EXHIBIT 10.2

 

BAYVIEW BUSINESS PARK

 

STANDARD LEASE

 

BASIC LEASE INFORMATION

  1.   Date:  6/16/03

 

  2.   Lessor:  Bayview Ignacio, LLC

P. O. Box 11068

Santa Rosa, Ca 95406

(707) 544-7050

(707) 523-7031 FAX

 

  3.   Lessee:  BioMarin Pharmaceutical Inc.

Address for Lessee Notices:  90 Digital Drive, Novato, California 94949

Phone:  (415) 884-6700

FAX:  (415) 382-7885

 

  4.   Lessee Responsible Party:  Jeffrey Landau, Vice President of
Administration

Address of Responsible Party:  90 Digital Drive, Novato, California 94949

 

  5.   Premises:  The entire premises consisting of Building “O” located at 105
Digital  Drive and Building “P” located at 90 Digital Drive, Novato, California

 

Total:  74,825 square feet

 

  6.   Term:  Ten full years (plus a partial month if Commencement Date is other
than the 1st of the month)

 

  7.   Estimated Commencement Date:  November 1st, 2003 (Refer to Paragraph
3(d))

 

  8.   Base Term Expiration Date:  October 31st, 2013 (Based upon November 1st,
2003 Commencement Date)

 

  9.   Initial Base Monthly Rent:  $112,237.50

 

  10.   Initial Security Deposit:  $561,000.00

 

  11.   Use:  Administrative offices and storage. As part of the foregoing uses,
Lessee may use the Premises for conference rooms, employee cafeterias and lunch
rooms, boardrooms, telecommunications and data equipment rooms, training rooms,
lobbies, and employee gymnasium and fitness rooms. Use of part or all of the
Premises for lab is specifically excluded.

 

  12.   Exhibits:

“A”        The Building

“B”        The Premises

“C”        Declaration of Covenants and Protective Standards

“D”        Insurance Endorsement Format

“E”         Estoppel Format

“F”         Lessee Hazardous Materials

“G”        Initial Improvement Concept Drawings

“H”         Preliminary Space Plans

“I”          Complete Working Drawings

(Note: Exhibits “G,H and I” to be combined and replaced with As Built Initial
Interior Plans within 24 months of Commencement Date)

“J”          Exterior Preliminary Plans

“K”         Exterior Permit Plans

(Note: Exhibits “J and K” to be combined and replaced with As Built Exterior
Plans within 24 months of Commencement Date)

“L”         Site Plan

 

  13.   Addenda:  Paragraphs 43 through 50.

 

In the event of conflict between any Basic Lease Information and the Lease, the
former shall control.

 

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Lessor

   Lessee

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BAYVIEW BUSINESS PARK

STANDARD LEASE

 

For and in consideration of the rents, covenants, conditions and agreements
hereinafter reserved and contained, by Lessee, to be paid, kept, observed and
performed, Lessor, Bayview Ignacio, LLC, leases unto Lessee and Lessee hires
from Lessor the premises described in the Basic Lease Information (the Premises)
together with appurtenances, situated in Buildings “O” at 105 Digital Drive and
“P” at 90 Digital Drive located in Bayview Business Park (the Project or
Property), in the city of Novato, county of Marin, state of California.

 

Said hiring and letting is upon each and every of the following terms and
conditions:

 

1.   BACKGROUND:

 

The Lessor holds a fee simple interest in the Project and represents and
warrants that Lessor has right, title and authority to enter into this
agreement.

 

2.   LESSEE AUTHORITY:

 

If Lessee is a corporation, trust or general or limited partnership, or sole
proprietor, each individual executing this Lease on behalf of such entity
represents and warrants that he and/or she is duly authorized to execute and
deliver this Lease on behalf of said entity. Lessee shall, prior to the
execution of this Lease, deliver satisfactory evidence to Lessor of such
authority. Failure to comply with this requirement within the time stated shall
constitute a breach of the Lease.

 

3.   TERM:

 

  a.   The term of this Lease shall be for a period of ten (10) years and one
partial month (if applicable), beginning November 1st, 2003 and continuing until
October 31st, 2013. Lessee shall be tendered occupancy of the Premises as of the
stated Commencement Date.

 

  b.   Lessor shall keep Lessee informed of any changes in the Commencement
Date.

 

  c.   If Lessor shall not have tendered possession of the Premises to Lessee
such that the occupancy date thereof would be more than ninety (90) days after
the commencement date set forth in paragraph “a” above, Lessee may at Lessee’s
option by notice in writing to Lessor, cancel this Lease, in which event Lessor
and Lessee shall be discharged from all obligations hereunder. In the event this
Lease is cancelled by Lessee due to Lessor’s failure to diligently pursue work
on the Premises to be performed by it, Lessor shall be discharged from all
obligations under this Lease and shall not be liable for any other costs or
damages which Lessee may suffer, except for return of advance rent payments and
security deposits made by Lessee.

 

  d.   In the event that the Lease commences on a date later than November 1st,
2003 pursuant to the terms of Subparagraph “c” above, or as otherwise agreed to
by Lessor and Lessee, the Commencement Date shall be the date when possession of
the Premises is delivered by Lessor to Lessee. In such event the Commencement
Date shall be memorialized in writing acknowledged by both Lessor and Lessee.

 

4.   SECURITY DEPOSIT:

 

  a.   Lessee shall deposit with Lessor upon execution of this Lease the sum
indicated on the Basic Lease Information as initial security for Lessee’s full
and faithful performance of Lessee’s obligations hereunder. Such deposit does
not constitute an advance payment of any rent, including last months’ rent. If
Lessee fails to pay rent or other charges due hereunder or otherwise defaults
with respect to any provision of this Lease, Lessor may use, apply or retain all
or any portion of such deposit for payment of any rent or other charge in
default, or for the payment 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. Should Lessor so use, apply or retain
all or any portion of such deposit, Lessee shall, within five (5) days after
written demand therefor, deposit certified funds with Lessor in an amount
sufficient to restore such deposit to the full amount hereinabove stated, and
Lessee’s failure to do so shall be a material breach of this Lease.

 

  b.   Lessor shall not be required or in any way obligated to keep such deposit
separate from its general accounts. No trust relationship is created herein
between Lessor and Lessee with respect to such deposit. If Lessee performs all
of Lessee’s obligations hereunder, such deposit, or so much thereof as has not
therefore been used, applied or retained by Lessor, shall be returned, without
payment of interest or other increment for its use, except as otherwise set
forth in Paragraph 4d below, to Lessee within twenty-one (21) days of the later
of Lease expiration or Lessee’s vacating the Premises and return of keys to
Lessor.

 

  c.   If Lessee applies to Lessor for approval of changes, additions,
improvements or modifications as described in Paragraphs 13 and 14 of this Lease
(except with respect to the Initial Interior and Exterior Improvements as set
forth in Paragraphs 49 and 50 of Addendum 1 to this Lease), Lessor may, at its
sole option, require Lessee to increase the deposit by such amounts as are, in
Lessor’s commercially reasonable discretion, necessary to restore the premises
to its original condition at termination of this Lease. Such additional amounts,
if any, will be subject to the provisions of this Paragraph 4.

 

  d.   Lessor shall credit Lessee annually with interest on the Security
Deposit, in the amount of the average of the Bank of America passbook rate for
the previous year, against the next installment of the Base Monthly Rent due.

 

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5.   USE:

 

The Premises are hereby leased to Lessee upon the express condition that Lessee
shall use said Premises ONLY for the use indicated in the Basic Lease
Information.

 

Lessee agrees that Lessee’s business shall be established and conducted through
the term hereof in a first class manner; that Lessee will not use the demised
Premises for, or carry on or permit upon said Premises any unreasonably
offensive, noisy, dangerous or unlawful trade, business, manufacture or
occupation or any nuisance or violation of public policy, nor permit any auction
sale to be held or conducted on or about said Premises; that Lessee shall not
commit, or suffer to be committed, any waste upon the Premises; that Lessee
shall not do or suffer anything to be done upon said Premises which will cause
structural injury to said Premises or the Building of which same form a part;
that said Premises will not be overloaded and that no machinery, apparatus or
other appliance shall be used or operated in or upon the Premises which will in
any manner injure, vibrate or shake said Premises or the Building of which it is
a part; that no use will be made of the Premises which will in any way impair
the efficient operation of the sprinkler system within the Building containing
the Premises; that Lessee will not abandon said Premises during the term hereof
unless pursuant to an assignment of this Lease or subletting of the Premises
approved by Lessor in the manner described elsewhere in this Lease; and that
without the advance written permission of Lessor no musical instrument of any
sort, or any noise-making device will be operated or allowed upon said Premises
for the purpose of attracting trade or otherwise.

 

Lessee further agrees not to use or permit the use of the Premises or any part
thereof for any purpose prohibited by law or which will increase the existing
rate of insurance upon the Building in which the Premises may be located, or
cause a cancellation of any insurance policy covering said Building or any part
thereof. If any act or use of Premises on the part of Lessee shall cause,
directly or indirectly, any increase of Lessor’s insurance premiums said
additional premiums shall be paid by Lessee to Lessor upon demand. No such
payment by Lessee shall limit Lessor in the exercise of any other rights or
remedies, or constitute a waiver of Lessor’s right to require Lessee to
discontinue such act or use.

 

No use shall be made or permitted to be made of the Premises or any part
thereof, and no act done therein, which may unreasonably disturb the quiet
enjoyment of any other tenant in the Project or the Building of which the
Premises are a part. Lessee, at Lessee’s sole cost and expense, agrees to do all
things necessary to:

 

  1.   maintain the Premises in a clean, neat, sanitary and safe manner;

  2.   to repair and maintain the interior of the Premises forming all or part
of the Building in compliance and conformity with all municipal, state, federal
laws and ordinances, and with the requirements of any other governmental board
or authority, present or future, in any way relating to the condition, use or
occupancy of the Premises throughout the entire term of this Lease and to the
perfect exoneration from liability of Lessor,

  3.   or if due to Lessee’s specific use of the Premises any governmental
authority requires alterations, Lessee shall make such alterations at its sole
cost and expense.

 

The judgment of any court or the admission of Lessee in any action or proceeding
against Lessee, whether Lessor be a party thereto or not, that Lessee has
violated any such law, ordinance, requirement or order in the use of the
Premises, shall be conclusive of that fact between Lessor and Lessee.

 

Lessee shall keep at the Premises, and maintain in good working condition, a
sufficient number of fire extinguishers as determined by the Novato Fire
Department or other agency of authority in this regard.

 

Lessee shall not, without prior written consent from Lessor, use any common area
of the Project or Building(s) for any purpose not specifically granted in this
Lease and Attachments (if any).

 

6.   ACCEPTANCE OF PREMISES BY LESSEE:

 

Lessor shall deliver the Premises in “broom-clean” good condition and repair
upon the Commencement Date, including, without limitation, building systems
(HVAC, fire life safety, mechanical, electrical, plumbing, elevators) and
structural elements (roof, foundation, load bearing and exterior walls) and in
compliance with applicable laws and governmental regulations (including without
limitation, the Americans with Disabilities Act of 1990). Lessee has examined
the Premises as of the date of this Lease and acknowledges and covenants to
Lessor that same is in the condition represented by Lessor and fit and suitable
for the use and purpose demised. Lessee hereby accepts the Premises “AS IS”,
subject to the terms of this Lease.

 

7.   RENT:

 

  a.   Starting with the commencement date of this Lease, Lessee shall pay to
Lessor the Base Monthly Rent as indicated in the Basic Lease Information. The
Base Monthly Rent shall be paid on the first (1st) day of each month during the
term thereof without notice, demand or any offset, and shall be paid in lawful
money of the United States. Lessee shall pay to Lessor one month’s Base Monthly
Rent upon execution of this Lease, which shall be applied to the first (1st)
month rent due hereunder.

 

  b.   If the commencement date does not fall on the first (1st) of the month,
or if Lessee with Lessor’s consent occupies the Premises prior to the
commencement date, Lessee shall pay to Lessor rent for the first month of the
term, prorated at 1/30th of the Basic Monthly Rent thereof per day. In this
case, Lessee’s anniversary date shall be considered to be the first (1st) day of
the month immediately following occupancy.

 

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  c.   The Basic Monthly Rent hereunder shall be increased during the term of
the Lease as hereinafter provided, but in no event shall any adjustment to rent
result in a reduction below the initial Basic Monthly Rent or any subsequently
determined rent, whichever is higher.

  d.   Rent shall be payable to Lessor at the address listed on the Basic Lease
Information or to such other person(s) or at such other place(s) as Lessor may
designate in writing.

 

8.   COST OF LIVING ADJUSTMENT:

 

  a.   On each and every anniversary following the commencement of this Lease,
the Basic Monthly Rent shall be adjusted for the ensuing twelve (12) months by
the proportion that the Consumer Price Index All Items, All Urban Consumers in
the San Francisco Bay Area, of the U.S. Department of Labor, Bureau of Labor
Statistics, then most recently published, bears to the Consumer Price Index All
Items, All Urban Consumers in the San Francisco Bay Area most recently published
prior to the previous anniversary.

  b.   Should the U.S. Department of Labor discontinue its computation and
publication of said Consumer Price Index or the publication thereof should be
delayed so as to prevent its use hereunder at the times required, there shall be
substituted therefor by Lessor such other index or method of ascertaining
changes in the price levels as, in the opinion of the Lessor, most closely
resembles the Consumer Price Index and method of arriving at the index figure by
said Bureau.

  c.   The annual increase shall be not less than 3% nor more than 6%.

 

9.   OPERATING EXPENSES:

 

Lessee shall pay to Lessor in addition to the Basic Monthly Rent during the term
hereof, Lessee’s share of all Operating Expenses, as hereinafter defined, during
each month of the term of this Lease. “Lessee’s share” is defined, for the
purposes of this Lease, as the percentage determined by division of Lessee’s
Premises square footage divided by the rentable square footage of the Project.
As of the Commencement Date, “Lessee’s Share” is 100%. As improvements,
additions and deletions may affect the Project square footage, and/or Lessee may
add space, this percentage may change from time to time. “Operating Expenses” is
defined, for the purposes of this Lease, as all costs incurred by Lessor,
including, but not limited to:

  a.   the operation, repair and maintenance in neat, clean, good order and
condition, of the common areas, including, but not limited to parking areas,
loading and unloading areas, trash enclosures, roadways, sidewalks, parkways,
driveways, landscaped areas, striping, irrigation systems, common area lighting,
fences and gates;

  b.   Fire detection systems, including sprinkler maintenance, monitoring and
repair;

  c.   Project management fees;

  d.   The cost of premiums for liability, property and business income
insurance policies elsewhere described in this Lease to be responsibility of
Lessor and any deductible portion of an insured loss covered by said policies;

  e.   Utility services to the Common Areas;

  f.   Capital expenditures such as roofing, HVAC replacement, and parking lot
resurfacing, etc. pro-rated over their useful life as reasonably determined by
Lessor utilizing generally accepted accounting principles and procedures
(“GAAP”);

  g.   The prorata portion of a maintenance contract for the HVAC,

  h.   All costs relating to Lessor’s employees for the Project;

  i.   Other costs connected with the operation and maintenance of the Project.

 

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

 

Lessor shall maintain the Common Areas and other areas of the Project for which
Lessor is responsible in good condition and repair as determined by Lessor in
Lessor’s good faith and reasonable determination. The manner and method of
operation, maintenance, upkeep and repair thereof, however, shall be at the sole
and absolute discretion of Lessor, and all costs incurred in connection
therewith by Lessor in good faith shall conclusively and finally bind Lessee.

 

Lessee’s share of Operating Expenses shall be payable by Lessee within five (5)
days after a statement of expenses is presented to Lessee by Lessor. At Lessor’s
option, however, an amount may be estimated by Lessor from time to time of
Lessee’s share of Operating Expenses, which estimate shall be due within five
(5) days after such estimate is presented to Lessee by Lessor. Lessor shall
prepare and present to Lessee an actual statement of expenses as soon as is
practical after such estimate has been presented, and shall credit Lessee any
over-charge or bill any short-charge as may be actually due. Lessee shall have
the right to request, in writing, copies of bills, invoices, and statements
supporting any Operating Expenses billed, but not provided to Lessee with such
bill, and Lessor shall provide such documentation not previously provided within
thirty (30) days of receipt of such request which shall indicate Lessee’s share
of each such bill, invoice or statement.

 

The following items shall be excluded from Operating Expenses:

  a.   depreciation or payments of principal and interest on any mortgages upon
the Buildings or Project,

  b.   payments of ground rent pursuant to any ground lease covering the
Project,

  c.   the cost of utilities or services paid for directly by Lessee,

  d.   any cost expressly excluded from Operating Expenses in an express
provision contained in this Lease,

  e.   costs resulting from Lessor’s violation of this Lease,

 

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  f.   any of Lessor’s general overhead, and administrative costs, which are not
directly related to the operation of the Premises or the Project,

 

  g.   costs resulting from any gross negligence or willful misconduct of Lessor
or its employees or parties for which Lessor is responsible,

 

  h.   any costs for which Lessor is reimbursed by any lessee or occupant of the
Project or by insurance carried by Lessor, Lessee or any other party, or covered
by any warranty to the extent such amounts are actually received by Lessor,

 

  i.   the cost of services separately charged to and paid by any other lessee
of the Project.

 

  j.   Charitable or political contributions.

 

  k.   costs incurred in developing, expanding, constructing, demolishing or
reconstructing any tenant space or buildings in the Project other than the
Premises, including, without limitation, architectural fees, engineering fees,
space planning fees, construction costs, and attorney and other professional
fees.

 

10.   UTILITIES:

 

Lessee shall pay for all water, gas, heat, light, power, telephone and other
utilities and services supplied to the Premises, together with any taxes
thereon. If any such services are not separately metered to Lessee, Lessee shall
pay a reasonable proportion, to be determined by Lessor, of all charges jointly
metered with other premises. Lessor’s reasonable determination thereof, in good
faith, utilizing GAAP, shall be conclusive and shall be delivered to Lessee in
writing. Such written statement from Lessor shall include copies of the jointly
metered utilities and shall indicate the percentage charged to Lessee. Such
amount shall be payable by Lessee within five (5) days of presentation of such
statement.

 

Lessor shall have exclusive right of selection of power provider to the
Premises. However, Lessee may select one or more alternative power providers to
the Premises interior provided that:

 

  1.   Such alternative power provider(s) are authorized to provide such service
within the Sate of California,

  2.   Such alternative power provider(s) require NO changes to the equipment
which bring power to the Buildings,

  3.   Lessee shall notify Lessor, in writing and in advance, of the alternative
power provider(s) selected and shall provide Lessor with contact information for
the selected provider(s).

 

To the best of Lessor’s knowledge at the time this Lease is executed, only the
landscape irrigation water and power and exterior lighting power are not
separately metered.

 

11.   INSURANCE:

 

  a.   Liability Insurance:    Lessee shall, at Lessee’s expense, obtain and
keep in force throughout the term of this Lease, beginning upon Lessee taking
possession of the Premises or the Commencement Date, whichever occurs first, and
for a period of not less than two years following the expiration of this Lease,
a policy or policies of General Liability Insurance insuring Lessor and Lessee
against any liability arising out of the ownership, use, occupancy or
maintenance of the Premises and all areas appurtenant thereto. Such insurance
shall provide bodily injury, property damage, personal injury, advertising
injury, contractual liability and products-completed operations coverage and
shall have combined single limits in an amount not less than $2,000,000 per
occurrence or offense. The policy or policies shall provide fire legal liability
coverage with limits of at least $1,000,000. The policy or policies shall also
insure the risks assumed by Lessee of the indemnity provisions of Paragraph 15
of this Lease. The limits of said insurance shall not, however, limit or
decrease the liability of Lessee hereunder.

 

  b.   Additional Insured/Primary Insurance:    Lessee will insure that the
policy or policies required by subparagraph 11a. name Lessor as an additional
insured and further provide that such insurance shall be primary to, and
non-contributory with, any and all insurance maintained by Lessor. Lessee shall
provide Lessor with an endorsement to the policy or policies required by
subparagraph 11a. substantially identical to Exhibit “D” to this Lease.

 

  c.   Property Insurance:    Lessee shall obtain and keep in force during the
term of this Lease a policy or policies of insurance covering loss or damage to
its fixtures, equipment, tenant improvements, inventory and other contents
stored in the Premises, whether the property of Lessee or anyone else, in the
amount of the full replacement value thereof, as the same may exist from time to
time. Such policy or policies shall contain a waiver of subrogation provision
specifying that the insurer(s) waives any right of recovery against Lessor to
recover any payments made under the policy or policies.

 

  d.   Insurance Policies:    Insurance required hereunder shall be in companies
holding a “General Policyholders Rating” of at least “A”, or such other rating
as may be required by a lender having a lien on the Premises, as set forth in
the most current issue of “Best’s Insurance Guide”. The insuring party shall
deliver to the other party copies of policies of such insurance or certificates
evidencing the existence and amounts of such insurance with loss payable clauses
as required by this Paragraph. No such policy shall be cancelable or subject to
reduction of coverage or other modification except after thirty (30) days prior
written notice to Lessor. If Lessee is the insuring party, Lessee shall, at
least thirty (30) days prior to the expiration of such policies, furnish Lessor
with renewals or binders thereof, or Lessor may, at Lessor’s sole option and
discretion, order such insurance and charge the cost thereof to Lessee, which
amount shall be payable by Lessee immediately upon demand.

 

  e.   Waiver of Claims and Right of Subrogation:    Lessor shall not be liable
to Lessee, nor shall Lessor be liable to any person claiming under Lessee by
lease, license, assignment or subrogation by operation of law or contract, or
upon the Premises with the express, implied or constructive consent of Lessee,
or for any loss of, or damage to or the destruction of the Premises, or some
part or parts thereof, or any goods, furniture, fixtures or equipment thereon,
for the interruption of any business, or for any injury to the person (including
wrongful death)

 

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       or property of the Lessee or to any such persons claiming under Lessee,
resulting from any cause whatsoever, including without limitation the sole
negligence of Lessor, any broken pipe, water seepage, blocked drain, defective
wiring, interruption in power, malfunction of any air conditioning, plumbing
system, sewer, storm drain or the like.

 

  f.   Fire and Extended Coverage Insurance: At all times from and after the
date of commencement of this Lease, Lessor shall keep the Building of which the
Premises are a part, but not the contents of the Premises or any property of
Lessee or others, insured for the mutual benefit of Lessor and Lessee against
(i) loss or damage by fire and such other risks as may be included in a standard
form of Extended Coverage Insurance from time to time available, in amounts
sufficient to prevent Lessor or Lessee from becoming a co-insurer within the
terms of the applicable policies and, in any event, in an amount not less than
one hundred percent (100%) of the then full replacement value of the Building,
together with an addendum thereto providing for six (6) months rental income
coverage payable to Lessor, (ii) loss or damage from leakage of sprinkler
systems now or hereafter installed in the Building by Lessor in such amount as
Lessor shall reasonably establish, and (iii) loss or damage resulting from
explosion of steam boiler, air conditioning equipment, pressure vessels or
similar apparatus, now or hereinafter installed in or on the Building by Lessor,
in such amount as Lessor shall reasonably establish.

 

  g.   Notice by Lessee: Lessee agrees to give prompt written notice to Lessor
with respect to all events occurring upon the Premises which may be the subject
of claims on insurance policies, whether policies are being maintained by Lessor
or Lessee.

 

12.   TAXES:

 

  a.   Definition of “Real Property Tax”: As used herein the term “real property
tax” 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 inheritance, personal income
or estate taxes) imposed on the Premises by any authority having the direct or
indirect power to tax including any city, state or federal government or any
school, agricultural, sanitary, fire, street, drainage, lighting or other
improvement district thereof, as against any legal or equitable interest of
Lessor in the Premises or in the real property of which the Premises are a part,
as against Lessor’s right to rent or other income therefrom, and as against
Lessor’s business of leasing the Premises. The term “real property tax” shall
also include any tax, fee, levy, assessment or charge (i) in substitution of,
partially or totally, any tax, fee, levy, assessment or charge hereinabove
included within the definition of “real property tax”, or (ii) the nature of
which was hereinabove included within the definition of “real property tax”, or
(iii) which is imposed for a service or right not charged prior to June 1, 1978,
or, if previously charged, has been increased since June 1, 1978, or (iv) which
is imposed as a result of transfer, either partial or total, of Lessor’s
interest in the Premises or which is added to a tax or charge hereinabove
included within the definition of “real property tax” by reason of such
transfer, or (v) which is imposed by reason of this transaction, any
modification or changes hereto, or any transfers thereof.

 

         There shall be excluded from real property taxes all income taxes,
capital stock, inheritance, estate, gift, or any other taxes imposed upon or
measured by Lessor’s gross income or profits unless the same is specifically
included within the definition of real property taxes above or otherwise shall
be imposed in lieu of real estate taxes or other ad valorem taxes. For example,
assessment district fees would be included in real property taxes as items
imposed in leiu of real estate taxes.

 

  b.   Joint Assessment: If the Premises are not separately assessed, Lessee’s
liability shall be an equitable proportion of the real property taxes for all of
the land and improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from such information as may be reasonably
available. Lessor’s determination thereof, in good faith, shall be conclusive.
Lessee shall pay such proportion to Lessor within five (5) days of receipt of
Lessor’s written notice thereof.

 

  c.   Personal Property Taxes: Lessee shall pay prior to delinquency all taxes
assessed against and levied upon trade fixtures, furnishings, equipment and all
other personal property of Lessee contained in the Premises or elsewhere as it
may affect the Project. When possible, Lessee shall cause said trade fixtures,
furnishings, equipment and all other personal property to be assessed and billed
separately from the real property of the Lessor. If any of Lessee’s personal
property shall be assessed with Lessor’s real property, Lessee shall pay the
taxes attributable to Lessee within five (5) days of receipt of written notice
thereof from Lessor or taxing entity.

 

13.   REPAIRS:

 

  a.   Repairs by Lessee: Lessee agrees at its sole cost and expense to
maintain, repair and keep the interior of the Premises forming a part of the
Building, and all appurtenances (including without limitation wiring, plumbing,
sewage system, heating and air cooling installation, all glazing and doors in or
bordering the Premises and any store front) in good condition and repair during
the term of this Lease, excepting only the foundations and structural portions
of the Premises, damage thereto by fire, earthquake, civil insurrection and act
of God or the elements. Upon request from Lessor, Lessee shall provide Lessor
with evidence satisfactory to Lessor of Lessee’s maintenance contracts and
invoices of repair. In the event Lessee fails to make the repairs required of
Lessee within thirty (30) days from delivery of Lessor’s notice to Lessee to
make such repairs (provided, however, that in the event the repairs reasonably
require more than thirty (30) days to accomplish, Lessee shall not be in
default, and Lessor shall not avail itself of any of Lessor’s remedies relating
to the required repairs, if within such thirty (30) day period, Lessee commences
such repairs and thereafter diligently prosecutes the same to completion, and
provides Lessor with satisfactory proof thereof), Lessor, in addition

 

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         to all other remedies available hereunder or by law, and without
waiving any said alternative remedies, may make same and Lessee agrees to repay
Lessor the cost thereof, plus ten percent (10%) of costs for Lessor’s
administration expenses, within five (5) days of delivery of Lessor’s demand
thereof. Failure by Lessee to pay same shall carry with it the same consequences
as failure to pay any installment of rent. Lessee agrees during the full term of
this Lease, at its sole cost and expense, to make all repairs and replacements
of whatever kind or nature, to either the interior or exterior of the Premises,
rendered necessary by reason of any act or omission of Lessee or its agents,
servants or employees. Lessee waives all rights to make repairs at the expense
of Lessor as provided for in any statute or law in effect at the time of the
execution of this Lease or any amendment thereof or any other statute or law
which may be hereafter enacted during the term of this Lease, or sooner
termination hereof, and to surrender unto Lessor the Premises in the same
condition as received, ordinary wear and tear and damage by fire, earthquake,
civil insurrection, act of God or the elements alone excepted.

 

  b.   Repairs by Lessor: Lessor agrees, after receipt of written notice of the
necessity therefor, and should same not be caused by Lessee or by reason of
Lessee’s occupancy or improvements, alterations, changes or modifications to the
Premises (responsibility for such repairs to be that of Lessee), to initiate
necessary repairs to the fire sprinkler system, foundations and other structural
portions of the Premises forming a part of the Building, the common areas, the
roof, exterior walls, parking areas, landscaping, wiring to the Building,
plumbing and sewage system exterior to the Premises, within thirty (30) days or
as soon as is reasonably practical.

 

14.   ALTERATIONS; LIENS; PERMITS:

 

  a.   Except with respect to the Initial Interior Improvements and Initial
Exterior Improvements as set forth in Paragraphs 49 and 50, the construction of
which shall be pursuant to the provisions of Paragraphs 49 and 50 (and not
pursuant to this Paragraph 14), Lessee agrees not to make any structural
alterations of, changes in or additions to the Premises. Lessee agrees not to
make any non-structural alterations of, changes in or additions to the Premises
without the prior written consent of Lessor. Lessee shall be required to submit
plans, specifications and a budget, as well as the name, address and license
number of the general contractor performing the work, along with the application
for Lessor’s consent. Notwithstanding the foregoing, Lessee agrees and
acknowledges that (a) Lessor’s approval does not mean that such work is required
under the Lease or has been requested by Lessor, and (b) such work will not
materially enhance the value of Lessor’s property. Lessee shall provide Lessor
with an estoppel statement, in a form approved by Lessor, from each of their
contractors and/or sub-contractors, etc. stating that each of them agrees that
Lessor has validly posted a Notice of Non-responsibility, that Lessor is NOT a
participating owner (i.e., Lessee is not an agent of Lessor in performing any
alterations, changes, additions or improvements. Such work is not a requirement
of the Lease and does not materially enhance the value of Lessor’s property.)
and that all lien rights against Lessor/owner are waived and released. Lessee’s
failure to provide such estoppels shall constitute reasonable cause for Lessor
to withhold approval of the contractor and/or sub-contractors, and NO work may
commence unless/until Lessor approves. Lessee agrees that all non-structural
alterations, changes, additions and improvements, including fixtures, made in,
to or on the Premises, except unattached movable business fixtures, shall be
removed by Lessee at Lessee’s sole cost on or before the termination of the
Lease, and the Premises restored to substantially the same condition as existed
prior to the Lease. If requested by Lessee in writing at the time of any request
for Lessor’s approval of Lessee’s proposed work in and to the Premises, Lessor
may agree in its sole discretion (and only in writing) to allow such
alterations, changes, additions or improvements to be surrendered to Lessor at
the termination of this Lease, but only subject to Lessee’s written agreement
that such items have been surrendered to Lessor so that Lessee may avoid the
expense of removing the same, and that such additions, changes, alterations or
improvements do not materially enhance the value of Lessor’s property. Lessee
agrees that if any such alterations, changes, additions or improvements are
approved by Lessor, Lessee shall take all steps necessary to assure the
completion of same in a good and workmanlike manner and in compliance with
applicable code, and shall, at Lessee’s sole cost and expense, secure any
permits or licenses which may be required by government agency. Lessee further
agrees to pay for any and all taxes levied upon such alterations, changes,
additions or improvements, where such taxes are levied by a duly authorized
government entity.

 

  b.   Lessee agrees that no such alterations, changes, additions or
improvements will commence until seven (7) days after Lessee’s receipt of
written consent of Lessor as required by this Paragraph in order that Lessor may
post appropriate notices to avoid liability on account thereof. Lessee shall
also give Lessor written notice of the actual start of construction of each
component of the work (i.e., each separate trade or subcontractor’s work) within
48 hours after such construction commences to permit Lessor to post Notices of
Non-responsibility. Lessee agrees to indemnify and save harmless Lessor from all
liens, claims or demands arising out of any work performed, materials furnished
or obligations incurred by or for Lessee upon the Premises during the entire
term of this Lease, and agrees not to suffer any such lien or other lien to be
created.

 

  c.   Notwithstanding anything contained herein to the contrary, Lessee shall
have the right to make non-structural alterations, changes or additions to the
Premises for which a building or other permit is not required without Lessor’s
written approval, and without submitting plans, specifications and budget in
connection therewith. Lessee shall, however, timely provide Lessor with
sufficient information in writing that Lessor shall be able to prepare and post
notices of non-responsibility in connection therewith, and Lessee shall
otherwise follow the other requirements of this Paragraph 14 in connection with
such alterations, changes or additions. Lessee shall, if requested, provide
Lessor with updated plans or specifications on completion of any such work.

 

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15.   RELATIONSHIP OF THE PARTIES:

 

Neither Lessor nor Lessee intends that any relationship exists between them
other than that of Lessor and Lessee under this Lease. No relationship as
partners, co-venturers or principal and agent is formed other than as
specifically set forth in the Lease. Specifically, and with regard to tenant
improvements performed by Lessee’s contractors and/or sub-contractors, Lessor is
not a participating owner and claims no ownership interest in such tenant
improvements (i.e. Lessee is not an agent of Lessor in performing any
alterations or improvements. Such work is not a condition of the Lease and does
not materially enhance the value of Lessor’s property).

 

16.   HOLD HARMLESS:

 

This Lease is made upon the express condition that Lessee agrees to indemnify,
keep save and hold Lessor free and harmless from all liability, penalties,
losses, damages, costs, expenses, causes of action, claims and/or judgments
arising by reason of any injury or damage to any person or persons, including
without limitation, Lessee, its invitees, servants, agents and employees, or
property of any kind whatsoever and to whomsoever belonging, including, without
limitation, Lessee, its invitees, servants’, agents’ and employees’, from any
cause or causes whatsoever, excepting the gross negligence or willful misconduct
of Lessor, while in, upon, or in any way connected with said demised Premises or
the Building or Project of which the Premises are a part, or its appurtenances,
or the sidewalks adjacent thereto, during the term of this Lease or any
occupancy hereunder, Lessee hereby covenants and agrees to defend, indemnify,
protect and save Lessor harmless from all liability, loss, costs and obligations
on account of or arising out of any such claims, injuries or losses, however
occurring, excepting those that are a result of Lessor’s gross negligence or
willful misconduct. In the event of any breach by Lessee of any of the
requirements of Paragraph 11 Insurance, then Lessee’s indemnity obligations
shall be extended to include any benefits to which Lessor would have been
entitled under the policy or policies described in Paragraph 11 Insurance, and
Lessee shall be obligated to provide Lessor with all of the benefits that would
have been furnished under such policy or policies, and Lessee shall assume all
of the obligations of an insurer under such policy or policies in addition to
any other remedy available to Lessor, either provided in this Lease or by law.
Lessee, as a material part of the consideration to be rendered to Lessor, hereby
waives all claims against Lessor for damages to goods, wares and merchandise in,
upon or about the Premises and for injuries to Lessee, his agents or third
persons in or about the Premises from any cause arising at any time including,
without limiting the generality of the foregoing, damages arising from the sole
negligence of Lessor, from acts or omissions of other tenants of the Building or
Project of which the Premises are a part and from failure of Lessor to make
repairs.

 

Lessor shall indemnify, protect, defend and hold Lessee (and Lessee’s invitees,
servants, agents, employees and contractors) harmless from and against any and
all claims, demands, actions, obligations, losses, liabilities, damages, costs,
and expenses incurred by or asserted against Lessee in connection with any
claim, action, or demand for bodily injury or death or property damage arising
out of any gross negligence or willful misconduct of Lessor or any of Lessor’s
employees or officers occurring on or about the Common Areas, the Buildings or
the Project; provided, however, that the foregoing shall not apply to the extent
of any gross negligence or willful misconduct of Lessee (or Lessee’s invitees,
servants, agents, employees or contractors). Lessor’s obligations and Lessee’s
obligations under this Paragraph 16 shall survive the expiration or earlier
termination of this Lease.

 

17.   ENTRY AND INSPECTION:

 

Lessee agrees that Lessor and his agents may enter upon the Premises to inspect
same, to submit them to a prospective purchaser, lender or lessee or to make any
changes, alterations or repairs which Lessor shall consider necessary for the
protection, improvement or preservation thereof, or of the Building in which the
Premises are situated, or to make changes in the plumbing, wiring, meters or
other equipment, fixtures or appurtenances of the Building, or to post any
notice provided for by law, or otherwise to protect any and all rights of
Lessor. Lessor shall provide Lessee reasonable notice of intent to enter, except
in case of emergency. Lessor shall have the right to erect and maintain all
necessary or proper scaffolding or other structures for the making of such
changes, alterations or repairs (provided the entrance to the Premises shall not
be blocked thereby and that such work shall be completed with diligence and
dispatch) and there shall be no liability against Lessor for damages thereby
sustained by Lessee, nor shall Lessee be entitled to any abatement of rent by
reason of the exercise by Lessor of any such rights herein reserved. Nothing
herein contained shall be construed to obligate Lessor to make any changes,
alterations or repairs. Notwithstanding anything contained in this Paragraph 17
to the contrary, Lessor shall coordinate the work which Lessor undertakes in the
Premises with Lessee, and use reasonable efforts to minimize interference with
Lessee’s use of the Premises or the conduct of Lessee’s business, except in case
of emergency. Lessee further agrees that at any time after nine (9) months prior
to the termination of this Lease, Lessor may place thereon “To Let” or “To
Lease” signs.

 

18.   EASEMENTS:

 

Lessor reserves to itself the right, from time to time, to grant such easements,
rights and dedications that Lessor deems necessary or desirable and to cause the
recordation of parcel maps and restrictions, so long as such easements, rights,
dedications, maps and restrictions do not unreasonably interfere with the use of
the Premises by Lessee. Lessee shall sign any of the aforementioned documents
upon request of Lessor and failure to do so in a timely manner shall constitute
a material breach of this Lease.

 

Notwithstanding anything contained herein to the contrary, Lessee shall have no
obligation to execute any such documents if the effect of such documents would
materially and adversely effect Lessee’s use or quiet enjoyment of the Premises
pursuant to the terms of the Lease. In such event, Lessee shall notify Lessor in
writing and within a reasonable time of such material and adverse effects and
the parties shall cooperate with each other in good faith to attempt to achieve
a mutually satisfactory resolution.

 

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19.   ESTOPPELS:

 

Lessee agrees, at any time and from time to time within seven (7) days of
written request from Lessor to execute, acknowledge and deliver to Lessor a
statement in writing certifying that this Lease is unmodified and in full force
and effect (or, if there have been modifications, that the same is in full force
and effect as modified, and stating the modifications) and the dates to which
rent and other charges have been paid in advance, if any, and any other matters
reasonably requested by Lessor, it being intended that any such statement
delivered pursuant to this Paragraph may be relied upon by any present or
perspective purchasers, mortgagee or assignee(s) of any mortgagee of the
Premises. Failure of Lessee to comply with any and all provisions of this
Paragraph shall constitute a breach of the Lease.

 

Lessor agrees, at reasonable times and intervals, but not more than twice per
year, within fourteen (14) business days of receipt of written request from
Lessee to execute, acknowledge and send to Lessee a statement in writing
certifying that this Lease is unmodified and in full force and effect (or, if
there have been modifications, that the same is in full force and effect as
modified, and stating the modifications) and the dates to which rent and other
charges have been paid in advance, if any, it being intended that any such
statement delivered pursuant to this Paragraph may be relied upon by the party
requesting such estoppel. Notwithstanding the foregoing, such estoppel shall not
contain any subordination terms or conditions obligating Lessor to subordinate
any interest of Lessor in the Project, the Premises or the Lease.

 

20.   MULTIPLE TENANT BUILDING:

 

In the event that the Premises are a part of a larger building or group of
buildings, Lessee agrees that it will abide by, keep and observe all reasonable
rules and regulations which Lessor may make from time to time, including but not
limited to the management, safety, operation, care and cleanliness of the
Building and grounds, the parking of the vehicles and the preservation of good
order therein as well as for the convenience of other occupants and tenants of
the Project. Violation of any such rules and regulations shall be deemed a
breach of this Lease by Lessee.

 

21.   SIGNS:

 

Lessee agrees not to inscribe, paint or affix any signs, advertisements,
placards or awnings on the exterior or roof of the Premises or upon the entrance
doors, windows, monuments, or the sidewalk on or adjacent to the Premises
without the written consent of Lessor first obtained. Any signs so placed on the
Premises shall be so placed upon the understanding and agreement that Lessee
will remove same at the termination of tenancy herein created and repair any
damage or injury to the Premises caused thereby, and if not so removed by
Lessee, then Lessor may have same so removed at Lessee’s expense. Lessee shall
not be allowed to use the name of the Project, or words to such effect in
connection with any business carried on in the Premises (except as the address
of the Lessee) without the written consent of Lessor. Lessor reserves the right
to change the name and title of the Project and Building at any time during the
term of said Lease. Lessee hereby expressly agrees to such change at the option
of Lessor and waives any and all damage occasioned thereby.

 

22.   ABANDONMENT:

 

If Lessee should abandon or surrender Premises or be dispossessed by process of
law, in addition to all other remedies of Lessor, Lessor, at its option, may
deem that any personal property belonging to Lessee left on the Premises is
abandoned and/or Lessor may at once enter upon the Premises and remove therefrom
any and all equipment, fixtures and merchandise therein and may sell same at
public or private sale at such price and upon such terms as Lessor may
determine, without notice to or demand upon Lessee. Out of the proceeds of such
sale Lessor may reimburse itself for the expense of such taking, removal and
sale and for any indebtedness of Lessee to Lessor and the surplus, if any, shall
be accounted for to Lessee at Lessee’s last known address.

 

23.   DESTRUCTION; RENEWAL:

 

  a.   In the event of damage or destruction to the Premises during the term
hereof which Lessor is obligated to repair by the terms of this Lease, Lessor
shall forthwith repair the same, provided such repairs can be made within ninety
(90) days under the laws and regulations of State, Federal, County or Municipal
authorities, but such destruction shall in nowise annul or void this Lease,
except that Lessee shall be entitled to a proportionate reduction of rent to be
based upon the extent to which the making of such repairs shall interfere with
the business carried on by Lessee in the Premises. If such repairs cannot be
made within ninety (90) days, Lessor may, at its option, make same within a
reasonable time, in which event this Lease shall continue in full force and
effect and the monthly rent shall be proportionately reduced as aforesaid in
this Paragraph provided. In the event that Lessor does not so elect to make such
repairs which cannot be made within one hundred eighty (180) days, this Lease
may be terminated at the option of either party. In the event that the Building
of which the Premises are a part is damaged or destroyed to the extent of
one-third (33.33%) or more of the replacement cost thereof, Lessor may elect to
terminate this Lease, whether the Premises be injured or not, provided, however,
if Lessee so requests (except if the Lease is in the final twelve (12) months of
its initial term) (I) if there are adequate insurance proceeds available to
restore the Premises, then Lessor shall restore the Premises, and (ii) if there
are insufficient insurance proceeds available to restore the Premises, but
Lessee agrees to, and does, provide funds required in addition to the
insufficient insurance proceeds to restore the Premises, then Lessor shall
restore the Premises, or allow Lessee to restore the Premises at no cost to
Lessor; provided further that Lessor shall assign or deliver the insurance
proceeds to Lessee if Lessee is restoring the Premises and the insurance
proceeds are payable to Lessor (but not to Lessee) under the applicable
insurance policy or policies. If more than one-third (33.33%) of the Premises
are damaged or destroyed, and repairs cannot be made within one hundred-eighty

 

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         (180) days, Lessee may, at its option, elect to terminate this Lease
and shall notify Lessor of such election in writing.

 

  b.   Notwithstanding anything herein to the contrary, if, at any time during
the term hereof, any governmental agency having jurisdiction over the Premises
of Building(s) of which the Premises are a part, shall require the making of any
repairs, improvements or alterations to said Building(s) or Premises, and Lessor
determines to demolish said Building(s) or Premises rather than to make said
repairs, improvements or alterations, or allow same to be made, Lessor, upon
written notice to Lessee as soon as is practical, shall have the right to
terminate this Lease. Upon the date specified in such notice, this Lease shall
terminate and Lessor shall have no further liability to Lessee except that
Lessor shall refund to Lessee any unearned rents and shall return the balance of
security deposit after such offsets as may be provided in this Lease. In the
event Lessor had heretofore given written consent to any leasehold improvements
upon the Premises made and paid for by Lessee, and had agreed, in writing, as to
the cost thereof, Lessor shall pay to Lessee upon such termination the
unamortized portion of such cost as the number of full calendar months remaining
in the original term of this Lease bears to the total number of calendar months
is said original term.

 

24.   CONDEMNATION:

 

If any part of the Premises or of the Building of which same are a part (even if
no part of the Premises be taken) be condemned for a public or quasi-public use
by right of eminent domain, with or without litigation, or transferred by
agreement in connection with such public or quasi-public use, this Lease, as to
the part so taken, shall terminate as of the date title shall vest in the
condemnor, and the rent payable hereunder shall be adjusted so that the Lessee
shall be required to pay for the remainder of the term only such portion of rent
as the value of the part remaining after condemnation bears to the value of the
entire Premises at the date of condemnation. In such event Lessor shall have the
option to terminate this Lease as of the date when title to the part so
condemned vests in the condemnor. If more than one-third (33.33%) of the
Premises is taken, Lessee at Lessee’s option to be exercised in writing within
ten (10) days after Lessor shall have given written notice to Lessee of such
taking (or in absence of such notice, within ten (10) days after the condemning
authority shall have taken possession or title), terminate this Lease as of the
date the condemning authority takes such possession or title.

 

All compensation awarded upon such condemnation or taking shall belong and be
paid to Lessor and Lessee shall have no claim thereto, and Lessee hereby
irrevocably assigns and transfers to Lessor any right to compensation or damages
to which Lessee may become entitled during the term hereof by reason of the
condemnation of all or part of the Premises.

 

Notwithstanding anything contained herein to the contrary, if any award includes
amounts specifically allocated to Lessee’s personal property, fixtures or
equipment, then Lessee shall be entitled to that portion of such award, less
costs and fees reasonably incurred by Lessor in recovering such amounts (if
Lessor is not otherwise compensated for such costs and fees as part of the
award). Further, nothing contained herein shall prohibit Lessee from instituting
its own claim for compensation against the governmental agency in the event of
condemnation, in the event Lessor does not claim compensation on account of
Lessee’s property.

 

25.   SALE OF PREMISES:

 

In the event of a sale or conveyance by Lessor of the Premises, the same shall
operate to release Lessor from any future liability upon any of the covenants or
conditions, express or implied, herein contained in favor of Lessee, and in such
event Lessee agrees to look solely to the responsibility of the successor in
interest of Lessor. If any security be given by Lessee to secure faithful
performance of Lessee’s covenants in this Lease or any rent shall have been
prepaid, Lessor may transfer same as such to the purchaser of the reversion
thereon and thereupon Lessor shall be discharged from any further liability in
reference thereto.

 

In the event of such sale, if Lessor does not transfer such security or prepaid
rent remaining from that paid or provided by Lessee after deduction of amounts
owing to Lessor by Lessee as provided in this Lease, if any, then Lessee shall
not be liable to the successor in interest for replacement of such remaining
security or rent not transferred, and Lessee may exercise its legal and
equitable remedies in connection therewith if the same is not returned to Lessee
at the termination or expiration of this Lease as and to the extent required by
this Lease.

 

26.   COSTS OF SUIT:

 

Lessee agrees that if Lessor is involuntarily made a party defendant to any
litigation concerning this Lease or the Premises by reason of any act or
omission of Lessee and not because of any act or omission of Lessor, then Lessee
shall hold Lessor harmless from all liability by reason thereof, including
reasonable attorney’s fees incurred by Lessor in such litigation and all court
costs. If legal action be brought by either party hereto for the unlawful
detainer of the Premises, for the recovery of any rent due under the provisions
of this Lease, or due to any breach of any term, covenant, condition or
provision thereof, the party prevailing in said action (Lessor or Lessee as the
case may be) shall be entitled to recover from the party not prevailing court
costs and a reasonable attorney’s fee which shall be fixed by the Judge of the
Court. The entry of a dismissal without prejudice shall not create a prevailing
party.

 

Lessor agrees that if Lessee is involuntarily made a party defendant to any
litigation concerning this Lease or the Premises by reason of an act or omission
that is solely attributable to Lessor or parties for which Lessor is
responsible, and not because of any act or omission of Lessee or any third party
for which Lessor is not responsible, then Lessor shall hold Lessee harmless from
all liability by reason thereof, including reasonable attorney’s fees incurred
by Lessee in such litigation and all court costs.

 

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27.   SECURITY MEASURES:

 

Lessee hereby acknowledges that the rent payable to Lessor hereunder does not
include the cost of guard service or other security measures, and that Lessor
has no obligation whatsoever to provide it. Lessee assumes all responsibility
for the protection of Lessee, its agents and invitees, the Premises and any
property on the Premises from acts of third parties.

 

28.   PERFORMANCE UNDER PROTEST:

 

If at any time a dispute shall arise as to any amount or sum of money to be paid
by one party to the other under the provisions hereof, the party against whom
the obligation to pay the money is asserted shall have the right to make payment
“under protest” and such payment shall not be regarded as a voluntary payment,
and there shall survive the right on the part of said party to institute suit
for recovery of such sum. If it shall be adjudged that there was no legal
obligation on the part of said party to pay such sum or any part thereof, said
party shall be entitled to recover such sum or so much thereof as it was not
legally required to pay under the provisions of this Lease.

 

29.   ASSIGNMENT AND SUBLETTING:

 

  a.   Lessor’s Consent Required: Lessee shall not voluntarily or by operation
of law assign, transfer, mortgage, sublet or otherwise transfer or encumber all
or any part of Lessee’s interest in this Lease or in the Premises without
Lessor’s prior written consent. Lessee shall provide Lessor with documentation
including, but not limited to the sublease or assignment document, the legal
name of the proposed subtenant/assignee, financial statements for the proposed
subtenant/assignee, proposed use of the premises, the type of business to be
conducted by proposed subtenant/assignee, estimated cost of Tenant Improvements
and commissions, if any, and any other documentation required by Lessor to make
a reasonable determination. ( For the purposes of this section 28 it shall be
deemed reasonable for Lessor to deny a tenant, subtenant or assignee to sublet
or assign the Premises at less than the Base Rent payable under this Lease. )
Lessor shall respond to Lessee’s request for consent hereunder in a timely
manner. Except as set forth in Subparagraph 29b below, any attempted assignment,
transfer, mortgage, encumbrance or subletting without Lessor’s written consent,
which shall not be unreasonably withheld, conditioned or delayed, shall be void
and shall constitute a breach of this Lease.

 

  b.   Lessee Affiliate: Notwithstanding the provisions of Paragraph 29a above,
Lessee may assign this Lease or sublet the Premises, or any portion thereof, to
any corporation which controls, is controlled by or is under common control with
Lessee, or to any corporation resulting from the merger or consolidation with
Lessee, or to any person or entity which acquires all the assets of Lessee as a
going concern of the business that is being conducted on the Premises, provided
in the case of assignment that said assignee assumes, in full, the obligations
of Lessee under this Lease. For the purposes of this section, Lessor’s consent
shall not be required. However, Lessee agrees to notify Lessor in writing within
five (5) days of such assignment or subletting, which notice shall include the
legal name, contact person and contact information, type of business and current
financial statements of the Lease Affiliate.

 

  c.   No Release of Lessee: Regardless of Lessor’s consent, no subletting or
assignment shall release Lessee of Lessee’s obligation or alter the primary
liability of Lessee to pay the rent and to perform all other obligations to be
performed by Lessee hereunder. The acceptance of rent by Lessor from any other
person or entity shall not be deemed a waiver by Lessor of any provision
hereunder. Consent to one assignment or subletting shall not be deemed consent
to any subsequent assignment or subletting. In the event of default by any
assignee of Lessee or any successor of Lessee in the performance of any of the
terms hereof, Lessor may proceed directly against Lessee without the necessity
of exhausting remedies against said assignee or sub-tenant. Lessor may or may
not consent to subsequent assignments or subletting of this Lease, or amendments
or modifications to this Lease with assignees of Lessee, with or without
notifying Lessee, or any successors of Lessee, and without obtaining its or
their consent thereto and such action shall not relieve Lessee of liability
under this Lease.

 

  d.   Attorney’s Fees: In the event Lessee shall assign or sublet the Premises
or request consent of Lessor to any assignment or subletting, or if Lessee shall
request the consent of Lessor for any act Lessee proposes to do, then Lessee
shall pay Lessor’s attorney’s fees and any other costs incurred in connection
therewith.

 

  e.   Lessor’s Right of Recapture: If Lessee desires any assignment or
subletting pursuant to this Paragraph 29, other than to a Lessee Affiliate,
Lessee shall, in writing, first offer the space to Lessor for recapture under
the same terms and rate as Lessee intends to market the space. Lessor shall have
fifteen (15) days to accept the space at the terms and rate offered. If Lessor
does not accept the space for recapture, then Lessee may market the space.
Should Lessee change the terms or rate of the space, it must again be offered to
Lessor, in writing, and Lessor shall have fifteen (15) days to accept or decline
the recapture. If Lessor accepts the offer, it shall do so by mailing written
notice of its acceptance to Lessee within fifteen (15) days after Lessor
receives Lessee’s offer. Lessee shall be entitled to withdraw its notice of
intent to assign or sublet at any time until Lessor accepts Lessee’s offer. If
only a portion of the Premises would be affected by a sublease or assignment,
then Lessor shall have the right to reacquire the portion affected. If Lessor
elects to reacquire the portion affected under this provision, Lessee shall be
required to provide without charge reasonable and appropriate access to the
portion affected and reasonable use of any common facilities.

 

         Should Lessor decline the recapture and Lessee is successful in
locating an approved sub-lessee as provided in this Lease, at a rate greater
than the Lease rate, then Lessee shall pay to Lessor an amount equal to 50%
(fifty percent) of the profit, determined after Lessee’s reasonable cost of
brokerage commissions and tenant improvements required in connection with such
sublease, each month in advance for the duration of the sub-lease term.

 

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30.   CONFLICT:

 

       Any conflict between the printed provisions of this Lease and the
typewritten or handwritten provisions shall be controlled by the typewritten or
handwritten provisions, where both parties have initialed such provisions.

 

31.   SUBORDINATION:

 

  a.   This Lease, at Lessor’s option, shall be subordinate to any ground lease,
mortgage, deed of trust, or any other hypothecation or security now or hereafter
placed upon the real property of which the Premises are a part and to any and
all advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof. If any mortgagee, trustee
or ground lessor shall elect to have this Lease prior to the lien of its
mortgage, deed of trust or ground lease, and shall give written notice thereof
to Lessee, this Lease shall be deemed prior to such mortgage, deed of trust or
ground lease or the date of recording thereof.

 

  b.   Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease prior to the lien of any
mortgage, deed of trust or ground lease, as the case may be provided that any
such documents contain a non-disturbance provision accepting Lessee’s tenancy
under the Lease in the event of execution by the beneficiary(ies) of such
documents under their rights under such documents. Lessee’s failure to execute
such documents within seven (7) days after written demand shall constitute a
default by Lessee hereunder.

 

  c.   Within sixty (60) days from the non-contingent execution of this Lease,
Lessor shall use its best efforts to obtain a commercially reasonable
non-disturbance agreement (“Non-Disturbance Agreement”) from the holder of any
pre-existing loan secured by the Premises.

 

32.   SURRENDER OF LEASE:

 

       No act or conduct of Lessor, whether consisting of the acceptance of the
keys to the Premises, or otherwise, shall be deemed to be or constitute an
acceptance of the surrender of the Premises by Lessee prior to the expiration of
the term hereof, and such acceptance by Lessor of surrender by Lessee shall only
flow from and must be evidenced by a written acknowledgement of acceptance of
surrender by Lessor. The voluntary or other surrender of this Lease by Lessee,
or a mutual cancellation thereof, shall not work a merger and shall, at the
option of the Lessor, terminate all or any existing subleases, or subtenancies
or may, at the option of the Lessor, operate as an assignment to him of any or
all such subleases, or subtenancies.

 

33.   HOLDING OVER:

 

       Should Lessee hold over the term hereby created with written consent of
Lessor, Lessee shall become a tenant from month to month at one hundred fifty
percent (150%) of the rent payable hereunder for the prior six (6) months, and
otherwise upon the covenants and conditions in this Lease contained, and shall
continue to be such tenant until thirty (30) days after either party hereto
serves upon the other written notice of intent to terminate such monthly
tenancy. Should such termination occur on any day other than the last day of the
month, any unearned prepaid rent shall be prorated based on a 30 day month and
shall be credited to Lessee’s account as additional security deposit, to be
disbursed according to the provisions of Paragraph 4.

 

34.   NOTICES:

 

       It is agreed between the parties hereto that any notice required
hereunder or by law to be served upon either of the parties shall be in writing
and shall be delivered personally upon the other or sent by first class mail,
postage prepaid, commercial delivery service or by facsimile, addressed to the
addresses listed in the Basic Lease Information or such other address as may be
from time to time furnished in writing by Lessor to Lessee or by Lessee to
Lessor, each of the parties waiving personal or any other service than as in
this Paragraph provided for. Notice by first class mail shall be deemed to be
communicated the second business day from the time of mailing. Notice by any
other means shall be effective upon delivery, or refusal of delivery.

 

35.   DEFAULTS; REMEDIES:

 

  a.   Defaults: The occurrence of any one or more of the following events shall
constitute a default and breach of this Lease by Lessee:

  1.   The abandonment of the Premises by Lessee or assignee or sublessee as
applicable.

  2.   The failure of Lessee to make any payment of rent or any other payment
required to be made by Lessee hereunder, as and when due.

  3.   The failure by Lessee to observe or perform any conditions, covenants or
provisions of this Lease to be observed or performed by Lessee, other than
described in (i.) above, where such failure shall continue for a period of seven
(7) days after written notice thereof from Lessor to Lessee provided, however,
that if the nature of Lessee’s default is such that more than seven (7) days are
reasonably required for its cure, then Lessee shall not be deemed to be in
default if Lessee commenced such cure within said seven (7) day period and
thereafter diligently prosecutes such cure to completion.

  4.   The making by Lessee of any general arrangement or assignment for the
benefit of creditors;

  5.   The appointment of a trustee or receiver to take possession of
substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where possession is not restored to Lessee within thirty
(30) days; or

  6.   The attachment, execution or other judicial seizure of substantially all
of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease
where such seizure is not discharged within thirty (30) days. Provided, however,
in the event that any provision in this Paragraph is contrary to any applicable
law, such provision shall be of no force or effect.

 

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  7.   The discovery by Lessor that any financial information given to Lessor by
Lessee, any assignee of Lessee, any subtenant of Lessee, any successor in
interest of Lessee or any guarantor of Lessee’s obligation hereunder, and any of
them, was materially false.

 

  b.   Remedies: In the event of any such default or breach by Lessee, Lessor
may at any time thereafter, by written notice or demand and without limiting
Lessor in the exercise of any right or remedy which Lessor may have by reason of
such default or breach:

 

  1.   Terminate Lessee’s right to possession of the Premises by any lawful
means, in which case this Lease shall terminate and Lessee shall immediately
surrender possession of the Premises to Lessor. In such event Lessor shall be
entitled to recover from Lessee all damages incurred by Lessor by reason of
Lessee’s default including, but not limited to, the cost of recovering
possession of the Premises, attorney’s fees, any real estate commission actually
paid, the balance remaining of unamortized tenant improvements, if any, the
worth at the time of award by the court having jurisdiction thereof of the
unpaid rent which had been earned at the time of termination; the worth at the
time of award of the amount by which the unpaid rent would have been earned
after termination until the time of award exceeds the amount of such rental loss
that the Lessee proves could have been reasonably avoided; the worth at the time
of award of the amount by which the unpaid rent for the balance of the term
after the time of award exceeds the amount of such rental loss that the Lessee
proves could be reasonably avoided; and any other amount necessary to compensate
Lessor for all the detriment proximately caused by Lessee’s failure to perform
his obligations under the Lease or which in the ordinary course of things would
be likely to result therefrom.

  2.   Maintain Lessee’s right to possession in which case this Lease shall
continue in effect whether or not Lessee shall have abandoned the Premises. In
such event Lessor shall be entitled to enforce all of Lessor’s rights and
remedies under this Lease, including the right to recover rent as it becomes due
hereunder.

  3.   Pursue any other remedy now or hereafter available to Lessor under the
laws or judicial decisions of the state wherein the Premises are located. Unpaid
installments of rent and other monetary obligations of Lessee under the terms of
this Lease shall bear interest from the date due at the maximum rate then
allowable by law.

 

  c.   Default by Lessor: Lessor shall not be in default unless Lessor fails to
perform obligations required of Lessor within a reasonable time, after written
notice by Lessee to Lessor specifying wherein Lessor has failed to perform such
obligations provided, however, that if the nature of Lessor’s obligations is
such that more than sixty (60) days are required for performance then Lessor
shall not be in default if Lessor commences performance within such sixty
(60) day period and thereafter diligently pursues the same to completion.

 

  d.   Late Charges: Lessee hereby acknowledges that late payment by Lessee to
Lessor of rent and/or other sums due hereunder will cause Lessor to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing
and accounting charges, and late charges which may be imposed on Lessor by terms
of any mortgage or trust deed covering the premises. Accordingly, if any
installment of rent or any other sum due from Lessee shall not be received by
Lessor (or Lessor’s designee, if applicable) within five (5) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to six percent (6%) of such overdue
amount, plus accrued interest at the maximum amount allowable by law. The
parties agree that such late charge represents a fair and reasonable estimate of
the costs Lessor will incur by reason of late payment by Lessee. Acceptance of
such late charge by Lessor shall in no event constitute a waiver of Lessee’s
default with respect to such overdue amount, nor prevent Lessor from exercising
any of the other rights and remedies hereunder. In the event that a late charge
is payable hereunder, whether or not collected, for three (3) installments of
rent or other sum within a twenty-four (24) month period, then rent shall
automatically become due and payable quarterly in advance, rather than monthly,
notwithstanding Paragraph 8 or any other provision of this Lease to the
contrary. After thirty-six (36) months of timely payments thereafter, Lessee may
apply to Lessor in writing, and Lessor shall approve of Lessee’s right, to
return to monthly payments, in advance, as provided in this Lease.

 

  e.   Impounds: In the event that a late charge is payable hereunder, whether
or not collected, for three (3) installments of rent or any other sum due
hereunder within a twenty-four (24) month period, Lessee shall pay to Lessor, if
Lessor shall so request, in addition to any other payments required under this
Lease, a monthly advance installment, due on the first (1st) day of each month,
as estimated by Lessor for the real property tax, insurance and operating
expenses on the Premises which are payable by Lessee under the terms of this
Lease. Such fund shall be established to insure payment when due, before
delinquency, of any or all such taxes, premiums and expenses. If the amounts
paid to Lessor by Lessee under the provisions of this Paragraph are insufficient
to discharge the obligations of Lessee to pay such taxes, premiums and expenses
as the same shall become due, Lessee shall pay to Lessor, upon Lessor’s demand,
such additional sums as necessary to pay such obligations. All monies paid to
Lessor under this Paragraph may be intermingled with other monies of Lessor and
shall not bear interest. In the event of a default in the obligations of Lessee
to perform under this Lease, then any balance remaining from the funds paid to
Lessor under the provisions of this Paragraph 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 taxes, premiums and/or expenses. After thirty-six (36)
timely payments thereafter, Lessee may apply to Lessor in writing, and Lessor
shall approve of Lessee’s right, to return to monthly payments as provided in
this Lease.

 

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36.   CUMULATIVE REMEDIES; NON-WAIVER:

 

       The receipt by Lessor of any rent or payment with or without knowledge of
the breach of any covenant hereof shall not be deemed a waiver of any such
breach and no waiver by Lessor of any sum due hereunder or any provision hereof
shall be deemed to have been made unless expressed in writing and signed by
Lessor. No delay or omission in the exercise of any right or remedy accruing to
Lessor upon any breach by Lessee under this Lease shall impair such right or
remedy or be construed as a waiver of any such breach theretofore or hereafter
occurring. The waiver by Lessor of any breach of any term, covenant or condition
herein contained shall not be deemed to be a waiver of any subsequent breach of
the same or any other term, covenant or condition herein contained. All rights,
powers, options or remedies afforded to Lessor either hereunder or by law shall
be cumulative and not alternative and the exercise of one right, power, option
or remedy shall not bar other rights, powers, options or remedies allowed herein
or by law.

 

37.   ADDITIONAL RENT:

 

       Any monetary obligations of Lessee to Lessor under the terms of this
Lease shall be deemed to be rent. Any amount due to Lessor, if not paid when
due, shall bear interest from the date due until paid at the maximum amount
allowable by law. Payment of interest shall not excuse or cure any default
hereunder by Lessee.

 

38.   INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS:

 

       This Lease contains all agreements of the parties hereto with respect to
any matter mentioned herein. No prior agreement or understanding pertaining to
any such matter shall be effective. This Lease may be modified in writing only,
signed by the parties in interest at the time of the modification. Except as
otherwise stated in this Lease, Lessee hereby acknowledges that neither the
Lessor nor any employees or agents of any said persons has made any oral or
written warranties or representations relative to the condition or use by Lessee
of the Premises and Lessee acknowledges that Lessee assumes all responsibility
regarding the Occupational Safety Health Act, the legal use and adaptability of
the Premises and the compliance thereof with all applicable laws and regulations
in effect during the term of this Lease except as otherwise specifically state
in this Lease.

 

39.   COMPLIANCE WITH APPLICABLE LAWS:

 

       Lessee shall use the Premises in accordance with all applicable laws and
government regulations. If any law or government regulation (such as, but not
limited to, the Americans With Disabilities Act of 1990) should require
renovation or alteration of the Premises, Lessee shall be responsible for such
alteration or renovation and shall pay all costs and expenses required to alter
or renovate the Premises to conform to any such law or governmental regulation.
If any law or governmental regulation (such as, but not limited to, the
Americans With Disabilities Act of 1990) should require the renovation or
alteration of the Common Area(s), Lessor shall be responsible for such
renovation or alteration and shall pay all costs and expenses required to alter
or renovate the Common Area(s) to conform to any such law or governmental
regulation. All such costs and expenses required to alter or renovate the Common
Area(s) to conform to any such law or governmental regulation shall be included
in the Operating Expenses as provided in Paragraph 9 of this Lease. Lessee shall
indemnify and defend Lessor against any loss suffered or liability incurred by
Lessor, and all actions, suits, damages or claims brought against Lessor as a
result of Lessee’s failure to use the Premises in accordance with any such law
or governmental regulation.

 

40.   ENVIRONMENTAL MATTERS:

 

  a.   The term “Hazardous Materials” as used herein shall mean any petroleum
products, asbestos, polychlorinated biphenyls, P.C.B.’s, chemicals, compounds,
materials, mixtures or substances that are now or hereinafter defined, listed in
or otherwise classified as a “hazardous substance”, “hazardous material”,
“hazardous waste”, “extremely hazardous waste”, “infectious waste”, “toxic
substance”, “toxic pollutant”, or any other formulation intended to define, list
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity or toxicity pursuant to any federal,
state or local environmental law, regulation, ordinance, resolution, order or
decree relating to industrial hygiene, environmental protection or the use,
analysis, generation, manufacture, storage, release, disposal or transportation
of the same (“Hazardous Materials Laws”).

 

  b.   Lessee shall not use, manufacture, store, release, dispose or transport
any Hazardous Materials in, on, under or about the Premises, the Building or the
Project without giving prior written notice to Lessor and obtaining Lessor’s
prior written consent, which consent Lessor may withhold in its sole discretion.
Lessee shall, at its own expense, procure, maintain in effect and comply with
all conditions of any and all permits, licenses and other governmental and
regulatory approvals required in connection with Lessee’s generation, use,
storage, disposal and transportation of Hazardous Materials. Except as
discharged into the sanitary sewer in strict accordance and conformity with all
applicable Hazardous Materials laws, Lessee shall cause any and all Hazardous
Materials to be removed from the Premises and transported solely by duly
licensed haulers to duly licensed facilities for final disposal of such
materials and wastes. Regardless whether permitted under the Hazardous Materials
laws, Lessee shall not maintain in, on, under or about the Premises, the
Building or the Project any above or below ground storage tanks, clarifiers or
sumps nor shall any wells for the monitoring of ground water, soils or subsoils
be allowed. Notwithstanding anything contained in this Subparagraph to the
contrary, Lessor and Lessee acknowledge that Lessee will utilize the Hazardous
Materials described in Exhibit “F” attached hereto, and Lessor agrees that
Lessee may utilize such materials provided that Lessee complies with the
provisions of this Paragraph 40 and with the allowed uses stated elsewhere in
this Lease.

 

  c.   Lessee shall immediately notify Lessor in writing of any enforcement,
cleanup, removal or other governmental or regulatory action instituted,
completed or threatened pursuant to any Hazardous Materials law; any claim made
or threatened by any person or entity against Lessee or the Premises, Building
and/or Project relating to damage, contribution, cost,

 

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         recovery, compensation, loss or injury resulting from or claimed to
result from any Hazardous Materials; any reports, information, inquiries or
demands made, ordered or received by or on behalf of Lessee which arise out of
or in connection with the existence or potential existence of any Hazardous
Materials in, on, under or about the Premises, the Building or the Project,
including, without limitation, any complaints, notices, warnings, asserted
violations, or mandatory or voluntary informational filings with any
governmental agency in connection therewith, and immediately supply Lessor with
copies thereof.

 

  d.   Lessee shall indemnify, defend (by counsel reasonably acceptable to
Lessor), protect, and hold Lessor, and each of Lessor’s partners, officers,
directors, partners, employees, affiliates, joint venturers, members, trustees,
owners, shareholders, principals, agents, representatives, attorneys, successors
and assigns free and harmless from and against any and all claims, liabilities,
damages, fines, penalties, forfeitures, losses, cleanup and remediation costs or
expenses (including attorney fees) or death of or injury to any person or damage
to any property whatsoever, arising from or caused in whole or in part, directly
or indirectly by Lessee’s use, analysis, generation, manufacture, storage,
release, disposal or transportation of Hazardous Materials by Lessee, Lessee’s
agents, employees, contractors, licensees or invitees to, in, on, under, about
or from the Premises, the Building or the Project or Lessee’s failure to comply
with any Hazardous Materials law. Lessee’s obligations hereunder shall include,
without limitation, and whether foreseeable or unforeseeable, all costs of any
required or necessary repair, cleanup, detoxification or decontamination of the
Premises, the Building or the Project, and the preparation and implementation of
any closure, remedial action or other required plans in connection therewith,
and shall survive the expiration or earlier termination of this Lease.

 

  e.   Lessor shall have the right to enter the Premises during regular business
hours upon reasonable prior notice at all times for the purposes of ascertaining
compliance by Lessee with all applicable Hazardous Materials laws, provided,
however, that in the instance of an emergency Lessor’s entry onto the Premises
shall not be restricted to regular business hours nor shall notice be required.

 

  f.   Lessor shall have the option to declare a default of this Lease for the
release or discharge of Hazardous Materials by Lessee, Lessee’s employees,
agents, contractors or invitees on the Premises, Building or Project or in
violation of law or in deviation from prescribed procedures in Lessee’s use or
storage of Hazardous Materials. If Lessee fails to comply with any of the
provisions under this entire Paragraph 39, Lessor shall have the right, but not
the obligation, to remove or otherwise cleanup any Hazardous Materials from the
Premises, the Building or the Project. In such case, the costs of any Hazardous
Materials investigation, removal or other cleanup (including, without
limitation, transportation, storage, disposal, attorney fees and costs) will be
deemed additional rent due under this Lease, whether or not a court has ordered
the cleanup, and will become due and payable on demand by Lessor.

 

  g.   Notwithstanding anything contained in this Paragraph 40 to the contrary,
Lessee shall not be responsible for the presence or remediation of any Hazardous
Materials located on, over, below or about the Premises which were present in
such locations as of the Commencement Date.

 

41.   MISCELLANEOUS:

 

  a.   Lessee and Lessee’s Guarantor, if any, agree to deliver to Lessor, within
thirty (30) days from written request therefore (but not more frequently than
once each calendar year) a balance sheet prepared and certified by a Public
Accountant or Certified Public Accountant showing the true and accurate net
worth of Lessee and said Guarantor, if any, as of the close of Lessee’s and said
Guarantor’s most recent accounting period.

 

  b.   In case there is more than one Lessee, the obligations of Lessee
executing this Lease shall be joint and several. The words “Lessor” and “Lessee”
as used herein shall include the plural as well as the singular. The covenants
and agreements contained herein shall be binding upon and enforceable by the
parties hereto and their respective heirs, executors, administrators, successors
and assigns, subject to the restrictions herein imposed on assignment by Lessee.

 

  c.   Time is of the essence of this Lease and each and every covenant,
condition and provision herein contained.

 

  d.   The paragraph headings are inserted only as a matter of convenience and
for reference, and in no way define, limit or describe the scope or intent of
this agreement or any provision thereof or in any way affect this agreement.

 

  e.   In the event there is a Guarantor of this Lease, said Guarantor shall
have the same obligations as Lessee under this Lease.

 

42.   ADDENDA:

 

       Attached hereto is an addendum or addenda as indicated on the Basic Lease
Information which constitute(s) a part of this Lease.

 

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IN WITNESS WHEREOF, the parties hereto have subscribed their names, and if
corporations, executed this Lease by officers thereunto duly authorized by
resolution of said corporations, in duplicate, the day and year stated below.

 

Lessee: BioMarin Pharmaceutical Inc.   Lessor: Bayview Ignacio, LLC /s/    Jeff
Landau   /s/    Daniel Condiotti             

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

 

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By:   By: Senior Vice President, Administration     6/16/03  
Manager                                                     6/16/03        

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

 

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

Title                                                              Date        
  Title                                      
                          Date         /s/    Louis Drapeau    

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

   

By:

    Chief Financial Officer                          6/16/03            

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

   

Title                                                             Date        

   

 

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ADDENDUM 1

 

43.   Parking.

 

Throughout the Term of this Lease Lessee shall be entitled to the use of parking
spaces on Assessor’s Parcel #157-501-68 and shall be subject to the Parking
Agreement of Record on Assessor’s Parcel #157-501-67 which parcel is neither the
property nor under control of Lessor, as shown on Exhibit “L”.

 

44.   Rent Abatement.

 

Provided Lessee has not been in default or material breach of this Lease at any
time during the Initial Term, the first four (4) months of Base Monthly Rent on
Building “P” (90 Digital Drive) and one-half of each of the fifth through
twelfth months of Base Monthly Rent on Building “O” (105 Digital Drive) shall be
abated. In the event of default or material breach of this Lease on the part of
Lessee within the Initial Term, where such default or material breach shall
continue for any duration in excess of the cure periods herein provided, if any,
and unless such continued duration of default or material breach is with
Lessor’s express written consent, then such previously abated amount shall
become immediately due and payable by Lessee to Lessor, without offset, notice
or demand.

 

45.   Reduction in Security Deposit.

 

Provided Lessee is not in material breach or default of this Lease at any time
during the initial Term, Lessee may apply to Lessor in writing within the first
two months of the fifth year of the Initial Term (and again within the first two
months of the seventh year of the Initial Term) for a reduction for each
application of up to twenty percent (20%) of the Security Deposit held by Lessor
as of the date of Lessee’s Application, and Lessor shall not unreasonably deny
Lessee’s request to reduce the Security Deposit. Such reduction in Security
Deposit shall be applied as a credit towards the next amount due from Lessee
provided, however, that in no event shall the amount being held for security for
this Lease ever be less than three (3) months of the Initial Monthly Base Rent.

 

46.   Real Property Taxes; Value Limitation.

 

For the first two years of the Initial Term of this Lease, Lessee shall not be
responsible for the payment of any increase in Real Property Taxes resulting
from an increased property valuation due solely to a sale or transfer of the
property. Following the second year of the Initial Term of this Lease, Lessee
shall be responsible for increased taxes arising from a sale or transfer of the
Property.

 

47.   Option to Renew

 

If Lessee has not been in material breach or default of this Lease during the
Initial Term (and, subsequently, first Option Term, if exercised), Lessee shall
have two (2) successive options of five (5) years each to extend this Lease upon
the following conditions:

 

  a.   Lessee shall retain at least as much space as stated in the Basic Lease
Information hereto attached, and in “As Is” condition.

  b.   Lessee shall provide Lessor with written notice of their intent to
exercise such option not less than nine (9) months prior to the Lease initial
expiration date and, subsequently, the expiration of the first option period if
it has been exercised.

  c.   The Option(s) herein are personal to the Lessee and are not transferable
to sub-tenants or assignees. The Options shall be transferable to “Lessee
Affiliates” (as described in Paragraph 29 “a” of this Lease).

  d.   Lessor and Lessee agree that any brokerage fee or commission incurred
relating to the Option Period(s) shall be borne by the party incurring the fee
or commission.

  e.   The Base Monthly Rent for the first twelve (12) months of each option
period exercised shall be at ninety-five percent (95%) of the then fair market
rent for similar space in similar buildings in Novato, but shall be no more than
115% (One Hundred Fifteen Percent) of the Base Monthly Rent for the last month
of the previous Lease term.

 

48.   Initial Improvements By Lessee

 

Lessee desires to make substantial changes to both the interior and exterior of
the Premises, the scope and extent of which changes has not yet been determined.
Lessee has provided Lessor copies of their most recent architectural concept
drawings of Initial Improvements for attachment to this Lease as Exhibit “G”. It
is agreed between Lessor and Lessee that all Initial Improvements, both Interior
and Exterior, shall be made by Lessee under agreement with a licensed General
Contractor who shall be reasonably approved by Lessor.

 

49.   Initial Interior Improvements

 

  a.   Lessee shall diligently pursue completion of the preliminary space plan
drawings which shall include, in detail, the proposed Initial Interior
Improvements. Lessee shall submit two (2) sets of the preliminary space plans to
Lessor as soon as available for Lessor’s review.

  b.   Lessor shall have fourteen (14) days from receipt of the preliminary
space plans to approve, disapprove or request reasonable modifications of the
preliminary space

 

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         plans. If Lessor does not respond within fourteen (14) days of receipt
of the preliminary space plans, said plans shall be deemed approved and shall be
attached to this Lease as Exhibit “H”.

 

  1.   As long as the preliminary space plans and specifications reasonably
conform with the Use provisions of the lease the Lessor shall not unreasonably
refuse to approve them.

  2.   If Lessor requests modifications to conform the preliminary space plans
and specifications to the Use provisions then Lessee shall have 10 days to make
such modifications and resubmit to Lessor pursuant to this Paragraph 49.

 

  c.   Lessee shall develop working drawings from approved preliminary space
plans, such drawings to include finish specifications and final draft budget
(the “Complete Working Drawings”). Lessee shall submit two (2) sets of Complete
Working Drawings to Lessor for Lessor’s review and comments or approval.

 

  d.   Lessor shall have fourteen (14) days from receipt of Complete Working
Drawings to request reasonable modifications or approve the Complete Working
Drawings. For the purposes of this provision, it shall be deemed reasonable for
Lessor to disapprove elements of the Complete Working Drawings which deviate
substantially from the approved preliminary space plans. If Lessor does not
respond within fourteen (14) days of receipt of the Complete Working Drawings,
said drawings shall be deemed approved. The approved Complete Working Drawings
shall be attached to this Lease as Exhibit “I”.

 

  e.   Once the Complete Working Drawings are approved, Lessee shall have the
right to submit the approved plans for issuance of the appropriate Building
Permit(s).

 

  f.   Lessee shall provide Lessor with a copy of the General Contractor’s
Agreement prior to commencement of any work on, or delivery of any materials to
the Premises. It shall be a requirement of that agreement between Lessee and
General Contractor to acquire the executed Estoppel form (attached as Exhibit
“E”) from the General Contractor, prior to the commencement of any work on, or
delivery of any materials to the Premises. Lessee or Lessee’s General Contractor
will deliver the Estoppels to Lessor prior to commencement of work or delivery
of materials to the Premises.

 

  g.   Lessee shall provide Lessor with a copy of the Building Permit(s) upon
issuance and two (2) sets of plans as approved by the appropriate government
agency issuing the Building Permit(s).

 

  h.   Lessee shall notify Lessor in writing not less than seven (7) days in
advance of the commencement of any work on, or delivery of materials to the
Premises so that Lessor may cause to be recorded a Notice or Notices of
Non-Responsibility, or other Notice or Notices provided by law. Lessee shall
further notify Lessor in writing within forty-eight (48) hours after such work
commences.

 

  i.   Prior to the commencement of work on the Initial Interior Improvements,
Lessee and the General Contractor shall provide Lessor with a Performance and
Payments Bond in an amount sufficient to ensure the General Contractor will
promptly and faithfully perform said contract and payments to those
subcontracted entities required in California Civil Code Section 3110. The
Performance Bond shall include Lessor as Additional Obligee through attached
rider. Upon execution of a contract between Lessee and General Contractor for
the Initial Interior Improvements Lessee will file and record, pursuant to Civil
Code Section 3235, the general contract and Payments Bond with the County of
Marin and shall provide Lessor with a copy of the recorded documents. Lessee
will provide Lessor with the documents required in this Paragraph 49, subsection
( i ) prior to start of work. Lessor reserves the right to require an increase
in Performance and/or Payments Bond upon any change orders to the original
contract between Lessee and General Contractor.

 

  j.   Lessor shall have the right to stop work on the Initial Improvements
unless and until the requirements of this Paragraph 49 are met.

 

  k.   Lessee shall provide Lessor with copies of all change orders to the
approved Complete Working Drawings. If the change contemplated in a change order
is substantially different from the approved Complete Working Drawings or
involved structural modifications to the Building(s) the Lessor shall have seven
(7) days from receipt of same to request modification of or approve the change
orders. “Substantially different” shall include, but not be limited to, any
change in square footage, reducing the quality of the approved specifications, a
change in the improvements such that they no longer comply with applicable
codes, or a change in the improvements such that they no longer conform to the
Use. If Lessor does not respond within seven (7) days, the change order shall be
deemed approved.

 

  l.   Upon completion of the Initial Interior Improvements, or twenty-four (24)
months from the Commencement Date of this Lease, whichever occurs first, Lessee
shall provide Lessor with a copy of the final, signed-off Building Permit(s) and
two (2) complete sets of “As Built” plans, which shall replace Exhibits “G, H &
I”.

 

  m.   Lessor and Lessee agree that the Initial Interior Improvements approved
by Lessor pursuant to this Paragraph 49 shall not be subject to restoration
under the terms of this Lease, that such Initial Interior Improvements are not
required to make the Premises habitable for the use stated in this Lease, and
that Lessor’s election to waive restoration of same shall not be construed to
indicate Lessor as a participating owner.

 

2

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  n.   All other changes, additions, deletions, modifications or improvements to
the Premises not specifically included in the approved Initial Interior
Improvements, or included in the approved Initial Interior Improvements but not
completed within twenty-four (24) months of the Commencement Date of this Lease,
shall be subject to the Terms of this Lease, Paragraphs 49 & 50 excepted.

 

50.   Initial Exterior Improvements

 

  a.   Lessee shall diligently pursue development of renderings, specifications,
preliminary budget and appropriate engineering reports (the “Preliminary
Exterior Plans”) for Initial Exterior Improvements and shall provide two (2)
sets to Lessor as soon as available for Lessor’s review.

 

  b.   Lessor shall have fourteen (14) days from receipt of the Preliminary
Exterior Plans to approve, disapprove or request reasonable modifications to
said plans. If Lessor does not respond within fourteen (14) days, said plans
shall be deemed approved, and shall be attached to this Lease as Exhibit “J”. If
Lessor requests reasonable modifications to the Preliminary Exterior Plans then
Lessee shall have fourteen (14) days to make such modifications and resubmit the
plans to Lessor.

 

  c.   Lessee shall develop Exterior Permit Plans from the approved Preliminary
Exterior Plans with finish specifications, final draft budget and additional
engineering reports (if any) (the “Exterior Permit Plans”). Lessee shall submit
two (2) sets of Exterior Permit Plans to Lessor for Lessor’s review and comments
or approval.

 

  d.   Lessor shall have fourteen (14) days from receipt of the Exterior Permit
Plans to request reasonable modifications or approve the Exterior Permit Plans.
For the purpose of this provision, it shall be deemed reasonable for Lessor to
disapprove any substantial structural changes between the Preliminary Exterior
Plans and the Exterior Permit Plans. If Lessor does not respond within fourteen
(14) days, said plans shall be deemed approved and shall be attached as Exhibit
“K” to this Lease.

 

  e.   Once the Complete Exterior Permit Plans are approved, Lessee shall have
the right to submit the approved plans for issuance of the appropriate Building
Permit(s).

 

  f.   Lessee shall provide Lessor with a copy of the General Contractor’s
Agreement prior to commencement of any work on, or delivery of any materials to
the Premises. It shall be a requirement of that agreement to acquire the
executed Estoppel form (attached as Exhibit “E”) from the General Contractor
prior to the commencement of any work on, or delivery of any materials to the
Premises. Lessee or Lessee’s General Contractor will deliver the Estoppels to
Lessor prior to commencement of work or delivery of materials to the Premises.

 

  g.   Lessee shall provide Lessor with a copy of the Building Permit(s) upon
issuance and two (2) sets of plans as approved by the appropriate government
agency issuing the Building Permit(s).

 

  h.   Lessee shall notify Lessor in writing not less than seven days in advance
of the commencement of any work on, or delivery of materials to the Premises so
that Lessor may cause to be recorded a Notice or Notices of Non-Responsibility,
or other Notice or Notices provided by law. Lessee shall further notify Lessor
in writing within forty-eight (48) hours after such work commences.

 

  i.   Prior to the commencement of work on the Initial Exterior Improvements,
Lessee and the General Contractor shall provide Lessor with a Performance Bond
and Payments Bond in an amount sufficient to ensure the General Contractor will
promptly and faithfully perform said contract and payments to those
subcontracted entities required in California Civil Code Section 3110. The
Performance Bond shall include Lessor as Additional Obligee through attached
rider. Upon execution of a contract between Lessee and General Contractor for
the Initial Exterior Improvements Lessee will file and record, pursuant to Civil
Code Section 3235, the general contract and Payments Bond with the County of
Marin and shall provide Lessor with a copy of the recorded documents. Lessee
will provide Lessor with the documents required in this Paragraph 50, subsection
( i ) prior to start of work. Lessor reserves the right to require an increase
in the Performance and/or Payments Bond(s) upon any change orders to the
original contract between Lessee and General Contractor.

 

  j.   Lessor shall have the right to stop work on the Initial Exterior
Improvements unless and until the requirements of this Paragraph 50 are met.

 

  k.   Lessee shall provide Lessor with copies of all change orders to the
approved Exterior Permit Plans. If the change contemplated in a change order is
substantially different from the approved Exterior Permit Plans or involves
structural modifications to the Building(s) the Lessor shall have fourteen (14)
days from receipt of same to request modification of or approve the change
orders. “Substantially different” shall include, but not be limited to, any
change in square footage, reducing the quality of the approved specifications,
materially modifying the finish specifications, or a change in the improvements
such that they no longer comply with applicable codes. If Lessor does not
respond within fourteen (14) days, the change order shall be deemed approved.

 

  l.   Upon completion of the Initial Exterior Improvements, or twenty-four (24)
months from the Commencement Date of this Lease, whichever occurs first, Lessee
shall

 

3

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         provide Lessor with a copy of the final, signed-off Building Permit(s)
and two (2) complete sets of “As Built” plans, which shall replace Exhibits “J &
K”.

 

  m.   Lessor and Lessee agree that the Initial Exterior Improvements approved
by Lessor pursuant to this Paragraph 50 shall not be subject to restoration
under the terms of this Lease, that such Initial Exterior Improvements are not
required to make the Premises habitable for the use stated in this Lease, and
that Lessor’s election to waive restoration of same shall not be construed to
indicate Lessor as a participating owner.

 

  n.   All other changes, additions, deletions, modifications or improvements to
the Premises not specifically included in the approved Initial Exterior
Improvements, or included in the approved Initial Interior Improvements but not
completed within twenty-four (24) months of the Commencement Date of this Lease,
shall be subject to the Terms of this Lease, Paragraphs 49 & 50 excepted.

 

Lessee: BioMarin Pharmaceutical Inc.

        Lessor: Bayview Ignacio, LLC     

/s/    Jeffrey Landau

        /s/    Daniel Condiotti     

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By

        By     

Senior Vice President, Administration

   6/16/03    Manager    6/16/03

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Title

   Date    Title    Date

/s/    Louis Drapeau

              

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               By:               

Chief Financial Offiicer

   6/16/03          

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Title

   Date          

 

 

4

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ADDENDUM 2

51.)  Lessee shall have the right to occupy approximately 6,585 square feet of
first floor office space located at 105 Digital from July 1st, 2003 to November
1st, 2003 or Lease Commencement date, whichever occurs first. Lessee’s occupancy
shall be subject to all Terms, Conditions, Obligations and Covenants of the
Lease. Base Monthly Rent for this period shall be $6,585.
Should Lease Commencement occur after November 1st, 2003, Lessee may continue
occupancy of this space on a month-to-month basis until either party shall give
30 (thirty) days notice to the other party. Upon Lease Commencement this
Paragraph shall expire.

Lessee   Lessor   /s/ JEFFREY I. LANDAU   /s/ J. WARZ

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Jeffrey Landau, BioMarin Pharmaceuticals, Inc.   J. Warz, Bayview Ignacio, LLC  
6/17/03   6/17/03

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Date   Date

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Exhibit “C”
Copy Of
DECLARATION OF COVENANTS AND PROTECTIVE STANDARDS
OF
IGNACIO INDUSTRIAL PARK, UNITS #3 AND 3A
NOVATO, CALIFORNIA

This declaration, made on January 20, 1982, is made by Debra Investment
Corporation, a California corporation, and by Marvin Solland hereinafter
referred to as “Declarants.”

Witnesseth:

WHEREAS, Debra Investment Corporation and Marvin Solland are the Owners of
certain real property in the County of Marin, State of California, known as
Ignacio Industrial Park, Units #3 and 3A, an more particularly described
hereinafter; and

NOW, THEREFORE, Debra Investment Corporation and Marvin Solland hereby make the
following Declaration:

Establishment of Protective Standards:

Declarant Owners of said property hereby declare that said property is now held
and shall hereinafter be held, transferred, sold, conveyed and occupied subject
to the protective standards herein set forth, each and all of which is and are
for, and shall insure to, the benefit of and pass with each and every parcel of
said property and shall apply to and bind the heirs, assignees, and successors
in interest of any Owner thereof.

Description of Said Property:

Said property subject to this Declaration is described as follows, to wit: Lots
65 through 75, Lots 100 through 113, and Lots 125 through 137, all inclusive,
Map of Ignacio Industrial Park, Unit #3, recorded on April 17, 1981 in Map Book
18, Page 44, Official Records of the County of Marin, County of Marin, State of
California; and Lots 138 through 144 and Lots 145 through 151, inclusive, Map of
Ignacio Industrial Park unit #3A, recorded on December 7, 1981 in Map Book 18 at
Page 61, Official Records of the County of Marin, State of California.

ARTICLE I         Purpose of Protective Standards:

The purpose of these protective standards is to insure well-planned development
and proper use of said property, to protect each property Owner against such
adjacent development as may depreciated the value of his parcel; to require
attractive and harmonious improvements; and in general to require a high quality
of improvements throughout said property in accordance with these Covenants and
Protective Standards for the mutual benefit of all parcel Owners.

ARTICLE II         Architectural Control Committee:

1.         Formation:

Debra Investment Corporation shall form an Architectural Control Committee,
hereinafter called “Committee”, which shall consist of three members. The
appointment of such members shall be disclosed by a written instrument setting
forth the facts of the appointment, the names and business addresses for the
members, and the period for which they are appointed. Said instrument shall be
signed by Declarant, acknowledged before a Notary Public, and recorded in the
officer of the County Recorder, of the County of Marin, State of California. Any
changes in the membership of the Committee shall be similarly acknowledged and
recorded. Upon resignation of a member, Declarant may appoint a replacement for
the balance of the member’s term. A majority of the Committee may designate a
representative to act for it. Any authorization, approval, or power given by the
Committee must be in writing, and must be signed by at least one duly appointed
member.

2.         Duties:

The Committee shall as soon as practicable after formation, develop basic
specific design criteria, including but not limited to the following building
design and site development issues:

  A.     Building  Materials   B.     Colors   C.     Signing (Identification
and directional)

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  D.    Surface Treatment (walkways and paving)   E.    Lighting (building and
area)   F.    Parking   G.    Landscaping   H.    Fencing

and shall utilize said design criteria in acting on projects in accordance with
the procedures set forth in Article III.

3.         Succession:

At any time after seventy percent of the property subject to these restrictions
has been sold; based upon the number of square feet owned as compared with the
total number of square feet subject to these Restrictions, control of the
Committee may be relinquished by the Declarant by a duly recorded written
statement, and all powers and controls, including designation of Committee
membership, may be transferred to an Ignacio Industrial Park Improvement
Association.

ARTICLE III          Improvement Restrictions and Conditions:

1.         Site Plan an Architectural Approval:

No improvements, defined as any man-made/manufactured physical feature, shall be
erected, placed, altered, maintained, or permitted to remain on any building
site unless and until a complete set of plans and specifications therefor,
including a plot plan, floor plan, sections and exterior elevations, including
colors therefor, shall have been first submitted to and approved in writing by
the Architectural Control Committee, as specified in Article II. Such plans and
specifications, and color scheme shall be submitted for approval over the
signature of the Owner of the building site or over the signature of his
authorized Agent. Approval shall be based, among other things, on adequacy of
site dimensions; conformity and harmony of external design, effect of location
and use of improvements on neighboring sites; relation of topography, grade and
finished ground elevation of the building site being improved to that of
neighboring sites; plans and specifications to the purpose and intent of these
protective standards.

The Committee shall not arbitrarily or unreasonable withhold its approval of
such plans and specifications, plot plan, elevation, material and/or color
scheme. If the Committee shall fail to approve of disapprove the same within
thirty (30) days after they have been submitted, it shall be conclusively
presumed that the Committee has approved said plans and specifications, and/or
color schemes, subject to these protective standards. If, after such plans,
specifications, and color schemes shall have been approved, the improvements or
any part thereof shall be altered, erected or maintained upon the lot or
building site otherwise than so approved by the Committee, such alteration or
erection shall be deemed to have been undertaken and made without the approval
of the Committee as required.

Neither the Committee nor its successors or assigns shall be liable in damages
to anyone submitting plans, specifications and color scheme to it for approval
or to any owner of land affected by this Declaration, by reason of mistake in
judgement, negligence, or non-feasance arising out of or in connection with the
approval or disapproval or failure to approve the same. Every person who submits
plans, specifications and color scheme to property to the Committee for approval
agrees, by submission of same, and every Owner of any of said property agrees
acquiring title thereof, that he will not bring any action or suit against the
Committee to recover such damages.

Notwithstanding anything to the contrary contained herein, after expiration of
six months from recording of the Notice of Completion by the Owner of any
improvement, said improvement shall in favor of purchasers and encumbrances in
good faith and for value, to be in compliance with all provisions hereof unless
actual notice of such completion or non-completion executed by the Committee
shall appear on record in the office of the County Recorder of Marin County,
California, or unless legal proceedings shall have been instituted to enforce
compliance or completion.

2.         Landscaping:

Street and lot landscaping shall conform to the “Landscape Master Plan” and the
“Landscape Guidelines” prepared for this industrial park by F. Furuichi and
dated October 1980, revised October 1981. Copies are available at the Novato
Planning Department.

All planting and irrigation plans shall be submitted to the Novato Planning
Department for routine plan check and compliance to applicable standards, codes,
covenants, and regulations.

3.         Succession of Authority to Modify:

At any time after seventy percent of the property subject to these Restrictions
has been sold, based upon the number of square feet

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owned as compared to the number of square feet subject to these restrictions,
Debra Investment Corporation may transfer authority for modification of this
Article to an Ignacio Industrial Park Unit #3 and #3A improvement Association.

ARTICLE IV         Use Restriction and Condition:

1.         Permitted Uses:

The following uses may be established upon any property or site within Ignacio
Industrial Park, Units #3 and #3A:

  A. Industrial, manufacturing and business service uses, conducted entirely
within an enclosed structure, not involving retail sales or personal service
activities, and not having objectionable characteristics of noise, odor, dust,
smoke, or glare.   B. Laboratories.   C. Sale or repair of industrial or
manufacturing equipment.   D. Warehousing, wholesale distribution or storage
uses.   E. Professional or administrative offices.   F. Retail sales which are
specifically accessory to and directly related to an otherwise allowed use.   G.
Snack bars, barer shops, and similar small convenience service uses only if
scaled to the size of the complex and intended to serve the tenants/employees of
the park only   H. Outdoor storage of goods and materials only if specifically
incidental to a primary use within the building, and then only with the written
consent of the Architectural Control Committee.

      (Note:   Some of the above listed uses may require permits or requests for
approval form government agencies: It is the business Owner’s/Operator’s
responsibility for securing all such permits or approvals).

2.         Prohibited Uses:

The following uses may not be established upon any property or site within
Ignacio Industrial Park Units #3 and #3A:

  A.     Any use which is identifiable as one of the following:

                      1.     Auto wrecking/dismantling  
               2.     Auto repair (mechanical or electrical or body work)  
               3.     Auto painting                  4.     Auto towing  
               5.     Retail sales except as allowed by IC, F and G above.   
               6.     Moving and storage                  7.     
Mini-warehousing

  B.     Any use which has any of the following characteristics:

                                1.          Smoke of a shade as dark or darker
than that designated as No. 1 on the Ringleman Chart, as published by the United
States Bureau of Mines, for a period aggregating more than three minutes in any
one hour.                                 2.         Obnoxious odors  
                              3.        Dust, dirt, or fly ash  
                              4.        Noxious, toxic, or corrosive fumes or
gases                                 5.        Unusual fire or explosion
hazards as determined by the Novato Fire District.  
                              6.        The disposal of garbage, refuse or
objectional material within the bounds of the Industrial Park or bordering
easements.                                 7.         Heat and glare, whether
from floodlights or high temperature processes such as combustion, welding or
otherwise. This shall apply to permitted signs.  
                              8.         Vibrations.  
                              9.        Electromagnetic interference  
                              10.        Noise or sound that either:

                                                a.       Exceeds seventy (70)
decibels for a period(s) aggregating more than three (3) minutes in any one
hour, measured at a distance of 25 fee and at a height of 6 feet; or
                                                b.        Is objectionable due
to intermittent beat, frequency or shrillness.

                                      11.         Store-front display of product
or merchandise.                                 12.        Outdoor storage
unless specifically approved by the Architectural Control Committee.

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ARTICLE V     Maintenance Requirements:

All improvements on each site, including - without limitation - landscaping, all
walks, driveways, and the exterior of all structures on each site, shall be
maintained in good order, repair and condition. All exterior painted surfaces
shall be maintained in a first-class condition.

If the grounds and improvements on each site are not maintained in accordance
with all of the requirements of these Restrictions, the Declarant shall have the
right, after 10 days to enter upon the site to perform the required maintenance
and repair. The expenses of such maintenance and repair shall be a joint and
several obligation of the Owner and all Occupants of the site, and shall be
payable upon demand of the Declarant and shall commence to bear interest at the
maximum rate permitted by law from the date of demand for payment by the
Declarant until the date of payment. Entry upon a site by the Declarant or its
Agents for the purpose of maintenance and repair shall not be a trespass, and
the Owner and all Occupants shall be deemed to have consented thereto.

ARTICLE VI     Enforcement:

1.     Abatement and Suit:

Violation or breach of any restrictions herein contained shall give to
Declarant, and every Owner of property subject to these Restrictions, the right
to prosecute a proceeding at law or in equity against the person or persons who
have violated or are attempting to violate any of these Restrictions to enjoin
or prevent them from doing so, to cause said violation to be remedied or to
recover damages for said violation.

The result of every action or omission whereby any restriction herein contained
is violated in whole or in part is hereby declared to be and to constitute a
nuisance, and every remedy allowed by law or equity against an Owner, either
public or private, shall be applicable against every such result and may be
exercised by Declarant, or by any Owner of property subject to these
Restrictions.

In any legal or equitable proceeding for the enforcement or to restrain the
violation of the Declaration or any provisions thereof. The losing party or
parties shall pay the attorney’s fees of the prevailing party or parties in such
amount as may be fixed by the court in such proceedings. All remedies provided
herein or at law or in equity shall be cumulative and not exclusive.

2.     Failure to Enforce Not a Waiver of Rights:

The failure of Declarant or any property Owner to enforce any protective
standard herein contained shall in no event be deemed to be a waiver of the
right to do so thereafter, of the right to enforce any other protective
standard.

ARTICLE VII     Miscellaneous:

1.     Duration, Modification:

This Declaration, every provision hereof, and every covenant, condition, and
protective standard contained herein shall continue in full force and affect for
a period of thirty (30) years from the date hereof; provided, however, that this
Declaration or any provision hereof, any covenant condition or protective
standard contained herein, except for Article II (Architectural Control
Committee) and Article III (Improvement Restrictions & Conditions), may be
terminated, extended, modified or amended as to the whole of said property with
the written consent of the Owners of fifty percent (50%) of the said property,
based on the number of square feet owned as compared to the total number of
square feet of said property. No such termination, extension, modification or
amendment shall be effective until a property instrument in writing has been
executed and acknowledged and recorded in the office of the Recorder of Marin
County, California.

2.     Easements:

Said property, lots and building sites are and shall be subject to such
easements as are now matters of public record and such easements are hereby
reserved for the benefit of all the Owners, present or future, or the lots and
building sites in said property.

3.     Assignability of Declarant’s Rights and Duties:

Any and all of the rights, powers and reservations of Declarant herein contained
may be assigned by Declarant to any other person, corporation or association
which will asso the duties of Declarant pertaining to particular rights, power
and reservations assignee and upon any such person, corporation or association
evidencing its consent in writing to accept such assignment and

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assume such duties, he or it shall, to the extent of such assignment, have the
same tasks and powers and be subject to the same obligations and duties as are
given to an assumed by Declarant. The term “Declarant”, as used herein, includes
all such assignees and their heirs, successors and assigns.

4.     Constructive Notice of Acceptance:

Every person who now or hereafter owns or acquires any right, title, estate or
interest in or to any portion of said property is and shall be conclusively
deemed to have consented and agreed to every covenant, condition and protective
standard contained herein, whether or not any reference to this Declaration is
contained in the instrument by which such person acquired an interest in said
property.

5.     Right of Mortgagees:

All restrictions and other provisions herein contained shall be deemed subject
and subordinate to all mortgage and deeds of trust now or hereafter executed
upon land subject to these protective standards, and none of said protective
standards shall supercede or in any way reduce the security or affect the
validity of any such mortgage or deed of trust; provided, however, that if any
portion of said property is sold under a foreclosure of any mortgage or under
the provisions of any deed of trust, any purchaser at such sale, and his
successors and assignees, shall hold any and all property so purchased subject
to all of the protective standards and other provisions of this Declaration.

6.     Mutuality, Reciprocity Runs With Land:

All protective standards, conditions, covenants and agreements contained herein
are made for the direct, mutual and reciprocal benefit of each and every part
and parcel of said property; shall create mutual, equitable servitude upon each
parcel; shall create reciprocal rights and obligations between the respective
Owners of all parcels, and privity of contract and estate between all grantees
of said parcel, his heirs, successors and assigns; operate as covenants running
with the land, for the benefit of all parcels.

7.     Marginal Headings:

The marginal headings of titles to the paragraphs of the Declaration are not a
part of this Declaration and shall have no effect upon the constitution or
interpretation of any part thereof.

ARTICLE VII     Miscellaneous:

8.     Effect of Invalidation:

In any provision of this Declaration is held to be invalid by any court, the
invalidity of such provision shall not affect the validity of the remaining
provisions hereof.

IN WITNESS WHEREOF, the undersigned have executed this Declaration on the date
first hereinabove written.

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A. CONDIOTTI, President   MARVIN SOILAND DEBRA INVESTMENT CORPORATION   OWNER OF
LOTS 65 THROUGH 76,              INCLUSIVE, of IGNACIO INDUSTRIAL PARK, UNIT #3
STATE OF CALIFORNIA)     COUNTY OF SONOMA)    

     On January 20, 1982, before me, the undersigned, a Notary Public in and for
said County and State personally appeared A. Condiotti known to me to be the
President and known to me to be the of the corporation that executed the within
instrument, and known to me to be the persons who executed the within instrument
on behalf of the corporation therein named and acknowledged to me that such
corporation executed the within instrument pursuant to its by-laws or a
resolution of its Board of Directors.

WITNESS my hand and official seal.
Notary Public in and for said County and State
My commission expires August 2, 1982.

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FOUNDATION OF ARCHITECTURAL CONTROL COMMITTEE
for
IGNACIO INDUSTRIAL PARK, UNITS # 3 AND # 3A
IN ACCORDANCE WITH THE DECLARATION OF RESTRICTIONS
FOR THOSE SUBDIVISIONS

DEBRA INVESTMENT CORPORATION hereby appoints the following individuals as the
members of the Architectural Committee in accordance with Article II of the
Declaration for Covenants and Protective Standards for Ignacio Industrial Park,
Units #3 and #3A. Novato, California.

1. Mr. A. Condiotti 2. Marvin Soiland 3. Mr. Phillip A. Trowbridge Debra
Investment Corporation Soiland Company, Inc. Debra Investment Corporation P.O.
Box 6855 1220 Airport Boulevard P. O. Box 6855 Santa Rosa, CA 95406 Santa Rosa,
CA 95401 Santa Rosa, CA 95406

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  A. Condiotti, President   Debra Investment Corporation       State of
California)   County of Sonoma)  

On this 20th day of January in the year one thousand nine hundred and
eighty-two, before me, Linda Tower, a Notary Public, State of California, duly
commissioned and sworn, personal appeared Marvin Soiland, known to me to be the
person whose name is acknowledged to me that be executed the same.

IN WITNESS WHEREOF I have herein set my hand and affixed in official seal in the
County of Sonoma the day and year this certificate first above written.

 

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  Notary Public, State of California   My commission expires August 2, 1982

EXHIBIT 1
TO EXHIBIT “C”

PROPERTY DESCRIPTION FOR LAKEPOINT BUSINESS PARK

Description of Said Property:

Said property subject to this Declaration is described as follows, to wit: Lots
65 through 75, Lots 100 through 113, and Lots 125 through 137, all inclusive,
Map of Ignacio Industrial Park, Unit #3, recorded on April 17, 1981 in Map Book
18 page 44 Official Records of the County of Marin, State of California,; and
Lots 138 through 144 and Lots 145 through 151, inclusive, Map of Ignacio
Industrial Park Unit #3A, recorded on December 7, 1981 in Map Book 18 page 64,
Official Records of the County of Marin, State of California.

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EXHIBIT “D”

POLICY NUMBER__________________________________

THIS ENDORSEMENT CHANGES THE POLICY
ADDITIONAL INSURED-LESSOR OF PREMISES

This endorsement modifies insurance provided under the following:
GENERAL LIABILITY COVERAGE

1 Designation of Premises:     BAYVIEW BUSINESS PARK     90 & 105 Digital Drive
    Novato, California     Buildings “O” & “P”     2 Name of
Organization—Additional Insured:     Bayview Ignacio, LLC     P. O. Box 11068  
  Santa Rosa, California 95406-1068     (707) 544-7050     (707) 523-7031 Fax  

        WHO IS AN INSURED is amended to include as insures the organization
named above but only with respect to liability arising out of the ownership,
maintenance or use of that part or parts of the Premises leased to you and
designated above.

        The insurance provided to the additional insured by this policy shall be
primary to, and non-contributory with, any other insurance available to the
additional insured as the Named Insured, and such other insurance shall only
apply in excess of this insurance.

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EXHIBIT “E”

 

ESTOPPEL STATEMENT

 

The undersigned hereby acknowledges the notification and receipt of the Notice
of Non-responsibility (a copy of which is attached hereto) by the property owner
and Lessor, Bayview Ignacio, LLC, with respect to             

 

 

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  .

 

The undersigned is aware that the filing and posting of such Notice of
Non-responsibility, as set forth in Section 3094 of the California Civil Code,
has the effect of exempting Lessor’s interest in the property from any
mechanics’ liens filed in connection with any alterations, changes, additions or
improvements performed at the request of Lessee.

 

The undersigned acknowledges and understands that the Notice of
Non-responsibility is the method by which a property owner exempts the property
from mechanics’ liens and notifies all those who are expending labor and/or
materials on a project that the property owner will not be responsible for such
labor and/or materials.

 

The undersigned acknowledges that Lessor is NOT a PARTICIPATING OWNER (i.e.,
Lessee is not an agent of Lessor in performing any alterations, changes,
additions or improvements. Such work is not a condition of the Lease, and does
not materially enhance the value of Lessor’s property) and that no relationship
exists between Lessor and Lessee other than that of landlord and tenant. The
undersigned acknowledges and understands that Lessor claims no ownership
interest in such tenant improvements, and any retention of such improvements as
part of the Premises when they are returned to Lessor at the termination of the
Lease is not a requirement under the Lease, and may occur only if Lessee desires
to avoid the expense of restoring the property to its condition prior to the
Lease and complies with such requirements under the Lease. Accordingly, the
undersigned hereby waives and relinquishes any and all rights to assert a claim
and/or file a mechanics’ lien against the Lessor’s interest in the property
relating to or arising from the work described herein; provided, however, that
nothing in this estoppel shall prohibit any claims from being made against the
Lessee’s interest in the property and/or Lessee’s alterations, changes,
additions or improvements thereto.

 

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By:    Date

For:

California Contractor’s License # 

  

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