molina Healthcare, Inc.

One Golden Shore

Long Beach, CA 90802

          Re:    ARCO Center, 200 Oceangate               Via Personal Delivery

                    Must Take Space, 5th Floor

Dear Joe,

Pursuant to the Lease Agreement dated July 10, 2002, paragraph 1.1 and the Second Amendment to
Lease dated December 5, 2002, paragraph 6, pertaining to the “Must Take Floor”, the Landlord will
deliver to Molina Healthcare the entire 5th floor in the 200 Oceangate tower consisting
of 16,575 rentable square feet. The approximate intended delivery date is April 1, 2005 with rent
commencing on the earlier of (i) four months following the date that Landlord delivers possession,
or (ii) the date that Tenant commences business operations therein.

	 	 	 	 	 
	Sincerely,

 	 	 
	/s/ Cory J. Kristoff
 	 	 
	Cory J. Kristoff, CPM®, RPA 	 	 

200 Oceangate, LLC,

a Delaware limited liability company

	 	 	 	 	 
	By:  	      Pacific
Towers Associates, A California Limited Partnership
 	 	 
	 	Its:      Sole Member 	 	 
	 	 	 	 
	By:  	      SIC —
Long Beach, A California Limited Partnership
 	 	 
	 	Its:      General Partner
 	 	 
	 	 	 	 
	By:  	The Swig
Company,

a California corporation
 	 	 
	 	Its:      General Partner
 	 	 

	 	 	 	 	 
	By:  	/s/ Kennard P. Perry
 	 	 
	 	Name:  	Kennard P. Perry 	 	 
	 	Its:       Chief Investment Officer / Head of Asset Management 	 	 

cc: Damian McKinney / e Realty

 

 

SECOND AMENDMENT TO OFFICE LEASE

     This Second Amendment to Office Lease is entered into as of the 5th day of December
2002, by and between PACIFIC TOWERS ASSOCIATES, a California Limited Partnership, as “Landlord”,
and MOLINA HEALTHCARE, INC., a California corporation, as “Tenant”.

RECITALS

     WHEREAS, Landlord and Tenant entered into that certain Office Lease (“Lease”) dated July 10, 2002,
as amended by that certain First Amendment to Office Lease dated November 5, 2002, for premises
(“Premises”) commonly known as (Illegible) 200, 600 and 700, Arco Center, 200 Oceangate, Long
Beach, California; and

     WHEREAS, Landlord and Tenant now desire to amend the Lease in connection with (i) Tenant’s
expansion onto the 3rd and 4th Floors, and (ii) Tenant’s “must take” space.

     NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

1. Expansion of Premises to Include Entire 3rd and 4th Floors.
Subject to the terms and conditions contained herein, the Premises are hereby expanded to include
the entire 3rd and 4th Floors of 200 Oceangate, comprising a total expansion
of 33,150 rentable square feet (the “Expansion Premises”). The Expansion Premises are leased to
Tenant for a term (“Expansion Premises Lease Term”) commencing 120 days after the date Landlord
delivers possession thereof to Tenant, or upon Tenant commencing business operations therein,
whichever occurs first, and expiring on December 4, 2012.

2. Monthly Base Rental for Expansion Premises. Beginning on the first day of the Expansion
Premises Lease Term and continuing throughout the Expansion Premises Lease Term, the Monthly Base
Rental for the Expansion Premises shall be the same per rentable square foot Monthly Base Rental
(with the same increases) as is then applicable to the Premises originally leased by Tenant under
the Lease.

3. Tenant Improvement Allowance. In connection with Tenant’s leasing of the Expansion
Premises, Landlord shall provide the same $20.00 per usable square foot Tenant Improvement
Allowance that Landlord is providing in connection with the initial Premises leased under the
Lease. Said Tenant Improvement Allowance for the Expansion Premises shall be delivered to Tenant on
the same terms and conditions as provided for the original Premises, as set forth in the
Workletter, but any reference therein to the Commencement Date shall mean the commencement date of
the Lease term for the Expansion Premises.

4. Additional Tenant Improvement Allowance. In addition to the Tenant Improvement Allowance
set forth above, Landlord shall provide, with respect to the 3rd and 4th
Floors, the same $26,000 per floor additional Tenant Improvement Allowance that was provided to
Tenant pursuant to the First Amendment to Office Lease. Said additional Tenant Improvement
Allowance shall be delivered to Tenant on the same terms and conditions, and with Tenant having the
same improvement obligations on the applicable Floor, as set forth in said First Amendment to
Office Lease, but said $26,000 per Floor amount shall be reduced by $6,000 with respect to the
3rd floor to reflect the fact that on the 3rd Floor the elevator lobby fire
doors, related walls and associated hardware are already in place and are ADA code compliant.

5. Additional Terms and Conditions. Except as set forth in this Second Amendment to Office
Lease, the 3rd and 4th Floors shall be leased to Tenant on the same terms and
conditions as the original Premises; provided however, (i) parking provided in connection with the
leasing of the 3rd and 4th Floors shall be in the ratio of 4.5/1,000 rentable
square feet for the 3rd Floor and 4.0/1,000 rentable square feet

1

 

for the 4th Floor, and (ii) on the 3rd and 4th Floors, as well as
on the “Must Take” Floor (as defined below) the total connected electrical load shall not exceed 6
watts per usable square foot, determined on a Floor by Floor basis. Landlord shall supply
electrical current as is needed to meet said connected electrical load of up to 6 watts per usable
square foot of 3rd and 4th Floor Premises, as well as on the “Must Take”
Floor, in accordance with the terms and conditions of the Lease.

6.
Amendments (Illegible) To 8th Floor “Must Take” Floor.

     Landlord and Tenant agree that the “must take” Floor that Tenant is currently obligated to take
pursuant to Article 1.1 of the Lease shall be modified so that Landlord can deliver either the
5th Floor or the 8th Floor, and that the delivery date therefore shall be
sometime in the calendar year 2005. Landlord shall give Tenant at least 120 days prior written
notice of the approximate intended delivery date and shall provide Tenant with updates as to the
exact delivery date, as such information becomes available to Landlord.

     Accordingly, the second paragraph of Article 1.1. of the Lease is hereby (Illegible) and is
replaced with the following:

     “Commencing on the earlier of (i) four months following the date that Landlord delivers possession
thereof in Tenant, or (ii) the date that Tenant commences business operations therein, the Premises
shall be further expanded to include the entire 5th Floor or 8th Floor (at
Landlord’s election) of 200 Oceangate, containing, in either case, 16,575 rentable square feet. The
target date for Landlord’s delivery of possession is sometime in the calendar year 2005, (with
Landlord giving Tenant at least 120 days prior written notice of the approximate(Illegible)
delivery date) but Landlord may be delayed in delivering the Floor by said date as a result of the
occupancy by the current Tenants and subtenants, but in no event shall the delay extend beyond
December 31, 2006. To the(Illegible) Landlord is so delayed beyond December 31, 2005 in delivering
the entire 5th or 8th Floor Premises. Tenant may elect, by written notice to
Landlord prior to March 31, 2007 or such earlier date as possession of said 5th or
8th Floor Premises are delivered, not to expand into said 5th or
8th Floor Premises.”

     In connection with the foregoing, the reference to the 8th Floor in the Basic Lease
Information, the references to the 8th Floor in Paragraph 10 of the Tenant Improvement
Workletter, and the references to the 8th Floor in the First Amendment to Office Lease
are hereby amended by replacing the words “8th Floor” with the words “5th
Floor or 8th Floor, depending on which Floor Tenant expands into pursuant to the second
paragraph of Article 1.1 of the Lease, as amended by the Second Amendment to Office Lease”.

7. Amendments to Parking Provisions. As a result of the amendments made to the Lease
pursuant tot this Second Amendment to Office Lease, Paragraph 4 of the Lease Addendum is hereby
deleted in its entirely and is replaced with the following.

     4. PARKING. Tenant shall be provided with a parking ratio of four and one half (4.5) parking
passes per 1,000 square feet of rentable square footage of the 2nd, 3rd,
6th and 7th Floor Premises, and in the ratio of four (4) parking passes per
1,000 rentable square feet with respect to the 4th Floor Premises. Said parking passes
shall include single unreserved and (Illegible) parking, with the allocation as follows: 40%
(Illegible) and 60% single unreserved. Landlord shall provide Tenant with additional parking on a
month-to-month basis, as needed and as available and at prevailing ARCO Center rates.

     From December 5, 2002 through December 4, 2007, the monthly parking costs for parking allocated in
connection with the 2nd, 3rd, 6th, and 7th Floor
Premises then leased by Tenant shall be in accordance with the following schedule: $70.00 per
single unreserved parking pass per month and $45.00 per (Illegible) parking pass per

2

 

month. Therefore, the rates shall be the then prevailing ARCO Center rates in accordance with
Exhibit D of the Lease.

     The monthly parking costs for parking allocated in connection with the 4th Floor
Premises shall be the then prevailing ARCO Center rates in accordance with Exhibit D of the Lease.

     Parking
ratios and rates for all parking allocated in connection with any expansion beyond the
2nd,3rd,4th, 6th and 7th Floor Premises
leased hereunder shall be in the ratio and at rates as are negotiated between Landlord and Tenant:
provided, however, in no event shall the parking ratio be less than 3.0 passes per 1,000 rentable
square feet of expansion space. Landlord shall use its reasonable efforts to provide 3.5 passes per
1,000 rentable square feet of expansion space if and to the extent Landlord and the Building is not
adversely affected thereby and Landlord does not incur any additional cost, loss of revenue or loss
of parking for anticipated Building needs, including but not limited to the needs of existing or
future tenants, or visitors, as a result thereof. Under no circumstances shall Tenant have any
right to dispute any determination of Landlord in connection with the
quantity of parking passes
provided.

     Notwithstanding anything to the (Illegible), Landlord reserves the right to fulfill all or a
portion of Tenant’s parking allocation with staffed valet parking”.

     Except as set forth in this Second Amendment to Lease, the Lease as previously amended shall remain
unamended and in full force and effect.

	 	 	 	 	 
	PACIFIC TOWERS ASSOCIATES, a California Limited Partnership

 	 	 
	By:  	SIC
— Long Beach, a California Limited Partnership,
 General Partner of Pacific Towers Associates 	 	 
	 	 	 
	By:  	The
Swig Company, a California Corporation,
General Partner of SIC
— Long Beach 	 	 
	 	 	 
	By:  	/s/ Kennard P. Perry
 	 	 
	 	Title:  VICE PRESIDENT 	 	 
	 	 	 	 
	MOLINA HEALTHCARE, INC., a California corporation

 	 	 
	By:  	/s/ Illegible
 	 	 
	 	Its:      Executive V.P. 	 	 
	 	 	 	 
	By:  	/s/ C. Joseph Heinz
 	 	 
	 	Its:      Associate V.P./CAO 	 	 
	 

3

 

THIRD AMENDMENT TO OFFICE LEASE

MOLINA HEALTHCARE, INC.

     This Third Amendment to Office Lease (“Amendment”) is entered into as of the 5th day of April 2006,
by and between 200 OCEANGATE, LLC, a Delaware limited liability company, successor to Pacific
Towers Associates, a California limited partnership, as “Landlord” and MOLINA HEALTHCARE, INC., a
California corporation, as “Tenant”.

RECITALS

     WHEREAS, Landlord and Tenant are parties to that certain Office Lease dated July 10, 2002, as
amended by that certain First Amendment to Office Lease dated November 5, 2002, and by that certain
Second Amendment to Office Lease dated December 5, 2002 (collectively, the “Lease”), for premises
(“Premises”) commonly known as Suites 200, 300, 400, 500, 600 and 700, Arco Center, 200 Oceangate,
Long Beach, California, containing approximately 99,181 rentable square feet (the “Current
Premises”); and

     WHEREAS, Landlord and Tenant now desire to amend the Lease in connection with (i) Tenant’s
expansion onto the 11th, 14th and Ground Floors of 200 Oceangate and (ii) the extension of the
Lease Term to December 31, 2018; and

     WHEREAS, for the purpose of this Third Amendment to Office Lease, capitalized terms, to the extent
they are not defined herein, shall have the same meaning as set forth in the Lease.

     NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

AGREEMENT

1. Expansion of Premises to Include Entire 11th, 14th and Ground Floors. Subject to the
terms and conditions contained herein, the Premises are hereby expanded to include the entire 11th
Floor of 200 Oceangate (“11th Floor Expansion Premises”), the entire 14th Floor of 200 Oceangate
(“14th Floor Expansion Premises”) and the entire Ground Floor of 200 Oceangate (“Ground Floor
Expansion Premises”), comprising a total expansion of 47,713 rentable square feet (collectively,
the “Expansion Premises”). The rentable square footage of each portion of the Expansion Premises is
as follows: 11th Floor Expansion Premises: 16,575 rentable square feet; 14th Floor Expansion
Premises: 16,575 rentable square feet; Ground Floor Expansion Premises: 14,563 rentable square
feet. The location of said Expansion Premises is more particularly shown on Exhibit A, attached
hereto.

2. Term; Delivery of Possession.

     a. Commencement Date of Term for Expansion Premises. The Expansion Premises are leased to
Tenant for a Term commencing on the following dates:

	 	 	 
	          14th Floor Expansion Premises:

	 	August 1, 2006
	          11th Floor Expansion Premises:

	 	April 1, 2007
	          Ground Floor Expansion Premises:

	 	July 1, 2008

     Upon the commencement date for each portion of the Expansion Premises, Landlord shall prepare, and
Landlord and Tenant shall execute, a Commencement Date Memorandum which shall

1

 

specify, among other things, the exact commencement date for the applicable portion of the
Expansion Premises and the increase to Tenant’s Share resulting therefrom.

     b. Expiration Date of Term for Expansion Premises. The Expansion Premises are leased to
Tenant for a Term expiring on December 31, 2018.

     c. Extension of Term for Current Premises. The Term of the Lease for the Current Premises
(99,181 rentable square feet) is hereby extended and shall have an expiration date of December 31,
2018. In connection therewith, Tenant’s option to extend the Term of the Lease pursuant to
Paragraph 2 of the Lease Addendum shall be for two consecutive five-year periods commencing on
January 1, 2019.

     d. Delivery of Possession. Possession of the Expansion Premises shall be delivered to
Tenant on the following dates:

	 	 	 
	          14th Floor Expansion Premises:

	 	Upon the full execution of this Amendment
	          11th Floor Expansion Premises:

	 	February 1, 2007
	          Ground Floor Expansion Premises:

	 	May 1, 2008

     Said possession prior to the applicable commencement dates shall be on all of the terms and
conditions set forth herein with the exception of the obligation to pay rent.

     In the event Landlord is delayed in delivering any portion of the Expansion Premises, the portion
shall be delivered as soon as reasonably possible and the commencement date therefor shall be
extended by a like number of days.

3. Monthly Base Rental. Beginning on the commencement date of the Lease Term for each
portion of the Expansion Premises and continuing through November 30, 2012, the Monthly Base Rental
for each portion of the Expansion Premises shall be the same per rentable square foot Monthly Base
Rental (with the same increases) as is then applicable to the Current Premises. On December 1, 2012
and on each subsequent December 1 throughout the remainder of the Term, the Monthly Base Rental for
the entire Premises (both the Expansion Premises and the Current Premises) shall be increased by
three percent (3%) of the Monthly Base Rent then in effect.

4. Condition of Expansion Premises. Each portion of the Expansion Premises shall be
delivered to and accepted by Tenant in its then existing “as-is”, “where-is” condition and state of
repair. Tenant acknowledges that Landlord has no obligation to make any improvements or
modifications to the Expansion Premises or to pay for any improvements made thereto.

5. Tenant’s Work. Tenant shall improve the Expansion Premises at its sole cost and expense
in accordance with the terms and conditions of the Workletter, together with its exhibits, attached
hereto as Exhibit B, and Tenant shall be solely responsible throughout the Term for the maintenance
and repair of all improvements it constructs and existing improvements it modifies.

     Accordingly, prior to the improvement of each portion of the Expansion Premises, Landlord and
Tenant shall enter into a Workletter in the form of said Exhibit B but updated to reflect any
changes that have occurred in Building polices following the date of this Amendment.

     Within 30 days following the issuance of the Certificate of Occupancy for each portion of the
Expansion Premises, or six months after Tenant occupies the space, whichever occurs first, Tenant
shall provide to Landlord the documentation required by Landlord’s “Close Out Package” attached to
the Workletter as Attachment D.

2

 

6. Additional Terms and Conditions. The following additional terms and conditions shall
apply to Tenant’s leasing of the Expansion Premises:

     a. Parking. Parking passes provided in connection with the leasing of the Expansion
Premises shall be in the ratio of 3/1,000 rentable square feet, provided to Tenant in increments at
such time as the Term commencement date occurs for each portion of the Expansion Premises. Said
parking passes shall include single unreserved and tandem parking, with the allocation determined
by Landlord, as follows: up to 40% tandem and the balance single unreserved, and the rates shall be
at the then and thereafter prevailing ARCO Center rates in accordance with Exhibit D of the Lease.
Notwithstanding anything to the contrary, Landlord reserves the right to fulfill all or a portion
of Tenant’s parking allocation with staffed valet parking.

     b. Additional Key Cards. When requested by Tenant, Landlord shall provide additional key
cards to access the Building, at the Building Standard rate, currently $15.00 per card, but at no
monthly charge. Said key cards shall not enable the holder to access the parking area.

     c. Electrical. The total connected electrical load in the Expansion Premises shall not
exceed 6 watts per usable square foot, determined on a Floor by Floor basis.

     d. Operating Expenses and Taxes.

     i. Base Year.

     A. The Base Expense Year for Operating Expenses for the 14th Floor Expansion Premises shall be
2006. Notwithstanding the foregoing, there shall be no Operating Expense pass throughs for the 14th
Floor Expansion Premises before August 1, 2007.

     B. The Base Expense Year for Operating Expenses for the 11th Floor Expansion Premises shall be
2007. Notwithstanding the foregoing, there shall be no Operating Expense pass throughs for the 11th
Floor Expansion Premises before April 1, 2008.

     C. The Base Expense Year for Operating Expenses for the Ground Floor Expansion Premises shall be
2008. Notwithstanding the foregoing, there shall be no Operating Expense pass throughs for the
Ground Floor Expansion Premises before July 1, 2009.

     ii. Tenant’s Share. Tenant’s Share of increased Operating Expenses and Taxes shall be
increased in accordance with the Lease as the Term commences with respect to each portion of the
Expansion Premises.

     iii. Other Terms and Conditions. All other terms and conditions regarding Operating
Expenses and Taxes shall be as set forth in the Lease.

     e. Rent to be Paid Upon Execution. Upon the full execution of this Amendment, Tenant shall
pay Monthly Base Rental for August 2006 for the 14th Floor Expansion Premises.

3

 

     f. Signage. Landlord, at its sole cost and expense, shall provide Tenant with reasonable
Building Standard directory signage for the Expansion Premises. Suite signage shall be at Tenant’s
sole cost and expense.

     g. Commissions. In connection with Tenant’s leasing of the Expansion Premises, Tenant shall
pay any and all procuring side broker’s commission and/or finder’s fees.

     h. Option to Extend. The Expansion Premises shall be included in and subject to the Option
to Extend provision as contained in the Paragraph 2 of the Lease Addendum.

7. Expansion of Right of First Negotiation. Tenant’s existing Right of First Negotiation
contained in Paragraph 3 of the Addendum to Lease is hereby expanded to include all space in 200
Oceangate.

8. Molina Healthcare, Inc.’s Right of First Offer to Purchase Building. Prior to selling
the Building to any unaffiliated third party, Landlord shall notify Molina Healthcare, Inc. of the
availability of the Building for sale and the price and terms at which Landlord would be willing to
sell the Building to Molina Healthcare, Inc.. Molina Healthcare, Inc. shall have twenty (20) days
after receipt of such offer to notify Landlord in writing as to whether it desires to purchase the
Building. If Molina Healthcare, Inc. so notifies Landlord, Landlord and Molina Healthcare, Inc.
shall negotiate in good faith the terms of a purchase agreement. If Molina Healthcare, Inc. does
not so notify Landlord or if, despite such good faith efforts, Landlord and Molina Healthcare, Inc.
are unable to fully negotiate and execute a purchase agreement within thirty (30) days after Molina
Healthcare, Inc.’s notice that it desires to purchase the Building, Landlord may thereafter sell
the Building to any third party on any terms acceptable to Landlord, but at a price of not less
than 97% of the price that was offered to Molina Healthcare, Inc. If Landlord fails to consummate
such sale to a third party within nine (9) months after its most recent offer to Molina Healthcare,
Inc. or if Landlord desires to sell the Building at a price that is less than 97% of the price that
was most recently offered to Molina Healthcare, Inc., Landlord must first re-offer the Building to
Molina Healthcare, Inc. in accordance with this Paragraph prior to selling the Building. This right
of first offer shall terminate upon (i) the expiration or other termination of this Lease, (ii) the
sale of the Building to an unaffiliated third party, or (iii) the transfer of the Building by
foreclosure or deed in lieu of foreclosure, and thereafter this Paragraph shall be of no further
force or effect. This right of first offer shall not apply to (i) foreclosure sales, (ii) deeds in
lieu of foreclosure, (iii) sales by reason of condemnation or threatened condemnation, (iv) sales
of partial interests in the Building and sales or other transfers of interests in 200 Oceangate,
LLC or in the entities that own or are affiliated with the ownership of 200 Oceangate, LLC, but
only if the Swig family continues to directly or indirectly own a majority interest in the
Building, and (v) other sales or transfers which are not bona-fide full market value voluntary
sales to unaffiliated third parties.

     The rights of Molina Healthcare, Inc. pursuant to this Paragraph 8 are personal to Molina
Healthcare, Inc. and are non-assignable. At such time as the Right of First Offer is no longer of
any force and effect, Molina Healthcare, Inc. shall execute an Acknowledgement of Termination of
Right of First Offer in such reasonable form as is prescribed by Landlord.

9. No Additional Terms and Conditions. Except as set forth in this Third Amendment to
Office Lease, the Expansion Premises shall be leased to Tenant on the same terms and conditions as
apply to the Current Premises.

4

 

10. No Further Amendments; Lease to Continue in Full Force and Effect. Except as set forth
in this Third Amendment to Office Lease, the Lease as previously amended shall remain unamended and
in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have entered into and executed this Third Amendment to
Office Lease as of the day and year first set forth above.

	 	 	 	 	 
	200 OCEANGATE, LLC,

a Delaware limited liability company
 	 	 
	 
	By: Pacific Towers Associates,

a California limited partnership, its sole member
 	 	 
	 
	By: SIC — Long Beach,

a California limited partnership, its general partner
 	 	 
	 
	By: The Swig Company,

a California corporation, its general partner
 	 	 
	By:  	/s/ Kennard P. Perry
 	 	 
	 	Title:      CHIEF INVESTMENT OFFICER 	 	 
	 

	 	 	 	 	 
	MOLINA HEALTHCARE, INC.,

a California corporation

 	 	 
	By:  	/s/ Illegible
 	 	 
	 	Its: EVP & CFO 	 	 
	 
	By:  	/s/ C. Joseph Heinz
 	 	 
	 	Its: VP & CAO 	 	 
	 	 	 	 
	 

5

 

FOURTH AMENDMENT TO OFFICE LEASE

MOLINA HEALTHCARE, INC.

     This Fourth Amendment to Office Lease (“Amendment”), dated for reference purposes as of the 1st day
of June 2006, is made and entered into by and between 200 OCEANGATE, LLC, a Delaware limited
liability company, successor to Pacific Towers Associates, a California limited partnership, as
“Landlord” and MOLINA HEALTHCARE, INC., a California corporation, as “Tenant”.

RECITALS

     WHEREAS, Landlord and Tenant are parties to that certain Office Lease dated July 10, 2002, as
amended by that certain First Amendment to Office Lease dated November 5, 2002, by that certain
Second Amendment to Office Lease dated December 5, 2002 and by that certain Third Amendment to
Office Lease (“Third Amendment”) dated April 5, 2006 (collectively, the “Lease”), for Premises
located in the Arco Center, 200 Oceangate, Long Beach, California; and

     WHEREAS, Landlord and Tenant now desire to further amend the Lease in connection with (i) Tenant’s
occupancy and leasing of a portion of the Ground Floor Expansion Premises prior to the May 1, 2008
delivery date and July 1, 2008 Term Commencement Date that were set forth and established in the
Third Amendment, and (ii) Tenant’s leasing of additional space commonly known as Suite 1050 in 200
Oceangate; and

     WHEREAS, for the purpose of this Fourth Amendment to Office Lease, capitalized terms, to the extent
they are not defined herein, shall have the same meaning as set forth in the Lease.

     NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

AGREEMENT

1. Amendments Pertaining to Ground Floor Expansion Premises.

     a. Early Delivery of Possession and Leasing of a Portion of Ground Floor Expansion
Premises. Paragraph 2d of the Third Amendment is hereby amended so that the delivery of
possession of the Ground Floor Expansion Premises shall be as follows:

     i. Possession of 9,575 rentable square feet of the Ground Floor Expansion Premises, as shown on
Exhibit A attached hereto, (the 9,575 RSF Space”) shall be delivered to Tenant upon the full
execution of this Fourth Amendment.

     ii. Possession of the remaining portion of the Ground Floor Expansion Premises, containing 4,988
rentable square feet (the “4,988 RSF Space”) and as shown on Exhibit B attached hereto, shall be
delivered to Tenant on May 1, 2008.

     In the event Landlord is delayed in delivering any portion of the Ground Floor Expansion Premises,
the portion shall be delivered as soon as reasonably possible and the commencement date of the term
therefore shall be extended by a like number of days.

     b. Commencement Date of Term for Ground Floor Expansion Premises. Paragraph 2a of the Third
Amendment is hereby amended so that the Ground Floor Expansion Premises are leased to Tenant for a
Term commencing on the following dates:

1

 

	 	 	 	 	 
	 
	 	 	 	 
	 

	 	9,575 RSF Space:
	 	September 1, 2006
	 

	 	4,988 RSF Space:
	 	July 1, 2008

     c. Base Year for Operating Expenses. Paragraph 6(d)(i)C of the Third Amendment is hereby
amended so that the Base Expense Year for Operating Expenses for the 9,575 RSF Space shall be 2006
and for the 4,988 RSF Space shall be 2008. Notwithstanding the foregoing, there shall be no
Operating Expense pass throughs for the 9,575 RSF Space before September 1, 2007 and for the 4,988
RSF Space before July 1, 2009.

2. Tenant’s Leasing of Suite 1050. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord Suite 1050, 200 Oceangate, containing 7,608 rentable square feet, as shown on
Exhibit C attached hereto (“Suite 1050”). Possession of Suite 1050 shall he delivered to Tenant in
its “AS-IS” condition upon the full execution hereof. The Commencement Date of the Term of the
lease therefore and the rent commencement date applicable to Suite 1050 shall be September 1, 2006.
The Base Year applicable to said Suite shall be 2006 although there shall be no Operating Expense
pass throughs for Suite 1050 before September 1, 2007. Said Suite shall otherwise be leased to
Tenant upon all of the terms and conditions, including at the same Monthly Base Rental rate per
rentable square foot, as apply to the Expansion Premises.

3. No Further Amendments; Lease to Continue in Full Force and Effect. Except as set forth
in this Fourth Amendment to Office Lease, the Lease previously amended shall remain unamended and
in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have entered into and executed this Fourth Amendment to
Office Lease as of the dates set forth below.

	 	 	 	 	 
	200 OCEANGATE, LLC,

a Delaware limited liability company

 	 	 
	By:  	Pacific Towers Associates,
    a California limited partnership, its sole member
 	 	 
	 
	By:  	SIC — Long Beach,
    a California limited partnership, its general partner
 	 	 
	 
	By:  	The Swig Company, 
a California corporation, its general partner
 	 	 
	 
	By:  	/s/ Kennard P.Perry
 	 	 
	 	Title:         CIO 	 	 
	 	Date of Execution:                                                        	 	 
	 
	MOLINA HEALTHCARE, INC.,

a California corporation

 	 	 
	By:  	/s/ Illegible
 	 	 
	 	Its:           CFO 	 	 
	 
	By:  	               /s/ C.Joseph Heinz
 	 	 
	 	Its:           VP & CFO 	 	 
	 	Date of Execution: 06-14-06 	 	 

2

 

	 	 	 	 	 

200 OCEANGATE, LLC

STANDARD FORM OFFICE LEASE

EXHIBIT A

FLOOR PLAN

GROUND FLOOR, SUITE 100

200 TOWER

 

 

200 OCEANGATE, LLC

STANDARD FORM OFFICE LEASE

EXHIBIT B

FLOOR PLAN

GROUND FLOOR, SUITE 100

200 TOWER

 

 

200 OCEANGATE, LLC

STANDARD FORM OFFICE LEASE

EXHIBIT C

FLOOR PLAN

10TH FLOOR, SUITE 1050

200 TOWER

 

 

FIFTH AMENDMENT TO OFFICE LEASE

MOLINA HEALTHCARE, INC.

     This Fifth Amendment to Office Lease (“Amendment”), dated for reference purposes as of the 1st day
of July 2006, is made and entered into by and between 200 OCEANGATE, LLC, a Delaware limited
liability company, successor to Pacific Towers Associates, a California limited partnership, as
“Landlord” and MOLINA HEALTHCARE, INC., a Delaware corporation (formerly a California corporation),
as “Tenant”.

RECITALS

     WHEREAS, Landlord and Tenant are parties to that certain Office Lease dated July 10, 2002, as
amended by that certain First Amendment to Office Lease dated November 5, 2002, by that certain
Second Amendment to Office Lease dated December 5, 2002, by that certain Third Amendment to Office
Lease (“Third Amendment”) dated April 5, 2006 and by that certain Fourth Amendment to Office Lease
dated June 1, 2006 (collectively, the “Lease”), for Premises located in the Arco Center, 200
Oceangate, Long Beach, California; and

     WHEREAS, Landlord and Tenant now desire to further amend the Lease in connection with Tenant’s
occupancy and leasing of the 11th Floor Expansion Premises prior to the February 1, 2007 delivery
date and April 1, 2007 Term Commencement Date that were set forth and established in the Third
Amendment, and

     WHEREAS, for the purpose of this Fifth Amendment to Office Lease, capitalized terms, to the extent
they are not defined herein, shall have the same meaning as set forth in the Lease.

     NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

AGREEMENT

	1.	 	Amendments Pertaining to 11th Floor Expansion Premises.

     a. Early Delivery of Possession and Leasing of 11th Floor Expansion Premises. Paragraph 2d
of the Third Amendment is hereby amended so that possession of the 11th Floor Expansion Premises
shall be delivered to Tenant on approximately September 1, 2006. In the event Landlord is delayed
in delivering the 11th Floor Expansion Premises, said Expansion Premises shall be delivered as soon
as reasonably possible.

     b. Commencement Date of Term for 11th Floor Expansion Premises. Paragraph 2a of the Third
Amendment is hereby amended so that the 11th Floor Expansion Premises are leased to Tenant for a
Term commencing on the later of (i) November 1, 2006, or (ii) sixty (60) days after delivery of
possession thereof.

     c. Base Year for Operating Expenses. Paragraph 6(d)(i)B of the Third Amendment is hereby
amended so that the Base Expense Year for Operating Expenses for the 11th Floor Expansion Premises
shall be 2006. Notwithstanding the foregoing, there shall be no Operating Expense pass throughs for
the 11th Floor Expansion Premises before November 1, 2007.

1

 

2. Identity of Tenant. Tenant has recently informed Landlord that Tenant has become a
Delaware corporation and is no longer a California corporation. Accordingly, the Tenant under the
Lease is Molina Healthcare, Inc., a Delaware corporation.

3. No Further Amendments; Lease to Continue in Full Force and Effect. Except as set forth
in this Fifth Amendment to Office Lease, the Lease as previously amended shall remain unamended and
in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have entered into and executed this Fifth Amendment to
Office Lease as of the dates set forth below.

	 	 	 	 	 
	200 OCEANGATE, LLC,

a Delaware limited liability company

 	 	 
	By:  	Pacific Towers Associates, a California limited partnership, its sole member
 	 	 
	 
	 	 	 
	By:  	 SIC — Long Beach, a California limited partnership, its general partner
 	 	 
	 
	 	 	 
	By:  	The Swig Company, a California corporation, its general partner
 	 	 
	 

	 	 	 	 	 
	 	 	 
	By:  	/s/ Kennard P. Perry
 	 	 
	 	Title: CEO  	 	 
	 	Date of Execution: 8/18/2006	 	 
	 

	 	 	 	 	 
	MOLINA HEALTHCARE, INC.,

a Delaware corporation

 	 	 
	By:  	/s/ Illegible
 	 	 
	 	Its:           CFO  	 	 
	 
	By:  	/s/ C. Joseph Heinz
 	 	 
	 	Its: VP & CAO	 	 
	 	Date of Execution: 8-16-06	 	 
	 

2

 

SIXTH AMENDMENT TO OFFICE LEASE

MOLINA HEALTHCARE, INC.

     This Sixth Amendment to Office Lease (“Sixth Amendment”), dated for reference purposes as of the
21st day of May 2007, is made and entered into by and between 200 OCEANGATE, LLC, a
Delaware limited liability company, successor to Pacific Towers Associates, a California limited
partnership, as “Landlord” and MOLINA HEALTHCARE, INC., a Delaware corporation (formerly a
California corporation), as “Tenant”.

RECITALS

     WHEREAS, Landlord and Tenant are parties to that certain Office Lease dated July 10, 2002, as
amended by that certain First Amendment to Office Lease dated November 5, 2002, by that certain
Second Amendment to Office Lease dated December 5, 2002, by that certain Third Amendment to Office
Lease dated April 5, 2006, by that certain Fourth Amendment to Office Lease dated June 1, 2006
(“Fourth Amendment”) and by that certain Fifth Amendment to Office Lease dated July 1, 2006
(collectively, the “Lease”), for Premises located in the Arco Center, 200 Oceangate, Long Beach,
California; and

     WHEREAS, pursuant to the Fourth Amendment, a portion of the Ground Floor Expansion Premises
consisting of 9,575 rentable square feet was delivered to Tenant upon the full execution of said
Fourth Amendment and the remaining portion of the Ground Floor Expansion Premises consisting of
4,988 rentable square feet is to be delivered to Tenant on May 1, 2008; and

     WHEREAS, Landlord and Tenant now desire to further amend the Lease in order to document an increase
in the square footage of the 9,575 portion of the Ground Floor Expansion Premises that was
delivered to Tenant; and

     WHEREAS, for the purpose of this Sixth Amendment, capitalized terms, to the extent they are not
defined herein, shall have the same meanings as set forth in the Lease.

     NOW, THEREFORE, Landlord and Tenant hereby agree as follows:

AGREEMENT

1. Amendments Pertaining to Ground Floor Expansion Premises.

     a. As a result of the expansion of the Ground Floor Expansion Premises into part of the Building’s
main lobby, effective June 1, 2007 (the “418 RSF Effective Date”), the rentable square footage of
the 9,575 RSF Space, as referenced and defined in the Fourth Amendment, shall be increased from
9,575 to 9,993 rentable square feet by the addition of approximately 418 rentable square feet as
shown on Exhibit A, attached hereto (the “418 RSF Space”).

     b. Effective on 418 RSF Effective Date, the 418 RSF Space is leased by Tenant at the same Monthly
Base Rental rate per rentable square foot, for the same term, and on the same other terms and
conditions as apply to the 9,575 RSF Space, and Tenant’s Share shall be increased to reflect the
increased rentable square footage.

     c. The 418 RSF Space is leased to Tenant in its AS-IS condition and Landlord shall have no
obligation to provide or pay for any improvements to such space.

1

 

     2. No Further Amendments; Lease to Continue in Full Force and Effect. Except as set forth
in this Sixth Amendment to Office Lease, the Lease as previously amended shall remain unamended and
in full force and effect.

     IN WITNESS WHEREOF, Landlord and Tenant have entered into and executed this Sixth Amendment to
Office Lease as of the date set forth above.

	 	 	 	 	 
	200 OCEANGATE, LLC,

a Delaware limited liability company

 	 	 
	By:  	 Pacific Towers Associates, a California limited partnership, its sole member
 	 	 
	 
	By:  	 SIC — Long Beach, a California limited partnership, its general partner
 	 	 
	 
	By:  	 The Swig Company, a California corporation, its general partner
 	 	 

	 	 	 	 	 
	By:  	/s/
Kennard P. Perry
 	 	 
	 	Title: CIO 	 	 

	 	 	 	 	 
	MOLINA HEALTHCARE, INC.,

a Delaware corporation

 	 	 
	By:  	/s/
C. Joseph Heinz
 	 	 
	Its: 	 	 
	 
	By:  	
 	 	 
	Its: 	 	 

2

 

	 	 	 	 	 

200 OCEANGATE, LLC

STANDARD FORM OFFICE LEASE

EXHIBIT A

FLOOR PLAN

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