Exhibit 10.27

Standard Multi-Tenant Office Lease - Net, dated October 11, 2017, by and between
Eiger BioPharmaceuticals, Inc. and the McDonald Family Co. LLC, and addendum.

 

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STANDARD MULTI-TENANT OFFICE LEASE - NET

 

1.

Basic Provisions (“Basic Provisions”).

1.1Parties. This Lease (“Lease”), dated for reference purposes only October 11,
2017, is made by and between McDonald Family Co. LLC (“Lessor”) and Eiger
BioPharmaceuticals Inc. (“Lessee”), (collectively the “Parties”, or individually
a “Party”).

1.2(a)Premises: That certain portion of the Project (as defined below), commonly
known as (street address, suite, city, state): 2171 Park Blvd, Palo Alto, CA
(“Premises”). The Premises are located in the County of Santa Clara, and consist
of approximately 8, 029 rentable square feet and approximately 8,029 useable
square feet. In addition to Lessee’s rights to use and occupy the Premises as
hereinafter specified, Lessee shall have non-exclusive rights to the Common
Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall
not have any rights to the roof, the exterior walls, the area above the dropped
ceilings, or the utility raceways of the building containing the Premises
(“Building”) or to any other buildings in the Project. The Premises, the
Building, the Common Areas, the land upon which they are located, along with all
other buildings and improvements thereon, are herein collectively referred to as
the “Project.” The Project consists of approximately _______ rentable square
feet. (See also Paragraph 2)

1.2(b)Parking: _______ unreserved and 17 reserved vehicle parking spaces at a
monthly cost of _______ per unreserved space and _______ per reserved space.
(See Paragraph 2.6)

1.3Term: 5 years and _______ months (“Original Term”) commencing March 1, 2018
(“Commencement Date”) and ending February 28, 2023 (“Expiration Date”). (See
also Paragraph 3)

1.4Early Possession: If the Premises are available Lessee may have non-exclusive
possession of the Premises commencing February 1, 2018 (“Early Possession
Date”). (See also Paragraphs 3.2 and 3.3)

1.5Base Rent: $6.00 per month (“Base Rent”), payable on the 1st day of each
month commencing March 1, 2018. (See also  Paragraph 4) The Base Rent shall
increase annually by 3%.

☑ If this box is checked, there are provisions in this Lease for the Base Rent
to be adjusted. See Paragraph 51.

1.6Lessee’s Share of Operating Expenses: fifty-five percent (55%) (“Lessee’s
Share”). In the event that that size of the Premises and/or the Project are
modified during the term of this Lease, Lessor shall recalculate Lessee’s Share
to reflect such modification.

1.7Base Rent and Other Monies Paid Upon Execution:

 

(a)

Base Rent: $48,174.00 for the period March 1, 2018 - March 31, 2018.

 

(b)

Operating Expenses: $7,627.65 for the period March 1, 2018 - March 31, 2018.

 

(c)

Security Deposit: $289,044.00 (“Security Deposit”). (See also Paragraph 5 and
Addendum 58)

(d) Parking: _______ for the period _______.

(e) Other: _______ for _______.

 

(f)

Total Due Upon Execution of this Lease: $337,218.00.

1.8Agreed Use: Professional, office, R&D uses and other permitted legal uses.
(See also Paragraph 6)

1.9Insuring Party. Lessor is the “Insuring Party”. (See also Paragraph 8)

1.10Real Estate Brokers. (See also Paragraph 15 and 25)

 

(a)

Representation: The following real estate brokers (the “Brokers”) and brokerage
relationships exist in this transaction (check applicable boxes):

☑ Newmark Cornish & Carey represents Lessor exclusively (“Lessor’s Broker”);

☑ Jones Lang LaSalle represents Lessee exclusively (“Lessee’s Broker”); or

☐ _______represents both Lessor and Lessee (“Dual Agency”).

 

(b)

Payment to Brokers. Upon execution and delivery of this Lease by both Parties,
Lessor shall pay to the Brokers the brokerage fee agreed to in a separate
written agreement (or if there is no such agreement, the sum of _______ or
_______ % of the total Base Rent) for the brokerage services rendered by the
Brokors.

1.11Guarantor. The obligations of the Lessee under this Lesse-shall-be
guaranteed by  _______ (“Guarantor”). (See also Paragraph 37)

1.12Business Hours for the Building: 8:00 a.m. to 6:00 p.m., Mondays through
Fridays (except Building Holidays) and 9:00 a.m. to 1:00 p.m. on Saturdays
(except Building Holidays). “Building Holidays” shall mean the dates of
observation of New Year’s Day, President’s Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, Christmas Day, and _______.

1.13Lessor Supplied Services. Notwithstanding the provisions of Paragraph 11.1,
Lessor is NOT obligated to provide the following within the Premises:

☑ Janitorial services

☑ Electricity

☐ Other (specify): _______

1.14Attachments. Attached hereto are the following, all of which constitute a
part of this Lease:

☑ an Addendum consisting of Paragraphs 50 through 80;

☑ a plot plan depicting the Premises;

☑ a current set of the Rules and Regulations;

☐ a Work Letter;

☐ a janitorial schedule;

☑ other (specify): Floor Plan.

 

2.

Premises.

2.1Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, the Premises, for the term, at the rental, and upon all of the terms,
covenants and conditions set forth in this Lease. While the approximate square
footage of the Premises may have been used in the marketing of the Premises for
purposes of comparison, the Base Rent stated herein is NOT tied to square
footage and is not subject to adjustment should the actual size be determined to
be different. NOTE: Lessee is advised to verify the actual size prior to
executing this Lease.

2.2Condition. Lessor shall deliver the Premises to Lessee in a clean condition
on the Commencement Date or the Early Possession Date, whichever first occurs
(“Start Date”), and warrants that the existing electrical, plumbing, fire
sprinkler, lighting, heating, ventilating and air conditioning systems (“HVAC”),
and all other items which the Lessor is obligated to construct pursuant to the
Work Letter attached hereto, if any, other than those constructed by Lessee,
shall be in good operating condition on said date, that the structural elements
of the roof, bearing walls and foundation of the Unit shall be free of material
defects, and that the Premises do not contain hazardous levels of any mold or
fungi defined as toxic under applicable state or federal law. Lessor also
warrants, that unless otherwise specified in writing, Lessor is unaware of (i)
any recorded Notices of Default affecting the Premise; (ii) any delinquent
amounts due under any loan secured by the Premises; and (iii) any bankruptcy
proceeding affecting the Premises.

2.3Compliance. Lessor warrants that to the best of its knowledge the
improvements on the Premises and the Common Areas comply with the building
codes, applicable laws, covenants or restrictions of record, regulations, and
ordinances (“Applicable Requirements”) that were in effect at the time that each
improvement, or portion thereof, was constructed. Said warranty does not apply
to the use to which Lessee will put the Premises, modifications which may be
required by the Americans with Disabilities Act or any similar laws as a result
of Lessee’s use (see Paragraph 49), or to any Alterations or Utility
Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee.
NOTE: Lessee is responsible for determining whether or not the zoning and other
Applicable Requirements are appropriate for Lessee’s intended use, and
acknowledges that past uses of the Premises may no longer be allowed. If the
Premises do not comply with said warranty, Lessor shall, except as otherwise
provided, promptly after receipt of written notice from Lessee setting forth
with specificity the nature and extent of such non-compliance, rectify the same.
If the Applicable Requirements are hereafter changed so as to require during the
term of this Lease the construction of an addition to or an alteration of the
Premises, the remediation of any Hazardous Substance, or the reinforcement or
other physical modification of the Premises (“Capital Expenditure”), Lessor and
Lessee shall allocate the cost of such work as follows:

(a)Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required
as a result of the specific and unique use of the Premises by Lessee as

 

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compared with uses by tenants in general, Lessee shall be fully responsible for
the cost thereof, provided, however, that if such Capital Expenditure is
required during the last 2 years of this Lease and the cost thereof exceeds 6
months’ Base Rent, Lessee may instead terminate this Lease unless Lessor
notifies Lessee, in writing, within 10 days after receipt of Lessee’s
termination notice that Lessor has elected to pay the difference between the
actual cost thereof and the amount equal to 6 months’ Base Rent. If Lessee
elects termination, Lessee shall immediately cease the use of the Premises which
requires such Capital Expenditure and deliver to Lessor written notice
specifying a termination date at least 90 days thereafter. Such termination date
shall, however, in no event be earlier than the last day that Lessee could
legally utilize the Premises without commencing such Capital Expenditure.

(b)If such Capital Expenditure is not the result of the specific and unique use
of the Premises by Lessee (such as, governmentally mandated seismic
modifications), then Lessor shall pay for such Capital Expenditure and Lessee
shall only be obligated to pay, each month during the remainder of the term of
this Lease or any extension thereof, on the date that on which the Base Rent is
due, an amount equal to 1/144th of the portion of such costs reasonably
attributable to the Premises. Lessee shall pay Interest on the balance but may
prepay its obligation at any time. If, however, such Capital Expenditure is
required during the last 2 years of this Lease or if Lessor reasonably
determines that it is not economically feasible to pay its share thereof, Lessor
shall have the option to terminate this Lease upon 90 days prior written notice
to Lessee unless Lessee notifies Lessor, in writing, within 10 days after
receipt of Lessor’s termination notice that Lessee will pay for such Capital
Expenditure. If Lessor does not elect to terminate, and fails to tender its
share of any such Capital Expenditure, Lessee may advance such funds and deduct
same, with Interest, from Rent until Lessor’s share of such costs have been
fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of
the Rent due and payable for the remainder of this Lease is not sufficient to
fully reimburse Lessee on an offset basis, Lessee shall have the right to
terminate this Lease upon 30 days written notice to Lessor.

(c)Notwithstanding the above, the provisions concerning Capital Expenditures are
intended to apply only to non-voluntary, unexpected, and new Applicable
Requirements. If the Capital Expenditures are instead triggered by Lessee as a
result of an actual or proposed change in use, change in intensity of use, or
modification to the Premises then, and in that event, Lessee shall either: (i)
immediately cease such changed use or intensity of use and/or take such other
steps as may be necessary to eliminate the requirement for such Capital
Expenditure, or (ii) complete such Capital Expenditure at its own expense.
Lessee shall not have any right to terminate this Lease.

2.4Acknowledgements. Lessee acknowledges that: (a) it has been given an
opportunity to inspect and measure the Premises, (b) Lessee has been advised by
Lessor and/or Brokers to satisfy itself with respect to the size and condition
of the Premises (including but not limited to the electrical, HVAC and fire
sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements), and their suitability for Lessee’s intended use, (c)
Lessee has made such investigation as it deems necessary with reference to such
matters and assumes all responsibility therefor as the same relate to its
occupancy of the Premises, (d) it is not relying on any representation as to the
size of the Premises made by Brokers or Lessor, (e) the square footage of the
Premises was not material to Lessee’s decision to lease the Premises and pay the
Rent stated herein, and (f) neither Lessor, Lessor’s agents, nor Brokers have
made any oral or written representations or warranties with respect to said
matters other than as set forth in this Lease. In addition, Lessor acknowledges
that: (i) Brokers have made no representations, promises or warranties
concerning Lessee’s ability to honor the Lease or suitability to occupy the
Premises, and (ii) it is Lessor’s sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants.

2.5Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2
shall be of no force or effect if immediately prior to the Start Date, Lessee
was the owner or occupant of the Premises. In such event, Lessee shall be
responsible for any necessary corrective work.

2.6Vehicle Parking. So long as Lessee is not in default, and subject to the
Rules and Regulations attached hereto, and as established by Lessor from time to
time, Lessee shall be entitled to rent and use the number of parking spaces
specified in Paragraph 1.2(b) at the rental rate applicable from time to time
for monthly parking as set by Lessor and/or its licensee.

(a)If Lessee commits, permits or allows any of the prohibited activities
described in the Lease or the rules then in effect, then Lessor shall have the
right, without notice, in addition to such other rights and remedies that It may
have, to remove or tow away the vehicle involved and charge the cost to Lessee,
which cost shall be immediately payable upon demand by Lessor.

(b)The monthly rent per parking space specified in Paragraph 1.2(b) is subject
to change upon 30 days prior written notice to Lessee. The rent for the parking
is payable one month in advance prior to the first day of each calendar month.

2.7Common Areas - Definition. The term “Common Areas” is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Project and interior utility raceways and installations within the Premises that
are provided and designated by the Lessor from time to time for the general
nonexclusive use of Lessor, Lessee and other tenants of the Project and their
respective employees, suppliers, shippers, customers, contractors and invitees,
including, but not limited to, common entrances, lobbies, corridors, stairwells,
public restrooms, elevators, parking areas, loading and unloading areas, trash
areas, roadways, walkways, driveways and landscaped areas.

2.8Common Areas - Lessee’s Rights. Lessor grants to Lessee, for the benefit of
Lessee and its employees, suppliers, shippers, contractors, customers and
invitees, during the term of this Lease, the non-exclusive right to use, in
common with others entitled to such use, the Common Areas as they exist from
time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or
restrictions governing the use of the Project. Under no circumstances shall the
right herein granted to use the Common Areas be deemed to include the right to
store any property, temporarily or permanently, in the Common Areas. Any such
storage shall be permitted only by the prior written consent of Lessor or
Lessor’s designated agent, which consent may be revoked at any time. In the
event that any unauthorized storage shall occur, then Lessor shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove the property and charge the cost to Lessee, which cost shall be
immediately payable upon demand by Lessor.

2.9Common Areas - Rules and Regulations. Lessor or such other person(s) as
Lessor may appoint shall have the exclusive control and management of the Common
Areas and shall have the right, from time to time, to adopt, modify, amend and
enforce reasonable rules and regulations (“Rules and Regulations”) for the
management, safety, care, and cleanliness of the grounds, the parking and
unloading of vehicles and the preservation of good order, as well as for the
convenience of other occupants or tenants of the Building and the Project and
their invitees. The Lessee agrees to abide by and conform to all such Rules and
Regulations, and shall use its best efforts to cause its employees, suppliers,
shippers, customers, contractors and invitees to so abide and conform. Lessor
shall not be responsible to Lessee for the noncompliance with said Rules and
Regulations by other tenants of the Project.

2.10Common Areas - Changes. Lessor shall have the right, in Lessor’s sole
discretion, from time to time:

(a)To make changes to the Common Areas, including, without limitation, changes
in the location, size, shape and number of the lobbies, windows, stairways, air
shafts, elevators, escalators, restrooms, driveways, entrances, parking spaces,
parking areas, loading and unloading areas, ingress, egress, direction of
traffic, landscaped areas, walkways and utility raceways;

(b)To close temporarily any of the Common Areas for maintenance purposes so long
as reasonable access to the Premises remains available;

(c)To designate other land outside the boundaries of the Project to be a part of
the Common Areas;

(d)To add additional buildings and improvements to the Common Areas;

(e)To use the Common Areas while engaged in making additional improvements,
repairs or alterations to the Project, or any portion thereof; and

(f)To do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Project as Lessor may, in the exercise of sound
business judgment, deem to be appropriate.

 

3.

Term.

3.1Term. The Commencement Date, Expiration Date and Original Term of this Lease
are as specified in Paragraph 1.3.

3.2Early Possession. Any provision herein granting Lessee Early Possession of
the Premises is subject to and conditioned upon the Premises being available for
such possession prior to the Commencement Date. Any grant of Early Possession
only conveys a non-exclusive right to occupy the Premises. If Lessee totally or
partially occupies the Premises prior to the Commencement Date, the obligation
to pay Base Rent shall be abated for the period of such Early Possession. All
other terms of this Lease (including but not limited to the obligations to pay
Lessee’s Share of the Operating Expenses) shall be in effect during such period.
Any such Early Possession shall not affect the Expiration Date.

3.3Delay In Possession. See Addendum Lessor agrees to use its best commercially
reasonable efforts to deliver possession of the Premises to Lessee by the
Commencement Date. If, despite said efforts, Lessor is unable to deliver
possession by such date, Lessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Lease or change the
Expiration Date. Lessee shall not, however, be obligated to pay Rent or perform
its other obligations until Lessor delivers possession of the Premises and any
period of rent abatement that Lessee would otherwise have enjoyed shall run from
the date of delivery of possession and continue for a period equal to what
Lessee would otherwise have enjoyed under the terms hereof, but minus any days
of delay caused by the acts or omissions of Lessee. If possession is not
delivered within 60 days after the Commencement Date, as the same may be
extended under the terms of any Work Letter executed by Parties, Lessee may, at
its option, by notice in writing within 10 days after the end of such 60 day
period, cancel this Lease, in which event the Parties shall be discharged from
all obligations hereunder. If such written notice is not received by Lessor
within said 10 day period, Lessee’s right to cancel shall terminate. lf
possession of the Premises is not delivered within 120 days after the
commencement Date, this Lease shall terminate unless other agreements are
reached between Lessor and Lessee, in writing.

3.4Lessee Compliance. Lessor shall not be required to deliver possession of the
Premises to Lessee until Lessee complies with its obligation to provide evidence
of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be
required to perform all of its obligations under this Lease from and after the
Start Date, including the payment of Rent, notwithstanding Lessor’s election to
withhold possession pending receipt of such evidence of insurance. Further, if
Lessee is required to perform any other conditions prior to or concurrent with
the Start Date, the Start Date shall occur but Lessor may elect to withhold
possession until such conditions are satisfied.

4.

Rent.

4.1Rent Defined. All monetary obligations of Lessee to Lessor under the terms of
this Lease (except for the Security Deposit) are deemed to be rent (“Rent”).

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INITIALS

Last Edited: 11/17/2017 9:41 AM

INITIALS

© 2017 AIR CRE. All Rights Reserved.

 

MTON-20.00, Revised 01-03-2017

 

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4.2Operating Expenses. Lessee shall pay to Lessor during the term hereof, in
addition to the Base Rent, Lessee’s Share of all Operating Expenses, as
hereinafter defined, during each calendar year of the term of this Lease, in
accordance with the following provisions:

(a)“Operating Expenses” include all costs relating to the ownership and
operation of the Project, calculated as if the Project was at least 95%
occupied, including, but not limited to, the following:

(i)The operation, repair, and maintenance in neat, clean, safe, good order and
condition, of the following:

(aa)The Common Areas, including their surfaces, coverings, decorative items,
carpets, drapes and window coverings, and including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, stairways,
parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
Common Area lighting facilities, building exteriors and roofs, fences and gates;

(bb)All heating, air conditioning, plumbing, electrical systems, life safety
equipment, communication systems and other equipment used in common by, or for
the benefit of, lessees or occupants of the Project, including elevators and
escalators, tenant directories, fire detection systems including sprinkler
system maintenance and repair.

(cc)The Premises and/or any other space occupied by a tenant.

(ii)The cost of trash disposal, janitorial and security services, and pest
control services, and the costs of any environmental inspections;

(iii)The cost of any other service to be provided by Lessor that is elsewhere in
this Lease stated to be an “Operating Expense”;

(iv)The cost of the premiums for the insurance policies maintained by Lessor
pursuant to paragraph 8 and any deductible portion of an insured loss concerning
the Building or the Common Areas;

(v) The amount of the Real Property Taxes payable by Lessor pursuant to
paragraph 10;

(vi)The cost of water, sewer, gas, electricity, and other publicly mandated
services not separately metered;

(vii)Labor, salaries, and applicable fringe benefits and costs, materials,
supplies and tools, used in maintaining and/or cleaning the Project and
accounting and management fees attributable to the operation of the Project;

(viii)The cost to replace equipment or capital components such as the roof,
foundations, or exterior walls, the cost to replace a Common Area capital
improvement, such as the parking lot paving, elevators or fences, and/or the
cost of any capital improvement to the Building or the Project not covered under
the provisions of Paragraph 2.3. Provided however, that if such equipment or
capital component has a useful life for accounting purposes of 5 years or more
that Lessor shall allocate the cost of any such capital improvement over a 12
year period and Lessee shall not be required to pay more than Lessee’s Share of
1/144th of the cost of such capital improvement in any given month;

(ix)The cost to replace equipment or improvements that have a useful life for
accounting purposes of 5 years or less.

(x)Reserves set-aside for maintenance, repair and/or raplacement of improvements
and equipment.

(b)Any item of Operating Expense that is specifically attributable to the
Premises, the Building or to any other building in the Project or to the
operation, repair and maintenance thereof, shall be allocated entirely to such
Premises, Building, or other building. However, any such item that is not
specifically attributable to the Building or to any other building or to the
operation, repair and maintenance thereof, shall be equitably allocated by
Lessor to all buildings in the Project.

(c)The inclusion of the improvements, facilities and services set forth in
Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to
either have said improvements or facilities or to provide those services unless
the Project already has the same, Lessor already provides the services, or
Lessor has agreed elsewhere in this Lease to provide the same or some of them.

(d)See Addendum Lessee’s Share of Operating Expenses is payable monthly on the
same days as the Base Rent it due hereunder. The amount of such. payments shall
bo based on Lessor’s estimate of the Operating Expenses Within 60 days after
written request (but not more than once each year) Lessor shall deliver. to
Lessee a reasenably detailed statement showing Lessee’s Share of the actual
Operating Expenses for the preceding year, If Lessee’s payments during such year
exceed Lessee’s Share, Lessor shall credit the amount-of such over-payment
against Lessee’s future payments. If Lessee’s payments during such year were
less than Lessee’s Share, Lessee shall pay to Lessor the amount of the
deficiency-within 10 days after delivery by Lessor to Lessee of-the statement.

(e)Operating Expenses shall not include any expenses paid by any tenant directly
to third parties, or as to which Lessor is otherwise reimbursed by any third
party, other tenant, or by insurance proceeds.

 

4.3Payment. Lessee shall cause payment of Rent to be received by Lessor in
lawful money of the United States, without offset or deduction (except as
specifically permitted in this Lease), on or before the day on which it is due.
All monetary amounts shall be rounded to the nearest whole dollar. In the event
that any invoice prepared by Lessor is inaccurate such inaccuracy shall not
constitute a waiver and Lessee shall be obligated to pay the amount set forth in
this Lease. Rent for any period during the term hereof which is for less than
one full calendar month shall be prorated based upon the actual number of days
of said month. Payment of Rent shall be made to Lessor at its address stated
herein or to such other persons or place as Lessor may from time to time
designate in writing. Acceptance of a payment which is less than the amount then
due shall not be a waiver of Lessor’s rights to the balance of such Rent,
regardless of Lessor’s endorsement of any check so stating. In the event that
any check, draft, or other instrument of payment given by Lessee to Lessor is
dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in
addition to any Late Charge and Lessor, at its option, may require all future
Rent be paid by cashier’s check. Payments will be applied first to accrued late
charges and attorney’s fees, second to accrued interest, then to Base Rent and
Operating Expenses, and any remaining amount to any other outstanding charges or
costs.

 

5.Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee’s faithful performance of its
obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults
under this Lease, Lessor may use, apply or retain all or any portion of said
Security Deposit for the payment of any amount already due Lessor, for Rents
which will be due in the future, and/ or to reimburse or compensate Lessor for
any liability, expense, loss or damage which Lessor may suffer or incur by
reason thereof. If Lessor uses or applies all or any portion of the Security
Deposit, Lessee shall within 10 days after written request therefor deposit
monies with Lessor sufficient to restore said Security Deposit to the full
amount required by this Lease. if the Base Rent increases during the term of
this Lease,Lessee shall, upon written request from Less or, deposit additional
monies with Lessor so that the total amount of the Security Deposit shall at all
times bear the same proportion to the increased Base Rent the initial Security
Deposit bore to the initial Base Rent Should the Agreed Use be amended to
accommodate a material change in the business of Lessee or to accommodate a
sublessee or assignee, Lessor shall have the right to increase the Security
Deposit to the extent necessary, In Lessor’s reasonable judgment, to account for
any increased wear and tear that the Premises may suffer as a result thereof. If
a change in control of Lessee occurs during this Lease and following such change
the financial condition of Lessee is, in Lessor’s reasonable judgment,
significantly reduced, Lessee shall deposit such additional monies with Lessor
as shall be sufficient to cause the Security Deposit to be at a commercially
reasonable level based on such change in financial condition. Lessor shall not
be required to keep the Security Deposit separate from its general accounts.
Within 90 days after the expiration or termination of this Lease, Lessor shall
return that portion of the Security Deposit not used or applied by Lessor.
Lessor shall upon written request provide Lessee with an accounting showing how
that portion of the Security Deposit that was not returned was applied. No part
of the Security Deposit shall be considered to be held in trust, to bear
interest or to be prepayment for any monies to be paid by Lessee under this
Lease. THE SECURITY DEPOSIT SHALL NOT BE USED BY LESSEE IN LIEU OF PAYMENT OF
THE LAST MONTH’S RENT.

 

6.Use.

6.1Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any
other legal use which is reasonably comparable thereto, and for no other
purpose. Lessee shall not use or permit the use of the Premises in a manner that
is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of
or causes damage to neighboring premises or properties. Other than guide, signal
and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets,
animals, birds, fish, or reptiles. Lessor shall not unreasonably withhold or
delay its consent to any written request for a modification of the Agreed Use,
so long as the same will not impair the structural integrity of the improvements
of the Building, will not adversely affect the mechanical, electrical, HVAC, and
other systems of the Building, and/or will not affect the exterior appearance of
the Building. If Lessor elects to withhold consent, Lessor shall within 7 days
after such request give written notification of same, which notice shall include
an explanation of Lessor’s objections to the change in the Agreed Use.

6.2Hazardous Substances.

(a)Reportable Uses Require Consent. The term “Hazardous Substance” as used in
this Lease shall mean any product, substance, or waste whose presence, use,
manufacture, disposal, transportation, or release, either by Itself or in
combination with other materials expected to be on the Premises, is either: (i)
potentially injurious to the public health, safety or welfare, the environment
or the Premises, (ii) regulated or monitored by any governmental authority, or
(iii) a basis for potential liability of Lessor to any governmental agency or
third party under any applicable statute or common law theory. Hazardous
Substances shall include, but not be limited to, hydrocarbons, petroleum,
gasoline, and/or crude oil or any products, byproducts or fractions thereof.
Lessee shall not engage in any activity in or on the Premises which constitutes
a Reportable Use of Hazardous Substances without the express prior written
consent of Lessor and timely compliance (at Lessee’s expense) with all
Applicable Requirements. “Reportable Use” shall mean (i) the installation or use
of any above or below ground storage tank, (ii) the generation, possession,
storage, use, transportation, or disposal of a Hazardous Substance that requires
a permit from, or with respect to which a report, notice, registration or
business plan is required to be filed with, any governmental authority, and/or
(iii) the presence at the Premises of a Hazardous Substance with respect to
which any Applicable Requirements requires that a notice be given to persons
entering or occupying the Premises or neighboring properties. Notwithstanding
the foregoing, Lessee may use any ordinary and customary materials reasonably
required to be used in the normal course of the Agreed Use such as ordinary
office supplies (copier toner, liquid paper, glue, etc.) and common household
cleaning materials, so long as such use is in compliance with all Applicable
Requirements, is not a Reportable Use, and does not expose the Premises or
neighboring property to any meaningful risk of contamination or damage or expose
Lessor to any liability therefor. In addition, Lessor may condition its consent
to any

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Reportable Use upon receiving such additional assurances as Lessor reasonably
deems necessary to protect itself, the public, the Premises and/or the
environment against damage, contamination, injury and/or liability, including,
but not limited to, the installation (and removal on or before Lease expiration
or termination) of protective modifications (such as concrete encasements)
and/or increasing the Security Deposit.

(b)Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe,
that a Hazardous Substance has come to be located in, on, under or about the
Premises, other than as previously consented to by Lessor, Lessee shall
immediately give written notice of such fact to Lessor, and provide Lessor with
a copy of any report, notice, claim or other documentation which it has
concerning the presence of such Hazardous Substance.

(c)Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance
to be spilled or released in, on, under, or about the Premises (including
through the plumbing or sanitary sewer system) and shall promptly, at Lessee’s
expense, comply with all Applicable Requirements and take all investigatory
and/or remedial action reasonably recommended, whether or not formally ordered
or required, for the cleanup of any contamination of, and for the maintenance,
security and/or monitoring of the Premises or neighboring properties, that was
caused or materially contributed to by Lessee, or pertaining to or involving any
Hazardous Substance brought onto the Premises during the term of this Lease, by
or for Lessee, or any third party.

(d)Lessee Indemnification. Lessee shall indemnify, defend and hold Lessor, its
agents, employees, lenders and ground lessor, if any, harmless from and against
any and all loss of rents and/or damages, liabilities, judgments, claims,
expenses, penalties, and attorneys’ and consultants’ fees arising out of or
involving any Hazardous Substance brought onto the Premises by or for Lessee, or
any third party (provided, however, that Lessee shall have no liability under
this Lease with respect to underground migration of any Hazardous Substance
under the Premises from areas outside of the Project not caused or contributed
to by Lessee). Lessee’s obligations shall include, but not be limited to, the
effects of any contamination or injury to person, property or the environment
created or suffered by Lessee, and the cost of investigation, removal,
remediation, restoration and/or abatement, and shall survive the expiration or
termination of this Lease. No termination, cancellation or release agreement
entered into by Lessor and Lessee shall release Lessee from its obligations
under this Lease with respect to Hazardous Substances, unless specifically so
agreed by Lessor in writing at the time of such agreement.

(e)Lessor Indemnification. Except as otherwise provided in paragraph 8.7, Lessor
and Its successors and assigns shall Indemnify, defend, reimburse and hold
Lessee, its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which result from
Hazardous Substances which existed on the Premises prior to Lessee’s occupancy
or which are caused by the gross negligence or willful misconduct of Lessor, its
agents or employees. Lessor’s obligations, as and when required by the
Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall
survive the expiration or termination of this Lease,

(f)Investigations and Remediations. Lessor shall retain the responsibility and
pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Premises prior to Lessee’s occupancy, unless such remediation
measure is required as a result of Lessee’s use (Including “Alterations”, as
defined in paragraph 7.3(a) below) of the Premises, In which event Lessee shall
be responsible for such payment, Lessee shall cooperate fully in any such
activities at the request of Lessor, including allowing Lessor and Lessor’s
agents to have reasonable access to the Premises at reasonable times in order to
carry out Lessor’s investigative and remedial responsibilities.

(g)Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph
9.1(e)) occurs during the term of this Lease, unless Lessee is legally
responsible therefor (in which case Lessee shall make the investigation and
remediation thereof required by the Applicable Requirements and this Lease shall
continue in full force and effect, but subject to Lessor’s rights under
Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s option, either (i)
investigate and remediate such Hazardous Substance Condition, if required, as
soon as reasonably possible at Lessor’s expense, in which event this Lease shall
continue in full force and effect, or (ii) If the estimated cost to remediate
such condition exceeds 12 times the then monthly Base Rent or $100,000,
whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance
Condition, of Lessor’s desire to terminate this Lease as of the date 60 days
following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, within 10 days thereafter, give written notice
to Lessor of Lessee’s commitment to pay the amount by which the cost of the
remediation of such Hazardous Substance Condition exceeds an amount equal to 12
times the then monthly Base Rent or $100,000, whichever is greater. Lessee shall
provide Lessor with said funds or satisfactory assurance thereof within 30 days
following such commitment. In such event, this Lease shall continue in full
force and effect, and Lessor shall proceed to make such remediation as soon as
reasonably possible after the required funds are available. If Lessee does not
give such notice and provide the required funds or assurance thereof within the
time provided, this Lease shall terminate as of the date specified in Lessor’s
notice of termination.

6.3Lessee’s Compliance with Applicable Requirements. Except as otherwise
provided In this Lease, Lessee shall, at Lessee’s sole expense, fully,
diligently and in a timely manner, materially comply with all Applicable
Requirements, the requirements of any applicable fire insurance underwriter or
rating bureau, and the recommendations of Lessor’s engineers and/or consultants
which relate in any manner to the Premises, without regard to whether said
Applicable Requirements are now in effect or become effective after the Start
Date. Lessee shall, within 10 days after receipt of Lessor’s written request,
provide Lessor with copies of all permits and other documents, and other
information evidencing Lessee’s compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in
writing (with copies of any documents involved) of any threatened or actual
claim, notice, citation, warning, complaint or report pertaining to or Involving
the failure of Lessee or the Premises to comply with any Applicable
Requirements, Likewise, Lessee shall immediately give written notice to Lessor
of: (i) any water damage to the Premises and any suspected seepage, pooling,
dampness or other condition conducive to the production of mold; or (ii) any
mustiness or other odors that might indicate the presence of mold in the
Premises.

6.4Inspection; Compliance. See Addendum Lessor and Lessor’s “Lender” (as defined
in Paragraph 30) and consultants authorized by Lessor shall have the right to
enter into Premises at any time, in the case of an emergency, and otherwise at
reasonable times, after reasonable notice, for the purpose of inspecting and/or
testing the condition of the Premises and/or for verifying compliance by Lessee
with this Lease. The cost of any such inspections shall be paid by Lessor,
unless a violation of Applicable Requirements, or a Hazardous Substance
Condition (see Paragraph 9.1) is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case,
Lessee shall upon request reimburse Lessor for the cost of such inspection, so
long as such inspection is reasonably related to the violation or contamination.
In addition, Lessee shall provide copies of all relevant material safety data
sheets (MSDS) to Lessor within 10 days of the receipt of written request
therefor. Lessee acknowledges that any failure on its part to allow such
inspections or testing will expose Lessor to risks and potentially cause Lessor
to incur costs not contemplated by this Lease, the extent of which will be
extremely difficult to ascertain. Accordingly, should the Lessee fail to allow
such inspections and/or testing in a timely fashion the Base Rent shall be
automatically increased, without any requirement for notice to Lessee, by an
amount equal to 10% of the then existing Base Rent or $100, whichever is greater
for the remainder to the Lease. The Parties agree that such increase in Base
Rent represents fair and reasonable compensation for the additional risk/costs
that Lessor will incur by reason of Lessee’s failure to allow such inspection
and/or testing. Such increase in Base Rent shall in no event constitute a waiver
of Lessee’s Default or Breach with respect to such failure nor prevent the
exercise of any of the other rights and remedies granted hereunder.

 

7.Maintenance; Repairs; Utility Installations; Trade Fixtures and Alterations.

 

7.1Lessee’s Obligations. Notwithstanding Lessor’s obligation to keep the
Premises in good condition and repair, Lessee shall be responsible for the cost
of painting, repairing or replacing wall coverings, and to repair or replace any
improvements within the Premises.

7.2Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2
(Condition), 2.3 (Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee’s
Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject
to reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition
and repair the Premises, the foundations, exterior walls, structural condition
of interior bearing walls, exterior roof, fire sprinkler system, fire alarm
and/or smoke detection systems, fire hydrants, and the Common Areas.

7.3Utility Installations; Trade Fixtures; Alterations.

(a)Definitions. The term “Utility Installations” refers to all floor and window
coverings, air lines, vacuum lines, power panels, electrical distribution,
security and fire protection systems, communication cabling, lighting fixtures,
HVAC equipment, and plumbing in or on the Premises. The term “Trade Fixtures”
shall mean Lessee’s machinery and equipment that can be removed without doing
material damage to the Premises. The term “Alterations” shall mean any
modification of the improvements, other than Utility Installations or Trade
Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or
Utility Installations” are defined as Alterations and/or Utility Installations
made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a).

(b)Consent. Lessee shall not make any Alterations or Utility Installations to
the Premises without Lessor’s prior written consent. Lessee may, however, make
non-structural Alterations or Utility Installations to the interior of the
Premises (excluding the roof) without such consent but upon notice to Lessor, as
long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof, ceilings, floors or any existing walls, will
not affect the electrical, plumbing, HVAC, and/or life safety systems, do not
trigger the requirement for additional modifications and/or improvements to the
Premises resulting from Applicable Requirements, such as compliance with Title
24, and the cumulative cost thereof during this Lease as extended does not
exceed $2000$15,000. Notwithstanding the foregoing, Lessee shall not make or
permit any roof penetrations and/or install anything on the roof without the
prior written approval of Lessor. Lessor may, as a precondition to granting such
approval, require Lessee to utilize a contractor chosen and/or approved by
Lessor. Any Alterations or Utility Installations that Lessee shall desire to
make and which require the consent of the Lessor shall be presented to Lessor in
written form with detailed plans. Consent shall be deemed conditioned upon
Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing
Lessor with copies of both the permits and the plans and specifications prior to
commencement of the work, and (iii) compliance with all conditions of said
permits and other Applicable Requirements in a prompt and expeditious manner.
Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion
furnish Lessor with as-built plans and specifications. For work which costs an
amount in excess of one month’s Base Rent, Lessor may condition its consent upon
Lessee providing a lien and completion bond in an amount equal to 150% of the

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estimated cost of such Alteration or Utility Installation and/or upon Lessee’s
posting an additional Security Deposit with Lessor.

(c)Liens; Bonds. Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use on
the Premises, which claims are or may be secured by any mechanic’s or
materialmen’s lien against the Premises or any interest therein. Lessee shall
give Lessor not less than 10 days notice prior to the commencement of any work
in, on or about the Premises, and Lessor shall have the right to post notices of
non-responsibility. If Lessee shall contest the validity of any such lien, claim
or demand, then Lessee shall, at its sole expense defend and protect itself.
Lessor and the Premises against the same and shall pay and satisfy any such
adverse judgment that may be rendered thereon before the enforcement thereof. If
Lessor shall require, Lessee shall furnish a surety bond in an amount equal to
150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such
action, Lessee shall pay Lessor’s attorneys’ fees and costs.

7.4Ownership; Removal; Surrender; and Restoration. See Addendum

(a)Ownership. Subject to Lessor’s right to require removal or elect ownership as
hereinafter provided, all Alterations and Utility Installations made by Lessee
shall be the property of Lessee, but considered a part of the Premises. Lessor
may, at any time, elect in writing to be the owner of all or any specified part
of the Lessee Owned Alterations and Utility Installations. Unless otherwise
instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall, at the expiration or termination of this Lease, become the
property of Lessor and be surrendered by Lessee with the Premises.

(b)Removal. By delivery to Lessee of written notice from Lessor not earlier than
90 and not later than 30 days prior to the end of the term of this Lease, Lessor
may require that any or all Lessee Owned Alterations or Utility Installations be
removed by the expiration or termination of this Lease. Lessor may require the
removal at any time of all or any part of any Lessee Owned Alterations or
Utility Installations made without the required consent.

(c)Surrender; Restoration. Lessee shall surrender the Premises by the Expiration
Date or any earlier termination date, with all of the improvements, parts and
surfaces thereof clean and free of debris, and in good operating order,
condition and state of repair, ordinary wear and tear excepted. “Ordinary wear
and tear” shall not include any damage or deterioration that would have been
prevented by good maintenance practice. Notwithstanding the foregoing, if the
Lessee occupies the Premises for 12 months or less, then Lessee shall surrender
the Premises in the same condition as delivered to Lessee on the Start Date with
NO allowance for ordinary wear and tear. Lessee shall repair any damage
occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee
owned Alterations and/or Utility Installations, furnishings, and equipment as
well as the removal of any storage tank installed by or for Lessee. Lessee shall
also remove from the Premises any and all Hazardous Substances brought onto the
Premises by or for Lessee, or any third party (except Hazardous Substances which
were deposited via underground migration from areas outside of the Project) to
the level specified in Applicable Requirements. Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee. Any personal property of
Lessee not removed on or before the Expiration Date or any earlier termination
date shall be deemed to have been abandoned by Lessee and may be disposed of or
retained by Lessor as Lessor may desire. The failure by Lessee to timely vacate
the Premises pursuant to this Paragraph 7.4(c) without the express written
consent of Lessor shall constitute a holdover under the provisions of Paragraph
26 below,

 

8.Insurance; Indemnity.

8.1Insurance Premiums. The cost of the premiums for the insurance policies
maintained by Lessor pursuant to paragraph 8 are included as Operating Expenses
(see paragraph 4.2 (a)(iv)). Said costs shall include increases in the premiums
resulting from additional coverage related to requirements of the holder of a
mortgage or deed of trust covering the Premises, Building and/or Project,
increased valuation of the Premises, Building and/or Project, and/or a general
premium rate increase. Said costs shall not, however, include any premium
increases resulting from the nature of the occupancy of any other tenant of the
Building. In no event, however, shall Lessee be responsible for any portion of
the premium cost attributable to liability insurance coverage in excess of
$2,000,000 procured under Paragraph 8.2(b).

8.2Liability Insurance.

(a)Carried by Lessee. Lessee shall obtain and keep in force a Commercial General
Liability policy of insurance protecting Lessee and Lessor as an additional
insured against claims for bodily injury, personal injury and property damage
based upon or arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be on an
occurrence basis providing single limit coverage in an amount not less than
$21,000,000 per occurrence with an annual aggregate of not less than
$32,000,000. Lessee shall add Lessor as an additional insured by means of an
endorsement at least as broad as the Insurance Service Organization’s
“Additional Insured-Managers or Lessors of Premises” Endorsement. The policy
shall not contain any intra-insured exclusions as between insured persons or
organizations, but shall include coverage for liability assumed under this Lease
as an “insured contract” for the performance of Lessee’s indemnity obligations
under this Lease. The limits of said insurance shall not, however, limit the
liability of Lessee nor relieve Lessee of any obligation hereunder. Lessee shall
provide an endorsement on its liability policy(ies) which provides that its
insurance shall be primary to and not contributory with any similar insurance
carried by Lessor, whose insurance shall be considered excess insurance only.

(b)Carried by Lessor. Lessor shall maintain liability insurance as described in
Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to
be maintained by Lessee. Lessee shall not be named as an additional insured
therein.

8.3Property Insurance - Building, Improvements and Rental Value.

(a)Building and Improvements. Lessor shall obtain and keep in force a policy or
policies of insurance in the name of Lessor, with loss payable to Lessor, any
ground-lessor, and to any Lender insuring loss or damage to the Building and/or
Project. The amount of such insurance shall be equal to the full insurable
replacement cost of the Building and/or Project, as the same shall exist from
time to time, or the amount required by any Lender, but in no event more than
the commercially reasonable and available insurable value thereof. Lessee Owned
Alterations and Utility Installations, Trade Fixtures, and Lessee’s personal
property shall be insured by Lessee not by Lessor. If the coverage is available
and commercially appropriate, such policy or policies shall insure against all
risks of direct physical loss or damage (except the perils of flood and/or
earthquake unless required by a Lender), including coverage for debris removal
and the enforcement of any Applicable Requirements requiring the upgrading,
demolition, reconstruction or replacement of any portion of the Premises as the
result of a covered loss. Said policy or policies shall also contain an agreed
valuation provision in lieu of any coinsurance clause, waiver of subrogation,
and inflation guard protection causing an increase in the annual property
insurance coverage amount by a factor of not less than the adjusted U.S.
Department of Labor Consumer Price Index for All Urban Consumers for the city
nearest to where the Premises are located. If such insurance coverage has a
deductible clause, the deductible amount shall not exceed $5,000 per occurrence.

(b)Rental Value. Lessor shall also obtain and keep in force a policy or policies
in the name of Lessor with loss payable to Lessor and any Lender, insuring the
loss of the full Rent for one year with an extended period of indemnity for an
additional 180 days (“Rental Value insurance”). Said insurance shall contain an
agreed valuation provision in lieu of any coinsurance clause, and the amount of
coverage shall be adjusted annually to reflect the projected Rent otherwise
payable by Lessee, for the next 12 month period.

(c)Adjacent Premises. Lessee shall pay for any increase in the premiums for the
property insurance of the Building and for the Common Areas or other buildings
in the Project if said increase is caused by Lessee’s acts, omissions, use or
occupancy of the Premises.

(d)Lessee’s Improvements. Since Lessor is the Insuring Party, Lessor shall not
be required to insure Lessee Owned Alterations and Utility Installations unless
the item in question has become the property of Lessor under the terms of this
Lease.

8.4Lessee’s Property; Business Interruption Insurance; Worker’s Compensation
Insurance.

(a)Property Damage. Lessee shall obtain and maintain insurance coverage on all
of Lessee’s personal property, Trade Fixtures, and Lessee Owned Alterations and
Utility installations. Such insurance shall be full replacement cost coverage
with a deductible of not to exceed $1,000 per occurrence. The proceeds from any
such insurance shall be used by Lessee for the replacement of personal property,
Trade Fixtures and Lessee Owned Alterations and Utility Installations.

(b)Business Interruption. Lessee shall obtain and maintain loss of income and
extra expense insurance in amounts as will reimburse Lessee for direct or
indirect loss of earnings attributable to all perils commonly insured against by
prudent lessees in the business of Lessee or attributable to prevention of
access to the Premises as a result of such perils.

(c)Worker’s Compensation Insurance. Lessee shall obtain and maintain Worker’s
Compensation Insurance in such amount as may be required by Applicable
Requirements. Such policy shall include a ‘Waiver of Subrogation’ endorsement.
Lessee shall provide Lessor with a copy of such endorsement along with the
certificate of insurance or copy of the policy required by paragraph 8.5.

(d)No Representation of Adequate Coverage. Lessor makes no representation that
the limits or forms of coverage of insurance specified herein are adequate to
cover Lessee’s property, business operations or obligations under this Lease.

 

8.5Insurance Policies. See Addendum Insurance required herein shall be by
companies maintaining during the policy term a “ General Policyholders Rating”
of at least A-, VII, as set forth in the most current issue of “ Best’s
Insurance Guide”, or such other rating as may be required by a Lender, Lessee
shall not do or permit to be done anything which invalidates the required
insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor
certified copies of policies of such insurance or certificates with copies of
the required endorsements evidencing the existence and amounts of the required
insurance. No such policy shall be canceable or subject to modification except
after 30 days prior written notice to Lessor. Lessee shall, at least 10 days
prior to the expiration of such policies, furnis Lessor with evidence of
renewals or “insurance binders” evidencing renewal thereof, or Lessor may
increase his liabillty insurance coverage and charge the cost thereof to Lessee,
which amount shall be payable by Lessee to Lessor upon demand. Such policies
shall be for a term of at least one year, or the length of the remaining term of
this Lease, whichever is less If either Party shall fall to procure and maintain
the insurance required to be carried by it, the other Party may, but shall not
be required to, procure and maintain the same.

 

8.6Waiver of Subrogation. Without affecting any other rights or remedies, Lessee
and Lessor each hereby release and relieve the other, and waive their entire
right to recover damages against the other, for loss of or damage to its
property arising out of or incident to the perils required to be insured against
herein. The effect of such

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releases and waivers is not limited by the amount of insurance carried or
required, or by any deductibles applicable hereto. The Parties agree to have
their respective property damage insurance carriers waive any right to
subrogation that such companies may have against Lessor or Lessee, as the case
may be, so long as the insurance is not invalidated thereby.

8.7Indemnity. Except for Lessor’s gross negligence or willful misconduct, Lessee
shall indemnify, protect, defend and hold harmless the Premises, Lessor and its
agents, Lessor’s master or ground lessor, partners and Lenders, from and against
any and all claims, loss of rents and/or damages, liens, judgments, penalties,
attorneys’ and consultants’ fees, expenses and/or liabilities arising out of,
involving, or in connection with, the use and/or occupancy of the Premises by
Lessee. If any action or proceeding is brought against Lessor by reason of any
of the foregoing matters, Lessee shall upon notice defend the same at Lessee’s
expense by counsel reasonably satisfactory to Lessor and Lessor shall cooperate
with Lessee in such defense. Lessor need not have first paid any such claim in
order to be defended or indemnified.

8.8See Addendum Exemption of Lessor and its Agents from Liability.
Notwithstanding the negligence or breach of this Lease by Lessor or its agents,
neither Lessor nor its agents shall be liable under any circumstances for: (i)
injury or damage to the person or goods, wares, merchandise or other property of
Lessee, Lessee’s employees, contractors, invitees, customers, or any other
person in or about the Premises, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, indoor air quality,
the presence of mold or from the breakage, leakage, obstruction or other defects
of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting
fixtures, or from any other cause, whether the said injury or damage results
from conditions arising upon the Premises or upon other portions of the
Building, or from other sources or places, (ii) any damages arising from any act
or neglect of any other tenant of Lessor or from the failure of Lessor or its
agents to enforce the provisions of any other lease in the Project, or (iii)
injury to Lessee’s business or for any loss of income or profit therefrom.
Instead, it is intended that Lessee’s sole recourse in the event of’ such
damages or injury be to file a claim on the insurance policy(ies) that Lessee is
required to maintain pursuant to the provisions of paragraph 8.

8.9Failure to Provide Insurance. Lessee acknowledges that any failure on its
part to obtain or maintain the insurance required herein will expose Lessor to
risks and potentially cause Lessor to incur costs not contemplated by this
Lease, the extent of which will be extremely difficult to ascertain.
Accordingly, for any month or portion thereof that Lessee does not maintain the
required insurance and/or does not provide Lessor with the required binders or
certificates evidencing the existence of the required insurance, the Base Rent
shall be automatically increased, without any requirement for notice to Lessee,
by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents fair and
reasonable compensation for the additional risk/costs that Lessor will incur by
reason of Lessee’s failure to maintain the required insurance. Such increase in
Base Rent shall in no event constitute a waiver of Lessee’s Default or Breach
with respect to the failure to maintain such insurance, prevent the exercise of
any of the other rights and remedies granted hereunder, nor relieve Lessee of
its obligation to maintain the insurance specified in this Lease.

 

9.Damage or Destruction.

9.1Definitions.

(a)“Premises Partial Damage” shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations, which can reasonably be repaired in 3 months or less from the
date of the damage or destruction, and the cost thereof does not exceed a sum
equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30
days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.

(b)“Premises Total Destruction” shall mean damage or destruction to the
improvements on the Premises, other than Lessee Owned Alterations and Utility
Installations and Trade Fixtures, which cannot reasonably be repaired in 3
months or less from the date of the damage or destruction and/or the cost
thereof exceeds a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee
in writing within 30 days from the date of the damage or destruction as to
whether or not the damage is Partial or Total.

(c)“Insured Loss” shall mean damage or destruction to improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and
Trade Fixtures, which was caused by an event required to be covered by the
insurance described in Paragraph 8.3(a), irrespective of any deductible amounts
or coverage limits involved.

(d)“Replacement Cost” shall mean the cost to repair or rebuild the improvements
owned by Lessor at the time of the occurrence to their condition existing
immediately prior thereto, including demolition, debris removal and upgrading
required by the operation of Applicable Requirements, and without deduction for
depreciation.

(e)“Hazardous Substance Condition” shall mean the occurrence or discovery of a
condition involving the presence of, or a contamination by, a Hazardous
Substance, in, on, or under the Premises which requires restoration.

9.2Partial Damage - Insured Loss. If a Premises Partial Damage that is an
Insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such damage
(but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility
Installations) as soon as reasonably possible and this Lease shall continue in
full force and effect; provided, however, that Lessee shall, at Lessor’s
election, make the repair of any damage or destruction the total cost to repair
of which is $5,000 or less, and, in such event, Lessor shall make any applicable
insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the
insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds as and when required to
complete said repairs. In the event, however, such shortage was due to the fact
that, by reason of the unique nature of the improvements, full replacement cost
Insurance coverage was not commercially reasonable and available, Lessor shall
have no obligation to pay for the shortage in insurance proceeds or to fully
restore the unique aspects of the Premises unless Lessee provides Lessor with
the funds to cover same, or adequate assurance thereof, within 10 days following
receipt of written notice of such shortage and request therefor. If Lessor
receives said funds or adequate assurance thereof within said 10 day period, the
party responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If
such funds or assurance are not received, Lessor may nevertheless elect by
written notice to Lessee within 10 days thereafter to; (i) make such restoration
and repair as is commercially reasonable with Lessor paying any shortage in
proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled
to reimbursement of any funds contributed by Lessee to repair any such damage or
destruction. Premises Partial Damage due to flood or earthquake shall be subject
to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but
the net proceeds of any such insurance shall be made available for the repairs
if made by either Party.

9.3Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not an
Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in
which event Lessee shall make the repairs at Lessee’s expense), Lessor may
either: (i) repair such damage as soon as reasonably possible at Lessor’s
expense (subject to reimbursement pursuant to Paragraph 4.2), in which event
this Lease shall continue in full force and effect, or (ii) terminate this Lease
by giving written notice to Lessee within 30 days after receipt by Lessor of
knowledge of the occurrence of such damage, Such termination shall be effective
60 days following the date of such notice. In the event Lessor elects to
terminate this Lease, Lessee shall have the right within 10 days after receipt
of the termination notice to give written notice to Lessor of Lessee’s
commitment to pay for the repair of such damage without reimbursement from
Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance
thereof within 30 days after making such commitment. In such event this Lease
shall continue in full force and effect, and Lessor shall proceed to make such
repairs as soon as reasonably possible after the required funds are available.
If Lessee does not make the required commitment, this Lease shall terminate as
of the date specified in the termination notice.

9.4Total Destruction. Notwithstanding any other provision hereof, if a Premises
Total Destruction occurs, this Lease shall terminate 60 days following such
Destruction. If the damage or destruction was caused by the gross negligence or
willful misconduct of Lessee, Lessor shall have the right to recover Lessor’s
damages from Lessee, except as provided in Paragraph 8.6.

9.5Damage Near End of Term. See Addendum if at any time during the last 6 months
of this Lease there is damage for which the cost to repair- exceeds one month’s
Base Rent, whether or not an Insured Loss Lessor may terminate this Lease
effective 60 days following the date of occurence of such damage by giving a
written termination notice to Lessee within 30 days after the date of occurrence
of such damage. Notwithstanding the foregoing, if Lessee at that time has an
exercisable option to extend this Lease or to purchase the Premises, then Lessee
may preserve this Lease by, (a) exercising such option and (b) providing Lessor
with any shortage in insurance proceeds (or adequate assurance thereof) needed
to make the repairs on or before the earlier of (i) the date which is 10 days
after Lessee’s receipt of Lessor’s written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires. If
Lessee duly exercises such option during such period and provides Lessor with
funds (or adequate assurance thereof) to cover any shortage in insurance
proceeds, Lessor shall, at Lessor’s commercially reasonable expense, repair such
damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Lessee fails to exercise such option and provide such funds
or assurance during such period, then this Lease shall terminate on the date
specified in the termination notice and Lessee’s option shall be extinguished.

9.6Abatement of Rent; Lessee’s Remedies.

(a)Abatement. In the event of Premises Partial Damage or Premises Total
Destruction or a Hazardous Substance Condition for which Lessee is not
responsible under this Lease, the Rent payable by Lessee for the period required
for the repair, remediation or restoration of such damage shall be abated in
proportion to the degree to which Lessee’s use of the Premises is impaired, but
not to exceed the proceeds received from the Rental Value insurance. All other
obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall
have no liability for any such damage, destruction, remediation, repair or
restoration except as provided herein.

(b)Remedies. If Lessor shall be obligated to repair or restore the Premises and
does not commence, in a substantial and meaningful way, such repair or
restoration within 90 days after such obligation shall accrue, Lessee may, at
any time prior to the commencement of such repair or restoration, give written
notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee’s election to terminate this Lease on a date not less than 60 days
following the giving of such notice. if Lessee gives such notice and such repair
or restoration is not commenced within 30 days thereafter, this Lease shall
terminate as of the date specified in said notice. If the repair or restoration
is commenced within such 30 days, this Lease shall continue in full force and
effect. “Commence” shall mean either the unconditional authorization of the
preparation of the required plans, or the beginning of the actual work on the
Premises, whichever first occurs.

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9.7Termination; Advance Payments. Upon termination of this Lease pursuant to
Paragraph 6.2(g) or Paragraph 9, an equitable adjustment shall be made
concerning advance Base Rent and any other advance payments made by Lessee to
Lessor, Lessor shall, in addition, return to Lessee so much of Lessee’s Security
Deposit as has not been, or is not then required to be, used by Lessor.

 

10.Real Property Taxes.

10.1Definitions. See Addendum As used herein, the term “Real Property Taxes”
shall include any form of assessment; real estate, general, special, ordinary or
extraordinary, or rental levy or tax (other than inheritance, personal income or
estate taxes); improvement bond; and/or license fee imposed upon or levied
against any legal or equitable interest of Lessor in the Project, Lessor’s right
to other income therefrom, and/or Lessor’s business of leasing, by any authority
having the direct or indirect power to tax and where the funds are generated
with reference to the Project address. “Real Property Taxes” shall also include
any tax, fee, levy, assessment or charge, or any increase therein: (i) imposed
by reason of events occurring during the term of this Lease, including but not
limited to, a change in the ownership of the Project, (ii) a change in the
improvements thereon, and/or (iii) levied or assessed on machinery or equipment
provided by Lessor to Lessee pursuant to this Lease.

10.2Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor
shall pay the Real Property Taxes applicable to the Project, and said payments
shall be included in the calculation of Operating Expenses in accordance with
the provisions of Paragraph 4.2.

10.3Additional Improvements. Operating Expenses shall not include Real Property
Taxes specified in the tax assessor’s records and work sheets as being caused by
additional improvements placed upon the Project by other lessees or by Lessor
for the exclusive enjoyment of such other lessees. Notwithstanding Paragraph
10.2 hereof, Lessee shall, however, pay to Lessor at the time Operating Expenses
are payable under Paragraph 4.2, the entirety of any increase in Real Property
Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility
Installations placed upon the Premises by Lessee or at Lessee’s request or by
reason of any alterations or improvements to the Premises made by Lessor
subsequent to the execution of this Lease by the Parties.

10.4Joint Assessment. If the Building is not separately assessed, Real Property
Taxes allocated to the Building shall be an equitable proportion of the Real
Property Taxes for all of the land and Improvements included within the tax
parcel assessed, such proportion to be determined by Lessor from the respective
valuations assigned in the assessor’s work sheets or such other information as
may be reasonably available. Lessor’s reasonable determination thereof, in good
faith, shall be conclusive.

10.5Personal Property Taxes. Lessee shall pay prior to delinquency all taxes
assessed against and levied upon Lessee Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all personal property
of Lessee contained in the Premises. When possible, Lessee shall cause its
Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately
from the real property of Lessor. If any of Lessee’s said property shall be
assessed with Lessor’s real property, Lessee shall pay Lessor the taxes
attributable to Lessee’s property within 10 days after receipt of a written
statement setting forth the taxes applicable to Lessee’s property.

 

11.Utilities and Services.

11.1Services Provided by Lessor. Lessor shall provide heating, ventilation, air
conditioning, reasonable amounts of electricity for normal lighting and office
machines, water for reasonable and normal drinking and lavatory use in
connection with an office, and replacement light bulbs and/or fluorescent tubes
and ballasts for standard overhead fixtures. Lessor shall also provide
janitorial services to the Premises and Common Areas 5 times per week, excluding
Building Holidays, or pursuant to the attached janitorial schedule, if any.
Lessor shall not, however, be required to provide janitorial services to
kitchens or storage areas included within the Premises.

11.2Services Exclusive to Lessee. Notwithstanding the provision of paragraph
11.1, Lessee shall pay for all water, gas, heat, light, power, telephone and
other utilities and services specially or exclusively supplied and/or metered
exclusively to the Premises or to Lessee, together with any taxes thereon. If a
service is deleted by Paragraph 1.13 and such service is not separately metered
to the Premises, Lessee shall pay at Lessor’s option, either Lessee’s Share or a
reasonable proportion to be determined by Lessor of all charges for such jointly
metered service.

11.3Hours of Service. Said services and utilities shall be provided during times
set forth in Paragraph 1.12, Utilities and services.required at other times
shall be subject to advance request and reimbursement by Lessee to Lessor of the
cost thereof.

11.4Excess Usage by Lessee. Lessee shall not make connection to the utilites
except by or through existing outlots and shall not install or use machinery or
equipment in or about the Permises that uses excess water, lighting or power, or
suffer or permit any act that causes extra burden upon the utilities or services
including but not limited to security and trash services, over standard office
usage for the Project, Lessor shall require Lessee to reimburse Losser for any
excess expenses or costs that may arise out of a branch of this subparagraph by
Lessee, Lessor may, in its solo discretion, install at Lessee’s expense
supplemental equipment and/ or separate metering applicable to Lessee,s excess
usage or loading.

11.5Interruptions. There shall be no abatement of rent and Lessor shall not be
liable in any respect whatsoever for the inadequacy, stoppage, interruption or
discontinuance of any utility or service due to riot, strike, labor dispute,
breakdown, accident, repair or other cause beyond Lessor’s reasonable control or
in cooperation with governmental request or directions.

 

12Assignment and Subletting. See Addendum

12.1Lessor’s Consent Required.

(a)Lessee shall not voluntarily or by operation of law assign, transfer,
mortgage or encumber (collectively, “assign or assignment”) or sublet all or any
part of Lessee’s interest in this Lease or in the Premises without Lessor’s
prior written consent.

(b)Unless Lessee is a corporation and its stock is publicly traded on a national
stock exchange, a change in the control of Lessee shall constitute an assignment
requiring consent. The transfer, on a cumulative basis, of 25% 51% or more of
the voting control of Lessee shall constitute a change in control for this
purpose.

(c)The involvement of Lessee or its assets in any transaction, or series of
transactions (by way of merger, sale, acquisition, financing, transfer,
leveraged buyout or otherwise), whether or not a formal assignment or
hypothecation of this lease or Lessee’s assets occurs, which results or will
result in a reduction of the Not Worth of Lessee by an amount graeter than 25%
of such Net Worth as it was represented at the time of the execution of this
Lease or at the time of the most recent assignment to which Lesser has
consented, or as it exists immediately prior to said transaction or transctions
constituting such reduction, whichever was or is greater, shall be considered an
assignment of this Lease to which Lessor may withhold its consent “Net Worth of
Lessee” shall mean the net worth of Lessee (excluding any guarantors)
established under generally accepted accounting principles.

(d)An assignment or subletting without consent shall, at Lessor’s option, be a
Default curable after notice per Paragraph 13.1(d), or a noncurable Breach
without the necessity of any notice and grace period. If Lessor elects to treat
such unapproved assignment or subletting as a noncurable Breach, Lessor may
either: (i) terminate this Lease, or (ii) upon 30 days written notice, increase
the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment, (i) the purchase price of any option
to purchase the Premises held by Lessee shall be subject to similar adjustment
to 110% of the price previously in effect, and (ii) all fixed and non-fixed
rental adjustments scheduled during the remainder of the Lease term shall be
increased to 110% of the scheduled adjusted rent.

(e)Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be limited
to compensatory damages and/or injunctive relief.

(f)Lessor may reasonably withhold consent to a proposed assignment or subletting
if Lessee is in Default at the time consent is requested.

(g)Notwithstanding the foregoing, allowing a de minimis portion of the Premises,
ie. 20 square feet or less, to be used by a third party vendor in connection
with the installation of a vending machine or payphone shall not constitute a
subletting.

12.2Terms and Conditions Applicable to Assignment and Subletting.

(a)Regardless of Lessor’s consent, no assignment or subletting shall: (i) be
effective without the express written assumption by such assignee or sublessee
of the obligations of Lessee under this Lease, (ii) release Lessee of any
obligations hereunder, or (iii) alter the primary liability of Lessee for the
payment of Rent or for the performance of any other obligations to be performed
by Lessee.

(b)Lessor may accept Rent or performance of Lessee’s obligations from any person
other than Lessee pending approval or disapproval of an assignment. Neither a
delay in the approval or disapproval of such assignment nor the acceptance of
Rent or performance shall constitute a waiver or estoppel of Lessor’s right to
exercise its remedies for Lessee’s Default or Breach.

(c)Lessor’s consent to any assignment or subletting shall not constitute a
consent to any subsequent assignment or subletting.

(d)In the event of any Default or Breach by Lessee, Lessor may proceed directly
against Lessee, any Guarantors or anyone else responsible for the performance of
Lessee’s obligations under this Lease, including any assignee or sublessee,
without first exhausting Lessor’s remedies against any other person or entity
responsible therefor to Lessor, or any security held by Lessor.

(e)Each request for consent to an assignment or subletting shall be in writing,
accompanied by information relevant to Lessor’s determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee, including but not limited to the intended use and/or
required modification of the Premises, if any, together with a fee of $1,000500
as consideration for Lessor’s considering and processing said request. Lessee
agrees to provide Lessor with such other or additional information and/or
documentation as may be reasonably requested. (See also Paragraph 36)

(f)Any assignee of, or sublessee under, this Lease shall, by reason of accepting
such assignment, entering into such sublease, or entering into possession of the
Premises or any portion thereof, be deemed to have assumed and agreed to conform
and comply with each and every term, covenant, condition and obligation herein
to be observed or performed by Lessee during the term of said assignment or
sublease, other than such obligations as are contrary to or inconsistent with
provisions of an assignment or sublease to which Lessor has specifically
consented to in writing.

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(g)Lessor’s consent to any assignment or subletting shall not transfer to the
assignee or sublessee any Option granted to the original Lessee by this Lease
unless such transfer is specifically consented to by Lessor in writing. (See
Paragraph 39.2)

12.3Additional Terms and Conditions Applicable to Subletting. The following
terms and conditions shall apply to any subletting by Lessee of all or any part
of the Premises and shall be deemed included in all subleases under this Lease
whether or not expressly incorporated therein:

(a)Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all
Rent payable on any sublease, and Lessor may collect such Rent and apply same
toward Lessee’s obligations under this Lease; provided, however, that until a
Breach shall occur in the performance of Lessee’s obligations, Lessee may
collect said Rent. In the event that the amount collected by Lessor exceeds
Lessee’s then outstanding obligations any such excess shall be refunded to
Lessee. Lessor shall not, by reason of the foregoing or any assignment of such
sublease, nor by reason of the collection of Rent, be deemed liable to the
sublessee for any failure of Lessee to perform and comply with any of Lessee’s
obligations to such sublessee. Lessee hereby irrevocably authorizes and directs
any such sublessee, upon receipt of a written notice from Lessor stating that a
Breach exists in the performance of Lessee’s obligations under this Lease, to
pay to Lessor all Rent due and to become due under the sublease. Sublessee shall
rely upon any such notice from Lessor and shall pay all Rents to Lessor without
any obligation or right to inquire as to whether such Breach exists,
notwithstanding any claim from Lessee to the contrary.

(b)In the event of a Breach by Lessee, Lessor may, at its option, require
sublessee to attorn to Lessor, in which event Lessor shall undertake the
obligations of the sublessor under such sublease from the time of the exercise
of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such
sublessee to such sublessor or for any prior Defaults or Breaches of such
sublessor.

(c)Any matter requiring the consent of the sublessor under a sublease shall also
require the consent of Lessor,

(d)No sublessee shall further assign or sublet all or any part of the Premises
without Lessor’s prior written consent.

(e)Lessor shall deliver a copy of any notice of Default or Breach by Lessee to
the sublessee, who shall have the right to cure the Default of Lessee within the
grace period, if any, specified in such notice. The sublessee shall have a right
of reimbursement and offset from and against Lessee for any such Defaults cured
by the sublessee.

 

13.Default; Breach; Remedies. See Addendum

13.1Default; Breach. A “Default” is defined as a failure by the Lessee to comply
with or perform any of the terms, covenants, conditions or Rules and Regulations
under this Lease. A “Breach” is defined as the occurrence of one or more of the
following Defaults, and the failure of Lessee to cure such Default within any
applicable grace period:

(a)The abandonment of the Premises; or the vacating of the Premises without
providing a commercially reasonable level of security, or where the coverage of
the property insurance described in Paragraph 8.3 is jeopardized as a result
thereof, or without providing reasonable assurances to minimize potential
vandalism.

(b)The failure of Lessee to make any payment of Rent or any Security Deposit
required to be made by Lessee hereunder, whether to Lessor or to a third party,
when due, to provide reasonable evidence of insurance or surety bond, or to
fulfill any obligation under this Lease which endangers or threatens life or
property, where such failure continues for a period of 3 business days following
written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT
OR SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS,
INCLUDING LESSOR’S RIGHT TO RECOVER POSSESSION OF THE PREMISES.

(c)The failure of Lessee to allow Lessor and/or its agents access to the
Premises or the commission of waste, act or acts constituting public or private
nuisance, and/or an illegal activity on the Premises by Lessee, where such
actions continue for a period of 3 business days following written notice to
Lessee. In the event that Lessee commits waste, a nuisance or an illegal
activity a second time then, the Lessor may elect to treat such conduct as a
non-curable Breach rather than a Default.

(d)The failure by Lessee to provide (i) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the
rescission of an unauthorized assignment or subletting, (iv) an Estoppel
Certificate or financial statements, (v) a requested subordination, (vi)
evidence concerning any guaranty and/or Guarantor, (vii) any document requested
under Paragraph 41, (viii) material safety data sheets (MSDS), or (ix) any other
documentation or information which Lessor may reasonably require of Lessee under
the terms of this Lease, where any such failure continues for a period of 10
days following written notice to Lessee.

(e)A Default by Lessee as to the terms, covenants, conditions or provisions of
this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those
described in subparagraphs 13.1(a), (b), (c) or (d), above, where such Default
continues for a period of 30 days after written notice; provided, however, that
if the nature of Lessee’s Default is such that more than 30 days are reasonably
required for its cure, then it shall not be deemed to be a Breach if Lessee
commences such cure within said 30 day period and thereafter diligently
prosecutes such cure to completion.

(f)The occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor”
as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed within 60 days);
(iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where possession is not restored to Lessee within 30
days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where such seizure is not discharged within 30 days;
provided, however, in the event that any provision of this subparagraph (e) is
contrary to any applicable law, such provision shall be of no force or effect,
and not affect the validity of the remaining provisions.

(g)The discovery that any financial statement of Lessee or of any Guarantor
given to Lessor was materially false.

(h)If the performance of Lessee’s obligations under this Lease is guaranteed:
(i) the death of a Guarantor, (ii) the termination of a Guarantor’s liability
with respect to this Lease other than in accordance with the terms of such
guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy
filing, (iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s
breach of its guaranty obligation on an anticipatory basis, and Lessee’s
failure, within 60 days following written notice of any such event, to provide
written alternative assurance or security, which, when coupled with the then
existing resources of Lessee, equals or exceeds the combined financial resources
of Lessee and the Guarantors that existed at the time of execution of this
Lease.

13.2 Remedies. If Lessee fails to perform any of its affirmative duties or
obligations, within 10 days after written notice (or in case of an emergency,
without notice), Lessor may, at its option, perform such duty or obligation on
Lessee’s behalf, including but not limited to the obtaining of reasonably
required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and
expenses incurred by Lessor in such performance upon receipt of an invoice
therefor. In the event of a Breach, Lessor may, with or without further notice
or demand, and without limiting Lessor in the exercise of any right or remedy
which Lessor may have by reason of such Breach:

(a)Terminate Lessee’s right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Lessee shall immediately surrender
possession to Lessor. In such event Lessor shall be entitled to recover from
Lessee: (i) the unpaid Rent which had been earned at the time of termination;
(ii) the worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that the Lessee proves could have been reasonably
avoided; (iii) the worth at the time of award of the amount by which the unpaid
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment
proximately caused by the Lessee’s failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to the cost of recovering possession of the
Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys’ fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the
unexpired term of this Lease. The worth at the time of award of the amount
referred to in provision (iii) of the immediately preceding sentence shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of the District within which the Premises are located at the time of award
plus one percent. Efforts by Lessor to mitigate damages caused by Lessee’s
Breach of this Lease shall not waive Lessor’s right to recover any damages to
which Lessor is otherwise entitled. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right
to recover in such proceeding any unpaid Rent and damages as are recoverable
therein, or Lessor may reserve the right to recover all or any part thereof in a
separate suit. If a notice and grace period required under Paragraph 13.1 was
not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice
required by Paragraph 13.1. In such case, the applicable grace period required
by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and
the failure of Lessee to cure the Default within the greater of the two such
grace periods shall constitute both an unlawful detainer and a Breach of this
Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.

(b)Continue the Lease and Lessee’s right to possession and recover the Rent as
it becomes due, in which event Lessee may sublet or assign, subject only to
reasonable limitations. Acts of maintenance, efforts to relet, and/or the
appointment of a receiver to protect the Lessor’s interests, shall not
constitute a termination of the Lessee’s right to possession.

(c)Pursue any other remedy now or hereafter available under the laws or judicial
decisions of the state wherein the Premises are located. The expiration or
termination of this Lease and/or the termination of Lessee’s right to possession
shall not relieve Lessee from liability under any indemnity provisions of this
Lease as to matters occurring or accruing during the term hereof or by reason of
Lessee’s occupancy of the Premises.

13.3 Inducement Recapture. Any agreement for free or abated rent or other
charges, the cost of tenant improvements for Lessee paid for or performed by
Lessor, or for the giving or paying by Lessor to or for Lessee of any cash or
other bonus, inducement or consideration for Lessee’s entering into this Lease,
all of which concessions are hereinafter referred to as “Inducement Provisions,”
shall be deemed conditioned upon Lessee’s full and faithful performance of all
of the terms, covenants and conditions of this Lease. Upon Breach of this Lease
by Lessee, any such Inducement Provision shall automatically be deemed deleted
from this Lease and of no further force or effect, and any rent, other charge,
bonus, inducement or consideration theretofore abated, given or paid by Lessor
under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee,
The acceptance by Lessor of rent or the cure of the Breach which initiated the
operation of this paragraph shall not be deemed a waiver by Lessor of the
provisions of this paragraph unless specifically so stated in writing by Lessor
at the time of such acceptance.

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13.4 See Addendum Late Charges. Lessee hereby acknowledges that late payment by
Lessee of Rent will cause Lessor 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 upon Lessor by any Lender. Accordingly, if any Rent
shall not be received by Lessor within 5 days after such amount shall be due,
then, without any requirement for notice to Lessee, Lessee shall immediately pay
to Lessor a one-time late charge equal to 10% of each such overdue amount or
$100, whichever is greater. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of such late payment. Acceptance of such late charge by Lessor shall in
no event constitute a waiver of Lessee’s Default or Breach with respect to such
overdue amount, nor prevent the exercise of any of the other rights and remedies
granted hereunder. In the event that a late charge is payable hereunder, whether
or not collected, for 3 consecutive installments of Base Rent, then
notwithstanding any provision of this Lease to the contrary, Base Rent shall, at
Lessor’s option, become due and payable quarterly in advance.

13.5 Interest. Any monetary payment due Lessor hereunder, other than late
charges, not received by Lessor, when due shall bear interest from the 31st day
after it was due. The interest (“Interest”) charged shall be computed at the
rate of 10% per annum but shall not exceed the maximum rate allowed by law.
Interest is payable in addition to the potential late charge provided for In
Paragraph 13.4.

13.6 Breach by Lessor.

(a)Notice of Breach. Lessor shall not be deemed in breach of this Lease unless
Lessor fails within a reasonable time to perform an obligation required to be
performed by Lessor. For purposes of this Paragraph, a reasonable time shall in
no event be less than 30 days after receipt by Lessor, and any Lender whose name
and address shall have been furnished to Lessee in writing for such purpose, of
written notice specifying wherein such obligation of Lessor has not been
performed; provided, however, that if the nature of Lessor’s obligation is such
that more than 30 days are reasonably required for its performance, then Lessor
shall not be in breach if performance is commenced within such 30 day period and
thereafter diligently pursued to completion.

(b)Performance by Lessee on Behalf of Lessor. In the event that neither Lessor
nor Lender cures said breach within 30 days after receipt of said notice,

or if having commenced said cure they do not diligently pursue it to completion,
then Lessee may elect to cure said breach at Lessee’s expense and offset from
Rent the actual and reasonable cost to perform such cure, provided, however,
that such offset shall not exceed an amount equal to the greater of one month’s
Base Rent or the Security Deposit, reserving Lessee’s right to seek
reimbursement from Lessor for any such expense in excess of such offset. Lessee
shall document the cost of said cure and supply said documentation to Lessor.

 

14.Condemnation. If the Premises or any portion thereof are taken under the
power of eminent domain or sold under the threat of the exercise of said power
(collectively “Condemnation”), this Lease shall terminate as to the part taken
as of the date the condemning authority takes title or possession, whichever
first occurs. If more than 10% of the rentable floor area of the Premises, or
more than 25% of Lessee’s Reserved Parking Spaces, if any, are taken by
Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within
10 days after Lessor shall have given Lessee written notice of such taking (or
in the absence of such notice, within 10 days after the condemning authority
shall have taken possession) terminate this Lease as of the date the condemning
authority takes such possession. If Lessee does not terminate this Lease in
accordance with the foregoing, this Lease shall remain in full force and effect
as to the portion of the Premises remaining, except that the Base Rent shall be
reduced in proportion to the reduction in utility of the Premises caused by such
Condemnation. Condemnation awards and/or payments shall be the property of
Lessor, whether such award shall be made as compensation for diminution in value
of the leasehold, the value of the part taken, or for severance damages;
provided, however, that Lessee shall be entitled to any compensation paid by the
condemnor for Lessee’s relocation expenses, loss of business goodwill and/or
Trade Fixtures, without regard to whether or not this Lease is terminated
pursuant to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation only,
shall be considered the property of the Lessee and Lessee shall be entitled to
any and all compensation which is payable therefor. In the event that this Lease
is not terminated by reason of the Condemnation, Lessor shall repair any damage
to the Premises caused by such Condemnation.

 

15.Brokerage Fees.

15.1 Additional Commission. In addition to the payments owed pursuant to
Paragraph 1.10 above, Lessor agrees that: (a) if Lessee exercises any Option,(b)
Lessee or anyone affiliated with Lessee acquires form Lessor any rights to the
Premises or other premises owned by Lesser and located within the Project, (c)
if Lessee remains in-possession of the Premises, with the consent-of-Lessor,
after the expiration of this Lease,-or (d) if Base Rent is increased, whether by
agreement or operation of an escalation clause herein, then, Lesser shall pay
Brokers a fee in accordance with the fee schedule of the Brokers in effect at
the time the Lease was executed.

15.2 Assumption of Obligations. Any buyer or transferee of Lessor’s interest in
this Lease shall be deemed to have assumed Lessor’s obligation hereunder.
Brokers shall be third party beneficiaries of the provisions of Paragraphs 1.10,
15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for
brokerage fees pertaining to this Lease when due, then such amounts shall accrue
Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker
when due, Lessee’s Broker may send written notice to Lessor and Lessee of such
failure and if Lessor fails to pay such amounts within 10 days after said
notice, Lessee shall pay said monies to its Broker and offset such amounts
against Rent. In addition, Lessee’s Broker shall be deemed to be a third party
beneficiary of any commission agreement entered into by and/or between Lessor
and Lessor’s Broker for the limited purpose of collecting any brokerage fee
owed.

15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor
each represent and warrant to the other that it has had no dealings with any
person, firm, broker or finder (other than the Brokers, if any) in connection
with this Lease, and that no one other than said named Brokers is entitled to
any commission or finder’s fee in connection herewith. Lessee and Lessor do each
hereby agree to indemnify, protect, defend and hold the other harmless from and
against liability for compensation or charges which may be claimed by any such
unnamed broker, finder or other similar party by reason of any dealings or
actions of the indemnifying Party, including any costs, expenses, attorneys’
fees reasonably incurred with respect thereto.

 

16.Estoppel Certificates.

(a)Each Party (as “Responding Party”) shall within 10 days after written notice
from the other Party (the “Requesting Party”) execute, acknowledge and deliver
to the Requesting Party a statement in writing in form similar to the then most
current “Estoppel Certificate” form published BY AIR CRE, plus such additional
information, confirmation and/or statements as may be reasonably requested by
the Requesting Party.

(b)If the Responding Party shall fail to execute or deliver the Estoppel
Certificate within such 10 day period, the Requesting Party may execute an
Estoppel Certificate stating that: (i) the Lease is in full force and effect
without modification except as may be represented by the Requesting Party, (ii)
there are no uncured defaults in the Requesting Party’s performance, and (iii)
if Lessor is the Requesting Party, not more than one month’s rent has been paid
in advance. Prospective purchasers and encumbrancers may rely upon the
Requesting Party’s Estoppel Certificate, and the Responding Party shall be
estopped from denying the truth of the facts contained in said Certificate. In
addition, Lessee acknowledges that any failure on its part to provide such an
Estoppel Certificate will expose Lessor to risks and potentially cause Lessor to
incur costs not contemplated by this Lease, the extent of which will be
extremely difficult to ascertain. Accordingly, should the Lessee fail to execute
and/or deliver a requested Estoppel Certificate in a timely fashion the monthly
Base Rent shall be automatically increased, without any requirement for notice
to Lessee, by an amount equal to 10% of the then existing Base Rent or $100,
whichever is greater for remainder of the Lease. The Parties agree that such
increase in Base Rent represents fair and reasonable compensation for the
additional risk/costs that Lessor will incur by reason of Lessee’s failure to
provide the Estoppel Certificate. Such increase in Base Rent shall in no event
constitute a waiver of Lessee’s Default or Breach with respect to the failure to
provide the Estoppel Certificate nor prevent the exercise of any of the other
rights and remedies granted hereunder.

(c)If Lessor desires to finance, refinance, or sell the Premises, or any part
thereof, Lessee and all Guarantors shall within 10 days after written notice
from Lessor deliver to any potential lender or purchaser designated by Lessor
such financial statements as may be reasonably required by such lender or
purchaser, including but not limited to Lessee’s financial statements for the
past 3 years. All such financial statements shall be received by Lessor and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.

 

17.Definition of Lessor. The term “Lessor” as used herein shall mean the owner
or owners at the time in question of the fee title to the Premises, or, if this
is a sublease, of the Lessee’s interest in the prior lease. In the event of a
transfer of Lessor’s title or interest in the Premises or this Lease, Lessor
shall deliver to the transferee or assignee (in cash or by credit) any unused
Security Deposit held by Lessor. Upon such transfer or assignment and delivery
of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of all
liability with respect to the obligations and/or covenants under this Lease
thereafter to be performed by the Lessor. Subject to the foregoing, the
obligations and/or covenants in this Lease to be performed by the Lessor shall
be binding only upon the Lessor as hereinabove defined.

 

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

 

19.Days. Unless otherwise specifically indicated to the contrary, the word
“days” as used in this Lease shall mean and refer to calendar days.

 

20.Limitation on Liability. The obligations of Lessor under this Lease shall not
constitute personal obligations of Lessor, or its partners, members, directors,
officers or shareholders, and Lessee shall look to the Project, and to no other
assets of Lessor, for the satisfaction of any liability of Lessor with respect
to this Lease, and shall not seek recourse against Lessor’s partners, members,
directors, officers or shareholders, or any of their personal assets for such
satisfaction.

 

21.Time of Essence. Time is of the essence with respect to the performance of
all obligations to be performed or observed by the Parties under this Lease.

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22.No Prior or Other Agreements; Broker Disclaimer. This Lease contains all
agreements between the Parties with respect to any matter mentioned herein, and
no other prior or contemporaneous agreement or understanding shall be effective.
Lessor and Lessee each represents and warrants to the Brokers that it has made,
and is relying solely upon. Its own investigation as to the nature, quality,
character and financial responsibility of the other Party to this Lease and as
to the use, nature, quality and character of the Premises. Brokers have no
responsibility with respect thereto or with respect to any default or breach
hereof by either Party.

 

23.Notices.

 

23.1Notice Requirements. All notices required or permitted by this Lease or
applicable law shall be in writing and may be delivered in person (by hand or by
courier) or may be sent by regular, certified or registered mail or U.S. Postal
Service Express Mail, with postage prepaid, or by facsimile transmission, or by
email, and shall be deemed sufficiently given if served in a manner specified in
this Paragraph 23. The addresses noted adjacent to a Party’s signature on this
Lease shall be that Party’s address for delivery or mailing of notices. Either
Party may by written notice to the other specify a different address for notice,
except that upon Lessee’s taking possession of the Premises, the Premises shall
constitute Lessee’s address for notice. A copy of all notices to Lessor shall be
concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate in writing.

23.2Date of Notice. Any notice sent by registered or certified mail, return
receipt requested, shall be deemed given on the date of delivery shown on the
receipt card, or if no delivery date is shown, the postmark thereon. If sent by
regular mail the notice shall be deemed given 72 hours after the same is
addressed as required herein and mailed with postage prepaid. Notices delivered
by United States Express Mail or overnight courier that guarantees next day
delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices delivered by hand, or transmitted by fascimile
transmission or by email shall be deemed delivered upon actual receipt. If
notice is received on a Saturday, Sunday or legal holiday, it shall be deemed
received on the next business day.

 

24.Waivers.

(a) No waiver by Lessor of the Default or Breach of any term, covenant or
condition hereof by Lessee, shall be deemed a waiver of any other term, covenant
or condition hereof, or of any subsequent Default or Breach by Lessee of the
same or of any other term, covenant or condition hereof. Lessor’s consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or
be construed as the basis of an estoppel to enforce the provision or provisions
of this Lease requiring such consent.

(b) The acceptance of Rent by Lessor shall not be a waiver of any Default or
Breach by Lessee. Any payment by Lessee may be accepted by Lessor on account of
monies or damages due Lessor, notwithstanding any qualifying statements or
conditions made by Lessee in connection therewith, which such statements and/or
conditions shall be of no force or effect whatsoever unless specifically agreed
to in writing by Lessor at or before the time of deposit of such payment.

(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO
ALL MATTERS RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR
FUTURE STATUTE TO THE EXTENT THAT SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.

 

25.Disclosures Regarding The Nature of a Real Estate Agency Relationship.

(a) When entering into a discussion with a real estate agent regarding a real
estate transaction, a Lessor or Lessee should from the outset understand what
type of agency relationship or representation it has with the agent or agents in
the transaction. Lessor and Lessee acknowledge being advised by the Brokers in
this transaction, as follows:

(i)Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor
acts as the agent for the Lessor only. A Lessor’s agent or subagent has the
following affirmative obligations: To the Lessor: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee
and the Lessor. (a) Diligent exercise of reasonable skills and care in
performance of the agent’s duties. (b) A duty of honest and fair dealing and
good faith. (c) A duty to disclose all facts known to the agent materially
affecting the value or desirability of the property that are not known to, or
within the diligent attention and observation of, the Parties. An agent is not
obligated to reveal to either Party any confidential information obtained from
the other Party which does not involve the affirmative duties set forth above.

(ii)Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In
these situations, the agent is not the Lessor’s agent, even if by agreement the
agent may receive compensation for services rendered, either in full or in part
from the Lessor. An agent acting only for a Lessee has the following affirmative
obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty,
and loyalty in dealings with the Lessee. To the Lessee and the Lessor: (a)
Diligent exercise of reasonable skills and care in performance of the agent’s
duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to
disclose all facts known to the agent materially affecting the value or
desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent is not obligated to reveal
to either Party any confidential information obtained from the other Party which
does not involve the affirmative duties set forth above.

(iii)Agent Representing Both Lessor and Lessee. A real estate agent, either
acting directly or through one or more associate licenses, can legally be the
agent of both the Lessor and the Lessee in a transaction, but only with the
knowledge and consent of both the Lessor and the Lessee. In a dual agency
situation, the agent has the following affirmative obligations to both the
Lessor and the Lessee: (a) A fiduciary duty of utmost care, integrity, honesty
and loyalty in the dealings with either Lessor or the Lessee. (b) Other duties
to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In
representing both Lessor and Lessee, the agent may not without the express
permission of the respective Party, disclose to the other Party that the Lessor
will accept rent in an amount less than that indicated in the listing or that
the Lessee is willing to pay a higher rent than that offered. The above duties
of the agent in a real estate transaction do not relieve a Lessor or Lessee from
the responsibility to protect their own interests. Lessor and Lessee should
carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualified to
advise about real estate. If legal or tax advice is desired, consult a competent
professional.

(b) Brokers have no responsibility with respect to any default or breach hereof
by either Party. The Parties agree that no lawsuit or other legal proceeding
involving any breach of duty, error or omission relating to this Lease may be
brought against Broker more than one year after the Start Date and that the
liability (including court costs and attorneys’ fees), of any Broker with
respect to any such lawsuit and/or legal proceeding shall not exceed the fee
received by such Broker pursuant to this Lease; provided, however, that the
foregoing limitation on each Broker’s liability shall not be applicable to any
gross negligence or willful misconduct of such Broker.

(c) Lessor and Lessee agree to identify to Brokers as “Confidential” any
communication or information given Brokers that is considered by such Party to
be confidential.

 

26.No Right To Holdover. Lessee has no right to retain possession of the
Premises or any part thereof beyond the expiration or termination of this Lease.
In the event that Lessee holds over, then the Base Rent shall be increased to
150% of the Base Rent applicable immediately preceding the expiration or
termination. Holdover Base Rent shall be calculated on a monthly basis. Nothing
contained herein shall be construed as consent by Lessor to any holding over by
Lessee.

 

27.Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.

 

28.Covenants and Conditions; Construction of Agreement. All provisions of this
Lease to be observed or performed by Lessee are both covenants and conditions.
In construing this Lease, all headings and titles are for the convenience of the
Parties only and shall not be considered a part of this Lease. Whenever required
by the context, the singular shall include the plural and vice versa. This Lease
shall not be construed as if prepared by one of the Parties, but rather
according to its fair meaning as a whole, as if both Parties had prepared it.

 

29.Binding Effect; Choice of Law. This Lease shall be binding upon the parties,
their personal representatives, successors and assigns and be governed by the
laws of the State in which the Premises are located. Any litigation between the
Parties hereto concerning this Lease shall be initiated in the county in which
the Premises are located.

 

30.Subordination; Attornment; Non-Disturbance.

30.1Subordination. This Lease and any Option granted hereby shall be subject and
subordinate to any ground lease, mortgage, deed of trust, or other hypothecation
or security device (collectively, “Security Device”), now or hereafter placed
upon the Premises, to any and all advances made on the security thereof, and to
all renewals, modifications, and extensions thereof. Lessee agrees that the
holders of any such Security Devices (in this Lease together referred to as
“Lender”) shall have no liability or obligation to perform any of the
obligations of Lessor under this Lease. Any Lender may elect to have this Lease
and/or any Option granted hereby superior to the lien of its Security Device by
giving written notice thereof to Lessee, whereupon this Lease and such Options
shall be deemed prior to such Security Device, notwithstanding the relative
dates of the documentation or recordation thereof.

30.2Attornment. In the event that Lessor transfers title to the Premises, or the
Premises are acquired by another upon the foreclosure or termination of a
Security Device to which this Lease is subordinated (i) Lessee shall, subject to
the non-disturbance provisions of Paragraph 30.3, attorn to such new owner, and
upon request, enter into a new lease, containing all of the terms and provisions
of this Lease, with such new owner for the remainder of the term hereof, or, at
the election of the new owner, this Lease will automatically become a new lease
between Lessee and such new owner, and (ii) Lessor shall thereafter be relieved
of any further obligations hereunder and

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such new owner shall assume all of Lessor’s obligations, except that such new
owner shall not: (a) be liable for any act or omission of any prior lessor or
with respect to events occurring prior to acquisition of ownership; (b) be
subject to any offsets or defenses which Lessee might have against any prior
lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be
liable for the return of any security deposit paid to any prior lessor.

30.3Non-Disturbance. With respect to Security Devices entered into by Lessor
after the execution of this Lease, Lessee’s subordination of this Lease shall be
subject to receiving a commercially reasonable non-disturbance agreement (a
“Non-Disturbance Agreement”, from the Lender which Non-Disturbance Agreement
provides that Lessee’s possession of the Premises, and this Lease, including any
options to extend the term hereof, will not be disturbed so long as Lessee is
not in Breach hereof and attorns to the record owner of the Premises. Further,
within 60 days after the execution of this Lease, Lessor shall, if requested by
Lessee, use its commercially reasonable efforts to obtain a Non-Disturbance
Agreement from the holder of any pre-existing Security Device which is secured
by the Premises. In the event that Lessor is unable to provide the
Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s
option, directly contact Lender and attempt to negotiate for the execution and
delivery of a Non-Disturbance Agreement.

30.4Self-Executing. The agreements contained in this Paragraph 30 shall be
effective without the execution of any further documents; provided, however,
that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such
further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.

 

31.Attorneys’ Fees. If any Party or Broker brings an action or proceeding
involving the Premises whether founded in tort, contract or equity, or to
declare rights hereunder, the Prevailing Party (as hereafter defined) in any
such proceeding, action, or appeal thereon, shall be entitled to reasonable
attorneys’ fees. Such fees may be awarded in the same suit or recovered in a
separate suit, whether or not such action or proceeding is pursued to decision
or judgment. The term, “Prevailing Party” shall include, without limitation, a
Party or Broker who substantially obtains or defeats the relief sought, as the
case may be, whether by compromise, settlement, judgment, or the abandonment by
the other Party or Broker of its claim or defense. The attorneys’ fees award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys’ fees reasonably Incurred. In addition,
Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection
therewith, whether or not a legal action is subsequently commenced in connection
with such Default or resulting Breach ($200 is a reasonable minimum per
occurrence for such services and consultation).

 

32.Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall
have the right to enter the Premises at any time, in the case of an emergency,
and otherwise at reasonable times after reasonable prior notice for the purpose
of showing the same to prospective purchasers, lenders, or tenants, and making
such alterations, repairs, improvements or additions to the Premises as Lessor
may deem necessary or desirable and the erecting, using and maintaining of
utilities, services, pipes and conduits through the Premises and/or other
premises as long as there is no material adverse effect to Lessee’s use of the
Premises. All such activities shall be without abatement of rent or liability to
Lessee. In addition, Lessor shall have the right to retain keys to the Premises
and to unlock all doors in or upon the Premises other than to files, vaults and
safes, and in the case of emergency to enter the Premises by any reasonably
appropriate means, and any such entry shall not be deemed a forcible or unlawful
entry or detainer of the Premises or an eviction. Lessee waives any charges for
damages or injuries or interference with Lessee’s property or business in
connection therewith.

 

33.Auctions. Lessee shall not conduct, nor permit to be conducted, any auction
upon the Premises without Lessor’s prior written consent. Lessor shall not be
obligated to exercise any standard of reasonableness in determining whether to
permit an auction.

 

34.Signs. Lessor may place on the Premises ordinary “For Sale” signs at any time
and ordinary “For Lease” signs during the last 6 months of the term hereof.
Lessor may not place any sign on the exterior of the Building that covers any of
the windows of the Premises. Except for ordinary “For Sublease” signs which may
be placed only on the Premises, Lessee shall not place any sign upon the Project
without Lessor’s prior written consent. All signs must comply with all
Applicable Requirements.

 

35.Termination; Merger. Unless specifically stated otherwise in writing by
Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual
termination or cancellation hereof, or a termination hereof by Lessor for Breach
by Lessee, shall automatically terminate any sublease or lesser estate in the
Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor’s failure within 10 days following any such event
to elect to the contrary by written notice to the holder of any such lesser
interest, shall constitute Lessor’s election to have such event constitute the
termination of such interest.

 

36.Consents. See Addendum All requests for consent shall be in writing. Except
as otherwise provided herein, wherever in this Lease the consent of a Party is
required to an act by or for the other Party, such consent shall not be
unreasonably withheld or delayed. Lessor’s actual reasonable costs and expenses
(including but not limited to architects’, attorneys’, engineers’ and other
consultants’ fees) incurred in the consideration of, or response to, a request
by Lessee for any Lessor consent, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance, shall
be paid by Lessee upon receipt of an invoice and supporting documentation
therefor. Lessor’s consent to any act, assignment or subletting shall not
constitute an acknowledgment that no Default or Breach by Lessee of this Lease
exists, nor shall such consent be deemed a waiver of any then existing Default
or Breach, except as may be otherwise specifically stated in writing by Lessor
at the time of such consent. The failure to specify herein any particular
condition to Lessor’s consent shall not preclude the imposition by Lessor at the
time of consent of such further or other conditions as are then reasonable with
reference to the particular matter for which consent is being given. In the
event that either Party disagrees with any determination made by the other
hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail
within 10 business days following such request.

 

37.Guarantor.

37.1Execution. The Guarantors, if any, shall each execute a guaranty in the form
most recently published BY AIR CRE.

37.2Default. It shall constitute a Default of the Lessee if any Guarantor fails
or refuses, upon request to provide: (a) evidence of the execution of the
guaranty, including the authority of the party signing on Guarantor’s behalf to
obligate Guarantor, and in the case of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d)
written confirmation that the guaranty is still in effect.

 

38.Quiet Possession. Subject to payment by Lessee of the Rent and performance of
all of the covenants, conditions and provisions on Lessee’s part to be observed
and performed under this Lease, Lessee shall have quiet possession and quiet
enjoyment of the Premises during the term hereof.

 

39.Options. If Lessee is granted any option, as defined below, then the
following provisions shall apply.

39.1Definition. “Option” shall mean: (a) the right to extend or reduce the term
of or renew this Lease or to extend or reduce the term of or renew any lease
that Lessee has on other property of Lessor; (b) the right of first refusal or
first offer to lease either the Premises or other property of Lessor; (c) the
right to purchase, the right of first offer to purchase or the right of first
refusal to purchase the Premises or other property of Lessor.

39.2Options Personal To Original Lessee. Any Option granted to Lessee in this
Lease is personal to the original Lessee, and cannot be assigned or exercised by
anyone other than said original Lessee and only while the original Lessee is in
full possession of the Premises and, if requested by Lessor, with Lessee
certifying that Lessee has no intention of thereafter assigning or subletting.

39.3Multiple Options. In the event that Lessee has any multiple Options to
extend or renew this Lease, a later Option cannot be exercised unless the prior
Options have been validly exercised.

39.4Effect of Default on Options.

(a)Lessee shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said
Default is cured, (ii) during the period of time any Rent is unpaid (without
regard to whether notice thereof is given Lessee), (iii) during the time Lessee
is in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or
more notices of separate Default, whether or not the Defaults are cured, during
the 12 month period immediately preceding the exercise of the Option.

(b)The period of time within which an Option may be exercised shall not be
extended or enlarged by reason of Lessee’s inability to exercise an Option
because of the provisions of Paragraph 39.4(a).

(c)An Option shall terminate and be of no further force or effect,
notwithstanding Lessee’s due and timely exercise of the Option, if, after such
exercise and prior to the commencement of the extended term or completion of the
purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent
becomes due (without any necessity of Lessor to give notice thereof), or (ii) if
Lessee commits a Breach of this Lease.

 

40.Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor
hereunder does not include the cost of guard service or other security measures,
and that Lessor shall have no obligation whatsoever to provide same. Lessee
assumes all responsibility for the protection of the Premises, Lessee, its
agents and invitees and their property from the acts of third parties. In the
event, however, that Lessor should elect to provide security services, then the
cost thereof shall be an Operating Expense.

__________

 

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41.Reservations.

(a)Lessor reserves the right: (i) to grant, without the consent or joinder of
Lessee, such easements, rights and dedications that Lessor deems necessary, (ii)
to cause the recordation of parcel maps and restrictions, (iii) to create and/or
install new utility raceways, so long as such easements, rights, dedications,
maps, restrictions, and utility raceways do not unreasonably interfere with the
use of the Premises by Lessee. Lessor may also: change the name, address or
title of the Building or Project upon at least 90 days prior written notice;
provide and install, at Lessee’s expense, Building standard graphics on the door
of the Premises and such portions of the Common Areas as Lessor shall reasonably
deem appropriate; grant to any lessee the exclusive right to conduct any
business as long as such exclusive right does not conflict with any rights
expressly given herein; and to place such signs, notices or displays as Lessor
reasonably deems necessary or advisable upon the roof, exterior of the Building
or the Project or on pole signs in the Common Areas. Lessee agrees to sign any
documents reasonably requested by Lessor to effectuate such rights. The
obstruction of Lessee’s view, air, or light by any structure erected in the
vicinity of the Building, whether by Lessor or third parties, shall in no way
affect this Lease or impose any liability upon Lessor.

(b)Lessor also reserves the right to move Lessee to other space of comparable
size in the Building-or..Project. Lesser must provide least days prior written
notice of such move, and the new space must contain.improvements of comparable
quality to those containad within tha Promises Lessor shall pay the coasonable
out of pocket costs thatLessen incurs with regard to such relocation including
the expenses of moving and necessary stationary revision costs in no event,
however, shall Lesser be required to pay an amount in excess of two months Base
Rent. Lessee may not be relocated more than once during the term of this

 

(c)Lessee shall not: (i) use a representation (photographic or otherwise) of the
Building or Project or their name(s) in connection with Lessee’s business; or
(ii) suffer or permit anyone, except in emergency, to go upon the roof of the
Building.

 

42.Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one Party to the other under the provisions
hereof, the Party against whom the obligation to pay the money is asserted shall
have the right to make payment “under protest” and such payment shall not be
regarded as a voluntary payment and there shall survive the right on the part of
said Party to institute suit for recovery of such sum. If it shall be adjudged
that there was no legal obligation on the part of said Party to pay such sum or
any part thereof, said Party shall be entitled to recover such sum or so much
thereof as it was not legally required to pay. A Party who does not initiate
suit for the recovery of sums paid “under protest” within 6 months shall be
deemed to have waived its right to protest such payment.

 

43.Authority; Multiple Parties; Execution.

(a)If either Party hereto is a corporation, trust, limited liability company,
partnership, or similar entity, each individual executing this Lease on behalf
of such entity represents and warrants that he or she is duly authorized to
execute and deliver this Lease on its behalf. Each Party shall, within 30 days
after request, deliver to the other Party satisfactory evidence of such
authority.

(b)If this Lease is executed by more than one person or entity as “Lessee”, each
such person or entity shall be jointly and severally liable hereunder. It is
agreed that any one of the named Lessees shall be empowered to execute any
amendment to this Lease, or other document ancillary thereto and bind all of the
named Lessees, and Lessor may rely on the same as if all of the named Lessees
had executed such document.

(c)This Lease may be executed by the Parties in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.

 

44.Conflict. Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions.

 

45.Offer. Preparation of this Lease by either party or their agent and
submission of same to the other Party shall not be deemed an offer to lease to
the other Party. This Lease is not intended to be binding until executed and
delivered by all Parties hereto.

 

46.Amendments. This Lease may be modified only in writing, signed by the Parties
in interest at the time of the modification. As long as they do not materially
change Lessee’s obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease as may be reasonably required by a
Lender in connection with the obtaining of normal financing or refinancing of
the Premises.

 

47.Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT
OF THIS AGREEMENT.

 

48.Arbitration of Disputes. An Addendum requiring the Arbitration of all
disputes between the Parties and/or Brokers arising out of this Lease ☐ is ☐ is
not attached to this Lease.

 

49.Accessibility; Americans with Disabilities Act.

(a)The Premises:

 

☑ have not undergone an inspection by a Certified Access Specialist (CASp).
Note: A Certified Access Specialist (CASp) can inspect the subject premises and
determine whether the subject premises comply with all of the applicable
construction-related accessibility standards under state law. Although state law
does not require a CASp inspection of the subject premises, the commercial
property owner or lessor may not prohibit the lessee or tenant from obtaining a
CASp inspection of the subject premises for the occupancy or potential occupancy
of the lessee or tenant, if requested by the lessee or tenant. The parties shall
mutually agree on the arrangements for the time and manner of the CASp
inspection, the payment of the fee for the CASp inspection, and the cost of
making any repairs necessary to correct violations of construction-related
accessibility standards within the premises.

 

☐ have undergone an inspection by a Certified Access Specialist (CASp) and it
was determined that the Premises met all applicable construction-related
accessibility standards pursuant to California Civil Code §55.51 et seq. Lessee
acknowledges that it received a copy of the inspection report at least 48 hours
prior to executing this Lease and agrees to keep such report confidential.

 

☐ have undergone an inspection by a Certified Access Specialist (CASp) and it
was determined that the Premises did not meet all applicable
construction-related accessibility standards pursuant to California Civil Code
§55.51 et seq. Lessee acknowledges that it received a copy of the inspection
report at least 48 hours prior to executing this Lease and agrees to keep such
report confidential except as necessary to complete repairs and corrections of
violations of construction related accessibility standards.

 

In the event that the Premises have been issued an inspection report by a CASp
the Lessor shall provide a copy of the disability access inspection certificate
to Lessee within 7 days of the execution of this Lease.

 

(b)Since compliance with the Americans with Disabilities Act (ADA) and other
state and local accessibility statutes are dependent upon Lessee’s specific use
of the Premises, Lessor makes no warranty or representation as to whether or not
the Premises comply with ADA or any similar legislation. In the event that
Lessee’s use of the Premises requires modifications or additions to the Premises
in order to be in compliance with ADA or other accessibility statutes, Lessee
agrees to make any such necessary modifications and/or additions at Lessee’s
expense.

 

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MTON-20.00, Revised 01-03-2017

 

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LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR
INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE
TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE
AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.

 

ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY AIR CRE OR BY ANY
BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS
LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:

1.SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE.

2.RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS,
COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE
PREMISES FOR LESSEE’S INTENDED USE.

 

WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN
PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE
STATE IN WHICH THE PREMISES ARE LOCATED.

 

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The parties hereto have executed this Lease at the place and on the dates
specified above their respective signatures.

 

Executed at: __________

Executed at: __________

On: 12-8-17

On: 12-7-17

 

 

By LESSOR:

By LESSEE

McDonald Family Co. LLC

Eiger BioPharmaceuticals Inc.

 

 

By: [Signature]

By: [Signature]

Name Printed: __________

Name Printed: JIM WELCH

Title: __________

Title: CFO

Phone: __________

Phone: 650 - 279 - 9845

 

 

Fax: __________

Fax: 650 - 619 - 1621

Email: __________

Email: jweich@eigevbio.com

 

 

By: ______________________________________________________________

By: ______________________________________________________________

Name Printed: __________

Name Printed: __________

Title: __________

Title: __________

Phone: __________

Phone: __________

Fax: __________

Fax: __________

Email: __________

Email: __________

 

 

Address: __________

Address: __________

Federal ID No.: __________

Federal ID No.: __________

 

 

BROKER

BROKER

__________

__________

 

 

Attn: __________

Attn: __________

Title: __________

Title: __________

 

 

Address: __________

Address: __________

Phone: __________

Phone: __________

Fax: __________

Fax: __________

Email: __________

Email: __________

Federal ID No.: __________

Federal ID No.: __________

Broker/Agent BRE License #: __________

Broker/Agent BRE License #: __________

 

AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777,
Email contracts@aircre.com

NOTICE: No part of these works may be reproduced in any form without permission
in writing.

 

 

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MTON-20.00, Revised 01-03-2017

 

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[g2018030920015449751691.jpg]

RULES AND REGULATIONS FOR

STANDARD OFFICE LEASE

 

Date:

October 11, 2017

 

 

By and Between

 

Lessor:

McDonald Family Co. LLC

 

 

Lessee:

Eiger BioPharmaceuticals Inc.

 

 

Property Address:

2171 Park Blvd, Palo Alto, CA

 

 

 

(street address, city, state, zip)

 

 

GENERAL RULES

 

1.Lessee shall not suffer or permit the obstruction of any Common Areas,
including driveways, walkways and stairways.

2.Lessor reserves the right to refuse access to any persons Lessor in good faith
judges to be a threat to the safety and reputation of the Project and its
occupants.

3.Lessee shall not make or permit any noise or odors that annoy or interfere
with other lessees or persons having business within the Project.

4.Lessee shall not keep animals or birds within the Project, and shall not bring
bicycles, motorcycles or other vehicles into areas not designated as authorized
for same.

5.Lessee shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.

6.Lessee shall not alter any lock or install new or additional locks or bolts.

7.Lessee shall be responsible for the inappropriate use of any toilet rooms,
plumbing or other utilities. No foreign substances of any kind are to be
inserted therein.

8.Lessee shall not deface the walls, partitions or other surfaces of the
Premises or Project.

9.Lessee shall not suffer or permit anything in or around the Premises or
Building that causes excessive vibration or floor loading in any part of the
Project.

10.Furniture, significant freight and equipment shall be moved into or out of
the building only with the Lessor’s knowledge and consent, and subject to such
reasonable limitations, techniques and timing, as may be designated by Lessor.
Lessee shall be responsible for any damage to the Office Building Project
arising from any such activity.

11.Lessee shall not employ any service or contractor for services or work to be
performed in the Building, except as approved by Lessor.

12.Lessor reserves the right to close and lock the Building on Saturdays,
Sundays and Building Holidays, and on other days between the hours of ________
P.M. and ________ A.M. of the following day. If Lessee uses the Premises during
such periods, Lessee shall be responsible for securely locking any doors it may
have opened for entry.

13.Lessee shall return all keys at the termination of its tenancy and shall be
responsible for the cost of replacing any keys that are lost.

14.No window coverings, shades or awnings shall be installed or used by Lessee.

15.No Lessee, employee or invitee shall go upon the roof of the Building.

16.Lessee shall not suffer or permit smoking or carrying of lighted cigars or
cigarettes in areas reasonably designated by Lessor or by applicable
governmental agencies as non-smoking areas.

17.Lessee shall not use any method of heating or air conditioning other than as
provided by Lessor.

18.Lessee shall not install, maintain or operate any vending machines upon the
Premises without Lessor’s written consent.

19.The Premises shall not be used for lodging or manufacturing, cooking or food
preparation.

20.Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor or any applicable governmental agency.

21.Lessor reserves the right to waive any one of these rules or regulations,
and/or as to any particular Lessee, and any such waiver shall not constitute a
waiver of any other rule or regulation or any subsequent application thereof to
such Lessee.

22.Lessee assumes all risks from theft or vandalism and agrees to keep its
Premises locked as may be required.

23.Lessor reserves the right to make such other reasonable rules and regulations
as it may from time to time deem necessary for the appropriate operation and
safety of the Project and its occupants. Lessee agrees to abide by these and
such rules and regulations.

 

PARKING RULES

 

1.Parking areas shall be used only for parking by vehicles no longer than full
size, passenger automobiles herein called “Permitted Size Vehicles.” Vehicles
other than Permitted Size Vehicles are herein referred to as “Oversized
Vehicles.”

2.Lessee shall not permit or allow any vehicles that belong to or are controlled
by Lessee or Lessee’s employees, suppliers, shippers, customers, or invitees to
be loaded, unloaded, or parked in areas other than those designated by Lessor
for such activities.

3.Parking stickers or identification devices shall be the property of Lessor and
be returned to Lessor by the holder thereof upon termination of the holder’s
parking privileges. Lessee will pay such replacement charge as is reasonably
established by Lessor for the loss of such devices.

4.Lessor reserves the right to refuse the sale of monthly identification devices
to any person or entity that willfully refuses to comply with the applicable
rules, regulations, laws and/or agreements.

5.Lessor reserves the right to relocate all or a part of parking spaces from
floor to floor, within one floor, and/or to reasonably adjacent offsite
location(s), and to reasonably allocate them between compact and standard size
spaces, as long as the same complies with applicable laws, ordinances and
regulations.

6.Users of the parking area will obey all posted signs and park only in the
areas designated for vehicle parking.

7.Unless otherwise instructed, every person using the parking area is required
to park and lock his own vehicle. Lessor will not be responsible for any damage
to vehicles, injury to persons or loss of property, all of which risks are
assumed by the party using the parking area.

8.Validation, if established, will be permissible only by such method or methods
as Lessor and/or its licensee may establish at rates generally applicable to
visitor parking.

9.The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.

10.Lessee shall be responsible for seeing that all of its employees, agents and
invitees comply with the applicable parking rules, regulations, laws and
agreements.

11.Lessor reserves the right to modify these rules and/or adopt such other
reasonable and non-discriminatory rules and regulations as it may deem necessary
for the proper operation of the parking area.

12.Such parking use as is herein provided is intended merely as a license only
and no bailment is intended or shall be created hereby.

 

AIR CRE. 500 North Brand Blvd, Suite 900, Glendale, CA 91203, Tel 213-687-8777,
Email contracts@aircre.com

NOTICE: No part of these works may be reproduced in any form without permission
in writing.

 

 

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OFGRR-2.00, Revised 01-03-2017

 

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[g2018030920015453151692.jpg]

 

 

[g2018030920015454951693.jpg]

Eiger BioPharmaceuticals

 

6700 Call Center Parkway, Suite 110

2155 Park Ave

FP-1 : Fit Plan

Pleasantan, CA 94566

1st Floor

11-20-17

Tel: 925.484.5245 / Fax: 925,484,5206

Polo Alto, CA

mnl: BD

www.idarchitecture.com

Project # : 17216

 

 

 

 

CAD File: O:\days\2155 Park Blvd_Palo Alto\FLR1/17216_Eiger
BioPharmaceuticals\17216_Base_01.dwgDATE PLOTTED: Monday: Nov 20, 2017 - mlgo

 

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[g2018030920015455851693.jpg]

 

 

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ADDENDUM TO LEASE

 

This ADDENDUM TO LEASE (“Addendum”) is attached to and is an integral part of
that certain Standard Multi - Tenant Office Lease-Net (the “Lease”) dated
October 11, 2017, by and between the McDonald Family Co. LLC, as Lessor, and
Eiger BioPharmaceuticals, Inc., a Delaware corporation, as Lessee, for the
Premises commonly known as 2171 Park Blvd, 1st & 2nd floor, Palo Alto,
California consisting of approximately 8,029 rentable square feet.. Capitalized
terms used herein without definition will have the same meanings as in the
Lease. In the event of any conflict between this Addendum and the remainder of
the Lease, this Addendum shall control.

 

50.

Early Access:

Lessee, along with its contractors or agents, etc., shall be permitted to enter
the Premises, without obligation to pay Base Rent or Operating Expenses, on
February 1, 2018, provided that Lessee has delivered to Lessor proof of
insurance required pursuant to Section 8.4 of the Lease (the “Early Access
Period”) for the purpose of installing Lessee’s equipment, personal property,
cabling and otherwise preparing the Premises for occupancy (the “Early Access
Work”). Lessor and Lessee shall each take commercially reasonable efforts to
ensure that Lessor’s contractors and Lessee’s contractors cooperate in
commercially reasonable ways in order to avoid any delays in the substantial
completion of the Lessor Work (as defined below). Notwithstanding Section 3.2 of
the Lease, during the Early Access Period Lessee shall have no obligation to pay
Base Rent or Operating Expenses, except that since the utilities serving the
Premises are separately metered in the name of Lessor, Lessee shall be
responsible for payment to Lessor of such separately metered utilities during
the Early Access Period and for contracting and paying for janitorial services
to the Premises during the Early Access Period.

 

51.

Base Rent (NNN): The monthly Base Rent amount shall be as follows: Months 01-

 

12:

$6.00 per rentable square foot/mo./NNN($48,174.00)

(March 1, 2018- February 28, 2019)

 

 

Months 13-24:

$6.18 per rentable square

foot/mo./NNN($49,619.22)(March 1, 2019- February 29, 2020)

 

 

Months 25-36:

$6.37 per rentable square foot/mo./NNN($51,107.80)

(March 1, 2020- February 28, 2021)

 

 

Months 37 - 48:

$6.56 per rentable square foot/mo./NNN($52,641.04)

(March 1, 2021- February 28, 2022)

 

 

Months 49 - 60:

$6.75 per rentable square foot/mo./NNN($54,220.26)

(March 1, 2022- February 28, 2023)

 

52.

Vehicle Parking:

The words “beyond any applicable notice and cure periods” are hereby added after
the words “not in default” in the first sentence of Paragraph 2.6 of the Lease.
Additionally, there will be no charge for Lessee’s parking during the Term and
Paragraph 2.6(b) of the Lease is hereby deleted. Street parking from the City of
Palo Alto will be available at City of Palo Alto rates.

 

53.

Common Area Changes:

In the event that Lessor makes any of the Common Area changes set forth in
Paragraph 2.10 of the Lease, Lessor and Lessee agree that there shall be no
change to the square footage of the Premises as a result thereof, and Lessor
shall use reasonable efforts to minimize any interference with Lessee’s business
caused by such changes and the construction thereof.

 

54.

Delay in Possession:

Section 3.3 of the Lease is hereby deleted and replaced with the following:

 

“3.3 Delay in Possession. Lessor agrees to use its best commercially reasonable
efforts to deliver possession of the Premises to Lessee by the Commencement
Date. If, despite said efforts, Lessor is unable to deliver possession by such
date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the

1

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validity of this Lease or change the Expiration Date. Lessee shall not, however,
be obligated to pay Rent or perform its other obligations until Lessor delivers
possession of the Premises and any period of rent abatement that Lessee would
otherwise have enjoyed shall run from the date of delivery of possession and
continue for a period equal to what Lessee would otherwise have enjoyed under
the terms hereof, but minus any days of delay caused by the acts or omissions of
Lessee. If Lessor is unable to deliver the Premises to Lessee with the Lessor’s
Work substantially complete on the Commencement Date, Lessee shall also be
entitled to rent abatement for the period from the date which is forty (40) days
following the Commencement Date through the date that is one hundred sixty (160)
days after the Commencement Date, which abatement shall be applied beginning
after the expiration of any rent abatement period set forth in the Lease. If
possession is not delivered within 160 days after the Commencement Date, as the
same may be extended under the terms of any Work Letter executed by Parties,
Lessee may, at its option, by notice in writing after the end of such 160 day
period, cancel this Lease, in which event the Parties shall be discharged from
all obligations hereunder.”

55.

Operating Expenses:

 

55.1Lessor’s estimate of Operating Expenses for the Premises for 2017 is
$.95/rsf/month, which amount Lessee shall use to calculate monthly Operating
Expenses owed until receipt of Lessor’s Statement for calendar year 2018.

 

55.2Notwithstanding anything to the contrary set forth in the Lease, Lessor will
contract directly for utilities servicing the Premises and Lessee will be
responsible for contracting directly for janitorial service to the Premises. The
utilities are separately metered to the Premises and will be billed
independently and not as an Operating Expense. Payments for utilities will be
made promptly following the receipt of a written invoice therefor from Lessor,
but in any event not later than twenty (20) days following receipt of such
written invoice.

 

55.3Lessor’s property management fee, not exceed three percent (3%) of the gross
rents of the Building minus the amount of the management fee throughout the
initial Term and any Extension Options, shall be included as an Operating
Expense.

 

55.4Notwithstanding Lessee’s Share stated in Paragraph 1.6 of the Lease, Lessee
shall be responsible for 100 percent (100%) of all costs connected with
maintenance, repair and replacement of the HVAC system that serves only the
Premises.

 

55.5The words “and the costs of any environmental inspections” are hereby
deleted from Section 4.2(a)(ii).

 

55.6Section 4.2(a)(x) is hereby deleted from the Lease and no reserves shall be
part of Operating Expenses payable by Lessee.

 

55.7The capital improvement and replacement expenses set forth in Section
4.2(a)(viii) of the Lease shall be limited to those which are: (1) reasonably
expected by Lessor to produce an actual reduction in operating charges or energy
consumption or effect other economies in the operation or maintenance of the
Building; or (2) required after the date of this Lease under any governmental
law or regulation not in effect as of the Commencement Date (but not including
any Capital Expenditure set forth in Section 2.3(b) of the Lease) (collectively,
“Permitted Capital Expenditures”).

 

55.8Section 4.2(d) is hereby deleted and replaced with the following:

 

“Lessee’s Share of Operating Expenses is payable monthly on the same day as the
Base Rent is due hereunder. The amount of such payments shall be based on
Lessor’s good faith estimate of Operating Expenses for the current calendar
year. Within ninety (90) days following the end of any given calendar year,
Lessor will use reasonable efforts to furnish to Lessee a statement in
reasonable detail, setting forth the actual Operating Expenses for the
applicable calendar year (“Lessor’s Statement”). If the estimated monthly
payments of Lessee’s Share of Operating Expenses that Lessee has paid has paid
are greater than Lessee’s Share of Operating Expenses as set forth in Lessor’s
Statement, Lessor shall credit such overpayment against subsequent obligations
of Lessee for payment of Operating Expenses, or refund such overpayment if the
Term has ended and Lessee has no further obligations to Lessor hereunder. If the
estimated monthly payments of Lessee’s Share

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of Operating Expenses are less than the amount due for such calendar year,
Lessee shall pay the balance due within twenty (20) days from receiving Lessor’s
Statement.

 

55.9During the sixty (60)-day period after receipt of any Lessor’s Statement
(the “Review Period”), Lessee may, at its sole cost and expense, inspect and
audit on a non-contingency basis Lessor’s records relevant to the cost and
expense items reflected in such Lessor’s Statement at a reasonable time mutually
agreeable to Lessor and Lessee during Lessor’s usual business hours. Each
Lessor’s Statement shall be conclusive and binding upon Lessee unless within the
Review Period Lessee notifies Lessor in writing that it disputes the correctness
of Lessor’s Statement and specifies how Lessor’s Statement is claimed to be
incorrect. All inspections and audits of Lessor’s books and records and any
arbitration shall be subject to a confidentiality agreement reasonably
acceptable to Lessor. If Lessee’s audit determines that actual Operating
Expenses have been overstated by more than five percent (5%), then Lessor shall
reimburse Lessee for the reasonable out-of-pocket costs of such audit and
Lessee’s rent shall be appropriately adjusted to reflect any overstatement in
Operating Expenses.

 

55.10Notwithstanding anything to the contrary in Section 4 of the Lease, the
following items shall be excluded from Operating Expenses:

 

 

i.

Any fines, penalty charges, or interest incurred by Lessor due to violation of
law or late payment.

 

 

ii.

Expenses incurred in connection with the services provided to others but not to
Lessee.

 

 

iii.

Expenses incurred in connection with leasing, drafting, or enforcing leases in
the Building, such as, but not limited to, (l) real estate broker’s commission,
(2) accounting, legal, architectural, space planning, or engineering fees, or
(3) advertising or promotions costs.

 

 

iv.

Repairs and maintenance necessary because of negligence or willful misconduct of
other tenants, their officers, agents, employees, invitees, licensees, and those
parties working through or under those tenants.

 

 

v.

Except for Permitted Capital Expenditures, any capital improvement or
replacement costs.

 

 

vi.

Ground lease rental (except for any ground lease rental fee attributable to the
area where Lessee’s parking spaces described in Section 1.2(b) of the Lease are
located, which rental fees may be included in Operating Expenses up to an amount
not to exceed $200 per month) and depreciation; principal and interest payments
of mortgages (and any fees or points associated with any mortgages) and other
non-operating debts of Lessor.

 

 

vii.

Sums paid to subsidiaries or other affiliates of Lessor for services on or to
the Building and/or Premises, but only to the extent that the costs of such
services exceed the competitive cost for such services rendered by unrelated
persons or entities of similar skill, competence and experience.

 

 

viii.

All costs associated with the operation of the business of the entity which
constitutes “Lessor” (as distinguished from the costs of operating, maintaining,
repairing and managing the Building) including, but not limited to, Lessor’s or
Lessor’s managing agent’s general corporate overhead and general administrative
expenses;

 

 

ix.

Costs for alterations of other tenants’ premises prior to and during duration of
leases.

 

 

x.

Costs incurred in connection with the original construction or any future
expansion of the Building (including without limitation costs to correct defects
in, or inadequacy of, the initial design or construction).

 

 

xi.

Costs incurred to obtain or upgrade a LEED certification or similar rating for
the Building (provided that monitoring and maintenance costs required to
maintain such a

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rating or certification once obtained may be included in Operating Expenses).

 

 

Xii.

Any fines, penalties or interest resulting from the active negligence or willful
misconduct of Lessor.

 

 

xiii.

Any cost or expense related to removal, cleaning, abatement or remediation of
Hazardous Substances existing as of the date of this Lease in, about or under
the Building or migrating onto or under thereafter.

 

 

xiv.

To the extent any employee of Lessor spends only a portion of his or her time
working with respect to the Building (as opposed to full time work with respect
to the Building), a prorated amount of such employee’s wages, salaries and
compensation based upon the portion of time spent by such employee with respect
to the projects other than the Building.

 

 

xv.

Costs of services for which Lessee or any tenant of the Building is obligated to
separately reimburse Lessor pursuant to this Lease or its respective lease with
its Lessor.

 

 

xvi.

Except with respect to insurance deductibles (but subject to any express
limitations set forth in this Lease), the cost of repairs or replacements
incurred by reason of fire or other casualty or condemnation;

 

 

xvii.

Any costs expressly excluded from Operating Expenses elsewhere in the Lease
and/or this Addendum.

 

 

xviii.

Costs related to travel expenses, charitable or political contributions or art
work.

 

56.

Real Property Taxes Exclusions: Paragraph 10.1 of the Lease is hereby amended by
adding the following to the end thereof:

 

“Real Property Taxes shall not include:

 

(i) Inheritance or estate taxes imposed upon or assessed against the interest of
any person in the Building;

 

(ii) Taxes computed upon the basis of the net income of any owners of any
interest in the Building; or

 

(iii) Any penalties, interest or fees attributable to Lessor’s negligent failure
to pay any Real Property Taxes when due and payable.”

 

57.

Use:

Lessee may use the Premises for Professional, Office and R&D uses and other
permitted legal uses.

 

58.

Lessor Work-Delivery Condition:

 

58.1Upon the Commencement Date, Lessor, at its sole cost and expense, will
deliver the Premises in compliance with applicable laws and codes, clean and
free of all Hazardous Substances, free of all personal property, with the roof
and building envelope in watertight condition, with all Building systems
operational and in good condition and repair and all of Lessor Work
substantially completed (“Delivery Condition”). Lessor warrants such Building
systems, including, but not limited to, the roof, building envelope and HVAC
equipment, for the first six (6) months of the Term. In the event that any such
Building systems are not in good condition and repair during the initial 6
months of the Term, Lessor shall repair such Building system and shall not
include the cost of such repairs as an Operating Expense. Following the initial
6 months, to the extent Lessor is required to make such repairs, then the cost
of such repairs may be included as an Operating Expense as set forth in
paragraph 4.2 of the Lease. For the avoidance of doubt, notwithstanding the
foregoing or anything to the contrary contained in this Lease, Lessee shall not
be responsible for (i) compliance with any Applicable Requirements where such
compliance is not related specifically to Lessee’s particular use and occupancy
of the Premises or where a failure of the Premises to comply with any Applicable
Requirements

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arose prior to the Start Date, and (ii) in no event shall Lessee be liable for,
and Lessor shall indemnify Lessee for any damages caused by, the storage,
release or disposal of any Hazardous Substances on the Building or Property (A)
prior to the Commencement Date, or (ii) by anyone other than Lessee.

 

58.2Lessor shall use commercially reasonable efforts to deliver the Premises to
Lessee with the Lessor Work (as defined below) on or before the Commencement
Date. Upon execution of this Lease, Lessor, at Lessor’s sole cost and expense,
shall have an architect develop a test fit of the Premises for the Lessee in
line with Lessor’s budget for the Lessor Work of Two Hundred Thousand and 00/100
Dollars ($200,000) (the “Lessor Work Budget”). Lessee and Lessor will work
together to develop a mutually agreeable space plan with mutually agreeable
finishes. Lessor, at Lessor’s cost, not to be passed through as an Operating
Expense, shall design a space plan with:

 

 

a.

7-10 Private offices

 

b.

1 small conference room (4-6 people)

 

c.

1 medium conference room (8-12 people)

 

d.

2 call rooms/phone booths (1-2 people)

 

e.

1 large conference room (14-20 people)

 

f.

Upgraded kitchenettes to new building standards

 

g.

New finishes.

 

As the same are depicted on Exhibit A attached hereto (collectively “Lessor
Work”). Should Lessee request any additions to the Lessor Work (“Additional
Lessor Work”) it shall provide written notice thereof to Lessor and Lessor shall
promptly provide Lessee with an estimate for completing such Additional Lessor
Work (the “Lessor Estimate”). Should the Lessor Estimate indicate that the
Additional Lessor Work would cause Lessor to exceed the Lessor Work Budget, any
such increase in price over the Lessor Work Budget that is a result of the
Additional Lessors Work shall be amortized over the initial Term of this Lease
at 6% interest and added to the Base Rent. If applicable, Lessor’s Estimate
shall contain a calculation of any such increase in Base Rent. Following
reception of the Lessor Estimate, Lessee shall provide Lessor written
confirmation of whether it chooses to proceed with the Additional Lessor Work,
and if so this Lease shall be amended to set forth the revised Base Rent, if
applicable. Any changes to the Lessor Work in excess of Fifty Thousand Dollars
and 00/100 ($50,000.00) shall require a written change order approved by both
Lessee and Lessor. Notwithstanding the foregoing, any costs in excess of the
Lessor Work Budget relating to compliance with applicable laws and base building
systems, up to an amount not to exceed Twenty Five Thousand Dollars and 00/100
($25,000.00), shall be borne solely by Lessor, not be passed on through
Operating Expenses.

 

Once commenced, Lessor shall diligently proceed to achieve Substantial
Completion of Lessor’s Work As used herein, the term “Substantial Completion”
shall mean that Lessor shall have substantially completed Lessor’s Work, with
the exception of minor punch list items that do not materially impede Lessee’s
moving into the Premises for Lessee’s use and occupancy of the Premises.
Following Substantial Completion of Lessor Work and prior to Lessee occupancy,
Lessor and Lessee shall conduct a walkthrough of the Premises and if applicable,
provide a punch list of any items to be repaired by Lessor. Lessor shall
complete any repairs within thirty (30) days of the delivery date, subject only
to availability of materials.

 

If any portion of Lessor’s Work that requires repair or replacement is covered
by a guaranty or warranty by a contractor, a subcontractor and/or a material
supplier, Lessor shall assign to Lessee such guaranty or warranty. In addition
to (1) any warranties or guaranties issued by contractors, subcontractors, or
material suppliers relating to Lessor’s Work and (2) Lessor’s warranty in
Paragraph 2.2 of the Lease (which warranty for electrical, mechanical, and
plumbing systems shall extend for three months following the Commencement Date),
Lessor warrants that Lessor’s Work shall be free from material defects for a
period of one year following the date of Substantial Completion.

 

Lessee, at Lessee cost, is responsible for installation of any additional
improvements which Lessee desires, including network wiring, subject to Lessor
prior approval, which approval shall not be unreasonably withheld or delayed.

 

Except for the Lessor Work and as otherwise set forth in this Lease, Lessor
shall deliver the Premises to Lessee in their “as is” condition.

 

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59.

Assignment and Subletting.

 

59.1Affiliates. Despite any other provision of the Lease, Lessor’s consent is
not required for any transfer by operation of law, sale, assignment, transfer of
any interest in Lessee or this Lease or the Premises, sublet of all or any part
of the Premises, grant of any right to use the Premises or any part thereof
(“Transfer”) to an Affiliate, as defined below, as long as the following
conditions are met: (i) At least ten (10) business days before the Transfer,
Lessor receives written notice of the Transfer (as well as any documents or
information reasonably requested by Lessor regarding the Transfer or the
assignee (“Transferee”)); (ii) The Transfer is not a subterfuge by Lessee to
avoid its obligations under the Lease; (iii) if the Transfer is an assignment,
Transferee assumes in writing all of Lessee’s obligations under this Lease which
include the use of the Premises and (iv) Transferee’s net worth is equal to or
greater than that of Lessee as of the date hereof; Lessee and the Transferee to
provide current audited financial statements to Lessor for review and approval
at the time of Lessee notification to Lessor per 56.1 (i) above. An “Affiliate”
shall mean (i) any entity that controls, is controlled by, or is under common
control with Lessee. For this purpose, “control” shall mean the direct or
indirect ownership of more than fifty percent (50%) of the voting securities of
an entity or possession of the right to vote more than fifty percent (50%) of
the voting interest in the ordinary direction of the entity’s affairs.

 

Regardless of any provision in this Lease which might provide or be construed
otherwise, however, the prohibition against Transfers will not be construed to
include a prohibition against any transfer resulting from, or as a part of, a
bona fide merger or consolidation, sale of assets, sale of a controlling
interest in stock or other ownership interest, or by like manner, or by
operation of law, so long as the resultant Transferee is of such financial
standing and operational responsibility so as to give reasonable assurance of
the payment of all Rent reserved in, and compliance with all of the other terms,
provisions, covenants and conditions of, this Lease (in any such case, a
“Corporate Transfer”); however, Lessee in undertaking any such Corporate
Transfer, may not manipulate the ownership interests of Lessee as a means to
subvert the general prohibition against Transfers set forth herein. Affiliate
Transfers and Corporate Transfers, any of which may be undertaken and
accomplished without the need for obtaining Lessor’s consent, are referred to
herein as “Approved Affiliates”.

 

59.2: Rent-Sharing. As a reasonable condition to Lessor’s consent to any
assignment or subletting, Lessee shall pay to Lessor the Transfer Premium.
“Transfer Premium” shall mean fifty percent (50%) of the following: all base
rent, additional rent, and other consideration, cash or non-cash, payable by a
Transferee to Lessee (including key money and bonus money and any payment in
excess of fair market value for services rendered by Lessee to Transferee or
assets, fixtures, inventory, equipment, or furniture transferred by Lessee to
Transferee in connection with the Transfer (“Transferee Rent”)), after deducting
the rent payable by Lessee under this Lease (excluding the Transfer Premium) for
the portion of the Premises that is subject to the Transfer (“Lessee Rent”).
Lessee shall pay the Transfer Premium on a monthly basis, together with its
payment of Base Rent. In calculating the Transfer Premium, Lessee Rent, and
Transferee Rent, the parties shall first adjust the rent to the actual effective
rent to be paid, taking into consideration only any rent credit (free rent
provided to Transferee), reasonable subtenant improvements, legal fees and
broker commission paid. For purposes of calculating the effective rent, all
those concessions shall be amortized on a straight-line basis over the relevant
term. On Lessor’s request, Lessee shall furnish a complete statement describing
in detail the computation of any Transfer Premium that Lessee has derived or
will derive from the Transfer. If Lessor’s independent certified public
accountant finds that the Transfer Premium for any Transfer has been
understated, Lessee shall, within thirty (30) days after demand, pay the
deficiency and if such understatement is greater than 5%, also Lessor’s costs of
that audit.

 

59.3Recapture. If Lessee proposes to sublease or assign all of the Premises for
the remainder of the Term, once a letter of intent for such sublease or
assignment has been executed, Lessee shall provide notice to Lessor (the
“Recapture Notice”) of such intended sublease or assignment together with a copy
of the executed letter of intent. Lessor shall have the option to recapture the
entire Premises for the remainder of the Term by giving written notice thereof
to Lessee within five (5) business days after receipt of the Recapture Notice.
Such recapture notice shall cancel and terminate this Lease in its entirety as
of the date stated in the Recapture Notice as the effective date of the proposed
Transfer. If Lessor declines, or fails to elect in a timely manner to recapture
the Premises under this Section 59.3, then it shall have waived its right to
recapture such sublease or assignment and Lessee may proceed with the
negotiation of such sublease or assignment and request consent thereto from
Lessor pursuant to Section 12 of the Lease.

 

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60.

Option to Extend:

 

60.1:Generally. According to Article 39 of the Lease, if Lessee is not in Breach
at the time of giving the Extension Option Notice (defined below), then Lessee
shall have the option (“Extension Option”) to extend the Term for an additional
thirty-six (36) months, starting immediately upon expiration of the Initial Term
(“Extension Term”). Any Default by Lessee hereunder or termination of this Lease
during the Original Term shall terminate this Extension Option. The Extension
Term shall be under all of the covenants, terms and conditions of the Lease,
except that the following provisions will not be part of this Lease for the
Extension Term:(i) the amount of Base Rent to be paid by Lessee during the
Extension Term, which shall be established as set forth below,(ii) the Extension
Option to extend provided for in this Paragraph 56.1,and (iii) any Lessor
obligations to construct or to fund initial improvements. The Extension Option
is personal to Lessee or an Approved Affiliate and may not be assigned or
transferred without Lessor’s express prior written consent except to an Approved
Affiliate. If Lessee elects to exercise the Extension Option, Lessee shall give
Lessor written notice of such election (“Extension Option Notice”) not less than
one hundred eighty (180) days and not more than two hundred seventy (270) days
before the end of the Term.

 

60.2:Rent During Option Term. If Lessee exercises the Extension Option, Base
Rent for the Extension Term shall be 95% of the Fair Market Rental Rate (as
defined below) of the Premises in relation to market conditions for the Palo
Alto California Avenue Office market at the time of the extension. The Fair
Market Rental Rate hereunder shall be determined as follows:

 

(a)Mutual Agreement. After timely receipt by Lessor of the Extension Option
Notice, Lessor and Lessee shall have a period of thirty (30) days in which to
agree on the Fair Market Rental Rate of the Premises. If Lessor and Lessee agree
on the Fair Market Rental Rate for the Premises, then they shall immediately
execute an amendment to the Lease stating and incorporating such agreed-upon
Fair Market Rental Rate as the Base Rent for the Extension Term.

(b)Arbitration.

 

i. If Lessor and Lessee are unable to agree upon the Fair Market Rental Rate
within thirty (30) days following Lessee’s exercise of the Extension Option,

then the dispute shall proceed to arbitration. The arbitration procedure shall
commence when either party submits the matter to arbitration. Not later than ten
(10) days after the arbitration procedure has commenced, each party shall
appoint an arbitrator and notify the other party of such appointment by
identifying the appointee. Each party hereto agrees to select as its respective
appointee a licensed real estate agent, who is an individual with at least 5
years’ experience with respect to office building ownership, management and
marketing in the downtown Palo Alto area. Neither party may consult directly or
indirectly with any arbitrator regarding the Fair Market Rental Rate prior to
appointment, or after appointment, outside the presence of the other party. The
arbitration shall be conducted under the provisions of the commercial
arbitration rules of the American Arbitration Association.

ii.Not later than (10) days after both arbitrators are appointed, each party
shall separately, but simultaneously, submit in a sealed envelope to each
arbitrator their separate suggested Fair Market Rental Rate and shall provide a
copy of such submission to the other party. The two (2) selected arbitrators,
after reviewing such submissions, shall determine whether Lessor’s or Lessee’s
estimate of the Fair Market Rental Rate is closer to the actual Fair Market
Rental Rate for the Premises. If both arbitrators agree that one of said
declared estimates is closer to the actual Fair Market Rental Rate, they shall
declare that estimate to be the Fair Market Rental Rate, and their decision
shall be final and binding upon the parties.

iii.If the two (2) selected arbitrators are unable to agree that one of the
declared estimates is closer to the actual Fair Market Rental Rate, within
thirty (30) days after receipt of Lessor’s and Lessee’s submitted estimates,
then the arbitrators shall inform the parties. Unless the parties shall both
otherwise then direct, said arbitrators shall select a third arbitrator, not
later than ten (10) days after the expiration of said thirty (30) day period. If
no arbitrator is selected within such ten (10) day period, either party may
immediately petition a court with appropriate jurisdiction to appoint such third
arbitrator. The third arbitrator shall have the qualifications and restrictions
set forth above, and shall conduct arbitration pursuant to the commercial
arbitration rules of the American Arbitration Association. The third
arbitrator’s decision shall be final and binding as to which estimate (as
between Lessor’s and Lessee’s) of the Fair Market Rental Rate is closer to the
actual Fair Market Rental Rate. Such third arbitrator shall make a decision not
later than thirty (30) days after appointment.

iv.Each party shall be responsible for the costs, charges and/or fees of its
respective appointee and the parties shall share equally in the costs, charges
and/or fees of the third arbitrator. The decision of the arbitrator(s) may be
entered in any court having jurisdiction thereof.

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(c) Fair Market Rental Rate. The term “Fair Market Rental Rate” shall mean the
amount per rentable square foot that a willing, comparable, non-equity,
non-renewal, non-expansion new tenant would pay and a willing, comparable
landlord would accept at arm’s length, giving appropriate consideration to
rental rates per rentable square foot, the credit strength of Lessee, the type
of escalation clauses (including, but without limitation, operating expense,
real estate taxes, CPI), the extent of liability under the escalation clauses
(e.g., whether determined on a “net lease” basis or by increases over a
particular base year
orbasedollaramount),abatementprovisionsreflectingfreerentand/ornorentduring the
period of construction or any other period during the lease term, brokerage
commissions, if any, length of lease term, size and location of premises being
leased, and other generally applicable terms and conditions of tenancy for the
space in question.

 

61.

Security Deposit/Prepaid Rent:

 

61.1Tenant shall pre-pay the first months’ Base Rent, Estimated Operating
Expenses and Security Deposit upon the execution of the Lease. The Security
Deposit due upon execution of the Lease shall be equal to six (6) months’ Base
Rent calculated using the Base Rent rate payable upon execution of the Lease.
Assuming Lessee is not in default (beyond notice and cure periods), Lessor will
reduce the Security Deposit per the following schedule:

 

 

-

Initial Security Deposit: $289,044.00, equivalent to the first six (6) months of
base rent.

 

-

Lessor to give back two (2) months after the 24th month of the Term (
$96,348.00)

 

-

Lessor to give back one (1) month after the 30th month of the Term ( $48,174.00)

 

-

Lessor to give back one (1) month after the 48th month of the Term ($48,174.00)

 

-

Lessor will hold the remaining amount of $96,348.00 through the remainder of the
Term.

 

Lessor will return the above stated amounts to Lessee, by check at the address
set forth in the Lease, within fifteen (15) days of the dates listed above.

 

61.2Security Deposit: Notwithstanding anything to the contrary contained in
Section 5 of the Lease, Lessee shall have no obligation to increase the amount
of the Security Deposit upon a transfer of the Lease.

 

62.

Inspection; Compliance Notice:

The following is hereby added to the end of Paragraph 6.4 of the Lease:
“Notwithstanding the provisions of this Paragraph 6.4, Lessor shall provide
Lessee with at least 24 hours’ prior actual notice before entering the Premises.
In the event of an emergency, the determination of which shall require Lessor to
be reasonable, Lessor shall use its best efforts to provide Lessee with notice
reasonable in such situation. In the event of any entry by Lessor onto the
Premises, Lessor shall use its best efforts not to interfere with the conduct of
Lessee’s business.”

 

63.

Alterations:

The dollar amount set forth in the fifth line of Section 7.3(b) of the Lease
shall be $15,000 (and not $2,000). Lessee shall not be required to provide a
bond or surety for any Alterations unless the cost of the work exceeds two (2)
months’ Base Rent. Notwithstanding Section 7.4(b) of the AIR Lease, Lessee shall
not be required to remove any Alteration or Utility Installation unless Lessor
notifies Lessee of the requirement to do so either (a) upon Lessor granting its
consent to such Alteration or Utility Installation, or (b) within ten (10) days
of Lessee’s request for a determination from Lessor.

 

64.

Insurance; Indemnity:

 

(a)Section 8.5 is hereby deleted in its entirety and replaced with the
following:

 

8.5 Insurance Policies. Insurance required herein shall be by companies
maintaining during the policy term a “General Policyholders Rating” of at least
A☐,VII, as set forth in the most current issue of “Best’s Insurance Guide”, or
such other rating as may be required by a Lender. Lessee shall not do or permit
to be done anything which invalidates the required insurance policies. Lessee
shall, prior to the Start Date, deliver to Lessor certified copies of
certificates with copies of the required endorsements evidencing the existence
and amounts of the required insurance. Lessee shall furnish Lessor with evidence
of renewals or “insurance binders” evidencing renewal thereof in a reasonable
amount of time after the renewal. Such policies shall be for a term of at least
one year, or the length of the remaining term of this Lease, whichever is less.
If either Party shall fail to procure and maintain the insurance required to be
carried by it, the other Party may, but shall not be required to, procure and
maintain the same.”

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(b)Lessee’s waiver of Lessor liability under Section 8.8 of the Lease shall not
apply to the extent any losses or injuries as set forth therein are caused by
the gross negligence or willful misconduct of Lessor or its agents, or a breach
by Lessor under this Lease.

 

65.

Damage or Destruction:

Notwithstanding anything to the contrary in Section 9 of the AIR Lease:

 

 

a.

Notwithstanding Section 9.2 of the AIR Lease, Lessee shall not be required to
make the repair of any damage or destruction.

 

 

b.

Lessor shall have thirty (30) days from the date of the damage or destruction to
inform Lessee as to whether or not the damage is Partial or Total.

 

 

c.

Lessee’s right to rent abatement set forth in Section 9.6(a) shall not be
limited to the proceeds received from the Rental Value Insurance.

 

 

d.

The first sentence of Section 9.5 of the AIR Lease is hereby deleted and
replaced with the following: “If at any time during the last twelve (12) months
of this Lease there is damage for which the cost to repair exceeds one months’
Base Rent, whether or not an Insured Loss, either party may terminate this Lease
effective sixty (60) days following the date of occurrence of such damage by
giving a written termination notice to the other party within thirty (30) days
after the date of occurrence of such damage.”

 

 

e.

If Lessor is obligated to repair or restore the Premises following Premises
Partial Damage or Premises Total Destruction and does not commence, in a
substantial and meaningful way, such repair or restoration within thirty (30)
days after such obligation shall accrue, Lessee may exercise its right to
terminate the Lease as set forth in Section 9.6(b).

 

66.

Excess Utility Consumption:

Section 11.3 and 11.4 of the Lease are hereby deleted. Lessee may use utility
services in amounts reasonably necessary for the conduct of its business
operations on a 24 hours a day, seven days a week basis, and utilities will be
provided on such basis and no advance request needs to be made for use thereof.

 

67.

Utility Interruption:

Provided no Default shall then exist under this Lease (beyond any applicable
notice and cure periods), if electrical power or HVAC is interrupted due to the
negligence or willful misconduct of Lessor or its employees or agents (a
“Utility Interruption”), and Lessee is unable to carry on its business in a
reasonably normal manner due to the failure of any of such utilities and
services, and therefore vacates all or the affected portion of the Premises
and/or ceases business operations in the Premises for a period in excess of five
(5) business days, the Base Rent and additional rental payable under this Lease
shall be abated retroactively from the first day of the Utility Interruption (in
proportion to the area of the Premises vacated by Lessee by reason of such
failure, if less than all of the Premises is affected) and for as long as such
inability to carry on Lessee’s business continues, until such time as the
service is restored or Lessee reoccupies the Premises or affected portion
thereof, whichever is earlier. In the event of any curtailment, diminution, or
failure with respect to utilities and services in the Building or the Premises,
Lessor agrees to use due diligence to restore full service.

 

68.

Lessor’s Consent:

The word “cumulative” in Paragraph 12.1(b) of the Lease shall be amended to read
“noncumulative” and the percentage provided in said Paragraph 12.1(b) shall be
51% (and not 25%). Further, Paragraph 12.1(c) of the Lease shall be deleted and
of no force and effect.

 

69.

Default:

Notwithstanding anything to the contrary in Section 13.1(d) of the Lease, Lessee
shall have fifteen (15) days following written notice from Lessor to deliver the
documents required under Section 13.1(d) before any failure to deliver shall
constitute a Default under the Lease.

 

70.

Remedies:

Notwithstanding anything to the contrary in the first paragraph of Section 13.2
of the Lease, (a) Lessor may not perform the duties or obligations of Lessee
under the Lease unless Lessee fails to perform any of its affirmative

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duties or obligations within thirty (30) days after written notice to Lessee,
unless a longer period of time is required to cure the same, in which case
Lessee shall have such longer period of time to perform the same so long as
Lessee has commenced to perform within such thirty (30) day period and
diligently performs the same to completion, and (b) Lessor shall not charge more
than a 10% markup for work performed as a result of Lessee failures set forth in
(a) above on the costs and expenses incurred by Lessor in performing such
obligations or duties.

 

71.

Late Charges:

Notwithstanding anything in Section 13.4 of the Lease to the contrary, Lessor
will not assess a late charge until Lessor has given written notice of such late
payment for the first later payment in any twelve (12) month period and after
Lessee has not cured such late payment within three (3) days from receipt of
such notice.

 

72.

Lessor Access:

Notwithstanding anything to the contrary in the Lease: (a) Lessor shall give not
less than 24 hours’ notice to Lessee prior to entering the Premises (except in
case of emergency), and (b) Lessee shall have the right to require that an
employee, officer or agent of Lessee is present at all times during any such
entry (except in case of emergency).

 

73.

Consents:

Lessor’s charges in connection with any request for consent by Lessee pursuant
to Section 36 of the Lease shall not exceed $1,500 per request.

 

74.

ADA:

Lessor represents that the Premises complies with ADA provisions per
negotiations with the City of Palo Alto during the permitting process for the
Lessor Work, of the ADA in effect on the Effective Date of the Lease.

 

75.

No Relocation:

Paragraph 41(b) of the Lease shall be deleted and of no force and effect.

 

76.

Notice of Rule Changes:

Notwithstanding any provision of the Lease or the Rules and Regulations, Lessee
shall not abide by any modifications, updates or changes to the Rules and
Regulations unless Lessee has received such modifications, updates or changes in
writing from Lessor.

 

77.

Parking Rules

Notwithstanding anything set forth in the parking rules and regulations, in no
event shall Lessor move Lessee’s parking spaces to adjacent or offsite
locations.

 

78.

Notices:

Lessor:

McDonald Family Co. LLC

2183 Park Blvd

Palo Alto, CA 94306

Attention: Brion McDonald

 

Lessee:

Eiger BioPharmaceuticals, Inc.

2171 Park Blvd.

Palo Alto, CA 94306

Attention: Matthew Bys

 

with a copy to:

 

Cooley LLP

101 California St, 5th Floor

San Francisco, CA 94111

Attention: Marlena C. Schultz

 

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IN WITNESS WHEREOF, Lessor and Lessee have executed this Addendum concurrently
with the Lease of even date herewith.

 

Lessor:

 

Lessee:

McDonald Family Co., LLC

a California limited Liability Co.

 

Eiger BioPharmaceuticals, Inc.,

a Delaware corporation

 

 

 

Executed at:

 

 

Executed at:

 

 

 

 

 

On:

12/8/17

,2017

 

On:

12/7/17

,2017

 

 

 

 

 

By:

/signature/

 

By:

/signature/

 

 

 

 

Printed Name:

Brian McDonald

 

Printed Name:

Jim Welch

 

 

 

 

Title:

CEO

 

Title:

CFO

 

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EXHIBIT A

 

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