Exhibit 10.1
SINGLE TENANT INDUSTRIAL TRIPLE NET LEASE
This Single Tenant Industrial Triple Net Lease (this “Lease”) is made and
entered into as of July 2, 2020 (the “Effective Date”), by and between Icon
Owner Pool 1 West/Southwest, LLC, a Delaware limited liability company
(“Landlord”) and GenMark Diagnostics, Inc., a Delaware corporation (“Tenant”).
The following exhibits and attachments are incorporated into and made a part of
this Lease: Exhibit A (Outline and Location of Premises), Exhibit B (Work
Letter), Exhibit C (Prohibited Use), Exhibit D (Rules and Regulations),
Exhibit E (Confirmation Letter, if required), Exhibit F (Requirements for
Improvements or Alterations by Tenant), Exhibit G (Hazardous Materials Survey
Form), Exhibit H (Move Out Conditions), Exhibit I (Minimum Service Contract
Requirements), Exhibit J (Additional Provisions), and Exhibit K (Judicial
Reference).
1.BASIC LEASE INFORMATION.
1.1“Building” shall mean the industrial building located at [***], Carlsbad,
California. “Rentable Square Footage of the Building” is deemed to be 73,057
square feet.
1.2“Premises” shall mean the entire Building. The Premises is outlined on
Exhibit A attached hereto. The “Rentable Square Footage of the Premises” is
deemed to be 73,057 square feet. Landlord and Tenant stipulate and agree that
the Rentable Square Footage of the Building and the Rentable Square Footage of
the Premises and the Rentable Square Footage of the Project (as herein defined)
are correct and shall not be subject to challenge or re-calculation by either
Landlord or Tenant (except as expressly provided in Section 1.12).
1.3“Base Rent”:
Period

Monthly Base RentFebruary 1, 2021 – January 31, 2022$ 116,160.63February 1, 2022
– January 31, 2023$ 119,645.45February 1, 2023 – January 31, 2024$
123,234.81February 1, 2024 – January 31, 2025$ 126,931.86February 1, 2025 –
January 31, 2026$ 130,739.81February 1, 2026 – January 31, 2027$
134,662.01February 1, 2027 – January 31, 2028$ 138,701.87February 1, 2028 –
January 31, 2029$ 142,862.92February 1, 2029 – January 31, 2030$
147,148.81February 1, 2030 – January 31, 2031$ 151,563.28February 1, 2031 – June
30, 2031$ 156,110.17

Certain identified information has been omitted from this document because it is
both not material and would be competitively harmful if publicly disclosed, and
had been marked with "[***]" to indicate where omissions have been made.

1.4“Tenant’s Share”: for the Building shall mean 100%; “Tenant’s Share” for the
Project (hereinafter defined) shall mean 27.56%.
1.5“Term”: The period commencing on February 1, 2021 (the “Commencement Date”)
and, unless terminated earlier in accordance with this Lease, ending on June 30,
2031 (the “Termination Date”). Notwithstanding anything to the contrary, the
Commencement Date shall not be subject to any delay due to any Force Majeure
event.
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1.6“Allowance”: an amount not to exceed $4,273,834.50 (i.e., $58.50 per rentable
square foot of the Building), as further described in the attached Exhibit B.
1.7“Letter of Credit”: $846,000.06, as more fully described in Section 3 of
Exhibit J.
1.8“Broker(s)”: Craig Knox of Hughes Marino (“Tenant’s Broker”), which
represented Tenant in connection with this transaction, and Aric Starck and
Dennis Visser of Cushman & Wakefield (“Landlord’s Broker”), which represented
Landlord in connection with this transaction.
1.9“Permitted Use”: Research and development, manufacturing, distribution, and
office use (including, but not limited to diagnostics and test kit
manufacturing), subject to Section 2.2 below, and for no other purpose.
1.10“Notice Address(es)”:

Landlord:Tenant:
Icon Owner Pool 1 West/Southwest, LLC
90 Park Avenue, 32nd Floor
New York, New York 1006
Attention: General Counsel

and

Icon Owner Pool 1 West/Southwest, LLC
220 Commerce Drive, 4th Floor
Fort Washington, Pennsylvania 19034
Attention: Lease Administration
Email: leaseadministration@liprop.com
GenMark Diagnostics, Inc.
5964 La Place Court
Carlsbad, California 92008
Attn: Scott Mendel
and

GenMark Diagnostics, Inc.
5964 La Place Court
Carlsbad, California 92008
Attn: General Counsel
And

Blackacre LLP
1219 Morningside Drive, Suite 216
Manhattan Beach, CA 90266
Attn: Daniel S. Brozost, Esq.

1.11“Property” means the Building and the parcel(s) of land on which it is
located (the “Land”) and, at Landlord’s discretion, the parking facilities and
other improvements, if any, serving the Building and the parcel(s) of Land on
which they are located.
1.12“Project” means the buildings, including the Building located within
Northpointe Tech Center. The “Rentable Square Footage of the Project” is deemed
to be 265,078 square feet.
1.13“Initial Tenant’s Work” means the work that Tenant is obligated to perform
in the Premises pursuant to a separate agreement (the “Work Letter”) attached to
this Lease as Exhibit B.
1.14“Landlord Work” means the following itemized work as depicted in Schedule 3
to Exhibit B attached to this Lease that Landlord, at its sole cost and expense,
shall be obligated to perform and complete before the date that is ninety (90)
days after the Effective Date (but subject to any Force Majeure event or Tenant
Delay (as defined below)) to a portion of the Land other than the Building using
building standard materials and finishes and pursuant to existing Applicable
Laws (as defined below) as interpreted and in effect as of the Effective Date:
(i) remove the tree
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blocking the handicap parking space sign located to the north of the southeast
entrance to the Building; (ii) install truncated domes on three (3) ramps (two
(2) ramps located north of the southeast entrance to the Building and one (1)
ramp located south of the northeast entrance to the Building); and (iii) create
a sixty (60) inch minimum opening to the ramp located immediately north of the
southeast entrance to the Building or remediate such ramp and adjacent handicap
paint striping such that the concrete curb does not overlap with the handicap
paint striping. “Tenant Delay” shall mean any delay in the performance of the
Landlord Work as a result of the acts or omissions of Tenant, any Tenant Party
(as defined below) or their respective contractors or vendors, including,
without limitation, changes requested by Tenant to approved plans, Tenant’s
failure to comply with any of its obligations under this Lease, Tenant’s failure
to install furniture, equipment or telecommunications cable in the Premises
within the time periods specified by Landlord and to the extent required in
order to obtain all approvals necessary for the occupancy of the Premises,
Tenant’s failure to complete work on or to the Premises to be performed by
Tenant, or Tenant’s specification of any materials or equipment with long lead
times not specifically identified in the approved plans. Tenant shall execute
and return (or, by notice to Landlord, reasonably object to) a notice
substantially in the form of Exhibit E, as a confirmation of the information set
forth therein within thirty (30) days after receiving it from Landlord, and if
Tenant fails to do so, Tenant shall be deemed to have executed and returned it
without exception.
2.PREMISES/USE.
2.1Premises. Landlord hereby leases to Tenant the Premises, but excluding the
Common Area (as herein defined), and any other portion of the Land, Property
and/or the Project. Tenant (i) ACCEPTS THE PREMISES “AS-IS,” EXCEPT FOR THE
LANDLORD WORK AND OTHERWISE AS EXPRESSLY PROVIDED HEREIN, WITH TENANT ACCEPTING
ALL DEFECTS, IF ANY; AND LANDLORD MAKES NO WARRANTY OF ANY KIND, EXPRESS OR
IMPLIED, WITH RESPECT TO THE PREMISES (WITHOUT LIMITATION, LANDLORD MAKES NO
WARRANTY AS TO THE HABITABILITY, FITNESS OR SUITABILITY OF THE PREMISES FOR A
PARTICULAR PURPOSE, NOR AS TO COMPLIANCE WITH ANY APPLICABLE LAWS (AS HEREIN
DEFINED), OR AS TO THE ABSENCE OF ANY TOXIC OR OTHERWISE HAZARDOUS MATERIALS),
(ii) acknowledges that the Premises are acceptable for Tenant’s use, and (iii)
except as expressly provided herein, waives all claims of defect in the Premises
and any implied warranty that the Premises are suitable for Tenant’s intended
purposes. Tenant hereby acknowledges that the area of the Premises, the Building
and the Project set forth in the Basic Lease Information is approximate only,
and Tenant accepts and agrees to be bound by such figures for all purposes in
this Lease. Notwithstanding anything to the contrary contained in this Section
2.1, Landlord hereby covenants that, on the date of Substantial Completion of
Landlord’s Work, the Landlord’s Work shall be in a condition that meets all
current Applicable Laws as then interpreted, including, without limitation, the
ADA (as defined in Section 2.2 below), and the Premises shall otherwise be
vacant and broomclean, and the structural portions of the roof of the Premises
shall be in good condition and repair (collectively, the “Required Delivery
Condition”). If it is determined that the Premises or the Common Areas were not
in the Required Delivery Condition, the validity of this Lease shall not be
affected or impaired thereby, Landlord shall not be in default under the terms
of this Lease or be liable to Tenant for any damages therefor, nor shall Tenant
be permitted to nullify delivery or acceptance of the Premises or be entitled to
abatement of any of Tenant’s obligations under this Lease, but as Tenant’s sole
remedy, Landlord, at no cost to Tenant, shall perform such work or take such
other action as may be necessary to place the same in the Required Delivery
Condition; provided, however, that if Tenant does not give Landlord notice of
any deficiency in the Required Delivery Condition within one (1) month following
the Commencement Date, correction of such deficiency shall be governed by the
parties’ respective maintenance and repair obligations set forth in this Lease
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2.2Use. The Premises shall be used only for the Permitted Use and for no other
uses without Landlord’s written consent, which may be granted or withheld in
Landlord’s sole, absolute, and unfettered discretion. Tenant’s use of the
Premises shall be in compliance with and subject to all applicable laws,
statutes, codes, ordinances, orders, zoning, rules, regulations, conditions of
approval and requirements of all federal, state, county, municipal and
governmental authorities and all administrative or judicial orders or decrees
and all permits, licenses, approvals and other entitlements issued by
governmental entities, and rules of common law, relating to or affecting the
Property, the Premises or the Building or the use or operation thereof, whether
now existing or hereafter enacted, including, without limitation, the Americans
with Disabilities Act of 1990, 42 USC 12111 et seq. (the “ADA”) as the same may
be amended from time to time, all Environmental Laws (as defined in
Section 15.2), and any covenants, conditions and restrictions encumbering the
Land, Property and/or the Project (“CC&Rs”) or any supplement thereto recorded
in any official or public records with respect to the Property and/or the
Project or any portion thereof (collectively, “Applicable Laws”, or
individually, as the context may require, an “Applicable Law”). Tenant shall be
responsible for obtaining any permit, business license, or other permits or
licenses required by any governmental agency permitting Tenant’s use or
occupancy of the Premises and for performing, at Tenant’s sole cost, all
modifications or additions to the Premises or the Common Areas (except for
Landlord’s Work) in order to be in ADA compliance, except as provided in Section
2.1 above. Except as expressly provided herein, Tenant shall be responsible for
ensuring that the Permitted Use conforms with all Applicable Laws. Landlord
shall use commercially reasonable efforts to perform all of its obligations
pursuant to CC&Rs, and use commercially reasonable efforts to cause all other
parties to such CC&Rs to perform their obligations thereunder, to the extent
necessary to avoid (i) any interference with Tenant’s use of the Premises for
the Permitted Use, or (ii) any decrease in Tenant’s rights, or increase in
Tenant’s obligations, under this Lease. Except as provided in Section 2.1 above,
Landlord shall have no obligation to bring the Premises or Common Areas into
compliance with ADA. If a change to the Common Areas or the Building becomes
required under Applicable Law (or if any such requirement is enforced) as a
result of any Alterations (herein defined) made to the Premises, the
installation of any trade fixture in the Premises, any particular use of the
Premises other than the Permitted Use, or any breach of Tenant’s obligations
under this Lease, then Tenant, upon demand, shall (x) at Landlord’s option,
either make such change at Tenant’s sole cost or pay Landlord the cost of making
such change, and (y) pay Landlord a coordination fee equal to [***] of the cost
of such change. In no event shall the Premises be used for any Prohibited Use
(as defined in Exhibit C). Tenant shall comply with the rules and regulations
attached hereto as Exhibit D, together with such additional reasonable rules and
regulations as Landlord may from time to time prescribe (“Rules and
Regulations”). Landlord shall not knowingly discriminate against Tenant in
Landlord’s enforcement of the Rules and Regulations. Landlord shall not be
responsible or liable to Tenant for the non-performance of any other tenant or
occupant of the Building or Project of the Rules and Regulations or for any
interference or disturbance of Tenant by any other tenant or occupant. Tenant
shall not commit waste, overload the floors or structure of the Building,
subject the Premises, the Building, the Common Area, Property or the Project to
any use which would damage the same or increase the risk of loss or violate any
insurance coverage, permit any unreasonable odors, smoke, dust, gas, substances,
noise or vibrations to emanate from the Premises, take any action which would
constitute a nuisance or would unreasonably disturb, obstruct or endanger any
other tenants of the Project, take any action which would abrogate any
warranties, use or allow the Premises to be used for any unlawful purpose or
conduct, or permit to be conducted, any auction upon the Premises.
Notwithstanding the foregoing, Landlord shall use commercially reasonable
efforts to correct any non-performance of any other tenant or occupant of the
Project of the Rules and Regulations or for any interference or disturbance of
Tenant by any other tenant or occupant.

Subject to the express terms of this Lease, the rights reserved to Landlord
herein, emergencies, casualty, eminent domain, and “Force Majeure” (as these
terms are defined below), Tenant shall
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have access to, and shall be permitted by Landlord to operate in, the Premises
twenty four (24) hours a day, seven (7) days per week, three hundred sixty-five
(365) days per year.
3.ADJUSTMENT OF COMMENCEMENT DATE; POSSESSION.
3.1Intentionally omitted.
3.2Possession. Landlord represents and warrants that it has entered into a
conditional termination agreement with the previous tenant of the Premises
(which is only conditioned upon the execution of this Lease). Landlord shall
deliver sole and exclusive possession of the Premises to Tenant on the Effective
Date (the “Outside Delivery Date”) for Tenant to perform the Initial Tenant’s
Work. In the event delivery of possession does not occur by the day which is
seven (7) days after the Outside Delivery Date, Tenant shall have the option to
deliver notice to Landlord of Tenant’s election to terminate this Lease until
actual delivery of possession of the Premises occurs, in which instance Landlord
and Tenant shall each be relieved from any further liability to each other
resulting under this Lease, except only that Landlord shall return any prepaid
Rent or Letter of Credit deposited by Tenant to Landlord, and Landlord shall
immediately reimburse Tenant for Tenant’s actual documented, reasonable,
third-party out-of-pocket design, architectural, engineering and other
associated costs (including legal costs) incurred in connection with the Lease.
If Tenant takes possession of, conducts business in, or enters the Premises
before the Commencement Date, Tenant shall be subject to the terms and
conditions of this Lease; provided, however, except for the cost of utilities or
services requested by Tenant (e.g. electricity or HVAC service), Tenant shall
not be required to pay Rent for any entry or possession before the Commencement
Date.
4.RENT. Tenant shall pay to Landlord the Base Rent, Real Property Taxes (as
herein defined) and Operating Expenses (as herein defined), without notice,
demand, offset or deduction (except as expressly provided herein), in advance,
on the first day of each calendar month. All Rent and payments required to be
paid by Tenant to Landlord shall be made by Tenant payable to the entity and
sent to the address Landlord designates and shall be made by good and sufficient
check payable in United States of America currency or by other means acceptable
to Landlord or by Electronic Fund Transfer of immediately available federal
funds before 11:00 a.m. Eastern Time. Upon the execution of this Lease, Tenant
shall pay to Landlord the first full calendar month’s Base Rent and the first
full calendar month’s installment of estimated Operating Expenses. If the Term
commences on a date other than the first day of a month, Base Rent shall be
prorated on the basis of a thirty (30) day month (and such prorated amount shall
be paid within three (3) days of the Commencement Date). All sums other than
Base Rent which Tenant is obligated to pay under this Lease shall be deemed to
be additional rent due hereunder (“Additional Rent”), whether or not such sums
are designated Additional Rent. The term “Rent” means the Base Rent and all
Additional Rent payable hereunder. The obligation of Tenant to pay Base Rent and
other sums to Landlord and the obligations of Landlord under this Lease are
independent obligations. Tenant shall have no right at any time to abate,
reduce, or set-off any rent due hereunder except as may be expressly provided in
this Lease. If Tenant is delinquent in any monthly installment of Base Rent or
Additional Rent for more than five (5) days, Tenant shall pay to Landlord on
demand a late charge equal to [***] of such delinquent sum and such delinquent
sum shall also bear interest from the date such amount was due until paid in
full at the lesser of (i)  [***] per annum; or (ii) at the maximum rate
permitted by law (“Applicable Interest Rate”). Notwithstanding the foregoing,
before assessing a late charge the first time in any calendar year, Landlord
shall provide Tenant written notice of the delinquency and will waive the right
if Tenant pays such delinquency within five (5) days thereafter. The provision
for such late charge shall be in addition to all of Landlord’s other rights and
remedies hereunder or at law and shall not be construed as a penalty.
5.Intentionally Omitted.
6.UTILITIES.
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6.1Utilities. Tenant will be responsible, at its sole cost and expense, for the
furnishing of all services and utilities to the Building, including, but not
limited to heating, ventilation and airconditioning, water, gas, electricity,
telephone and telecommunications, janitorial and interior Building security
services. Tenant shall pay all charges for utilities (including without
limitation, heat, water, gas, electricity, telephone and any other utilities)
and services used on or provided to the Premises. Landlord shall not be liable
to Tenant for interruption in or curtailment of any utility service, nor shall
any such interruption or curtailment constitute constructive eviction or grounds
for rental abatement (except as expressly provided herein). Landlord shall not
provide janitorial services for the Building. Tenant shall be solely responsible
for performing all janitorial services and other cleaning of the Premises, and
all trash collection for 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 the other buildings within the Project.
Tenant shall provide its reasonable cooperation to Landlord at all times and
abide by all commercially reasonable regulations and requirement that Landlord
may reasonably prescribe for the proper functioning and protection of the HVAC,
electrical, mechanical and plumbing systems. 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 and
telecommunications, janitorial and interior Building security services. Landlord
shall maintain the fire-life safety service contract, the cost of which shall be
included in Operating Expenses (provided that Tenant shall be responsible for
any maintenance or repair, as provided in Section 12 below, relating to such
items, to the extent the costs thereof are not included in the cost of the
service contract).
6.2Interruption of Utilities. Landlord shall have no liability to Tenant for any
interruption in utilities or services to be provided to the Premises when such
failure is caused by all or any of the following: (a) accident, casualty,
breakage or repairs; (b) strikes, lockouts or other labor disturbances or labor
disputes of any such character; (c) governmental regulation, moratorium or other
governmental action; (d) inability, despite the exercise of reasonable
diligence, to obtain electricity, water or fuel; (e) service interruptions or
any other unavailability of utilities resulting from causes beyond Landlord’s
control including without limitation, any electrical power “brown-out” or
“black-out”; (f) act or default by Tenant or other party; or (g) any other cause
beyond Landlord’s reasonable control. In addition, in the event of any such
interruption in utilities or services, Tenant shall not be entitled to any
abatement or reduction of Rent (except as expressly provided in Section 16 and
Section 17 if such failure is a result of any casualty damage or Taking
described therein), no eviction of Tenant shall result, and Tenant shall not be
relieved from the performance of any covenant or agreement in this Lease.
Notwithstanding the foregoing, if all or a material portion of the Premises is
made untenantable or inaccessible for more than five (5) consecutive business
days after notice from Tenant to Landlord as a result of an interruption in
utilities, and such interruption in utilities (i) can be corrected through
Landlord’s reasonable efforts, (ii) has been caused by the gross negligence or
willful misconduct of Landlord, (iii) does not result from any casualty damage
(as provided in Section 16), a Taking (defined in Section 17) or any negligence,
willful misconduct or breach of this Lease of or by Tenant, any party claiming
by, through or under Tenant, their (direct or indirect) owners, or any of their
respective beneficiaries, trustees, managers, members, principals, partners,
officers, directors, employees, agents, contractors, licensees or invitees, and
(iv) results in Tenant ceasing to do business in (all or a portion of) the
Premises, then, as Tenant’s sole remedy, Monthly Base Rent shall abate for the
period beginning on the sixth (6th) consecutive business day of such
interruption in utilities and ending on the day such interruption in utilities
ends, but only in proportion to the percentage of the rentable square footage of
the Premises made untenantable or inaccessible and not occupied by Tenant. In
the event of any stoppage or interruption of services or utilities which are not
obtained directly by Tenant, Landlord shall diligently attempt to resume such
services or utilities as promptly as practicable. Tenant hereby waives the
provisions of any applicable existing or future law, ordinance or governmental
regulation concerning constructive eviction or permitting the termination of
this Lease due to an interruption, failure or inability to provide any services
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(including, without limitation, to the extent the Premises are located in
California, the provisions of California Civil Code §1932(1)).
7.TAXES. Tenant shall pay to Landlord Tenant’s Share of all Real Property Taxes
(as herein defined) for each full or partial calendar year during the Term in
accordance with the terms and provisions of Section 8 and Section 9 below. “Real
Property Taxes” shall mean (a) all taxes, assessments, supplementary taxes,
parcel taxes, possessory interest taxes, levies, fees, exactions or charges and
other governmental charges, together with any interest, charges, fees and
penalties in connection therewith, which are assessed, levied, charged,
conferred or imposed by any public authority upon the Land, the Building, the
Property, the Project or any other improvements, fixtures, equipment or other
property located at or on the Land, the Building, the Property, or the Project,
all capital levies, franchise taxes, any excise, use, margin, transaction, sales
or privilege taxes, assessments, levies or charges and other taxes assessed or
imposed on Landlord upon the rents payable to Landlord under this Lease
(excluding net income taxes imposed on Landlord unless such net income taxes are
in substitution for any Real Property Taxes payable hereunder), including but
not limited to, gross receipts taxes, assessments for special improvement
districts and building improvement districts, governmental charges, fees and
assessments for police, fire, traffic mitigation or other governmental service
of purported benefit to the Land, Building, Property, Project or Premises, taxes
and assessments levied in substitution or supplementation in whole or in part of
any such taxes and assessments and the share of the Land, Building, Property,
Project and Premises of any real estate taxes and assessments under any
reciprocal easement agreement, common area agreement or similar agreement as to
the Land, Building, Property, Project or Premises; (b) all personal property
taxes for property that is owned by Landlord and used in connection with the
operation, maintenance and repair of the Land, Building, Property, Project or
Premises; and (c) all costs and fees incurred in connection with seeking
reductions in any tax liabilities described in (a) and (b), including, without
limitation, any costs incurred by Landlord for compliance, review and appeal of
tax liabilities. Prior to delinquency, Tenant shall pay all taxes and
assessments, together with any interest, charges, fees and penalties in
connection therewith, levied upon trade fixtures, alterations, additions,
improvements, inventories, equipment and other personal property located and/or
installed on the Premises by Tenant; and, upon request, Tenant shall provide
Landlord copies of receipts for payment of all such taxes and assessments. To
the extent any such taxes are not separately assessed or billed to Tenant,
Tenant shall pay the amount thereof as invoiced by Landlord. Landlord may, but
is not obligated to, contest by appropriate legal proceedings the amount,
validity, or application of any Real Property Taxes or liens thereof.
Notwithstanding anything herein to the contrary, Real Property Taxes shall
exclude 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 general or net
income (as opposed to rents, receipts or income attributable to Tenant’s
operations at the Property) and any interest or late fees due to Landlord’s late
payment of Real Property Taxes.
8.OPERATING EXPENSES.
8.1Operating Expenses. Tenant shall pay to Landlord Tenant’s Share of Operating
Expenses for each full or partial calendar year during the Term, as provided in
Section 9 below. It is intended that this Lease be a “triple net lease,” and
that the Rent to be paid hereunder by Tenant will be received by Landlord
without any deduction or offset whatsoever by Tenant, foreseeable or
unforeseeable, except as expressly set forth in this Lease. Except as expressly
provided to the contrary in this Lease, Landlord shall not be required to make
any expenditure, incur any obligation, or incur any liability of any kind
whatsoever in connection with this Lease or the ownership, construction,
maintenance, operation or repair of the Premises, Property or the Project. To
the extent the Building shares certain items or services with other buildings or
there are any costs or expenses incurred on the Land, and/or the Project,
Landlord shall reasonably and equitably allocate those items or services or
costs or expenses between such buildings, portions of the Project, and/or
users so that Tenant will pay Tenant’s Share of those costs as allocated to the
Building. 
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8.2Definition of Operating Expenses. “Operating Expenses” means the total costs
and expenses incurred by Landlord in the ownership, operation, maintenance,
repair, replacement and management of the Building, the Land, the Common Area
and/or the Project, including, but not limited to: (1) repair, replacement,
maintenance, utility costs and landscaping of the Land and the Common Area,
including, but not limited to, any and all costs of maintenance, repair and
replacement of all parking areas (including bumpers, sweeping, striping and
slurry coating), common driveways, loading and unloading areas, trash areas,
outdoor lighting, sidewalks, walkways, landscaping (including tree trimming),
irrigation systems, fences and gates and other costs which are allocable to the
Building, the Common Area, the Land and/or the Project; (2) non-structural
maintenance and repair of the roof (and roof membrane), skylights and exterior
walls of the Premises (including exterior painting); (3) the costs relating to
the insurance maintained by Landlord as described in Section 11.1 below,
including, without limitation, Landlord’s cost of any deductible or
self-insurance retention; (4) costs under maintenance contracts for, and the
repair and replacement of, the elevators, if any, and all heating, ventilation
and air-conditioning (HVAC) systems, but only to the extent maintained by
Landlord or to the extent used in common with other occupants of the Project or
otherwise serving any Common Area; (5) maintenance, repair, replacement,
monitoring and operation costs of all mechanical, electrical and plumbing
systems, but only to the extent maintained by Landlord or to the extent used in
common with other occupants of the Project or otherwise serving any Common Area;
(6) maintenance, repair, replacement, monitoring and operation costs of the
fire/life safety and sprinkler system (to the extent Landlord is obligated to do
so pursuant to Section 12.2); (7) trash collection and snow removal costs;
(8) costs of capital improvements or capital replacements (excluding the roof
structure) made to or capital assets acquired for the Building, the Project, or
the Land after the Commencement Date that are intended to reduce Operating
Expenses or are reasonably necessary for the health and safety of the occupants
of the Building or the Project or are required under any governmental law or
regulation promulgated, revised, or reinterpreted after the Effective Date,
which capital costs, or an allocable portion thereof, shall be amortized over a
commercially reasonable period determined by Landlord, together with interest on
the unamortized balance at [***]; (9) any other costs incurred by Landlord
related to the Building, the Land and/or the Project including, but not limited
to, paving, parking areas, roads, driveways, alleys, mowing, landscape, heating
and ventilation; (10) assessments, association fees and all other costs assessed
or charged under the CC&Rs, if any, that are attributable to the Land, the
Building and/or the Project in connection with any property owners or
maintenance association or operator; and (11) a management fee, not to exceed
[***] of gross receipts from leases at the Building and/or the Project, for the
management of this Lease, the Premises, the Building, the Land and/or the
Project including the cost of those services which are customarily performed by
a property management services company, whether performed by Landlord or by an
affiliate of Landlord or through an outside management company or any
combination of the foregoing. Notwithstanding anything to the contrary contained
herein, Operating Expenses shall not include (i) replacement of the roof
structure, foundation, concrete subflooring, or the exterior walls; provided,
however, that the costs for any such replacement shall be included as Operating
Expenses if the replacement of such item was caused by Tenant’s or its
employees, agents, or contractors’ negligence or willful misconduct;
(ii) repairs to the extent covered by insurance proceeds that are actually
received by Landlord, or paid by Tenant or other third parties;
(iii) alterations solely attributable to tenants of the Project other than
Tenant; (iv) marketing expenses; (v) any cost or expense associated with
compliance with any laws, ordinances, rules or regulations regarding any
condition existing in the Building or on the Land or in the Project if such
condition existed prior to the Commencement Date; (vi) all items (including
repairs) and services for which Tenant pays directly to third parties or for
which Tenant reimburses Landlord (other than through Operating Expenses); (vii)
amounts (other than management fees) paid to Landlord’s affiliates for services,
but only to the extent such amounts exceed the prices charged for such services
by parties having similar skill and experience; (viii) fines or penalties
resulting from any violations of Applicable Laws, negligence or willful
misconduct of Landlord or its employees, agents or contractors; (ix) advertising
and promotional expenses; (x) Landlord’s charitable and political contributions;
(xi) ground lease rental; (xii)
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attorney’s fees and other expenses incurred in connection with negotiations or
disputes with tenants or other occupants of the Project; (xiii) costs of
services or benefits made available to other tenants of the Building or Project
but not to Tenant; (xiv) any expense for which Landlord has received actual
reimbursement from a third party (other than from a tenant of the Project
pursuant to its lease); (xv) costs of curing defects in design or original
construction of the Project; (xvi) costs that Landlord is entitled to recover
under a warranty, unless Landlord has not received payment under such warranty
and it would not be fiscally prudent to pursue legal action to recover collect
on such warranty; (xvii) reserves not spent by Landlord by the end of the
calendar year for which Operating Expenses are paid; (xviii) bad debt expenses;
(xix) costs of cleaning up “hazardous materials” not caused by Tenant or its
employees, agents, contractors or invitees except as related to the general
repair, operation and maintenance of the Project; (xx) wages, salaries, fees or
fringe benefits (“Labor Costs”) paid to Landlord personnel above the level of
general manager or property manager (provided, however, that if such individuals
provide services directly related to the operation, maintenance or ownership of
the Project that, if provided directly by a general manager or property manager
or his or her general support staff, would normally be chargeable as an
operating expense of a comparable industrial building, then the Labor Costs of
such individuals may be included in Operating Expenses to the extent of the
percentage of their time that is spent providing such services to the Project);
(xxi) Key man and other life insurance, long-term disability insurance and
health, accident and sickness insurance, except only for group plans providing
reasonable benefits to persons of the grade of building manager or general
manager and below who are employed and engaged in operating and managing the
Project; (xxii) costs of Landlord’s general overhead, including general
administrative expenses, which costs would not be chargeable to operating
expenses of the Project in accordance with generally accepted accounting
principles, consistently applied; (xxiii) Landlord’s entertainment expenses and
travel expenses, except for those travel expenses that are necessary, reasonable
and incurred in connection with Landlord’s operation and maintenance of the
Project; (xxiv) income, capital levy, capital stock, succession, transfer,
franchise, gift, estate or inheritance tax; (xxv) to the extent any services (on
a per square foot basis) are provided to a tenant or occupant of the Project at
a level that is materially greater than the level at which such services are
available to Tenant, the cost of providing such services at a level that is over
and above the level available to Tenant shall be excluded from Operating
Expenses; (xxvi) insurance deductibles exceeding commercially reasonable amounts
(provided, however, that, without limitation, the following amounts shall be
deemed commercially reasonable: (i) earthquake insurance deductibles up to [***]
of the total insurable value of the Project per occurrence, and (ii) any other
insurance deductibles up to [***] per occurrence; and (xxvii) any expense for
which Landlord is reimbursed by another tenant of the Building pursuant to its
lease (other than through payment of operating costs or expenses).

Notwithstanding the foregoing, for purposes of computing Tenant’s Share of
Operating Expenses, the Controllable Expenses (hereinafter defined) shall not
increase by more than [***] per calendar year over the Controllable Expenses for
the previous year. In other words, Controllable Expenses for the first calendar
year after the calendar year in which the Commencement Date occurs shall not
exceed [***] of the Controllable Expenses for the calendar year in which the
Commencement Date occurs. Controllable Expenses for the second calendar year
after the calendar year in which the Commencement Date occurs shall not exceed
[***] of the allowable Controllable Expenses for the first calendar year after
the calendar year in which the Commencement Date occurs, etc. Any category of
Controllable Expenses that are not included as part of Operating Expenses during
any calendar year due to the application of this cap may be included as part of
Controllable Expenses in any subsequent calendar year subject to the cap
applicable to the calculation of Controllable Expenses for such subsequent
calendar year; provided that any amount of Controllable Expenses excluded during
any calendar year due to the application of this cap shall not be included as
part of Controllable Expenses in any subsequent calendar year. By way of
illustration only, an example of this cap is provided in Section 7 of Exhibit J.
“Controllable Expenses” shall mean all Operating Expenses other than (i) costs
of utilities for the Common Area, snow and ice removal, repairs and restoration
of the Common Area due to hurricanes and other weather-related causes,
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(ii) insurance premiums and deductibles (including, without limitation,
Landlord’s cost of any self-insurance deductible or retention), (iii) permitted
capital expenditures, (iv) any market-wide cost increases resulting from
extraordinary circumstances, including Force Majeure, boycotts, strikes,
conservation surcharges, embargoes or shortages, (v) the cost of any repair or
replacement that Landlord reasonably expects will not recur on an annual or more
frequent basis, (vi) costs of materials, supplies, and removal of debris, (vii)
Real Property Taxes, and (viii) other Operating Expenses to the extent: (a) that
a component of such Operating Expenses are union labor wages (including labor
that is unionized after the date hereof), or (b) such Operating Expenses are
incurred as a result of any requirements of Applicable Law. For purposes of
determining Controllable Expenses, any management fee shall be calculated
without regard to any free rent, abated rent, or the like, or any increase in
gross annual receipts from the Project.

If Landlord fails to bill any Operating Expenses other than Real Property Taxes
within twenty-four (24) months following the end of the calendar year in which
the amount was incurred, then Tenant shall not be obligated to pay such amount.
If Landlord fails to bill any Real Property Taxes within sixty (60) months
following the end of the calendar year in which the amount was incurred, then
Tenant shall not be obligated to pay such amount.
8.3Gross Up. If the Project is less than ninety-five percent (95%) occupied
during any calendar year, the variable components of Operating Expenses as
reasonably determined by Landlord shall be calculated as if the Project had been
95% occupied for the full calendar year. Any Operating Expenses or Real Property
Taxes that are specifically attributable to the Building or to any other
building in the Project or to the operation, repair and maintenance thereof,
shall be allocated entirely to the Building or to such other building. However,
any Operating Expenses and Real Property Taxes that are not specifically
attributable to the Building or to any other building or to the operation,
repair and maintenance thereof, may be equitably allocated by Landlord to
either: (i) each individual tenant so that Tenant shall pay Tenant’s Share of
such Operating Expenses and/or Real Property Taxes as allocated to the Project
or (ii) all buildings in the Project so that Tenant shall pay Tenant’s Share of
such Operating Expenses and/or Real Property Taxes as allocated to the Building.
9.ESTIMATED EXPENSES.
9.1Payment. “Estimated Expenses” for any particular year shall mean Landlord’s
estimate of Operating Expenses and Real Property Taxes for a calendar year.
Tenant shall pay Tenant’s Share of the Estimated Expenses with installments of
Base Rent in monthly installments of one-twelfth (1/12th) thereof on the first
day of each calendar month during such year. If at any time Landlord determines
that Operating Expenses and/or Real Property Taxes are projected to vary from
the then Estimated Expenses, Landlord may, no more than two (2) times per
calendar year, by at least fifteen (15) days’ prior written notice to Tenant,
revise such Estimated Expenses, and Tenant’s monthly installments for the
remainder of such year shall be adjusted so that by the end of such calendar
year Tenant has paid to Landlord Tenant’s Share of the revised Estimated
Expenses for such year. If Landlord does not provide Tenant with an estimate of
the Operating Expenses or the Real Property Taxes by January 1 of a calendar
year, Tenant shall continue to pay monthly installments based on the previous
year’s estimate(s) until Landlord provides Tenant with the new estimate. Upon
delivery of the new estimate, an adjustment shall be made for any month for
which Tenant paid monthly installments based on the previous year’s estimate.
9.2Adjustment. “Operating Expenses and Real Property Taxes Adjustment” (or
“Adjustment”) shall mean the difference between Tenant’s Share of Estimated
Expenses, on the one hand, and Tenant’s Share of Operating Expenses and Real
Property Taxes, collectively, on the other hand, for any calendar year. Promptly
after the end of each calendar year, Landlord shall deliver to Tenant a
statement of Tenant’s Share of Operating Expenses and Real Property Taxes for
such calendar year, accompanied by a computation of the Adjustment. If Tenant’s
payments for
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Operating Expenses are less than Tenant’s Share of Operating Expenses, or if
Tenant’s payments of Real Property Taxes are less than Tenant’s Share of Real
Property Taxes, then Tenant shall pay the difference within twenty (20) days
after receipt of such statement. Tenant’s obligation to pay such amount shall
survive the expiration or termination of this Lease. If Tenant’s payments for
Operating Expenses exceed Tenant’s Share of Operating Expenses, or if Tenant’s
payments for Real Property Taxes exceed Tenant’s Share of Real Property Taxes,
then so long as an Event of Default by Tenant has not occurred Landlord shall
credit such excess amount to future installments of Tenant’s Share of Operating
Expenses and/or Real Property Taxes, as the case may be, for the next calendar
year (or pay to Tenant such excess in the event the Term has expired). If an
Event of Default by Tenant occurs, Landlord may, but shall not be required to,
credit such amount to Rent arrearages.
9.3Books and Records. Landlord shall use commercially reasonable efforts to
provide annual Operating Expense statements as soon as is reasonably
practicable. Except as otherwise provided in this Lease, within sixty (60) days
after receiving any statement of Operating Expenses for any calendar year (the
“Review Notice Period”), Tenant may give Landlord notice (“Review Notice”)
stating that Tenant elects to review Landlord’s calculation of the Operating
Expenses for the calendar year to which such statement applies and identifying
with reasonable specificity the records of Landlord reasonably relating to such
matters that Tenant desires to review. Within a reasonable time after receiving
a timely Review Notice (and, at Landlord’s option, an executed confidentiality
agreement as described below), Landlord shall deliver to Tenant, or make
available for inspection at a location reasonably designated by Landlord, copies
of such records. Within sixty (60) days after such records are made available to
Tenant (the “Objection Period”), Tenant may deliver to Landlord notice (an
“Objection Notice”) stating with reasonable specificity any objections to the
statement, in which event Landlord and Tenant shall work together in good faith
to resolve Tenant’s objections. Tenant may not deliver more than one (1) Review
Notice or more than one (1) Objection Notice with respect to any statement or
more than one (1) Objection Notice in a calendar year. If Tenant fails to give
Landlord a Review Notice before the expiration of the Review Notice Period or
fails to give Landlord an Objection Notice before the expiration of the
Objection Period, Tenant shall be deemed to have approved the statement. If
Tenant retains an agent to review Landlord’s records, the agent must be with a
CPA firm licensed to do business in the state or commonwealth in which the
Building is located and its fees shall not be contingent, in whole or in part,
upon the outcome of the review. Tenant shall be responsible for all costs of
such review. The records and any related information obtained from Landlord
shall be treated as confidential, and as applicable only to the Premises, by
Tenant, its auditors, consultants, and any other parties reviewing the same on
behalf of Tenant (collectively, “Tenant’s Auditors”). Before making any records
available for review, Landlord may require Tenant and Tenant’s Auditors to
execute a reasonable confidentiality agreement, in which event Tenant shall
cause the same to be executed and delivered to Landlord within thirty (30) days
after receiving it from Landlord, and if Tenant fails to do so, the Objection
Period shall be reduced by one day for each day by which such execution and
delivery follows the expiration of such 30-day period. Notwithstanding any
contrary provision hereof, Tenant may not examine Landlord’s records or dispute
any statement if any Rent remains unpaid past its due date. If, for any calendar
year, Landlord and Tenant determine that the sum of Tenant’s Share of the actual
Operating Expenses is less or more than the amount reported, Tenant shall
receive a credit in the amount of its overpayment, or pay Landlord the amount of
its underpayment, against or with the Rent next due hereunder; provided,
however, that if this Lease has expired or terminated and Tenant has vacated the
Premises, Landlord shall pay Tenant the amount of its overpayment (less any Rent
due), or Tenant shall pay Landlord the amount of its underpayment, within thirty
(30) days after such determination. If Tenant delivers an Objection Notice
before the expiration of the Objection Period, but Landlord and Tenant are
unable to agree on whether (and to the extent) the Operating Expenses are less
or more than the amount shown on the applicable statement within ninety (90)
days after the Objection Notice is delivered, then Landlord and Tenant shall
submit Tenant’s objections to an independent certified public accountant working
for a CPA firm licensed to do business in the state reasonably
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acceptable to both Landlord and Tenant to issue a final and conclusive
determination thereof and its fees shall not be contingent, in whole or in part,
upon the outcome of the review (the “Final Auditor”). The Final Auditor shall
issue a final and conclusive determination within sixty (60) days after Tenant’s
objections are submitted. Upon receipt of the final and conclusive
determination, Tenant shall receive a credit in the amount of its overpayment,
or pay Landlord the amount of its underpayment, against or with the Rent next
due hereunder; provided, however, that if this Lease has expired or terminated
and Tenant has vacated the Premises, Landlord shall pay Tenant the amount of its
overpayment (less any Rent due), or Tenant shall pay Landlord the amount of its
underpayment, within thirty (30) days after such determination. Tenant shall pay
the cost of such independent certification unless such statement overstated the
amount of the Operating Expenses by more than [***], in which case Landlord
shall bear the reasonable cost of such independent certification and also
Landlord shall bear or reimburse to Tenant (as applicable) the reasonable cost
of Tenant’s Auditors’ review.
10.INDEMNITY AND WAIVER OF CLAIMS.
10.1Indemnity. Tenant shall indemnify, protect, defend (by counsel reasonably
acceptable to Landlord) and hold harmless Landlord and Landlord’s affiliated
entities, and each of their respective trustees, members, managers, principals,
beneficiaries, partners, directors, officers, employees, shareholders,
Mortgagees, agents, contractors, successors and assigns (individually and
collectively, “Indemnitees”) from and against any and all claims, judgments,
causes of action, damages, obligations, penalties, fines, taxes, costs, liens,
liabilities, losses, charges and expenses, including without limitation all
attorneys’ fees and other professional fees (collectively referred to as
“Losses”) which may be imposed upon, incurred by or asserted against Landlord or
any of the Indemnitees at any time during or after the Term by any third party
and arising out of or in connection with (1) any Event of Default in the
performance of any obligation on Tenant’s part to be performed under the terms
of this Lease, or (2) any damages or injury occurring in the Premises, Tenant’s
use of the Premises, any acts or omissions (including violations of Applicable
Laws) of Tenant or any Tenant Party, the conduct of Tenant’s business, or any
activity, work or things done, permitted or suffered by Tenant or any Tenant
Party in or about the Premises, the Building, the Common Area, the Property or
other portions of the Project, except to the extent caused by Landlord’s gross
negligence or willful misconduct. Landlord reserves the right to retain counsel
for its defense, in which case Tenant shall be responsible for the costs of such
defense. Landlord shall indemnify, protect, defend and hold harmless Tenant, and
Tenant’s affiliated entities, and each of their respective trustees, members,
managers, principals, beneficiaries, partners, directors, officers, employees,
shareholders, agents, contractors, successors and assigns (individually and
collectively, “Tenant Indemnitees”) from and against any and all Losses which
may be imposed upon , incurred by or asserted against Tenant or any of the
Tenant Indemnitees at any time during or after the Term by any third party and
arising out of or in connection with (1) any breach of this Lease by Landlord
beyond the expiration of any applicable notice and cure periods, or (2) any acts
or omissions (including violations of Applicable Laws) of Landlord, except to
the extent caused by Tenant’s negligence or willful misconduct. The obligations
of Tenant and Landlord under this Section 10 shall survive the termination of
this Lease with respect to any claims or liability arising prior to such
termination.
10.2Waiver of Claims. Tenant, as a material part of the consideration to
Landlord, hereby assumes all risk of illness or injury to persons in, upon or
about the Premises, the Land, the Common Area or other portions of the Property
or Project arising from any cause and all risk of damage to property including,
but not limited to, Tenant’s Property and all Alterations in, upon or about the
Premises, the Land, the Common Area or other portions of the Property arising
from any cause and Tenant hereby expressly releases Landlord and the Indemnitees
and waives all claims in respect thereof against Landlord and the Indemnitees;
provided, however, subject to Section 11.3.5, the foregoing release and waiver
shall not apply to the extent such claims are caused by Landlord’s gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, Landlord shall
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not be liable for any damages arising from any act or neglect of any contractor
or other tenant, if any, of the Project or Landlord’s failure to enforce the
terms of any agreements with parties other than Tenant.
11.INSURANCE.
11.1Landlord. Landlord shall maintain insurance policies insuring the Building
against fire and extended coverage (including, if Landlord elects, “special
cause of loss form” coverage, earthquake/volcanic action, flood and/or surface
water insurance) for the full replacement cost of the Building, with deductibles
in the form and endorsements of such coverage as selected by Landlord, together
with business interruption insurance against loss of Rent in an amount equal to
the amount of Rent for a period of at least twelve (12) months commencing on the
date of loss. Landlord may also carry such other insurance as Landlord may deem
prudent or advisable, including, without limitation, liability insurance in such
amounts and on such terms as Landlord shall determine. The Building may be
included in a blanket policy or captive insurance program. Tenant shall pay to
Landlord, as a portion of the Operating Expenses, the costs of the insurance
coverages described herein, including, without limitation, Landlord’s cost of
any self-insurance deductible or retention.
11.2Tenant. Tenant shall, at Tenant’s expense, obtain and keep in force at all
times the following insurance in the following coverage amounts:
11.2.1Commercial General Liability Insurance (Occurrence Form). A policy of
commercial general liability insurance (“CGL Policy”) (occurrence form) having a
combined single limit of not less than [***] per occurrence and [***] aggregate
per location (if Tenant has multiple locations) with deductible amounts that are
reasonably acceptable to Landlord (and its lender, if applicable), providing
coverage for defense costs outside of the policy limits and including coverage
for, among other things, bodily injury, personal injury, property damages
arising out of Tenant’s operating and contractual liabilities (see below for
contractual liability coverage), premises and operations, products/completed
operations, personal and advertising injury, and with an “Additional
Insured-Managers or Lessors of Premises Endorsement” or similar language and
including coverage for damage caused by heat, smoke or fumes from a hostile
fire.    The CGL Policy shall include coverage for liability assumed under this
Lease as an “insured contract” for the performance of Tenant’s indemnity
obligations under this Lease;
11.2.2Automobile Liability Insurance. Business automobile liability insurance
having a combined single limit of not less than [***] per occurrence and
insuring Tenant against liability for claims arising out of ownership,
maintenance, or use of any owned, hired or non-owned automobiles;
11.2.3Workers’ Compensation and Employer’s Liability Insurance. Workers’
compensation insurance having limits not less than those required by applicable
state and federal statute, and covering all persons employed by Tenant,
including volunteers, in the conduct of its operations on the Premises, together
with employer’s liability insurance coverage in the amount of at least [***]
each accident for bodily injury by accident; [***] each employee for bodily
injury by disease; and [***] policy limit for bodily injury by disease;
11.2.4Property Insurance. “All risk” or “special cause of loss form” property
insurance including coverage for vandalism, malicious mischief, sprinkler
leakage and, if applicable, boiler and machinery comprehensive form, insuring
(1) Tenant’s fixtures, furniture, equipment (including electronic data
processing equipment, if applicable), merchandise, inventory, and all other
personal property and other contents contained within the Premises (collectively
“Tenant’s Property”) and (2) the Alterations (as hereinafter defined) in an
amount equal to the then applicable full replacement cost thereof. Landlord
shall be designated as a loss payee with respect to Tenant’s property insurance
on any Alterations. In the event property of Tenant’s invitees or customers are
kept in the Premises or Project, Tenant shall maintain warehouser’s legal
liability or bailee customers insurance for the full value of the property of
such invitees or customers as determined by the warehouse contract between
Tenant and its customer;
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11.2.5Business Interruption. Loss of income and extra expense insurance in
amounts as will reimburse Tenant for direct or indirect loss of earnings for a
period of not less than twelve (12) months, attributable to all perils included
in the “all risk” or “special cause of loss form” property insurance policy
required in Section 11.2.4 above or attributable to prevention of access to the
Premises as a result of such perils; and
11.2.6Environmental Insurance. If Tenant handles, stores or utilizes Hazardous
Materials in its business operations, Pollution Legal Liability Insurance and/or
Environmental Impairment Insurance covering claims for damage or injury caused
by hazardous materials, including, without limitation, bodily injury, wrongful
death, property damage, including loss of use, removal, cleanup and restoration
or work and material necessary to return the Premises and any other property of
whatever nature located on the Premises to their condition existing prior to the
appearance of Tenant’s hazardous materials on the Premises. If such coverage is
required, Landlord shall determine limits of liability; and
11.2.7Umbrella/Excess Insurance. An umbrella liability policy or excess
liability policy having a limit of not less than [***], which policy shall be in
“following form” and shall provide that if the underlying aggregate is
exhausted, the excess coverage will drop down as primary insurance. Such
umbrella liability policy or excess liability policy shall include coverage for
additional insureds.
11.3General.
11.3.1Insurance Companies. Insurance required to be maintained by Tenant shall
be written by companies authorized to do business in the state in which the
Premises are located and having a “Financial Strength Rating” of at least
“A-VIII” (or such higher rating as may be required by a Mortgagee [as herein
defined] having a lien on the Premises) as determined by A.M. Best Company.
11.3.2Certificates of Insurance. Tenant shall deliver to Landlord certificates
of insurance for all insurance required to be maintained by Tenant in the form
of ACORD 28 (Evidence of Commercial Property Insurance) and ACORD 25-S
(Certificate of Liability Insurance) (or in a form acceptable to Landlord in its
reasonable discretion), no later than seven (7) days after the Effective Date of
this Lease (but in any event prior to any entry onto the Premises by Tenant or
any employee, agent or contractor of Tenant).  Tenant shall, at least ten (10)
days prior to expiration of any required coverage, furnish Landlord with
certificates of renewal or “binders” thereof. Acceptance by Landlord of delivery
of any certificates of insurance does not constitute approval or agreement by
Landlord that the insurance requirements in Section 11.2 have been met, and
failure of Landlord to demand such evidence of full compliance with these
insurance requirements or failure of Landlord to identify a deficiency from
evidence provided will not be construed as a waiver of Tenant’s obligation to
maintain such insurance.  If Tenant fails to maintain any insurance required in
this Lease, Tenant shall be liable for all losses and costs suffered or incurred
by Landlord (including litigation costs and attorneys’ fees and expenses)
resulting from said failure.  If Tenant fails to deliver any certificate or
renewal to Landlord required under this Lease within the prescribed time period
or if any such policy is canceled during the Term without notification to the
Landlord, Landlord may obtain such insurance and charge the cost thereof to
Tenant which amount shall be payable by Tenant to Landlord upon demand, as
Additional Rent.
11.3.3Additional Insureds; Primary Coverage. Landlord, Landlord’s Mortgagee, if
any, any property management company of Landlord for the Premises, and any other
party designated by Landlord shall be named as additional insureds (“Additional
Insureds”) under Insurance Services Office (“ISO”) endorsement CG 201011 85 or
similar form that is commercially available under all of the policies required
by Sections 11.2.1, 11.2.2, and 11.2.6 and such endorsement or policy language
shall be included with the certificates to be provided to Landlord pursuant to
Section 11.3.2 above.  The policies carried or required to be carried by Tenant
pursuant to Sections 11.2.1, 11.2.2, 11.2.6 and 11.2.7 shall provide for
severability of interest and shall be primary as respects the Additional
Insureds, and any insurance maintained by the Additional Insureds shall be
excess and non-contributing.  Landlord is to be insured as its interests may
appear and is to be designated as a loss payee on the insurance required to be
maintained by Tenant pursuant to Section 11.2.4.
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11.3.4Limits of Insurance. The limits and types of insurance maintained by
Tenant shall not limit Tenant’s liability under this Lease, except as expressly
provided in Section 11.3.5 below.
11.3.5Mutual Waiver of Subrogation. Each party waives, and shall cause its
insurance carrier to waive, any right of recovery against the other for any loss
of or damage to property which loss or damage is (or, if the insurance required
hereunder had been carried, would have been) covered by insurance. The failure
of a party to insure its property shall not void this waiver. Neither party, nor
its officers, directors, employees, managers, agents, or contractors, shall be
liable to the other for any business interruption loss incurred, and each party
waives any claims against the other party, and its officers, directors,
employees, managers, agents and contractors for such business interruption loss
from any cause whatsoever, including, but not limited to damage caused in whole
or in part, directly or indirectly, by the negligent acts of the other party at
the Premises or the Project. For purposes of this Section 11.3.5, any deductible
with respect to a party’s insurance shall be deemed covered by, and recoverable
by such party under, valid and collectable policies of insurance.
11.3.6Notification of Incidents. Tenant shall notify Landlord within twenty-four
(24) hours after the occurrence of any accidents or incidents in the Premises,
Common Areas, Property or the Project which could give rise to a claim under any
of the insurance policies required under this Section 11.
12.REPAIRS AND MAINTENANCE.
12.1Tenant Obligations. Except as otherwise expressly provided in Section 12.2,
Tenant, at Tenant’s sole cost and expense, shall keep and maintain the interior
and exterior of the Premises in good, clean and safe order, condition and
repair, including replacement (as necessary, unless such replacement is
Landlord’s obligation as provided in Section 12.2.), including, without
limitation, the following: roof and roof membrane; loading docks, roll up doors
and ramps; floors, subfloors, and floor coverings; walls and wall coverings
(excluding painting of exterior walls); doors, locks and other locking devices,
windows, glass and plate glass; ceilings, skylights, and lighting systems; all
plumbing, electrical and mechanical equipment and systems inside or exclusively
serving the Premises; all heating, ventilating and air conditioning equipment
and systems inside or exclusively serving the Premises (subject to Landlord’s
rights described below); and wiring, appliances and devices using or containing
refrigerants, or otherwise attached to or part of Tenant’s trade-fixtures and/or
equipment. Tenant shall enter into a regularly scheduled preventive
maintenance/service contract (“Service Contract”) with a maintenance contractor
reasonably acceptable to Landlord for servicing all heating ventilation, and air
conditioning systems and equipment inside or exclusively serving the Premises
(collectively, the “HVAC System”), which Service Contract shall maintain the
HVAC System in a first-class manner and shall also substantially comply with the
requirements set forth on Exhibit I attached hereto. Tenant shall deliver full
and complete copies of the Service Contract to Landlord within one hundred
twenty (120) days after the Commencement Date. Upon Landlord’s request and
within five (5) business days of receiving such request, Tenant shall deliver
full and complete copies of any other service contracts entered into by Tenant
pertaining to Tenant’s maintenance obligations of the Premises pursuant to this
Lease. Notwithstanding the foregoing, during the continuance of an Event of
Default by Tenant, Landlord may elect to maintain the Service Contract
respecting the HVAC System, in which case Tenant shall reimburse Landlord within
thirty (30) days after Landlord’s demand for the cost of the Service Contract
and shall promptly undertake and complete the repairs and/or replacements
recommended by such maintenance contractor during the Term of this Lease. All
repairs and replacements by Tenant shall be made and performed: (1) at Tenant’s
cost and expense and at such time and in such manner as Landlord may reasonably
designate, (2) by certified contractors or mechanics reasonably approved by
Landlord, (3) so that same shall be at least equal in quality, value and utility
to the original work or installation, (4) in a manner and using equipment and
materials that will not interfere with or impair the operations, use or
occupation of the Building or any of the mechanical, electrical, plumbing or
other systems in the Building, Property or the Project, and (5) in accordance
with the Rules and Regulations and all Applicable Laws. In the event Tenant
fails, in the reasonable judgment of Landlord, to maintain
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the Premises in accordance with the obligations under this Lease, which failure
continues at the end of fifteen (15) days following Tenant’s receipt of written
notice from Landlord stating the nature of the failure, or in the case of an
emergency immediately without prior notice, Landlord shall have the right to
enter the Premises and perform such maintenance, repairs or refurbishing at
Tenant’s sole cost and expense (including a sum for overhead to Landlord equal
to [***] of the costs of maintenance, repairs or refurbishing). Tenant shall
maintain written records of maintenance and repair and shall deliver copies
thereof to Landlord upon request.
12.2Landlord Obligations. Landlord shall, as a cost to be included in Operating
Expenses (to the extent permitted pursuant to Section 8.2), be responsible for
the replacement of the structural portions of the roof, foundation, concrete
subflooring, and load-bearing portions of walls (excluding wall coverings,
painting, glass and doors) of the Building, and Landlord shall maintain and
repair the Common Areas (as herein defined); provided, (a) if such damage is
caused by an act or omission of Tenant, or any Tenant Party, then such repairs
shall be at Tenant’s sole expense and (b) Landlord shall not be required to make
any repair resulting from (1) any alteration or modification to the Building or
to mechanical equipment within the Building performed by, for or because of
Tenant or to special equipment or systems installed by, for or because of
Tenant, (2) the installation, moving, use or operation of Tenant’s Property,
(3)  Tenant’s use or occupancy of the Premises in violation of Section 15 of
this Lease, (4) fire and other casualty, except as provided by Section 16 of
this Lease, or (5) condemnation, except as provided in Section 17 of this Lease.
There shall be no abatement of Rent during the performance of such work.
Landlord shall not be liable to Tenant for injury or damage that may result from
any defect in the construction or condition of the Premises, nor for any damage
that may result from interruption of Tenant’s use of the Premises during any
repairs by Landlord. Except as expressly provided in Section 18.5, Tenant waives
any right to repair the Premises, the Building, the Project and/or the Common
Area at the expense of Landlord under any Applicable Laws.
13.ALTERATIONS.
13.1Trade Fixtures; Alterations. Subject to limitations set forth in this Lease,
Tenant may install trade fixtures, equipment and furniture in the Premises,
provided that all alterations are done in compliance with Exhibit F and such
items are installed and are removable without structural or material damage to
the Premises (unless Tenant, at its sole cost and expense using building
standard materials and finishes and in compliance with Exhibit F, immediately
repairs any such material damage). Tenant shall not construct, nor allow to be
constructed, any alterations or physical additions in, about or to the Premises
without obtaining the prior written consent of Landlord, which consent shall not
be unreasonably withheld, conditioned, or delayed, and shall be conditioned upon
Tenant’s compliance with the provisions of Exhibit F and any other applicable
requirements of Landlord regarding construction of improvements and alterations.
If Landlord does not respond to a written request from Tenant made in accordance
with Exhibit F within ten (10) business days, then Landlord shall be deemed to
disapprove such request. If requested by Landlord, Tenant shall file a notice of
completion after completion of such work and provide Landlord with a copy
thereof. Notwithstanding the foregoing, Tenant may make interior alterations
that do not require a permit and are cosmetic only (such as paint and carpeting)
having a cost not to exceed [***] in the aggregate in any twelve (12) month
period which will not affect, in any way, the mechanical, electrical, plumbing,
HVAC, structural, and/or fire and life safety components of the Building, are
not visible from the exterior of the Premises or Building, and do not require
work to be performed inside the walls or above the ceiling of the Premises
without Landlord's consent, but upon providing Landlord prior, written notice of
such alterations (“Cosmetic Alterations”). Any such Cosmetic Alterations must be
performed in compliance with Exhibit F and any other applicable requirements of
Landlord regarding construction of improvements and alterations.
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13.2Damage; Removal. Upon the expiration or earlier termination of this Lease,
Tenant shall remove any or all trade fixtures, alterations, additions,
improvements and partitions (“Alteration(s)”) made or installed by or for the
benefit of Tenant and repair all damage caused by the installation or removal
thereof; provided, however, Landlord may require Tenant, which requirement must
be given at the time of applicable approval, to have all or any portion of such
items designated by Landlord to remain at the Premises, in which event they
shall be and become the property of Landlord upon the expiration or earlier
termination of this Lease. Notwithstanding the foregoing, Tenant shall have no
obligation to remove or restore Cosmetic Alterations or the Initial Tenant’s
Work other than those portions of the Initial Tenant’s Work that Landlord so
identifies at the time it provides approval of the Initial Tenant’s Work, or any
portion thereof. All such removals and restoration shall be accomplished in a
good and workmanlike manner and so as not to cause any damage to the Premises,
the Common Area, the Property or the Project whatsoever.
13.3Liens. Tenant shall promptly pay and discharge all claims for labor
performed, supplies furnished and services rendered at the request of Tenant and
shall keep the Premises free of all mechanics’ and materialmen’s liens in
connection therewith. Tenant shall remove any such lien within ten (10) business
days after notice from Landlord, and if Tenant fails to do so, an Event of
Default by Tenant shall have occurred, and in addition, Landlord, without
limiting its remedies, may bond, insure over or otherwise pay the amount
necessary to cause such removal, whether or not such lien is valid. The amount
so paid, together with reasonable attorneys’ fees and expenses, shall be
reimbursed by Tenant upon demand. Tenant shall provide at least ten (10) days
prior written notice to Landlord before any labor is performed, supplies
furnished or services rendered on or at the Premises and Landlord shall have the
right to post on the Premises notices of non-responsibility.
14.LANDLORD’S RIGHTS. Landlord reserves the right to enter the Premises upon
reasonable prior notice to Tenant (or without notice in case of an emergency)
and/or to undertake the following all without abatement of rent or liability to
Tenant (except as expressly provided below): inspect the Premises and/or the
performance by Tenant of the terms and conditions hereof; make such alterations,
repairs, improvements or additions to the Premises as required or permitted
hereunder; change boundary lines of the Land so long as such change does not
materially and adversely impact Tenant’s use of the parking area and/or access
to the Premises; install, use, maintain, repair, alter, relocate or replace any
pipes, ducts, conduits, wires, equipment and other facilities in the Common Area
or the Building; install, maintain and operate conduit cabling within the
utility and/or conduit ducts and risers within the Building, as well as grant
lease, license or use rights to third parties, to utilize the foregoing
easements or licenses on the Land, the Property and/or the Project; grant
easements, rights of way, utility raceways and make dedications; dedicate for
public use portions of the Land, the Property and/or the Project (excluding the
Building unless otherwise required by Applicable Law); and record parcel maps,
restrictions, covenants, conditions and restrictions affecting the Land, the
Property and/or the Project and/or amendments to existing CC&Rs which do not
unreasonably interfere with Tenant’s use of the Premises or impose additional
material monetary obligations on Tenant; change the name of the Property and/or
the Project; affix reasonable signs and displays (including rental signs) on the
Land (but not the Building unless required by Applicable Law), but subject to
Tenant’s signage rights under this Lease; and, show the Premises to prospective
purchasers, current or prospective investors, Mortgagees, ground lessees or
insurers, or, during the last twelve (12) months of the Term (or during the
continuance of any Event of Default), prospective tenants. If reasonably
necessary and using commercially reasonable efforts to minimize interference to
Tenant’s use of the Premises, Landlord may temporarily close all or a portion of
the Premises to perform repairs, replacements, alterations and additions.
Landlord shall in all events use commercially reasonable efforts to minimize
interference to Tenant’s use of the Premises while performing repairs,
replacements, alterations and additions, and any such repairs, replacements,
alterations and additions shall not materially interfere with Tenant’s use of
the Premises once completed. However, except in emergencies, Landlord will not
close the Premises if the work can reasonably be completed on weekends and after
normal business hours. Except as specifically provided otherwise in this
Section 14, entry by Landlord shall not constitute a constructive eviction or
entitle Tenant to an abatement or reduction of Rent. However, if Landlord
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temporarily closes the Premises as provided above for a period in excess of five
(5) consecutive business days due to an event or condition that (a) does not
result from a casualty, a Taking, or any negligence, willful misconduct or
breach of this Lease of or by Tenant, any party claiming by, through or under
Tenant, their (direct or indirect) owners, or any of their respective
beneficiaries, trustees, managers, members, principals, partners, officers,
directors, employees, agents, contractors, licensees or invitees, and (b)
results in Tenant ceasing to do business in all or a portion of the Premises,
then as Tenant’s sole remedy, Tenant shall be entitled to receive a per diem
abatement of Base Rent during the period beginning on the sixth (6th)
consecutive business day of closure and ending on the date on which such closure
ends, but only in proportion to the percentage of the rentable square footage of
the Premises made untenantable or inaccessible and not occupied by Tenant.
Landlord acknowledges and agrees that Tenant may designate certain areas of the
Premises as “Secured Areas” should Tenant require such areas for the purpose of
securing certain valuable operations, confidential information or for other
purposes related to Tenant’s operational standards (such as maintaining “clean
rooms” or similar areas which are subject to restricted access for purposes of
maintaining cleanliness or preventing contamination), security and/or safety.
Except in the case of emergency, in the event of a Landlord inspection or to
perform Landlord’s other obligations hereunder, Landlord may not enter such
Secured Areas unless it provides Tenant with two (2) days’ prior notice of the
specific date and time of such Landlord inspection (and Landlord will comply
with all reasonable protocols of Tenant in connection with such entry) and
Tenant shall be responsible for all damages resulting from Landlord’s delayed
and/or reduced access to such areas as determined by Landlord in its sole,
absolute, and unfettered discretion.
15.ENVIRONMENTAL MATTERS.
15.1Hazardous Materials Survey Form. Prior to the execution of this Lease,
Tenant shall complete, execute and deliver to Landlord a Hazardous Materials
Survey Form in the form of Exhibit G attached hereto (“Survey Form”), and Tenant
shall certify to Landlord that all information contained in the Survey Form is
true and correct. The completed Survey Form shall be deemed incorporated into
this Lease for all purposes, and Landlord shall be entitled to rely on the
information contained therein. On a quarterly basis, Tenant shall disclose to
Landlord in writing the names and amounts of all Hazardous Materials (as defined
below), or any combination thereof, which were stored, generated, used or
disposed of on, under or about the Premises for the twelve (12) month period
prior to and after each such request, or which Tenant intends to store,
generate, use or dispose of on, under or about the Premises. At Landlord’s
option, Tenant’s disclosure obligation under this Subparagraph shall include the
requirement that Tenant update, execute and deliver to Landlord the Survey Form,
as the same may be modified by Landlord from time to time. In addition to the
foregoing, Tenant shall promptly notify Landlord of, and shall promptly provide
Landlord with true, correct, complete and legible copies of, all of the
following environmental items relating to the Premises: reports filed pursuant
to any self-reporting requirements; reports filed pursuant to any Environmental
Laws (as defined below) or this Lease; all permit applications, permits,
monitoring reports, workplace exposure and community exposure warnings or
notices, and all other reports, disclosures, plans or documents (excluding those
that may be characterized as confidential) relating to water discharges, air
pollution, underground storage tanks or Hazardous Materials; all orders,
reports, notices, listings and correspondence (excluding those that may be
considered confidential, provided Tenant shall remain liable to address any such
confidential Hazardous Materials matters in accordance with this Article 15) of
or concerning the release, investigation, compliance, clean up, remedial and
corrective actions, and abatement of Hazardous Materials whether or not required
by Environmental Laws; and all complaints, pleadings and other legal documents
filed against Tenant related to Tenant's use, handling, storage or disposal of
Hazardous Materials. Tenant may submit an updated Survey Form to Landlord from
time to time, which updated Survey Form shall be subject to Landlord's approval
(which approval shall not be unreasonably withheld, conditioned or delayed).
From time to time at Landlord’s request, Tenant shall execute affidavits,
representations and the like concerning Tenant’s best knowledge and belief
regarding the presence or absence of Hazardous Materials on the Premises or the
Property, and shall provide copies of all required permits for Tenant’s
activities in the Premises.
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15.2Hazardous Materials. Tenant, Tenant’s affiliates, or Tenant’s employees,
agents, customers, visitors, invitees, licensees, contractors, assignees or
subtenants (individually, a “Tenant Party” and collectively, “Tenant’s Parties”)
shall strictly comply with all applicable Environmental Laws (as defined below)
and Applicable Laws pertaining to the transportation, storage, use or disposal
of Hazardous Materials (defined below), for all Hazardous Materials generated,
produced, brought upon, used, stored, treated or disposed of in or about or on
the Building, including obtaining proper permits. Tenant and Tenant’s Parties
shall promptly notify Landlord in writing of the violation of any Environmental
Law. After the Effective Date, Landlord, any insurance carrier, and any lender
that holds a security interest in the Property or this Lease shall have the
right, but not the obligation, at its sole cost and expense to inspect,
investigate, sample and/or monitor the Premises, including any air, soil, water,
groundwater or other sampling, and any other testing, digging, drilling or
analyses, at any time to determine whether Tenant is complying with the terms of
this Article 15, and in connection therewith, Tenant shall, subject to the
Article 14 above, provide Landlord with access to all relevant facilities,
records and personnel. In the event Tenant is default of any of the provisions
of this Article 15, such tests indicate the presence of any environmental
condition (defined below) caused or exacerbated by Tenant or any Tenant Party or
arising during Tenant’s or any other Tenant’s Party’s occupancy, or Landlord or
any such insurance carrier or lender reasonably believes Tenant may be in
default of any of the provisions of this Article 15, Tenant agrees to pay to
remediate or clean-up any such default along with the reasonable cost of any
such environmental inspection or assessment to the extent that such inspection
or assessment pertains to any release, threat of release, contamination, claim
of contamination, loss or damage or determination of condition (together,
“Environmental Incidents”) in the Premises, other than in connection with
Environmental Incidents arising prior to the date Tenant occupies the Premises
for the conduct of its business or migrating to the Premises from some other
part of the Buildings through no fault, act or omission of Tenant. Except for
the above grade tanks approved by Landlord as part of Exhibit G or the Initial
Tenant’s Work, Tenant shall not install, operate or maintain any above or below
grade tank, sump, pit, pond, lagoon or other storage or treatment vessel or
device on the Property without Landlord’s prior written consent which may be
withheld in its reasonable discretion. As used herein, the term “Environmental
Laws” means all statutes, Applicable Laws, rules, regulations, codes,
ordinances, standards, guidelines, authorizations and orders of federal, state
and local public authorities pertaining to any of the Hazardous Materials or to
environmental compliance, contamination, cleanup or disclosures of any release
or threat of release to the environment, of any hazardous or toxic substances,
wastes or materials, any pollutants or contaminants which are included under or
regulated by any municipal, county, state or federal statutes, Applicable Laws,
rules, regulations, codes, ordinances, standards, guidelines, authorizations or
orders, including, without limitation, the Toxic Substances Control Act, 15
U.S.C. § 2601, et seq.; the Clean Water Act, 33 U.S.C. § 1251, et seq.; the
Clean Air Act, 42 U.S.C. § 7401, et seq.; the Safe Drinking Water Act, 42 U.S.C.
§ 300f-300j, et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1321,
et seq.; the Solid Waste Disposal Act, 42 U.S.C. § 6901, et seq.; the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601 et seq.; the Federal Resource Conservation and Recovery Act,
42 U.S.C. Section 6901 et seq.; the Superfund Amendments and Reauthorization Act
of 1986, Public Law No. 99-499 (signed into law October 17, 1986); M.G.L. c.21C;
and oil and hazardous materials as defined in M.G.L. c.21E, as any of the same
are from time to time amended, and the rules and regulations promulgated
thereunder, and any judicial or administrative interpretation thereof, including
any judicial or administrative orders or judgments, and all other federal, state
and local statutes, Applicable Laws, rules, regulations, codes, ordinances,
standards, guidelines, authorizations and orders regulating the generation,
storage, containment or disposal of any Hazardous Materials, including but not
limited to those relating to lead paint, radon gas, asbestos, storage and
disposal of oil and hazardous wastes, substances and materials, and underground
and above-ground oil storage tanks; and any amendments, modifications or
supplements of any of the foregoing. The term “Hazardous Materials” means and
includes any substance, hazardous waste, environmental substances, oil,
petroleum products and any waste or substance, which because of its quantitative
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concentration, chemical, biological, radioactive, flammable, explosive,
infectious or other characteristics, constitutes or may reasonably be expected
to constitute or contribute to a danger or hazard to public health, safety or
welfare or to the environment, including without limitation any asbestos
(whether or not friable) and any asbestos-containing materials, lead paint,
waste oils, solvents and chlorinated oils, polychlorinated biphenyls (PCBs),
toxic metals, etchants, pickling and plating wastes, explosives, reactive metals
and compounds, pesticides, herbicides, radon gas, urea formaldehyde foam
insulation and chemical, biological and radioactive wastes, or any other similar
materials which are mentioned under or regulated by any Environmental Law; and
the regulations adopted under these acts, and including any other products or
materials subsequently found by an authority of competent jurisdiction to have
adverse effects on the environment or the health and safety of persons. As
defined in Environmental Laws, Tenant is and shall be deemed to be the
“operator” of Tenant’s “facility” and the “owner” of all Hazardous Materials
brought on the Premises by Tenant, its agents, employees, contractors or
invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom. Tenant shall neither create or suffer to exist, nor permit
any Tenant Party to create or suffer to exist any lien, security interest or
other charge or encumbrance of any kind with respect to the Property, including
without limitation, any lien imposed pursuant to Section 107(f) of the Superfund
Amendments and Reauthorization Act of 1986 (42 U.S.C. Section 9607(1)) or any
similar state statute. The phrase “environmental condition” shall mean any
adverse condition relating to any Hazardous Materials or the environment,
including surface water, groundwater, drinking water supply, land, surface or
subsurface strata or the ambient air and includes air, land and water
pollutants, noise, vibration, light and odors. In the event of any such
environmental condition, Tenant shall promptly notify both the property manager
and the Landlord and Tenant, at its sole cost and expense, shall promptly take
any and all steps necessary to rectify the same to the satisfaction of the
applicable agencies and Landlord, or shall, at Landlord’s election, reimburse
Landlord, upon demand, for the cost to Landlord of performing work. The
reimbursement shall be paid to Landlord in advance of Landlord’s performing such
work, based upon Landlord’s reasonable estimate of the cost thereof; and upon
completion of such work by Landlord, Tenant shall pay to Landlord any shortfall
promptly after receipt of Landlord’s bills therefor or Landlord shall promptly
refund to Tenant any excess deposit, as the case may be. Tenant’s obligations
under this Section 15.2 shall survive the expiration or termination of this
Lease. If Tenant or Tenant's Parties caused the release of any Hazardous
Materials on, under, from or about the Premises in violation of Environmental
Laws, then Landlord may require Tenant, at Tenant's sole cost and expense, to
conduct monitoring activities on or about the Premises reasonably satisfactory
to Landlord concerning such release of Hazardous Materials on, under, from or
about the Premises.
15.3Indemnification. If Tenant’s or a Tenant Party’s failure to act, activities
(including, but not limited to, transportation, storage, use, or disposal of
Hazardous Materials), or breach of Section 15 (and Sections 5 and 6 of Exhibit J
if applicable) on the Property results in the contamination of the Premises,
soil, or surface or ground water or loss or damage to person(s) or property,
Tenant agrees to: (a) notify Landlord immediately of any release, threat of
release, contamination, claim of contamination, loss or damage; (b) after
consultation with Landlord, clean up the release, threat of release, or
contamination in full compliance with all applicable statutes, regulations and
standards; and (c) indemnify, defend and hold Landlord, ground landlord, if any,
and the Indemnitees harmless from and against any claims, suits, causes of
action, costs and fees, including attorneys’ fees and costs, arising from or
connected with any such release, threat of release, contamination, claim of
contamination, loss or damage. In the event of such contamination, Tenant agrees
to cooperate fully with Landlord and provide such documents, affidavits and
information as may be requested by Landlord (1) to comply with any Environmental
Law or Applicable Laws, (2) to comply with the reasonable request of any lender,
purchaser or tenant, and/or (3) for any other reasonable reason deemed necessary
by Landlord. Tenant shall notify Landlord promptly in the event of any spill or
other release of any Hazardous Materials at, in, on, under or about the Premises
which is required to be reported to a governmental authority under any
Environmental Law or Applicable Laws, shall promptly forward to Landlord copies
of
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any notices received by Tenant relating to alleged violations of any
Environmental Law or Applicable Laws and shall promptly pay when due any fine or
assessment against Landlord, Tenant, or the Premises relating to any violation
during the Term of any Environmental Law or Applicable Laws by Tenant, its
employees, agents, independent contractors, or invitees or with respect to the
Premises or Property. If any governmental authority files a lien against the
Premises due to any act or omission, intentional or unintentional, of Tenant or
any Tenant Party resulting in the releasing, spilling, leaking, leaching,
pumping, emitting, pouring, emptying or dumping of any Hazardous Materials,
Tenant shall, within thirty (30) days from the date that Tenant is first given
notice of such lien (or within such shorter period of time as may be specified
by Landlord if such governmental authority takes steps to cause the Premises to
be sold pursuant to such lien) either (A) pay the claim and remove the lien or
(B) furnish a cash deposit, bond or such other security as is satisfactory in
all respects to Landlord and sufficient to discharge the lien completely.
Landlord reserves the right to retain counsel for its defense, in which case
Tenant shall be responsible for the cost of such defense. This indemnity shall
include, without limitation, any Losses arising from or in connection with
(i) the effects of any contamination or injury to person, property or the
environment created or suffered by Tenant, (ii) the cost of any required or
necessary repair, cleanup or detoxification, and the preparation and
implementation of any closure, monitoring or other required plans, whether such
action is required or necessary prior to or following the termination of this
Lease, (iii) lost profits, consequential damages, the cost of demolition or
rebuilding any improvements on real property, interest, penalties and damages
arising from claims brought by or on behalf of employees of Tenant (with respect
to which Tenant waives any right to raise as a defense against Landlord any
immunity to which it may be entitled under any industrial or worker’s
compensation laws), (iv) fees, costs or expenses incurred for the services of
attorneys, consultants, contractors, experts, laboratories, and all other costs
incurred in connection with the investigation or remediation of such Hazardous
Materials or violation of such Environmental Laws, and (v) diminution in the
fair market value of the Property including without limitation any reduction in
fair market rental value or life expectancy of the Property or the improvements
located thereon or the restriction on the use of or adverse impact on the
marketing of the Property or any portion thereof. Tenant’s obligations pursuant
to the foregoing indemnity shall survive the expiration or termination of this
Lease. Neither the written consent by Landlord to the presence of Hazardous
Materials on, under or about the Premises, nor the strict compliance by Tenant
with all Environmental Laws and Applicable Laws, shall excuse Tenant from
Tenant’s obligation of indemnification pursuant hereto. Tenant’s obligations
under this Section 15.3 shall survive the expiration or termination of this
Lease.
15.4Surrender. In the ninety (90) days prior to the expiration or termination of
the Lease, Tenant, at its sole cost and expense, shall have an environmental
assessment and decommissioning survey of the Property performed by an
independent, certified third party, reasonably approved by Landlord. Such
assessment and survey shall comply with the American National Standards
Institute’s Laboratory Decommissioning Guidelines (ANSI/AIHA Z9.11-2008 or any
successor standards published by ANSI) or any successor organization (if ANSI
and its successors no long exist). During such time period, Tenant shall
represent to Landlord in writing that, to the best of Tenant's knowledge, no
Hazardous Materials exist on, under or about the Premises as a result of any
acts or (where action is required by Tenant under this Lease) omissions of
Tenant or its agents, employees or contractors, other than as specifically
identified to Landlord by Tenant in writing. Tenant shall perform, at its sole
cost and expense, any clean-up or remedial work recommended by said independent,
certified third party performing such assessment and survey which is necessary
to remove, mitigate or remediate any Hazardous Materials and/or contamination of
the Property caused by the acts or omissions of Tenant or any Tenant Parties.
Tenant’s obligations under this Section 15.4 shall survive the expiration or
termination of this Lease.
15.5Health and Safety Disclosure. California law requires Landlords to disclose
to Tenants the existence of certain Hazardous Materials. Hazardous Material
includes any hazard or toxic substance, material, or waste at any concentration
that is or becomes regulated by the United
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States, the State of California, or any local governmental authority having
jurisdiction over the Building. Gasoline and other automotive fluids are found
in the parking areas adjacent to the Building and may, under some circumstances,
be found within the Building. Cleaning, lubricating and hydraulic fluids used in
the operation and maintenance of the Building may be found in certain areas of
the Building. Building occupants may use products which contain Hazardous
Materials. Certain adhesives, paints and other construction materials and
finishes used in portions of the Building may contain Hazardous Materials.
Although smoking is prohibited in the Building, there may, from time to time, be
tobacco smoke exposure in the Building.
15.6Pre-Existing Conditions. Landlord agrees that Tenant shall not be liable for
any Losses (and such Losses shall not be included in Operating Expenses)
incurred in connection with any environmental condition that existed at the
Premises prior to the Commencement Date not caused or exacerbated by Tenant or
Tenant’s Parties, the costs of which shall be borne solely by Landlord.
16.DAMAGE AND DESTRUCTION. If at any time during the Term all or a portion of
the Premises are damaged by a fire or other casualty, Landlord shall notify
Tenant within sixty (60) days after Landlord becomes aware of such damage as to
the amount of time Landlord reasonably estimates it will take to restore the
Premises. If the restoration time is estimated to exceed nine (9) months from
the issuance of all permits, subject to extensions for Force Majeure (up to a
maximum of 120 days of such Force Majeure extensions), Landlord may elect to
terminate this Lease and if such restoration period is greater than twelve (12)
months from the issuance of all permits, then Tenant may, as its sole remedy,
terminate this Lease on or before thirty (30) days after receipt of Landlord’s
notice describing the estimated restoration time that is greater than twelve
(12) months. In addition, Landlord, by notice to Tenant within ninety (90) days
after the date of the fire or other casualty shall have the right to terminate
this lease if: (1) any Mortgagee requires that the insurance proceeds be applied
to the payment of the mortgage debt or ground lease, or (2) a material uninsured
loss to the Premises occurs. If neither party either elects to terminate this
Lease as provided above or if neither party has the right to terminate this
Lease as provided above, then, subject to receipt of sufficient insurance
proceeds, Landlord shall promptly commence to restore the Premises, subject to
delays arising from the collection of insurance proceeds or from Force Majeure
events. During such restoration, Landlord shall endeavor to consult with
Tenant’s specialists and consultants to ensure that such improvements are
restored to be suitable for Tenant’s use; provided, however, Landlord shall be
entitled to reject any changes requested by Tenant’s specialists and consultants
to Landlord’s planned improvements to the extent such changes are unreasonable
or incur costs that exceed the insurance proceeds received by Landlord for such
restoration improvements and Landlord shall have the right to reject, in
Landlord’s sole, absolute, and unfettered discretion, any such changes that do
incur costs that exceed the insurance proceeds received by Landlord. Such
restoration shall be to substantially the same condition that existed prior to
the fire or other casualty, except for modifications required by Applicable
Laws. Upon notice from Landlord, Tenant shall assign or endorse over to Landlord
(or to any party designated by Landlord) all property insurance proceeds payable
to Tenant under Tenant insurance with respect to any Alterations, provided if
the estimated cost to repair such Alterations exceeds the amount of insurance
proceeds received by Landlord from Tenant’s insurance carrier, the excess cost
of such repairs shall be paid by Tenant to Landlord prior to Landlord’s
commencement of repairs. Within fifteen (15) days of demand, Tenant shall also
pay Landlord for any additional excess costs that are determined during the
performance of the repairs to such Alterations. Notwithstanding the foregoing,
if this Lease is terminated pursuant to the provisions of this Section 16, the
total amount that Tenant is required to assign or pay to Landlord under this
sentence shall not exceed the cost of restoring the Alterations to a
Building-standard configuration and condition, as reasonably determined by
Landlord and Landlord shall promptly return to Tenant the amount, if any, by
which the sum of such insurance proceeds plus any such additional excess costs
paid to Landlord by Tenant on an estimated basis exceeds the actual cost of such
restoration. Landlord agrees that one hundred percent (100%) of the property
insurance proceeds payable to Tenant under Tenant’s insurance with respect to
any Alterations which are assigned or endorsed over to Landlord (or to any party
designated by Landlord) and any excess costs of repairs paid by Tenant to
Landlord, as required pursuant to this Section, shall be used by Landlord to
restore the Alterations. In no event shall Landlord be required to spend more
for the restoration of the Premises than the proceeds received by Landlord,
whether insurance proceeds or
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proceeds from Tenant. Landlord shall not be liable for any inconvenience to
Tenant, or injury to Tenant’s business resulting in any way from the fire or
other casualty, or the repair thereof. If this Lease is not terminated by
Landlord or Tenant in accordance with this Section, Tenant shall be responsible
for and shall pay to Landlord Tenant’s Share of any deductible or retention
amount payable under the property insurance for the Building following any such
casualty. Tenant at Tenant’s expense shall promptly perform, subject to delays
arising from the collection of insurance proceeds, or from Force Majeure events,
all repairs or restoration not required to be done by Landlord and shall
promptly re-enter the Premises and commence doing business in accordance with
this Lease. Notwithstanding the foregoing, either party may terminate this Lease
if the Premises are damaged during the last year of the Term and Landlord
reasonably estimates that it will take more than three (3) months to repair such
damage. Provided no Event of Default by Tenant has occurred, Base Rent and
Tenant’s Share of Operating Expenses and Real Property Taxes shall be abated for
the period of repair and restoration commencing on the date of such casualty
event in the proportion which the area of the Premises, if any, which is
untenantable bears to the total area of the Premises. Such abatement shall be
the sole remedy of Tenant, and except as provided herein, Tenant waives any
right to terminate this Lease by reason of damage or casualty loss. Tenant
agrees that the terms of this Section 16 shall govern any damage or destruction
and shall accordingly supersede any contrary statute or rule of law. If Landlord
does not substantially complete the repairs caused by the casualty which
Landlord is required to make pursuant to this Section 16 (the “Landlord
Repairs”) by the Outside Restoration Date (defined below), Tenant may terminate
this Lease by notifying Landlord within fifteen (15) days after the Outside
Restoration Date and before the substantial completion of the Landlord Repairs.
As used herein, “Outside Restoration Date” means the date occurring two (2)
months after the later of (a) the expiration of the time set forth in Landlord’s
estimate described in the first sentence of this Section 16, or (b) the date
occurring two hundred seventy (270) days after the commencement of the Landlord
Repairs; provided, however, that the Outside Restoration Date shall be extended
to the extent of (i) any delay caused by the insurance adjustment process, (ii)
any delay caused by Tenant or any party claiming by, through or under Tenant,
and (iii) any other delay caused by events of Force Majeure. Notwithstanding the
foregoing, if Landlord determines in good faith that it will be unable to
substantially complete the Landlord Repairs by the Outside Restoration Date,
Landlord may cease its performance of the Landlord Repairs and provide Tenant
with notice (the “Restoration Date Extension Notice”) stating such inability and
identifying the date on which Landlord reasonably believes such substantial
completion will occur, in which event Tenant may terminate this Lease by
notifying Landlord within five (5) business days after receiving the Restoration
Date Extension Notice. If Tenant does not terminate this Lease within such five
(5) business day period, the Outside Restoration Date shall be automatically
amended to be the date identified in the Restoration Date Extension Notice.
17.CONDEMNATION. If any part of the Building should be taken for any public or
quasipublic use under governmental law, ordinance, or regulation, or by right
of eminent domain, or by private purchase in lieu thereof (a “Taking” or
“Taken”), and the Taking would substantially interfere with or impair Landlord’s
ownership or operation of the Property and/or the Project (as reasonably
determined by Landlord), then upon written notice by Landlord this Lease shall
terminate and Base Rent and Tenant’s Share of Operating Expenses and Real
Property Taxes shall be apportioned as of said date. If part of the Building
shall be Taken and such condemnation does not substantially interfere with or
impair Landlord’s ownership or operation of the Property and/or the Project, and
this Lease is not terminated as provided above, the Base Rent and Tenant’s Share
of Operating Expenses and Real Property Taxes payable hereunder during the
unexpired Term shall be reduced based upon the reduced square footage of the
Premises. In the event of any such Taking, Landlord shall be entitled to receive
the entire price or award from any such Taking without any payment to Tenant,
and Tenant hereby assigns to Landlord Tenant’s interest, if any, in such award.
Tenant shall have the right, to the extent that same shall not diminish
Landlord’s award, to make a separate claim against the condemning authority (but
not Landlord) for such compensation as may be separately awarded or recoverable
by Tenant for alterations and tenant improvements paid for by Tenant, the value
of Tenant’s leasehold estate, moving expenses and damage to Tenant’s trade
fixtures, if a separate award for such items is made to Tenant. If only a part
of the Premises is subject to a Taking and this Lease is not terminated,
Landlord, with reasonable diligence, will restore the remaining portion of the
Premises as
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nearly as practicable to the condition immediately prior to the Taking. Tenant
agrees that the terms of this Section 17 shall govern any Taking and shall
accordingly supersede any contrary statute or rule of law.
18.DEFAULT.
18.1Event of Default. The occurrence of any of the following events shall, at
Landlord’s option, constitute an “Event of Default”:
18.1.1Tenant shall fail to pay any installment of Base Rent or any other payment
required herein when due, and such failure shall continue for a period of three
(3) business days after written notice to Tenant.
18.1.2Tenant or any guarantor or surety of Tenant’s obligations hereunder shall
(1) make a general assignment for the benefit of creditors; (2) commence any
case, proceeding or other action seeking to have an order for relief entered on
its behalf as a debtor or to adjudicate it as bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, liquidation, dissolution or composition
of it or its debts or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or of any substantial part of its
property (collectively, a “proceeding for relief”); (3) become the subject of
any proceeding for relief which is not dismissed within sixty (60) days of its
filing or entry; or (4) die or suffer a legal disability (if Tenant, guarantor,
or surety is an individual) or be dissolved or otherwise fail to maintain its
legal existence (if Tenant, guarantor or surety is a corporation, partnership or
other entity).
18.1.3Any insurance required to be maintained by Tenant pursuant to this Lease
shall be cancelled or terminated or shall expire or shall be reduced or
materially changed, except, in each case, as permitted in this Lease.
18.1.4Tenant shall not occupy or shall vacate the Premises whether or not Tenant
is in monetary or other default under this Lease; provided, however, that
Tenant’s vacating of the Premises shall not constitute an Event of Default if,
prior to vacating the Premises, Tenant has made arrangements reasonably
acceptable to Landlord to (1) ensure that Tenant’s insurance for the Premises
will not be voided or cancelled with respect to the Premises as a result of such
vacancy, (2) ensure that the Premises are secured and not subject to vandalism,
and (3) ensure that the Premises will be properly maintained after such
vacation, including, but not limited to, keeping the heating, ventilation and
cooling systems maintenance contracts required by this Lease in full force and
effect.
18.1.5There shall occur any assignment, subleasing or other transfer of Tenant’s
interest in or with respect to this Lease except as otherwise permitted in this
Lease.
18.1.6Tenant breaches a particular provision hereof (other than a provision
requiring payment of Rent) on three (3) separate occasions during any twelve
(12)-month period, and in such event, Tenant’s subsequent breach of such
provision shall be, at Landlord’s option, an incurable Event of Default.
18.1.7Tenant shall fail to comply with any provision of this Lease other than
those specifically referred to in this Section 18.1, and except as otherwise
expressly provided herein, such default shall continue for more than thirty (30)
days after Landlord shall have given Tenant written notice of such default (or
such longer period not to exceed ninety (90) days as may be reasonably required
provided that such failure can be cured and Tenant diligently pursues such
cure).
18.1.8Tenant or any affiliate of Tenant is in default beyond any notice and cure
period under any other provision of the Lease or under any other lease or
agreement with Landlord at the Project.
18.2Landlord’s Remedies. Upon any Event of Default, Landlord shall have, in
addition to any other remedies available to Landlord at law or in equity (which
shall be cumulative and nonexclusive),
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the option to pursue any one or more of the following remedies (which shall be
cumulative and nonexclusive) without any notice or demand:
18.2.1Landlord may 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 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 of damages therefor;
and Landlord may recover from Tenant the following: (a) the worth at the time of
award of the unpaid Rent which had been earned at the time of such termination;
(b) 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; (c) the worth at the time of award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds the amount of
such Rent loss that Tenant proves could be reasonably avoided; (d) any other
amount necessary to compensate Landlord for all the detriment proximately caused
by Tenant’s failure to perform its obligations hereunder or which in the
ordinary course of things would be likely to result therefrom, including
brokerage commissions, advertising expenses, expenses of remodeling any portion
of the Premises for a new tenant (whether for the same or a different use), and
any special concessions made to obtain a new tenant; plus (e) at Landlord’s
option, such other amounts in addition to or in lieu of the foregoing as may be
permitted from time to time by law. As used in subsection (a) and subsection (b)
above, the “worth at the time of award” shall be computed by allowing interest
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 shall reasonably designate if such rate ceases to be
published) plus two (2) percentage points, or (ii) the highest rate permitted by
Law. As used in subsection (c) 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 1%. Landlord agrees to use
reasonable efforts to mitigate damages, provided that those efforts shall not
require Landlord to relet the Premises in preference to any other space in the
Building or Project or to relet the Premises to any party that Landlord could
reasonably reject as a transferee pursuant to Section 19.
18.2.2Landlord 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 Event of
Default by Tenant, Landlord may, from time to time, without terminating this
Lease, enforce all of its rights and remedies hereunder, including the right to
recover all Rent as it becomes due. Landlord agrees to use reasonable efforts to
mitigate damages, provided that those efforts shall not require Landlord to
relet the Premises in preference to any other space in the Building or Project
or to relet the Premises to any party that Landlord could reasonably reject as a
transferee pursuant to Section 19.
18.2.3Landlord 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 Section 18.2.1 and Section 18.2.2, or any law or other
provision hereof), without prior demand or notice except as required by 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.
18.2.4Unless Landlord provides Tenant with express notice to the contrary, no
re-entry, repossession, repair, maintenance, change, alteration, addition,
reletting, appointment of a receiver or other action or omission by Landlord
shall (a) 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, or
(b) operate to release Tenant from any of its obligations hereunder. Tenant
waives, for Tenant and for all those claiming by, through or under Tenant,
California Civil Code Section 3275, California Code of Civil Procedure
Sections 1174(c) and 1179, and any existing or future rights to redeem or
reinstate, by order or judgment of any court or by any legal process or writ,
this Lease or Tenant’s right of occupancy of the Premises after any termination
hereof.
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18.2.5If Landlord elects to cure such Event of Default by Tenant, Landlord may,
at Landlord’s option, enter into and upon the Premises and correct the same
without being deemed in any manner guilty of trespass, eviction or forcible
entry and detainer and without incurring any liability for any damage or
interruption of Tenant’s business resulting therefrom. If any lien is filed and
not cured within the fifteen (15) day time period set forth above, then Landlord
may take such action as may be necessary to remove such lien. Tenant agrees to
pay Landlord an amount equal to [***] of any expenses which Landlord may incur
in thus effecting compliance with Tenant’s obligations under this Lease,
including without limitation, attorney’s fees, together with interest thereon at
the Applicable Interest Rate from the date of expenditure.
18.2.6Exercise by Landlord of any one (1) or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement or
by operation of law, it being understood that except as provided in Section
18.2.1 and Section 18.2.2 above, such surrender and/or termination can be
effected only by the written agreement of Landlord and Tenant. Any law, usage,
or custom to the contrary notwithstanding, Landlord shall have the right at all
times to enforce the provisions of this Lease in strict accordance with the
terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same. Tenant
and Landlord further agree that forbearance or waiver by Landlord to enforce its
rights pursuant to this Lease or at law or in equity, shall not be a waiver of
Landlord’s right to enforce one (1) or more of its rights in connection with any
subsequent Event of Default. A receipt by Landlord of rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord’s intention to re-enter as provided for in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge.
The terms “enter,” “re-enter,” “entry” or “re-entry,” as used in this Lease, are
not restricted to their technical legal meanings. Any reletting of the Premises
shall be on such terms and conditions as Landlord in its sole, absolute and
unfettered discretion may determine (including without limitation a term
different than the remaining Term, rental concessions, alterations and repair of
the Premises, lease of less than the entire Premises to any tenant and leasing
any or all other portions of the Project before reletting the Premises).
Landlord shall not be liable, nor shall Tenant’s obligations hereunder be
diminished because of, Landlord’s failure to relet the Premises or collect rent
due in respect of such reletting.
18.3Any notice required under this Section 18 shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure,
Section 1161.
18.4Landlord Default. Landlord shall not be in default hereunder unless it fails
to begin within thirty (30) days after written notice from Tenant, or fails to
pursue with reasonable diligence thereafter, the cure of any breach by Landlord
of its obligations hereunder. Before exercising any remedies for a default by
Landlord, Tenant shall give notice and a reasonable time to cure to any
Mortgagee of which Tenant has been notified. In the event of a default by
Landlord under the Lease, Tenant shall use reasonable efforts to mitigate its
damages and losses arising from any such default and Tenant may pursue any and
all remedies available to it at law or in equity, except as otherwise provided
herein.
18.5Notwithstanding any provision set forth in the Lease to the contrary, if (a)
Tenant provides prior written notice to Landlord (which notice may be by email
to: pmwest@liprop.com; westleaseadmin@liprop.com;
leaseadministration@liprop.com; mford@liprop.com; and jfinnigan@liprop.com or
any other additional or different parties specified in advance by Landlord as
responsible parties) of an emergency event or circumstance (e.g., a leak in the
roof) that is causing a material interference to Tenant’s operations and which
requires the action of Landlord with respect to repair and/or maintenance (a
“Required Action”), (b) Landlord is, in fact, required to perform such repairs
and/or maintenance under the terms of the Lease, and (c) Landlord (i) fails to
commence such action within a reasonable period of time, given the
circumstances, after the receipt of such notice, but in any event not later than
twenty-four (24) hours after receipt of such notice (the “Commencement Period”),
or (ii) fails to pursue such Required Action after the Commencement Period with
reasonable diligence and complete the same with a
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reasonable time (the “Required Action Period”), then Tenant may proceed to take
the required action after delivery of an additional twenty-four (24) hour notice
to Landlord and any Mortgagee for which Tenant has been given an address for
notices (such second notice given not earlier than the expiration of the first
aforesaid twenty-four (24) hour period for commencement of the repair and/or
maintenance, or not earlier than the expiration of the Required Action Period,
as applicable) specifying that the first twenty-four (24) hour period has
expired or the Required Action Period has expired, the specific action required
and that Tenant intends to take such Required Action; provided, however, if
Tenant reasonably anticipates that a dispute will result under this Section
18.5, Tenant may submit the anticipated dispute to arbitration pursuant to
Section 18.6 by written notice given not earlier than ten (10) days after
Tenant’s delivery of the first aforesaid notice. Tenant shall be entitled to
take any such Required Action only if Landlord’s failure to do so directly,
materially and adversely affects Tenant’s use of the Premises. Notwithstanding
the foregoing to the contrary, the foregoing requirements to wait for Landlord’s
response to the notices shall not apply to the bare minimum amount of temporary
remedial work necessary to most immediately address the situation to prevent
damage while the foregoing notices and respective twenty-four (24) hour periods
are occurring. If Landlord believes that the requested maintenance and/or repair
is not required because it is not necessary pursuant to the terms of the Lease,
or if Landlord is already taking the Required Action or other action Landlord
believes appropriate in the circumstances in accordance with its obligations
under the Lease, Landlord shall have the option within said second twenty-four
(24) hour period to commence the Required Action or to submit the dispute to
arbitration pursuant to Section 18.6 within fifteen (15) days after Tenant’s
delivery of the first aforesaid notice. If such action is required under the
terms of the Lease to be taken by Landlord and is not commenced or completed (as
applicable) by Landlord within such second twenty-four (24) hour period and
Landlord has not submitted the dispute to arbitration, then Tenant shall be
entitled to prompt reimbursement by Landlord of Tenant’s reasonable and
necessary, actual out-of-pocket costs and expenses in taking such action (and
only such action as specified in the second twenty-four (24) hour notice given
to Landlord). Such amounts shall be promptly reimbursed by Landlord on the
receipt from Tenant of a detailed invoice setting forth a particularized
breakdown of the costs and expenses incurred in connection with the action taken
by Tenant. In the event Tenant takes such action, and such work affects the
Building systems or the structural integrity of the Building, Tenant shall use
only those contractors used by Landlord in the Building for work on such systems
unless such contractors are unwilling or unable to perform, or timely perform,
such work, in which event Tenant may utilize the services of any other qualified
contractor which normally and regularly performs similar work in comparable
buildings. Further, if Landlord or any Mortgagee does not deliver a detailed
written objection to Tenant within thirty (30) days after Landlord’s receipt of
an invoice by Tenant of its costs and expenses of taking such action which
Tenant claims should have been taken by Landlord, and if such invoice from
Tenant sets forth a particularized breakdown of its costs and expenses incurred
in connection with taking such action, then Tenant shall be entitled to deduct
from Rent payable by Tenant under the Lease the amount set forth in the invoice.
If, however, Landlord or any Mortgagee delivers to Tenant within thirty (30)
days after receipt of Tenant’s invoice, a written objection to the payment of
such invoice, setting forth with reasonable particularity Landlord’s reasons for
its claim that such action did not have to be taken by Landlord pursuant to the
terms of the Lease or that the charges are excessive (in which case Landlord
shall pay the amount it contends would not have been excessive), then Tenant
shall not be entitled to such deduction from rent, but as Tenant’s sole remedy,
Tenant may submit the dispute to arbitration pursuant to the procedures set
forth in Section 18.6.
18.6Arbitration.
18.6.1The obligation of Landlord and Tenant to submit a dispute to arbitration
is limited to disputes arising under Section 18.5. The party desiring
arbitration under Section 18.5 shall give written notice thereof to the other
specifying the dispute to the arbitrated. Within ten (10) days after the date on
which the arbitration procedure is invoked, each party shall appoint an
Experienced Arbitrator (as defined below) and notify the other party of the
Experienced Arbitrator’s name and address. For purposes of this Section 18.6, an
“Experienced Arbitrator” is defined as a licensed lawyer who shall have been
active over the ten (10) year period ending on the date of such appointment in
the leasing of first class commercial industrial properties in Southern
California. If any party fails to so appoint an Experienced Arbitrator and
notify the other party of such Experienced Arbitrator’s name and address, an
Experienced Arbitrator shall be appointed pursuant to the same procedure that is
followed when agreement cannot be reached as to the third Experienced
Arbitrator. Within ten (10) days after the appointment of the second Experienced
Arbitrator and notice to the other party of such Experienced Arbitrator’s
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name and address, the two (2) Experienced Arbitrators so appointed shall appoint
a third Experienced Arbitrator as described above, but who has at no time ever
represented or acted on behalf of any of the parties, and shall notify both
parties of the third Experienced Arbitrator’s name and address. If the three (3)
Experienced Arbitrators to be so appointed are not appointed within thirty (30)
days after the date the arbitration procedure is invoked, then the final
Experienced Arbitrator shall be appointed as quickly as possible by any court of
competent jurisdiction, by any licensing authority, agency or organization
having jurisdiction over such lawyers, by any professional association of
lawyers in existence for not less than ten (10) years at the time of such
dispute or disagreement and the geographical membership boundaries of which
extend to the County of San Diego or by any arbitration association or
organization in existence for not less than ten (10) years at the time of such
dispute or disagreement and the geographical boundaries of which extend to the
County of San Diego. Any such court, authority, agency, association or
organization shall be entitled either to directly select such third lawyer or to
designate in writing, delivered to each of the parties, an individual who shall
do so. The Experienced Arbitrator or Experienced Arbitrators so selected shall
furnish Landlord and Tenant with a written decision within thirty (30) days
after the date of selection of the last of the Experienced Arbitrators to be so
selected. Any decision so submitted shall be signed by a majority of the
Experienced Arbitrators. In the event of any subsequent vacancies or inabilities
to perform among the Experienced Arbitrators appointed, the Experienced
Arbitrator or Experienced Arbitrators involved shall be replaced in accordance
with the provisions of this Section 18.6 as if such replacement was an initial
appointment to be made under this Section 18.6 within the time constraints set
forth in this Section 18.6, measured from the date of notice of such vacancy or
inability to the person or persons required to make such appointment, with all
the attendant consequences of failure to act timely if such appointment person
is a party hereto. In designating Experienced Arbitrators and in deciding the
dispute, the Experienced Arbitrators shall utilize their utmost skill and act
diligently in accordance with the Commercial Rules of Arbitration then in force
of the American Arbitration Association, subject, however, to such limitations
as may be placed upon them by the provisions of this Lease.
18.6.2The Experienced Arbitrators appointed pursuant to this Section 18.6 shall
(i) enforce and interpret the rights and obligations set forth in Section 18.5
to the extent not prohibited by law, (ii) fix and establish any and all rules as
it shall consider appropriate in its sole and absolute discretion to govern the
proceedings before it, including any and all rules of discovery, procedure
and/or evidence, and (iii) make and issue any and all orders, final or
otherwise, and any and all awards, as a court of competent jurisdiction sitting
at law or in equity could make and issue and as it shall consider appropriate in
its sole and absolute discretion, including the awarding of money (but shall not
award consequential damages to either party and shall not award punitive
damages) consistent with the provisions of Section 18.6, and the awarding of
reasonable attorneys’ fees and costs (including costs of the arbitration) to the
prevailing party as determined by the Experienced Arbitrators in their sole
discretion, and the issuance of injunctive relief. If the party against whom the
award is issued complies with the award within the time period established by
the Experienced Arbitrators, then no event of default will be deemed to have
occurred, unless the event of default pertained to the non-payment of money by
either party, and such party failed to make such payment under protest.
18.6.3The decision of the Experienced Arbitrators shall be final and binding,
may be confirmed and entered by any court of competent jurisdiction at the
request of any party and may not be appealed to any court of competent
jurisdiction or otherwise except upon a claim of fraud on the part of the
Experienced Arbitrators, or on the basis of a mistake as to the applicable law.
The Experienced Arbitrators shall retain jurisdiction over any dispute until its
award has been implemented, and judgment on any such award may be entered in any
court having appropriate jurisdiction. If Tenant prevails in the arbitration,
the amount of the Arbitration Award may be deducted by Tenant from the Rent next
due and owing under this Lease.
18.6.4Neither party shall be in default hereunder with respect to any provision
hereof during the time period commencing as of the initial notice of desire to
arbitrate and ending on the date of resolution by the Experienced Arbitrators;
provided, however, that during said period each party shall continue to make all
payments of money required by this Lease (which payments may be made under
protest) and shall otherwise perform all duties and obligations required to be
performed by such party under this Lease and, with respect to the issue under
arbitration, shall maintain the status quo.
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19.ASSIGNMENT AND SUBLETTING.
19.1Tenant shall not assign, sublet, convey, mortgage, license or otherwise
transfer (any of the foregoing, a “Transfer”), whether voluntarily or
involuntarily or by operation of law, the Premises or any part thereof without
Landlord’s prior written approval, which shall not be unreasonably withheld,
conditioned, or delayed. A “Transfer” shall be deemed to include, without
limitation, any of the following: (i) the merger of Tenant with any other entity
or the indirect or direct transfer of any controlling or managing ownership or
beneficial interest in Tenant, and (ii) the assignment or transfer of a
substantial portion of the assets of Tenant, whether or not located at the
Premises. For the avoidance of doubt, Landlord acknowledges that, so long as
Landlord is notified of the change in control within thirty (30) days following
the effective date of the change in control, the following transfers of
ownership interests in Tenant shall not require the consent of the Landlord
hereunder: (a) any transfer or sale of the ownership interests in Tenant
(whether voting or non-voting): (i) to the spouse(s) and/or children of a
shareholder of Tenant or (ii) to any trust, the beneficiary(ies) of which are
family members of a shareholder of Tenant, (b) issuance or sale of Tenant’s
stock on a recognized securities exchange, or (c) any change in control
resulting from a transfer of stock or other ownership interest by reason of
bequest or inheritance. If Tenant desires to undertake a Transfer, Tenant shall
give Landlord prior written notice thereof with copies of all related documents
and agreements associated with the Transfer, including without limitation, the
financial statements of any proposed assignee, subtenant or transferee, at least
thirty (30) days prior to the anticipated effective date of the Transfer. Tenant
shall pay Landlord’s reasonable attorneys’ and financial consultant’s fees
incurred in the review of such documentation, not to exceed [***], whether or
not a Transfer is consummated or approval is granted. If Landlord fails to
notify Tenant in writing of Landlord’s approval or disapproval of any proposed
Transfer within fifteen (15) business days of Landlord’s receipt of all required
documentation, Landlord shall be deemed to have disapproved such Transfer. If
Landlord approves of such Transfer, the parties shall enter into a consent
agreement in a form reasonably designated by Landlord, and in the case of an
assignment, the assignee shall assume in writing, for Landlord’s benefit, all of
Tenant’s obligations hereunder. Any purported Transfer contrary to the
provisions hereof shall be void and constitute an Event of Default. This Lease
may not be assigned by operation of law. In the event of an assignment of this
Lease or subletting of more than fifty percent (50%) of the rentable square
footage of the Premises for more than fifty percent (50%) of the remaining Term
(excluding unexercised options), Landlord shall have the right to recapture the
portion of the Premises that Tenant is proposing to assign or sublease;
provided, however, that in the event Landlord intends to exercise its recapture
right, it shall provide Tenant written notice of the same and Tenant shall have
five (5) business days to provide notice to Landlord that it is withdrawing its
request to assign or sublease the Premises. If Landlord exercises its right to
recapture, this Lease shall automatically be amended (or terminated if the
entire Premises is being assigned or sublet) to delete the applicable portion of
the Premises effective on the proposed effective date of the Transfer, although
Landlord may require Tenant to execute a reasonable amendment or other document
reflecting such reduction or termination. If Tenant receives rent or other
consideration for any such Transfer in excess of the Rent, or in the case of a
sublease of a portion of the Premises, in excess of such Rent that is fairly
allocable to such portion, after appropriate adjustments to assure that all
other payments required hereunder are appropriately taken into account, Tenant
shall pay Landlord fifty percent (50%) of the difference between each such
payment of rent or other consideration and the Rent required hereunder, after
Tenant’s recovery of its actual and reasonable attorney’s fees, commercially
reasonable concessions it provided as part of such assignment or subletting,
brokerage commissions and improvement allowances or improvement costs incurred
directly in connection with such assignment or subletting, determined on a
straight-line basis. Tenant shall continue to be liable as a principal and not
as a guarantor or surety to the same extent as though no assignment had been
made, and in no event shall any assignment or other Transfer release or relieve
Tenant from any obligation under this Lease. Tenant shall not collaterally
assign, mortgage, pledge, hypothecate or otherwise encumber this
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Lease or any of Tenant’s rights hereunder without the prior written consent of
Landlord, which consent Landlord may withhold in its sole, absolute, and
unfettered discretion.
19.2Notwithstanding anything to the contrary contained in this Section 19,
neither Tenant nor any other person having a right to possess, use, or occupy
(for convenience, collectively referred to in this subsection as “Use”) the
Premises shall enter into any lease, sublease, license, concession or other
agreement for Use of all or any portion of the Premises which provides for
rental or other payment for such Use based, in whole or in part, on the net
income or profits derived by any person that leases, possesses, uses, or
occupies all or any portion of the Premises (other than an amount based on a
fixed percentage or percentages of receipts or sales), and any such purported
lease, sublease, license, concession or other agreement shall be absolutely void
and ineffective as a Transfer of any right or interest in the Use of all or any
part of the Premises.
19.3Permitted Transfers. Tenant may (i) assign this Lease to a successor to
Tenant by merger, consolidation, or the purchase of all or substantially all of
Tenant’s assets or stock or (ii) assign this Lease to an Affiliate, in each case
without Landlord’s consent, provided that all of the following conditions are
satisfied (a “Permitted Transfer”): (a) no Event of Default by Tenant has
occurred and is continuing; (b) Tenant must give Landlord written notice at
least 15 business days before such Transfer (unless restricted from doing so due
to confidentiality constraints, in which instance Tenant shall provide notice as
soon thereafter as is permitted); (c) if such Transfer will result from a merger
or consolidation of Tenant with another entity which results in a new entity
succeeding to Tenant’s interest hereunder (i.e., the Tenant originally named
hereunder would no longer be the Tenant under the Lease), or the purchase of all
or substantially all of Tenant’s assets by another entity, then the Credit
Requirement (defined below) must be satisfied; and (d) in the case of an
assignment of this Lease other than pursuant to a merger or consolidation, the
assignee must execute and deliver to Landlord, at least ten (10) business days
before the assignment a commercially reasonable instrument pursuant to which the
assignee assumes, for Landlord’s benefit, all of Tenant’s obligations hereunder.
Tenant’s notice to Landlord shall include information and documentation
evidencing the Permitted Transfer and showing that each of the above conditions
has been satisfied. The “Credit Requirement” shall be deemed satisfied if, as of
the date immediately succeeding the date of the Permitted Transfer, the Tangible
Net Worth (as herein defined) of either (a) the entity with which Tenant is to
merge or consolidate in the event of a merger or consolidation, or (b) the
entity which is purchasing all or substantially all of Tenant’s assets in the
event of a sale of all or substantially all of Tenant’s assets, is, after such
transaction, not less than the greater of (1) that of Tenant as of the date
immediately preceding the Transfer and (2) that of Tenant on the Effective Date.
“Tangible Net Worth” shall be determined by Landlord in its sole discretion and
shall mean assets less intangible assets and total liabilities, with intangible
assets including nonmaterial benefits such as goodwill, patents, copyrights, and
trademarks. Tenant shall deliver to Landlord for review the financial statements
of either (a) the entity with which Tenant is to merge or consolidate in the
event of a merger or consolidation, or (b) the entity which is purchasing all or
substantially all of Tenant’s assets in the event of a sale of all or
substantially all of Tenant’s assets, as the case may be, covering such entity’s
last two (2) fiscal years before the date of the Permitted Transfer, prepared in
accordance with generally accepted accounting principles consistently applied
and, if such audited statements are readily available, audited by a nationally
recognized public accounting firm acceptable to Landlord (and if such audited
statements are not readily available, then certified as being true and accurate
by an officer of Tenant), and any other financial information reasonably
requested by Landlord (collectively, “Tenant’s Financial Information”).
“Affiliate” means, with respect to any party, a person or entity that controls,
is under common control with, or is controlled by such party.
20.ESTOPPEL, ATTORNMENT AND SUBORDINATION.
20.1Estoppel. Within fifteen (15) days after written request by Landlord, Tenant
shall execute and deliver a commercially reasonable estoppel certificate to
those parties as are reasonably requested
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by Landlord (including a Mortgagee or prospective purchaser). Without
limitation, such estoppel certificate may include a certification as to the
status of this Lease, the existence of any Event of Defaults and the amount of
Rent that is due and payable. In the event Tenant fails to deliver said
statement in such time period, then Landlord shall provide Tenant a second
written request and five (5) business days to execute and deliver said estoppel
certificate. Thereafter, Tenant’s failure to deliver said statement after shall
be an Event of Default hereunder and shall be conclusive upon Tenant that
(1) this Lease is in full force and effect, without modification except as may
be represented by Landlord; (2) there are no uncured Event of Defaults in
Landlord’s performance and Tenant has no right of offset, counterclaim or
deduction against Rent hereunder; and (3) no more than one month’s Base Rent has
been paid in advance.
20.2Subordination. This Lease shall unconditionally be and at all times remain
subject and subordinate to all ground leases, master leases and all mortgages
and deeds of trust which now or hereafter affect the Premises, the Property or
the Project or Landlord’s interest therein (including any modifications,
renewals or extensions thereof and all amendments thereto) (collectively,
referred to as a “Mortgage”), all without the necessity of Tenant’s executing
further instruments to effect such subordination. The party having the benefit
of a Mortgage shall be referred to as a “Mortgagee”. If requested, Tenant shall
execute and deliver to Landlord within ten (10) days after Landlord’s request
whatever documentation that may reasonably be required to further effect the
provisions of this paragraph including a Subordination, Nondisturbance and
Attornment Agreement (“SNDA”) in the form reasonably required by the applicable
Mortgagee. Notwithstanding anything contained in this Lease to the contrary,
(1) the obligation for commissions under Section 26.19 shall not be binding on,
and will not be enforceable against, any of owner’s Mortgagees, and (2) such
commission obligation shall be unconditionally subordinate to the lien of any
Mortgage, and any commissions otherwise payable under this Lease shall not be
due or payable after an event of default under any such mortgage or other
security interest. Notwithstanding anything to the contrary contained in this
Section 20.2, the holder of any such Mortgage may at any time subordinate its
Mortgage to this Lease, without Tenant’s consent, by notice in writing to
Tenant, and thereupon this Lease shall be deemed prior to such Mortgage without
regard to their respective dates of executing, delivery or recording and in the
event such Mortgagee shall have the same rights with respect to this Lease as
though this Lease has been executed prior to the executing, delivery and
recording of such Mortgage and had been assigned to such Mortgagee.
Notwithstanding the foregoing, upon written request by Tenant, Landlord will use
reasonable efforts to obtain a subordination, non-disturbance and attornment
agreement from Landlord’s then current Mortgagee on such Mortgagee’s then
current standard form of agreement. “Reasonable efforts” of Landlord shall not
require Landlord to incur any cost, expense or liability to obtain such
agreement, it being agreed that Tenant shall be responsible for any fee or
review costs charged by the Mortgagee. Upon request of Landlord, Tenant will
execute the Mortgagee’s commercially reasonable form of subordination,
non-disturbance and attornment agreement and return the same to Landlord for
execution by the Mortgagee. Landlord’s failure to obtain a subordination,
non-disturbance and attornment agreement for Tenant shall have no effect on the
rights, obligations and liabilities of Landlord and Tenant or be considered to
be a default by Landlord hereunder. Notwithstanding anything contained in
Section 20.2 to the contrary, Tenant’s agreement to subordinate this Lease to a
future Mortgage shall not be effective unless Landlord has provided Tenant with
a commercially reasonable non-disturbance agreement from the future Mortgagee.
For purposes of the preceding sentence, a non-disturbance agreement shall not be
deemed commercially reasonable unless it provides that: (a) so long as no Event
of Default exists, this Lease and Tenant’s right to possession hereunder shall
remain in full force and effect; (b) the Mortgagee shall have additional time
(not to exceed sixty (60) days after written notice from Tenant) to cure any
default of Landlord; and (c) neither the Mortgagee nor any successor in interest
shall be (i) bound by (A) any payment of Rent for more than 1 month in advance,
or (B) any amendment of this Lease made without the written consent of the
Mortgagee or such successor in interest; (ii) liable for (A) the return of any
security deposit, letter of credit or other collateral, except to the extent it
was received by the Mortgagee, or (B) any act, omission,
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representation, warranty or default of any prior landlord (including Landlord);
or (iii) subject to any offset or defense that Tenant might have against any
prior landlord (including Landlord), except those offset rights expressly
provided in this Lease.
20.3Attornment. Subject to the non-disturbance provisions set forth in Section
20.2, Tenant hereby agrees that Tenant will recognize as its landlord under this
Lease and shall attorn to any person succeeding to the interest of Landlord in
respect of the land and the buildings governed by this Lease upon any
foreclosure of any Mortgage upon such land or buildings or upon the execution of
any deed in lieu of foreclosure in respect to such Mortgage. Tenant shall pay
all rental payments required to be made pursuant to the terms of this Lease for
the duration of the term of this Lease. Tenant’s attornment shall be effective
and self-operative without the execution of any further instrument immediately
upon Mortgagee’s succeeding Landlord’s interest in this Lease and giving written
notice thereof to Tenant. If requested, Tenant shall execute and deliver an
instrument or instruments confirming its attornment as provided for herein;
provided, however, that no such Mortgagee or successor- in-interest shall be
bound by any payment of Base Rent for more than one (1) month in advance, or any
amendment or modification of this Lease made without the express written consent
of such Mortgagee where such consent is required under applicable loan
documents. Mortgagee shall not be liable for, nor subject to, any offsets or
defenses which Tenant may have by reason of any act or omission of Landlord
under this Lease, nor for the return of any sums which Tenant may have paid to
Landlord under this Lease as and for security deposits, advance rentals or
otherwise, except to the extent that such sums are actually delivered by
Landlord to Mortgagee. If Mortgagee, by succeeding to the interest of Landlord
under this Lease, should become obligated to perform the covenants of Landlord
hereunder, then, upon, any further transfer of Landlord’s interest by Mortgagee,
all such obligations shall terminate as to Mortgagee.
20.4Mortgagee Protection. Tenant agrees to give any Mortgagee of any Mortgage
secured by the Premises, the Property or the Project, by registered or certified
mail or nationally recognized overnight delivery service, a copy of any notice
of default served upon the Landlord by Tenant concurrently with delivery to
Landlord, provided that, prior to such notice, Tenant has been notified in
writing (by way of service on Tenant of a copy of assignment of rents and leases
or otherwise) of the address of such Mortgagee. Tenant further agrees that if
Landlord shall have failed to cure such default within thirty (30) days after
such notice to Landlord (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if Landlord has
commenced within such thirty (30) day period and is diligently pursuing the
remedies or steps necessary to cure or correct such default), then the Mortgagee
shall have an additional sixty (60) days within which to cure or correct such
default (or if such default cannot be cured or corrected within that time, then
such additional time as may be necessary if such Mortgagee has commenced within
such sixty (60) day period and is diligently pursuing the remedies or steps
necessary to cure or correct such default). Notwithstanding the foregoing, in no
event shall any Mortgagee have any obligation to cure any default of the
Landlord.
21.LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN THIS LEASE, THE LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL
BE LIMITED 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 70% OF THE VALUE OF THE
BUILDING. TENANT SHALL LOOK SOLELY TO LANDLORD’S INTEREST IN THE BUILDING FOR
THE RECOVERY OF ANY JUDGMENT OR AWARD AGAINST LANDLORD OR ANY INDEMNITEES.
NEITHER LANDLORD NOR ANY INDEMNITEES SHALL BE PERSONALLY LIABLE FOR ANY JUDGMENT
OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY INDEMNITEES OR MORTGAGEES
BE LIABLE TO TENANT FOR LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR ANY FORM
OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN ALLEGED
DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S) WHOM TENANT
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HAS BEEN NOTIFIED HOLD MORTGAGES, NOTICE AND REASONABLE TIME TO CURE THE ALLEGED
DEFAULT. WHENEVER LANDLORD TRANSFERS ITS INTEREST, LANDLORD SHALL BE
AUTOMATICALLY RELEASED FROM FURTHER PERFORMANCE UNDER THIS LEASE AND FROM ALL
FURTHER LIABILITIES AND EXPENSES HEREUNDER AND THE TRANSFEREE OF LANDLORD’S
INTEREST SHALL ASSUME ALL LIABILITIES AND OBLIGATIONS OF LANDLORD HEREUNDER FROM
THE DATE OF SUCH TRANSFER.
22.INTENTIONALLY OMITTED.
23.HOLDING OVER. If Tenant holds over the Premises or any part thereof after
expiration of the Term, such holding over shall be a tenancy at sufferance only,
for the entire Premises, subject to the terms and conditions of this Lease,
provided that Tenant shall pay monthly Base Rent and Additional Rent (determined
on a per month basis without reduction for partial months during the holdover)
equal to [***] of the Base Rent and one [***] of the Additional Rent in effect
immediately prior to such holding over. This Section shall not be construed as
Landlord’s permission for Tenant to hold over. Acceptance of Rent by Landlord
following expiration or termination shall not constitute a renewal of this Lease
or extension of the Term except as specifically set forth above. If Tenant fails
to surrender the Premises upon expiration or earlier termination of this Lease,
Tenant shall indemnify and hold Landlord harmless from and against all Losses
(including without limitation consequential damages) resulting from or arising
out of Tenant’s failure to surrender the Premises, including, but not limited
to, any amounts required to be paid to any tenant or prospective tenant who was
to have occupied the Premises after the expiration or earlier termination of
this Lease and any related attorneys’ fees and brokerage commissions.
24.NOTICES. All demands, approvals, consents or notices (collectively referred
to as a “notice”) shall be in writing and delivered by hand or sent by
registered, express, or certified mail, with return receipt requested or with
delivery confirmation requested from the U.S. postal service, or sent by
overnight or same day courier service at the party’s respective Notice
Address(es) set forth in Section 1; provided, however, notices sent by Landlord
regarding general Building operational matters may be sent via e-mail to the
e-mail address provided by Tenant to Landlord for such purpose. In addition, if
the Building is closed (whether due to emergency, governmental order or any
other reason), then any notice address at the Building shall not be deemed a
required notice address during such closure, and, unless Tenant has provided an
alternative valid notice address to Landlord for use during such closure, any
notices sent during such closure may be sent via e-mail or in any other
practical manner reasonably designed to ensure receipt by the intended
recipient. Each notice shall be deemed to have been received on the earlier to
occur of actual delivery or the date on which delivery is refused, or, if Tenant
has vacated the Premises or any other Notice Address of Tenant without providing
a new Notice Address, 3 days after notice is deposited in the U.S. mail or with
a courier service in the manner described above. Either party may, at any time,
change its Notice Address (other than to a post office box address) by giving
the other party written notice of the new address.
25.SURRENDER. Upon the expiration or earlier termination of this Lease, Tenant
shall repair any damage to and restore the condition of the Premises in
accordance with Section 13.2. Tenant shall also remove all of Tenant’s Property
and shall repair all damage to the Premises, the Building, the Common Area,
Property or the Project caused by the installation or removal of Tenant’s
Property. In no event shall Tenant remove from the Building any mechanical or
electrical systems, including without limitation, any power wiring or power
panels, lighting or lighting fixtures, wall coverings, drapes, blinds or other
window coverings, carpets or other floor coverings, heaters, air conditioners or
any other heating and air conditioning equipment, fencing or security gates,
load levelers, dock lights, dock locks or dock seals, or any wiring or any other
aspect of any systems within the Premises, unless Landlord specifically permits
or requires (to the extent expressly permitted by Section 13.2 of this Lease)
such removal in writing. Tenant shall surrender the Premises, together with all
keys and security codes, to Landlord broom clean, in as good a condition as
existed after Substantial Completion of the Initial Tenant’s Work, and in the
condition described on Exhibit H attached hereto, ordinary wear and tear and
damage by fire or casualty excepted. Conditions existing because of Tenant’s
failure to perform maintenance, repairs or replacements shall not
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be deemed “reasonable wear and tear”. If Tenant fails to remove any of Tenant’s
Property, or to restore the Premises to the required condition, within 2 days
after termination of this Lease or Tenant’s right to possession, Landlord, at
Tenant’s sole cost and expense, shall be entitled (but not obligated) to remove
and store Tenant’s Property and/or perform such restoration of the Premises.
Landlord shall not be responsible for the value, preservation or safekeeping of
Tenant’s Property. Tenant shall pay Landlord, upon demand, the expenses and
storage charges incurred. If Tenant fails to remove Tenant’s Property from the
Premises or storage, within 30 days after notice, Landlord may deem all or any
part of Tenant’s Property to be abandoned and, at Landlord’s option, title to
Tenant’s Property shall vest in Landlord or Landlord may dispose of Tenant’s
Property in any manner Landlord deems appropriate.
26.MISCELLANEOUS.
26.1Entire Agreement. This Lease, Addenda, Exhibits and Schedules set forth all
the agreements between Landlord and Tenant concerning the Premises; and there
are no agreements either oral or written other than as set forth herein. This
Lease may be modified only by a written agreement signed by an authorized
representative of Landlord and Tenant.
26.2Time of Essence; Business Days. Time is of the essence with respect to
Tenant’s exercise of any expansion, renewal or extension rights granted to
Tenant. The expiration of the Term, whether by lapse of time, termination or
otherwise, shall not relieve either party of any obligations which accrued prior
to or which may continue to accrue after the expiration or termination of this
Lease. For all purposes herein, a “business day” shall mean Monday through
Friday of each week, exclusive of New Year’s Day, Presidents Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day (“Holidays”).
Landlord may designate additional Holidays that are commonly recognized by other
industrial buildings in the area where the Building is located.
26.3Attorneys’ Fees; Jury Trial Waiver. In any action or proceeding between the
parties, including any appellate or alternative dispute resolution proceeding,
the prevailing party may recover from the other party all of its costs and
expenses in connection therewith, including reasonable attorneys’ fees and
costs. Tenant shall pay all reasonable attorneys’ fees and other fees and costs
that Landlord incurs in interpreting or enforcing this Lease or otherwise
protecting its rights hereunder (a) where Tenant has failed to pay Rent when
due, or (b) in any bankruptcy case, assignment for the benefit of creditors, or
other insolvency, liquidation or reorganization proceeding involving Tenant or
this Lease. THE PARTIES WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT
TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO 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.
26.4Severability. If any provision of this Lease or the application of any such
provision shall be held by a court of competent jurisdiction to be invalid, void
or unenforceable to any extent, the remaining provisions of this Lease and the
application thereof shall remain in full force and effect and shall not be
affected, impaired or invalidated.
26.5Law. This Lease shall be construed and enforced in accordance with the laws
of the state in which the Premises are located, and Landlord and Tenant hereby
irrevocably consent to the jurisdiction and proper venue of such state.
26.6No Option. Submission of this Lease to Tenant for examination or negotiation
does not constitute an option to lease, offer to lease or a reservation of, or
option for, the Premises; and this document shall become effective and binding
only upon the execution and delivery hereof by Landlord and Tenant.
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26.7Successors and Assigns. This Lease shall be binding upon and inure to the
benefit of the successors and assigns of Landlord and, subject to compliance
with the terms of Section 19, Tenant.
26.8Third Party Beneficiaries. Nothing herein is intended to create any third
party beneficiary.
26.9Memorandum of Lease. Tenant shall not record this Lease or a short form
memorandum hereof.
26.10Agency, Partnership or Joint Venture. Nothing contained herein nor any acts
of the parties hereto shall be deemed or construed by the parties hereto, nor by
any third party, as creating the relationship of principal and agent or of
partnership or of joint venture by the parties hereto or any relationship other
than the relationship of landlord and tenant.
26.11Merger. The voluntary or other surrender of this Lease by Tenant or a
mutual cancellation thereof or a termination by Landlord shall not work a merger
and shall, at the option of Landlord, terminate all or any existing subtenancies
or may, at the option of Landlord, operate as an assignment to Landlord of any
or all of such subtenancies.
26.12Headings. Section headings have been inserted solely as a matter of
convenience and are not intended to define or limit the scope of any of the
provisions contained therein.
26.13Security Measures. Tenant hereby acknowledges that Landlord shall have no
obligation to provide a guard service or other security measures whatsoever.
26.14No Press Release. Any press release or other similar public statement
regarding Tenant’s occupancy of the Premises or this Lease shall require the
prior written approval of Landlord and Tenant, such approval not to be
unreasonably withheld by either party.
26.15Landlord’s Lien/Security Interest. Tenant hereby grants Landlord a security
interest, and this Lease constitutes a security agreement, within the meaning of
and pursuant to the Uniform Commercial Code of the state in which the Premises
are situated as to all of Tenant’s Property (except merchandise sold in the
ordinary course of business) as security for all of Tenant’s obligations
hereunder, including, without limitation, the obligation to pay rent.
Notwithstanding the foregoing, Landlord agrees that it will subordinate its
security interest and landlord's lien to the security interest of Tenant's
supplier or institutional financial source subject to the terms and conditions
contained in a separate written document.
26.16Signage. All signs and graphics of every kind visible in or from public
view or corridors, the Common Areas or the exterior of the Premises (whether
located inside or outside of the Premises) including, without limitation,
Tenant’s Signage, shall be subject to Landlord’s prior written approval (not to
be unreasonably withheld, conditioned, or delayed) and shall be subject to the
CC&Rs and any applicable governmental laws, ordinances, and regulations and in
compliance with Landlord’s signage program (if any). The installation of any
sign on the Premises by or for Tenant shall be subject to the provisions of
Section 13 (Alterations). Tenant, at Tenant’s sole cost and expense, shall
remove all such signs and graphics prior to the termination of this Lease. Such
installations and removals shall be made in such manner as to avoid injury or
defacement of the Premises; and Tenant shall repair any injury or defacement,
including without limitation, discoloration caused by such installation or
removal. So long as Tenant leases all of the rentable square footage of the
Building, Tenant, at its sole cost and expense, shall be entitled to install and
maintain the following signage (collectively, the “Tenant’s Signage”): (i) one
(1) exclusive Building-top signage identifying Tenant's name or logo located at
the top of the Building; (ii) any “eyebrow” signage located at the main entrance
of the Building; and (iii) one (1) strip on the existing a monument sign located
at the Building. Tenant’s Signage rights shall terminate and be of no further
force or effect in the event that Tenant does not install Tenant’s Signage
within
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twelve (12) months after the Commencement Date. The rights contained in this
Section 26.16 shall be personal to the Tenant named originally in this Lease
(the “Original Tenant”), and may only be exercised and maintained by such party
or any Affiliate (and not any assignee, sublessee or other transferee of the
Original Tenant's interest in this Lease). To the extent Tenant desires to
change the name and/or logo set forth on Tenant's Signage, such name and/or logo
shall not have a name 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, which would otherwise reasonably
offend a landlord of comparable buildings or projects, or is in violation of
signage rights previously granted to other tenants of the Building or the
Project. Should Tenant's Signage require repairs and/or maintenance, as
determined in Landlord's reasonable judgment, Landlord shall have the right to
provide notice thereof to Tenant and Tenant (except as set forth above) shall
cause such repairs and/or maintenance to be performed within fifteen (15)
business days after receipt of such notice from Landlord, at Tenant's sole cost
and expense; provided, however, if such repairs and/or maintenance are
reasonably expected to require longer than fifteen (15) business days to
perform, Tenant shall commence such repairs and/or maintenance within such
fifteen (15) business day period and shall diligently prosecute such repairs and
maintenance to completion. Should Tenant fail to perform such repairs and/or
maintenance within the periods described in the immediately preceding sentence,
Landlord shall, upon the delivery of an additional five (5) business days’ prior
written notice, have the right to cause such work to be performed and to charge
Tenant as Additional Rent for the cost of such work.
26.17Waiver. No waiver of any default or breach hereunder shall be implied from
any omission to take action on account thereof, notwithstanding any custom and
practice or course of dealing. No waiver by either party of any provision under
this Lease shall be effective unless in writing and signed by such party. No
waiver shall affect any default other than the default specified in the waiver
and then such waiver shall be operative only for the time and to the extent
therein stated. Waivers of any covenant shall not be construed as a waiver of
any subsequent breach of the same.
26.18Financial Statements. Tenant shall provide, and cause each Guarantor, if
applicable, to provide to any Mortgagee, any purchaser of the Building, the
Property and/or the Project or Landlord, within ten (10) business days after
request, a current, accurate, audited (if Tenant is no longer a public company)
financial statement for Tenant and Tenant’s business (and Guarantor and
Guarantor’s business, if applicable) and financial statements for Tenant and
Tenant’s business (and Guarantor and Guarantor’s business, if applicable) for
each of the two (2) years prior to the current financial statement year prepared
under generally accepted accounting principles consistently applied and
certified by an officer of the Tenant (or Guarantor, if applicable) as being
true and correct. Tenant shall also provide, and cause each Guarantor, if
applicable, to provide, within said ten (10)-day period such other financial
information or tax returns as may be reasonably required by Landlord, any
purchaser of the Building, the Property and/or the Project or any Mortgagee of
either. Tenant hereby authorizes Landlord, and shall cause each Guarantor, if
applicable, to authorize Landlord to obtain one (1) or more credit reports on
Tenant (and Guarantor, if applicable) at any time, and shall execute such
further authorizations as Landlord may reasonably require in order to obtain a
credit report. Notwithstanding anything to the contrary set forth above, if
Tenant is a “public company” and its financial information is publicly
available, then the foregoing delivery requirements of this Section 26.18 shall
not apply.
26.19Brokers. Tenant represents to Landlord that it has dealt only with Tenant’s
Broker as its broker, agent or finder in connection with this Lease. Tenant
shall indemnify, defend, and hold Landlord harmless from all claims of any
brokers, agents or finders other than Tenant’s Broker, claiming to have
represented Tenant in connection with this Lease. Landlord shall indemnify,
defend and hold Tenant harmless from all claims of any brokers, agents or
finders, including Landlord’s Broker, claiming to have represented Landlord in
connection with this Lease. Tenant acknowledges that any affiliate of Landlord
that is involved in the negotiation of this Lease is representing only Landlord,
and that any assistance rendered by any agent or employee of such affiliate in
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connection with this Lease or any subsequent amendment or other document related
hereto has been or will be rendered as an accommodation to Tenant solely in
furtherance of consummating the transaction on behalf of Landlord, and not as
agent for Tenant. Landlord agrees to pay a brokerage commission to Tenant’s
Broker in accordance with the terms of a separate written commission agreement
to be entered into between Landlord and Tenant’s Broker.
26.20Authorization. If Tenant signs as a corporation, partnership, limited
liability company, trust or other legal entity each of the persons executing
this Lease on behalf of Tenant represents and warrants that Tenant has been and
is qualified to do business in the state in which the Premises is located, that
the entity has full right and authority to enter into this Lease, and that all
persons signing on behalf of the entity were authorized to do so by appropriate
actions. Tenant agrees to deliver to Landlord, simultaneously with the delivery
of this Lease, a Secretary’s certificate, in a form reasonably acceptable to
Landlord evidencing the due authorization of Tenant to enter into this Lease.
26.21Joint and Several. If Tenant consists of more than one person, the
obligation of all such persons shall be joint and several. In such event,
requests or demands from any one person or entity comprising Tenant shall be
deemed to have been made by all such persons or entities, and notices to any one
person or entity shall be deemed to have been given to all persons and entities.
26.22Covenants and Conditions. Each provision to be performed by Tenant
hereunder shall be deemed to be both a covenant and a condition.
26.23Consents. Except as otherwise provided elsewhere in this Lease, Landlord’s
actual reasonable costs and expenses (including, but not limited to,
architects’, attorneys’, engineers’ and other consultants’ fees) incurred in the
consideration of, or response to, a request by Tenant for any Landlord consent,
including but not limited to, consents to an assignment, a subletting or the
presence or use of a Hazardous Material, shall be paid by Tenant upon receipt of
an invoice and supporting documentation therefor.
26.24Force Majeure. “Force Majeure” as used in this Lease means delays resulting
from causes beyond the reasonable control of Landlord or Tenant, including,
without limitation, any delay caused by any action, inaction, order, ruling,
moratorium, regulation, statute, condition or other decision of any private
party or governmental agency having jurisdiction over any portion of the
Property or the Project, over the construction anticipated to occur thereon or
over any uses thereof, or by delays in inspections or in issuing approvals by
private parties or permits by governmental agencies, or by fire, flood,
inclement weather, strikes, pandemics, lockouts or other labor or industrial
disturbance, failure or inability to secure materials, supplies or labor through
ordinary sources, earthquake, or other natural disaster, or any cause whatsoever
beyond the reasonable control (excluding financial inability) of the Landlord or
Tenant, or any of its contractors or other representatives, whether or not
similar to any of the causes hereinabove stated. If either party is prevented
from or delayed in performing any of its obligations hereunder as a result of
Force Majeure such obligation shall be excused during the period of such
prevention or delay, and if this Lease specifies a time period for the
performance of such obligation, such time period shall be extended by the period
of such prevention or delay. The foregoing shall not excuse or delay any
obligation to pay any amounts due hereunder.
26.25OFAC. Tenant hereby represents, warrants and certifies that: (i) neither it
nor its officers, directors, or controlling owners is acting, directly or
indirectly, for or on behalf of any person, group, entity, or nation named by
any Executive Order, the United States Department of Justice, or the United
States Treasury Department as a terrorist, “Specifically Designated National or
Blocked Person,” or other banned or blocked person, entity, nation, or
transaction pursuant to any law, order, rule or regulation that is enforced or
administered by the Office of Foreign Assets Control (“SDN”); (ii) neither it
nor its officers, directors or controlling owners is engaged in this
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transaction, directly or indirectly on behalf of, or instigating or facilitating
this transaction, directly or indirectly on behalf of, any such person, group,
entity, or nation; and (iii) neither it nor its officers, directors or
controlling owners is in violation of Presidential Executive Order 13224, the
USA PATRIOT Act, (Public Law 107-56), the Bank Secrecy Act, the Money Laundering
Control Act or any regulations promulgated pursuant thereto. If the foregoing
representations are untrue at any time during the Term, an Event of Default will
be deemed to have occurred, without the necessity of notice to Tenant. The
provisions of this Paragraph shall survive the expiration or earlier termination
of this Lease.
26.26Roof Use by Landlord. Landlord shall not use or perform any work on the
surface of the roof in any manner which materially interferes with Tenant’s use
of the Premises except as may be required by Applicable Law or to repair or
replace the HVAC System. In such event, Landlord shall provide Tenant at least
two (2) days’ prior notice to Tenant before performing any such work.
26.27Guarantors. The Guarantors, if any, shall each execute a full payment and
performance guaranty in a form provided by Landlord. It shall constitute an
Event of Default of the Tenant if any Guarantor fails or refuses, upon request
to provide: (1) evidence of the execution and continued enforceability of the
guaranty, including the authority of the party signing on Guarantor’s behalf to
obligate Guarantor, and in the case of a corporate Guarantor, a certified copy
of a resolution of its board of directors authorizing the making of such
guaranty, (2) current financial statements, (3) an estoppel certificate, or
(4) written confirmation that the guaranty is still in effect as a valid binding
obligation.
26.28Parking. Unless otherwise directed by Landlord and subject to Tenant’s use
of any parking spaces for the Initial Tenant’s Work (in which case the number of
parking spaces Landlord is required to provide Tenant shall be reduced by the
number of parking spaces so used by Tenant), Tenant shall have the right to park
in not more than two hundred forty-eight (248) nonreserved parking spaces common
with other tenants of the Project in those areas designated by Landlord for
nonreserved parking; provided, however, Tenant may designate up to ten (10) of
those nonreserved parking space to be used as exclusive parking spaces by Tenant
and Tenant’s invitees in a location that is mutually agreeable to both Landlord
and Tenant. Tenant agrees not to overburden the parking facilities and agrees to
cooperate with Landlord and other tenants in the use of parking facilities.
Landlord may, but is not obligated to, designate exclusive parking spaces for
other tenants of the Project in the Property and/or Project if Landlord
reasonably determines that such designation is necessary. Landlord shall not be
responsible for enforcing Tenant’s parking rights against any third parties, but
shall use reasonable efforts to ensure Tenant has access to at least the
allocated parking set forth above, and in the event such parking allocation is
not available to Tenant, Landlord must provide alternative parking within
reasonable proximity to the Premises. The parking spaces shall be used for
parking by vehicles no larger than full-size passenger automobiles, SUV’s or
pick-up trucks (“Permitted Size Vehicles”). Vehicles other than Permitted Size
Vehicles shall be parked and loaded or unloaded as directed by Landlord. Tenant
shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant’s employees, suppliers, shippers, customers, contractors or
invitees to be loaded, unloaded, or parked in areas other than those designated
by Landlord for such activities. If Tenant permits or allows any of the
prohibited activities described in this Section, then Landlord shall have the
right, without notice, in addition to such other rights and remedies that it may
have, to remove or tow away the vehicle involved and charge the cost to Tenant,
which cost shall be immediately payable upon demand by Landlord. No vehicle or
equipment of any kind shall be dismantled or repaired or serviced on the Common
Area.
26.29Common Area. Tenant may, subject to any CC&Rs and any Rules or Regulations,
use the following areas of the Project (the “Common Area”) in common with
Landlord and tenants or lawful users of the Project: refuse facilities,
landscaped areas, roads, driveways necessary for
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access to the Premises, parking spaces, sidewalks, retention basins and other
common facilities designated by Landlord from time to time for the common use of
all tenants and owners of the Project. Landlord shall not be responsible for
non-compliance by any other tenant or occupant of the Project with, or
Landlord’s failure to enforce, any of the Rules or Regulations or CC&Rs or any
other terms or provisions of such tenant’s or occupant’s lease. Tenant shall
promptly comply with the reasonable requirements of any board of fire insurance
underwriters or other similar body now or hereafter constituted. Under no
circumstances shall the right herein granted to use the Common Area be deemed to
include the right to store any property, temporarily or permanently, in the
Common Area. In the event that any unauthorized storage shall occur, then
Landlord shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove the property and charge the cost to
Tenant, which cost shall be immediately payable upon demand by Landlord.
Landlord may change the shape and size of the Common Areas, including the
addition of, elimination of or change to any improvements located in the Common
Areas, so long as such change does not materially adversely affect Tenant’s
ability to use the Premises for the Permitted Use, access or available parking.
Subject to the terms of this Lease and the foregoing portions of this Section
26.29, Landlord shall maintain and operate the Common Areas in a manner
consistent with other first class industrial properties within the vicinity of
the Property.
26.30Counterparts. This Lease may be executed in counterparts and shall
constitute an agreement binding on all parties notwithstanding that all parties
are not signatories to the original or the same counterpart provided that all
parties are furnished a copy or copies thereof reflecting the signature of all
parties. Transmission of a facsimile or by email of a pdf copy of the signed
counterpart of the Lease shall be deemed the equivalent of the delivery of the
original, and any party so delivering a facsimile or pdf copy of the signed
counterpart of the Lease by email transmission shall in all events deliver to
the other party an original signature promptly upon request.
26.31Light and Air. This Lease does not grant any rights to light or air over or
about the Building. Landlord excepts and reserves exclusively to itself any and
all rights not specifically granted to Tenant under this Lease.
26.32Auctions. Tenant shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Landlord’s prior written consent, which Landlord
may withhold in its sole, absolute, and unfettered discretion. Notwithstanding
anything to the contrary in this Lease, Landlord shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent.
26.33Unrelated Business Income. If Landlord is advised by its counsel at any
time that any part of the payments by Tenant to Landlord under this Lease may be
characterized as unrelated business income under the United States Internal
Revenue Code and its regulations, then Tenant shall enter into any amendment
proposed by Landlord to avoid such income, so long as the amendment does not
require Tenant to make more payments or accept fewer services from Landlord,
than this Lease provides.
26.34Waiver of Redemption of Tenant. Tenant hereby waives, for Tenant and for
all those claiming under Tenant, 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 or Property after any termination of this
Lease.
26.35Independent 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, subject to Section 18.5, Tenant agrees that if Landlord fails to perform
its obligations set forth herein, Tenant shall not be entitled to make any
repairs or
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perform any acts hereunder at Landlord’s expense or to any setoff of the Rent or
other amounts owing hereunder against Landlord.
26.36Confidentiality. Tenant and Landlord acknowledge that the content of this
Lease and any related documents are confidential information. Tenant and
Landlord shall keep such confidential information confidential and shall not
disclose such confidential information to any person or entity other than such
party’s lenders, potential lenders, transferees, potential transferees,
financial, legal and space planning consultants and other parties required to
know such information on a need to know basis.

Notwithstanding the foregoing, Landlord and Tenant may disclose the terms of
this Lease pursuant to the requirements of any law or regulation, including, but
not limited, as may be required in connection with any filings required to made
with the U.S. Securities and Exchange Commission, or by the disclosure policies
of a major stock exchange, provided that Tenant (i) uses reasonable efforts to
inform Landlord prior to making any such disclosure or filing, and (ii) requests
confidential treatment of such information (or portions thereof) as reasonably
determined in the opinion of Landlord’s or Tenant’s respective counsel.
26.37Waiver of Statutory Provisions. Each party waives California Civil
Code Sections 1932(2), 1933(4) and 1945. Tenant waives (a) any rights under
(i) California Civil Code Sections 1932(1), 1941, 1942, 1950.7 or any similar
Law, or (ii) California Code of Civil Procedure Sections 1263.260 or 1265.130;
and (b) any right to terminate this Lease under California Civil Code
Section 1995.310.
26.38Energy Usage. If Tenant (or any party claiming by, through or under Tenant)
pays directly to the provider for any energy consumed at the Property, Tenant,
promptly upon request, shall deliver to Landlord (or, at Landlord’s option,
execute and deliver to Landlord an instrument enabling Landlord to obtain from
such provider) any data about such consumption at the Building that Landlord may
request.
[Signature Page Follows]

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Landlord and Tenant have executed this Lease in two or more counterparts as of
the Effective Date.

LANDLORD:
Icon Owner Pool 1 West/Southwest, LLC,
a Delaware limited liability company

By:    ______/s/ Ryan Ingle______________
Name:    _________ Ryan Ingle_____________
Title:    ___Managing Director_____________
TENANT:
GenMark Diagnostics, Inc.,
a Delaware corporation

By:    ____/s/ Scott Mendel _____________
Name:    ______Scott Mendel______________
Title:    ______CEO_____________________

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EXHIBIT A
OUTLINE AND LOCATION OF PREMISES
[See attached]

Exhibit A

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EXHIBIT B
WORK LETTER
[See attached]

Exhibit A

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EXHIBIT C
PROHIBITED USE

[See attached]

Exhibit C

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EXHIBIT D
RULES AND REGULATIONS

[See attached]

Exhibit D

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EXHIBIT E
CONFIRMATION LETTER
[See attached]

Exhibit E

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EXHIBIT F
REQUIREMENTS FOR IMPROVEMENTS OR ALTERATIONS BY TENANT
[See attached]

Exhibit F

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ATTACHMENT 1 TO EXHIBIT F
ITEMS TO BE FURNISHED TO LANDLORD FOR EACH WORK OF IMPROVEMENT

[See attached]

Attachment 1 to Exhibit F

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EXHIBIT G
HAZARDOUS MATERIALS SURVEY FORM

[See attached]

Attachment 1 to Exhibit F

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EXHIBIT H
MOVE OUT CONDITIONS

[See attached]

Exhibit H

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EXHIBIT I
MINIMUM SERVICE CONTRACT REQUIREMENTS

[See attached]

Exhibit I

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EXHIBIT J
ADDITIONAL PROVISIONS
This Exhibit is attached to and made a part of the Single Tenant Industrial
Triple Net Lease (the “Lease”) by and between Icon Owner Pool 1 West/Southwest,
LLC, a Delaware limited liability company (“Landlord”) and GenMark Diagnostics,
Inc., a Delaware corporation (“Tenant”), for the Building located at [***],
Carlsbad, California. Capitalized terms used but not defined herein shall have
the meanings given in the Lease.
1.Extension Option.
1.1Grant of Option; Conditions. Tenant shall have the right to extend the Term
(the “Extension Option”) for two (2) additional periods of five (5) years
commencing on the day following the Termination Date of the Term and ending on
the fifth anniversary of the Termination Date (the “Extension Term”), if:
1.1.1Landlord receives irrevocable and unconditional written notice of exercise
(“Extension Notice”) not less than twelve (12) full calendar months prior to the
expiration of the Term and not more than eighteen (18) full calendar months
prior to the expiration of the Term; and
1.1.2No Event of Default by Tenant beyond any applicable cure periods has
occurred as of the date that Tenant delivers its Extension Notice; and
1.1.3No more than 30% of the Premises is sublet (except to Tenant’s Affiliates,
which shall not count toward the foregoing 30% cap) at the time that Tenant
delivers its Extension Notice; and
1.1.4The Lease has not been assigned (except pursuant to an assignment not
requiring Landlord’s consent under the Lease [a “Permitted Transfer”]) prior to
the date that Tenant delivers its Extension Notice.
1.2Terms Applicable to Premises During Extension Term.
1.2.1The initial Base Rent rate per rentable square foot for the Premises during
the Extension Term shall equal the Prevailing Market (hereinafter defined) rate
per rentable square foot for the Premises. Base Rent during the Extension Term
shall increase, if at all, in accordance with the increases assumed in the
determination of the Prevailing Market rate. Base Rent attributable to the
Premises shall be payable in monthly installments in accordance with the terms
and conditions of the Lease.
1.2.2Tenant shall pay Additional Rent (i.e. Real Property Taxes and Operating
Expenses) for the Premises during the Extension Term in accordance with the
Lease, and the manner and method in which Tenant reimburses Landlord for
Tenant’s Share of Real Property Taxes and Operating Expenses applicable to such
matter, shall be some of the factors considered in determining the Prevailing
Market rate for the Extension Term.
1.3Definition of Prevailing Market. For purposes hereof, “Prevailing Market”
shall mean the arm’s length fair market annual rental rate per rentable square
foot under renewal leases and amendments entered into on or about the date on
which the Prevailing Market is being determined hereunder for space comparable
to the Building, a use comparable to Tenant’s Permitted Use, and industrial
buildings comparable to the Building in the central and northern portions of the
County of San Diego, California area. The determination of Prevailing Market
shall take into account any material economic differences between the terms of
this Lease and any comparison lease, such as rent abatements, construction costs
and other concessions, the term for such lease, and the manner, if any, in which
the landlord under any such lease is reimbursed for operating expenses and
taxes. Notwithstanding the foregoing, space leased under any of the following
circumstances shall not be considered to be comparable for purposes hereof:
(i) the lease term is for less than 5 years or more than 7 years, or (ii) the
space is encumbered by the option rights of another tenant. The foregoing is not
intended to be an exclusive list of space that will not be considered to be
comparable.

Exhibit J

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1.4Effect of Failure to Give Notice; Arbitration Procedure. Tenant shall
exercise the Extension Option by giving the Landlord the Extension Notice. If
Tenant fails to give the Extension Notice to Landlord within the time period
described above, then the Extension Option shall be null and void and of no
further force or effect. Within thirty (30) days of receiving Tenant’s Extension
Notice, Landlord shall give Tenant notice of Landlord’s determination of the
applicable Base Rent rate for the Extension Term (the “Landlord’s Determination
Notice”). If Tenant disagrees with Landlord’s determination of the applicable
Base Rent rate, Landlord and Tenant shall attempt to agree on the applicable
Base Rent rate. If the parties do not so agree on the applicable Base Rent rate
within thirty (30) days of the date of Landlord’s Determination Notice, Landlord
and Tenant shall submit the determination of the Prevailing Market rate (for
purposes of determining the applicable Base Rent rate) to binding arbitration
unless the parties otherwise mutually agree in their respective sole discretion.
In such event, Landlord and Tenant shall attempt to agree on an arbitrator
within ten (10) days after the expiration of such thirty (30) day period. If
they fail, after good faith efforts, to agree on an arbitrator within such ten
(10) day period, Landlord and Tenant shall each appoint a reputable commercial
leasing broker as arbitrator, each of whom shall have at least ten (10) years’
active and current experience in the commercial real estate industry and the
central and northern portions of the County of San Diego, California leasing
market with working knowledge of current rental rates and leasing practices
related to buildings similar to the Building. Such an appointment shall be
signified in writing by each party to the other. If either party shall fail to
appoint an arbitrator within a period of ten (10) days after written notice from
the other party to make such appointment, the sole arbitrator appointed shall
make the determination of the Prevailing Market rate in the same manner provided
below as though it were the third arbitrator. If both parties appoint an
arbitrator, the arbitrators so appointed shall appoint a third arbitrator, who
is a reputable commercial leasing broker and has at least ten (10) years’ active
and current experience in the commercial real estate industry and in the central
and northern portions of the County of San Diego, California area leasing market
with working knowledge of current rental rates and leasing practices related to
buildings similar to the Building, within ten (10) days after the appointment of
the second arbitrator. Each of Landlord and Tenant shall furnish each of the
three arbitrators with a copy of their respective final determination of the
Prevailing Market rate. The third arbitrator shall proceed with all reasonable
dispatch to determine whether Landlord’s final determination of Prevailing
Market rate or Tenant’s final determination of Prevailing Market rate, most
closely reflects the Prevailing Market rate and in no event shall the arbitrator
have the right (i) to average the final determination of Prevailing Market rate
of Landlord and Tenant or (ii) to choose another rate. The decision of such
third arbitrator shall in any event be rendered within thirty (30) days after
his/her appointment, or within such other period as the parties shall agree, and
such decision shall be in writing and in duplicate, one counterpart thereof to
be delivered to each of the parties. The arbitration shall be conducted in
accordance with the rules of the American Arbitration Association (or its
successor) and Applicable Laws and this Section, which shall govern to the
extent of any conflict between this Section and the rules of the American
Arbitration Association, and the decision of the third arbitrator shall be
reviewable only to the extent provided by the rules of the American Arbitration
Association and shall otherwise be binding, final and conclusive on the parties.
Each party shall pay the fees of the arbitrator it chose and the fees of its
counsel and the losing party shall pay for the fees of the third arbitrator and
the reasonable and necessary expenses incident to the proceedings; provided
however, if a party fails to appoint an arbitrator, the fees of the sole
arbitrator shall be split between the two parties equally.
1.5Extension Amendment. If Tenant is entitled to and validly exercises its
Extension Option, Landlord shall prepare an amendment (the “Extension
Amendment”) to reflect changes in the Base Rent, Term, Termination Date and
other appropriate terms. The Extension Amendment shall be (i) sent to Tenant
within a reasonable time after determination of the Prevailing Market rate, and
(ii) executed by Tenant and returned to Landlord within fifteen (15) days after
the Extension Amendment is delivered to Tenant by Landlord. Notwithstanding the
foregoing, an otherwise valid exercise of the Extension Option shall be fully
effective whether or not the Extension Amendment is executed.
1.6Time of the Essence. Time is of the essence with respect to all of the time
periods set forth in this Section 1.
1.7Personal to Tenant. Notwithstanding anything herein to the contrary, Tenant’s
Extension Option is personal to Tenant and in no event shall such Extension
Option be assignable (except pursuant to an assignee of a Permitted Transfer).
2.Right of First Refusal.

Exhibit J

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2.1Grant of Option; Conditions. Tenant shall have an ongoing right of first
refusal (the “Right of First Refusal”) with respect to the buildings located at
either [***], Carlsbad, California and [***], Carlsbad, California (the “Refusal
Space”). Tenant’s Right of First Refusal shall be exercised as follows: when
Landlord has a prospective tenant, other than the existing tenant in the Refusal
Space, (the “Prospect”) interested in leasing all or a portion of the Refusal
Space, Landlord shall advise Tenant (the “Advice”) of the financial terms and
other material terms, including the tenant improvement allowance being offered
to the prospective tenant, under which Landlord is prepared to lease the Refusal
Space to such Prospect, which shall include a copy of any written offer received
from the Prospect (to the extent such an offer exists), and Tenant may lease the
Refusal Space, under such terms, by providing Landlord with written notice of
exercise (the “Notice of Exercise”) within ten (10) days after the date of the
Advice, which Notice of Exercise shall include a representation and warranty
from Tenant to Landlord that the Refusal Space is intended for the exclusive use
of Tenant during the Term. Notwithstanding the foregoing, Tenant shall have no
such Right of First Refusal and Landlord need not provide Tenant with an Advice
if:
2.1.1An Event of Default by Tenant has occurred under the Lease beyond any
applicable cure periods at the time that Landlord would otherwise deliver the
Advice; or
2.1.2the Premises, or any portion thereof, is sublet at the time Landlord would
otherwise deliver the Advice; or
2.1.3the Lease has been assigned prior to the date Landlord would otherwise
deliver the Advice, except pursuant to a Permitted Transfer; or
2.1.4Tenant is not occupying the Premises on the date Landlord would otherwise
deliver the Advice; or
2.1.5the Refusal Space is not intended for the exclusive use of Tenant during
the Term; or
2.1.6the existing tenant or occupant in the Refusal Space is interested in
extending or renewing its lease for the Refusal Space or entering into a new
lease for such Refusal Space or any other person or entity having any
pre-existing rights in the Refusal Space is interested in entering into a new
lease for the Refusal Space.
2.2Terms for Refusal Space.
2.2.1The term for the Refusal Space shall commence upon the commencement date
stated in the Advice and thereupon such Refusal Space shall be considered a part
of the Premises, provided that all of the terms stated in the Advice, including
the termination date set forth in the Advice, shall govern Tenant’s leasing of
the Refusal Space and only to the extent that they do not conflict with the
Advice, the terms and conditions of the Lease shall apply to the Refusal Space.
Tenant shall pay Base Rent and Additional Rent and be provided the tenant
improvement allowance for the Refusal Space in accordance with the terms and
conditions of the Advice.
2.2.2The Refusal Space (including improvements and personalty, if any) shall be
accepted by Tenant in its as is condition and as-built configuration existing on
the earlier of the date Tenant takes possession of the Refusal Space or the date
the term for such Refusal Space commences, unless the Advice specifies work to
be performed by Landlord in the Refusal Space, in which case Landlord shall
perform such work in the Refusal Space. If Landlord is delayed delivering
possession of the Refusal Space due to the holdover or unlawful possession of
such space by any party, Landlord shall use reasonable efforts to obtain
possession of the space, and the commencement of the term for the Refusal Space
shall be postponed until the date Landlord delivers possession of the Refusal
Space to Tenant free from occupancy by any party.
2.3Termination of Right of First Refusal. The rights of Tenant hereunder with
respect to the applicable offered Refusal Space shall terminate on the earlier
to occur of (i) eighteen (18) months prior to the then current Termination Date;
(ii) Tenant’s failure to exercise its Right of First Refusal within the ten (10)
day period provided in Section 2.1 above (solely with respect to the lease
contemplated by the applicable Advice); and (iii) the date Landlord would have
provided Tenant an Advice if Tenant had not been in violation of one or more of
the conditions set forth in Section 2.1

Exhibit J

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above (solely with respect to the lease contemplated by the applicable Advice).
Landlord may enter into a lease for the Refusal Space on terms which may differ
from the terms set forth in the Advice; provided, however, the Effective Rental
Rate under such lease shall not be less than [***] of the Effective Rental Rate
specified in the Advice. The "Effective Rental Rate" shall mean the constant
rent per period that equals the present value of the net cash flows, including,
without limitation, cash flows related to capital items such as tenant
improvements and leasing commissions, and taking into account all concessions,
abatements, incentives and similar items, over the lease term, discounted at an
annual cost of capital rate equal to [***]; and (iii) the date Landlord would
have provided Tenant an Advice if Tenant had not been in violation of one or
more of the conditions set forth in Section 2.1 above. In addition, if Landlord
provides Tenant with an Advice for any portion of the Refusal Space that
contains expansion rights (whether such rights are described as an expansion
option, right of first refusal, right of first offer or otherwise) with respect
to any other portion of the Refusal Space (such other portion of the Refusal
Space subject to such expansion rights is referred to herein as the “Encumbered
Refusal Space”) and Tenant does not exercise its Right of First Refusal to lease
the Refusal Space described in the Advice, Tenant’s Right of First Refusal with
respect to the Encumbered Refusal Space shall be subject and subordinate to all
such expansion rights contained in the Advice. Notwithstanding anything
contained herein to the contrary, if Tenant was entitled to exercise its Right
of First Refusal, but failed to provide Landlord with a Notice of Exercise
within the ten (10) day period provided in Section 2.1 above, Tenant shall once
again have the Right of First Refusal if Landlord does not enter into a lease
for the Refusal Space with the Prospect or any other prospect within a period of
6 months following the date of the Advice, In addition, if Landlord does enter
into a lease for the Refusal Space, Tenant shall have a Right of First Refusal
on such Refusal Space (subject to the terms hereof) upon the expiration of the
lease with the Prospect, subject to any extension or renewal rights of such
Prospect. In no event shall Tenant have any rights under this Right of First
Refusal provision described in this Section 2 after eighteen (18) months prior
to the then current Termination Date.
2.4Refusal Space Amendment. If Tenant exercises its Right of First Refusal,
Landlord shall prepare an amendment (the “Refusal Space Amendment”) adding the
Refusal Space to the Premises on the terms set forth in the Advice and
reflecting the changes in the Base Rent, Rentable Square Footage of the
Premises, Tenant’s Share and other appropriate terms. A copy of the Refusal
Space Amendment shall be sent to Tenant within a reasonable time after
Landlord’s receipt of the Notice of Exercise executed by Tenant, and Tenant
shall execute and return the Refusal Space Amendment to Landlord within 15 days
thereafter, but an otherwise valid exercise of the Right of First Refusal shall
be fully effective whether or not the Refusal Space Amendment is executed.
2.5Subordination. Notwithstanding anything herein to the contrary, Tenant’s
Right of First Refusal is subject and subordinate to the renewal or extension
rights of any tenant leasing all or any portion of the Refusal Space.
2.6Time of the Essence. Time is of the essence with respect to all time periods
set forth in this Section 2.
2.7Personal to Tenant. Notwithstanding anything herein to the contrary, Tenant’s
Right of First Refusal is personal to Tenant and in no event shall such Right of
First Refusal be assignable or exercisable by any party other than the original
named Tenant and any assignee of a Permitted Transfer.
3.Letter of Credit.
3.1General Provisions. By the earlier of (i) five (5) business days following
Tenant’s execution of this Lease, or (ii) the date Landlord actually delivers
possession of the Premises to Tenant, Tenant shall deliver to Landlord, as
collateral for the full performance by Tenant of all of its obligations under
this Lease and for all losses and damages Landlord may suffer as a result of
Tenant’s failure to comply with one or more provisions of this Lease, a standby,
unconditional, irrevocable, transferable letter of credit (the “Letter of
Credit”) in the form of Attachment1 hereto and containing the terms required
herein, in the face amount of $846,000.06 (the “Letter of Credit Amount”),
naming Landlord as beneficiary, issued (or confirmed) by a financial institution
acceptable to Landlord in Landlord’s sole discretion, permitting multiple and
partial draws thereon, and otherwise in form acceptable to Landlord in its sole
discretion. Tenant shall cause the Letter of Credit to be continuously
maintained in effect (whether through replacement, renewal or extension) in the
Letter of Credit Amount through the date (the “Final LC Expiration Date”) that
is sixty (60) days after the scheduled expiration date of the Term or any
renewal Term. If the Letter of Credit held by Landlord expires earlier than the
Final LC Expiration Date (whether by reason of a stated expiration date or a
notice of termination or non-renewal given by the issuing

Exhibit J

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bank), Tenant shall deliver a new Letter of Credit or certificate of renewal or
extension (a “Renewal or Replacement LC”) to Landlord not later than sixty (60)
days prior to the expiration date of the Letter of Credit then held by Landlord.
Any Renewal or Replacement LC shall comply with all of the provisions of this
Section 3, shall be irrevocable, transferable and shall remain in effect (or be
automatically renewable) through the Final LC Expiration Date upon the same
terms as the expiring Letter of Credit or such other terms as may be acceptable
to Landlord in its sole discretion. Notwithstanding the foregoing, if at any
time during the Term Landlord reasonably determines that the financial condition
of the issuing bank is such that Landlord’s ability to draw upon the Letter of
Credit is, or in the future may be, impaired, restricted, refused or otherwise
affected, then Tenant shall, within (10) business days of Landlord’s written
request to Tenant, obtain a renewal or replacement Letter of Credit in form
acceptable to Landlord in substitution of the then current Letter of Credit from
an issuing bank acceptable to Landlord in Landlord’s reasonable discretion.
Provided no Event of Default (nor an event which, with notice, the passage of
time, or both, would constitute an Event of Default) has occurred and is then
continuing, then after the fifth (5th) anniversary of the Commencement Date
Tenant shall be entitled to reduce the Letter of Credit Amount in accordance
with the following procedures: (i) Tenant shall provide written notice to
Landlord requesting to reduce the Letter of Credit Amount; (ii) upon receipt of
such notice, Landlord shall have five (5) business days to evaluate and
reasonably determine whether Tenant is entitled to reduce the Letter of Credit
Amount; and (iii) so long as Landlord does not object to a reduction of the
Letter of Credit Amount based on such above enumerated grounds, then Tenant
shall replace the Letter of Credit then being held by Landlord with a new Letter
of Credit with a reduced Letter of Credit Amount of $141,000.01.
3.2Drawings under Letter of Credit. Upon Tenant’s failure to comply with one or
more provisions of this Lease (beyond any applicable cure periods), or as
otherwise specifically agreed by Landlord and Tenant pursuant to this Lease or
any amendment hereof, Landlord may, without prejudice to any other remedy
provided in this Lease or by Law, draw on the Letter of Credit and use all or
part of the proceeds to (a) satisfy any amounts due to Landlord from Tenant, and
(b) satisfy any other damage, injury, expense or liability caused by Tenant’s
failure to so comply. In addition, if Tenant fails to furnish a Renewal or
Replacement LC complying with all of the provisions of this Section 3 at least
thirty (30) days prior to the stated expiration date of the Letter of Credit
then held by Landlord, Landlord may draw upon such Letter of Credit and hold the
proceeds thereof (and such proceeds need not be segregated) in accordance with
the terms of this Section 3 (the “LC Proceeds Account”).
3.3Use of Proceeds by Landlord. The proceeds of the Letter of Credit shall
constitute Landlord’s sole and separate property (and not Tenant’s property or
the property of Tenant’s bankruptcy estate) and Landlord may immediately upon
any draw (and without notice to Tenant) apply or offset the proceeds of the
Letter of Credit: (a) against any Rent payable by Tenant under this Lease that
is not paid when due; (b) against all losses and damages that Landlord has
suffered or that Landlord reasonably estimates that it may suffer as a result of
Tenant’s failure to comply with one or more provisions of this Lease;
(c) against any costs incurred by Landlord in connection with the Lease
(including attorneys’ fees); and (d) against any other amount that Landlord may
spend or become obligated to spend by reason of Tenant’s Default. Provided
Tenant has performed all of its obligations under this Lease, Landlord agrees to
pay to Tenant within forty-five (45) days after the Final LC Expiration Date the
amount of any proceeds of the Letter of Credit received by Landlord and not
applied as allowed above; provided, that if prior to the Final LC Expiration
Date a voluntary petition is filed by Tenant or any Guarantor, or an involuntary
petition is filed against Tenant or any Guarantor by any of Tenant’s or
Guarantor’s creditors, under the Federal Bankruptcy Code, then Landlord shall
not be obligated to make such payment in the amount of the unused Letter of
Credit proceeds until either all preference issues relating to payments under
this Lease have been resolved in such bankruptcy or reorganization case or such
bankruptcy or reorganization case has been dismissed, in each case pursuant to a
final court order not subject to appeal or any stay pending appeal.
3.4Additional Covenants of Tenant. If, as result of any application or use by
Landlord of all or any part of the Letter of Credit, the amount of the Letter of
Credit shall be less than the Letter of Credit Amount, Tenant shall, within five
(5) days thereafter, provide Landlord with additional letter(s) of credit in an
amount equal to the deficiency (or a replacement letter of credit in the total
Letter of Credit Amount), and any such additional (or replacement) letter of
credit shall comply with all of the provisions of this Section 3, and if Tenant
fails to comply with the foregoing, notwithstanding anything to the contrary
contained in this Lease, the same shall constitute an uncurable Default by
Tenant. Tenant further covenants and warrants that it will neither assign nor
encumber the Letter of Credit or any part thereof and that neither Landlord nor
its successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.

Exhibit J

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3.5Nature of Letter of Credit. Landlord and Tenant (a) acknowledge and agree
that in no event or circumstance shall the Letter of Credit or any renewal
thereof or substitute therefor or any proceeds thereof (including the LC
Proceeds Account) be deemed to be or treated as a “security deposit” under any
Law applicable to security deposits in the commercial context (“Security Deposit
Laws”), (b) acknowledge and agree that the Letter of Credit (including any
renewal thereof or substitute therefor or any proceeds thereof) is not intended
to serve as a security deposit, and the Security Deposit Laws shall have no
applicability or relevancy thereto, and (c) waive any and all rights, duties and
obligations either party may now or, in the future, will have relating to or
arising from the Security Deposit Laws.
3.6Secondary Letter of Credit. If, at any time during the Term, (a) an Event of
Default pursuant to Section 18.1.1 of the Lease occurs or (b) Tenant’s cash
reserves and short term investments total less than [***], as reasonably
determined by Landlord, for more than thirty (30) days, then Landlord shall have
the right, upon delivery of written notice to Tenant, to have Tenant deliver to
Landlord within three (3) business days a second Letter of Credit in the form of
Attachment1 hereto (the “Secondary Letter of Credit”) in the face amount of
$846,000.06 (“Secondary Letter of Credit Amount”). The Secondary Letter of
Credit shall comply with all the terms of this Section 3 except that Tenant
shall not have the right to reduce the Secondary Letter of Credit Amount.
Provided no Event of Default pursuant to Section 18.1.1 has occurred and
Tenant’s cash reserves and short term investments total more than [***] (as
reasonably determined by Landlord), then after the first (1st) anniversary of
Landlord’s receipt of the Secondary Letter of Credit, Tenant shall be entitled
to have Landlord release the Secondary Letter of Credit to Tenant in accordance
with the following procedures: (i) Tenant shall provide written notice to
Landlord requesting Landlord release the Secondary Letter of Credit; (ii) upon
receipt of such notice, Landlord shall have five (5) business days to evaluate
and reasonably determine whether Tenant is entitled to have Secondary Letter of
Credit be released (pursuant to the criteria enumerated above); and (iii) so
long as Landlord does not object to releasing the Secondary Letter of Credit for
failure to meet the criteria enumerated above, then Landlord shall release the
Secondary Letter of Credit to Tenant.
4.California Civil Code Section 1938. Pursuant to California Civil Code
§ 1938(a), Landlord hereby states that the Premises have not undergone
inspection by a Certified Access Specialist (“CASp”) (defined in California
Civil Code § 55.52). Accordingly, pursuant to California Civil Code
Section 1938(e), Landlord hereby further states as follows:
A Certified Access Specialist (CASp) can inspect the subject premises and
determine whether the subject premises comply with all of the applicable
construction-related accessibility standards under state law. Although state law
does not require a CASp inspection of the subject premises, the commercial
property owner or lessor may not prohibit the lessee or tenant from obtaining a
CASp inspection of the subject premises for the occupancy or potential occupancy
of the lessee or tenant, if requested by the lessee or tenant. The parties shall
mutually agree on the arrangements for the time and manner of the CASp
inspection, the payment of the fee for the CASp inspection, and the cost of
making any repairs necessary to correct violations of construction-related
accessibility standards within the premises.
    In accordance with the foregoing, Landlord and Tenant agree that if Tenant
obtains a CASp inspection of the Premises, then Tenant shall, at its sole cost
and expense, pay (i) the fee for such inspection, and (ii) except as may be
otherwise expressly provided in this Lease, the cost of making any repairs
necessary to correct violations of construction-related accessibility standards
within the Premises.
5.MEDICAL WASTE POLICY. In the event Tenant, or any assignee, subtenant, or
other transferee commences to generate Hazardous Medical Waste (defined below)
or Infectious Waste (defined below) in or on the Premises, then the following
terms, conditions, and obligations shall apply:
5.1Tenant hereby agrees to furnish to Landlord upon demand, written evidence
that Tenant has established a written policy (the “Medical Waste Policy”)
concerning the identification, collection, storage, decontamination and disposal
of Hazardous Medical Waste (defined below) and Infectious Waste (defined below).
Tenant is responsible for the proper containment and identification of its
Hazardous Medical Waste and Infectious Waste, the disposal of the Hazardous
Medical Waste and Infectious Waste and the transportation of the Hazardous
Medical Waste and Infectious Waste using a properly qualified agent (including,
but not limited to, Stericycle). Landlord shall have the right to

Exhibit J

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reasonably designate an area within the Premises reasonably acceptable to Tenant
for the pick-up of Hazardous Medical Waste and Infectious Waste.
5.2“Hazardous Medical Waste” is defined as used needles and syringes, gloves and
linen, uniforms and laundry, and cleaning equipment or materials used to clean
any of the foregoing; any solid, liquid or gas that is capable of producing
harmful affects on humans or the environment; material that is ignitable,
corrosive, reactive or toxic; or any materials that are classified as hazardous
medical waste by Law.
5.3“Infectious Waste” is defined as any waste that contains pathogens or is
capable of producing infectious disease; material contaminated by potentially
infectious materials (taking into consideration the factors necessary for
induction of disease, which include, but are not limited to, adequate dose,
resistance of host, portal of entry and presence of a pathogen and virulence);
material that contains pathogens with sufficient virulence and quantity so that
exposure to the waste by a susceptible host could result in an infectious
disease; or wastes capable of causing disease. Including but not limited to:
5.3.1Cultures and stocks of agents infectious to humans, and associated
biologicals (including but not limited to cultures from medical laboratories;
waste from the production of biologicals; discarded live and attenuated
vaccines, and culture dishes and devices used to transfer, inoculate and mix
cultures);
5.3.2Human pathological wastes (including but not limited to tissue, organs and
body parts, and body fluids that are removed during medical procedures and
specimens of body fluids and their containers);
5.3.3Discarded waste blood and blood components (including but not limited to
serum and plasma) and saturated material containing free flowing blood and blood
components (including but not limited to lab specimens);
5.3.4Discarded sharps used in human patient care, medical research or clinical
or pharmaceutical laboratories (including but not limited to hypodermic, I.V.,
and other medical needles; hypodermic and I.V. syringes; Pasteur pipettes;
scalpel blades; blood vials; and broken or unbroken glassware in contact with
infectious agents, including slides or cover slips); and
5.3.5Discarded hypodermic, I.V. and other medical needles, hypodermic, I.V.,
syringes, sharps and scalpel blades and whether used or unused (as it is often
difficult to determine if they have been used).
5.4Tenant further agrees that such Medical Waste Policy shall incorporate the
following elements: (a) Tenant’s employees and agents shall be expressly
forbidden from disposing of any Hazardous Medical Waste or Infectious Waste
within the Premises or the Buildings in a manner which is contrary to the terms
of the Medical Waste Policy; (b) all such Hazardous Medical Waste and Infectious
Waste shall be collected, stored, decontaminated and removed from the Premises
and the Buildings by a qualified party in compliance with all Applicable Laws
and guidelines (including, without limitation, the Occupational Safety and
Health Act) of any local, state or federal entity having jurisdiction over this
matter; (c) Infectious Waste shall be separated from other waste by containing
it in disposable red plastic bags/containers which are impervious to moisture;
(d) needles and sharps shall be contained in disposable rigid containers which
can be sealed with a tight fitting lid; (e) all spills of Infectious Waste shall
be wiped immediately using a spill kit that contains instructions and disposable
red plastic bags; (f) any spillage, or injury from handling Infectious Waste
shall be immediately reported to Landlord and Landlord shall immediately be
given a specific incident report; and (g) Tenant and its employees and agents
shall at all times employ proper procedures, including, without limitation, the
use of tags, signs or other appropriate written communication, to prevent
accidental injury or illness to other tenants in the Project (including their
employees, agents and invitees) resulting from Tenant’s collection, storage,
decontamination and disposal of Hazardous Medical Waste and Infectious Waste.
Tenant hereby covenants and agrees that at all times during the Term, Tenant and
its employees and agents shall adhere to the terms and conditions of the Medical
Waste Policy. Tenant agrees to indemnify,

Exhibit J

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defend and hold Landlord and the Indemnitees harmless from and against any and
all liabilities, obligations, damages, penalties, claims, costs, charges or
expenses, including without limitation, reasonable attorney’s fees, clean-up
costs, fines or penalties arising out of or resulting from Tenant’s violation of
this Section 5.
6.LAB STANDARDS. Landlord acknowledges that Tenant currently does not, but in
the event Tenant, or any assignee, subtenant, or other transferee commences to
maintain or operate laboratory space in or on the Premises, then the following
terms, conditions, and obligations shall apply:
Tenant shall keep and maintain the lab space in accordance with (i) the
Institute of Laboratory Animal Resources “Guide for the Care and Use of
Laboratory Animals”, (ii) the Animal Welfare Act (7 U.S.C. 2131 et. Seq.), and
(iii) all other Applicable Laws, guidelines and policies relating to the
operation and maintenance of biomedical laboratory facilities (collectively, the
“Lab Standards”).
6.1Landlord acknowledges that as part of Tenant’s operations in the lab space,
Tenant may perform certain medical research work on animals (the “Permitted
Animals”). Tenant shall at all times keep and maintain the Permitted Animals
utilized by Tenant in accordance with the Lab Standards. All animals brought
onto the Property shall be transported in accordance with such rules and
regulations as Landlord shall reasonably designate. All animals kept in the lab
space shall be caged or restrained at all times. In no event shall Tenant use or
occupy the lab space in a manner that would be inconsistent with the character
and dignity of the Buildings or the Project and Landlord may require Tenant to
immediately cease any business, procedures, activities or other use which is
causing disturbance of, or interference with Landlord’s operation and management
of the Project or the use and occupancy thereof by any tenant therein.
6.2Without limiting the limitations imposed by the Permitted Use clause, Tenant
shall not use or permit the lab space to be used for any purpose that would
allow animal, medical or medicinal odors, fumes or noises to emanate from the
lab space. In the event such odors, fumes or noises do emanate from the lab
space, Tenant, at its sole cost and expense, shall be responsible for taking
whatever steps are necessary in accordance with all Applicable Laws and the
terms of this Lease in order to either eliminate such odors, fumes or noises or
to keep such odors, fumes or noises from emanating from the Premises in a manner
reasonably approved by Landlord. Such steps may include the installation of an
exhaust system or sound proofing in accordance with plans and specifications
approved by Landlord. If Landlord and Tenant are unable to reach an agreement on
the course of action Tenant will take to correct the odor or noise problem, as
the case may be, within ten (10) days after the date Landlord first contacts
Tenant to inform Tenant of the odor or noise problem, Landlord (in its
commercially reasonable discretion) shall determine the course of action Tenant
shall take to correct the odor or noise problem. Such work to correct the odor
or noise problem shall be completed by Tenant within thirty (30) days of the
date a determination is made by either Landlord or Landlord and Tenant (as
applicable) as to the scope of work Tenant shall perform.
6.3Tenant agrees to be solely responsible for the disposal of all medical,
infectious and hazardous waste (including without limitation, all needles,
syringes, bloodbags, bandages and vials) and all animal bodies or parts that are
generated in the Tenant’s lab space during the Term and to indemnify and hold
Landlord harmless from and against all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses which may be imposed upon,
incurred by, or asserted against Landlord in connection with the generation and
existence of such medical, infectious and/or hazardous waste (including without
limitation, all needles, syringes, bloodbags, bandages and vials) and all animal
bodies or parts and the removal thereof from the lab space. Tenant agrees to
comply with all Applicable Laws, ordinances, orders, rules, and regulations of
any governmental or regulatory agency with respect to the generation, existence,
removal, storage and disposal of any such medical, infectious and/or hazardous
waste (including without limitation, all needles, syringes, bloodbags, bandages
and vials) and all animal bodies and parts.
6.4agrees to contract with a licensed and insured medical waste disposal vendor
acceptable to Landlord for the lawful disposal of all medical, infectious and
hazardous waste (including without limitation, all needles, syringes, blood
bags, bandages and vials) and all animal bodies and parts that are generated in
Tenant’s lab space, and to provide a copy of such contract to Landlord. If
vendors are changed, Tenant agrees to notify Landlord of such change prior to
the effective date thereof and to provide the appropriate documentation to
Landlord. In no event shall any medical,

Exhibit J

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infectious and/or hazardous waste be placed or stored outside of the lab space,
it being agreed that all such materials shall be kept in the lab space until
picked up by the approved medical waste disposal vendor.
6.5Tenant, at Tenant’s sole cost and expense, shall obtain and maintain
throughout the Term any licenses, permits or zoning approvals required by any
governmental body for the conduct of Tenant’s business and medical uses with the
lab space.
6.6In the event Tenant’s activities in the Premises result in any disturbance,
disruption of or interference with the business of the Project, including, but
not limited to, demonstrations, pickets, boycotts and/or confrontations or
disputes on or about the Property opposing or supporting Tenant’s activities (a
“Use Dispute”), then Tenant shall take all actions necessary to resolve the Use
Dispute and to have the demonstrators, picketers or other individuals engaged in
the Use Dispute removed from the Property in an expeditious manner. Tenant shall
have no claim for damages against Landlord or any of the Indemnitees, as a
result of the above actions.
6.7Tenant agrees to indemnify, defend and hold Landlord and the Indemnitees
harmless from and against any and all liabilities, obligations, damages,
penalties, claims, costs, charges or expenses, including without limitation,
attorney’s fees, clean-up costs, fines or penalties arising out of or resulting
from Tenant’s violation of this Section 6.
7.Illustration of Cap on Controllable Expenses.
‘[***]

Exhibit J

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ATTACHMENT 1 TO EXHIBIT J
LETTER OF CREDIT

[See attached]

Attachment 1 to Exhibit J

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EXHIBIT K
JUDICIAL REFERENCE
[See attached]

Exhibit K