INDUSTRIAL REAL ESTATE LEASE

QuickLinks -- Click here to rapidly navigate through this document

Exhibit 10.44

INDUSTRIAL REAL ESTATE LEASE
(MULTI-TENANT PROJECT NET LEASE)

ARTICLE 1:     BASIC TERMS     

        This Article 1 contains the Basic Terms of this Lease between the Landlord and Tenant named below. Other Articles, Sections and Paragraphs of this Lease referred to in this Article 1 explain and define the Basic Terms and are to be read in conjunction with the Basic Terms. Tenant, prior to the Commencement Date of this Lease on November 1, 2008 has been leasing Unit A-3 at 2203 East Carson Street, Carson, California ("Unit A-3") from the Landlord pursuant to a lease dated November 1, 2007 ("Old Lease"). Upon the first to occur of the Commencement Date of this Lease or the Tenant occupying and paying rent for Unit B-3 (under Section 2.4, below) then the Old Lease and the leasing thereunder of Unit A-3 shall terminate. The immediately preceding sentence is subject to Section 2.2.

        Section 1.1     Date of Lease:     July 8, 2008

        Section 1.2     Landlord:     Cypress-Southbay, LLC, a California limited liability company

Address of Landlord:    10940 Wilshire Boulevard, Suite 1900, Los Angeles, California 90024

        Section 1.3     Tenant:     OMP, Inc., a Delaware corporation d/b/a "Obagi, Inc."

Address of Tenant: 2203 E. Carson Street, Unit B-3, Carson, California 90810

        Section 1.4     Property:     The "Property" shall refer to Units B-1, B-2 and B-3 located at 2205 E. Carson Street, Carson, California, which Property is part of a multi-tenant property development (the "Project"). The Project consists of three (3) buildings known as building A (2203 East Carson Street), building B (2205 East Carson Street), and building C (2207 East Carson Street). The Property is part of building B. The Property shall consist of approximately twenty-six thousand nine hundred fifty-nine (26,959) rentable square feet, which square feet includes a second-story mezzanine area consisting of approximately one thousand one hundred forty (1,140) rentable square feet. In addition to the 26,959 rentable square feet, stated under the immediately preceding sentence, the Tenant shall be permitted to utilize (without paying additional Base Rent) the 1,146 square feet of unfinished second floor mezzanine area for Unit B-2 and the 1,166 square feet of unfinished mezzanine area for Unit B-3. However, if the Tenant does finish off such currently unfinished second floor mezzanine space, then the Tenant shall pay to the Landlord additional Base Rent in an amount based upon the same per square foot Base Rent which applies to the other portions of the Property. The Tenant shall be responsible for the maintenance, repair, taxes, insurance premiums and other amounts pertaining to such unfinished second story mezzanine area in the same manner as specified for the other portions of the Property under this Lease. The Project includes the land, the buildings, and all other improvements located on the land, and the Common Areas described in Section 6.7 for all three (3) buildings.

        Section 1.5     Lease Term:     Sixty (60) months commencing November 1, 2008 ("Commencement Date"), and ending on sixty (60) months thereafter. (See Section 2.3 for Options to extend this Lease.)

        Section 1.6     Permitted Uses:     (See Article 5) Warehousing and distribution functions, and all legally related uses thereto.

        Section 1.7    [intentionally deleted]    

        Section 1.8     Initial Security Deposit:     (See Section 3.3) Twenty-Two Thousand Seven Hundred Fifty-Six Dollars and Ninety-Four Cents ($22,756.94).

1

        Section 1.9     Rent and Other Charges Payable by Tenant:     

        (a)    BASE RENT:    The Base Rent shall be paid as provided in Section 3.1. The Base Rent for the first twelve (12) months of the initial Lease Term shall be Twenty Thousand Two Hundred Nineteen Dollars and Twenty-Five Cents ($20,219.25) per month. The Base Rent shall be increased on the first day of the 13th, 25th, 37th and 49th months of the Lease Term (herein referred to collectively as the "Rental Adjustment Dates" and individually as the "Rental Adjustment Date") pursuant to Section 3.2. The Base Rent under each of the Rental Adjustment Dates specified under the immediately preceding sentence shall be increased a minimum of three percent (3%) and a maximum of six percent (6%) from the applicable Comparison Base Rent.

        (b)    OTHER PERIODIC PAYMENTS:    (i) Real Property Taxes (See Section 4.2); (ii) Utilities (See Section 4.3); (iii) Insurance Premiums (See Section 4.4); (iv) Impounds for Insurance Premiums and Property Taxes (See Section 4.7); (v) Maintenance, Repairs, Common Area Costs and Alterations (See Article 6).

        Section 1.10     Limitations on Tenant's Responsibilities:     See Paragraph 5.3(i) for Tenant not being responsible for pre-existing Hazardous Materials in violation of Environmental Laws, and Article 6 for limitations on Tenant's responsibility for the foundation and structural items.

        Section 1.11     Tenant's Pro Rata Share:     Tenant's "Pro Rata Share" shall mean 19.749 percent (19.749%), subject to Section 6.7.

        Section 1.12     Riders:     The following Riders are attached to and made a part of this Lease and incorporated herein by this reference: Construction Rider.

ARTICLE 2:     LEASE TERM     

        Section 2.1     Lease of Property for Lease Term.     Landlord leases the Property to Tenant and Tenant leases the Property from Landlord for the Lease Term. The Lease Term is for the period stated in Section 1.5 above and shall begin and end on the dates specified in Section 1.5 above, unless the beginning or end of the Lease Term is changed under any provision of this Lease. The "Commencement Date" shall be the date specified in Section 1.5 above for the beginning of the Lease Term, unless advanced or delayed under any provision of this Lease.

        Section 2.2     Delay in Commencement.     Landlord shall not be liable to Tenant if Landlord does not deliver possession of the Property or any portion thereof ("Nondelivered Property") to Tenant on the Commencement Date. Landlord's non-delivery of the Property to Tenant on that date shall not affect this Lease or the obligations of Tenant for the other portions of the Property under this Lease except that the Commencement Date on the Nondelivered Property shall be delayed until Landlord delivers possession of such Nondelivered Property to Tenant and the Lease Term for the entire Property (including the Nondelivered Property) shall be extended for a period equal to the delay in delivery of possession of the Nondelivered Property to Tenant, plus the number of days necessary to end the Lease Term on the last day of a month. If delivery of possession of any portion of the Property to Tenant is delayed, Landlord and Tenant shall, upon such delivery, execute an amendment to this Lease setting forth the actual Commencement Date and expiration date of this Lease. Failure to execute such amendment shall not affect the actual Commencement Date and expiration date of this Lease.

        Tenant may occupy and pay rent on Unit A-3 until Unit B-3 is substantially completed for Tenant to occupy. Upon the Landlord's substantial completion of Unit B-3, the Tenant will immediately vacate Unit A-3 and leave Unit A-3 in the condition required under the Old Lease, and will move into Unit B-3 and occupy Unit B-3 under this Lease. See Section 2.4 for the terms of Tenant's early occupancy of Unit B-3. If Landlord is not able to deliver Unit B-3 to the Tenant in substantially completed

2

condition on or before November 1, 2008, then the Tenant or the Landlord may elect to terminate this Lease by providing written notice to the other person on or before November 20, 2008.

        Section 2.3     Option to Extend.     

        (a)     Exercise.     Landlord hereby grants to Tenant one (1) option (referred to herein as "Option") to renew and extend the term of this Lease for a term of five (5) years for such Option (such five-year term for an Option is referred to herein as the "Option Term"). The Option must be exercised by written notice ("Option Notice") received by Landlord no later than that date which is six (6) months prior to the expiration of the Lease Term. Furthermore, the Option shall not be deemed to be properly exercised if Tenant is prohibited from exercising the Option pursuant to subparagraphs (i) or (ii), below. If the Option is not properly exercised within the Option Notice period in the manner prescribed herein, it shall expire and be of no further force and effect. Time is of the essence. Tenant may not revoke the election of an Option once Tenant makes an election to exercise such Option. Provided that Tenant has properly exercised an Option, the term of the Lease shall be extended for the Option Term, and all terms, covenants and conditions of the Lease shall remain unmodified and in full force and effect, except that the Base Rent shall be modified as set forth in Paragraphs 2.3(b), (c) and (d), below.

        (i)    If Tenant is in default under any provision of this Lease, then Tenant may not exercise the Option; provided however if Tenant's default is due to the fact that Tenant has failed to pay a monetary amount due under the Lease, then the Option may not be exercised until such monetary amount is paid before the Option Notice period expires, and if such default is the result of Tenant's failure to perform a non-monetary obligation and Tenant has received written notice of such default, then Tenant may only exercise the Option if Tenant properly cures such non-monetary default within the stated cure period before the Option Notice period expires. The period of time within which the Option may be exercised shall not be extended or enlarged by reason of Tenant's inability to exercise such Option because of Tenant's default.

        (ii)   The Option granted to Tenant in this Lease is personal to Tenant and may not be exercised or assigned, voluntarily or involuntarily, by or to any person or entity other than the named Tenant in Article One of this Lease; provided, however, that this Option right along with the Lease may be assigned to a consented to or permitted assignee or sublessee under Article 9 of the Lease. The Tenant shall remain liable for the performance of all of the Lease terms and obligations during the Option Term. The Option herein granted to Tenant is not assignable to any person separate and apart from this Lease.

        (b)     Base Rent.     The Base Rent payable for the first twelve (12) months of each Option Term shall be the Fair Rental Value (as determined under Paragraph 2.3(c)).

        (c)     Fair Rental Value.     For purposes of this Section 2.3, the term "Fair Rental Value" shall mean the Fair Rental Value based upon a per square foot basis and shall be determined as follows: After Landlord's receipt of Tenant's election to exercise the Option, but not before that date which is six (6) months prior to the expiration of the then current Lease term, Landlord shall determine the Fair Rental Value and provide written notice of such amount to Tenant. Tenant shall have fifteen (15) days (the "Tenant Review Period") after receipt of Landlord's notice of the Fair Rental Value within which to accept such Fair Rental Value amount or to reasonably object thereto in writing. In the event that Tenant objects in writing to Landlord within the Tenant Review Period of Landlord's determination, then Landlord and Tenant shall attempt to agree upon such Fair Rental Value. The failure of Tenant to so notify Landlord in writing of Tenant's objection of Landlord's determined Fair Rental Value amount within the Tenant Review Period shall conclusively be deemed Tenant's acceptance of the Fair Rental Value determined by Landlord. If Landlord and Tenant fail to reach agreement of the Fair Rental Value within ten (10) days of the end of Tenant's Review Period, then each party shall place in a separate sealed envelope its final proposed determination as to the Fair Rental Value (which

3

determination may be different than such party's original determination), and such determination shall be submitted to a Qualified Appraiser for determination. Landlord shall deliver to Tenant after the end of Tenant's Review Period and receipt of Tenant's written objection to Landlord's determination of Fair Rental Value, a list of three (3) Qualified Appraisers, and Tenant shall choose one (1) of such Qualified Appraisers from such list within five (5) days of Landlord's delivery to Tenant of such list. If Tenant so fails to choose a Qualified Appraiser within five (5) days of delivery of such list to Tenant, then Landlord may choose such Qualified Appraiser from such list. The Qualified Appraiser's determination shall be limited solely to the issue of whether Landlord's or Tenant's submitted Fair Rental Value per square foot for the Property is the closest to the actual prevailing Fair Rental Value per square foot, using the criteria described herein (in which case Landlord's or Tenant's determination of the Fair Rental Value chosen by the Qualified Appraiser shall be the Fair Rental Value). Such Qualified Appraiser shall within thirty (30) days of appointment reach a decision and shall notify Landlord and Tenant of such determination and such determination shall be final.

        (i)    The term "Qualified Appraiser" for purposes of this Paragraph 2.3(c) shall mean an independent professional real estate appraiser who has no preexisting or ongoing relationship with Landlord and who is a Member of the Appraisal Institute (sometimes known as an "MAI" appraiser) who shall have been active over the five (5) preceding years ending on the date of such appointment in the appraisal of similar properties within a ten (10) mile radius of the subject Property. The cost of the Qualified Appraiser shall be paid equally by Landlord and Tenant. If at the time of the appointment of a Qualified Appraiser, the designation "MAI" is no longer utilized, then a qualification for appraisers most nearly equivalent to an MAI appraiser shall be utilized.

        (ii)   The criteria by which the Qualified Appraiser, and the Landlord's and Tenant's determination, of Fair Rental Value per month shall be as follows:.

        (a)   Only available comparable office/distribution building rentals closest to the date that such Option term is to commence of equal quality to the Property within a five (5) mile radius of the Property shall be used. Comparable properties shall be compared on a rentable square footage basis.

        (b)   Only buildings in a planned business development of at least the same quality as the business development in which the subject Property is located shall be used.

        (c)   The appraiser in calculating comparable property rentals shall only consider a tenant improvement allowance, if any, given to the tenant of such comparable property as to that portion of such tenant improvement allowance for "cosmetic items." Any such permitted cosmetic items of such tenant improvement allowance shall be amortized without interest over the entire lease term of the comparable property. "Cosmetic items" shall solely mean the cost of interior wall painting and interior floor coverings, and shall specifically exclude any costs associated with moving walls, demolition, structural, new partition construction, new office areas, woodworking, plumbing, lighting, electrical, heating, ventilating and air conditioning, or mechanical systems.

        (d)     Increase.     The monthly Base Rent payable for the first (1st) month through the twelfth (12th) month of the Option Term shall be the new monthly Base Rent for the Option Term as determined under Paragraphs 2.3(b) and (c), above. Such Base Rent shall be increased on the 13th, 25th, 37th and 49th month of the Option Term ("Rental Adjustment Date(s)") as provided in Section 3.2; provided, however, that such rent increase on each Rental Adjustment Date shall be a minimum of three percent (3%) and a maximum of six percent (6%) from the Comparison Base Rent.

        Section 2.4     Early Occupancy of Unit B-3.     Tenant is currently occupying Unit A-3 in the Project under the terms of the Old Lease. If the Landlord is able to complete the tenant improvements for Unit B-3, then the Tenant shall vacate Unit A-3 (and in which event the Old Lease shall terminate on

4

such date of vacation) and the Tenant shall simultaneously occupy Unit B-3, which occupancy of Unit B-3 prior to the Commencement Date is referred to herein as the "Early Occupancy Period". During such Early Occupancy Period, Tenant's lease of Unit B-3 shall be subject to all of the terms and provisions of this Lease, with the Tenant paying a Base Rent for Unit B-3 during such Early Occupancy Period of Five Thousand Seven Hundred and Sixty-Three Dollars ($5,763) per month (or a partial portion thereof for any fractional month), plus taxes, insurance premiums and Common Area Cost (based upon Unit B-3's share which is 5.629%). Such early occupancy of Unit B-3 shall not advance the expiration date of this Lease. Tenant shall pay all other charges specified in this Lease for Unit B-3 for such Early Occupancy Period. The parties to this Lease hope that the Early Occupancy Period for Unit B-3 would commence on or about July 12, 2008, but the parties recognize that it is possible that there may be no Early Occupancy Period for Unit B-3 such as because the current tenant of Unit B-3 is late in vacating same or for other reasons beyond the Landlord's control. See Section 2.2 for other provisions regarding Unit B-3.

        Section 2.5     Holding Over.     Tenant shall vacate the Property upon the expiration or earlier termination of this Lease. Tenant shall reimburse Landlord for and indemnify Landlord against all damages which Landlord incurs from Tenant's delay in vacating the Property. If Tenant does not vacate the Property upon the expiration or earlier termination of this Lease and Landlord thereafter accepts rent from Tenant, Tenant's occupancy of the Property shall be a "month-to-month" tenancy, subject to all of the terms of this Lease applicable to a month-to-month tenancy, except that the Base Rent then in effect shall be increased by fifty percent (50%).

        Section 2.6     Right of Termination of Lease.     The Tenant may elect to have this Lease terminate on October 31, 2009 ("Termination Date"), by the Tenant delivering to the Landlord on or before April 30, 2009 ("Termination Notice Date") a written signed notice that the Tenant elects to terminate the lease on the Termination Date. In the event that the Tenant timely provides to the Landlord such Termination Notice, then the Lease shall terminate on the Termination Date and the Tenant shall owe all amounts of Base Rent, property taxes, insurance premiums and other amounts due under this Lease through such Termination Date, with no additional penalties. Time is of the essence in Tenant providing to Landlord such Termination Notice, and if Tenant fails to deliver such timely Termination Notice to Landlord for any reason, then this Lease shall not terminate and shall continue under its provisions. The Tenant may not deliver such Termination Notice to Landlord if the Tenant is then in default under the terms of this Lease unless the Tenant cures such default within the applicable notice and cure period for such default prior to the Termination Notice Date. The Tenant's rights to terminate the Lease under this Section 2.6 may not be assigned to any other person and may solely be exercised by the named Tenant under Section 1.3. Such right of termination hereunder shall only apply to the entire Property and this Lease, and may not be applied solely to a portion thereof.

ARTICLE 3:     BASE RENT     

        Section 3.1     Time and Manner of Payment.     Upon execution of this Lease, Tenant shall pay Landlord the Base Rent in the amount stated in Paragraph 1.9(a), above, for the first full month of the Lease Term. Tenant, prior to occupancy of the Property, shall pay Landlord any Base Rent for any fractional month. On the first day of the second full month of the Lease Term and each month thereafter, Tenant shall pay Landlord the Base Rent, in advance, without offset, deduction or prior demand. The Base Rent shall be payable at Landlord's address or at such other place as Landlord may designate in writing. All Base Rent shall be due and timely paid whether or not Landlord sends a bill or invoice to Tenant. Landlord may require that all Base Rent and other amounts due and owing to Landlord under this Lease be paid to Landlord by wire transfer, and Tenant shall comply with such requests.

        Section 3.2     Cost of Living Increases.     The Base Rent shall be increased on each date (the "Rental Adjustment Date") stated in Paragraphs 1.9(a) and 2.3(d), above, in accordance with the

5

increase in the United States Department of Labor, Bureau of Labor Statistics, Consumer Price Index for All Urban Consumers (all items for the geographical Statistical Area in which the Property is located on the basis of 1982-1984 = 100) (the "Index") as follows:

        (a)     Calculation.     The Base Rent (the "Comparison Base Rent") in effect immediately before each Rental Adjustment Date shall be increased on an annual cumulative and annual compounded basis for each twelve (12) month period (and any fractions thereof) by the amount of the increase (but not decrease) in the Index during each such twelve (12) month (and any fractional periods) from the date the Comparison Base Rent began (the "Comparison Date") through the month in which the applicable Rental Adjustment Date occurs. The Base Rent shall not be reduced by reason of such computation or if the Index declines in any twelve (12) month (or fractional) period. Landlord shall notify Tenant of each Rental Adjustment Date increase by a written statement which shall include the Index for the applicable Comparison Date, the percentage increases between Indices, the minimum and maximum percentage amounts (if any), and the new Base Rent. Any increase in the Base Rent provided for in this paragraph shall then be subject to any minimum or maximum increase, provided for in Paragraph 1.9(a) or 2.3(d), as the case may be.

        (b)     Payment.     Tenant shall pay the new Base Rent from the applicable Rental Adjustment Date until another new Base Rent is calculated for the next Rental Adjustment Date. Landlord's notice may be given after the applicable Rental Adjustment Date of the increase, and Tenant shall pay Landlord the accrued rental adjustment for the months elapsed between the effective date of the increase and Landlord's notice of such increase within ten (10) days after Landlord's notice. If the format or components of the Index are materially changed after the Commencement Date, Landlord shall substitute an index which is published by the Bureau of Labor Statistics or similar agency and which is most nearly equivalent to the Index in effect on the Commencement Date. The substitute index shall be used to calculate the increase in the Base Rent unless Tenant objects to such index in writing within fifteen (15) days after receipt of Landlord's notice. If Tenant objects, Landlord and Tenant shall submit the selection of the substitute index for binding arbitration in accordance with the rules and regulations of the American Arbitration Association at its office closest to Landlord's then principal place of business. The costs of arbitration shall be borne equally by Landlord and Tenant.

        Section 3.3     Security Deposit; Increases.     

        (a)     Payment.     Upon the execution of this Lease, Tenant shall deposit with Landlord a cash Security Deposit in the amount set forth in Section 1.8 above. Landlord may apply all or part of the Security Deposit to any unpaid rent or other charges due from Tenant or to cure any other defaults of Tenant (and to pay for any obligations or expenses of Tenant under Article 6). If Landlord uses any part of the Security Deposit, Tenant shall restore the Security Deposit to its full amount within ten (10) days after Landlord's written request. Tenant's failure to do so shall be a material default under this Lease. No interest shall be paid on the Security Deposit. Landlord shall not be required to keep the Security Deposit separate from its other accounts and no trust relationship is created with respect to the Security Deposit. Tenant hereby waives the provisions of California Civil Code Section 1950.7.

        Section 3.4     Termination; Advance Payments.     Within sixty (60) days after termination of this Lease under Article 7 (Damage or Destruction), Article 8 (Condemnation) or any other termination not resulting from Tenant's default, and after Tenant has vacated the Property in the manner required by this Lease, provided that Tenant is not then in default, Landlord shall refund or credit to Tenant the unused portion of the Security Deposit. If the Tenant is then in default under the Lease, if the Tenant should cure such default within the applicable cure period under the Lease, then the Landlord upon such cure of such default shall refund to the Tenant the unused portion of the Security Deposit.

6

ARTICLE 4:     OTHER CHARGES PAYABLE BY TENANT     

        Section 4.1     Additional Rent.     All charges payable by Tenant other than Base Rent are called "Additional Rent." Unless this Lease provides otherwise, Tenant shall pay all Additional Rent then due with the next monthly installment of Base Rent. The term "rent" shall mean Base Rent and Additional Rent.

        Section 4.2     Property Taxes.     

        (a)     Real Property Taxes.     Tenant shall pay all real property taxes on the Property (including any fees, taxes or assessments against, or as a result of, any tenant improvements existing on the Property or installed on the Property by or for the benefit of Tenant) for periods during the Lease Term (even if the property tax bill or supplemental bill is issued after the Lease Term). Landlord shall bill Tenant for such real property taxes due, and Tenant shall pay Landlord such taxes within fifteen (15) days of Landlord's delivery of request for payment. Landlord may bill Tenant for such taxes prior to Landlord's payment of such taxes to the governmental agency, and Landlord may bill Tenant for such taxes pursuant to Section 6.7. If Tenant does not pay over any such amount(s) to Landlord within fifteen (15) days of Landlord's delivery of request for payment to Tenant, then Tenant shall be required to pay such amount(s) to Landlord with Tenant's next rental installment, together with interest from the date of Landlord's payment of such taxes, at the interest rate provided in Section 4.6. If Tenant fails to pay such amount(s) to Landlord by the due date of Tenant's next Base Rent installment following the expiration of such fifteen (15) day period, then such amount(s) shall be treated as a failure of Tenant to pay Landlord a monetary amount due under the terms of this Lease, and Tenant shall be deemed to be in default under this Lease.

        (b)     Definition of "Real Property Tax."     "Real property tax" or "real property taxes" means (i) any fee, license fee, license tax, business license fee, commercial rental tax, levy, charge, assessment, penalty or tax imposed by any taxing authority against the Property; (ii) any tax, fee, license fee, license tax, business license fee, commercial rental tax, levy, charge, assessment or penalty on the Landlord's right to receive, or the receipt of, rent or income from the Property or against Landlord's business of leasing the Property; (iii) any tax, assessment or charge for fire protection, streets, sidewalks, road maintenance, landscaping, refuse or other services provided to the Property by any governmental agency; (iv) any tax imposed upon this transaction or based upon a reassessment of the Property due to a change in law, a change of ownership, as defined by applicable law, or other transfer of all or part of Landlord's or any other person's interest in the Property; and (v) change in the property tax laws and any charge or fee replacing any tax previously included within the definition of real property tax. "Real property tax" does not, however, include Landlord's federal or state income, franchise, inheritance or estate taxes.

        (c)     Pro Rata Share of Real Property Tax.     Landlord shall, at Landlord's reasonable discretion, determine Tenant's share of the real property taxes for the Property under Paragraph 4.2(a) based upon the square footage of the Property and upon the amount of improvements contained in the Property. Tenant understands that the Property is part of a Project and may not be separately assessed by the applicable governmental agency, and Tenant understands that Landlord is determining the amount of Tenant's real property taxes based upon the information reasonably available to Landlord. Landlord may, in Landlord's reasonable discretion, base Tenant's share of the real property taxes for the Property upon the real property taxes for the entire Project multiplied times Tenant's Pro Rata Share. Subject to Sections 4.7 and 6.7, Tenant shall pay such share of real property taxes to Landlord within fifteen (15) days after receipt of Landlord's written statement.

7

        (d)     Personal Property Taxes.     

        (i)    Tenant shall timely pay all taxes charged against trade fixtures, furnishings, equipment or any other personal property belonging to Tenant. Tenant shall use its commercially reasonable efforts to have personal property taxed separately from the Property.

        (ii)   If any of Tenant's personal property is taxed with the Property, Tenant shall pay Landlord the taxes for the personal property within fifteen (15) days after Tenant receives a written statement from Landlord for such personal property taxes.

        Section 4.3     Utilities and Janitorial Services.     Tenant shall pay, directly to the appropriate supplier, the cost of all natural gas, heat, light, power, sewer service, telephone, water, refuse disposal, and other utilities and services supplied to the Property. However, if any services or utilities are jointly metered with other property, Landlord shall make a reasonable determination of Tenant's proportionate share of the cost of such utilities and services and Tenant shall pay such share to Landlord within fifteen (15) days after receipt of Landlord's written statement. Landlord shall not be liable in any way to Tenant for any failure, defect or interruption of, or change in the supply, character and/or quantity of utility service furnished to the Property for any reason. There shall not be any allowance to Tenant for a diminution of rental value, nor shall the same constitute an actual or constructive eviction of Tenant, in whole or in part, nor relieve Tenant from any of Tenant's Lease obligations, and no liabilities shall arise on the part of Landlord by reason of inconvenience, annoyance or injury to Tenant's business if there is an interruption of, or change in the supply, character and/or quantity of, any utility. Tenant shall obtain at Tenant's cost and timely pay all amounts for regular janitorial service and waste removal services for the Property (but Landlord may have waste removal service as part of the Common Area Costs).

        Section 4.4     Insurance Policies.     

        (a)     Liability Insurance.     During the Lease Term, Tenant shall maintain and pay all premiums thereon for a policy of commercial general liability insurance (sometimes known as broad form comprehensive general insurance) insuring Tenant against liability for bodily injury, property damage (including loss of use of property) and personal injury arising out of the operation, use or occupancy of the Property. Tenant shall name Landlord as an additional insured under such policy and shall obtain the appropriate endorsement to such policy showing Landlord as an additional insured. The initial amount of such insurance shall be at least Two Million Dollars ($2,000,000) per occurrence and shall be subject to periodic increase based upon inflation, increased liability awards, recommendation of Landlord's professional insurance advisers and other relevant factors. The liability insurance obtained by Tenant under this Paragraph 4.4(a) shall: (i) be primary and non-contributing; (ii) contain cross-liability endorsements; and (iii) insure Landlord against Tenant's performance under Section 5.6, if the matters giving rise to the indemnity under Section 5.6 result from the acts or negligence of Tenant. The amount and coverage of such insurance shall not limit Tenant's liability nor relieve Tenant of any other obligation under this Lease. Landlord may also obtain comprehensive public liability insurance in an amount and with coverage determined by Landlord insuring Landlord against liability arising out of the ownership, operation, use or occupancy of the Property. The policy obtained by Landlord shall not be contributory and shall not provide primary insurance.

        (b)     Property and Rental Income Insurance.     During the Lease Term, Landlord shall maintain (at Tenant's cost) policies of insurance covering loss of or damage to the Property (including tenant improvements constructed under any construction rider to this Lease which are attached to and become part of the Property) in the full amount of its replacement value. The deductible amount under such policies shall be an amount acceptable to, and determined by, Landlord. Such policy shall provide protection against perils included within the classification of fire, extended coverage, vandalism, malicious mischief, special extended perils (all risk), and any other perils which Landlord deems reasonably necessary. Landlord shall have the right (but no requirement) to obtain (at Tenant's cost)

8

flood or earthquake insurance if required by any lender holding a security interest in the Property or if the premium cost of such insurance is commercially reasonable as determined by Landlord. Tenant shall obtain and pay for insurance for Tenant's equipment, inventory, furniture, fixtures and other assets which Tenant owns or Tenant holds for others on the Property, and are placed, used, held or installed by Tenant on the Property. During the Lease Term, Landlord shall also obtain (at Tenant's cost) a rental income insurance policy, with loss payable to Landlord, in an amount equal to twelve (12) months' Base Rent, plus estimated real property taxes and insurance premiums. Tenant shall be liable for the payment of any deductible amount under Landlord's or Tenant's insurance policies maintained by Landlord or Tenant pursuant to this Section 4.4; provided, however, that Tenant shall not be liable for the payment of any deductable amount over Fifty Thousand Dollars ($50,000) under a policy of earthquake insurance. Tenant shall not do or permit anything to be done which invalidates any such insurance policies. All property insurance and rental income insurance shall provide for all payments of proceeds to be made to Landlord, and Landlord shall be the loss payee (and/or lender(s) designated by Landlord). Currently, the Landlord has a deductable amount of $5,000 for the Property casualty insurance. If the Landlord should change this deductable amount in the future, then the Landlord shall provide written notice of such change to the Tenant.

        (c)     Payment of Premiums.     Subject to Sections 4.7 and 6.7, Tenant shall pay all premiums for the insurance policies described in Paragraphs 4.4(a) and (b) (whether such insurance is obtained by Landlord or Tenant) within fifteen (15) days after Tenant's receipt of the amount due prepared by Landlord or the insurance company. Before the Commencement Date, Tenant shall deliver to Landlord a copy of any policy of insurance which Tenant is required to maintain under this Section 4.4. At least thirty (30) days prior to the expiration of any such policy, Tenant shall deliver to Landlord a renewal of such policy. As an alternative to providing a policy of insurance, Tenant shall have the right to provide Landlord a certificate of insurance, executed by an authorized officer of the insurance company, showing that the insurance which Tenant is required to maintain under this Section 4.4 is in full force and effect and containing such other information which Landlord reasonably requires (but Landlord shall from time to time have the right to require Tenant to furnish Landlord with a copy of such insurance policy).

        (d)     Tenant's Share of Insurance Premiums.     Landlord shall pay the premiums on insurance policies covering the Property and other properties in the Project as to those insurance policies described under Paragraph 4.4(b) required to be obtained (or elected to be obtained) by Landlord. Landlord shall reasonably determine Tenant's share of the insurance premiums to be paid by Tenant based upon the square footage of the Property, and based upon the amount of improvements contained in the Property and other properties in the Project. Notwithstanding the immediately preceding sentence, Landlord may, in Landlord's reasonable discretion, determine Tenant's share of such insurance premiums hereunder by using the insurance premiums of the entire Project multiplied times Tenant's Pro Rata Share. Subject to Sections 4.7 and 6.7, such amount shall be paid by Tenant to Landlord within fifteen (15) days after Tenant's receipt of a copy of the bill from Landlord (regardless of whether the Landlord has paid the insurance company at that time), and if Tenant fails to pay such amount within such time period, then same shall be treated as a failure of Tenant to pay a monetary amount under the terms of this Lease.

        (e)     General Insurance Provisions.     

        (i)    Any insurance which Tenant is required to maintain under this Lease shall include a provision which requires the insurance carrier to give Landlord not less than thirty (30) days' written notice prior to any cancellation or modification of such coverage.

        (ii)   If Tenant fails to deliver any policy, certificate or renewal to Landlord required under this Lease within the prescribed time period or if any such policy is canceled or modified during the Lease Term without Landlord's consent, or if Tenant fails to pay premiums for any insurance

9

policy, Landlord, as one of Landlord's remedies, may obtain such insurance (or pay premiums on an existing insurance policy), in which case Tenant shall reimburse Landlord for the cost of such insurance and premiums within fifteen (15) days after receipt of a statement that indicates the cost of such insurance and premiums. Prior to the Landlord purchasing an insurance policy under the immediately preceding sentence which the Tenant is required to maintain under this Lease, Landlord shall give to the Tenant ten (10) days prior written notice before the Landlord purchases such insurance policy.

        (iii)  Tenant shall maintain all insurance required to be maintained by Tenant under this Lease with companies holding a "General Policy Rating" of A-12 or better, as set forth in the most current issue of "Best Key Rating Guide." Tenant acknowledges that the insurance described in this Section 4.4 is for the primary benefit of Landlord. Landlord makes no representation as to the adequacy of any insurance (whether such insurance policy is maintained by Landlord or Tenant) to protect Landlord's or Tenant's interests of or in the Property. Tenant agrees that Landlord is not responsible for the performance of, nor is Landlord guaranteeing the performance of, payment by or financial viability of, any insurance company (whether insuring the Property or insuring any person for any liability). Therefore, Tenant shall obtain any such additional property or liability insurance which Tenant deems necessary to protect Landlord and Tenant.

        (iv)  Unless prohibited under any applicable insurance policies maintained, Tenant hereby waives any and all rights of recovery against Landlord, or against the officers, partners, employees, agents or representatives of Landlord, for loss of or damage to Tenant's property or the property of others under Tenant's control, to the extent such loss or damage is actually reimbursed to Tenant from any proceeds from an insurance policy in force (whether or not described in this Lease) at the time of such loss or damage. Unless prohibited under any applicable insurance policy maintained, Landlord hereby waives any and all rights of recovery against Tenant, or against the officers, partners, employees, agents or representatives of Tenant, for loss of or damage to Landlord's property or the property of others under Landlord's control, to the extent such loss or damage is actually reimbursed to Landlord from any proceeds of an insurance policy for which Tenant pays the premium cost or any portion thereof which is maintained under this Section 4.4 at the time of such loss or damage. Upon obtaining the required policies of insurance, Landlord and Tenant shall give notice to the insurance carriers of this mutual waiver of subrogation.

        (v)   Landlord may obtain a blanket insurance policy or policies for property and rental income insurance (or a separate blanket policy for any insurance risk) for the Property under Paragraph 4.4(b) and any other properties. if Tenant's use of the Property creates an extraordinary risk or increased premium, or if Tenant and/or the Property have a substantial amount of improvements (as determined by Landlord) so that the cost of the insurance premiums for any of the insurance required to be maintained under Paragraph 4.4(b) for the Project increases, then the Tenant shall be solely responsible for paying for such amount of increased premium.

        Section 4.5     Late Charges.     Tenant's failure to pay rent promptly may cause Landlord to incur unanticipated costs. The exact amount of such costs are impractical or extremely difficult to ascertain. Such costs may include, but are not limited to, processing and accounting charges and late charges which may be imposed on Landlord by any ground lease, mortgage or trust deed encumbering the Property. Therefore, if Landlord does not receive any rent payment within seven (7) days after it becomes due ("Late Charge Due Date"), Tenant shall immediately pay Landlord a late charge equal to ten percent (10%) of the overdue amount. The parties agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of such late payment. Tenant shall pay such late charge to Landlord immediately after the Late Charge Due Date, and if Tenant fails to so pay such amount to Landlord, then such nonpayment shall be considered a monetary default by Tenant and a failure by Tenant to pay rent under this Lease, and Tenant shall pay interest to Landlord on such unpaid late charge amount pursuant to Section 4.6, below (but not greater than the maximum amount

10

permitted by law on such late charge and only to the extent permitted by law) from the Late Charge Due Date.

        Section 4.6     Interest on Past Due Obligations.     Any amount owed by Tenant to Landlord under this Lease which is not paid within seven (7) days after the date due shall bear interest at the rate of ten percent (10%) per annum from the due date of such amount (but not greater than the maximum interest rate permitted by law). The payment of interest on such amounts shall not excuse or cure any default by Tenant under this Lease. If the interest rate specified in this Lease is higher than the rate permitted by law, the interest rate is hereby decreased to the maximum legal interest rate permitted by law.

        Section 4.7     Impounds for Insurance Premiums and Real Property Taxes.     If requested by any ground lessor or lender to whom Landlord has granted a security interest in the Property, or if Tenant is more than ten (10) business days late in the payment of rent more than once in any consecutive twelve (12) month period, Tenant shall pay Landlord a sum equal to one- twelfth ( ¹ / 12 ) of the annual real property taxes and insurance premiums payable by Tenant under this Lease, together with each payment of Base Rent. Landlord shall hold such payments in a non- interest bearing impound account. If unknown, Landlord shall reasonably estimate the amount of real property taxes and insurance premiums when due. Tenant shall pay any deficiency of funds in the impound account to Landlord upon written request. If Tenant defaults under this Lease, Landlord may apply any funds in the impound account to any obligation then due under this Lease.

ARTICLE 5:     USE OF PROPERTY     

        Section 5.1     Permitted Uses.     Tenant may use the Property only for the Permitted Uses set forth in Section 1.6, above.

        Section 5.2     Manner of Use.     Tenant shall not cause or permit the Property to be used in any way which constitutes a violation of any law, ordinance, or governmental regulation or order, or which annoys or interferes with the rights of any other tenants of Landlord or other parts of the Project, or which constitutes a nuisance or waste. Tenant may not place any equipment or items on the roof without Landlord's written permission. Tenant shall not have any access to the roof area of the Project, shall not go onto the roof of the Project, and shall prohibit Tenant's employees, customers and invitees from going onto the roof area of the Project. Tenant shall not keep any live animals (other than service animals) inside or outside of the Property or Project, nor shall Tenant leave food either inside or outside of the Property or Project which would attract animals to the Property or Project. Subject to any specific requirements in the Construction Rider for Landlord to obtain specific permits, Tenant shall obtain and pay for all permits required for Tenant's occupancy of the Property and shall promptly take all actions necessary to comply with all applicable statutes, ordinances, rules, covenants, conditional use permits, conditions and restrictions, regulations, orders and requirements regulating the use by Tenant of the Property, including the Occupational Safety and Health Act and the California Occupational Safety and Health Act, and regulations and rules thereunder.

        Section 5.3     Hazardous Materials.     

        (a)     Definitions.     As used in this Section 5.3, the following definitions shall apply:

        (i)    "Environmental Laws" shall mean all federal, state and local laws, ordinances, rules and regulations now or hereafter in force, as amended from time to time, in any way relating to or regulating human health or safety, or industrial hygiene or environmental conditions, or protection of the environment, or pollution, or contamination of the air, soil, surface water or ground water, including but not limited to the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, the Clean Water Act, the Hazardous Substance Account Act, California Health and Safety Code provisions, the California

11

Hazardous Waste Control Law, the California Medical Waste Management Act, and the California Porter-Cologne Water Quality Control Act.

        (ii)   "Hazardous Material" shall mean any substance or material that is described as a toxic or hazardous substance, waste or material, or a pollutant or contaminant, or words of similar import, in any of the Environmental Laws, and includes asbestos, petroleum (including crude oil or any fraction thereof, machine or other oils, natural gas, natural gas liquids, liquified natural gas, or synthetic gas useable for fuel, or any mixture thereof), petroleum products, polychlorinated biphenyls, urea formaldehyde, radon gas, radioactive matter, medical waste, and chemicals which may cause cancer or reproductive toxicity.

        (iii)  "Release" shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment, including but not limited to the continuing migration of Hazardous Material into or through soil, surface water, or ground water.

        (iv)  For purposes of this Section 5.3, the activities, acts, use, production, processing, manufacturing, generation, treatment, handling, storage and Release by "Tenant" shall mean those of Tenant, Tenant's employees, partners, members, contractors, sublessees, customers, licensees, guests and/or invitees. For purposes of this Section 5.3, the activities, acts, use, production, processing, manufacturing, generation, treatment, handling, storage and Release by "Landlord" shall mean those of Landlord, Landlord's employees, partners, members and contractors.

        (b)     Covenant on Use of Property.     Tenant shall not use, produce, process, manufacture, generate, treat, handle, store or dispose of any Hazardous Material in, on or under the Property or Project, or use the Property or Project for any such purposes, or Release any Hazardous Material into any air, soil, surface water or ground water at, on or about the Property or Project, or permit any person using or occupying the Property or Project or any part thereof to do any of the foregoing, which are in violation of any Environmental Laws. Tenant assumes the risk that Environmental Laws may change in the future. Tenant shall comply, and shall cause all persons using the Property or any part thereof to comply with all Environmental Laws applicable to the Property, or the use or occupancy thereof, or any operations or activities therein or thereon. Tenant shall obtain all permits, licenses and approvals required by all applicable Environmental Laws for the use and occupancy of, and all operations and activities in the Property, comply fully with all such permits, licenses and approvals, and keep all such permits, licenses and approvals in full force and effect. Landlord's consent in allowing Tenant to permit or engage in any activity relating to Hazardous Material shall not be construed to mean Landlord in any way approves of the manner in which the Tenant is engaging in such activities, or that Landlord has determined that such activity or manner of activity is safe.

        (c)     No Storage Tanks Below Ground.     Tenant shall not install or use any storage tanks on the Property below ground. In no event shall Landlord be required to consent to the installation or use of any storage tanks below ground on the Property.

        (d)     Presence of Hazardous Material on Property.     Subject to Tenant not being responsible for pre-existing Hazardous Materials under Paragraph 5.3(i), below, in the event that any Hazardous Material is present or Released, or there is a threatened Release of Hazardous Material on or under the Property which has violated or which may violate an Environmental Law (or any nearby property which can migrate into or onto the Property), or that any violation of any Environmental Laws may have occurred at the Property, Tenant shall immediately give notice to Landlord thereof. Additionally, Tenant shall immediately furnish to Landlord copies of all written communications received by Tenant from any person or given by Tenant to any person concerning any past or present Release or threatened Release of Hazardous Material in, on or under the Property (or any nearby property which could migrate to the Property), or any past or present violation of any Environmental Laws which may affect the Property. Landlord shall have the right, but not the obligation, to obtain from Tenant, at any

12

time, any additional information regarding Hazardous Material generated, produced, brought onto, used, stored, treated or disposed of by Tenant or any other person on or above the Property, and/or activities relating thereto, on or about the Property. Tenant shall immediately comply with Landlord's requests.

        (e)     Landlord's Right to Inspect and Audit.     Landlord shall have the right, but not the obligation, to enter the Property to investigate at reasonable times (except in the case of an emergency Landlord may enter at any time) upon reasonable prior notice to Tenant the presence of Hazardous Material, and the compliance with Environmental Laws, and to take all actions reasonably necessary to remediate any threat or breach of any Environmental Laws or from any Release of Hazardous Material on or about the Property. If Tenant violates any of the provisions of this Section 5.3, Landlord may require Tenant, at Tenant's sole expense, to have an environmental audit (which may, in Landlord's determination, include a Phase I and/or a Phase II environmental report) or other appropriate investigation of the Property conducted by a third party reasonably satisfactory to Landlord and reasonably approved by Landlord regarding the presence of Hazardous Material and compliance with Environmental Laws. Tenant acknowledges that any such inspections or reports undertaken by Tenant and Landlord are solely for the protection of Landlord, and agrees that Landlord has no duty to Tenant with respect to Hazardous Material or Environmental Laws as a result of any such inspections or reports.

        (f)     Remediation Work.     If any Release or threatened Release of Hazardous Material in, on or under the Property exists or occurs by any person other than Landlord during the term of this Lease or by Tenant at any time as to the Property or the Project, Tenant shall immediately give notice of the condition to Landlord, and Tenant shall promptly clean up and remove all Hazardous Material (and in no event may Tenant leave any Hazardous Material on or under the Property) and restore the Property (or Project, as the case may be) to the same condition as such Property (or Project as the case may be) was prior to such Release of Hazardous Materials, and additionally, shall restore and cause the Property (or the Project as the case may be) to be in compliance with all Environmental Laws which relate to the Release of the subject Hazardous Materials (the "Remediation Work"). Tenant shall comply with the orders and directives of all persons having jurisdiction over the Property or the Remediation Work. Landlord may review any plans and specifications for the Remediation Work before such Remediation Work is performed. Any such plans or specifications shall be prepared by a qualified, licensed engineer or contractor, which Landlord shall have the right to approve, and shall comply with all applicable Environmental Laws, and all other laws, ordinances, rules and regulations. Tenant shall be responsible at Tenant's sole expense to obtain all permits, licenses and approvals for the Remediation Work and to complete the Remediation Work diligently and in a timely manner. Tenant shall pay for all Remediation Work, including the cost of plans, utilities, permits, fees, taxes and insurance premiums in connection therewith. Tenant shall furnish to Landlord promptly upon receipt, copies of all reports, studies, analysis, investigations, contracts, correspondence, claims, complaints, pleadings and other information and communications received or prepared by Tenant at any time in connection with any Remediation Work.

        (g)     Right to Participate by Landlord.     Landlord shall have the right, but not the obligation, to participate in any action or proceeding relating to any past or present Release or threatened Release of any Hazardous Material in, on or under the Property or Project, or any past or present violation of any Environmental Laws at the Property, or the necessity for or adequacy of any Remediation Work. Tenant shall provide immediate notice upon receipt to Landlord and allow Landlord to participate in any negotiations or discussions with any federal, state or local governmental agency, including environmental, occupational or public health and safety agencies with regard to Hazardous Material or any Environmental Laws, including all settlement or discussions regarding abatement or Remediation Work.

13

        (h)     Indemnification by Tenant.     Tenant shall indemnify, reimburse, defend and hold harmless Landlord (and its employees, partners, members, managers, agents, affiliates, successors, lenders and representatives) against all claims, demands, liabilities, losses, damages, costs and expenses in any way arising from, relating to, or connected with: (i) the existence, location, nature, use, generation, manufacture, storage, disposal, handling, or Release or threatened Release of any Hazardous Material in, on or under the Property by any person other than Landlord during the term of this Lease, or by Tenant at any time as to the Property or the Project; (ii) any violation of Environmental Laws at the Property by any person other than Landlord during the term of this Lease, or by Tenant at any time as to the Property or the Project; (iii) any breach of any duty to perform Remediation Work required of Tenant under this Section 5.3; and/or (iv) any breach of any covenant, representation or warranty made by Tenant hereunder, or any failure of Tenant to perform any of Tenant's covenants or obligations in accordance with this Section. The foregoing indemnification shall include all expenses of investigation and monitoring, costs of containment, abatement, removal, repair, clean up, restoration and remedial work, penalties and fines, attorneys' fees and disbursements, environmental engineering fees and costs, and other response costs. The foregoing indemnification shall also include any lost rental amounts which Landlord does not receive from any person, including Tenant (including lost rental amounts after the term of this Lease), diminution in the value of the Property or Project, and other damages caused by or as a result of the release of Hazardous Material, violation of Environmental Laws, or because such Hazardous Material must be remediated from the Property or Project. If Tenant fails to perform any obligation of Tenant in accordance with this Section, Landlord shall have the right, but not the obligation, to perform such obligation on behalf of Tenant. It is agreed that Tenant's duties and obligations of indemnification, reimbursement, defense and hold harmless under this Section specifically permit Landlord to hire (at Tenant's cost) attorneys and environmental engineers to monitor and supervise and to advise Landlord as to any remediation and clean up activities and to perform and monitor any environmental studies of the Property, and to engage such attorneys and environmental engineers to represent and assist Landlord in the event of any litigation (or threat thereof), administrative proceedings or other governmental or private party actions. Tenant shall, on demand, pay to Landlord all sums expended by Landlord in the performance of any such obligations of Tenant, together with interest thereon after such demand at the maximum rate of interest then provided by law. The term "attorneys' fees" under this Section shall mean fees charged by the attorneys in question based upon such attorneys' then prevailing hourly rates as opposed to any statutory presumption specified by any statute then in effect in the State of California. All representations, warranties and indemnifications by Tenant under this Section 5.3 shall survive the termination of this Lease. Tenant waives the right to assert any statute of limitations as a bar to the enforcement of this Section or to any action brought to enforce the provisions of this Section. This Section shall not affect, impair or waive any rights or remedies of Landlord or any obligations imposed or created by Environmental Laws of Tenant with respect to Hazardous Materials (including Landlord's rights of reimbursement or contribution under Environmental Laws). The remedies in this Section are cumulative and in addition to all remedies provided by law.

        (i)     Tenant Not Responsible for Pre-existing Hazardous Materials.     Tenant shall not be responsible for those Hazardous Materials in violation of Environmental Laws existing on the Commencement Date of this Lease which are present on the Property prior to the first to occur of: (i) the date of Tenant's first occupancy of the relevant Unit comprising the Property where the violating Hazardous Materials are present; or (ii) the Commencement Date of this Lease. Notwithstanding the immediately preceding sentence, the Tenant shall be responsible for any Hazardous Materials Released by the Tenant onto the Property, regardless of when such Release has occurred.

        Section 5.4     Outside Storage.     In addition to any other provision specified in this Lease or as required by any law, rule or regulation, Tenant agrees to not have any outside storage of inventory or materials and to keep the exterior of the Property free from debris.

14

        Section 5.5     Signs and Auctions.     Tenant shall not place any signs on the Property without Landlord's prior written consent. Landlord reserves the right to approve the size, type and appearance of any sign. Landlord may require that any sign be installed only by companies approved by Landlord. Tenant shall not conduct or permit any auctions or sheriffs sales at the Property.

        Section 5.6     Indemnity.     Tenant shall indemnify Landlord against, defend Landlord, and hold Landlord harmless from any and all costs, claims or liability arising from: (a) Tenant's use of the Property or the Project; (b) the conduct of Tenant's business or anything else done or permitted by Tenant to be done in or about the Property or the Project, including any contamination of the Property, the Project, or any other property resulting from the presence or use of Hazardous Material caused or permitted by Tenant; (c) any breach or default in the performance of Tenant's obligations under this Lease; (d) any misrepresentation or breach of warranty by Tenant under this Lease; (e) any claims brought against Landlord by another tenant of the Project or person using the Project due to the negligence or acts of the Tenant; or (f) other acts or omissions of Tenant. Tenant shall defend Landlord against any such cost, claim or liability at Tenant's expense with counsel reasonably acceptable to Landlord or, at Landlord's election, Tenant shall reimburse Landlord for any legal fees or costs incurred by Landlord in connection with any such claim. Such indemnification shall include all of Landlord's reasonable engineering fees, attorneys' fees, expenses and costs should Tenant default or breach any of Tenant's maintenance or repair obligations under this Lease. As a material part of the consideration to Landlord, Tenant assumes all risk of damage to property or injury to persons in or about the Property or the Project arising from any cause, and Tenant hereby waives all claims in respect thereof against Landlord. As used in this Section, the term "Tenant" shall include Tenant's employees, agents, contractors, licensees, customers and invitees, if applicable.

        Section 5.7     Landlord's Access.     Landlord or its agents may enter the Property at all reasonable times to show the Property to potential buyers, investors or (in the last 6 months of the Lease Term) tenants or other parties; to do any other act or to inspect and conduct tests in order to monitor Tenant's compliance with all applicable Environmental Laws and all laws governing the presence and use of Hazardous Material; or for any other purpose Landlord deems necessary. Landlord shall give Tenant one (1) business day prior notice of such entry, except in the case of an emergency. Additionally, Landlord may from time to time take interior and exterior photographs of the Property and perform surveys and measurements of the Property at all reasonable times. Landlord may place customary "For Sale" or "For Lease" signs on the Property.

        Section 5.8     Quiet Possession.     If Tenant pays the rent and complies with all of the terms of this Lease, and is not in default under this Lease, then Tenant may occupy and enjoy the Property for the full Lease Term, subject to the provisions of this Lease.

        Section 5.9     Future Easements and Governmental Requirements.     Tenant agrees that Tenant shall cooperate with Landlord in granting any easements and signing any easements, covenants, conditions or restrictions which may be required by any governmental agency or utility for the Property, or which Landlord may otherwise require, provided that such easement, condition or restriction does not materially interfere with Tenant's use of the Property.

ARTICLE 6:     CONDITION OF PROPERTY; MAINTENANCE, REPAIRS AND ALTERATIONS     

        Section 6.1     Existing Conditions.     Except as provided in the Construction Rider, Tenant accepts the Property and the Project in its condition as of the execution of this Lease, subject to all recorded matters, laws, ordinances, conditional use permits, and governmental regulations and orders. Except as provided herein and in the Construction Rider, Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation as to the condition of the Property or the Project or the suitability of the Property or the Project for Tenant's intended use. Tenant acknowledges that prior to the execution of this Lease Tenant has