Exhibit 10.1

 

NET COMMERCIAL LEASE

This Net Commercial Lease (this “Lease”) dated August 15, 2018, for reference
purposes only, is by and between JCN PARTNERS, a California limited partnership
(“Lessor”), and AUDENTES THERAPEUTICS, INC., a Delaware corporation (“Lessee”).

IT IS HEREBY AGREED:

Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
premises described in Paragraph 1 below for the term and subject to the
covenants, agreements and conditions hereinafter set forth. Lessee covenants, as
a material part of the consideration for this Lease, to keep and perform all
said covenants and conditions by it to be kept and performed and that this Lease
is made upon the condition of such performance.  Prior to the executon of the
Lease, Lessee and Lessor have entered into those certain NET COMMERCIAL LEASE
Agreements, one dated January 7, 2017 for that certain commercial real property
commonly known as 550-3 Eccles Avenue, South San Francisco, California (the
“550-3 Eccles Lease”), and the second lease agreement, dated January 7, 2017 for
that certain commercial real property commonly known as 528 B, Eccles Avenue,
South San Francisco, California (the “528 B Eccles Lease”).  The 550-3 Eccles
Lease and the 528 B Eccles Lease are collectively referred to as the “Existing
Leases”.   This Lease shall be effective upon its mutual execution and delivery;
however, if prior to the Commencment Date, as defined below, an Event of Default
exists as to the Existing Leases, then this Lease shall terminate and be of no
futher force or effect.

1.Definitions. Unless the context otherwise specifies or requires, the following
terms shall have the following meanings:

A.Building. The term “Building” shall mean the land and other real property and
improvements located in 528-534 Eccles Avenue, South San Francisco, California,
the surrounding grounds and parking and driveway areas, including the common
easement roadway (the “Common Roadway”) adjacent to the Building, which location
is shown on Exhibit C attached hereto and incorporated herein by this reference.

B.Premises. The term “Premises” shall mean those sections of the Building
outlined by dark diagonal lines on the floor plan attached hereto as Exhibit A,
and incorporated herein by this reference, commonly referred to as 534 Eccles
Avenue, South San Francisco, CA, consisting of approximately 37,071 rentable
square feet and the exclusive use of forty-one (41)  parking spaces marked on
Exhibit B, attached hereto and incorporated herein by this reference, or as
designated from time to time by Lessor. For purposes of Lessee’s
responsibilities under this Lease, the Premises also includes the grounds
surrounding the Premises particularly the two exterior concrete blocks and the
walkway located adjacent to the East and North exterior walls of the
Premises.  Lessee shall have access to the Premises twenty-four (24) hours per
day, seven (7) days per week.

C.Lessee's Percentage Share. The term “Lessee's Percentage Share,” except when
said term refers to the cost of maintaining the Common Roadway, shall mean
thirty-three and ninety-nine hundredths percent (33.99%). Lessor and Lessee
acknowledge that Lessee's Percentage Share, except when said term refers to the
cost of maintaining the Common Roadway,

 

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has been obtained by dividing the net rental area of the Premises, which Lessor
and Lessee agree is 37,071 square feet, by the total net rental area of the
Building, which Lessor and Lessee agree is 109,056 square feet, and multiplying
such quotient by 100.  Lessee’s Percentage Share shall not be subject to change,
except for physical additions or deletions to the Premises or Building, or
caused by condemnation or destruction.

D.Lessee's Percentage Share of Common Roadway. The term “Lessee's Percentage
Share” when said term refers to the cost of maintaining the Common Roadway shall
mean nineteen and seventy-four one hundredths percent (19.74%). Lessor and
Lessee acknowledge that Lessee's Percentage Share, when said term refers to the
cost of maintaining the Common Roadway, has been obtained by dividing the net
rental area of the Premises, which Lessor and Lessee agree is 37,071 square
feet, by the total square footage of the two buildings which use the Common
Roadway which Lessor and Lessee agree is 187,770 square feet, and multiplying
such quotient by 100.

E.Common Area Maintenance and Repair Costs. The term “Common Area Maintenance
and Repair Costs” shall include, but not be limited to, all commercially
reasonable costs of maintaining and repairing, including the cost of any
maintenance or service contract, the Building's water, sewer, ventilating and
air-conditioning systems (unless such system only serves the Premises, or any
part thereof, in which event Lessee shall maintain said system), common
entryways, doors and passage ways, the plumbing and sewer system and sewer lines
which extend from the Premises and the Building, the grounds surrounding the
Building (including landscaping whether located adjacent to the Building or
elsewhere on the parcel on which the Building is located), the parking areas and
driveways and the Common Roadway (including but not limited to the resealing,
re-striping and re-paving of all such areas and filling in pot holes), fences,
the drain and gutter pipes at the roof level, and all other common areas.  Such
term shall also include the cost of washing the exterior walls or painting or
repairing such walls for the purpose of removing any graffiti which may appear
thereon and Lessee’s Percentage Share of a management fee of four and one-half
percent (4.5%) of the Base Monthly Rent each month during the term of this
Lease. Such term shall also include the cost of any needed replacements of such
equipment or systems or any other replacements or capital improvements.  With
regard to items which are capital improvements, Lessor shall determine what
replacements shall constitute a capital improvement and any such costs shall be
amortized over the useful life of the improvement, which Lessor shall determine
in its discretion, together with interest on the unamortized balance at the rate
of 10% per annum if Lessor has used its own funds or the interest rate as may
have been paid by Lessor on funds borrowed for the purpose of constructing or
installing such replacements or improvements. Lessee shall only be obligated to
pay, each month during the remainder of the term of this Lease, or any extension
thereof, on the date on which Rent is due, an amount equal to Lessee’s
Percentage Share for the amortization period of the useful life of such
improvement.

(1)Common Area Maintenance and Repair Costs shall not include the following:

(a)The cost of installing, operating and maintaining any specialty service, such
as daycare, cafeteria, athletic or recreational club;

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(b)The cost of any work or service performed for any tenant of the Building
(other than Lessee) to a materially greater extent or in a materially more
favorable manner than that furnished generally to the tenants and other
occupants (including Lessee);

(c)The cost of any repairs, alterations, additions, changes, replacements and
other items which are made in order to prepare for a new tenant’s occupancy
unless any such cost is required because of Alterations undertaken to the
Premises by Lessee;

(d)The cost of any repair in accordance with the casualty and condemnation
sections of this Lease, except for deductibles under any insurance policy
carried by Lessor;

(e)Any costs representing an amount paid to a corporation related to Lessor
which is in excess of the amount which would have been paid in the absence of
such relationship;

(f)Interest and penalties due to late payment of any amounts owed by Lessor,
except such as may be incurred as a result of Lessee’s failure to timely pay
Lessee’s Percentage Share of Real Property Taxes, Insurance premiums or Common
Area Maintenance and Repair Costs;

(g)Costs related to the existence and maintenance of Lessor as a legal entity,
except to the extent attributable to the operation and management of the
Premises or Building;

(h)Legal costs, auditing fees, leasing commissions, advertising costs or fees
incurred by Lessor with respect to the Premises, the Building or the Common
Roadway;

(i)Costs incurred by Lessor to correct any existing violations of any applicable
law, rule, governmental regulation, ordinance or restriction of record
(“Applicable Laws”) with respect to the Premises, the Building or the Common
Roadway; or

(j)Any expense or cost reserves of Lessor.

(2)Lessee, at its sole cost and expense shall have the right during business
hours upon not less than five (5) business day advance notice to examine and/or
audit the books and documents evidencing the Common Area Maintenance and Repair
Costs for both the Building and the Common Roadway once every calendar year.
Lessee at Lessee’s sole cost may also have the records maintained by Lessor for
the Common Area Maintenance and Repair Costs audited by a reputable certified
public accountant once every calendar year.  If any such audit should disclose
that Lessee has been overcharged by Lessor for Lessee’s Percentage Share of
Common Area Maintenance and Repair Costs for the Building or Lessee’s Percentage
Share for the Common Roadway for any year, Lessee shall be credited for such
overpayment, plus interest at the rate of ten percent (10%) per annum. If such
audit should disclose that Lessee has been undercharged by Lessor for any year,
then Lessee shall pay to Lessor all such undercharged amounts within thirty (30)
days with interest thereon at ten percent (10%) per annum. If the amount of any
overcharge for the combined total of Lessee’s Percentage Share of Common Area

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Maintenance and Repair Costs and maintaining the Common Roadway exceeds ten
percent (10%) of Lessee’s Percentage Share of Common Area Maintenance Costs and
the cost of maintaining the Common Roadway for that year, Lessor shall promptly
reimburse Lessee for the reasonable costs of such audit. The provisions of this
Paragraph 1E(2) shall survive the expiration or earlier termination of this
Lease.

2.Term; Delivery of Possession

A.The term of this Lease shall begin on May 1, 2019 (“Commencement Date”),  and
shall end, unless sooner terminated as hereinafter provided, on May 31, 2027.  

B.Lessor shall deliver possesson of the Premises broom clean and free of debris
on the Commencement Date and warrants that the existing electrical, plumbing,
fire sprinkler, lighting, heating, ventilating and air conditioning systems
(“HVAC”), loading doors, sump pumps, if any, and all other such elements in the
Premises, shall be in good operating condition on said date, that the structural
elements of the roof, bearing walls and foundation of the Property shall be free
of material defects, and that, to the best of Lessor’s actual knowledge, without
duty of investigation, the Premises does not contain hazardous levels of any
mold or fungi defined as toxic under applicable state or federal law.  

Lessor expressly disclaims any representation or warranty, express or implied
that the improvements existing in or on the Premises comply with building codes,
applicable laws, covenants or restrictions of record, regulations and
ordinances, including but not limited to the Americans With Disabilty Act and
Title 24 of California Code of Regulations.

C.Lessor shall use its best commercially reasonable efforts to deliver
possession of the Premises to Lessee by the Commencement Date.  If, despite such
efforts, Lessor is unable to deliver possession by such date, Lessor shall not
be subject to any liability therefor, nor shall such failure affect the validity
of this Lease. Lessee shall not, however, be obligated to pay Rent or perform
any other obligation of Lessee under the terms of this Lease until Lessor
delivers possession of the Premises to Lessee.

D.Lessor represents to Lessee that as of the Commencement Date it is not in
default under any deed of trust encumbering the Building, that the Premises are
not subject to any pending litigation, and there is no right of first refusal to
lease or purchase the Building.  

3.Rent and General Provisions Regarding Payments.

A.Lessee shall pay the following rent (“Base Monthly Rent”) to Lessor in advance
no later than the first day of each month during the term of this Lease,
commencing on the Commencement Date, for the rental of the Premises (except as
provided in Subparagraph 2C above):

From May 1, 2019, through April 30. 2020$70,435.00 per month

From May 1, 2020, through April 30, 2021$72,548.00 per month

From May 1, 2021, through April 30, 2022 $74,724.00 per month

From May 1, 2022,  through April 30, 2023$76,966.00 per month

From May 1, 2023, through April 30, 2024 $79,275.00per month

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From May 1, 2024 through April 30, 2025 $81,653.00 per month

From May 1, 2025 through April 30, 2026 $84,103.00 per month

From May 1, 2026 through April 30, 2027 $86,626.00 per month

B.All payments of Base Monthly Rent and all other sums due to be paid by Lessee
to Lessor under this Lease, all of which are sometimes collectively referred to
as “Rent”, shall be paid to Lessor, without prior demand,  prior notice,
deduction or offset (except as may be otherwise provided in this Lease), in
lawful money of the United States of America at Lessor’s address for notices
hereunder (or to such other person or at such other place as Lessor may from
time to time designate in writing).  Lessee may also pay Rent by automatic
clearing house (“ACH”) transfer. All Rent, if not received by Lessor at said
address or by ACH transfer within five (5) calendar days of the date the payment
is due (such five (5) day period to include the due date), shall bear interest,
from the due date until so received, at the rate of ten percent (10%) per
annum.  Lessee shall pay to Lessor the sum of Thirty and no/100 Dollars ($30.00)
for each check tendered by Lessee which is not honored for payment by Lessee's
bank for whatever reason and the statutory penalties if Lessor elects to pursue
said remedy.  In addition, Lessee shall pay to Lessor a late charge of five
percent (5%) of the total amount of the payment due for each payment of Base
Monthly Rent or other sum due pursuant to this Lease if said sum is not received
by Lessor within five (5) calendar days of the date the payment is due (such
five (5) day period to include the due date). Lessor and Lessee agree that
Lessor will incur damages and expenses on account of any such late payment,
including but not limited to added staff time to collect the sums due,
accounting and legal expenses and interest or other charges, and that the amount
of such damages and expenses will be extremely difficult and impractical to
ascertain. Accordingly, the parties agree that the five percent (5%) late charge
is a reasonable estimate of said expenses and damages.  

C.All sums received by Lessor from Lessee shall be applied first to the oldest
outstanding monetary obligation owed by Lessee to Lessor and any other
designation of the manner in which said payment is to be applied by Lessee shall
be void and of no effect.

D.If the term of this Lease commences on a day other than the first day of a
calendar month or ends on a day other than the last day of a calendar month, all
Rent due for such fractional month or months shall be prorated based on the
actual number of days in that month.

E.Lessee shall pay to Lessor Lessee’s Percentage Share of Common Area
Maintenance and Repair Costs and Lessee’s Percentage Share of the cost of
maintaining and repairing the Common Roadway,  computed and billed quarterly in
arrears.

4.Use.

A.The Premises may only be used for warehouse and office functions (the
“Permitted Use”), and for no other purpose without Lessor’s prior written
consent, which consent may be withheld in Lessor's sole discretion.  Prior to
the Commencement Date, and as condition of Lessor’s obligation of delivery of
the Premises, Lessee shall submit an application to the appropriate governmental
agency and/or department a separate Business License applicable to the Premises
stating that the use is “warehousing, distribution, and office” and Lessee shall
deliver a copy of such application to Lessor.  The inability to obtain such
license shall not invalidate this Lease Agreement.  Pursuant to Lessee’s current
overall space plan for the Premises attached hereto

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as Exhibit D and made a part hereof, Lessee intends to use approximately 16,071
square feet of the Premises for warehouse use and approximately 21,000 square
feet of the Premises for office use.  Lessor has made no warranty or
representation that the Premises may be used for the use Lessee intends to make
of the Premises and further makes no representation or warranty regarding the
legality of the improvements made by the prior tenant of the Premises. Lessee
understands that following the expiration or early termination of this Lease,
Lessor may convert the use of the Premises to other industrial uses including
wholesale, warehouse and distribution uses regardless of the nature of Lessee’s
use of the Premises at the time of such termination in accordance with the City
of South San Francisco Resolution No. 84-97 (as amended) adopted by the City
Council of the City of South San Francisco on July 9, 1997 (a copy of which is
attached hereto and made a part hereof as Exhibit E-1,) and further confirmed by
Senior Planner Tony Rozzi of the City of South San Francisco Planning Division
in his email dated May 17, 2018, a copy of which is attached hereto as Exhibit
E-2.

B.Not more than twelve (12) months or less than nine (9) months prior to the
expiration of the initial Term, as such initial Term may be extended by an
Extension Period, Lessee, at its sole cost and expense, shall apply for a letter
of determination, applicability, or approval, or similar written assurance
(each, a “Zoning Verification Letter”) from the appropriate governmental
entity.  If such Zoning Verification Letter confirms that the Premises may be
used for its originally designated use: wholesale, warehouse and distribution
purposes, and does not contain unreasonable conditions, in Lessor’s commercially
reasonable discretion, to the proposed reconversion of use, then it shall be
deemed a “Favorable Letter of Determination”.

C.Lessee agrees to submit such application for a Zoning Verification Letter to
Lessor for its review and approval (which shall not be unreasonably withheld) at
least fifteen (15) business days prior to the proposed submission to the
governmental entity, including without limitation all documents, studies and
reports related to such application.  If Lessor does not disapprove or amend
such application for a Zoning Verification Letter within such fifteen (15)
business day period, then such applications shall be deemed approved by Lessor.
A proposed application letter seeking the Zoning Verification Letter is attached
hereto as Exhibit E-3 and is hereby approved by Lessor. In no event shall the
Zoning Verification Letter be subject to Lessor’s prior approval, it being
understood that the content and direction of the Zoning Verification Letter
shall be written by and subject to the City of South San Francisco Planning
Division’s (or the appropriate governmental entity) sole discretion. Lessor
acknowledges that if the Zoning Verification Letter does not contain the
language in the attached application letter, the Zoning Verification Letter may
still be a Favorable Zoning Verification Letter.

D.In the event that a favorable Zoning Verification Letter is not obtained and
finalized through the applicable appeal period, or conditions to the proposed
reconversion of use are imposed by the governmental entity that are not
acceptable to Lessor, in its reasonable commercial discretion, then Lessee shall
forfeit to Lessor Three Million and no/100 Dollars ($3,000,000.00) of the
Security Deposit.  In the event that a Favorable Letter of Determination is
obtained and finalized, Lessor shall return the Three Million Dollars
($3,000,000.00) portion of the Security Deposit within thirty (30)  days of
receipt of such letter.

E.In the event that Lessee, without the prior written consent of Lessor, which
consent may be withheld in Lessor’s sole and absolute discretion, or upon such
conditions as Lessor shall

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deem appropriate in its sole and absolute discretion, changes the use from
warehouse and office to labs or manufacturing, or to any degree includes lab
and/or manufacturing operations in the Premises, Lessee shall execute and
deliver to Lessor an “Agreement for Restoration of Premises” in a form similar
to that certain Agreement for Restoration of Premises, dated December 10, 2015,
by and between Lessor and Solstice Neuroscience, LLC, US WorldMeds, LLC, and
Lessee, and Lessee shall deliver to Lessor a letter of credit, in the amount of
Five Hundred Thousand and no/100 Dollars ($500,000.00) in association with such
Agreement for Restoration of Premises.

F.In addition, immediately upon such change in use pursuant to the immediately
preceding paragraph of this Paragraph 4, Base Monthly Rent shall increase by
fifty percent (50%) of the then current Base Monthly Rent, and the Base Monthly
Rent applicable during any Extension Period (defined below) shall similarly
increase.  

G.The parties acknowledge that a change in use and the loss of the current
recognized use of the Property under the applicable zoning and use codes and
regulations of the City of South San Francisco shall cause substantial damage
and loss to Lessor, and Lessee and Lessor agree that Lessor’s actual damages
would be impracticable or extremely difficult to fix.  The parties therefore
agree that in the event that the current zoned “use” designation is changed by
the City of South San Francisco from warehousing, distribution and office to lab
and/or manufacturing due to Lessee’s actions and/or use of the Premises for lab
and/or manufacturing purposes (“Lessee’s Caused Change in Use”), Lessee shall
pay to Lessor the sum of Three Million and no/100 Dollars ($3,000,000.00) if
such event occurs during the initial term of the Lease, Four Million and no/100
Dollars ($4,000,000.00), if such event occurs during the first Extension Period,
and Five Million and no/100 Dollars ($5,000,000.00) if such event occurs during
the second Extension Period.  Such payment shall occur by Lessor’s partial
application of the Security Deposit in the amount of Three Million and no/100
Dollars ($3,000,000.00) and if such partial application is insufficient due to
such event occurring in the first or second Extension Period, Lessee shall pay
to Lessor the difference within thirty (30) days following written demand
therefor.

H.Lessor acknowledges and agrees that if, at any time during the Term, including
any Extension Periods, a Lessee Caused Change in Use shall occur and a Favorable
Letter of Determination is not obtained, the maximum amount Lessee would pay or
forfeit to Lessor pursuant to the terms of this Section 4 shall not exceed (i)
Three Million and 00/100 Dollars ($3,000,000.00) during the initial Term of the
Lease, (ii) Four Million and 00/100 Dollars ($4,000,000.00) during the first
Extension Period, and (iii) Five Million and 00/100 Dollars ($5,000,000.00)
during the second Extension Period.

________________________

Lessee’s InitialsLessor’s Initials

 

 

5.

Security Deposit and Reporting Requirements.

A.Upon the mutual execution and delivery of this Lease Agreement, Lessee shall
deposit with Lessor the sum of Three Million Two Hundred Fifty Nine Thousand
Eight Hundred Seventy Eight and no/100 Dollars ($3,259,878.00) (the “Security
Deposit”).  The

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Security Deposit shall be held by Lessor as security for the faithful
performance by Lessee of all of the provisions of this Lease to be performed or
observed by Lessee.  No portion of the Security Deposit may be used by Lessee
for any monetary obligation owed by Lessee during the term of this Lease and any
extension thereof, particularly the Rent due for the last month of the term of
this Lease or any extension thereof.  If Lessee fails to pay Rent or other
charges hereunder, or otherwise defaults with respect to any provision of this
Lease, Lessor may use, apply or retain all or any portion of the Security
Deposit for the payment of said obligation or of any other sum to which Lessor
may become obligated by reason of Lessee's default, or to compensate Lessor for
any loss or damage which Lessor may suffer thereby.

B.If Lessor so uses or applies all or any portion of the Security Deposit during
the term of this Lease or any extension thereof, Lessee shall within fifteen
(15) business days after demand therefor deposit cash with Lessor in an amount
sufficient to restore the Security Deposit to the full amount thereof. Lessee's
failure to do so shall be deemed a failure to pay Rent and shall constitute a
material breach of this Lease. Lessor shall not be required to keep the Security
Deposit separate from its general accounts; however on a quarterly basis Lessor
shall provide information to Lessee regarding the account(s) in which the
Security Deposit is held. No part of the Security Deposit shall be considered to
be held in trust, or bear interest.

C.If Lessee performs all of Lessee's obligations hereunder, the Security
Deposit, or so much thereof as has not theretofore been applied by Lessor, shall
be returned, without payment of interest or other increment for its use, to
Lessee (or, at Lessor's option, to the last assignee, if any, of Lessee's
interest hereunder) no later than sixty (60) days after the expiration of the
term hereof and after Lessee has vacated the Premises and they are returned to
Lessor in the condition in which they are obliged to be returned to Lessor.  

D.If Lessee ceases being a publicly traded company or if its financial
statements are not readily available to Lessor, on the internet,   Lessee will
provide Lessor with one mid-fiscal year interim complete financial statement and
one audited annual financial statement, within ten (10) days of their
preparation, each year throughout the term of the Lease including any option
periods, which statements shall be kept confidential by Lessor and Lessor’s
consultants.

6.Limitations on Use. Lessee's use of the Premises shall be in accordance with
the following:

A.Cancellation of insurance; increase in insurance rates. Lessee shall not do,
bring, or keep anything in or about the Premises that will cause a cancellation
of any insurance covering the Premises and the Building. If the rate of any
insurance carried by Lessor is increased as a result of any activity of Lessee
at the Premises, or if any lender of Lessor shall require Lessor to carry
additional insurance as a result of any activity of Lessee at the Premises,
Lessor shall notify Lessee of said event at least fifteen (15) days prior to the
date on which such premium is due and Lessee shall pay a sum equal to the total
difference between the original premium and the increased premium to Lessor
within five (5) days before the date Lessor is obligated to pay said premium on
the insurance. If Lessee should so request, Lessor shall deliver to Lessee a
statement from Lessor’s insurance carrier or lender stating that the rate
increase or requirement of additional insurance was caused primarily by an
activity of Lessee on the Premises.

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B.Compliance with Laws. Lessee shall, at Lessee’s sole cost and expense, comply
with all Applicable Laws concerning the Premises or Lessee’s use of and
activities in the Premises, including without limitation, the obligation at
Lessee’s cost to alter, maintain, or restore the Premises, in compliance and
conformity with all Applicable Laws relating to the condition, use, or occupancy
of the Premises during the term of this Lease or any extension thereof, whether
foreseen or unforeseen, regardless of the cost, and regardless of when during
the term the work is required, including, without limitation the United States
Americans With Disabilities Act, California Title 24 of the California Code of
Regulations, and all laws regulating the production of pharmaceuticals or drugs
and regulations issued by the Food and Drug Administration of the United States
Government or any other state, federal or local governmental agency with
jurisdiction with respect thereto.  

C.Limits on Hazardous Materials. Lessee shall not store, or permit the storage,
or use, or permit the use, of Hazardous Materials in such a manner which would
result in contamination, in violation of any Environmental Laws (as defined
below), of the Building, the Premises, or the surrounding soil or air, or cause
a substantial risk of fire, explosion, or release of hazardous, noxious or
corrosive fumes in or about the Premises or the Building or the Common Roadway
or within fifty (50) feet thereof, or conduct, or permit to be conducted, any
hazardous activities which would involve contamination of the Building, Premises
or surrounding soil or air in violation of any law or regulation described in
Paragraph 6.C.(1) below, or cause a substantial risk of fire, explosion, flood
or noxious, hazardous,  or corrosive fumes in or about the Premises or Building
or the Common Roadway or within fifty (50) feet thereof or endanger the good
health of any occupant or invitee to the Building or Premises or user of the
Common Roadway.  In addition to, and not by way of limitation of, Lessee’s
obligations set forth in this Lease, Lessee shall at all times comply with all
local, state and national laws regarding the manufacture, transportation,
storage, use and disposal of all Hazardous Materials.

(1)As used in this Lease, the term “Hazardous Materials” shall include the
following: any substance or material defined as “hazardous” or “toxic” by the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C. Section 9601 et seq.), as amended from time to time; the Hazardous
Materials Transportation Act (42 U.S.C. Section 1801 et seq.), as amended from
time to time; the Resource Conservation and Recovery Act (42 U.S.C. Section 6901
et seq.), as amended from time to time; the Hazardous Waste Control Law,
California Health & Safety Code Section 25100 et seq., as amended from time to
time; the Safe Drinking Water and Toxic Enforcement Act of 1986, as amended from
time to time; any rules and regulations promulgated under the foregoing
statutes; rules and regulations of the Environmental Protection Agency, the
California Water Quality Control Board, the Department of Labor, the California
Department of Industrial Relations, the Department of Transportation, the
Department of Agriculture, the Consumer Product Safety Commission, the
Department of Health and Human Services, the Food and Drug Administration any
other governmental agency now or hereafter authorized to regulate or protect the
environment or human health or safety; and any other federal, state, or local
law, statute, ordinance, or regulation now in effect or later enacted to protect
the environment or human health or safety (collectively, “Environmental
Laws”).  

(2)Lessee shall keep adequate records to demonstrate that all Hazardous
Materials are being properly handled, used, stored, transported and disposed of
in

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accordance with all applicable laws and regulations and shall make said records
available to Lessor promptly after receiving a request therefor from Lessor.  No
more than once per year, Lessor shall have the right to appoint a consultant, at
Lessee's expense, whose fee shall not exceed $5,000.00, upon no less than thirty
(30) days’ written notice to Lessee, to conduct an investigation to determine
whether Hazardous Materials are located in or about the Premises or whether
Hazardous Materials have been released in such a manner as would violate
applicable laws and regulations, and determine the corrective measures, if any,
required to remove such Hazardous Materials. Lessee, at its expense, shall
comply with all recommendations of such consultant.  If and to the extent Lessee
is not in violation of applicable laws. Lessor and Lessor’s consultant shall use
good faith efforts not to unreasonably disturb Lessee’s use and enjoyment of the
Premises during any such investigation.

(3)Without limiting the applicability of any other indemnity provision of this
Lease, Lessee shall indemnify, defend and hold Lessor harmless from all costs,
expenses and liabilities, including reasonable attorneys’ fees as incurred by
Lessor, arising from any violation by Lessee of the provisions of this Paragraph
6.C.

(4)Without limiting the foregoing, in the event Hazardous Materials brought onto
the Premises by, or with the knowledge of, Lessee result in contamination of the
Building, the Premises or any air, water or soil in or about the Bullding or the
Premises in violation of any law or regulation described in Paragraph 6.C.(1)
(except for Hazardous Materials that pre-existed before June 30, 2015), Lessee
shall, at its sole cost, promptly take all actions necessary to return the
Premises and/or the Building to the condition existing prior to the
contamination and into compliance with Environmental Laws.  Any remedial action
or disposal shall be undertaken in accordance with all Environmental Laws.

(5)Lessee shall promptly notify Lessor in writing of any discovery by Lessee,
its agents or employees, of the release of any Hazardous Material onto the
Premises or the Building and transmit to Lessor copies of all non-routine
reports from any governmental agency having jurisdiction over any activity of
Lessee in the Premises regarding any violations or suspected violations of any
laws or regulations governing Lessee’s use of and activities within the
Premises. Lessee shall furthermore promptly notify in writing Lessor of any
non-routine inquiry, test, investigation or enforcement proceeding by or against
Lessee or the Premises concerning a Hazardous Material (each, a “Proceeding”).
Lessee shall transmit to Lessor copies of any reports from any governmental
agency having jurisdiction in connection with any such Proceeding.  Lessee
agrees that Lessor, as owner of the Building, shall have the right to take such
actions as Lessor reasonably believes are necessary to protect its interest in
the Building with respect to any such Proceeding.  Lessee acknowledges that
Lessor, as the owner of the Building, at its election shall have the sole right,
at Lessee’s expense, to negotiate, defend, approve and appeal any action taken
or order issued in connection with any Proceeding, or with regard to Hazardous
Materials by an applicable governmental authority.

(6)In no event shall Lessee’s oligations under this Paragraph 6.C apply to or
with respect to any Hazardous Materials that were present or existed in the
Building, the Premises or the Common Roadway on or prior to June 30, 2015,
including, without limitation, any of Lessee’s obligations under Paragraph
6.C.(3) and Paragraph 6.C.(4) above.  

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D.Waste; Nuisance. Lessee shall not use the Premises in any manner that will
constitute waste or nuisance (including, without limitation, the use of
loudspeakers or sound or light apparatus that can be heard or seen outside the
Premises, or the emission of noxious odors from the Premises) or interference
with use or access of other tenants in the Building or of owners or occupants of
adjacent properties. In the event any use of the Premises by Lessee attracts the
attention of the public and the public enters or attempts to enter the Premises,
the Building or the grounds surrounding the Building in a manner that would, if
done by Lessee or any of Lessee's invitees, violate the provisions of Paragraph
6.E below, Lessee shall take all reasonable steps to abate such activities which
shall be deemed to be a nuisance and Lessor shall allow Lessee a reasonable time
to address such issues and take corrective measures.

E.Compliance with Rules Issued by Lessor. Lessee shall use the driveway(s) and
Common Roadway so as not to impede any ingress or egress by other vehicles, and
shall park all vehicles only in areas designated for such vehicles. Lessee shall
also comply with all reasonable rules which have been or which may hereinafter
be promulgated by Lessor regarding the use of the Common Roadway, driveways and
parking areas, which rules will apply equally to all who have rights to use the
Common Roadway. Lessee hereby consents to Lessor towing any such vehicles which
do not comply with this subparagraph or the above described rules.  Lessee shall
also refrain from storing any property on the grounds surrounding the Premises
or on driveways or parking areas or allowing the use of any such grounds except
as means for ingress and egress from the Premises or the Building.

F.No Retail Sales. Lessee shall not conduct any retail sales of any goods or
products from the Premises.

7.Personal Property Taxes. Lessee shall pay before delinquency all taxes,
assessments, license fees and other charges that are levied and assessed against
Lessee's personal property installed or located in or on the Premises, and that
become payable during the term. Within thirty (30) days after written request by
Lessor, Lessee shall furnish Lessor with satisfactory evidence of these
payments.

8.Real Property Taxes Payable by Lessee.

A.Lessee shall pay to Lessor as additional Rent, Lessee’s Percentage Share of
all Real Property Taxes. As used herein, the term “Real Property Taxes” shall
include any form of real estate tax or assessment, general, special, ordinary or
extraordinary, and any license fee, commercial rental tax, improvement bond or
bonds, levy or tax (other than: (i) any penalties or interest on taxes except to
the extent caused by Lessee’s failure to pay any part thereof; (ii) documentary
transfer taxes imposed on the sale or exchange of the Building; and (iii)
franchise, inheritance, death, gift, income or estate taxes) imposed upon the
Building by any authority having the direct or indirect power to tax, including
any city, county, state, or federal government, any school, agricultural,
sanitary, fire, street, drainage, or other improvement district thereof, levied
against any legal or equitable interest of Lessor in the Building or any portion
thereof, Lessor's right to Rent or other income therefrom , and/or Lessor's
business of leasing the Premises or Building.  The term “Real Property Taxes”
shall also include any tax, fee, levy, assessment or charge, or any increase
therein, imposed by reason of events occurring, or changes in applicable law
taking effect during the term of this Lease, including but not limited to a
change in the

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ownership of the Building or the improvements therein, the execution of this
Lease, or any modification, amendment or transfer thereof, and whether or not
contemplated by the parties to this Lease.

B.Lessee’s liability hereunder to pay any tax shall be prorated on a daily basis
to account for any fractional portion of a tax period included in the term of
this Lease or any extension thereof at its commencement and expiration.

C.Lessor shall notify Lessee, at least twenty-five (25) days before any taxes
must be paid before incurring a penalty, of Lessee’s Percentage Share of the
Real Property Taxes and whether Lessor has elected to pay said taxes in the
permitted installments or in one lump sum prior to the date on which the first
installment is due. Lessee shall pay Lessee’s Percentage Share of said taxes as
shown in Lessor's notice at least ten (10) days prior to the date said taxes
must be paid before incurring a penalty.  If Lessee is given at least
twenty-five (25) days’ notice prior to the date on which said taxes must be paid
before incurring a penalty and Lessee fails to pay the sums required within ten
(10) days of the date of the written notice, Lessee shall pay to Lessor, as
additional Rent, all interest and penalties assessed by the taxing authority if
Lessor has failed to make the timely payment of said taxes, in addition to the
late charge provided for in Paragraph 3.

D.Lessee shall also reimburse Lessor for all of any increases in Real Property
Taxes caused by an increase in the valuation of the Building due to the
construction by Lessee of improvements to the Premises and measured by the value
of such increased valuation.  

9.Repairs.

A.Lessee's Responsibilities.

(1)On the Commencement Date, Lessee shall accept the Premises in their “as is”
condition and in the condition in which Lessor is obligated to deliver them.
Lessee shall, at all times during the term hereof, and at Lessee’s sole cost and
expense, keep the Premises and every part thereof in good condition and repair,
ordinary wear and tear, damage by fire, earthquake, or act of God
excepted,  Lessee hereby waives all rights to make repairs at the expense of
Lessor or in lieu thereof to vacate the Premises as provided by California Civil
Code Section 1942 or any other law, statute or ordinance now or hereafter in
effect.  Said obligation on the part of Lessee includes, but is not limited to,
maintaining, repairing and/or replacing internal columns, windows, fixtures,
ballasts, lamps and light bulbs, roll-up doors, and the plumbing, electrical,
and heating, ventilating and air-conditioning systems serving exclusively the
Premises (whether or not the damaged portion of the Premises or the means of
repairing the same are reasonably or readily accessible to Lessee and whether or
not the need for such repairs occurs as a result of Lessee's use, any prior use,
the elements or the age of such portion of the Premises).  

(2)Unless otherwise directed by Lessor in accordance with the terms of Paragraph
10, Lessee shall, at the end of the term of this Lease or any extension thereof,
surrender to Lessor the Premises and all alterations, additions and improvements
thereto in good condition which condition includes, without limitation,
replacement of burnt-out lamps and ballasts, all roll up doors and dock levelers
serviced and in good repair, the concrete floor in smooth condition and all
interior walls in good condition and repair. Notwithstanding the

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foregoing, Lessee may remove Lessee’s trade fixtures upon termination of the
Lease, so long as Lessee repairs any damage caused by the installation,
maintenance and removal from the Premises.  Lessor has no obligation and has
made no promise to alter, remodel, improve, repair, decorate or paint the
Premises or any part thereof. No representations respecting the condition of the
Premises or the Building have been made by Lessor to Lessee, except as
specifically herein set forth.

(3)Commencing on the Commencement Date,  Lessee shall pay to Lessor Lessee's
Percentage Share of Common Area Maintenance and Repair Costs as additional Rent
hereunder within fifteen (15) days of receiving a written notification from
Lessor of Lessee’s Percentage Share of said costs delivered to Lessee in
accordance with Paragraph 3.E above.

B.Lessor's Responsibilities.

(1)Lessor shall at Lessor's expense (which shall not be included in Common Area
Maintenance and Repair Costs unless expressly permitted pursuant to Paragraph
1.E above) maintain the roof (including the roof membrane), the foundation, the
structural portions of the Building excluding internal support columns, and the
exterior walls of the Building.  Lessor’s financial responsibility for the roof
is for the structure and membrane alone and does not include the costs of the
maintenance of the drain pipes from the roof or other structures appurtenant
thereto.  Lessor’s financial responsibility for the exterior walls does not
include maintenance, repair or replacement of the interior portion of the
exterior walls, the interior partition walls, studs, sheet rock, or any windows,
window frames, or plate glass or doors or any damage directly caused by the act
or omission of Lessee or the costs of repairing any vandalism to the exterior
walls or roof - all of which remain the responsibility of Lessee. Except in
cases of an emergency posing a danger to persons or property or which materially
interfere with the conduct of Lessee’s business, Lessor shall have no obligation
to make repairs under this subparagraph until twenty (20) days after receipt of
written notice of the need for such repairs from Lessee.  If the repairs cannot
be completed within twenty (20) days after receipt of such notice, Lessor shall
not be in default hereunder if Lessor commences the repairs within the twenty
(20) days and continues thereafter to complete the repairs or if said repairs
cannot be completed timely due to factors beyond the reasonable control of
Lessor.  

(2)Lessor, subject to reimbursement as provided elsewhere herein, shall maintain
and repair all common areas (including lobbies and passage ways), grounds
(including landscaping, parking areas, the Common Roadway, driveways and
fences), drain pipes from the roof or other structures appurtenant thereto, any
utility systems or services or portions thereof which serve the Building as well
as the Premises and any damage caused by vandalism to the roof or exterior
walls.  If Lessee damages the internal columns in the Premises and fails within
thirty (30) days after written notice from Lessor to commence the repair or
replacement of said columns, Lessor at Lessor's option may enter the Premises
and cause said repairs to be made. Lessee shall reimburse Lessor for the full
cost of said repairs within thirty (30) days of being given written notice by
Lessor of the amount of the cost of said repairs.

(3)If Lessor (or its employees, agents or contractors) undertakes work to the
Building and that work directly causes damage to utility lines serving the
Premises resulting in a termination of such utilities serving the Premises which
causes Lessee to cease its operations

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in the Premises, if said interruption lasts longer than two (2) business
days,  Lessee shall be entitled to a rebate of Base Monthly Rent for each
additional business day it does not have utility services and it cannot operate
its business in the Premises.  

10.Alterations.

A.Except for the installation of unattached, movable trade fixtures which may be
installed without drilling, cutting or otherwise defacing the Premises (“Movable
Fixtures”) and except for Cosmetic Alterations (as hereinafter defined), Lessee
shall not make any alterations, additions or improvements to the Premises
(collectively, “Alterations”) without Lessor’s prior written consent, not to be
unreasonably withheld, conditioned or delayed.  As used herein, “Cosmetic
Alterations” shall mean an alteration, addition or improvement that: (i) is
limited to the interior of the Premises; (ii) does not affect the exterior
(including the appearance) of the Building;  (iii) is non-structural or does not
affect the structural integrity of the Building;  (iv) does not affect the usage
or the proper functioning of the mechanical, electrical, sanitary, HVAC or other
service systems of the Building; and (v) does not exceed One Hundred Thousand
and no/100 Dollars ($100,000.00) in each instance.  Lessee shall provide Lessor
written notice of all Cosmetic Alterations to the space fifteen (15) business
days prior to undertaking any such Cosmetic Alterations.

(1)Alterations. If Lessee desires to construct and install Alterations
(“Alterations”) to the Premises during the Lease term, Lessee shall submit a
space plan therefor (“Alterations Space Plan”) that includes a scope of work
prepared by Lessee’s architect for Lessor’s approval in accordance with the
terms of this Paragraph 10.A(1) and in accordance with the Approval Standards
(defined below). Lessor shall approve or disapprove of the Alterations Space
Plan by delivering written notice to Lessee within fifteen (15) business days of
its receipt of the Alterations Space Plan, and if Lessor shall fail to approve
or disapprove of the Alterations Space Plan within such fifteen (15) business
day period, Lessor shall be deemed to have approved of the Alterations Space
Plan. If Lessor approves of the Alterations Space Plan (or is deemed to have
approved of the Alterations Space Plan), Lessee shall prepare final construction
drawings (the “Alterations Construction Drawings”) for the Alterations (if
deemed necessary by Lessee and Lessor).  Lessor shall have the right to object
to the Alterations Construction Drawings based upon the following two (2)
criteria only:  (i) the scope of the Alterations has materially changed from the
scope of the Alterations depicted in the Alterations Space Plan or (ii) the
Alterations fail to satisfy the Approval Standards.   The Alterations
Construction Drawings shall be delivered to Lessor for its approval based upon
the above-mentioned criteria only, which shall not be unreasonably withheld,
conditioned or delayed. Lessor shall deliver its approval or disapproval to
Lessee in writing within ten (10) business days following its receipt of the
Alterations Construction Drawings, and if Lessor shall fail to approve or
disapprove of the Alterations Construction Drawings within such ten (10)
business day period, Lessor shall be deemed to have approved of the Alterations
Construction Drawings.  In the event Lessor shall disapprove of the Alterations
Construction Drawings, Lessor shall provide Lessee with Lessor's written
objections thereto in reasonable detail and Lessee shall promptly revise the
Alterations Construction Drawings to address Lessor's objections. The foregoing
procedure shall be repeated until Lessor approves of (or is deemed to have
approved of) the Alterations Construction Drawings.  Upon completion of the
Alterations, Lessee shall deliver to Lessor one set of the as-built drawings for
the Alterations in both hard copy and electronic format.

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(3)Approval Standards. Lessor shall not be deemed to have acted unreasonably if
it withholds its approval of the Alterations depicted in any construction
drawings in the Alterations Space Plan submitted to it pursuant to Paragraph
10.A(1) above because, in Lessor’s reasonable opinion, such Alterations (i)
would materially and adversely affect Building systems, the structure of the
Building, the exterior of the Building or the safety of the Building or its
occupants, (ii) would substantially increase the cost of operating the Building,
(iii) would result in a change of the use of the Premises from the use approved
in Paragraph 4, (iv) would violate any Applicable Laws, (v) contain or use
Hazardous Materials in violation of any Applicable Laws, rules, regulations or
ordinances, or (vi) would materially and adversely affect another tenant’s
premises in the Building (the “Approval Standards”).

B.Any Cosmetic Alterations or other Alterations shall remain on and be
surrendered by Lessee with the Premises on expiration or termination of the term
or any extension thereof, except that Lessor may elect, upon written notice to
Lessee delivered at least six (6) months prior to the expiration of the
then-current term, to require that Lessee remove any Cosmetic Alterations and/or
other Alterations that Lessee has made to the Premises.  If Lessor so elects,
Lessee at its sole cost shall restore the Premises to the condition existing
before such installation of such Cosmetic Alteration and/or other Alteration
before the last day of the term.  If Lessee fails to remove any of its Cosmetic
Alterations and/or other Alterations designated by Lessor and to so restore the
Premises and Lessor incurs costs to restore the Premises or to remove such
Cosmetic Alterations and/or other Alterations made by Lessee, Lessee shall
reimburse Lessor for all reasonable costs incurred by Lessor and shall also pay
Lessor the current amount of Base Monthly Rent prorated for each day after the
expiration of the term that Lessor must occupy the Premises for the purpose of
removing Lessee’s Cosmetic Alterations or other Alterations or making repairs..

C.If Lessee makes any Alterations to the Premises as provided in this Paragraph
10, the Alterations shall not be commenced until five (5) business days after
Lessor has received written notice from Lessee stating the date the installation
of the Alterations is to commence so that Lessor may post and record appropriate
notice(s) of non-responsibility.

D.Lessee's right to make Alterations, and the consent of Lessor given as
required by this Paragraph 10, shall be deemed conditioned upon Lessee complying
in the making of such Alterations with all requirements of state and local laws
and ordinances governing the manner in which such Alterations are made.  Lessee
shall complete any such work according to applicable building codes and other
applicable governmental regulations in a worker-like and expeditious
manner.  Upon completion of any Alterations which require the issuance of a
building permit, Lessee shall: (i) cause a Notice of Completion to be recorded
in the office of the Recorder of San Mateo County in accordance with Section
8182 of the Civil Code of the State of California or any successor
statute;  (ii) deliver to Lessor a reproducible copy of the “as built” drawings
of the Alterations; and (iii) deliver to Lessor evidence of payment,
contractors' affidavits and full and final waivers of all liens for labor,
services or materials.

E.Lessee shall pay all costs for any and all Alterations done by it or caused to
be done by it on the Premises as permitted by this Lease. Lessor shall have no
obligation or responsibility to make any alterations to the Premises except as
specifically provided in this Lease. Lessee shall keep the Premises free and
clear of all mechanics liens resulting from any Alterations done by or for
Lessee.  Lessee shall have the right to contest the correctness or the validity
of any

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such lien if, on written demand by Lessor, Lessee procures and records a lien
release bond issued by a corporation authorized to issue surety bonds in
California (in no event later than thirty (30) days from the recordation of the
lien) in an amount equal to one and one-half times the amount of the claim of
lien. The bond shall meet the requirements of California Civil Code Section 3143
and shall provide for the payment of any sum that the claimant may recover on
the claim (together with costs of suit, if it recovers in the action).

F.If at any time a mechanic’s or materialman’s lien is recorded against the
Building and Lessee fails to procure and record a lien release bond issued by a
corporation authorized to issue surety bonds in California in an amount equal to
one and one-half times the amount of the claim of lien which bond meets the
requirements set forth in Paragraph 10.E above,  Lessee may not make any further
non-cosmetic Alterations to the Premises, or purchase any additional equipment
which purchase would expose the Building to a lien resulting from the purchase
and installation of equipment in an amount in excess of Fifty Thousand and
no/100 Dollars ($50,000.00) in any twelve (12) month period without first
obtaining the prior approval of Lessor.  Lessor may,  as a condition for giving
its approval, require that Lessee meet the conditions set forth in Paragraph
10.E above (i.e., obtaining a completion bond).

11.Utilities and Services. Lessee shall make all arrangements for and pay for
all utilities and services furnished to or used by it at or about the Premises,
including, without limitation, gas, electricity, water, telephone service, meter
fees, and trash collection, and for all connection charges.  The foregoing
includes the requirement that Lessee install a water meter or sub-meter to
monitor all of Lessee’s use of water in the Premises.  Lessor shall not be
responsible for or have any liability whatsoever to Lessee arising in any way
from any interruption of any utility or service furnished to the Premises
regardless of duration and regardless of whether the interruption in any way
affects Lessee’s ability to conduct its business within the Premises, unless the
interruption was directly caused by some work directly undertaken by Lessor (or
its employees, agents or contractors) at the Premises or at the Building, in
which event the remedy stated in Paragraph 9.B.(3) above shall apply.  

12.Exculpation of Lessor. Except to the extent caused by the gross negligence or
willful misconduct of Lessor, its employees, agents or contractors, Lessor shall
not be liable to Lessee for any damage to Lessee or Lessee’s property from any
cause.  Lessee waives all claims against Lessor for damage to person or property
arising in any manner and for any reason, except that Lessor shall be liable to
Lessee for damage to Lessee resulting from the willful neglect or gross
negligence of Lessor or its employees, agents or contractors.  

13.Indemnity. Lessee shall be liable to Lessor for damage resulting from the
negligence or misconduct of Lessee or its employees agents or
contractors.  Lessee shall indemnify, defend and hold Lessor, its agents,
assigns, employees and contractors, harmless from all damages arising out of any
damage to any person or property occurring in or about the Premises during the
term of this Lease of any extension thereof and from all claims arising from
Lessee’s use and occupancy of the Premises. Lessor shall indemnify, defend and
hold Lessee, its agents, assigns, employees and contractors, harmless from and
against any and all damages arising from any damage to any person or property
occuring in or about the common areas of the Building or the Common Roadway
during the term of this Lease and any extension thereof arising from the gross
negligence or willful misconduct of Lessor or its employees, agents or
contractors.

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14.Insurance.

A.Lessee’s Liability Insurance. Throughout the term of this Lease and any
extension thereof,  Lessee shall, at its sole expense, maintain primary
commercial public liability insurance, including coverage for bodily injury,
property damage, emotional distress, wrongful death and personal injury, with a
combined single combined liability limit of not less than Five Million and
no/100 Dollars ($5,000,000.00), insuring Lessor and Lessee against all liability
of Lessee and its employees, agents and authorized representatives arising out
of and in connection with Lessee's use or occupancy of the Premises. Lessor and,
at Lessor’s request its lender, shall be named as an additional insured under
all policies used to meet this requirement.  Lessee shall deliver to Lessor on
or before the Commencement Date and annually thereafter Certificates of
Insurance evidencing that all insurance required to be mained by Lessee under
this Lease has been obtained and is in full force and effect.

B.Lessee’s Personal Property, Fire and Plate Glass Insurance. Lessee, at its
sole expense, shall maintain on all its personal property, Lessee's
improvements, and alterations, in, on, or about the Premises, a policy of
standard fire insurance, providing “all risk” or “special form” coverage
(including coverage for vandalism and malicious mischief), to the extent of at
least one hundred percent (100%) of their full replacement value.  The proceeds
from any such policy shall be used by Lessee for the replacement of its personal
property and for the restoration of its ímprovements or alterations.  Lessor
shall be named as an additional insured on all insurance maintained pursuant to
this Subparagraph on Lessee’s leasehold improvements and any alterations made to
the Premises.

C.Fire, Multi-Peril Insurance on Premises. Lessor shall maintain on the Building
with a combination of primary and excess liability coverage a Commercial Package
Policy, including but not limited to standard fire, multi-peril, income
replacement and rental loss,  and excess liability insurance, to the extent of
at least full replacement value of the Building and commercial general Liability
coverage in an amount of not less than $5,000,000.  Lessor may also obtain
earthquake insurance for damage to the Building and Lessee shall be required to
pay Lessee's Percentage Share of any such premium. The insurance policy or
policies shall be issued in the name of Lessor, and Lessor's lender, if
required.

D.Payment of Premiums. Lessee shall pay to Lessor Lessee's Percentage Share of
all premiums paid by Lessor for maintaining the insurance described in Paragraph
14.C above. Reimbursement shall be made by Lessee within fifteen (15) days after
Lessor notifies Lessee in writing of Lessee's Percentage Share of such costs,
which notice shall include a copy of the invoice for the premium.  Lessee's
obligation to pay the insurance premium costs shall be prorated for any partial
year at the commencement and expiration of the term.

E.Waiver of Subrogation. The parties release each other, and their respective
authorized representatives, from any claims for damage to the Premises and to
the fixtures, personal property, Lessee’s improvements, and alterations of
either Lessor or Lessee in or on the Premises that are caused by or result from
risks insured against under any insurance policies carried by the parties at the
time of such damage.  Each party shall cause each insurance policy obtained by
it to provide that the insurance company waives all right of recovery by way of
subrogation against either party in connection with any damage covered by any
policy.  Neither

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party shall be liable to the other for any damage caused by fire or any of the
risks insured against under any insurance policy required by this Lease.  

F.General Terms of Lessee's insurance. All insurance obtained by Lessee pursuant
to this Lease shall be primary and non-contributory with respect to any other
insurance that may be available to Lessor. All public liability insurance and
property damage insurance required to be carried by Lessee shall insure
performance by Lessee of the indemnity provisions of Paragraph 13 of this Lease.
Lessor (and Lessor's lenders, if required by any such lender holding a security
interest in the Building at any time during the term of this Lease or any
extension thereof) shall be named as additional insureds under such policy or
policies, and every policy shall contain cross-liability endorsements.

G.Other Insurance Matters. All the insurance required of Lessee under this Lease
shall:

(1)Be issued by insurance companies authorized to do business in the State of
California, with a Best’s rating of not less than A- VII; and

(2)Be issued as a primary policy.

In addition, Lessee will endeavor to obtain from its carrier an endorsement in
which the carrier agrees to provide thirty (30) days’ written notice [ten (10)
days notice if cancellation due to non-payment of premium] to Lessor and
Lessor's lender if required by Lessor, before cancellation or change in the
coverage, scope, or amount of any policy.  If Lessee’s carrier refuses to
provide such endorsement,  Lessee shall provide to Lessor notice of any
cancellation of the insurance required by this Paragraph 14 to be carried by
Lessee to Lessor within ten (10) business days of its receipt of such notice of
cancellation or its failure to pay any premium for any such required insurance.

15.Destruction.

A.If, during the term of this Lease or any extension thereof, the Premises are
totally or partially destroyed from a risk covered by the insurance described in
Paragraph14.C. above, rendering the Premises totally or partially inaccessible
or unusable, Lessor shall restore the Premises, but not Lessee’s Alterations or
any tenant improvements present in the Premises on the Commencement Date. The
restoration work will commence as soon as reasonably practical after the
destruction given the time constraints arising from the need for Lessor to
collect proceeds for the reconstruction from its insurance carrier, obtain
engineering studies and acceptable building plans and apply for and obtain
permits.  

(1)Such destruction shall not terminate this Lease provided, however, that: (a)
the work, if there is a total destruction must be completed within one (1) year
from the date of the event causing the destruction; or (b) if a partial
destruction, the work must be completed within nine (9) months from the date of
the event causing the destruction.  If Lessor cannot complete the rebuilding
within the foregoing time limits or if laws in effect at the time of destruction
do not permit such restoration, either party may terminate this Lease
immediately by giving notice to the other party.  If a partial destruction
occurs during the last twelve (12) months of the term of this Lease and the work
cannot be completed within sixty (60) days from the date

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of the event causing the destruction, Lessee may terminate this Lease
immediately by giving notice to Lessor. If Lessor intends to rebuild the
Premises, Lessor shall give written notice of such fact to Lessee within
forty-five (45) days of the event of destruction, including in said notice an
estimate of when the rebuilding will be completed.  If Lessee does not object in
writing to the time estimates given by Lessor within fifteen (15) business days
of the notice from Lessor, this Lease may not be terminated if, in fact, the
work is substantially completed within thirty (30) days of the estimated date of
completion and Lessor delivers possession of the damaged portion of the Premises
or the Premises, as applicable, to Lessee.

(2)If the cost of the restoration exceeds the amount of proceeds anticipated to
be received from the insurance required under Paragraph 14 by an amount greater
than an amount equal to twenty percent (20%) of the cost of restoration
(excluding from such calculations any deductible (which shall be paid by
Lessor)), Lessor may elect to terminate this Lease by giving notice to Lessee
within fifteen (15) days after determining that the restoration cost will exceed
the insurance proceeds by such amount. In the case of destruction to the
Premises only, if Lessor elects to terminate this Lease, Lessee, within fifteen
(15) days after receiving Lessor's notice to terminate, may elect to pay to
Lessor in cash, at the time Lessee notifies Lessor of its election, the
difference between the amount of insurance proceeds and the cost of restoration,
in which case Lessor shall restore the Premises. Lessor shall give Lessee
satisfactory evidence that all sums contributed by Lessee as provided in this
subparagraph have been expended by Lessor in paying the cost of restoration and
the Base Monthly Rent thereafter shall be reduced by amounts so paid by
Lessee.  If Lessor elects to terminate this Lease and Lessee does not elect to
contribute toward the cost of restoration as provided in this subparagraph, this
Lease shall terminate.

B.If, during the term, the Premises are totally or partially destroyed from a
risk not covered by the insurance described in Paragraph 14, rendering the
Premises totally or partially inaccessible or unusable, Lessor shall have the
option of restoring the Premises or terminating this Lease. In the case of
uninsured destruction to the Premises only, if Lessor elects to terminate this
Lease, which election shall be made by Lessor within forty-five (45) days
following the date of destruction, Lessee, within thirty (30) days after
receiving Lessor’s written notice to terminate, may elect to pay to Lessor in
cash or immediately available funds, at the time Lessee notifies Lessor of its
election, the difference between an amount equal to ten percent (10%) of the
then replacement cost of the Premises and the actual cost of restoration, in
which case Lessor shall restore the Premíses upon receipt of the required funds
from Lessee. Lessor shall give Lessee satisfactory evidence that all sums
contributed by Lessee as provided in this subparagraph have been expended by
Lessor in paying the cost of restoration.

If Lessor elects to terminate this Lease and Lessee does not elect to contribute
toward the cost of restoration as provided in this subparagraph, this Lease
shall terminate.

C.If Lessor is required or elects to restore the Premises as provided in this
Paragraph 15, Lessor shall not be required to restore Alterations made by Lessee
or Lessee’s predecessor in interest, Lessee’s trade fixtures and equipment
whether installed or not within the Premises, and Lessee's personal property,
such excluded items being the sole responsibility of Lessee to restore.

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D.In case of destruction and Lessor elects or is required to restore the
Premises, there shall be an abatement of Base Monthly Rent, Common Area
Maintenance and Repair Costs and other Rent on the unusable portion of the
Premises from the date of destruction to the date on which there is substantial
completion of the work.  

E.Notwithstanding anything to the contrary in this Paragraph, Lessee may elect
to terminate the Lease if either: (1) there is a total destruction and the work
cannot be completed within one (1) year from the date of the event causing the
destruction; (2) if there is a partial destruction and the work cannot be
completed within nine (9) months from the date of the event causing the
destruction; or (3) if there is a partial destruction during the last twelve
(12) months of the term and the work cannot be completed within sixty (60) days
from the date of the event causing the destruction.

F.Lessee waives the provisions of Civil Code Section 1932(2) and Civil Code
Section 1933(4) with respect to any destruction of the Premises.

16.Condemnation - Definitions.

A.Definitions.

(1)“Condemnation” means: (a) the exercise of any governmental power, whether by
legal proceedings or otherwíse, by a Condemnor (as defíned below) ; and (b) a
voluntary sale or transfer by Lessor to any Condemnor, either under threat of
Condemnation or while legal proceedings for Condemnation are pending.

(2)“Date of Taking” means the date the Condemnor has the right to possession of
the property being condemned.

(3)“Award” means all compensation, sums, or anything of value awarded, paid, or
received on a total or partial condemnation.

(4)“Condemnor” means any public or quasi-public authority, or private
corporation or individual, having the power of condemnation.

B.If, during the term or during the period of time between the execution of this
Lease and the date the term commences, there is any taking of all or any part of
the Premises or any interest in this Lease by Condemnation the rights and
obligations of the parties shall be determined pursuant to this Paragraph 16.

If the Premises are totally taken by condemnation, this Lease shall terminate on
the Date of taking. If any portion of the Premises is taken by Condemnation this
Lease shall remain in effect, except that Lessee can elect to terminate this
Lease if the remaining portion of the Premises, the Building or other
improvements or the parking areas on the land on which the Building is located
is rendered unsuitable for Lessee’s continued use of the Premises, as determined
by Lessee in its sole discretion. If Lessee elects to terminate this Lease,
Lessee must exercise its right to terminate pursuant to this Paragraph 16.B. by
giving notice to Lessor within thirty (30) days after the nature and the extent
of taking have been finally determined which determination shall have been made
by written notice to Lessee.  If Lessee elects to terminate this Lease as
provided in this

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Paragraph, Lessee shall notify Lessor of the termination, which date shall not
be earlier than thirty (30) days nor later than ninety (90) days after Lessee
has notified Lessor of its election to terminate; except that this Lease shall
terminate on the Date of Taking if the Date of Taking falls on a date before the
date of termination as designated by Lessee.  If Lessee does not terminate this
Lease within the thirty (30) day to ninety (90) day period, this Lease shall
continue in full force and effect except that Base Monthly Rent and the Common
Area Maintenance and Repair Costs shall be reduced per Paragraph 16.C below.

C.If any portion of the Premises is taken by condemnation and this Lease remains
in full force and effect, on the Date of Taking the Base Monthly Rent and the
Common Area Maintenance and Repair Costs shall be reduced by an amount that is
in the same ratio to Base Monthly Rent and the Common Area Maintenance and
Repair Costs as the value of the area of portion of the Premises taken bears to
the total value of the Premises immediately before the Date of Taking.

D.Each party waives the provisions of Code of Civil Procedure Section 1265.130
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial taking of the Premises.

E.If there is a partial taking of the Premises and this Lease remains in full
force and effect, Lessor at its cost shall accomplish all necessary restoration.
Base Monthly Rent and the Common Area Maintenance and Repair Costs shall be
abated or reduced during the period from the Date of Taking until the completion
of restoration, but all other obligations of Lessee under this Lease shall
remain in full force and effect. The abatement or reduction of Base Monthly Rent
and the Common Area Maintenance and Repair Costs shall be based on the extent to
which the restoration interferes with Lessee’s use of the Premises.

F.The award shall belong to and be paid to Lessor, except that Lessee shall
receive from the award a sum attributable to: (i) Lessee’s relocation expenses;
(ii) loss of business goodwill; (iii) Lessee’s equipment and trade fixtures; and
(iv) Lessee's improvements or alterations made to the Premises by Lessee in
accordance with this Lease, which Lessee’s improvements or alterations Lessee
has the right to remove from the Premises pursuant to the provisions of this
Lease but elects not to remove; or, if Lessee elects to remove any such Lessee’s
improvements or alterations, a sum for reasonable removal and relocation costs
not to exceed the market value of such improvements or alterations.

G.The taking of the Premises or any part of the Premises by military or other
public authority shall constitute a taking of the Premises by condemnation only
when the use and occupancy by the taking authority continues for longer than one
hundred eighty (180) consecutive days. During the one hundred eighty (180) day
period all the provisions of this Lease shall remain in full force and effect,
except that Base Monthly Rent and the Common Area Maintenance and Repair Costs
shall be abated or reduced during such period of taking based on the extent to
which the taking interferes with Lessee’s use of the Premises, and Lessor shall
be entitled to whatever award may be paid for the use and occupation of the
Premises for the period involved.

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17.Assignment and Subletting.

A.Definitions. The occurrence of any of the following, whether voluntarily or
involuntarily, because of death, divorce or disability, or by operation of law
or otherwise, shall constitute a “Transfer” of this Lease:   (i) any direct or
indirect sale, assignment, conveyance, alienation, sublease, hypothecation,
encumbrance, mortgaging or other transfer of Lessee's interest in this Lease or
in the Premises, or any part thereof or interest therein, including but not
limited to any parking spaces assigned to Lessee; (ii) if Lessee is a Legal
Entity (as defined below), the direct or indirect sale, assignment, conveyance,
alienation, encumbrance, mortgaging or other Transfer of any of the Ownership
Interests (as defined below) in such Legal Entity, (iii) if Lessee is a Legal
Entity, some or all of whose Ownership Interests are owned by another Legal
Entity, the occurrence of any of the events described in the preceding phrase
(ii) with respect to such constituent Legal Entity, or (iv) if any other person
or entity (except Lessee’s authorized representatives, agents, contractors,
employees, invitees or guests) occupies or uses all or any part of the Premises.
  Notwithstanding the foregoing, no Transfer shall be deemed to have occurred
solely by reason of the Ownership Interests of Lessee being traded on any public
securities exchange.

(1)As used herein, the term “Legal Entity” means any corporation, partnership,
limited liability company, trust, association or other legal entity, and the
term “Ownership Interest” means any share of stock, general or limited
partnership interest, membership interest, beneficial interest or other
ownership interest therein, as the case may be.  A “Transfer” includes a
transfer of any interest in this Lease held by an subtenant, assignee,
transferee or other person claiming an interest in Lessee’s interest in this
Lease. The provisions of this Paragraph 17 apply fully to any Transfer by any
subtenant, assignee or other holder of any interest in Lessee's interest in this
Lease.  

B.An assignment or subletting by Lessee of all or any portion of this Lease or
the Premises to (i) any present or future parent or subsidiary of Lessee, or
(ii) any person or entity which controls, is controlled by or under the common
control with Lessee, or (iii) any entity which purchases all or substantially
all of the stock or assets of Lessee, or (iv) any entity into or with which
Lessee is merged, reorganized or consolidated (all such persons or entities
described in clauses (i), (ii), (iii) and (iv) being sometimes herein referred
to as "Affiliates") shall not be subject to obtaining Lessor's prior consent,
Paragraph 17.C below shall not be applicable, and such assignments or subleases
or any transaction described in clauses (iii) or (iv) shall not be deemed a
Transfer, provided in all instances that:

(a)any such Affiliate was not formed as a subterfuge to avoid the obligations of
Lessee;

(b)Lessee gives Lessor prior notice of any such assignment or sublease to an
Affiliate, except solely for those assignments or subleases in connection with
which any Applicable Law precludes Lessee's delivery to Lessor of prior notice
of said assignment or sublease then, in all such instances, Lessee shall deliver
to Lessor subsequent notice of said assignment or sublease within ten (10) days
following the first (1st) day on which Lessee is permitted by law to deliver
notice of such assignment or sublease to Lessor;

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(c)the successor of Lessee shall possess a net worth prior to the completion of
the contemplated transfer of this Lease equal to or greater than the net worth
of Lessee on the Commencement Date.  The term "net worth" shall mean a tangible
net worth (not including goodwill as an asset) computed in accordance with
generally accepted accounting principles (excluding goodwill as an asset);

(d)any such assignment or sublease shall be subject to all of the applicable
terms and provisions of this Lease, and such assignee or sublessee (i.e. any
such Affiliate), other than in the case of an Affiliate resulting from a merger,
reorganization or consolidation, shall assume, in a written document reasonably
satisfactory to Lessor and delivered to Lessor upon or prior to the effective
date of such assignment or sublease, all the obligations of Lessee under this
Lease;

(e)the successor of Lessee shall use the Premises for the use approved in
Paragraph 4 above; and

(f) the successor of Lessee shall not allow a use that has a greater danger of
releasing any Hazardous Materials in or about the Premises or the Building than
that done by Lessee.

Lessor agrees to execute a commercially reasonable non-disclosure agreement if
required in connection with a Transfer.

C.Lessee shall not engage in or permit any Transfer of this Lease absent full
compliance with all of the terms and provisions of this Paragraph 17. Any
Transfer of this Lease occurring without full compliance with all of the terms
and conditions of this Paragraph 17 shall be voidable at the option of the
Lessor, and shall constitute a material and incurable default on the part of
Lessee under this Lease

D.Prior to engaging in or permitting any Transfer other than to an Affiliate,
Lessee shall give notice of any intended Transfer to Lessor and shall provide
Lessor with the following information in writing: (i) the name, address and
ownership of the proposed transferee, (ii) the current balance sheet, statement
of cash flows, report of any litigation in which the proposed Transferee is a
party or is a judgment debtor, aged schedule of accounts receivable and payable,
profit and loss statements, statement that all taxes payable by the proposed
transferee are current, and all notes, if any, to all financial and profit and
loss statements for the proposed transferee or any other person to be liable for
the Lessee's obligations under this Lease covering the prior three (3) years (or
for such shorter period as the proposed transferee or other person may have been
in existence), all certified as true and correct by the proposed transferee,
other person or an authorized officer thereof, (iii) a full description of the
terms and conditions of the proposed Transfer, including copies of any and all
documents and instruments, any purchase and sale agreements, sublease
agreements, assignment agreements and all other writings concerning the proposed
Transfer, (iv) a description of the proposed use of the Premises by the proposed
transferee, including any required or desired alterations or improvements to the
Premises that may be undertaken by such transferee in order to facilitate its
proposed use, and (v) any other information, documentation or evidence that may
be reasonably requested by Lessor.  Lessor agrees that it shall hold all such
information in confidence if requested to do so by Lessee and

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shall execute any reasonable confidentiality agreement presented on behalf of
and for the benefit of any proposed transferee.

E. In connection with any proposed or requested consent to Transfer, other than
to an Affiliate, Lessee shall pay to Lessor a transfer fee of $1,000.00 (payment
of which shall accompany Lessee's request for Transfer), plus all of Lessor's
reasonable attorneys fees expended in connection with the proposed Transfer not
to exceed $5,000.00.  

F.For Transfers to non-Affiliates, within ten (10) business days after the
submission of all required information described in Paragraph 17.D
above,  Lessor shall give notice to Lessee of its election under Paragraph 17.G.

G.Upon receiving a request for Transfer of this Lease (except in the case of a
Transfer to an Affiliate) that must be approved by Lessor, and compliance by
Lessee with all the requirements of this Paragraph 17,  Lessor shall have the
right to do any of the following:

(1)Lessor may consent to the proposed Transfer, subject to any reasonable
conditions on such Transfer, which reasonable conditions may include without
limitation: (a) that the proposed transferee assume in writing all of Lessee's
obligations under the Lease first arising or accruing after the date of Transfer
(without, however, releasing Lessee therefrom); (b) in the case of a proposed
sublease, that the subtenant agree that Lessor shall have the right to enforce
any and all of the terms of the sublease directly against such subtenant, and if
this Lease is terminated prior to the expiration of the sublease, that at the
election of Lessor, the sublease shall not terminate and the subtenant will
attorn to the Lessor; (c) that one-half (1/2) of all sums or other consideration
received by Lessee from the Transferee for the right to use and occupy the
Premises in excess of the Rent paid to Lessor be paid as additional Rent by
Lessee to Lessor at the same time that Lessee pays Base Monthly Rent to
Lessor;    (d)  that any existing Events of Defaults under this Lease be cured
prior to the effective date of the Transfer; and (e) that the Transferee provide
additional security deposits or other collateral or guarantees reasonably
acceptable to Lessor.

(2)Lessor may deny its consent to the proposed Transfer, except with respect to
a Transfer to an Affiliate, on any reasonable ground. Such grounds shall
include, without limitation, any one or more of the following, and shall be
conclusively deemed to be reasonable as to Lessee: (a) that the proposed
transferee's financial condition is insufficient to support all of the financial
and other obligations of Lessee with respect to the Lease; (b)  that the use to
which the Premises will be put by the proposed transferee is inconsistent with
the terms of the Lease or otherwise will materially and adversely affect any
interest of Lessor; (c) that the nature of the proposed transferee's proposed or
likely use of the Premises would involve any increased risk of the use, release
or mishandling of Hazardous Materials; or (d)  that Lessor has not received
assurances acceptable to Lessor in its sole discretion that all past due amounts
owing from Lessee to Lessor (if any) will be paid and all other Events of
Default on the part of Lessee (if any) will be cured prior to the effective date
of the proposed Transfer.

H.Lessee acknowledges and agrees that each of the rights of Lessor set forth in
Paragraph 17  in the event of a proposed Transfer is a reasonable restriction on
Transfer for purposes of California Civil Code Section 1951.4.

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I.Any consent to any proposed Transfer, whether conditional or unconditional,
shall not be deemed to be a consent to any other or further Transfer of this
Lease, or any other Transfer of this Lease on the same or other conditions (if
any).  No Transfer of this Lease shall in any way diminish, impair or release
any of the liabilities and obligations of Lessee, any guarantor or any other
person liable for all or any portion of the Lessee's obligations under this
Lease.

18.Lessee’s Default. The occurrence of any one of the following events (each an
“Event of Default”) shall constitute a material breach of this Lease by Lessee:

A.Lessee’s failure to pay Base Monthly Rent when due.

B.If Lessee shall fail to pay any other sum (all of which sums shall be deemed
to be additional Rent hereunder) to Lessor.

C.Lessee’s failure to perform any other provisions of this Lease if the failure
to perform is not cured within thirty (30) days’ after written notice has been
given to Lessee. If the default cannot reasonably be cured within such thirty
(30) day period, Lessee shall not be in default of this Lease if Lessee
commences to cure the default within the thirty (30) day period and diligently
and in good faith continues to cure the default thereafter.

D.If this Lease or any estate of Lessee hereunder shall be levied upon under any
attachment or execution and such attachment or execution is not vacated within
fifteen (15) days.

If within thirty (30) days after the commencement of any proceeding against
Lessee seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed, or if, within
thirty (30) days after the appointment of a receiver or liquidator of Lessee or
of any material part of its properties such appointment shall not have been
vacated.

E.An event of Default under the Exising Leases or this Lease shall be deemed to
be an event of Default under all such leases.   

19.Lessor’s Remedies.  If an Event of Default shall occur, Lessor shall have the
following remedies. These remedies are not exclusive; they are cumulative in
addition to any remedies now or later allowed by law.

A.Lessor may continue this Lease in full force and effect, and this Lease will
continue in effect as long as Lessor does not terminate Lessee’s right to
possession, and Lessor shall have the right to collect Rent when due. During an
Event of Default, Lessor may enter the Premises and relet them, or any part of
them, to third parties for Lessee’s account. Lessee shall be liable immediately
to Lessor for all costs Lessor incurs in reletting the Premises, including,
without limitation, broker’s commissions, expenses of remodeling the Premises
required by the reletting, and like costs.  Reletting can be for a period
shorter or longer than the remaining term of this Lease or any extension
thereof, except that Lessee shall only be responsible for brokers commission up
until the remaining term of this Lease has expired.  Lessee shall pay to Lessor
the Rent due under this Lease on the dates the Rent is due, less the Rent Lessor
received from any reletting.  No act

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by Lessor allowed under this subparagraph shall terminate this Lease unless
Lessor notifies Lessee that Lessor elects to terminate this Lease.

B.Lessor may terminate Lessee’s right to possession of the Premises at any time
by giving a written termination notice to Lessee, and on the date specified in
such notice (which shall be not less than five (5) days after the giving of such
notice) Lessee’s right to possession shall terminate and this Lease shall
terminate, unless on or before such date all arrears of Rent and all other sums
payable by Lessee under this Lease and all costs and expenses incurred by or on
behalf of Lessor hereunder shall have been paid by Lessee and all other breaches
of this Lease by Lessee at the time existing shall have been fully remedied to
the satisfaction of Lessor. No act by Lessor other than giving notice to Lessee
shall terminate this Lease. Acts of maintenance, efforts to relet the Premises,
or the appointment of a receiver on Lessor’s initiative to protect Lessor’s
interest under this Lease shall not constitute a termination of Lessee’s right
to possession. On termination, Lessor has the right to recover from Lessee:

(1)The worth, at the time of the award, of the unpaid Rent that had been earned
at the time of termination of this Lease;

(2)The worth, at the time of the award, of the amount by which the unpaid Rent
that would have been earned after the date of termination of this Lease until
the time of award exceeds the amount of the loss of Rent that Lessee proves
could have been reasonably avoided;

(3)The worth, at the time of the award, of the amount by which the unpaid Rent
for the balance of the term after the time of award exceeds the amount of the
loss of Rent that Lessee proves could have been reasonably avoided; and

(4)Any other amount, and court costs, necessary to compensate Lessor for all
detriment proximately caused by Lessee’s default. “The worth, at the time of the
award” as used in (1) and (2) of this subparagraph is to be computed by allowing
interest at the rate of ten percent (10%) per annum. “The worth, at the time of
award,” as referred to in (3) of this subparagraph is to be computed by
discounting the amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of the award, plus one percent (1%).

C.Lessor, at any time after an Event of Default, may cure said default at
Lessee’s cost.  If Lessor at any time, by reason of Lessee’s default, pays any
sum or does any act that requires the payment of any sum, the sum paid by Lessor
shall be due following five (5) business days’ written notice, and if paid at a
later date shall bear interest at the rate of ten percent (10%) per annum from
the date of such written notice until Lessor is reimbursed by Lessee. The sum,
together with interest on it, shall be deemed to be additional Rent.

D.Lessor shall have the following additional remedies:

(1)In the event that a late charge is payable hereunder, whether or not
collected, for three (3) installments of Base Monthly Rent or if Lessee fails to
pay any other monetary obligation of Lessee under this Lease within the
applicable cure or grace period, Lessee shall pay to Lessor, if Lessor shall so
request in writing, in addition to any other payments required under this Lease,
a monthly advance installment, payable at the same time as the Base Monthly

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Rent, as reasonably estimated by Lessor, for Lessee’s Percentage Share of Real
Property Tax and insurance premium expenses which are payable by Lessee under
the terms of this Lease. Such fund shall be established to insure payment when
due, before delinquency, of Lessee's Percentage Share of Real Property Tax and
insurance premiums. All moneys paid to Lessor under this subparagraph may be
intermingled with other moneys of Lessor and shall not bear interest. In the
event of a default in the obligations of Lessee under this Lease, then any
balance remaining from funds paid to Lessor under the provisions of this
subparagraph may, at the option of Lessor, be applied to the payment of any
monetary default of Lessee in lieu of being applied to the payment of real
property taxes and insurance premiums.

(2)In the event that a late charge is payable hereunder, whether or not
collected, for three (3) installments of Base Monthly Rent in any twelve (12)
month period, Lessor may demand and Lessee shall pay to Lessor an amount equal
to two (2) months of Base Monthly Rent, in the amount of the Base Monthly Rent
then due, as an addition to the Security Deposit to be held pursuant to the
terms of Paragraph 5 of this Lease.

E.To the extent permitted by law, Lessee hereby waives its rights to demand a
trial by jury in any action for unlawful detainer filed by Lessor.

F.Any monetary judgment or award against Lessee under this Lease shall bear
interest at the rate of ten percent (10%) per annum regardless of the Court
entering or enforcing such judgment or award.

20.Lessor’s Default. Lessor shall be in default of this Lease if it fails or
refuses to perform any provision of this Lease that it is obligated to perform
if the failure to perform is not cured within thirty (30) days after notice of
the default has been given by Lessee to Lessor. If the default cannot reasonably
be cured within thirty (30) days, Lessor shall not be in default of this Lease
if Lessor commences to cure the default within the thirty (30) day period and
diligently and in good faith continues to cure the default; provided, in the
event of an emergency, Lessor shall commence the performance of any cure within
seven (7) business days following receipt of written notice from Lessee.

21.Limitation of Lessor’s Liability.  If Lessor is in default of this Lease, and
as a consequence Lessee recovers a money judgment against Lessor, the judgment
shall be satisfied only out of the proceeds of sale received on execution of the
judgment and levy against the right, title and interest of Lessor in the
Building or out of Rent or other income from the Building receivable by Lessor
or out of the consideration received by Lessor from the sale or other
disposition of all or any part of Lessor’s right, title and interest in the
Building. Lessor shall not be personally liable for any deficiency.

22.Lessor’s Entry on Premises. Lessor and its authorized representatives shall
have the right to enter the Premises at all reasonable times, after reasonable
written notice to Lessee, but in no event less than one (1) business day, except
in the case of an emergency when no notice will be required, for any of the
following purposes:

A.To determine whether the Premises are in good condition and whether Lessee is
complying with its obligations under this Lease.

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B.To do any necessary maintenance, repair, replacement or alteration to the
Premises or the Building.

C.To serve, post, or keep posted any notices required or allowed under the
provisions of this Lease.

D.To post “for sale” signs and “for rent” or “for lease” signs on the exterior
of the Building at any time during the term (except that “for rent” and “for
lease” signs may only be posted in the last twelve (12) months of the term
unless there has been an Event of Default).

E.To place signs on the exterior of the Building identifying the owner or
manager or managing agent of the Building or complex.

F.To show the Premises to prospective brokers, agents, buyers, tenants or
persons interested in an exchange, at any time during the term (except that
Lessor may not show the Premises to potential tenants or their brokers until the
last twelve (12) months of the term unless there has been an Event of
Default).  Lessor shall not be liable in any manner for any inconvenience,
disturbance, loss of business, nuisance, or other damage arising out of Lessor’s
entry on the Premises as provided in this Paragraph 22. Lessee shall not be
entitled to an abatement or reduction of Rent if Lessor exercises any rights
reserved in this Paragraph 22, unless occasioned by Lessor’s gross negligence or
intentional wrongful conduct or that of Lessor’s employees, agents or
contractors. Notwihstanding the foregoing, Lessor shall use good faith efforts
to ensure all such entries do not unreasonably disturb Lessee’s use and
enjoyment of the Premises.

23.Subordination. This Lease is and shall be subordinate to any encumbrance now
of record or recorded after the date of this Lease affecting the Building, other
improvements and land of which the Premises are a part. Such subordination is
effective without any further act on the part of Lessee. Within ten (10)
business days after the Commencement Date,  Lessor must obtain and deliver to
Lessee a non-disturbance and attornment agreement, executed by Lessor’s lender
providing in substance that this Lease shall not be terminated by Lessor’s
lender so long as Lessee has not committed an Event of Default which Event of
Default has not been cured after the giving of the appropriate notice required
by Paragraph 19 hereof and that if any lender instructs Lessee to pay any Rent
to said lender said payment will be deemed to be the payment of such rental
obligation under this Lease. Lessee shall from time to time on written request
from Lessor execute and deliver any commercially reasonable documents or
instruments that may be required by a lender to effectuate any subordination of
this Lease to any encumbrance now of record or recorded after the date of this
Lease on the condition that any such instrument contain a quiet enjoyment clause
guaranteeing Lessee’s rights hereunder so long as Lessee does not commit an
Event of Default which is not cured after the giving of the appropriate notice
required by Paragraph 19 hereof.  Lessee’s failure to so execute any such
document after ten (10) business days’ written notice to Lessee requesting such
execution shall be deemed to be an Event of Default under this Lease.

24.Right to Estoppel Certificates. Within ten (10) business days after written
notice from Lessor, Lessee shall execute and deliver to Lessor, a certificate
stating that there are no defaults under the Lease, or itemizing any defaults
Lessee contends exists, that the Lease is unmodified and in full force and
effect, or in full force and effect as modified, and state the

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modifications and any other information reasonably required by a lender or
purchaser, including but not limited to the amount of Base Monthly Rent, the
date to which Base Monthly Rent has been paid in advance, and the amount of the
Security Deposit or any prepaid Rent. Failure to deliver the certificate within
the ten (10) business days shall be conclusive as to Lessee that this Lease is
in full force and effect and has not been modified except as may be represented
by Lessor. If Lessee fails to deliver the certificate within the ten (10)
business days, Lessee irrevocably constitutes and appoints Lessor as its special
attorney in fact to execute and deliver the certificate to any third party.

25.Notice. Any notice demand, request, consent, approval, or communication that
either party desires or is required to give to the other party or any other
person shall be in writing and either served personally or by overnight delivery
with a recognized delivery service.  Any notice demand, request, consent,
approval, or communication that either party desires or is required to give to
the other party shall be addressed to the other party at the address set forth
at the end of this Lease. Either party may change its address by notifying the
other party of the change of address.

26.Waiver. The waiver by either party of any breach of any term, covenant, or
condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition or any subsequent breach of the same or any other term,
covenant, or condition herein contained, nor shall any custom or practice which
may grow up between the parties in the administration of the terms hereof be
construed to waive or to lessen the right of either party to insist upon
performance by the other in strict accordance with said terms. The subsequent
acceptance of Rent hereunder by Lessor shall not be deemed to be a waiver of any
preceding breach by Lessee of any term, covenant or condition of this Lease,
regardless of Lessor’s knowledge of such preceding breach the time of acceptance
of such Rent.

27.Sale of Premises. If Lessor sells or transfers its interest in the Premises,
upon the consummation of the sale or transfer, Lessor shall be released from any
liability thereafter accruing under this Lease if Lessor’s successor has assumed
in writing, for the benefit of Lessee, Lessor’s obligations under this Lease. If
any letter of credit or prepaid Rent has been paid by Lessee, Lessor shall
transfer the letter of credit or prepaid Rent to Lessor’s successor and on such
transfer Lessor shall be discharged from any further liability in reference to
the Security Deposit or prepaid Rent, if any.

28.Attorneys’ Fees. If either party commences an action against the other party
arising out of or in connection with this Lease, the prevailing party shall be
entitled to have and recover from the non-prevailing party reasonable attorneys’
fees and costs of suit.  In any proceedings initiated by or against Lessee under
the United States Bankruptcy Code, Lessor shall be entitled to recover any and
all reasonable attorneys fees and expenses arising from or in connection with
proceedings for the assumption, rejection, or assignment of this Lease, stay
relief, or other protection of Lessor’s interests, regardless of any default
under the Lease.

29.Surrender of Premises. On expiration of the term of this Lease or any
extension thereof or upon any earlier termination of this Lease, Lessee shall
surrender to Lessor the Premises and all Lessee's Alterations in good condition
(except for ordinary wear and tear) unless Lessor has required Lessee to remove
its Alterations.  The surrender of the Premises will only be deemed

29

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to have occurred when Lessee delivers all keys to the Premises to Lessor, or
reimburses Lessor a reasonable amount for any lost or stolen keys. Lessee shall
remove all of its personal property, equipment and trade fixtures prior to the
expiration of the term of this Lease or any extension thereof or upon the
earlier termination of this Lease. Lessee shall perform at its expense all
restoration and repairs made necessary by the removal of any Alterations and
equipment as required by this Lease and any other agreements between Lessor and
Lessee.  

In the event Lessee fails to remove all of its equipment and personal property
following the expiration or earlier termination of this Lease, in addition to
any other remedies Lessor may have, Lessor may elect to retain or dispose of
said personal property and equipment in any manner Lessor in its sole discretion
may decide.  Without waiving any other remedy,  Lessor shall if it so elects to
by written notice to Lessee (and if permitted by Applicable Laws) obtain title
to any or all of Lessee’s equipment and personal property and retain or dispose
of the same.  Lessee waives all claims against Lessor for any damage to Lessee
resulting from Lessor’s retention or disposition of any such personal property.
Lessee shall also be liable to Lessor for Lessor’s costs for storing, removing,
and disposing of any such personal property.

If Lessee fails to surrender the Premises to Lessor on the expiration of the
term of this Lease or any extension thereof as required by this Paragraph 29,
Lessee shall hold Lessor harmless from all damages resulting from Lessee’s
failure to surrender the Premises, including without limitation, lost rental
value and any claims made by a new tenant resulting from Lessee’s failure to
surrender the Premises.

30.Holding Over. If Lessee, with Lessor’s consent, remains in possession of the
Premises after expiration or termination of the term of this Lease, or after the
date in any notice given by Lessor to Lessee terminating this Lease, such
possession by Lessee shall be deemed to be a month-to-month tenancy terminable
on ninety (90) days notice given at any time by either party.  All provisions of
this Lease except those pertaining to term shall apply to the month-to-month
tenancy, and except that Base Monthly Rent shall be equal to one hundred and
fifty percent (150%) of the Base Monthly Rent payable immediately prior to the
expiration or termination of this Lease.  If Lessee holds over without Lessor’s
consent, Lessor’s damages shall also include the per diem rental value of the
Premises measured by one hundred and fifty percent (150%) of the Base Monthly
Rent due in the last month of prior to the expiration or termination of this
Lease divided by 30 plus the daily cost of Lessee’s Percentage Share of Common
Area Maintenance and Repair Costs, Real Property Taxes and insurance premiums.

31.Option to Extend Term. Lessor hereby grants to Lessee options (the “Options”
or “Option”) to extend the term of this Lease for two (2) five (5) year terms
(the “Extension Periods” or “Extension Period”).  The first Extension Period
shall commence upon the expiration of the initial term hereof and the second
Extension Period shall commence upon the expiration of the first Extension
Period.  The terms and conditions of the Option are as follows.

A.Exercise of Option.  The Options shall be exercised by Lessee giving to Lessor
written notice of such exercise at least one hundred eighty (180) days prior to
the expiration of the original term of this Lease for the first Extension Period
and, for the second Extension Period, at least one hundred eighty (180) days
prior to the expiration of the first Extension Period.  Lessee shall have no
right to exercise the Option for the second Extension Period if Lessee has not

30

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exercised the Option for the first Extension Period. If proper notification of
the exercise of an option is not timely given, such option shall automatically
expire.

B.Terms and Conditions.  All terms and conditions of this Lease shall continue
to be binding upon Lessor and Lessee during the Extension Periods except that
the Base Monthly Rent during the first Extension Period shall be as follows:

Months 1-12:$89,225.00 per month

Months 13-24: $91,902.00 per month

Months 25-36: $94,659.00 per month

Months 37-48: $97,499.00 per month

Months 49-60: $100,424.00 per month

Base Monthly Rent for the second Extension Period shall be as follows:

Months 1-12: $103,436.00 per month

Months 13-24:$106,540.00 per month

Months 25-36:$109,735.00 per month

Months 37-48:$113,028.00 per month

Months 49-60:$116,419.00 per month

C.Option Not Assignable Separate From Lease.  The Option herein granted to
Lessee may be assigned by Lessee to Affiliates as described in Paragraph 17
above. Except as otherwise provided in this Paragraph 31.C, the Option herein
granted to Lessee is not assignable separate and apart from this Lease and may
not be exercised by anyone other than the successors or permitted assigns of
Lessee.

D.Assumption of Restoration Obligations. Lessee’s exercise of either Option
shall be deemed to include Lessee’s assumption of all obligations to restore the
Premises pursuant to Paragraph 10 above and to continue to securitize said
obligation to the full amount of the cost of both decommissioning any laboratory
or manufacturing facility and removal of all Alterations and other improvements,
if required by Lessor pursuant to Paragraph 10, in a manner reasonably
acceptable to Lessor.  Lessee’s failure to provide such security shall make the
Option voidable at Lessor’s option even if Lessee has exercised the Option.

E.Effect of Default on Option.

(1)Lessee shall have no right to exercise the Option, notwithstanding any
provision in the grant of option to the contrary during the time that an Event
of Default exists or if Lessor in the twelve (12) months prior to the day on
which Lessee exercises the Option, Lessor has given to Lessee two (2) or more
notices to cure an Event of Default or if during the last twenty-four (24)
months of the original term Lessee has incurred a late charge on account of the
late payment of Base Monthly Rent on three (3) or more separate occasions.    

(2)The period of time within which the Option may be exercised shall not be
extended or enlarged by reason of Lessee's inability to exercise such Option
because of the provisions of the above paragraph.

31

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(3)All rights of Lessee under the provisions of the grant of option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, an Event of Default occurs and Lessee fails to cure the default
within the period of time required by Paragraph 18 above.

32.Consent of Parties. Whenever consent or approval of either party is required,
that party shall not unreasonably withhold or delay such consent or approval.

33.Time of Essence. Time is of the essence of each provision of this Lease.

34.Successors. This Lease shall be binding on and inure to the benefit of the
parties and their successors and assigns.

35.Covenants and Conditions. All provisions, whether covenants or conditions, on
the part of the Lessee shall be deemed to be both covenants and conditions.

36.California Law. This Lease shall be construed and interpreted in accordance
with the laws of the State of California.

37.Entire Agreement. This Lease cannot be amended or modified except by a
written agreement.

38.Captions. The captions of this Lease shall have no effect on its
interpretation.

39.Number. When required by the context of this Lease, the singular shall
include the plural, and vice versa.

40.Joint and Several Obligations. “Party” shall mean Lessor or Lessee; and if
more than one person or entity is Lessor or Lessee, the obligations imposed on
that party shall be joint and several.

41.Authority. If either party signs as a corporation, partnership, trust,
limited liability company or similar entity each of the persons executing this
Lease on behalf of such party does hereby covenant and warrant that the company
is qualified to do business in the State of California and is in good standing
in the State of California, that the company has full right and authority to
enter into this Lease, and that the parties signing this Lease and that every
person signing on behalf of the company is authorized to do so.

42.Complete Agreement. There are no oral agreements between Lessor and Lessee
affecting this Lease, and this Lease supersedes and cancels any and all previous
negotiations, arrangements, brochures, and understandings, if any, between
Lessor and Lessee or displayed by Lessor to Lessee, except for those relating to
the nature of the materials to be tested and manufactured within the
Premises,  with respect to the subject matter of this Lease. There are no other
representations between Lessor and Lessee other than those contained in this
Lease, and all reliance with respect to any representations is solely upon the
representations contained in this Lease.

32

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43.Real Estate Brokers. Lessor and Lessee acknowledge that the only real estate
brokers involved in this transaction are Jon Faller, Faller Real Estate,
representing Lessee, and Marshall Hydorn, CBRE, representing Lessor (the
“Brokers”).  Lessor shall be solely responsible for any brokerage due the
Brokers, which shall be paid pursuant to a separate written agreement between
Lessor and Brokers.  Said commission shall be paid one-half (1/2) upon the
mutual execution of this Lease, and the remaining one-half (1/2) upon the Lease
Commencement Date.  Each party agrees that should any claim be made for a
brokerage commission or finder’s fee by any broker or finder other than the
Brokers, by, though or on account of any acts of said party or its
representatives, said party will indemnify and hold the other party free and
harmless from and against any and all loss, liability, cost, damage and expense
in connection therewith.  No commissions shall be due or payable should Lessee
exercise any option(s) granted under this Lease.

44.Addresses for Notices. Any notices required to be sent pursuant to this Lease
shall be sent to the parties al the following addresses unless changed pursuant
to the notification provisions of this Lease.

TO LESSOR:

JCN Partners, a California limited partnership

c/o John C. Nickel Properties

1 Camino Sobrante, Suite 205

Orinda, CA 94563

Attn:  John C. Nickel

 

 

With a copy to:

 

Joseph G. Tursi

SSL Law Firm, llp

515 Market Street, Suite 2700

San Francisco, CA 94105

 

TO LESSEE:

 

 

 

 

With a copy to:

Audentes Therapeutics, Inc.

600 California Street, Suite 1700

San Francisco, CA 94108

Attn:  Natalie Holles

Real Estate Law Group, LLP

2330 Marinship Way, Suite 211

Sausalito, California 94965

Attn:  Jeffrey D. Ebstein, Esq.

45.Counterparts. This Lease may be signed in multiple counterparts which, when
signed by all parties, shall constitute a binding agreement.

46.Access Disclosure.  Pursuant to California Civil Code Section 1938, Lessor
hereby notifies Lessee that as of the date of this Lease, the Premises have not
undergone inspection by a Certified Access Specialist (“CASp”) to determine
whether the Premises meet all applicable

33

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construction-related accessibility standards under California Civil Code Section
55.53.  Lessor hereby discloses pursuant to California Civil Code Section 1938
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.”  Lessor and
Lessee hereby acknowledge and agree that in the event that Lessee elects to
perform a CASp inspection of the Premises hereunder, such CASp inspection shall
be performed at Lessee's sole cost and expense and Lessee shall be solely
responsible for the cost of any repairs, upgrades, alterations and/or
modifications to the Premises or the Building necessary to correct any such
violations of construction-related accessibility standards identified by such
CASp inspection as required by Regulation, which repairs, upgrades, alterations
and/or modifications may, at Lessor’s option, be performed by Lessor at Lessee’s
expense, payable as Additional Rent within ten (10) days following Lessor’s
demand.

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

48.Lease Memorandum.  The parties agree that they will execute and record a
memorandum of lease substantially in the form annexed hereto as Exhibit F.  

[SIGNATURE PAGE FOLLOWS]

34

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IN W1TNESS W HEREOF, the parties have executed this Lease as of the date first
set forth above.

Dated:August __, 2018

JCN PARTNERS,

a California limited partnership

 

By:JCN Properties, LLC,

a California limited liability company,

Its General Partner

 

By:
Name:John C. Nickel
Title:Managing Member

 

Dated:August 15, 2018

AUDENTES THERAPEUTICS, INC.,

a Delaware corporation

 

 

By:/s/ Matthew Patterson
Name:Matthew Patterson
Title:CEO

 

 

By:
Name:
Title:

 

35

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EXHIBIT A

FLOOR PLAN

 

 

A-1

: 6/25/18

--------------------------------------------------------------------------------

 

EXHIBIT B

PARKING SPACES

 

 

B-1

: 6/25/18

--------------------------------------------------------------------------------

 

EXHIBIT C

COMMON ROADWAY

 

 

C-1

: 6/25/18

--------------------------------------------------------------------------------

 

EXHIBIT D

LESSEE’S CURRENT SPACE PLAN

 

 

D-1

: 6/25/18

--------------------------------------------------------------------------------

 

EXHIBIT E-1

 

RESOLUTION NO. 84-97

 

[g3dihec0hkcn000001.jpg]

 

E-1-1

: 6/25/18

--------------------------------------------------------------------------------

 

[g3dihec0hkcn000002.jpg]

 

E-1-2

: 6/25/18

--------------------------------------------------------------------------------

 

[g3dihec0hkcn000003.jpg]

 

 

E-1-3

: 6/25/18

--------------------------------------------------------------------------------

 

EXHIBIT E-2

CITY OF SOUTH SAN FRANCISCO EMAIL

[g3dihec0hkcn000004.jpg]

 

 

E-2-1

: 6/25/18

--------------------------------------------------------------------------------

 

EXHIBIT E- 3

 

Eccles Lease – Audentes - Proposed Language for Zoning Verification Letter

City of South San Francisco Planning Division

[Address]

Attention: Chief Planner [or Director of Economic and Community Development]

 

RE:

534 Eccles Avenue, City of South San Francisco (the “Property”) – Request for
Zoning Verification Letter

Dear _______,

Pursuant to Section 4.B of the lease (the “Lease”) for the premises (the
“Premises”) at the Property, between JCN Partners (“Lessor”) and Audentes
Therapeutics (“Audentes”), as tenant, dated August _, 2018, Audentes must
request a written determination by the City of South San Francisco Planning
Division regarding the zoning of the Property (a “Zoning Verification Letter”)
not more than twelve (12) months or less than nine (9) months prior to the
expiration of the term of the Lease.  As such, Audentes hereby requests that a
Zoning Verification Letter (or its equivalent) be issued that confirms that the
Premises can be reconverted to its originally designated use of Industrial Use
(as defined below), including, wholesale, warehouse and distribution under the
City’s current zoning ordinance following the termination of the Lease. Below is
a background summary that should assist you in issuing the Zoning Verification
Letter:

 

1.

The Property is located within an Employment District and zoned as a Business
Technology Park (BTP) (SSF Zoning Ordinance §§ 20.110.001, et seq.).  The
Property was rezoned as BTP from its previous zoning of “Planned Industrial.” At
the time of the rezoning, the Property use was an industrial use, including
wholesale, warehouse and distribution uses (individually and collectively, an
“Industrial Use”).  

 

 

2.

Audentes obtained written advice from Senior Planner Tony Rozzi of the South San
Francisco Planning Division to determine whether (1) Audentes could use the
Premises for life sciences for the term of the Lease (anticipated to be through
May 31, 2027, with options), and (2) whether the Premises could be converted
back to an Industrial Use upon expiration of the Lease.  On May 17, 2018, Mr.
Rozzi confirmed that the Premises could convert back to Industrial Use
regardless of the nature of Audentes’ use of the Premises during the term of the
Lease, pursuant to City of South San Francisco Resolution No. 84-97 (as
amended), and adopted on July 9, 1997.  A copy of Mr. Rozzi’s email, which
includes a copy of Resolution No. 84-97, is enclosed herein.  Indeed, Resolution
No. 84-97 specifically was adopted to address the concerns of property owners
within the BTP zone that previously were zoned as “Planned Industrial,”
including the Premises, “to resolve this particular issue.”

 

F-1

:

--------------------------------------------------------------------------------

 

 

3.

Audentes has used the Premises for office and warehouse uses.  The Lease will
expire on [fill in date - not more than 12 months or less than 9 months before
expiration of the Lease].  

 

Consistent with the above, Audentes now seeks a Zoning Verification Letter to
confirm that the Premises may be re-used for the Industrial Use, consistent with
Senior Planner Rozzi’s May 17, 2018 email and Resolution No. 84-97.

Sincerely,

 

[Audentes signatory]

 

 

 

F-1

:

--------------------------------------------------------------------------------

 

 

EXHIBIT F

 

MEMORANDUM OF LEASE

 

RECORDING REQUESTED BY:

 

AND WHEN RECORDED RETURN TO:

 

(Space above line for Recorder's use)

______________________________________________________________________________

MEMORANDUM OF LEASE

JCN PARTNERS, a California limited partnership (“Lessor”), and AUDENTES
THERAPEUTICS, INC., a Delaware corporation (“Lessee”), executed that Lease dated
as of ____________________, 2018 (the “Lease”) for premises commonly known as:
534 Eccles Avenue, South San Francisco, California.

Lessor and Lessee agree as follows:

1.The Commencement Date of the Lease is __________________________.

2.The end of the Initial Lease term and the date on which this Lease will expire
is ______________________.  

3.Lessee has two (2) five (5)-year options to extend the term of the Lease.

Dated:

LESSOR:

 

JCN PARTNERS,

a California limited partnership

 

By:JCN Properties, LLC,

a California limited liability company,
Its General Partner

 

 

By:

Name:

Title:

LESSEE:

 

AUDENTES THERAPEUTICS, INC.,

a Delaware corporation

 

 

By:________________________________

Name:______________________________

Its: _________________________________

F-1

:

--------------------------------------------------------------------------------

 

F-1

:

--------------------------------------------------------------------------------

 

 

A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

 

 

State of California)

)

County of ________ )

 

On ______________________________________ before me,
_____________________________, notary public (here insert name and title of the
officer), personally appeared _______________________, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

 

 

Signature _______________________________ (Seal)

 

F-1

:

--------------------------------------------------------------------------------

 

 

A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

 

 

State of California)

)

County of ________ )

 

On ______________________________________ before me,
_____________________________, notary public (here insert name and title of the
officer), personally appeared _______________________, who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

 

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

 

WITNESS my hand and official seal.

 

 

 

Signature _______________________________ (Seal)

 

 

 

F-1

: