Exhibit 10.83
BRITANNIA MODULAR LABS I
 
LEASE
 
This Lease (the "Lease"), dated as of the date set forth in Section 1 of the
Summary of Basic Lease Information (the "Summary"), below, is made by and
between BAYSIDE AREA DEVELOPMENT, LLC, a Delaware limited liability company
("Landlord"), and VISTAGEN THERAPEUTICS, INC., a California corporation
("Tenant").
 
SUMMARY OF BASIC LEASE INFORMATION
 
TERMS OF LEASE
DESCRIPTION
         1.           Date:
April 24, 2013
         2.           Premises
              (Article 1).
 
 
2.1           Building:
333-353 Allerton Avenue
South San Francisco, California
Comprising 67,337 rentable square feet of space ("RSF") in the aggregate.
 
2.2           Premises:
Approximately 10,909 RSF consisting of Suite 5 in the Building, with a street
address of 343 Allerton Avenue, as further set forth in Exhibit A to the Lease.
         3.            Lease Term
               (Article 2).
 
3.1           Length of Term:
Forty eight (48) months.
 
3.2           Lease Commencement Date:
The date that Landlord delivers the Premises to Tenant "Ready for Occupancy" as
that term is defined in Section 3(a) of the Tenant Work Letter attached to the
Lease as Exhibit B, which Lease Commencement Date is anticipated to be June 30,
2013.  Notwithstanding the foregoing and any early access to the Premises by
Tenant pursuant to Section 6 of the Tenant Work Letter, the Lease Commencement
Date shall not be sooner than June 30, 2013.
 
3.3           Lease Expiration Date:
If the Lease Commencement Date shall be the first day of a calendar month, then
the day immediately preceding the 48th month anniversary of the Lease
Commencement Date; or, if the Lease Commencement Date shall be other than the
first day of a calendar month, then the last day of the month in which the 48th
month anniversary of the Lease Commencement Date occurs.

 
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4.           Base Rent (Article 3):
 

 
Lease Year
   
Annual
Base Rent
   
Monthly
Installment
of Base Rent
   
Monthly Base Rent
per RSF
    1*     $ 242,179.80     $ 20,181.65     $ 1.85     2     $ 255,270.60     $
21,272.55     $ 1.95     3     $ 268,361.40     $ 22,363.45     $ 2.05     4    
$ 281,452.20     $ 23,454.35     $ 2.15  

 
*Note:  Tenant shall have no obligation to pay any Base Rent for the Premises
attributable to the first three (3) months of the Lease Term (the "Rent
Abatement Period").
 
5.  Tenant FF&E Allowance (Exhibit B):
An amount equal to $5.00 per RSF (i.e., $54,545.00 based upon 10,909 rentable
square feet in the Premises).
6.  Tenant's Share
     (Article 4):
 
16.20%.
7.  Permitted Use
     (Article 5):
 
The Premises shall be used only for general office, biotechnology and
pharmaceutical research and development, engineering, laboratory, storage and/or
warehouse uses, including, but not limited to, administrative offices and other
lawful uses reasonably related to or incidental to such specified uses, all
(i) consistent with first class life sciences and pharmaceutical projects in the
South San Francisco, California, area ("First Class Life Sciences Projects"),
and (ii) in compliance with, and subject to, applicable federal, state and local
laws, rules and regulations and the terms of this Lease.
8.  Security Deposit
     (Article 21):
 
$46,908.70
9.  Parking
     (Article 28):
 
2.8 unreserved parking spaces for every 1,000 RSF of the Premises, subject to
the terms of Article 28 of the Lease.

 
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10.  Address of Tenant
       (Section 29.18):
384 Oyster Point Blvd., Suite #8
South San Francisco, CA  94080
Attention: Shawn K. Singh
(Prior to Lease Commencement Date)
and
 
 
343 Allerton Avenue
South San Francisco, California  94080-4816
Attention:  Shawn K. Singh
(After Lease Commencement Date)
11.  Address of Landlord
       (Section 29.18):
 
See Section 29.18 of the Lease.
12.  Broker(s)
       (Section 29.24):
 
CBRE, Inc.
950 Tower Lane, Suite 870
Foster City, CA  94404
Attention:  Christopher R. Jacobs

 
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1. PREMISES, BUILDING, PROJECT, AND COMMON AREAS
 
1.1 Premises, Building, Project and Common Areas.
 
1.1.1 The Premises.  Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises set forth in Section 2.2 of the Summary (the
"Premises").  The outline of the Premises is set forth in Exhibit A attached
hereto.  The outline of the "Building" and the "Project," as those terms are
defined in Section 1.1.2 below, are further depicted on the Site Plan attached
hereto as Exhibit A-1.  The parties hereto agree that the lease of the Premises
is upon and subject to the terms, covenants and conditions herein set forth, and
Tenant covenants as a material part of the consideration for this Lease to keep
and perform each and all of such terms, covenants and conditions by it to be
kept and performed and that this Lease is made upon the condition of such
performance.  The parties hereto hereby acknowledge that the purpose of
Exhibit A is to show the approximate location of the Premises only, and such
Exhibit is not meant to constitute an agreement, representation or warranty as
to the construction of the Premises, the precise area thereof or the specific
location of the "Common Areas," as that term is defined in Section 1.1.3, below,
or the elements thereof or of the accessways to the Premises or the "Project,"
as that term is defined in Section 1.1.2, below.  Except as specifically set
forth in this Lease and in the Tenant Work Letter attached hereto as Exhibit B
(the "Tenant Work Letter"), Landlord shall not be obligated to provide or pay
for any improvement work or services related to the improvement of the
Premises.  Tenant also acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty regarding the condition of the
Premises, the Building or the Project or with respect to the suitability of any
of the foregoing for the conduct of Tenant's business, except as specifically
set forth in this Lease and the Tenant Work Letter.  The taking of possession of
the Premises by Tenant shall conclusively establish that the Premises and the
Building were at such time in good and sanitary order, condition and repair.
 
1.1.2 The Building and The Project.  The Premises are a part of the building set
forth in Section 2.1 of the Summary (the "Building").  The term "Project," as
used in this Lease, shall mean (i) the Building and the Common Areas, (ii) the
land (which is improved with landscaping, parking facilities and other
improvements) upon which the Building and the Common Areas are located, (iii)
the other office/laboratory buildings located in the project known as "Britannia
Modular Labs I", and the land upon which such adjacent office/laboratory
buildings and associated landscaping and parking facilities are located, and
(iv) at Landlord's discretion, any additional real property, areas, land,
buildings or other improvements added thereto outside of the Project.
 
1.1.3 Common Areas.  Tenant shall have the non-exclusive right to use in common
with other tenants in the Project, and subject to the rules and regulations
referred to in Article 5 of this Lease, those portions of the Project which are
provided, from time to time, for use in common by Landlord, Tenant and any other
tenants of the Project (such areas, together with such other portions of the
Project designated by Landlord, in its discretion, are collectively referred to
herein as the "Common Areas").  The manner in which the Common Areas are
maintained and operated shall be at the sole discretion of Landlord and the use
thereof shall be subject to such rules, regulations and restrictions as Landlord
may make from time to time.  Landlord reserves the right to close temporarily,
make alterations or additions to, or change the location of elements of the
Project and the Common Areas; provided, however, that any such closures,
alterations, additions or changes (a) shall not materially interfere with
Tenant's use of such Common Area and (b) shall be accomplished in a first-class
and professional manner.
 
1.2 Rentable Square Feet of Premises.  The rentable square footage of the
Premises is hereby deemed to be as set forth in Section 2.2 of the Summary, and
shall not be subject to measurement or adjustment during the Lease Term.
 
1.3 Right of First Offer/First Refusal.  Landlord hereby grants to the Tenant
named in the Summary (the "Original Tenant") a right of first offer with respect
to the suite adjacent to the Premises containing approximately 5,518 RSF, and
with the street address of 345 Allerton Avenue as shown on Exhibit A to this
Lease (the "First Offer Space").  Tenant's right of first offer shall be on the
terms and conditions set forth in this Section 1.3.

 
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1.3.1 Procedure for Offer.
 
1.3.1.1 Through October 31, 2013.  During the period prior to and including
October 31, 2013, Landlord shall notify Tenant (the "First Refusal Notice") from
time to time when Landlord receives a bona fide offer to lease the First Offer
Space or any portion thereof from a third party.  Pursuant to such First Refusal
Notice, Landlord shall offer to lease to Tenant the First Offer Space on the
"Early Exercise Terms", as defined in Section 1.3.2 below.
 
1.3.1.2 After October 31, 2013.  After October 31, 2013, Landlord shall notify
Tenant (the "First Offer Notice") from time to time when the First Offer Space
or any portion thereof becomes available for lease to third parties, and in any
event prior to entering into any lease of the First Offer Space with a third
party.  Pursuant to such First Offer Notice, Landlord shall offer to lease to
Tenant the then available First Offer Space.  The First Offer Notice shall
describe the space so offered to Tenant and shall set forth the rent and other
economic terms upon which Landlord is willing to lease such space to Tenant (the
"First Offer Rent").
 
1.3.2 Early Exercise of First Offer Right.  In the event that Tenant elects to
exercise its first offer right prior to October 31, 2013 (the "Early Exercise"),
then (i) the "First Offer Rent" payable during the term of Tenant's lease of the
First Offer Space shall be equal to the Base Rent payable under this Lease with
respect to the initial Premises (i.e., at the same rate per RSF, and including
the increases in such rate, applicable to the initial Premises as set forth in
Section 4 of the Summary), (ii) Landlord shall provide an improvement allowance
for the construction or improvement of the First Offer Space equal to $40.00 per
RSF of the First Offer Space, (iii) Landlord shall provide Tenant with ninety
(90) days in which to construct improvements and alterations in the First Offer
Space prior to the occurrence of the First Offer Commencement Date, and (iv) the
term of Tenant's lease of the First Offer Space shall expire coterminously with
Tenant's lease of the initial Premises (collectively, the "Early Exercise
Terms").
 
1.3.3 Procedure for Acceptance.  If Tenant wishes to exercise Tenant's right of
first offer with respect to the space described in the First Offer Notice, then
within five (5) business days of delivery of the First Refusal Notice or First
Offer Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant's
election to exercise its right of first offer with respect to the entire space
described in the First Offer Notice on the terms contained in such notice.  If
Tenant does not so notify Landlord within the five (5) business day period, then
Landlord shall be free to lease the space described in the First Offer Notice to
anyone to whom Landlord desires on any terms Landlord desires.  Notwithstanding
anything to the contrary contained herein, Tenant must elect to exercise its
right of first offer, if at all, with respect to all of the space offered by
Landlord to Tenant at any particular time, and Tenant may not elect to lease
only a portion thereof.
 
1.3.4 Construction In First Offer Space.  Tenant shall take the First Offer
Space in its "as is" condition, subject to any improvement allowance granted as
a component of the First Offer Rent (or as part of the Early Exercise Terms),
and the construction of improvements in the First Offer Space shall comply with
the terms of Article 8 of this Lease.
 
1.3.5 Amendment to Lease.  If Tenant timely exercises Tenant's right to lease
the First Offer Space as set forth herein, Landlord and Tenant shall within ten
(10) business days after such exercise, execute an amendment to this Lease for
such First Offer Space upon the terms and conditions as set forth in the First
Offer Notice, or upon the Early Exercise Terms, if applicable, and this Section
1.3.  Tenant shall commence payment of Rent for the First Offer Space, and the
term of the First Offer Space shall commence upon the date of delivery of the
First Offer Space to Tenant (the "First Offer Commencement Date") and terminate
on the date set forth in the First Offer Notice (except in the event of an Early
Exercise, in which event Tenant's lease of the First Offer Space shall expire
coterminously with Tenant's lease of the initial Premises).
 
1.3.6 Termination of Right of First Offer.  The rights contained in this
Section 1.3 shall be personal to the Original Tenant, and may only be exercised
by the Original Tenant (and not any assignee, sublessee or other transferee of
the Original Tenant's interest in this Lease) if the Original Tenant occupies
the entire Premises.  The right of first offer granted herein shall terminate
upon the failure by Tenant to exercise its right of first offer with respect to
the First Offer Space as offered by Landlord.  The terms of this Section 1.3
shall not apply after the end of the initial Lease Term.  Tenant shall not have
the right to lease First Offer Space, as provided in this Section 1.3, if, as of
the date of the attempted exercise of any right of first offer by Tenant, Tenant
is in default under this Lease, after the expiration of any applicable notice
and cure period, or Tenant has previously been in default, after the expiration
of any applicable notice and cure period, under this Lease more than once.

 
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2. LEASE TERM; DELAYED DELIVERY; OPTION TERM
 
2.1 Lease Term.  The terms and provisions of this Lease shall be effective as of
the date of this Lease.  The term of this Lease (the "Lease Term") shall be as
set forth in Section 3.1 of the Summary, shall commence on the date set forth in
Section 3.2 of the Summary (the "Lease Commencement Date"), and shall terminate
on the date set forth in Section 3.3 of the Summary (the "Lease Expiration
Date") unless this Lease is sooner terminated as hereinafter provided.  For
purposes of this Lease, the term "Lease Year" shall mean each consecutive twelve
(12) month period during the Lease Term.  At any time during the Lease Term,
Landlord may deliver to Tenant a notice in the form as set forth in Exhibit C,
attached hereto, as a confirmation only of the information set forth therein,
which Tenant shall execute and return to Landlord within five (5) days of
receipt thereof.
 
2.2 Delayed Delivery.  Landlord shall use commercially reasonable efforts to
cause the Lease Commencement Date to occur on or before June 30, 2013 (the
"Outside Delivery Date").  Subject to the terms of this Lease, if Landlord has
not caused the Lease Commencement Date to have occurred on or before the Outside
Delivery Date, then Landlord agrees that Landlord will reimburse Tenant the
actual increase in amounts required to be paid by Tenant with respect to its
existing lease of space at 384 Oyster Point Boulevard, in South San Francisco,
California (the "Hold Over Costs").  The Hold Over Costs shall consist of only
the amount by which the "base rental" is increased over the base rental payable
during the last month of Tenant's lease, and shall not include any costs for
utilities, taxes, insurance or other charges payable by Tenant under its
lease.  In no event shall the total amount of Hold Over Costs payable by
Landlord hereunder exceed $10,000.00.  Prior to Landlord being obligated to pay
any Hold Over Costs, Tenant shall provide Landlord with reasonable evidence of
the amount of such Hold Over Costs, and of Tenant's payment thereof.  Landlord's
obligation to pay such Hold Over Costs shall be Tenant's sole remedy for
Landlord's failure to cause the Lease Commencement Date to occur on or before
the Outside Delivery Date.  The Outside Delivery Date shall be extended to the
extent the Lease Commencement Date is delayed by "Tenant Delay", as that term is
defined in Section 1(j) of the Tenant Work Letter.
 
2.3 Option Term.
 
2.3.1 Option Right.  Landlord hereby grants Original Tenant one (1) option to
extend the Lease Term for a period of three (3) years (the "Option Term"), which
option shall be exercisable only by written notice delivered by Tenant to
Landlord as provided below, provided that, as of the date of delivery of such
notice, Tenant is not in default under this Lease, beyond any applicable notice
and cure period set forth in this Lease, and Tenant has not previously been in
default under this Lease, beyond any applicable notice and cure period set forth
in this Lease, more than two (2) times.  Upon the proper exercise of such option
to extend, and provided that, at Landlord's option, as of the end of the initial
Lease Term, Tenant is not in default under this Lease, beyond any applicable
notice and cure period set forth in this Lease, and Tenant has not previously
been in default under this Lease, beyond any applicable notice and cure period
set forth in this Lease, more than two (2) times, the Lease Term, as it applies
to the Premises, shall be extended for a period of three (3) years.  The rights
contained in this Section 2.3 shall be personal to the Original Tenant, and may
only be exercised by the Original Tenant if the Original Tenant occupies the
entire Premises.

 
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2.3.2 Option Rent.  The annual Rent payable by Tenant during the Option Term
(the "Option Rent") shall be equal to the "Fair Rental Value," as that term is
defined below, for the Premises as of the commencement date of the Option
Term.  The "Fair Rental Value," as used in this Lease, shall be equal to the
annual rent per rentable square foot (including additional rent and considering
any "base year" or "expense stop" applicable thereto), including all
escalations, at which tenants (pursuant to leases consummated within the twelve
(12) month period preceding the first day of the Option Term), are leasing
non-sublease, non-encumbered, non-equity space which is not significantly
greater or smaller in size than the subject space, for a comparable lease term,
in an arm's length transaction, which comparable space is located in the
Building or in "Comparable Buildings," as that term is defined in this
Section 2.3.2, below (transactions satisfying the foregoing criteria shall be
known as the "Comparable Transactions"), taking into consideration the following
concessions (the "Concessions"):  (a) rental abatement concessions, if any,
being granted such tenants in connection with such comparable space; (b) tenant
improvements or allowances provided or to be provided for such comparable space,
and taking into account the value, if any, of the existing improvements in the
subject space, such value to be based upon the age, condition, design, quality
of finishes and layout of the improvements; and (c) other reasonable monetary
concessions being granted such tenants in connection with such comparable space;
provided, however, that in calculating the Fair Rental Value, no consideration
shall be given to (i) the fact that Landlord is or is not required to pay a real
estate brokerage commission in connection with Tenant's exercise of its right to
extend the Lease Term, or the fact that landlords are or are not paying real
estate brokerage commissions in connection with such comparable space, and
(ii) any construction period, if any, granted to tenants in Comparable
Transactions in connection with the design, permitting and construction of
tenant improvements in such comparable spaces.  The Fair Rental Value shall
additionally include a determination as to whether, and if so to what extent,
Tenant must provide Landlord with financial security, such as a letter of credit
or guaranty, for Tenant's Rent obligations in connection with Tenant's lease of
the Premises during the Option Term.  Such determination shall be made by
reviewing the extent of financial security then generally being imposed in
Comparable Transactions from tenants of comparable financial condition and
credit history to the then existing financial condition and credit history of
Tenant (with appropriate adjustments to account for differences in the
then-existing financial condition of Tenant and such other tenants).  The
Concessions (A) shall be reflected in the effective rental rate (which effective
rental rate shall take into consideration the total dollar value of such
Concessions as amortized on a straight-line basis over the applicable term of
the Comparable Transaction (in which case such Concessions evidenced in the
effective rental rate shall not be granted to Tenant)) payable by Tenant, or
(B) at Landlord’s election, all such Concessions shall be granted to Tenant in
kind.  Notwithstanding the foregoing, during the Option Term, the Option Rent
shall increase by three percent (3%) per annum on each anniversary of the first
(1st) day of the Option Term.  The term “Comparable Buildings” shall mean other
First Class Life Sciences Projects located in the South San Francisco,
California, area that are comparable in age (based on the date of original
construction or the latest major renovation) location, quality of construction,
services and amenities.
 
2.3.3 Exercise of Option.  The option contained in this Section 2.3 shall be
exercised by Tenant, if at all, only in the following manner:  Tenant shall
deliver written notice (the "Option Exercise Notice") to Landlord not more than
twelve (12) months nor less than nine (9) months prior to the expiration of the
initial Lease Term, stating that Tenant is irrevocably exercising its option.
 
2.3.4 Determination of Option Rent.  In the event Tenant timely and
appropriately exercises its option to extend the Lease Term, Landlord shall
notify Tenant of Landlord's determination of the Option Rent on or before the
date that is thirty (30) days following Landlord's receipt of the Option
Exercise Notice.  If Tenant, on or before the date which is thirty (30) days
following the date upon which Tenant receives Landlord's determination of the
Option Rent, in good faith objects to Landlord's determination of the Option
Rent, then Landlord and Tenant shall attempt to agree upon the Option Rent using
their good-faith efforts.  If Landlord and Tenant fail to reach agreement within
thirty (30) days following Tenant's objection to the Option Rent (the "Outside
Agreement Date"), then each party shall thereafter make a separate determination
of the Option Rent, within five (5) business days of the Outside Agreement Date,
and such determinations shall be submitted to arbitration in accordance with
Sections 2.3.4.1 through 2.3.4.4, below.  If Tenant fails to object to
Landlord's determination of the Option Rent within the time period set forth
herein, then Tenant shall be deemed to have rejected Landlord's determination of
the Option Rent, and the matter shall be submitted to arbitration in accordance
with the terms hereof.

 
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2.3.4.1 Landlord and Tenant shall each appoint one arbitrator who shall be, at
the option of the appointing party, a MAI appraiser, a real estate broker, or
real estate attorney, who shall have been active over the five (5) year period
ending on the date of such appointment in the leasing or appraisal, as the case
may be, of life science properties in San Diego, California.  Each such
arbitrator shall be appointed within twenty (20) days after the Outside
Agreement Date.  Landlord and Tenant may consult with their selected arbitrators
prior to appointment and may select an arbitrator who is favorable to their
respective positions.  The arbitrators so selected by Landlord and Tenant shall
be deemed "Advocate Arbitrators."
 
2.3.4.2 The two (2) Advocate Arbitrators so appointed shall be specifically
required pursuant to an engagement letter within ten (10) days of the date of
the appointment of the last appointed Advocate Arbitrator to agree upon and
appoint a third arbitrator ("Neutral Arbitrator") who shall be qualified under
the same criteria set forth hereinabove for qualification of the two Advocate
Arbitrators, except that neither the Landlord or Tenant or either parties'
Advocate Arbitrator may, directly or indirectly, consult with the Neutral
Arbitrator prior or subsequent to his or her appointment.  The Neutral
Arbitrator shall be retained via an engagement letter jointly prepared by
Landlord's counsel and Tenant’s counsel.
 
2.3.4.3 The three arbitrators shall, within thirty (30) days of the appointment
of the Neutral Arbitrator, reach a decision as to whether the parties shall use
Landlord's or Tenant's submitted Option Rent, and shall notify Landlord and
Tenant thereof.  The determination of the arbitrators shall be limited solely to
the issue of whether Landlord's or Tenant's submitted Option Rent is the closest
to the actual Option Rent, taking into account the requirements of Section 2.3.2
of this Lease, as determined by the arbitrators.
 
2.3.4.4 The decision of the majority of the three arbitrators shall be binding
upon Landlord and Tenant.
 
2.3.4.5 If either Landlord or Tenant fails to appoint an Advocate Arbitrator
within twenty (20) days after the Outside Agreement Date, then either party may
petition the presiding judge of the Superior Court of San Diego County to
appoint such Advocate Arbitrator subject to the criteria in Section 2.3.4.1 of
this Lease, or if he or she refuses to act, either party may petition any judge
having jurisdiction over the parties to appoint such Advocate Arbitrator.
 
2.3.4.6 If the two (2) Advocate Arbitrators fail to agree upon and appoint the
Neutral Arbitrator within ten (10) business days after the appointment of the
last appointed Advocate Arbitrator, then either party may petition the presiding
judge of the Superior Court of San Diego County to appoint the Neutral
Arbitrator, subject to criteria in Section 2.3.4.2 of this Lease, or if he or
she refuses to act, either party may petition any judge having jurisdiction over
the parties to appoint such arbitrator.
 
2.3.4.7 The cost of the arbitration shall be paid by Landlord and Tenant
equally.
 
2.3.4.8 In the event that the Option Rent shall not have been determined
pursuant to the terms hereof prior to the commencement of the Option Term,
Tenant shall be required to pay as Option Rent, an amount equal to 103% of the
Base Rent payable by Tenant as of the expiration of the initial Lease Term, and
upon the final determination of the Option Rent, the payments made by Tenant
shall be reconciled with the actual amounts of Option Rent due, and the
appropriate party shall make any corresponding payment to the other party.
 
3. BASE RENT  Tenant shall pay, without prior notice or demand, to Landlord or
Landlord's agent at the management office of the Project, or, at Landlord's
option, at such other place as Landlord may from time to time designate in
writing, by electronic wire transfer or by a check for currency which, at the
time of payment, is legal tender for private or public debts in the United
States of America, base rent ("Base Rent") as set forth in Section 4 of the
Summary, payable in equal monthly installments as set forth in Section 4 of the
Summary in advance on or before the first day of each and every calendar month
during the Lease Term, without any setoff or deduction whatsoever.  The Base
Rent for the first full month of the Lease Term after the Rent Abatement Period
shall be paid at the time of Tenant's execution of this Lease.  If any Rent
payment date (including the Lease Commencement Date) falls on a day of the month
other than the first day of such month or if any payment of Rent is for a period
which is shorter than one month, the Rent for any fractional month shall accrue
on a daily basis for the period from the date such payment is due to the end of
such calendar month or to the end of the Lease Term at a rate per day which is
equal to 1/365 of the applicable annual Rent.  All other payments or adjustments
required to be made under the terms of this Lease that require proration on a
time basis shall be prorated on the same basis.

 
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4. ADDITIONAL RENT
 
4.1 General Terms.
 
4.1.1 Direct Expenses; Additional Rent.  In addition to paying the Base Rent
specified in Article 3 of this Lease, Tenant shall pay "Tenant's Share" of the
annual "Direct Expenses," as those terms are defined in Sections 4.2.6 and 4.2.2
of this Lease, respectively.  Such payments by Tenant, together with any and all
other amounts payable by Tenant to Landlord pursuant to the terms of this Lease,
are hereinafter collectively referred to as the "Additional Rent", and the Base
Rent and the Additional Rent are herein collectively referred to as "Rent."  All
amounts due under this Article 4 as Additional Rent shall be payable for the
same periods and in the same manner as the Base Rent.  Without limitation on
other obligations of Tenant which survive the expiration of the Lease Term, the
obligations of Tenant to pay the Additional Rent provided for in this Article 4
shall survive the expiration of the Lease Term.
 
4.1.2 Triple Net Lease.  Landlord and Tenant acknowledge that, except as
otherwise provided to the contrary in this Lease, it is their intent and
agreement that this Lease be a "TRIPLE NET" lease and that as such, the
provisions contained in this Lease are intended to pass on to Tenant or
reimburse Landlord for the costs and expenses reasonably associated with this
Lease, the Building and the Project, and Tenant's operation therefrom.  To the
extent such costs and expenses payable by Tenant cannot be charged directly to,
and paid by, Tenant, such costs and expenses shall be paid by Landlord but
reimbursed by Tenant as Additional Rent.
 
4.2 Definitions of Key Terms Relating to Additional Rent.  As used in this
Article 4, the following terms shall have the meanings hereinafter set forth:
 
4.2.1 Intentionally Deleted.
 
4.2.2 "Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."
 
4.2.3 "Expense Year" shall mean each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease
Term expires, provided that Landlord, upon notice to Tenant, may change the
Expense Year from time to time to any other twelve (12) consecutive month
period, and, in the event of any such change, Tenant's Share of Direct Expenses
shall be equitably adjusted for any Expense Year involved in any such change.

 
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4.2.4 "Operating Expenses" shall mean all expenses, costs and amounts of every
kind and nature which Landlord pays or accrues during any Expense Year because
of or in connection with the ownership, management, maintenance, security,
repair, replacement, restoration or operation of the Project, or any portion
thereof.  Without limiting the generality of the foregoing, Operating Expenses
shall specifically include any and all of the following:  (i) the cost of
supplying all utilities, the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith; (ii) the cost of licenses, certificates, permits and
inspections and the cost of contesting any governmental enactments which may
affect Operating Expenses, and the costs incurred in connection with a
governmentally mandated transportation system management program or similar
program; (iii) the cost of all insurance carried by Landlord in connection with
the Project and Premises as reasonably determined by Landlord; (iv) the cost of
landscaping, relamping, and all supplies, tools, equipment and materials used in
the operation, repair and maintenance of the Project, or any portion thereof;
(v) the cost of parking area operation, repair, restoration, and maintenance;
(vi) fees and other costs, including management and/or incentive fees,
consulting fees, legal fees and accounting fees, of all contractors and
consultants in connection with the management, operation, maintenance and repair
of the Project; (vii) payments under any equipment rental agreements and the
fair rental value of any management office space; (viii) subject to item (f),
below, wages, salaries and other compensation and benefits, including taxes
levied thereon, of all persons engaged in the operation, maintenance and
security of the Project; (ix) costs under any instrument pertaining to the
sharing of costs by the Project; (x) operation, repair, maintenance and
replacement of all systems and equipment and components thereof of the Project;
(xi) the cost of janitorial, alarm, security and other services, replacement of
wall and floor coverings, ceiling tiles and fixtures in common areas,
maintenance and replacement of curbs and walkways, repair to roofs and
re-roofing; (xii) amortization (including interest on the unamortized cost) over
such period of time as Landlord shall reasonably determine, of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Project, or any portion thereof; (xiii) the cost of
capital improvements or other costs incurred in connection with the Project (A)
which are intended to effect economies in the operation or maintenance of the
Project, or any portion thereof, or to reduce current or future Operating
Expenses or to enhance the safety or security of the Project or its occupants,
(B) that are required to comply with present or anticipated conservation
programs, (C) which are replacements or modifications of nonstructural items
located in the Common Areas required to keep the Common Areas in good order or
condition, or (D) that are required under any governmental law or regulation;
provided, however, that any capital expenditure shall be amortized (including
interest on the amortized cost) over such period of time as Landlord shall
reasonably determine; and (xiv) costs, fees, charges or assessments imposed by,
or resulting from any mandate imposed on Landlord by, any federal, state or
local government for fire and police protection, trash removal, community
services, or other services which do not constitute "Tax Expenses" as that term
is defined in Section 4.2.5, below, (xv) cost of tenant relation programs
reasonably established by Landlord, and (xvi) payments under any easement,
license, operating agreement, declaration, restrictive covenant, or instrument
pertaining to the sharing of costs by the Building, including, without
limitation, any covenants, conditions and restrictions affecting the property,
and reciprocal easement agreements affecting the property, any parking licenses,
and any agreements with transit agencies affecting the Property (collectively,
"Underlying Documents").  Notwithstanding the foregoing, for purposes of this
Lease, Operating Expenses shall not, however, include:
 
(a) costs, including legal fees, space planners' fees, advertising and
promotional expenses (except as otherwise set forth above), and brokerage fees
incurred in connection with the original construction or development, or
original or future leasing of the Project, and costs, including permit, license
and inspection costs, incurred with respect to the installation of tenant
improvements made for new tenants initially occupying space in the Project after
the Lease Commencement Date or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other occupants
of the Project (excluding, however, such costs relating to any common areas of
the Project or parking facilities);
 
(b) except as set forth in items (xii), (xiii), and (xiv) above, depreciation,
interest and principal payments on mortgages and other debt costs, if any,
penalties and interest;
 
(c) costs for which the Landlord is reimbursed by any tenant or occupant of the
Project or by insurance by its carrier or any tenant's carrier or by anyone
else, and electric power costs for which any tenant directly contracts with the
local public service company;

 
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(d) any bad debt loss, rent loss, or reserves for bad debts or rent loss;
 
(e) costs associated with the operation of the business of the partnership or
entity which constitutes the Landlord, as the same are distinguished from the
costs of operation of the Project (which shall specifically include, but not be
limited to, accounting costs associated with the operation of the
Project).  Costs associated with the operation of the business of the
partnership or entity which constitutes the Landlord include costs of
partnership accounting and legal matters, costs of defending any lawsuits with
any mortgagee (except as the actions of the Tenant may be in issue), costs of
selling, syndicating, financing, mortgaging or hypothecating any of the
Landlord's interest in the Project, and costs incurred in connection with any
disputes between Landlord and its employees, between Landlord and Project
management, or between Landlord and other tenants or occupants;
 
(f) the wages and benefits of any employee who does not devote substantially all
of his or her employed time to the Project unless such wages and benefits are
prorated to reflect time spent on operating and managing the Project vis-a-vis
time spent on matters unrelated to operating and managing the Project; provided,
that in no event shall Operating Expenses for purposes of this Lease include
wages and/or benefits attributable to personnel above the level of Project
manager;
 
(g) amount paid as ground rental for the Project by the Landlord;
 
(h) except for a Project management fee to the extent allowed pursuant to item
(l) below, overhead and profit increment paid to the Landlord or to subsidiaries
or affiliates of the Landlord for services in the Project to the extent the same
exceeds the costs of such services rendered by qualified, first-class
unaffiliated third parties on a competitive basis;
 
(i) any compensation paid to clerks, attendants or other persons in commercial
concessions operated by the Landlord, provided that any compensation paid to any
concierge at the Project shall be includable as an Operating Expense;
 
(j) rentals and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment which if purchased the cost of which would
be excluded from Operating Expenses as a capital cost, except equipment not
affixed to the Project which is used in providing engineering, janitorial or
similar services and, further excepting from this exclusion such equipment
rented or leased to remedy or ameliorate an emergency condition in the Project ;
 
(k) all items and services for which Tenant or any other tenant in the Project
reimburses Landlord or which Landlord provides selectively to one or more
tenants (other than Tenant) without reimbursement;
 
(l) any costs expressly excluded from Operating Expenses elsewhere in this
Lease;
 
(m) rent for any office space occupied by Project management personnel to the
extent the size or rental rate of such office space exceeds the size or fair
market rental value of office space occupied by management personnel of the
comparable buildings in the vicinity of the Building, with adjustment where
appropriate for the size of the applicable project;
 
(n) costs arising from the gross negligence or willful misconduct of Landlord in
connection with this Lease; and
 
(o) costs incurred to comply with laws relating to the removal of hazardous
material (as defined under applicable law) that was in existence in the Building
or on the Project prior to the Lease Commencement Date, or that is introduced to
the Project after the Lease Commencement Date by anyone other than Tenant or the
contractors, agents, servants, employees, invitees, guests or licensees of
Tenant.

 
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4.2.5 Taxes.
 
4.2.5.1 "Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real estate taxes, general and special assessments, transit
taxes, leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with the Project, or any portion thereof),
which shall be paid or accrued during any Expense Year (without regard to any
different fiscal year used by such governmental or municipal authority) because
of or in connection with the ownership, leasing and operation of the Project, or
any portion thereof.
 
4.2.5.2 Tax Expenses shall include, without limitation:  (i) Any tax on the
rent, right to rent or other income from the Project, or any portion thereof, or
as against the business of leasing the Project, or any portion thereof; (ii) Any
assessment, tax, fee, levy or charge in addition to, or in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax; (iii) Any assessment, tax,
fee, levy, or charge allocable to or measured by the area of the Premises or the
Rent payable hereunder, including, without limitation, any business or gross
income tax or excise tax with respect to the receipt of such rent, or upon or
with respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any portion
thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises or the improvements thereon.
 
4.2.5.3 Any costs and expenses (including, without limitation, reasonable
attorneys' and consultants' fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are incurred.  Tax refunds shall be credited against Tax Expenses and
refunded to Tenant regardless of when received, based on the Expense Year to
which the refund is applicable, provided that in no event shall the amount to be
refunded to Tenant for any such Expense Year exceed the total amount paid by
Tenant as Additional Rent under this Article 4 for such Expense Year.  If Tax
Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof for any reason, including, without limitation,
error or reassessment by applicable governmental or municipal authorities,
Tenant shall pay Landlord upon demand Tenant's Share of any such increased Tax
Expenses.  Notwithstanding anything to the contrary contained in this
Section 4.2.5, there shall be excluded from Tax Expenses (i) all excess profits
taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and
succession taxes, estate taxes, federal and state income taxes, and other taxes
to the extent applicable to Landlord's net income (as opposed to rents, receipts
or income attributable to operations at the Project), (ii) any items included as
Operating Expenses, and (iii) any items paid by Tenant under Section 4.5 of this
Lease.
 
4.2.6 "Tenant's Share" shall mean the percentage set forth in Section 6 of the
Summary.
 
4.3 Allocation of Direct Expenses.  The parties acknowledge that the Building is
a part of a multi-building project and that the costs and expenses incurred in
connection with the Project (i.e., the Direct Expenses) should be shared between
the Building and the other buildings in the Project.  Accordingly, as set forth
in Section 4.2 above, Direct Expenses (which consist of Operating Expenses and
Tax Expenses) are determined annually for the Project as a whole, and a portion
of the Direct Expenses, which portion shall be determined by Landlord on an
equitable basis, shall be allocated to the Building (as opposed to other
buildings in the Project).  Such portion of Direct Expenses allocated to the
Building shall include all Direct Expenses attributable solely to the Building
and an equitable portion of the Direct Expenses attributable to the Project as a
whole, and shall not include Direct Expenses attributable solely to other
buildings in the Project.
 
4.4 Calculation and Payment of Additional Rent.  Tenant shall pay to Landlord,
in the manner set forth in Section 4.4.1, below, and as Additional Rent,
Tenant's Share of Direct Expenses for each Expense Year.

 
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4.4.1 Statement of Actual Direct Expenses and Payment by Tenant.  Landlord shall
endeavor to give to Tenant following the end of each Expense Year, a statement
(the "Statement") which shall state the Direct Expenses incurred or accrued for
such preceding Expense Year, and which shall indicate the amount of Tenant's
Share of Direct Expenses.  Upon receipt of the Statement for each Expense Year
commencing or ending during the Lease Term, Tenant shall pay, with its next
installment of Base Rent due, the full amount of Tenant's Share of Direct
Expenses for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Direct Expenses," as that term is defined in
Section 4.4.2, below, and if Tenant paid more as Estimated Direct Expenses than
the actual Tenant's Share of Direct Expenses, Tenant shall receive a credit in
the amount of Tenant's overpayment against Rent next due under this Lease.  The
failure of Landlord to timely furnish the Statement for any Expense Year shall
not prejudice Landlord or Tenant from enforcing its rights under this Article
4.  Even though the Lease Term has expired and Tenant has vacated the Premises,
when the final determination is made of Tenant's Share of Direct Expenses for
the Expense Year in which this Lease terminates, Tenant shall immediately pay to
Landlord such amount, and if Tenant paid more as Estimated Direct Expenses than
the actual Tenant's Share of Direct Expenses, Landlord shall, within thirty (30)
days, deliver a check payable to Tenant in the amount of the overpayment.  The
provisions of this Section 4.4.1 shall survive the expiration or earlier
termination of the Lease Term.
 
4.4.2 Statement of Estimated Direct Expenses.  In addition, Landlord shall
endeavor to give Tenant a yearly expense estimate statement (the "Estimate
Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated Tenant's Share of Direct Expenses (the
"Estimated Direct Expenses").  The failure of Landlord to timely furnish the
Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Direct Expenses under this Article
4, nor shall Landlord be prohibited from revising any Estimate Statement or
Estimated Direct Expenses theretofore delivered to the extent
necessary.  Thereafter, Tenant shall pay, with its next installment of Base Rent
due, a fraction of the Estimated Direct Expenses for the then-current Expense
Year (reduced by any amounts paid pursuant to the last sentence of this
Section 4.4.2).  Such fraction shall have as its numerator the number of months
which have elapsed in such current Expense Year, including the month of such
payment, and twelve (12) as its denominator.  Until a new Estimate Statement is
furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Direct Expenses set
forth in the previous Estimate Statement delivered by Landlord to Tenant.
 
4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.  Tenant
shall be liable for and shall pay ten (10) days before delinquency, taxes levied
against Tenant's equipment, furniture, fixtures and any other personal property
located in or about the Premises.  If any such taxes on Tenant's equipment,
furniture, fixtures and any other personal property are levied against Landlord
or Landlord's property or if the assessed value of Landlord's property is
increased by the inclusion therein of a value placed upon such equipment,
furniture, fixtures or any other personal property and if Landlord pays the
taxes based upon such increased assessment, which Landlord shall have the right
to do regardless of the validity thereof but only under proper protest if
requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so
levied against Landlord or the proportion of such taxes resulting from such
increase in the assessment, as the case may be.
 
5. USE OF PREMISES
 
5.1 Permitted Use.  Tenant shall use the Premises solely for the Permitted Use
set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion.

 
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5.2 Prohibited Uses.  Tenant further covenants and agrees that Tenant shall not
use, or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose in violation of the laws of the United States of
America, the State of California, or the ordinances, regulations or requirements
of the local municipal or county governing body or other lawful authorities
having jurisdiction over the Project) including, without limitation, any such
laws, ordinances, regulations or requirements relating to hazardous materials or
substances, as those terms are defined by applicable laws now or hereafter in
effect, or any Underlying Documents.  Landlord shall have the right to impose
reasonable and customary rule and regulations regarding the use of the Project,
as reasonably deemed necessary by Landlord with respect to the orderly operation
of the Project, and Tenant shall comply with such reasonable rules and
regulations.  Tenant shall not do or permit anything to be done in or about the
Premises which will in any way damage the reputation of the Project or obstruct
or interfere with the rights of other tenants or occupants of the Building, or
injure or annoy them or use or allow the Premises to be used for any improper,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises.  Tenant shall comply with, and
Tenant's rights and obligations under the Lease and Tenant's use of the Premises
shall be subject and subordinate to, all recorded easements, covenants,
conditions, and restrictions now or hereafter affecting the Project.
 
5.3 Hazardous Materials.
 
5.3.1 Tenant's Obligations.
 
5.3.1.1 Prohibitions.  As a material inducement to Landlord to enter into this
Lease with Tenant, Tenant has fully and accurately completed Landlord’s
Pre-Leasing Environmental Exposure Questionnaire (the “Environmental
Questionnaire”), which is attached as Exhibit E.  Tenant agrees that except for
those chemicals or materials, and their respective quantities, specifically
listed on the Environmental Questionnaire, neither Tenant nor Tenant’s
employees, contractors and subcontractors of any tier, entities with a
contractual relationship with Tenant (other than Landlord), or any entity acting
as an agent or sub-agent of Tenant (collectively, "Tenant's Agents") will
produce, use, store or generate any "Hazardous Materials," as that term is
defined below, on, under or about the Premises, nor cause or permit any
Hazardous Material to be brought upon, placed, stored, manufactured, generated,
blended, handled, recycled, used or "Released," as that term is defined below,
on, in, under or about the Premises.  If any material information provided to
Landlord by Tenant on the Environmental Questionnaire, or otherwise relating to
information concerning Hazardous Materials is false, incomplete, or misleading
in any material respect, the same shall be deemed a default by Tenant under this
Lease.  Tenant shall deliver to Landlord an updated Environmental Questionnaire
at least once a year.  Landlord’s prior written consent shall be required to any
material change in Hazardous Materials use for the Premises described on the
initial Environmental Questionnaire, such consent not to be unreasonably
withheld.  Tenant shall not install or permit any underground storage tank on
the Premises.  For purposes of this Lease, "Hazardous Materials" means all
flammable explosives, petroleum and petroleum products, waste oil, radon,
radioactive materials, toxic pollutants, asbestos, polychlorinated biphenyls
(“PCBs”), medical waste, chemicals known to cause cancer or reproductive
toxicity, pollutants, contaminants, hazardous wastes, toxic substances or
related materials, including without limitation any chemical, element, compound,
mixture, solution, substance, object, waste or any combination thereof, which is
or may be hazardous to human health, safety or to the environment due to its
radioactivity, ignitability, corrosiveness, reactivity, explosiveness, toxicity,
carcinogenicity, infectiousness or other harmful or potentially harmful
properties or effects, or defined as, regulated as or included in, the
definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,”
or “toxic substances” under any Environmental Laws.  The term “Hazardous
Materials” for purposes of this Lease shall also include any mold, fungus or
spores, whether or not the same is defined, listed, or otherwise classified as a
“hazardous material” under any Environmental Laws, if such mold, fungus or
spores may pose a risk to human health or the environment or negatively impact
the value of the Premises.  For purposes of this Lease, "Release" or "Released"
or "Releases" shall mean any release, deposit, discharge, emission, leaking,
spilling, seeping, migrating, in­jecting, pumping, pouring, emptying, escaping,
dumping, disposing, or other movement of Hazardous Materials into the
environment.

 
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5.3.1.2 Notices to Landlord.  Tenant shall notify Landlord in writing as soon as
possible but in no event later than five (5) days after (i) the occurrence of
any actual, alleged or threatened Release of any Hazardous Material in, on,
under, from, about or in the vicinity of the Premises (whether past or present),
regardless of the source or quantity of any such Release, or (ii) Tenant becomes
aware of any regulatory actions, inquiries, inspections, investigations,
directives, or any cleanup, compliance, enforcement or abatement proceedings
(including any threatened or contemplated investigations or proceedings)
relating to or potentially affecting the Premises, or (iii) Tenant becomes aware
of any claims by any person or entity relating to any Hazardous Materials in,
on, under, from, about or in the vicinity of the Premises, whether relating to
damage, contribution, cost recovery, compensation, loss or
injury.  Collectively, the matters set forth in clauses (i), (ii) and (iii)
above are hereinafter referred to as “Hazardous Materials Claims”.  Tenant shall
promptly forward to Landlord copies of all orders, notices, permits,
applications and other communications and reports in connection with any
Hazardous Materials Claims.  Additionally, Tenant shall promptly advise Landlord
in writing of Tenant’s discovery of any occurrence or condition on, in, under or
about the Premises that could subject Tenant or Landlord to any liability, or
restrictions on ownership, occupancy, transferability or use of the Premises
under any "Environmental Laws," as that term is defined below.  Tenant shall not
enter into any legal proceeding or other action, settlement, consent decree or
other compromise with respect to any Hazardous Materials Claims without first
notifying Landlord of Tenant’s intention to do so and affording Landlord the
opportunity to join and participate, as a party if Landlord so elects, in such
proceedings and in no event shall Tenant enter into any agreements which are
binding on Landlord or the Premises without Landlord’s prior written
consent.  Landlord shall have the right to appear at and participate in, any and
all legal or other administrative proceedings concerning any Hazardous Materials
Claim.  For purposes of this Lease, “Environmental Laws” means all applicable
present and future laws relating to the protection of hu­man health, safety,
wildlife or the environment, including, without limitation, (i) all requirements
pertaining to reporting, licensing, permitting, investigation and/or remediation
of emissions, discharges, Releases, or threatened Releases of Hazardous
Materials, whether solid, liquid, or gaseous in nature, into the air, surface
water, groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
Hazardous Materials; and (ii) all requirements pertaining to the health and
safety of employees or the public.  Environmental Laws include, but are not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 USC § 9601, et seq., the Hazardous Materials Transportation
Authorization Act of 1994, 49 USC § 5101, et seq., the Solid Waste Disposal Act,
as amended by the Resource Conservation and Recovery Act of 1976, and Hazardous
and Solid Waste Amendments of 1984, 42 USC § 6901, et seq., the Federal Water
Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC § 1251,
et seq., the Clean Air Act of 1966, 42 USC § 7401, et seq., the Toxic Substances
Control Act of 1976, 15 USC § 2601, et seq., the Safe Drinking Water Act of
1974, 42 USC §§ 300f through 300j, the Occupational Safety and Health Act of
1970, as amended, 29 USC § 651 et seq., the Oil Pollution Act of 1990, 33 USC
§ 2701 et seq., the Emergency Planning and Community Right-To-Know Act of 1986,
42 USC § 11001 et seq., the National Environmental Policy Act of 1969, 42 USC
§ 4321 et seq., the Federal Insecticide, Fungicide and Rodenticide Act of 1947,
7 USC § 136 et seq., California Carpenter-Presley-Tanner Hazardous Substance
Account Act, California Health & Safety Code §§ 25300 et seq., Hazardous
Materials Release Response Plans and Inventory Act, California Health & Safety
Code, §§ 25500 et seq., Underground Storage of Hazardous Substances provisions,
California Health & Safety Code, §§ 25280 et seq., California Hazardous Waste
Control Law, California Health & Safety Code, §§ 25100 et seq., and any other
state or local law counterparts, as amended, as such applicable laws, are in
effect as of the Lease Commencement Date, or thereafter adopted, published, or
promulgated.
 
5.3.1.3 Releases of Hazardous Materials.  If any Release of any Hazardous
Material in, on, under, from or about the Premises shall occur at any time
during the Lease and/or if any other Hazardous Material condition exists at the
Premises that requires response actions of any kind, and such Release or
condition is or was caused by Tenant or an invitee of Tenant, then, in addition
to notifying Landlord as specified above, Tenant, at its own sole cost and
expense, shall (i) immediately comply with any and all reporting requirements
imposed pursuant to any and all Environmental Laws, (ii) provide a written
certification to Landlord indicating that Tenant has complied with all
applicable reporting requirements, (iii) take any and all necessary
investigation, corrective and remedial action in accordance with any and all
applicable Environmental Laws, utilizing an environmental consultant approved by
Landlord, all in accordance with the provisions and requirements of this Section
5.3, including, without limitation, Section 5.3.4, and (iv) take any such
additional investigative, remedial and corrective actions as Landlord shall in
its reasonable discretion deem necessary such that the Premises are remediated
to the condition existing prior to such Release.

 
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5.3.1.4 Indemnification.  Without limiting in any way Tenant’s obligations under
any other provision of this Lease, Tenant shall be solely responsible for and
shall protect, defend, indemnify and hold the Landlord Parties harmless from and
against any and all claims, judgments, losses, damages, costs, expenses,
penalties, enforcement ac­tions, taxes, fines, remedial actions, liabilities
(including, without limitation, actual attorneys’ fees, litigation, arbitration
and administrative proceeding costs, expert and consultant fees and laboratory
costs) including, without limitation, consequential damages and sums paid in
settlement of claims, which arise during or after the Lease Term, whether
foreseeable or unforeseeable, that arise during or after the Lease Term in whole
or in part, foreseeable or unforeseeable, directly or indirectly arising out of
or attributable to the presence, use, generation, manufacture, treatment,
handling, refining, production, processing, storage, Release or presence of
Hazardous Materials in, on, under or about the Premises by Tenant or Tenant's
Agents.  The foregoing indemnity shall not be applicable to claims based on any
Hazardous Materials existing on, in or under the Premises, Building or Project
as of the date of this Lease, except to the extent the actions of Tenant or
Tenant's Agents exacerbate any previously existing Hazardous Materials
condition.
 
5.3.1.5 Compliance with Environmental Laws.  Without limiting the generality of
Tenant’s obligation to comply with applicable laws as otherwise provided in this
Lease, Tenant shall, at its sole cost and expense, comply with all Environmental
Laws.  Tenant shall obtain and maintain any and all necessary permits, licenses,
certifications and approvals appropriate or required for the use, handling,
storage, and disposal of any Hazardous Materials used, stored, generated,
transported, handled, blended, or recycled by Tenant on the Premises.  Landlord
shall have a continuing right, without obligation, to require Tenant to obtain,
and to review and inspect any and all such permits, licenses, certifications and
approvals, together with copies of any and all Hazardous Materials management
plans and programs, any and all Hazardous Materials risk management and
pollution prevention programs, and any and all Hazardous Materials emergency
response and employee training programs respecting Tenant’s use of Hazardous
Materials.  Upon request of Landlord, Tenant shall deliver to Landlord a
narrative description explaining the nature and scope of Tenant’s activities
involving Hazardous Materials and showing to Landlord’s satisfaction compliance
with all Environmental Laws and the terms of this Lease.
 
5.3.2 Assurance of Performance.
 
5.3.2.1 Environmental Assessments In General.  Landlord may, but shall not be
required to, engage from time to time such contractors as Landlord determines to
be appropriate to perform environmental assessments of a scope reasonably
determined by Landlord (an "Environmental Assessment") to ensure Tenant’s
compliance with the requirements of this Lease with respect to Hazardous
Materials.  .
 
5.3.2.2 Costs of Environmental Assessments.  All costs and expenses incurred by
Landlord in connection with any such Environmental Assessment initially shall be
paid by Landlord; provided that if any such Environmental Assessment shows that
Tenant has failed to comply with the provisions of this Section 5.3, then all of
the costs and expenses of such Environmental Assessment shall be reimbursed by
Tenant as Additional Rent within ten (10) days after receipt of written demand
therefor.
 
5.3.3 Tenant’s Obligations upon Surrender.  At the expiration or earlier
termination of the Lease Term, Tenant, at Tenant’s sole cost and expense,
shall:  (i) cause an Environmental Assessment of the Premises to be conducted in
accordance with Section 15.3; (ii) cause all Hazardous Materials to be removed
from the Premises and disposed of in accordance with all Environmental Laws and
as necessary to allow the Premises to be used for any purpose; and (iii) cause
to be removed all containers installed or used by Tenant or Tenant’s Agents to
store any Hazardous Materials on the Premises, and cause to be repaired any
damage to the Premises caused by such removal.

 
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5.3.4 Clean-up.
 
5.3.4.1 Environmental Reports; Clean-Up.  If any written report, including any
report containing results of any Environmental Assessment (an “Environmental
Report”) shall indicate (i) the presence of any Hazardous Materials as to which
Tenant has a removal or remediation obligation under this Section 5.3, and
(ii) that as a result of same, the investigation, characterization, monitoring,
assessment, repair, closure, remediation, removal, or other clean-up (the
“Clean-up”) of any Hazardous Materials is required, Tenant shall immediately
prepare and submit to Landlord within thirty (30) days after receipt of the
Environmental Report a comprehensive plan, subject to Landlord’s written
approval, specifying the actions to be taken by Tenant to perform the Clean-up
so that the Premises are restored to the conditions required by this
Lease.  Upon Landlord’s approval of the Clean-up plan, Tenant shall, at Tenant’s
sole cost and expense, without limitation on any rights and remedies of Landlord
under this Lease, immediately implement such plan with a consultant reasonably
acceptable to Landlord and proceed to Clean-Up Hazardous Materials in accordance
with all applicable laws and as required by such plan and this Lease.  If,
within thirty (30) days after receiving a copy of such Environmental Report,
Tenant fails either (a) to complete such Clean-up, or (b) with respect to any
Clean-up that cannot be completed within such thirty-day period, fails to
proceed with diligence to prepare the Clean-up plan and complete the Clean-up as
promptly as practicable, then Landlord shall have the right, but not the
obligation, and without waiving any other rights under this Lease, to carry out
any Clean-up recommended by the Environmental Report or required by any
governmental authority having jurisdiction over the Premises, and recover all of
the costs and expenses thereof from Tenant as Additional Rent, payable within
ten (10) days after receipt of written demand therefor.
 
5.3.4.2 No Rent Abatement.  Tenant shall continue to pay all Rent due or
accruing under this Lease during any Clean-up, and shall not be entitled to any
reduction, offset or deferral of any Base Rent or Additional Rent due or
accruing under this Lease during any such Clean-up.
 
5.3.4.3 Surrender of Premises.  Tenant shall complete any Clean-up prior to
surrender of the Premises upon the expiration or earlier termination of this
Lease.  Tenant shall obtain and deliver to Landlord a letter or other written
determination from the overseeing governmental authority confirming that the
Clean-up has been completed in accordance with all requirements of such
governmental authority and that no further response action of any kind is
required for the unrestricted use of the Premises (“Closure Letter”).  Upon the
expiration or earlier termination of this Lease, Tenant shall also be obligated
to close all permits obtained in connection with Hazardous Materials in
accordance with applicable laws.
 
5.3.4.4 Failure to Timely Clean-Up.  Should any Clean-up for which Tenant is
responsible not be completed, or should Tenant not receive the Closure Letter
and any governmental approvals required under Environmental Laws in conjunction
with such Clean-up prior to the expiration or earlier termination of this Lease,
then Tenant shall be liable to Landlord as a holdover tenant (as more
particularly provided in Article 16) until Tenant has fully complied with its
obligations under this Section 5.3.
 
5.3.5 Confidentiality.  Unless compelled to do so by applicable law, Tenant
agrees that Tenant shall not dis­close, discuss, disseminate or copy any
information, data, findings, communications, conclusions and reports regarding
the environmental condition of the Premises to any Person (other than Tenant’s
consultants, attorneys, property managers and employees that have a need to know
such information), including any governmental authority, without the prior
written consent of Landlord.  In the event Tenant reasonably believes that
disclosure is compelled by applicable law, it shall provide Landlord ten
(10) days’ advance notice of disclosure of confidential information so that
Landlord may attempt to obtain a protective order.  Tenant may additionally
release such information to bona fide prospective purchasers or lenders, subject
to any such parties’ written agreement to be bound by the terms of this Section
5.3.
 
5.3.6 Copies of Environmental Reports.  Within thirty (30) days of receipt
thereof, Tenant shall provide Landlord with a copy of any and all environmental
assessments, audits, studies and reports regarding Tenant’s activities with
respect to the Premises, or ground water beneath the Land, or the environmental
condition or Clean-up thereof.  Tenant shall be obligated to provide Landlord
with a copy of such materials without regard to whether such materials are
generated by Tenant or prepared for Tenant, or how Tenant comes into possession
of such materials.

 
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5.3.7 Signs, Response Plans, Etc.  Tenant shall be responsible for posting on
the Premises any signs required under applicable Environmental Laws.  Tenant
shall also complete and file any business response plans or inventories required
by any applicable laws.  Tenant shall concurrently file a copy of any such
business response plan or inventory with Landlord.
 
5.3.8 Survival.  Each covenant, agreement, representation, warranty and
indemnification made by Tenant set forth in this Section 5.3 shall survive the
expiration or earlier termination of this Lease and shall remain effective until
all of Tenant’s obligations under this Section 5.3 have been completely
performed and satisfied.
 
6. SERVICES AND UTILITIES
 
6.1 In General.  Tenant will be responsible, at its sole cost and expense, for
the furnishing of all services and utilities to the Premises, including, but not
limited to heating, ventilation and air-conditioning, electricity, water,
telephone, janitorial and interior Premises security services.
 
6.1.1 All utilities (including without limitation, electricity, gas, sewer and
water) to the Building are separately metered at the Premises and shall be paid
directly by Tenant to the applicable utility provider.
 
6.1.2 Landlord shall not provide janitorial services for the Premises.  Tenant
shall be solely responsible for performing all janitorial services and other
cleaning of the Premises, all in compliance with applicable laws.  The
janitorial and cleaning of the Premises shall be adequate to maintain the
Premises in a manner consistent with First Class Life Sciences Projects.
 
Tenant shall cooperate fully with Landlord at all times and abide by all
regulations and requirements that Landlord may reasonably prescribe for the
proper functioning and protection of the HVAC, electrical, mechanical and
plumbing systems.  Provided that Landlord agrees to provide and maintain and
keep in continuous service utility connections to the Project, including
electricity, water and sewage connections, Landlord shall have no obligation to
provide any services or utilities to the Building, including, but not limited to
heating, ventilation and air-conditioning, electricity, water, telephone,
janitorial and interior Building security services.
 
6.2 Interruption of Use.  Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by breakage, repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building or
Project after reasonable effort to do so, by any riot or other dangerous
condition, emergency, accident or casualty whatsoever, by act or default of
Tenant or other parties, or by any other cause; and such failures or delays or
diminution shall never be deemed to constitute an eviction or disturbance of
Tenant's use and possession of the Premises or relieve Tenant from paying Rent
or performing any of its obligations under this Lease.  Furthermore, Landlord
shall not be liable under any circumstances for a loss of, or injury to,
property or for injury to, or interference with, Tenant's business, including,
without limitation, loss of profits, however occurring, through or in connection
with or incidental to a failure to furnish any of the services or utilities as
set forth in this Article 6.

 
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7. REPAIRS
 
7.1 Tenant Repair Obligations.  Tenant shall, throughout the Term, at its sole
cost and expense, maintain, repair, replace and improve as required, the
Premises and every part thereof in a good standard of maintenance, repair and
replacement as required, and in good and sanitary condition, all in accordance
with the standards of First Class Life Sciences Projects, except for Landlord
Repair Obligations, whether or not such maintenance, repair, replacement or
improvement is required in order to comply with applicable Laws ("Tenant's
Repair Obligations"), including, without limitation, the following: (1) glass,
windows, window frames, window casements (including the repairing, resealing,
cleaning and replacing of both interior and exterior windows) and skylights; (2)
interior and exterior doors, door frames and door closers; (3) interior lighting
(including, without limitation, light bulbs and ballasts); (4) the plumbing,
sewer, drainage, electrical, fire protection, elevator, escalator, life safety
and security systems and equipment, existing heating, ventilation and
air-conditioning systems, and all other mechanical, electrical and
communications systems and equipment (collectively, the "Premises Systems"),
including without limitation (i) any specialty or supplemental Premises Systems
installed by or for Tenant and (ii) all electrical facilities and equipment,
including lighting fixtures, lamps, fans and any exhaust equipment and systems,
electrical motors and all other appliances and equipment of every kind and
nature located in, upon or about the Premises; (5) all communications systems
serving the Premises; (6) all of Tenant's security systems in or about or
serving the Premises; (7) Tenant's signage; (8) interior demising walls and
partitions (including painting and wall coverings), equipment, floors, and any
roll-up doors, ramps and dock equipment; and (9) the non-structural portions of
the roof of the Building, including the roof membrane and coverings.  Tenant’s
Repair Obligations also includes the routine maintenance of the load bearing and
exterior walls of the Building within the Premises, including, without
limitation, any painting, sealing, patching and waterproofing of such
walls.  Tenant shall additionally be responsible, at Tenant’s sole cost and
expense, to furnish all expendables, including light bulbs, paper goods and
soaps, used in the Premises, and, to the extent that Landlord notifies Tenant in
writing of its intention to no longer arrange for such monitoring, cause the
fire alarm systems serving the Premises to be monitored by a monitoring or
protective services firm approved by Landlord in writing.
 
7.2 Service Contracts.  All Building Systems, including HVAC, elevators, main
electrical, plumbing and fire/life-safety systems, shall be maintained, repaired
and replaced by Tenant (i) in a commercially reasonable first-class condition,
(ii) in accordance with any applicable manufacturer specifications relating to
any particular component of such Premises Systems, (iii) in accordance with
applicable Laws.  Tenant shall contract with a qualified, experienced
professional third party service companies (a "Service Contract").  Tenant shall
regularly, in accordance with commercially reasonable standards, generate and
maintain preventive maintenance records relating to each Building’s mechanical
and main electrical systems, including life safety, elevators and the central
plant (“Preventative Maintenance Records”).  In addition, upon Landlord’s
request, Tenant shall deliver a copy of all current Service Contracts to
Landlord and/or a copy of the Preventative Maintenance Records.
 
7.3 Landlord's Right to Perform Tenant's Repair Obligations.  Tenant shall
notify Landlord in writing at least thirty (30) days prior to performing any
material Tenant's Repair Obligations, including without limitation, any Tenant's
Repair Obligation which affect the Premises Systems or which is reasonably
anticipated to cost more than $100,000.00.  Upon receipt of such notice from
Tenant, Landlord shall have the right to either (i) perform such material
Tenant's Repair Obligation by delivering notice of such election to Tenant
within thirty (30) days following receipt of Tenant's notice, and Tenant shall
pay Landlord the cost thereof (including Landlord's reasonable supervision fee)
within thirty (30) days after receipt of an invoice therefor, or (ii) require
Tenant to perform such Tenant's Repair Obligation at Tenant's sole cost and
expense.  If Tenant fails to perform any Tenant's Repair Obligation within a
reasonable time period, as reasonably determined by Landlord, then Landlord may,
but need not, following delivery of notice to Tenant of such election, make such
Tenant Repair Obligation, and Tenant shall pay Landlord the cost thereof,
(including Landlord's reasonable supervision fee) within thirty (30) days after
receipt of an invoice therefor.
 
7.4 Landlord Repair Obligations.  Landlord shall be responsible for repairs to
the exterior walls, foundation and roof of the Building, the structural portions
of the floors of the Building, except to the extent that such repairs are
required due to the negligence or willful misconduct of Tenant (the "Landlord
Repair Obligation"); provided, however, that if such repairs are due to the
negligence or willful misconduct of Tenant, Landlord shall nevertheless make
such repairs at Tenant's expense, or, if covered by Landlord's insurance, Tenant
shall only be obligated to pay any deductible in connection therewith.

 
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8. ADDITIONS AND ALTERATIONS
 
8.1 Landlord's Consent to Alterations.  Tenant may not make any improvements,
alterations, additions or changes to the Premises or any mechanical, plumbing or
HVAC facilities or systems pertaining to the Premises (collectively, the
"Alterations") without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than ten
(10) business days prior to the commencement thereof, and which consent shall
not be unreasonably withheld by Landlord, provided it shall be deemed reasonable
for Landlord to withhold its consent to any Alteration which adversely affects
the structural portions or the systems or equipment of the Building or is
visible from the exterior of the Building.  Notwithstanding the foregoing,
Tenant shall be permitted to make Alterations following ten (10) business days
notice to Landlord, but without Landlord's prior consent, to the extent that
such Alterations (i) do not affect the building systems or equipment, (ii) are
not visible from the exterior of the Building, and (iii) cost less than
$50,000.00 for a particular job of work.  The construction of the initial
improvements to the Premises shall be governed by the terms of the Tenant Work
Letter and not the terms of this Article 8.
 
8.2 Manner of Construction.  Landlord may impose, as a condition of its consent
to any and all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that upon Landlord's request,
Tenant shall, at Tenant's expense, remove such Alterations upon the expiration
or any early termination of the Lease Term.  Tenant shall construct such
Alterations and perform such repairs in a good and workmanlike manner, in
conformance with any and all applicable federal, state, county or municipal
laws, rules and regulations and pursuant to a valid building permit, issued by
the city in which the Building is located (or other applicable governmental
authority).    Tenant shall not use (and upon notice from Landlord shall cease
using) contractors, services, workmen, labor, materials or equipment that, in
Landlord's reasonable judgment, would disturb labor harmony with the workforce
or trades engaged in performing other work, labor or services in or about the
Building or the Common Areas.  Upon completion of any Alterations (or repairs),
Tenant shall deliver to Landlord final lien waivers from all contractors,
subcontractors and materialmen who performed such work.  In addition to Tenant's
obligations under Article 9 of this Lease, upon completion of any Alterations,
Tenant agrees to cause a Notice of Completion to be recorded in the office of
the Recorder of the County of San Francisco in accordance with Section 3093 of
the Civil Code of the State of California or any successor statute, and Tenant
shall deliver to the Project construction manager a reproducible copy of the "as
built" drawings of the Alterations as well as all permits, approvals and other
documents issued by any governmental agency in connection with the Alterations.
 
8.3 Payment for Improvements.  If Tenant orders any work directly from Landlord,
Tenant shall pay to Landlord an amount equal to five percent (5%) of the cost of
such work to compensate Landlord for all overhead, general conditions, fees and
other costs and expenses arising from Landlord's involvement with such work.  If
Tenant does not order any work directly from Landlord, Tenant shall reimburse
Landlord for Landlord's reasonable, actual, out-of-pocket costs and expenses
actually incurred in connection with Landlord's review of such work.
 
8.4 Construction Insurance.  In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may reasonably require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof.  In addition, Tenant's contractors and
subcontractors shall be required to carry (i) Commercial General Liability
Insurance in an amount approved by Landlord, with Landlord, and, at Landlord's
option, Landlord's property manager and project manager, as additional insureds
in an amount approved by Landlord, and otherwise in accordance with the
requirements of Article 10 of this Lease, and (ii) workers compensation
insurance with a waiver of subrogation in favor of Landlord .  Landlord may, in
its discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.

 
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8.5 Landlord's Property.  All Alterations, improvements, fixtures, built-in
equipment and/or appurtenances which may be installed in or about the Premises,
from time to time, shall be at the sole cost of Tenant and shall be and become
the property of Landlord and remain in place at the Premises following the
expiration or earlier termination of this Lease.  Notwithstanding the foregoing,
Landlord may, by written notice to Tenant prior to the end of the Lease Term, or
given following any earlier termination of this Lease, require Tenant, at
Tenant's expense, to remove any Alterations and/or improvements and/or systems
and equipment within the Premises and to repair any damage to the Premises and
Building caused by such removal and return the affected portion of the Premises
to a building standard tenant improved condition as determined by Landlord.  If
Tenant fails to complete such removal and/or to repair any damage caused by the
removal of any Alterations and/or improvements and/or systems and equipment in
the Premises and return the affected portion of the Premises to a building
standard tenant improved condition as reasonably determined by Landlord,
Landlord may do so and may charge the reasonable cost thereof to Tenant.  Tenant
hereby protects, defends, indemnifies and holds Landlord harmless from any
liability, cost, obligation, expense or claim of lien in any manner relating to
the installation, placement, removal or financing of any such Alterations,
improvements, fixtures and/or equipment in, on or about the Premises, which
obligations of Tenant shall survive the expiration or earlier termination of
this Lease.
 
9. COVENANT AGAINST LIENS  Tenant shall keep the Project and Premises free from
any liens or encumbrances arising out of the work performed, materials furnished
or obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys' fees
and costs) arising out of same or in connection therewith.  Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
work on the Premises (or such additional time as may be necessary under
applicable laws) to afford Landlord the opportunity of posting and recording
appropriate notices of non-responsibility (to the extent applicable pursuant to
then applicable laws).  Tenant shall remove any such lien or encumbrance by bond
or otherwise within ten (10) business days after notice by Landlord, and if
Tenant shall fail to do so, Landlord may pay the amount necessary to remove such
lien or encumbrance, without being responsible for investigating the validity
thereof.
 
10. INSURANCE
 
10.1 Indemnification and Waiver.  Tenant hereby assumes all risk of damage to
property or injury to persons in, upon or about the Premises from any cause
whatsoever and agrees that Landlord, its partners, subpartners and their
respective officers, agents, servants, employees, lenders, any property manager
and independent contractors (collectively, "Landlord Parties") shall not be
liable for, and are hereby released from any responsibility for, any damage
either to person or property or resulting from the loss of use thereof, which
damage is sustained by Tenant or by other persons claiming through
Tenant.  Tenant shall indemnify, defend, protect, and hold harmless the Landlord
Parties from any and all claims, loss, cost, damage, injury, expense and
liability (including without limitation court costs and reasonable attorneys'
fees) incurred in connection with or arising from any cause in, on or about the
Premises, any acts, omissions or negligence of Tenant or of any person claiming
by, through or under Tenant, or of the contractors, agents, servants, employees,
invitees, guests or licensees of Tenant or any such person, in, on or about the
Project or any breach of the terms of this Lease, either prior to, during, or
after the expiration of the Lease Term, provided that the terms of the foregoing
indemnity shall not apply to the gross negligence or willful misconduct of
Landlord.  Should Landlord be named as a defendant in any suit brought against
Tenant in connection with or arising out of Tenant's occupancy of the Premises,
Tenant shall pay to Landlord its costs and expenses incurred in such suit,
including without limitation, its actual professional fees such as reasonable
appraisers', accountants' and attorneys' fees.  The provisions of this
Section 10.1 shall survive the expiration or sooner termination of this Lease
with respect to any claims or liability arising in connection with any event
occurring prior to such expiration or termination.
 
10.2 Tenant's Compliance With Landlord's Property Insurance.  Landlord shall
insure the Building during the Lease Term against loss or damage under an "all
risk" property insurance policy.  Such coverage shall be in such amounts, from
such companies, and on such other terms and conditions, as Landlord may from
time to time reasonably determine.  Additionally, at the option of Landlord,
such insurance coverage may include the risks of earthquakes and/or flood damage
and additional hazards, a rental loss endorsement and one or more loss payee
endorsements in favor of the holders of any mortgages or deeds of trust
encumbering the interest of Landlord in the Building or the ground or underlying
lessors of the Building, or any portion thereof.  Tenant shall, at Tenant's
expense, comply with all insurance company requirements pertaining to the use of
the Premises.  If Tenant's conduct or use of the Premises causes any increase in
the premium for such insurance policies then Tenant shall reimburse Landlord for
any such increase. Tenant, at Tenant's expense, shall comply with all rules,
orders, regulations or requirements of the American Insurance Association
(formerly the National Board of Fire Underwriters) and with any similar body.

 
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10.3 Tenant's Insurance.  Tenant shall maintain the following coverages in the
following amounts.
 
10.3.1 Commercial General Liability Insurance on an occurrence form covering the
insured against claims of bodily injury, personal injury and property damage
(including loss of use thereof) arising out of Tenant's operations, and
contractual liabilities including a contractual coverage, and including products
and completed operations coverage, for limits of liability on a per location
basis of not less than:
 
Bodily Injury and
Property Damage Liability
 
$5,000,000 each occurrence
$5,000,000 annual aggregate
Personal Injury Liability
$3,000,000 each occurrence
$3,000,000 annual aggregate

 
10.3.2 Property Insurance covering (i) all office furniture, business and trade
fixtures, office equipment, free-standing cabinet work, movable partitions,
merchandise and all other items of Tenant's property on the Premises installed
by, for, or at the expense of Tenant, (ii) the "Tenant Improvements," as that
term is defined in the Tenant Work Letter, and any other improvements which
exist in the Premises as of the Lease Commencement Date (excluding the Base
Building) (the "Original Improvements"), and (iii) all other improvements,
alterations and additions to the Premises.  Such insurance shall be written on
an "all risks" of physical loss or damage basis, for the full replacement cost
value (subject to reasonable deductible amounts) new without deduction for
depreciation of the covered items and in amounts that meet any co-insurance
clauses of the policies of insurance and shall include coverage for damage or
other loss caused by fire or other peril including, but not limited to,
vandalism and malicious mischief, theft, water damage of any type, including
sprinkler leakage, bursting or stoppage of pipes, and explosion.
 
10.3.3 Business Income Interruption for one (1) year plus Extra Expense
insurance in such amounts as will reimburse Tenant for actual direct or indirect
loss of earnings attributable to the risks outlined in Section 10.3.2 above.
 
10.3.4 Worker's Compensation and Employer's Liability or other similar insurance
pursuant to all applicable state and local statutes and regulations.  The policy
shall include a waiver of subrogation in favor of Landlord, its employees,
Lenders and any property manager or partners.
 
10.4 Form of Policies.  The minimum limits of policies of insurance required of
Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease.  Such insurance shall (i) name Landlord, its subsidiaries and
affiliates, its property manager (if any) and any other party the Landlord so
specifies, as an additional insured or loss payee, as applicable, including
Landlord's managing agent, if any; (ii) be issued by an insurance company having
a rating of not less than A:IX in Best's Insurance Guide or which is otherwise
acceptable to Landlord and licensed to do business in the State of California;
(iv) be primary insurance as to all claims thereunder and provide that any
insurance carried by Landlord is excess and is non-contributing with any
insurance required of Tenant; (v) be in form and content reasonably acceptable
to Landlord; and (vi) provide that said insurance shall not be canceled or
coverage changed unless thirty (30) days' prior written notice shall have been
given to Landlord and any mortgagee of Landlord (unless such cancellation is the
result of non-payment of premiums).  Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least ten (10) days before the expiration dates thereof.  In the
event Tenant shall fail to procure such insurance, or to deliver such policies
or certificate, Landlord may, at its option, procure such policies for the
account of Tenant, and the cost thereof shall be paid to Landlord within five
(5) days after delivery to Tenant of bills therefor.
 
10.5 Subrogation.  Landlord and Tenant hereby agree to look solely to, and seek
recovery only from, their respective insurance carriers in the event of a
property or business interruption loss to the extent that such coverage is
agreed to be provided hereunder.  The parties each hereby waive all rights and
claims against each other for such losses, and waive all rights of subrogation
of their respective insurers, provided such waiver of subrogation shall not
affect the right to the insured to recover thereunder.  The parties agree that
their respective insurance policies do now, or shall, contain the waiver of
subrogation.

 
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10.6 Additional Insurance Obligations.  Tenant shall carry and maintain during
the entire Lease Term, at Tenant's sole cost and expense, increased amounts of
the insurance required to be carried by Tenant pursuant to this Article 10 and
such other reasonable types of insurance coverage and in such reasonable amounts
covering the Premises and Tenant's operations therein, as may be reasonably
requested by Landlord or Landlord's lender, but in no event in excess of the
amounts and types of insurance then being required by landlords of buildings
comparable to and in the vicinity of the Building.
 
11. DAMAGE AND DESTRUCTION
 
11.1 Repair of Damage to Premises by Landlord.  Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty.  If the Premises or any Common Areas serving or providing access to
the Premises shall be damaged by fire or other casualty, Landlord shall promptly
and diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas.  Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, which are consistent with the character of the Project,
provided that access to the Premises shall not be materially impaired.  Upon the
occurrence of any damage to the Premises, upon notice (the "Landlord Repair
Notice") to Tenant from Landlord, Tenant shall assign to Landlord (or to any
party designated by Landlord) all insurance proceeds payable to Tenant under
Tenant's insurance required under Section 10.3 of this Lease, and Landlord shall
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition; provided that if the cost
of such repair by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier, as assigned by Tenant, the cost of
such repairs shall be paid by Tenant to Landlord prior to Landlord's
commencement of repair of the damage.  In the event that Landlord does not
deliver the Landlord Repair Notice within sixty (60) days following the date the
casualty becomes known to Landlord, Tenant shall, at its sole cost and expense,
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition.  Whether or not Landlord
delivers a Landlord Repair Notice, prior to the commencement of construction,
Tenant shall submit to Landlord, for Landlord's review and approval, all plans,
specifications and working drawings relating thereto, and Landlord shall select
the contractors to perform such improvement work.  Landlord shall not be liable
for any inconvenience or annoyance to Tenant or its visitors, or injury to
Tenant's business resulting in any way from such damage or the repair thereof;
provided however, that if such fire or other casualty shall have damaged the
Premises or Common Areas necessary to Tenant's occupancy, and the Premises are
not occupied by Tenant as a result thereof, then during the time and to the
extent the Premises are unfit for occupancy, the Rent shall be abated in
proportion to the ratio that the amount of rentable square feet of the Premises
which is unfit for occupancy for the purposes permitted under this Lease bears
to the total rentable square feet of the Premises.  In the event that Landlord
shall not deliver the Landlord Repair Notice, Tenant's right to rent abatement
pursuant to the preceding sentence shall terminate as of the date which is
reasonably determined by Landlord to be the date Tenant should have completed
repairs to the Premises assuming Tenant used reasonable due diligence in
connection therewith.

 
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11.2 Landlord's Option to Repair.  Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of
discovery of the damage, such notice to include a termination date giving Tenant
sixty (60) days to vacate the Premises, but Landlord may so elect only if the
Building or Project shall be damaged by fire or other casualty or cause, whether
or not the Premises are affected, and one or more of the following conditions is
present: (i) in Landlord's reasonable judgment, repairs cannot reasonably be
completed within one hundred eighty (180) days after the date of discovery of
the damage (when such repairs are made without the payment of overtime or other
premiums); (ii) the holder of any mortgage on the Building or Project or ground
lessor with respect to the Building or Project shall require that the insurance
proceeds or any portion thereof be used to retire the mortgage debt, or shall
terminate the ground lease, as the case may be; (iii) the damage is not fully
covered by Landlord's insurance policies; (iv) Landlord decides to rebuild the
Building or Common Areas so that they will be substantially different
structurally or architecturally; (v) the damage occurs during the last twelve
(12) months of the Lease Term; or (vi) any owner of any other portion of the
Project, other than Landlord, does not intend to repair the damage to such
portion of the Project; provided, however, that if Landlord does not elect to
terminate this Lease pursuant to Landlord's termination right as provided above,
and the repairs cannot, in the reasonable opinion of Landlord, be completed
within one hundred eighty (180) days after being commenced, Tenant may elect, no
earlier than sixty (60) days after the date of the damage and not later than
ninety (90) days after the date of such damage, to terminate this Lease by
written notice to Landlord effective as of the date specified in the notice,
which date shall not be less than thirty (30) days nor more than sixty (60) days
after the date such notice is given by Tenant.  Notwithstanding the provisions
of this Section 11.2, Tenant shall have the right to terminate this Lease under
this Section 11.2 only if each of the following conditions is satisfied:  (a)
the damage to the Project by fire or other casualty was not caused by the gross
negligence or intentional act of Tenant or its partners or subpartners and their
respective officers, agents, servants, employees, and independent contractors;
(b) Tenant is not then in default under this Lease; (c) as a result of the
damage, Tenant cannot reasonably conduct business from the Premises; and, (d) as
a result of the damage to the Project, Tenant does not occupy or use the
Premises at all.
 
11.3 Waiver of Statutory Provisions.  The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or the Project, and any statute or regulation of the
State of California, including, without limitation, Sections 1932(2) and 1933(4)
of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.
 
12. NONWAIVER                                No provision of this Lease shall be
deemed waived by either party hereto unless expressly waived in a writing signed
thereby.  The waiver by either party hereto of any breach of any term, covenant
or condition herein contained shall not be deemed to be a waiver of any
subsequent breach of same or any other term, covenant or condition herein
contained.  The subsequent acceptance of Rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
Rent so accepted, regardless of Landlord's knowledge of such preceding breach at
the time of acceptance of such Rent.  No acceptance of a lesser amount than the
Rent herein stipulated shall be deemed a waiver of Landlord's right to receive
the full amount due, nor shall any endorsement or statement on any check or
payment or any letter accompanying such check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the full amount due.  No receipt of monies by
Landlord from Tenant after the termination of this Lease shall in any way alter
the length of the Lease Term or of Tenant's right of possession hereunder, or
after the giving of any notice shall reinstate, continue or extend the Lease
Term or affect any notice given Tenant prior to the receipt of such monies, it
being agreed that after the service of notice or the commencement of a suit, or
after final judgment for possession of the Premises, Landlord may receive and
collect any Rent due, and the payment of said Rent shall not waive or affect
said notice, suit or judgment.

 
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13. CONDEMNATION  If the whole or any part of the Premises, Building or Project
shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any part of the Premises, Building or Project, or if Landlord
shall grant a deed or other instrument in lieu of such taking by eminent domain
or condemnation, Landlord shall have the option to terminate this Lease
effective as of the date possession is required to be surrendered to the
authority.  Tenant shall not because of such taking assert any claim against
Landlord or the authority for any compensation because of such taking and
Landlord shall be entitled to the entire award or payment in connection
therewith, except that Tenant shall have the right to file any separate claim
available to Tenant for any taking of Tenant's personal property and fixtures
belonging to Tenant and removable by Tenant upon expiration of the Lease Term
pursuant to the terms of this Lease, and for moving expenses, so long as such
claims do not diminish the award available to Landlord, its ground lessor with
respect to the Building or Project or its mortgagee, and such claim is payable
separately to Tenant.  All Rent shall be apportioned as of the date of such
termination.  If any part of the Premises shall be taken, and this Lease
shall  not be so terminated, the Rent shall be proportionately abated.  Tenant
hereby waives any and all rights it might otherwise have pursuant to
Section 1265.130 of The California Code of Civil Procedure.  Notwithstanding
anything to the contrary contained in this Article 13, in the event of a
temporary taking of all or any portion of the Premises for a period of one
hundred and eighty (180) days or less, then this Lease shall not terminate but
the Base Rent and the Additional Rent shall be abated for the period of such
taking in proportion to the ratio that the amount of rentable square feet of the
Premises taken bears to the total rentable square feet of the
Premises.  Landlord shall be entitled to receive the entire award made in
connection with any such temporary taking.
 
14. ASSIGNMENT AND SUBLETTING
 
14.1 Transfers.  Tenant shall not, without the prior written consent of
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or enter into any
license or concession agreements or otherwise permit the occupancy or use of the
Premises or any part thereof by any persons other than Tenant and its employees
and contractors (all of the foregoing are hereinafter sometimes referred to
collectively as "Transfers" and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a "Transferee").  If
Tenant desires Landlord's consent to any Transfer, Tenant shall notify Landlord
in writing, which notice (the "Transfer Notice") shall include (i) the proposed
effective date of the Transfer, which shall not be less than thirty (30) days
nor more than one hundred eighty (180) days after the date of delivery of the
Transfer Notice, (ii) a description of the portion of the Premises to be
transferred (the "Subject Space"), (iii) all of the terms of the proposed
Transfer and the consideration therefor, including calculation of the "Transfer
Premium", as that term is defined in Section 14.3 below, in connection with such
Transfer, the name and address of the proposed Transferee, and a copy of all
existing executed and/or proposed documentation pertaining to the proposed
Transfer, and (iv) current financial statements of the proposed Transferee
certified by an officer, partner or owner thereof, business credit and personal
references and history of the proposed Transferee and any other information
reasonably required by Landlord which will enable Landlord to determine the
financial responsibility, character, and reputation of the proposed Transferee,
nature of such Transferee's business and proposed use of the Subject Space.  Any
Transfer made without Landlord's prior written consent shall, at Landlord's
option, be null, void and of no effect, and shall, at Landlord's option,
constitute a default by Tenant under this Lease.  Whether or not Landlord
consents to any proposed Transfer, Tenant shall pay Landlord's reasonable review
and processing fees, as well as any reasonable professional fees (including,
without limitation, attorneys', accountants', architects', engineers' and
consultants' fees) incurred by Landlord, within thirty (30) days after written
request by Landlord.
 
14.2 Landlord's Consent.  Landlord shall not unreasonably withhold or delay its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice.  Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:
 
14.2.1 The Transferee is of a character or reputation or engaged in a business
which is not consistent with the quality of the Building or the Project;

 
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14.2.2 The Transferee is either a governmental agency or instrumentality
thereof;
 
14.2.3 The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested; or
 
14.2.4 The proposed Transfer would cause a violation of another lease for space
in the Project, or would give an occupant of the Project a right to cancel its
lease.
 
If Landlord consents to any Transfer pursuant to the terms of this Section 14.2
(and does not exercise any recapture rights Landlord may have under Section 14.4
of this Lease), Tenant may within six (6) months after Landlord's consent, but
not later than the expiration of said six-month period, enter into such Transfer
of the Premises or portion thereof, upon substantially the same terms and
conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
changes in the terms and conditions from those specified in the Transfer Notice
such that Landlord would initially have been entitled to refuse its consent to
such Transfer under this Section 14.2, Tenant shall again submit the Transfer to
Landlord for its approval and other action under this Article 14 (including
Landlord's right of recapture, if any, under Section 14.4 of this
Lease).  Notwithstanding anything to the contrary in this Lease, if Tenant or
any proposed Transferee claims that Landlord has unreasonably withheld or
delayed its consent under Section 14.2 or otherwise has breached or acted
unreasonably under this Article 14, their sole remedies shall be a suit for
contract damages (other than damages for injury to, or interference with,
Tenant's business including, without limitation, loss of profits, however
occurring) or declaratory judgment and an injunction for the relief sought, and
Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee.
 
14.3 Transfer Premium.  If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined
in this Section 14.3, received by Tenant from such Transferee.  "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, and after deduction of (i) any costs of improvements made to the
Subject Space in connection with such Transfer, (ii) brokerage commissions paid
in connection with such Transfer, and (iii) reasonable legal fees incurred in
connection with such Transfer.  "Transfer Premium" shall also include, but not
be limited to, key money, bonus money or other cash consideration paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer.  The determination of the amount of
Landlord's applicable share of the Transfer Premium shall be made on a monthly
basis as rent or other consideration is received by Tenant under the Transfer.

 
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14.4 Landlord's Option as to Subject Space.  Notwithstanding anything to the
contrary contained in this Article 14, in the event Tenant contemplates a
Transfer which, together with all prior Transfers then remaining in effect,
would cause fifty percent (50%) or more of the Premises to be Transferred for
more than fifty percent (50%) of the then remaining Lease Term (taking into
account any extension of the Lease Term which has irrevocably exercised by
Tenant), Tenant shall give Landlord notice (the "Intention to Transfer Notice")
of such contemplated Transfer (whether or not the contemplated Transferee or the
terms of such contemplated Transfer have been determined).  The Intention to
Transfer Notice shall specify the portion of and amount of rentable square feet
of the Premises which Tenant intends to Transfer (the "Contemplated Transfer
Space"), the contemplated date of commencement of the Contemplated Transfer (the
"Contemplated Effective Date"), and the contemplated length of the term of such
contemplated Transfer, and shall specify that such Intention to Transfer Notice
is delivered to Landlord pursuant to this Section 14.4 in order to allow
Landlord to elect to recapture the Contemplated Transfer Space.  Thereafter,
Landlord shall have the option, by giving written notice to Tenant within thirty
(30) days after receipt of any Intention to Transfer Notice, to recapture the
Contemplated Transfer Space.  Such recapture shall cancel and terminate this
Lease with respect to such Contemplated Transfer Space as of the Contemplated
Effective Date.  In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, the Rent reserved herein
shall be prorated on the basis of the number of rentable square feet retained by
Tenant in proportion to the number of rentable square feet contained in the
Premises, and this Lease as so amended shall continue thereafter in full force
and effect, and upon request of either party, the parties shall execute written
confirmation of the same.  If Landlord declines, or fails to elect in a timely
manner, to recapture such Contemplated Transfer Space under this Section 14.4,
then, subject to the other terms of this Article 14, for a period of nine (9)
months (the "Nine Month Period") commencing on the last day of such thirty (30)
day period, Landlord shall not have any right to recapture the Contemplated
Transfer Space with respect to any Transfer made during the Nine Month Period,
provided that any such Transfer is substantially on the terms set forth in the
Intention to Transfer Notice, and provided further that any such Transfer shall
be subject to the remaining terms of this Article 14.  If such a Transfer is not
so consummated within the Nine Month Period (or if a Transfer is so consummated,
then upon the expiration of the term of any Transfer of such Contemplated
Transfer Space consummated within such Nine Month Period), Tenant shall again be
required to submit a new Intention to Transfer Notice to Landlord with respect
any contemplated Transfer, as provided above in this Section 14.4.
 
14.5 Effect of Transfer.  If Landlord consents to a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space.  Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof.  If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than two percent (2%), Tenant shall pay
Landlord's costs of such audit.
 
14.6 Additional Transfers.  For purposes of this Lease, the term "Transfer"
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of fifty percent (50%) or more of
the partners, or transfer of fifty percent (50%) or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or (B) the sale or other
transfer of an aggregate of fifty percent (50%) or more of the voting shares of
Tenant (other than to immediate family members by reason of gift or death),
within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or
pledge of an aggregate of fifty percent (50%) or more of the value of the
unencumbered assets of Tenant within a twelve (12)-month period.

 
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14.7 Occurrence of Default.  Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to:  (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer.  If Tenant shall be in default under this
Lease, Landlord is hereby irrevocably authorized, as Tenant's agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is
cured.  Such Transferee shall rely on any representation by Landlord that Tenant
is in default hereunder, without any need for confirmation thereof by
Tenant.  Upon any assignment, the assignee shall assume in writing all
obligations and covenants of Tenant thereafter to be performed or observed under
this Lease.  No collection or acceptance of rent by Landlord from any Transferee
shall be deemed a waiver of any provision of this Article 14 or the approval of
any Transferee or a release of Tenant from any obligation under this Lease,
whether theretofore or thereafter accruing.  In no event shall Landlord's
enforcement of any provision of this Lease against any Transferee be deemed a
waiver of Landlord's right to enforce any term of this Lease against Tenant or
any other person.  If Tenant's obligations hereunder have been guaranteed,
Landlord's consent to any Transfer shall not be effective unless the guarantor
also consents to such Transfer.
 
14.8 Non-Transfers.  Notwithstanding anything to the contrary contained in this
Article 14, an assignment or subletting of all or a portion of the Premises to
an affiliate of Tenant (an entity which is controlled by, controls, or is under
common control with, Tenant), shall not be deemed a Transfer under this Article
14, provided that Tenant notifies Landlord of any such assignment or sublease
and promptly supplies Landlord with any documents or information requested by
Landlord regarding such assignment or sublease or such affiliate, and further
provided that such assignment or sublease is not a subterfuge by Tenant to avoid
its obligations under this Lease.  "Control," as used in this Section 14.8,
shall mean the ownership, directly or indirectly, of at least fifty-one percent
(51%) of the voting securities of, or possession of the right to vote, in the
ordinary direction of its affairs, of at least fifty-one percent (51%) of the
voting interest in, any person or entity.  No such permitted assignment or
subletting shall serve to release Tenant from any of its obligations under this
Lease.
 
15. SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES
 
15.1 Surrender of Premises.  No act or thing done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord.  The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated.  The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.
 
15.2 Removal of Tenant Property by Tenant.  Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession and as
thereafter improved by Landlord and/or Tenant, reasonable wear and tear and
repairs which are specifically made the responsibility of Landlord hereunder
excepted.  Upon such expiration or termination, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and
rubbish, and such items of furniture, equipment, free-standing cabinet work,
movable partitions and other articles of personal property owned by Tenant or
installed or placed by Tenant at its expense in the Premises, and such similar
articles of any other persons claiming under Tenant, as Landlord may, in its
sole discretion, require to be removed, and Tenant shall repair at its own
expense all damage to the Premises and Building resulting from such removal.

 
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15.3 Environmental Assessment.  In connection with its surrender of the
Premises, Tenant shall submit to Landlord, at least one hundred twenty (120)
days prior to the expiration date of this Lease (or in the event of an earlier
termination of this Lease, as soon as reasonably possible following such
termination), an environmental Assessment of the Premises by a competent and
experienced environmental engineer or engineering firm reasonably satisfactory
to Landlord (pursuant to a contract approved by Landlord and providing that
Landlord can rely on the Environmental Assessment), which (i) evidences that the
Premises are in a clean and safe condition and free and clear of any Hazardous
Materials; and (ii) includes a review of the Premises by an environmental
consultant for asbestos, mold, fungus, spores, and other moisture conditions,
on-site chemical use, and lead-based paint.  If such Environmental Assessment
reveals that remediation or Clean-up is required under any Environmental Laws,
Tenant shall submit a remediation plan prepared by a recognized environmental
consultant and shall be responsible for all costs of remediation and Clean-up,
as more particularly provided in Section 5.3, above.
 
15.4 Condition of the Building and Premises Upon Surrender.  In addition to the
above requirements of this Article 15, upon the expiration of the Lease Term, or
upon any earlier termination of this Lease, Tenant shall, surrender the Premises
and Building such that the same are in compliance with all Applicable Laws and
with Tenant having complied with all of Tenant’s obligations under this Lease,
including those relating to improvement, repair, maintenance, compliance with
law, testing and other related obligations of Tenant set forth in Article 7 of
this Lease.  In the event that the Building and Premises shall be surrendered in
a condition which does not comply with the terms of this Section 15.4, because
Tenant failed to comply with its obligations set forth in Lease, then following
thirty (30) days notice to Tenant, during which thirty (30) day period Tenant
shall have the right to cure such noncompliance, Landlord shall be entitled to
expend all reasonable costs in order to cause the same to comply with the
required condition upon surrender and Tenant shall immediately reimburse
Landlord for all such costs upon notice and Tenant shall be deemed during the
period that Tenant or Landlord, as the case may be, perform obligations relating
to the Surrender Improvements to be in holdover under Article 16 of this Lease.
 
16. HOLDING OVER  If Tenant holds over after the expiration of the Lease Term or
earlier termination thereof, with the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term.  If Tenant holds over after
the expiration of the Lease Term of earlier termination thereof, without the
express or implied consent of Landlord, such tenancy shall be deemed to be a
tenancy by sufferance only, and shall not constitute a renewal hereof or an
extension for any further term.  In either case, Rent shall be payable at a
monthly rate equal to 150% of the Rent applicable during the last rental period
of the Lease Term under this Lease.  Such month-to-month tenancy or tenancy by
sufferance, as the case may be, shall be subject to every other applicable term,
covenant and agreement contained herein.  Nothing contained in this Article 16
shall be construed as consent by Landlord to any holding over by Tenant, and
Landlord expressly reserves the right to require Tenant to surrender possession
of the Premises to Landlord as provided in this Lease upon the expiration or
other termination of this Lease.  The provisions of this Article 16 shall not be
deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided herein or at law.  If Tenant fails to surrender the Premises
upon the termination or expiration of this Lease, in addition to any other
liabilities to Landlord accruing therefrom, Tenant shall protect, defend,
indemnify and hold Landlord harmless from all loss, costs (including reasonable
attorneys' fees) and liability resulting from such failure, including, without
limiting the generality of the foregoing, any claims made by any succeeding
tenant founded upon such failure to surrender and any lost profits to Landlord
resulting therefrom.
 
17. ESTOPPEL CERTIFICATES  Within ten (10) business days following a request in
writing by Landlord, Tenant shall execute, acknowledge and deliver to Landlord
an estoppel certificate, which, as submitted by Landlord, shall be substantially
in the form of Exhibit D, attached hereto (or such other form as may be required
by any prospective mortgagee or purchaser of the Project, or any portion
thereof), indicating therein any exceptions thereto that may exist at that time,
and shall also contain any other information reasonably requested by Landlord or
Landlord's mortgagee or prospective mortgagee.  Any such certificate may be
relied upon by any prospective mortgagee or purchaser of all or any portion of
the Project.  Tenant shall execute and deliver whatever other instruments may be
reasonably required for such purposes.  At any time during the Lease Term,
Landlord may require Tenant to provide Landlord with a current financial
statement and financial statements of the two (2) years prior to the current
financial statement year.  Such statements shall be prepared in accordance with
generally accepted accounting principles and, if such is the normal practice of
Tenant, shall be audited by an independent certified public accountant.  Failure
of Tenant to timely execute, acknowledge and deliver such estoppel certificate
or other instruments shall constitute an acceptance of the Premises and an
acknowledgment by Tenant that statements included in the estoppel certificate
are true and correct, without exception.

 
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18. SUBORDINATION  This Lease shall be subject and subordinate to all present
and future ground or underlying leases of the Building or Project and to the
lien of any mortgage, trust deed or other encumbrances now or hereafter in force
against the Building or Project or any part thereof, if any, and to all
renewals, extensions, modifications, consolidations and replacements thereof,
and to all advances made or hereafter to be made upon the security of such
mortgages or trust deeds, unless the holders of such mortgages, trust deeds or
other encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto.  Tenant covenants and
agrees in the event any proceedings are brought for the foreclosure of any such
mortgage or deed in lieu thereof (or if any ground lease is terminated), to
attorn, without any deductions or set-offs whatsoever, to the lienholder or
purchaser or any successors thereto upon any such foreclosure sale or deed in
lieu thereof (or to the ground lessor), if so requested to do so by such
purchaser or lienholder or ground lessor, and to recognize such purchaser or
lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and
not disturb Tenant's occupancy, so long as Tenant timely pays the rent and
observes and performs the terms, covenants and conditions of this Lease to be
observed and performed by Tenant.  Landlord's interest herein may be assigned as
security at any time to any lienholder.  Tenant shall, within ten (10) days of
request by Landlord, execute such further instruments or assurances as Landlord
may reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases.  Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.
 
19. DEFAULTS; REMEDIES
 
19.1 Events of Default.  The occurrence of any of the following shall constitute
a default of this Lease by Tenant:
 
19.1.1 Any failure by Tenant to pay any Rent or any other charge required to be
paid under this Lease, or any part thereof, when due unless such failure is
cured within five (5) business days after notice; or
 
19.1.2 Except where a specific time period is otherwise set forth for Tenant's
performance in this Lease, in which event the failure to perform by Tenant
within such time period shall be a default by Tenant under this Section 19.1.2,
any failure by Tenant to observe or perform any other provision, covenant or
condition of this Lease to be observed or performed by Tenant where such failure
continues for thirty (30) days after written notice thereof from Landlord to
Tenant; provided that if the nature of such default is such that the same cannot
reasonably be cured within a thirty (30) day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure such default; or
 
19.1.3 Abandonment or vacation of all or a substantial portion of the Premises
by Tenant; or
 
19.1.4 The failure by Tenant to observe or perform according to the provisions
of Articles 5, 14, 17 or 18 of this Lease where such failure continues for more
than two (2) business days after notice from Landlord; or
 
19.1.5 Tenant's failure to occupy the Premises within ten (10) business days
after the Lease Commencement Date.
 
The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law.
 
19.2 Remedies Upon Default.  Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.

 
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19.2.1 Terminate this Lease, in which event Tenant shall immediately surrender
the Premises to Landlord, and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
rent, enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying the Premises or any part thereof,
without being liable for prosecution or any claim or damages therefor; and
Landlord may recover from Tenant the following:
 
(i) The worth at the time of award of the unpaid rent which has been earned at
the time of such termination; plus
 
(ii) The worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus
 
(iii) The worth at the time of award of the amount by which the unpaid rent for
the balance of the Lease Term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; plus
 
(iv) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom; and
 
(v) At Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.
 
The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others.  As used in Sections 19.2.1(i) and
(ii), above, the "worth at the time of award" shall be computed by allowing
interest at the rate set forth in Article 25 of this Lease, but in no case
greater than the maximum amount of such interest permitted by law.  As used in
Section 19.2.1(iii) above, the "worth at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
 
19.2.2 Landlord shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations).  Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.
 
19.2.3 Landlord shall at all times have the rights and remedies (which shall be
cumulative with each other and cumulative and in addition to those rights and
remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other
provision of this Lease), without prior demand or notice except as required by
applicable law, to seek any declaratory, injunctive or other equitable relief,
and specifically enforce this Lease, or restrain or enjoin a violation or breach
of any provision hereof.
 
19.3 Subleases of Tenant.  Whether or not Landlord elects to terminate this
Lease on account of any default by Tenant, as set forth in this Article 19,
Landlord shall have the right to terminate any and all subleases, licenses,
concessions or other consensual arrangements for possession entered into by
Tenant and affecting the Premises or may, in Landlord's sole discretion, succeed
to Tenant's interest in such subleases, licenses, concessions or
arrangements.  In the event of Landlord's election to succeed to Tenant's
interest in any such subleases, licenses, concessions or arrangements, Tenant
shall, as of the date of notice by Landlord of such election, have no further
right to or interest in the rent or other consideration receivable thereunder.

 
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19.4 Efforts to Relet.  No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant.  Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.
 
20. COVENANT OF QUIET ENJOYMENT  Landlord covenants that Tenant, on paying the
Rent, charges for services and other payments herein reserved and on keeping,
observing and performing all the other terms, covenants, conditions, provisions
and agreements herein contained on the part of Tenant to be kept, observed and
performed, shall, during the Lease Term, peaceably and quietly have, hold and
enjoy the Premises subject to the terms, covenants, conditions, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through Landlord.  The foregoing covenant is in lieu of any other covenant
express or implied.
 
21. SECURITY DEPOSIT  On or before the Lease Commencement Date of this Lease,
Tenant shall deposit with Landlord a security deposit (the "Security Deposit")
in the amount set forth in Section 8 of the Summary, as security for the
faithful performance by Tenant of all of its obligations under this Lease.  If
Tenant defaults with respect to any provisions of this Lease, including, but not
limited to, the provisions relating to the payment of Rent, the removal of
property and the repair of resultant damage, Landlord may, without notice to
Tenant, but shall not be required to apply all or any part of the Security
Deposit for the payment of any Rent or any other sum in default and Tenant
shall, upon demand therefor, restore the Security Deposit to its original
amount.  Any unapplied portion of the Security Deposit shall be returned to
Tenant, or, at Landlord's option, to the last assignee of Tenant's interest
hereunder, within sixty (60) days following the expiration of the Lease
Term.  Tenant shall not be entitled to any interest on the Security
Deposit.  Tenant hereby irrevocably waives and relinquishes any and all rights,
benefits, or protections, if any, Tenant now has, or in the future may have,
under Section 1950.7 of the California Civil Code, any successor statute, and
all other provisions of law, now or hereafter in effect, including, but not
limited to, any provision of law which (i) establishes the time frame by which a
landlord must refund a security deposit under a lease, and/or (ii) provides that
a landlord may claim from a security deposit only those sums reasonably
necessary to remedy defaults in the payment of rent, to repair damage caused by
a tenant or to clean the subject premises.  Tenant acknowledges and agrees that
(a) any statutory time frames for the return of a security deposit are
superseded by the express period identified in this Article 21, above, and (b)
rather than be so limited, Landlord may claim from the Security Deposit (1) any
and all sums expressly identified in this Article 21, above, and (2) any
additional sums reasonably necessary to compensate Landlord for any and all
losses or damages caused by Tenant's default of this Lease, including, but not
limited to, all damages or rent due upon termination of Lease pursuant to
Section 1951.2 of the California Civil Code.
 
22. COMMUNICATIONS AND COMPUTER LINE  Tenant may install, maintain, replace,
remove or use any communications or computer wires and cables serving the
Premises (collectively, the "Lines"), provided that Tenant shall obtain
Landlord's prior written consent, use an experienced and qualified contractor
approved in writing by Landlord, and comply with all of the other provisions of
Articles 7 and 8 of this Lease.  Tenant shall pay all costs in connection
therewith.  Landlord reserves the right, upon notice to Tenant prior to the
expiration or earlier termination of this Lease, to require that Tenant, at
Tenant's sole cost and expense, remove any Lines located in or serving the
Premises prior to the expiration or earlier termination of this Lease.
 
23. SIGNS
 
23.1 Exterior Signage.  Landlord, at Landlord's sole cost and expense, shall
install the initial signage identifying Tenant (i) on the existing monument sign
located at the Building, and (ii) at the entrance to the Building (collectively,
"Tenant Signage"); provided, however, in no event shall Tenant's Signage include
an "Objectionable Name," as that term is defined in Section 23.3, of this
Lease.  All such signage shall be subject to all required governmental
approvals.  Upon the expiration or earlier termination of this Lease, Tenant
shall remove all of its signs at Tenant's sole cost and expense.  The graphics,
materials, color, design, lettering, lighting, size, illumination,
specifications and exact location of Tenant's Signage (collectively, the "Sign
Specifications") shall be Project standard as determined by Landlord.  Any
changes to Tenant's Signage shall be at Tenant's sole cost and expense.

 
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23.2 Objectionable Name.  Tenant's Signage shall not include a name or logo
which relates to an entity which is of a character or reputation, or is
associated with a political faction or orientation, which is inconsistent with
the quality of the Project, or which would otherwise reasonably offend a
landlord of the Comparable Buildings (an "Objectionable Name").  The parties
hereby agree that the following name, or any reasonable derivation thereof,
shall be deemed not to constitute an Objectionable Name:  "VistaGen
Therapeutics, Inc."
 
23.3 Prohibited Signage and Other Items.  Any signs, notices, logos, pictures,
names or advertisements which are installed and that have not been separately
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant.  Any signs, window coverings, or blinds (even if the same are
located behind the Landlord-approved window coverings for the Building), or
other items visible from the exterior of the Premises or Building, shall be
subject to the prior approval of Landlord, in its sole discretion.
 
24. COMPLIANCE WITH LAW  Tenant shall not do anything or suffer anything to be
done in or about the Premises or the Project which will in any way conflict with
any law, statute, ordinance or other governmental rule, regulation or
requirement now in force or which may hereafter be enacted or promulgated.  At
its sole cost and expense, Tenant shall promptly comply with all such
governmental measures.  Should any standard or regulation now or hereafter be
imposed on Landlord or Tenant by a state, federal or local governmental body
charged with the establishment, regulation and enforcement of occupational,
health or safety standards for employers, employees, landlords or tenants, then
Tenant agrees, at its sole cost and expense, to comply promptly with such
standards or regulations.  Tenant shall be responsible, at its sole cost and
expense, to make all alterations to the Building and Premises as are required to
comply with the governmental rules, regulations, requirements or standards
described in this Article 24.  The judgment of any court of competent
jurisdiction or the admission of Tenant in any judicial action, regardless of
whether Landlord is a party thereto, that Tenant has violated any of said
governmental measures, shall be conclusive of that fact as between Landlord and
Tenant.
 
25. LATE CHARGES  If any installment of Rent or any other sum due from Tenant
shall not be received by Landlord or Landlord's designee within five (5)
business days after Tenant's receipt of written notice from Landlord that said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount plus any reasonable attorneys' fees incurred
by Landlord by reason of Tenant's failure to pay Rent and/or other charges when
due hereunder.  The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner.  In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) the
annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical Release
Publication G.13(415), published on the first Tuesday of each calendar month (or
such other comparable index as Landlord and Tenant shall reasonably agree upon
if such rate ceases to be published) plus four (4) percentage points, and (ii)
the highest rate permitted by applicable law.
 
26. LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT
 
26.1 Landlord's Cure.  All covenants and agreements to be kept or performed by
Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein.  If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.
 
26.2 Tenant's Reimbursement.  Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor:  (i) sums equal to expenditures reasonably
made and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii)
sums equal to all losses, costs, liabilities, damages and expenses referred to
in Article 10 of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent
or in enforcing or attempting to enforce any rights of Landlord under this Lease
or pursuant to law, including, without limitation, all reasonable legal fees and
other amounts so expended.  Tenant's obligations under this Section 26.2 shall
survive the expiration or sooner termination of the Lease Term.

 
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27. ENTRY BY LANDLORD  Landlord reserves the right at all reasonable times and
upon reasonable notice to Tenant (except in the case of an emergency) to enter
the Premises to (i) inspect them; (ii) show the Premises to prospective
purchasers, or to current or prospective mortgagees, ground or underlying
lessors or insurers or, during the last twelve (12) months of the Lease Term, to
prospective tenants; (iii) post notices of nonresponsibility (to the extent
applicable pursuant to then applicable law); or (iv) alter, improve or repair
the Premises or the Building, or for structural alterations, repairs or
improvements to the Building or the Building's systems and equipment. Landlord
may make any such entries without the abatement of Rent, except as otherwise
provided in this Lease, and may take such reasonable steps as required to
accomplish the stated purposes.  In an emergency, Landlord shall have the right
to use any means that Landlord may deem proper to open the doors in and to the
Premises.  Any entry into the Premises by Landlord in the manner hereinbefore
described shall not be deemed to be a forcible or unlawful entry into, or a
detainer of, the Premises, or an actual or constructive eviction of Tenant from
any portion of the Premises.
 
28. TENANT PARKING  Tenant shall have the right to use the amount of parking set
forth in Section 9 of the Summary, in the on-site and/or off-site, as the case
may be, parking facility (or facilities) which serve the Project.  Tenant shall
abide by all reasonable rules and regulations which are prescribed from time to
time for the orderly operation and use of the parking facility where the parking
passes are located (including any sticker or other identification system
established by Landlord and the prohibition of vehicle repair and maintenance
activities in the parking facilities), and shall cooperate in seeing that
Tenant's employees and visitors also comply with such rules and
regulations.  Tenant's use of the Project parking facility shall be at Tenant's
sole risk and Tenant acknowledges and agrees that Landlord shall have no
liability whatsoever for damage to the vehicles of Tenant, its employees and/or
visitors, or for other personal injury or property damage or theft relating to
or connected with the parking rights granted herein or any of Tenant's, its
employees' and/or visitors' use of the parking facilities.
 
29. MISCELLANEOUS PROVISIONS
 
29.1 Terms; Captions.  The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular.  The necessary grammatical changes
required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed.  The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.
 
29.2 Binding Effect.  Subject to all other provisions of this Lease, each of the
covenants, conditions and provisions of this Lease shall extend to and shall, as
the case may require, bind or inure to the benefit not only of Landlord and of
Tenant, but also of their respective heirs, personal representatives, successors
or assigns, provided this clause shall not permit any assignment by Tenant
contrary to the provisions of Article 14 of this Lease.
 
29.3 No Air Rights.  No rights to any view or to light or air over any property,
whether belonging to Landlord or any other person, are granted to Tenant by this
Lease.  If at any time any windows of the Premises are temporarily darkened or
the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the  Project, the same shall
be without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.
 
29.4 Modification of Lease.  Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights and obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) business days
following a request therefor.  At the request of Landlord or any mortgagee or
ground lessor, Tenant agrees to execute a short form of Lease and deliver the
same to Landlord within ten (10) business days following the request therefor.
 
29.5 Transfer of Landlord's Interest.  Tenant acknowledges that Landlord has the
right to transfer all or any portion of its interest in the Project or Building
and in this Lease, and Tenant agrees that in the event of any such transfer,
Landlord shall automatically be released from all liability under this Lease and
Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee.

 
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29.6 Prohibition Against Recording.  Except as provided in Section 29.4 of this
Lease, neither this Lease, nor any memorandum, affidavit or other writing with
respect thereto, shall be recorded by Tenant or by anyone acting through, under
or on behalf of Tenant.
 
29.7 Landlord's Title.  Landlord's title is and always shall be paramount to the
title of Tenant.  Nothing herein contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord.
 
29.8 Relationship of Parties.  Nothing contained in this Lease shall be deemed
or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.
 
29.9 Application of Payments.  Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant's designation
of such payments, to satisfy any obligations of Tenant hereunder, in such order
and amounts as Landlord, in its sole discretion, may elect.
 
29.10 Time of Essence.  Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.
 
29.11 Partial Invalidity.  If any term, provision or condition contained in this
Lease shall, to any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.
 
29.12 No Warranty.  In executing and delivering this Lease, Tenant has not
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.
 
29.13 Landlord Exculpation.  The liability of Landlord or the Landlord Parties
to Tenant for any default by Landlord under this Lease or arising in connection
herewith or with Landlord's operation, management, leasing, repair, renovation,
alteration or any other matter relating to the Project or the Premises shall be
limited solely and exclusively to an amount which is equal to the lesser of (a)
the interest of Landlord in the Building or (b) the equity interest Landlord
would have in the Building if the Building were encumbered by third-party debt
in an amount equal to eighty percent (80%) of the value of the Building (as such
value is determined by Landlord), provided that in no event shall such liability
extend to any sales or insurance proceeds received by Landlord or the Landlord
Parties in connection with the Project, Building or Premises.  Neither Landlord,
nor any of the Landlord Parties shall have any personal liability therefor, and
Tenant hereby expressly waives and releases such personal liability on behalf of
itself and all persons claiming by, through or under Tenant.  The limitations of
liability contained in this Section 29.13 shall inure to the benefit of
Landlord's and the Landlord Parties' present and future partners, beneficiaries,
officers, directors, trustees, shareholders, agents and employees, and their
respective partners, heirs, successors and assigns.  Under no circumstances
shall any present or future partner of Landlord (if Landlord is a partnership),
or trustee or beneficiary (if Landlord or any partner of Landlord is a trust),
have any liability for the performance of Landlord's obligations under this
Lease.  Notwithstanding any contrary provision herein, neither Landlord nor the
Landlord Parties shall be liable under any circumstances for injury or damage
to, or interference with, Tenant's business, including but not limited to, loss
of profits, loss of rents or other revenues, loss of business opportunity, loss
of goodwill or loss of use, in each case, however occurring, or loss to
inventory, scientific research, scientific experiments, laboratory animals,
products, specimens, samples, and/or scientific, business, accounting and other
records of every kind and description kept at the premises and any and all
income derived or derivable therefrom.

 
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29.14 Entire Agreement.  It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties' entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease.  None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.
 
29.15 Right to Lease.  Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project.  Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.
 
29.16 Force Majeure.  Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to
obtain services, labor, or materials or reasonable substitutes therefor,
governmental actions, civil commotions, fire or other casualty, and other causes
beyond the reasonable control of the party obligated to perform, except with
respect to the obligations imposed with regard to Rent and other charges to be
paid by Tenant pursuant to this Lease (collectively, a "Force Majeure"),
notwithstanding anything to the contrary contained in this Lease, shall excuse
the performance of such party for a period equal to any such prevention, delay
or stoppage and, therefore, if this Lease specifies a time period for
performance of an obligation of either party, that time period shall be extended
by the period of any delay in such party's performance caused by a Force
Majeure.
 
29.17 Waiver of Redemption by Tenant.  Tenant hereby waives, for Tenant and for
all those claiming under Tenant, any and all rights now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant's right of occupancy of the Premises after any termination of this Lease.
 
29.18 Notices.  All notices, demands, statements, designations, approvals  or
other communications (collectively, "Notices") given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be (A)
sent by United States certified or registered mail, postage prepaid, return
receipt requested ("Mail"), (B) transmitted by telecopy, if such telecopy is
promptly followed by a Notice sent by Mail, (C) delivered by a nationally
recognized overnight courier, or (D) delivered personally.  Any Notice shall be
sent, transmitted, or delivered, as the case may be, to Tenant at the
appropriate address set forth in Section 10 of the Summary, or to such other
place as Tenant may from time to time designate in a Notice to Landlord, or to
Landlord at the addresses set forth below, or to such other places as Landlord
may from time to time designate in a Notice to Tenant.  Any Notice will be
deemed given (i) three (3) days after the date it is posted if sent by Mail,
(ii) the date the telecopy is transmitted, (iii) the date the overnight courier
delivery is made, or (iv) the date personal delivery is made.  As of the date of
this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as
the case may be, to the following addresses:
 
Bayside Area Development, LLC
c/o HCP, Inc.
3760 Kilroy Airport Way, Suite 300
Long Beach, CA  90806
Attention:  Legal Department
 
and:
 
HCP Life Science Estates
400 Oyster Point Boulevard, Suite 409
South San Francisco, CA 94080
Attention:  Jon Bergschneider

 
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with a copy to:
 
Allen Matkins Leck Gamble Mallory & Natsis LLP
1901 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
Attention:  Anton N. Natsis, Esq.
 
29.19 Joint and Several.  If there is more than one tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.
 
29.20 Authority.  If Tenant is a corporation, trust or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in the State of California and that Tenant has full right and authority
to execute and deliver this Lease and that each person signing on behalf of
Tenant is authorized to do so.  In such event, Tenant shall, within ten (10)
days after execution of this Lease, deliver to Landlord satisfactory evidence of
such authority and, if a corporation, upon demand by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in the State of California.
 
29.21 Attorneys' Fees.  In the event that either Landlord or Tenant should bring
suit for the possession of the Premises, for the recovery of any sum due under
this Lease, or because of the breach of any provision of this Lease or for any
other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.
 
29.22 Governing Law; WAIVER OF TRIAL BY JURY.  This Lease shall be construed and
enforced in accordance with the laws of the State of California.  IN ANY ACTION
OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE
JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II) SERVICE
OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST
OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR
SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS
LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE
PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY
REMEDY.  IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR
NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY
COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE
MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN
INDEPENDENT ACTION AT LAW.
 
29.23 Submission of Lease.  Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of, option for or option
to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.
 
29.24 Brokers.  Landlord and Tenant hereby warrant to each other that they have
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease.  Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys' fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.  The terms of this Section 29.24 shall survive the
expiration or earlier termination of the Lease Term.

 
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29.25 Independent Covenants.  This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.
 
29.26 Project or Building Name, Address and Signage.  Landlord shall have the
right at any time to change the name and/or address of the Project or Building
and to install, affix and maintain any and all signs on the exterior and on the
interior of the Project or Building as Landlord may, in Landlord's sole
discretion, desire.  Tenant shall not use the name of the Project or Building or
use pictures or illustrations of the Project or Building in advertising or other
publicity or for any purpose other than as the address of the business to be
conducted by Tenant in the Premises, without the prior written consent of
Landlord.
 
29.27 Counterparts.  This Lease may be executed in counterparts with the same
effect as if both parties hereto had executed the same document.  Both
counterparts shall be construed together and shall constitute a single lease.
 
29.28 Confidentiality.  Tenant acknowledges that the content of this Lease and
any related documents are confidential information.  Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than (a) Tenant's
financial, legal, and space planning consultants or (b) as otherwise required of
Tenant to comply with federal securities law and the rules and regulations of
the United States Securities and Exchange Commission.
 
29.29 Development of the Project.
 
29.29.1 Subdivision.  Landlord reserves the right to subdivide all or a portion
of the buildings and Common Areas.  Tenant agrees to execute and deliver, upon
demand by Landlord and in the form requested by Landlord, any additional
documents needed to conform this Lease to the circumstances resulting from a
subdivision and any all maps in connection therewith.  Notwithstanding anything
to the contrary set forth in this Lease, the separate ownership of any buildings
and/or Common Areas by an entity other than Landlord shall not affect the
calculation of Direct Expenses or Tenant's payment of Tenant's Share of Direct
Expenses.
 
29.29.2 Construction of Property and Other Improvements.  Tenant acknowledges
that portions of the Project may be under construction following Tenant's
occupancy of the Premises, and that such construction may result in levels of
noise, dust, obstruction of access, etc. which are in excess of that present in
a fully constructed project.  Tenant hereby waives any and all rent offsets or
claims of constructive eviction which may arise in connection with such
construction.
 
29.30 No Violation.  Tenant hereby warrants and represents that neither its
execution of nor performance under this Lease shall cause Tenant to be in
violation of any agreement, instrument, contract, law, rule or regulation by
which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys' fees
and costs, arising from Tenant's breach of this warranty and representation.
 
29.31 Transportation Management.  Tenant shall fully comply with all present or
future programs intended to manage parking, transportation or traffic in and
around the Project and/or the Building, and in connection therewith, Tenant
shall take responsible action for the transportation planning and management of
all employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities.  Such programs may include,
without limitation: (i) restrictions on the number of peak-hour vehicle trips
generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of
an in-house ridesharing program and an employee transportation coordinator; (iv)
working with employees and any Project, Building or area-wide ridesharing
program manager; (v) instituting employer-sponsored incentives (financial or
in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work
shifts for employees.

 
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IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed
the day and date first above written.
 
LANDLORD:
 
BAYSIDE AREA DEVELOPMENT, LLC,
a Delaware limited liability company
By:  /s/ Jon M. Bergschneider
Jon M. Bergschneider
Executive Vice President
TENANT:
 
VISTAGEN THERAPEUTICS, INC.,
a California corporation
By:  /s/ Shawn K. Singh
Shawn K. Singh
Chief Executive Officer
   

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