Exhibit 10.23

 

 

 

 

 

 

 

 

LEASE

 

 

by and between

 

 

BMR-201 INDUSTRIAL ROAD LP, a Delaware limited partnership

 

 

and

 

 

NATERA, INC.,

a Delaware corporation

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Table of Contents

 

 

 

 

 

 

1.

    

Lease of Premises

    

1 

 

 

 

 

 

2.

 

Basic Lease Provisions

 

1 

 

 

 

 

 

3.

 

Term

 

4 

 

 

 

 

 

4.

 

Possession and Commencement Date

 

5 

 

 

 

 

 

5.

 

Condition of Premises

 

6 

 

 

 

 

 

6.

 

Rentable Area

 

6 

 

 

 

 

 

7.

 

Rent

 

7 

 

 

 

 

 

8.

 

[Intentionally Omitted]

 

7 

 

 

 

 

 

9.

 

Operating Expenses

 

7 

 

 

 

 

 

10.

 

Taxes on Tenant's Property

 

13 

 

 

 

 

 

11.

 

Security Deposit

 

13 

 

 

 

 

 

12.

 

Use

 

16 

 

 

 

 

 

13.

 

Rules and Regulations, CC&Rs, Parking Facilities and Common Area

 

19 

 

 

 

 

 

14.

 

Project Control by Landlord

 

20 

 

 

 

 

 

15.

 

Quiet Enjoyment

 

22 

 

 

 

 

 

16.

 

Utilities and Services

 

22 

 

 

 

 

 

17.

 

Alterations

 

26 

 

 

 

 

 

18.

 

Repairs and Maintenance

 

29 

 

 

 

 

 

19.

 

Liens

 

30 

 

 

 

 

 

20.

 

Estoppel Certificate

 

31 

 

 

 

 

 

21.

 

Hazardous Materials

 

31 

 

 

 

 

 

22.

 

Odors and Exhaust

 

34 

 

 

 

 

 

23.

 

Insurance; Waiver of Subrogation

 

35 

 

 

 

 

 

24.

 

Damage or Destruction

 

39 

 

 

 

 

 

25.

 

Eminent Domain

 

41 

 

 

 

 

 

26.

 

Surrender

 

42 

 

 

 

 

 

27.

 

Holding Over

 

43 

 

 

 

 

 

28.

 

Indemnification and Exculpation

 

43 

 

 

 

 

 

29.

 

Assignment or Subletting

 

45 

 

 

 

 

 

30.

 

Subordination and Attornment

 

49 

 

 

 

 

 

31.

 

Defaults and Remedies

 

49 

 

 

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32.

    

Bankruptcy

    

55

 

 

 

 

 

33.

 

Brokers

 

55

 

 

 

 

 

34.

 

Definition of Landlord

 

56

 

 

 

 

 

35.

 

Limitation of Landlord's Liability

 

56

 

 

 

 

 

36.

 

Joint and Several Obligations

 

57

 

 

 

 

 

37.

 

Representations

 

57

 

 

 

 

 

38.

 

Confidentiality

 

58

 

 

 

 

 

39.

 

Notices

 

58

 

 

 

 

 

40.

 

Miscellaneous

 

58

 

 

 

 

 

41.

 

Rooftop Installation Area

 

61

 

 

 

 

 

42.

 

Option to Extend Term

 

62

 

 

 

 

 

43.

 

Right of First Refusal

 

64

 

 

 

 

 

44.

 

Storage Area

 

65

 

 

 

 

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LEASE

 

THIS LEASE (this “Lease”) is entered into as of this 26th day of October, 2015
(the “Execution Date”), by and between BMR-201 INDUSTRIAL ROAD LP, a Delaware
limited partnership (“Landlord”), and NATERA, INC., a Delaware corporation
(“Tenant”).

 

RECITALS

 

A.WHEREAS, Landlord owns certain real property (together with adjacent real
property owned by Landlord, the “Property”) and the improvements on the Property
located at 201 Industrial Road, San Carlos, California, including the building
located thereon (the “Building”); and

 

B.WHEREAS, Landlord wishes to lease to Tenant, and Tenant desires to lease from
Landlord, certain premises (the “Premises”) comprised of approximately
eighty-eight thousand three hundred ninety-two (88,392) square feet of Rentable
Area on the fourth (4th) floor of the Building, pursuant to the terms and
conditions of this Lease, as detailed below.

 

AGREEMENT

 

NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
agree as follows:

 

1.            Lease of Premises.

 

1.1.Effective  on  the  applicable  Term  Commencement  Date  (as  defined  below),
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
Premises, as shown on Exhibit A attached hereto, for use by Tenant in accordance
with the Permitted Use (as defined below) and no other uses.  The Property and
all landscaping, parking facilities, private drives and other improvements and
appurtenances related thereto, including the Building, are hereinafter
collectively referred to as the “Project.” All portions of the Project that are
for the non-exclusive use of tenants of the Building, including driveways,
sidewalks, parking areas, landscaped areas, service corridors, stairways,
elevators, public restrooms and public lobbies, are hereinafter referred to as
“Common Area.”

 

2.           Basic Lease Provisions.  For convenience of the parties, certain
basic provisions of this Lease are set forth herein.  The provisions set forth
herein are subject to the remaining terms and conditions of this Lease and are
to be interpreted in light of such remaining terms and conditions.

 

2.1.This Lease shall take effect upon the Execution Date and, except as
specifically otherwise provided within this Lease, each of the provisions hereof
shall be binding upon and inure to the benefit of Landlord and Tenant from the
date of execution and delivery hereof by all parties hereto.

 

 

 

 

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2.2.In the definitions below, each current Rentable Area (as defined below) is
expressed in square feet.   Rentable Area and "Tenant's Pro Rata Share" are both
subject to adjustment as provided in this Lease.

 

 

(As of the Term

 

 

Definition or Provision

Means the Following (As of the Term
Commencement Date)

Approximate Rentable Area of Premises

88,392 square feet

Approximate Rentable Area of Project

176,956 square feet

Tenant's  Pro Rata Share of Project

49.95%

 

2.3.Monthly and annual installments of Base Rent for the Premises ("Base Rent")
as of the Term Commencement Date:

 

Dates

Square Feet
of Rentable
Area

Base Rent per Square
Foot of Rentable Area

Monthly
Base Rent

Annual Base
Rent

10/6/16- 1/5/17

61,153*

$3.50 monthly

$214,035.50

$2,568,426.00

1/6/17- 10/5/17

88,392

$3.50 monthly

$309,372.00

$3,712,464.00

10/6/17- 10/5/18

88,392

$3.61 monthly

$319,095.12

$3,829,141.44

10/6/18 - 10/5/19

88,392

$3.72 monthly

$328,818.24

$3,945,818.88

10/6/19- 10/5/20

88,392

$3.83 monthly

$338,541.36

$4,062,496.32

10/6/20-10/5/21

88,392

$3.94 monthly

$348,264.48

$4,179,173.76

10/6/21- 10/5/22

88,392

$4.06 monthly

$358,871.52

$4,306,458.24

10/6/22- 10/5/23

88,392

$4.18 monthly

$369,478.56

$4,433,742.72

 

*That  certain  portion
of the Premises containing 27,239 square feet of Rentable Area and identified as
the "Intrexon Space" on Exhibit A-1 is currently subject to a lease with
Intrexon Corporation (the "Existing Tenant"), which lease is scheduled to expire
on January 5, 2017, but which lease contains an option pursuant to which
Existing Tenant may elect to extend its lease as to all or portions of the
Intrexon Space for a period of three (3) years.  The Intrexon Space will be
added to the Premises in accordance with the terms of Article 3.   The Premises,
excluding the Intrexon Space, is referred to herein as the "Initial Premises."
The Base Rent chart above will be modified in the event the Term Commencement
Date for the Intrexon Space does not occur on
January 6, 2017, which modification will be confirmed in an Acknowledgement of Term

 

 

 

2

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Commencement Date and Term Expiration Date in a form substantially similar to
Exhibit C. Failure to execute and deliver such acknowledgment, however, shall
not affect Tenant's liability hereunder.

 

2.4.Term Commencement Date:   October 6, 2016 as to the Initial Premises, and
estimated to be January 6, 2017 as to the Intrexon Space.

 

2.5.Term Expiration Date: October 5, 2023

 

2.6.Security Deposit: $500,000

 

2.7.Permitted Use:   Office, R&D, manufacturing and laboratory use in conformity
with all federal, state, municipal and local laws, codes, ordinances, rules and
regulations of Governmental Authorities (as defined below), committees,
associations, or other regulatory committees, agencies or governing bodies
having jurisdiction over the Premises, the Building, the Property, the Project,
Landlord or Tenant, including both statutory and common law and hazardous waste
rules and regulations ("Applicable Laws")

 

 

 

2.8.        Address for Rent Payment:

 

 

 

BMR-201 Industrial Road LP

 

Attention Entity 350

 

P.O. Box 511415

 

Los Angeles, California 90051-7970

 

 

2.9.        Address for Notices to Landlord:

 

 

 

BMR-201 Industrial Road LP

 

17190 Bernardo Center Drive

 

San Diego, California 92128

 

Attn: Real Estate Legal Department

 

 

2.10.        Address for Notices to Tenant:

 

 

 

Natera, Inc.

 

201 Industrial Road, Suite 410

 

San Carlos, California 94070

 

Attention: Controller

 

With a copy to:

 

 

 

Natera, Inc.

 

201 Industrial Road, Suite 410

 

San Carlos, California 94070

 

Attention: Legal Department

 

 

2.11.        Address for Invoices to Tenant:

 

3

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Natera, Inc.

 

201 Industrial Road, Suite 410

 

San Carlos, California 94070

 

Attention: Controller

 

2.12.The following Exhibits are attached hereto and incorporated herein by
reference:

 

 

 

Exhibit A

Premises, Storage Space and Mechanical Room

Exhibit A-I

Intrexon Space

Exhibit B

Work Letter

Exhibit B-1

Tenant Work Insurance Schedule

Exhibit C

Acknowledgement of Term Commencement Date and Term Expiration Date

Exhibit D

[Intentionally omitted]

Exhibit E

Form of Letter of Credit

Exhibit F

Rules and Regulations

Exhibit G

[Intentionally omitted]

Exhibit H

Tenant's Personal Property

Exhibit I

Form of Estoppel Certificate

 

3.           Term. The actual term of this Lease (as the same may be extended
pursuant to Article 42 hereof, and as the same may be earlier terminated in
accordance with this Lease, the "Term") shall commence on the Term Commencement
Date and end on the Term Expiration Date, subject to extension or earlier
termination of this Lease as provided herein.   TENANT HEREBY WAlVES THE
REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE
AMENDED FROM TIME TO TIME.

 

3.IThe Intrexon Space will be added to the Premises leased hereunder on the date
that is the later of(a)  January 6, 2017, and (b) the day after the date
Existing Tenant's lease of the Intrexon Space terminates and Existing Tenant
surrenders the Intrexon Space to Landlord. Landlord currently anticipates that
the Term Commencement Date as to the Intrexon Space will be January 6, 2017.  In
the event Existing Tenant exercises its extension option, then, as to that
portion of the Intrexon Space that Existing Tenant elects, Existing Tenant's
lease will expire on or about January 5, 2020, and, in such event, the estimated
Term Commencement Date will be January 6, 2020.  Tenant hereby acknowledges that
the effect of the foregoing may result in the Intrexon Space being delivered to
Tenant in two (2) phases (i.e., if Existing Tenant elects to extend only as to a
portion of the Intrexon Space).  Landlord shall not be liable to Tenant or
otherwise be in default hereunder in the event that Landlord is unable to
deliver the Intrexon Space to Tenant on the estimated Term Commencement Date or
any other anticipated delivery date due to Existing Tenant's exercise of its
option to extend or by reason of any failure of Existing Tenant to timely vacate
and surrender to Landlord the Intrexon Space or any portion thereof.  Landlord
will notifY Tenant whether Existing Tenant has exercised its option to extend
its lease as to the Intrexon Space upon written request of Tenant, which request
may be made at any time after April 15, 2016.  The Intrexon Space will be added
to the Initial Premises as of the Term Commencement Date (as the same may be
modified by this Section) on all of the same terms and conditions applicable to
the Initial Premises, including the amount of Base Rent

 

4

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payable on a per square foot basis and the Term Expiration  Date.   During the
period from the Term Commencement Date for the Initial Premises through the Term
Commencement Date for the Intrexon Space, Tenant's Pro Rata Share of the Project
shall be 34.56%.

 

4.           Possession and Commencement Date.

 

4.1.        The "Term Commencement Date" shall be the date set forth in Section
2.4, as modified by Section 3.1 as to the Intrexon Space.  Tenant shall execute
and deliver to Landlord written acknowledgment of the actual Term Commencement
Dates and the Term Expiration Date within ten (I 0) days after Tenant
takes occupancy of the Premises, in the form attached as Exhibit C
hereto.  Failure to execute and deliver such acknowledgment, however, shall not
affect the Term Commencement Date or Landlord's or Tenant's liability
hereunder.  Failure by Tenant to obtain validation by any medical review board
or other similar governmental licensing of the Premises  required 
for the Permitted Use by Tenant shall not serve to extend the Term
Commencement Date.   The term "Substantially Complete" or "Substantial
Completion" means that the Tenant Improvements are substantially complete in
accordance with the Approved Plans (as defined in the Work Letter), except for
minor punch list items.

 

4.2.       Tenant shall cause the Tenant Improvements to be constructed in the
Premises pursuant to the Work
Letter attached hereto as Exhibit B (the "Work Letter") at a cost to
Landlord not to exceed (a) Four Hundred Thousand Dollars ($400,000) (the "TI
Allowance").
The TI Allowance may be applied to the costs of (m) construction, (n) project review by
Landlord (which fee shall equal three percent (3%) of the cost of the
Tenant Improvements, including the TI Allowance), (o) commissioning of
mechanical, electrical and plumbing systems by a licensed, qualified
commissioning agent hired by Tenant, and review of such party's commissioning
report by a licensed, qualified commissioning agent hired by Landlord, (p) space
planning, architect, engineering and other related services performed by third
parties unaffiliated with Tenant, (q) building permits and other taxes, fees,
charges and levies by Governmental Authorities (as defined below) for permits or
for inspections of the Tenant Improvements, and (r)
costs and expenses for labor, material, equipment and fixtures. 
In no event shall the TI Allowance be used for (v) the cost of work that is not
authorized by the Approved Plans (as
defined in the Work Letter) or otherwise approved in writing by
Landlord, (w) payments to Tenant or any affiliates of Tenant, (x) the purchase
of any furniture, personal property or other non-building system equipment, (y)
costs resulting from any default by Tenant of its obligations under this Lease
or (z) costs that are recoverable by Tenant from a third party (e.g., insurers,
warrantors, or tortfeasors).

 

4.3.Tenant shall have until April I, 2018 (the "TI Deadline"), to expend the
unused portion of the TI Allowance, after which date Landlord's obligation to
fund such costs shall exp1re.

 

4.4.In no event shall any unused TI Allowance entitle Tenant to a credit against
Rent payable under this Lease. Tenant shall deliver to Landlord (a) a
certificate of occupancy for the Premises suitable for the Permitted Use and (b)
a Certificate of Substantial Completion in the form of the American Institute of
Architects document G704, executed by the project architect and the general
contractor.

 

5

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4.5.Prior to commencing any Tenant Improvements in the Premises, Tenant shall
furnish to Landlord evidence satisfactory to Landlord that insurance coverages
required of Tenant under the provisions of Article 23 are in effect, and Tenant
acknowledges that the Tenant Improvements will be constructed during the Term,
and such construction will not be deemed a constructive eviction, nor shall such
construction entitle Tenant to any abatement of Rent in connection therewith.

 

4.6.The selection of the architect, engineer, general contractor and maJor
subcontractors shall be made in accordance with the Work Letter.

 

5.            Condition of Premises.  Tenant has been in occupancy of the
Premises as a subtenant prior to the Execution Date, and has had an opportunity
to inspect the Premises and is familiar with the condition of the Premises.  
 Tenant acknowledges that neither Landlord nor any agent of Landlord has made
any representation or warranty with respect to the condition of the Premises,
the Building or the Project, or with respect to the suitability of the Premises,
the Building or the Project for the conduct of Tenant's business.    Tenant
acknowledges that (a) it is fully familiar with the condition of the Premises
and agrees to take the same in its condition "as is" as of the Term Commencement
Date and (b) Landlord shall have no obligation to alter, repair or otherwise
prepare the Premises for Tenant's occupancy or to pay for or construct any
improvements to the Premises, except with respect to the TI Allowance and the
last sentence of this Article. Tenant's execution and delivery of this Lease
shall, except as otherwise agreed to in writing by Landlord and Tenant,
conclusively establish that the Premises, the Building and the Project were, as
of the Execution Date, in good, sanitary and satisfactory condition and repair.
   Landlord will install, at Landlord's cost, on or before the Term Commencement
Date, ten (I0) bicycle lockers at a location designated by Landlord within the
Project for the shared use of all tenants and occupants of the Project.

 

6.            Rentable Area.

 

6.1.The term "Rentable Area" shall reflect such areas as reasonably calculated
by Landlord's architect, as the same may be reasonably adjusted from time to
time by Landlord in consultation with Landlord's architect to reflect changes to
the Premises, the Building or the Project, as applicable.  Notwithstanding the
foregoing to the contrary, in no event shall the Rentable Area of the Premises
be deemed to have increased unless due to a change in the outer dimensions of
the exterior walls of the same.

 

6.2.The Rentable Area of the Building is generally determined by making separate
calculations of Rentable Area applicable to each floor within the Building and
totaling the Rentable Area of all floors within the Building.  The Rentable Area
of a floor is computed by measuring to the outside finished surface of the
permanent outer Building walls.  The full area calculated as previously set
forth is included as Rentable Area, without deduction for columns and
projections or vertical penetrations, including stairs, elevator shafts,
flues, pipe shafts, vertical ducts and the like, as well as such items'
enclosing walls.

 

6.3.The term "Rentable Area," when applied to the Premises, is that area equal
to the usable area of the Premises, plus an equitable allocation of Rentable
Area within the Building that is not then utilized or expected to be utilized as
usable area, including that portion of the

 

6

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Building devoted to corridors, equipment rooms, restrooms, elevator lobby,
atrium and mailroom.

 

7.            Rent.

 

7.1.Tenant shall pay to Landlord as Base Rent for the Premises, commencing on
the Term Commencement Date, the sums set forth in Section 2.3.  Base Rent shall
be paid in equal monthly installments as set forth in Section 2.3, each in
advance on the first day of each and every calendar month during the Term.

 

7.2.In addition to Base Rent, Tenant shall pay to Landlord as additional rent
("Additional Rent") at times hereinafter specified in this Lease (a) Tenant's
Adjusted Share (as defined below) of Operating Expenses (as defined below), (b)
the Property Management Fee (as defined below), (c) the Facilities Management
Fee (as defined below) and (d) any other amounts
that Tenant assumes or agrees to pay under the provisions of this Lease that are owed to
Landlord, including any and all other sums that may become due by reason of any
default of
Tenant or failure on Tenant's part to comply with the agreements, terms, covenants and
conditions of this Lease to be performed by Tenant, after notice and the lapse
of any applicable cure periods.

 

7.3.Base Rent and Additional Rent shall together be denominated "Rent." Rent
shall be paid to Landlord, without abatement, deduction or offset, in lawful
money of the United States of America to the address set forth in Section 2.8 or
to such other person or at such other place as Landlord may from time designate
in writing.   In the event the Term commences  or ends on a day other than the
first day of a calendar month, then the Rent for such fraction of a month shall
be prorated for such period on the basis of the number of days in the month and
shall be paid at the then-current rate for such fractional month.

 

7.4.Tenant's obligation to pay Rent shall not be discharged or otherwise
affected by (a) any Applicable Laws now or hereafter applicable to the Premises,
(b) any other restriction on Tenant's use, (c) except as
expressly provided herein, any casualty or taking or (d) any other occurrence;
and (except as expressly provided herein) Tenant waives all rights now or
hereafter existing to terminate or cancel this Lease or quit or surrender the
Premises or any part thereof, or to assert any defense in the nature of
constructive eviction to any action seeking to recover rent.  Tenant's
obligation to pay Rent with respect to any period or obligations arising,
existing or pertaining to the period prior to the date of the expiration or
earlier termination of the Term or this
Lease shall survive any such expiration or earlier termination; provided, however, that
nothing in this sentence shall in any way affect Tenant's obligations with
respect to any other period.

 

8.            [Intentionally Omitted]

 

9.           Operating Expenses.

 

9.1.As used herein, the term "Operating Expenses" shall include:

 

(a)         Goverrunent impositions, including property tax costs consisting of
real and personal property taxes (including amounts due under any improvement
bond upon the

 

7

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Building or the Project (including the parcel or parcels of real property upon
which the Building and areas serving the Building are located)) or assessments
in lieu thereof imposed by any federal, state, regional, local or municipal
governmental authority, agency or subdivision (each, a "Governmental
Authority"); taxes on or measured by gross rentals received from the rental of
space in the Project; taxes based on the square footage of the Premises, the
Building or the Project, as well as any parking charges, utilities surcharges or
any other costs levied, assessed or imposed by, or at the direction of, or
resulting from Applicable Laws or interpretations thereof, promulgated by any
Governmental Authority in connection with the use or occupancy of the Project or
the parking facilities serving the Project; taxes on this transaction or any
document to which Tenant is a party creating or transferring an interest in the
Premises; any fee for a business license to operate an office building; and any
expenses, including the reasonable cost of attorneys or experts, reasonably
incurred by Landlord in seeking reduction by the taxing authority of the
applicable taxes, less tax refunds obtained as a result of an application for
review thereof; and

 

(b)          All other costs of any kind paid or incurred by Landlord in
connection with the operation or maintenance of the Building and the Project,
and costs of repairs and replacements to improvements within the Project as
appropriate to maintain the Project as required hereunder, including costs of
funding such reasonable reserves as Landlord, consistent with good business
practice, may establish to provide for future repairs and replacements; costs of
utilities furnished to the Common Area; sewer fees; cable television; trash
collection; cleaning, including windows; heating, ventilation and
air-conditioning ("HVAC"); maintenance of landscaping and grounds; maintenance
of drives and parking areas; maintenance of the roof; security services and
devices; building supplies; maintenance or replacement of equipment utilized for
operation and maintenance of the Project; ground lease rent; license, permit and
inspection fees; sales, use and excise taxes on goods and services purchased by
Landlord in connection with the operation, maintenance or repair of the Building
or Project systems and equipment; telephone, postage, stationery supplies and
other expenses incurred in connection with the operation, maintenance or repair
of the Project; accounting, legal and other professional fees and expenses
incurred in connection with the Project; costs of furniture, draperies,
carpeting, landscaping supplies and other customary and ordinary items of
personal property provided by Landlord for use in Common Area or in the Project
office; Project office rent or rental value for a commercially reasonable amount
of space, to the extent an office used for Project operations is maintained at
the Project, plus customary expenses for such office; capital expenditures
incurred (i) in replacing obsolete equipment, (ii) for the primary purpose of
reducing Operating Expenses or (iii) required by any Governmental Authority to
comply with changes in Applicable Laws that take effect after the Execution Date
or to ensure continued compliance with Applicable Laws in effect as of the
Execution Date, in each case amortized over the useful life thereof, as
reasonably determined by Landlord, in accordance with generally accepted
accounting principles, but in no event longer than ten (10) years; costs of
complying with Applicable Laws (except to the extent such costs are incurred to
remedy non-compliance as of the Execution Date with Applicable Laws); costs to
keep the Project in compliance with, or costs or fees otherwise required under
or incurred pursuant to any CC&Rs (as defined below), including condominium
fees; insurance premiums, including premiums for commercial general liability,
property casualty, earthquake, terrorism and environmental coverages; portions
of insured losses paid by Landlord as part of the deductible portion of a loss
pursuant to the terms of insurance policies; service contracts; costs of

8

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services of independent contractors retained to do work of a nature referenced
above; and costs of compensation (including employment taxes and fringe
benefits) of all persons who perform regular and recurring duties connected with
the day-to-day operation and maintenance of the Project, its equipment, the
adjacent walks, landscaped areas, drives and parking areas, including janitors,
floor waxers, window washers, watchmen, gardeners, sweepers, plow truck drivers,
handymen, and engineering/maintenance/facilities personnel.

 

(c)          Notwithstanding the foregoing, Operating Expenses shall not include
any net income, franchise, capital stock, estate or inheritance taxes, or taxes
that are the personal obligation of Tenant or of another tenant of the Project;
capital expenditures other than as expressly provided in Section 9(b); leasing
commissions; expenses that relate to preparation of rental space for a tenant or
relocation of any tenant; legal fees, advertising and promotional expenses and
similar costs incurred in procuring tenants for the Project; expenses of initial
development and construction, including grading, paving, landscaping and
decorating (as distinguished from maintenance, repair and replacement of the
foregoing); legal fees or other expenses incuned in enforcing leases with other
tenants; costs of repairs to the extent reimbursed by payment of insurance
proceeds received by Landlord; interest upon loans to Landlord or secured by a
mortgage or deed of trust covering the Project or a portion thereof (provided
that interest upon a government assessment or improvement bond payable in
installments shall constitute an Operating Expense under Subsection 9.l(a));
wages, bonuses or other compensation of employees above the level of Property
Manager; depreciation claimed by Landlord for tax purposes (provided that this
exclusion of depreciation is not intended to delete from Operating Expenses
actual costs of repairs and replacements and reasonable reserves in regard
thereto that are provided for in Subsection 9.l(b));  taxes that are excluded
from Operating Expenses by the last sentence of Subsection 9.l(a); costs or
expenses incurred in connection with the financing or sale of the Project or any
portion thereof; costs expressly excluded from Operating Expenses elsewhere in
this Lease or that are charged to or paid by Tenant under other provisions of
this Lease; professional fees and disbursements and other costs and expenses
related to the ownership (as opposed to the use, occupancy, operation,
maintenance or repair) of the Project; electric power costs or other utility
costs for which any tenant directly contracts with the local public service
company (but Landlord shall have the right to "gross up" as if such space was
vacant); costs or expenses incurred in connection with the removal, handling or
disposal of Hazardous Materials (as defined in Section 21.8 below) or defending
against claims relating to Hazardous Materials, in either instance where such
Hazardous Materials either (i) existed in the Premises as of the date Tenant
first occupied the Premises and were not exacerbated by any act or omission of
Tenant or any Tenant Party (as defined below) or (ii) were brought onto the
Project by Landlord in violation of Applicable Laws in existence at the time
such Hazardous Materials were brought onto the Project; expenses in connection
with services or other benefits which are not offered to Tenant or for which
Tenant is charged for directly but which are provided to another tenant or
occupant of the Building, without charge; charitable or political contributions;
costs incurred in connection with the acquisition of art work (provided that
costs to repair and maintain art work may be included in Operating Expenses);
the original construction costs of the Project and costs to remedy defects in
such original construction; costs reimbursed by insurance or by other tenants of
the Project (other than reimbursement as part of such other tenants' operating
expense payments); penalties, fines or interest incurred as a result of
Landlord's inability or failure to

 

9

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make payment of taxes or other obligations of Landlord when due; overhead and
profit increment paid to Landlord or to subsidiaries or affiliates of Landlord
for goods and/or services in or to the Project to the extent such payments
materially exceed the costs of such goods and/or services rendered by
unaffiliated third parties on a competitive basis; and any item that, if
included in Operating Expenses, would involve a double collection for such item
by Landlord. To the extent that Tenant uses more than Tenant's Pro Rata Share of
any item of Operating Expenses, Tenant shall pay Landlord for such excess in
addition to Tenant's obligation to pay Tenant's Pro Rata Share of Operating
Expenses (such excess, together with Tenant's Pro Rata Share, "Tenant's Adjusted
Share"); provided that the foregoing will not operate to provide double
collection for such item by Landlord.

 

9.2.        Tenant shall pay to Landlord on the first day of each calendar month
of the Term, as Additional Rent, (a) the Property Management Fee (as defined
below), (b) the Facilities Management Fee (as defined below) and (c) Landlord's
estimate of Tenant's Adjusted Share of Operating Expenses with respect to the
Building and the Project, as applicable, for such month.

 

(w)        The "Propertv Management Fee" shall equal three percent (3%) of Base
Rent due from Tenant.   Tenant shall pay the Property Management Fee in
accordance with Section 9.2 with respect to the entire Term, including any
extensions thereof or any holdover periods, regardless of whether Tenant is
obligated to pay Base Rent, Operating Expenses or any other Rent with respect to
any such period or portion thereof.

 

(x)        The "Facilities Management Fee" shall equal one-half of one  percent
(0.5%) of Base Rent and Operating Expenses due from Tenant.  Tenant shall pay
the Facilities Management Fee in accordance with Section 9.2 with respect to the
entire Term, including any extensions thereof or any holdover periods,
regardless of whether Tenant is obligated to pay Base Rent, Operating Expenses
or any other Rent with respect to any such period or portion thereof.

 

(y)        Within ninety (90) days after the conclusion of each calendar year
(or such longer period as may be reasonably required by Landlord), Landlord
shall furnish to Tenant a statement showing in reasonable detail the actual
Operating Expenses, Tenant's Adjusted Share of  Operating Expenses, and the cost
of providing utilities to the Premises for the previous calendar year
("Landlord's Statement").  Any additional sum due from Tenant to Landlord shall
be due and payable within thirty (30) days after receipt of an invoice
therefor.   If the amounts paid by Tenant pursuant to this Section exceed
Tenant's Adjusted Share of Operating Expenses for the previous calendar year,
then Landlord shall credit the difference against the Rent next due and owing
from Tenant; provided that, if the Lease term has expired, Landlord shall
accompany Landlord's Statement with payment for the amount of such difference.

 

(z)        Any amount due under this Section for any period that is less than a
full month shall be prorated for such fractional month on the basis of the
number of days in the month.

 

9.3.Landlord may, from time to time, modifY Landlord's calculation and
allocation procedures for Operating Expenses, so long as such modifications
produce Dollar results substantially consistent with Landlord's then-current
practice at the Project.  Landlord or an

 

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affiliate(s) of Landlord currently own other property(ies) adjacent to the
Project or its neighboring properties (collectively, "Neighboring
Properties").   In connection with Landlord performing services for the Project
pursuant to this Lease, similar services may be performed by the same vendor(s)
for Neighboring Properties.   In such a case, Landlord shall reasonably allocate
to each building and the Project the costs for such services based upon the
ratio that the square footage of the Building or the Project (as applicable)
bears to the total square footage of all of the Neighboring Properties or
buildings within the Neighboring Properties for which the services are
performed, unless the scope of the services performed for any building or
property (including the Building and the Project) is disproportionately more or
less than for others, in which case Landlord shall equitably allocate the costs
based on the scope of the services being performed for each building or property
(including the Building and the Project).

 

9.4.Landlord's annual statement shall be final and binding upon Tenant unless
Tenant, within sixty (60) days after Tenant's receipt thereof, shall contest any
item therein by giving written notice to Landlord, specifYing each item
contested and the reasons therefor; provided that Tenant shall in all events pay
the amount specified in Landlord's annual statement, pending the results of the
Independent Review and determination of the Accountant(s), as applicable and as
each such term is defined below. If, during such sixty (60)-day period, Tenant
reasonably and in good faith questions or contests the correctness of Landlord's
statement of Tenant's Adjusted Share of Operating Expenses, Landlord shall
provide Tenant with reasonable access to Landlord's books and records to the
extent relevant to determination of Operating Expenses, and such information as
Landlord reasonably determines to be responsive to Tenant's written
inquiries.  In the event that, after Tenant's review of such information,
Landlord and Tenant cannot agree upon the amount of Tenant's Adjusted Share of
Operating Expenses, then Tenant shall have the right to have an independent
public accounting firm hired by Tenant on an hourly basis and not on a
contingent-fee basis (at Tenant's sole cost and expense) and approved by
Landlord (which approval Landlord shall not umeasonably withhold or delay) audit
and review such of Landlord's books and records for the year in question as
directly relate to the determination of Operating Expenses for such year (the
"Independent Review"), but not books and records of entities other than
Landlord.  Landlord shall make such books and records available at the location
where Landlord maintains them in the ordinary course of its business. Landlord
need not provide copies of any books or records.  Tenant shall commence the
Independent Review within fifteen (15) days after the date Landlord has given
Tenant access to Landlord's books and records for the Independent
Review.  Tenant shall complete the Independent Review and notifY Landlord in
writing of Tenant's specific objections to Landlord's calculation of Operating
Expenses (including Tenant's accounting firm's written statement of the basis,
nature and amount of each proposed adjustment) no later than sixty (60) days
after Landlord has first given Tenant access to Landlord's books and records for
the Independent Review. Landlord shall review the results of any such
Independent Review. The parties shall endeavor to agree promptly and reasonably
upon Operating Expenses taking into account the results of such Independent
Review. If, as of the date that is sixty (60) days after Tenant has submitted
the Independent Review to Landlord, the parties have not agreed on the
appropriate adjustments to Operating Expenses, then the parties shall engage a
mutually agreeable independent third party accountant with at least ten (I0)
years' experience in commercial real estate accounting in the San Francisco Bay
area (the "Accountant"). If the parties cannot agree

 

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on the Accountant, each shall within ten (10) days after such impasse appoint an
Accountant (different from the accountant and accounting firm that conducted the
Independent Review) and, within ten (10) days after the appointment of both such
Accountants, those two Accountants shall select a third (which cannot be the
accountant and accounting firm that conducted the Independent Review).  If
either party fails to timely appoint an Accountant, then the Accountant the
other party appoints shall be the sole Accountant.  Within ten (10) days after
appointment of the Accountant(s), Landlord and Tenant shall each simultaneously
give the Accountants (with a copy to the other party) its determination of
Operating Expenses, with such supporting data or information as each submitting
party determines appropriate.  Within ten (10) days after such submissions, the
Accountants shall by majority vote select either Landlord's or Tenant's
determination of Operating Expenses.  The Accountants may not select or
designate any other determination of Operating Expenses.  The determination of
the Accountant(s) shall bind the parties.  If the parties agree or the
Accountant(s) determine that the Operating Expenses actually paid by Tenant for
the calendar year in question exceeded Tenant's obligations for such calendar
year, then Landlord shall, at Tenant's option, either (a) credit the excess to
the next succeeding installments of estimated Additional Rent or (b) pay the
excess to Tenant within thirty (30) days after delivery of such results.  If the
parties agree or the Accountant(s) determine that Tenant's payments of Operating
Expenses for such calendar year were less than Tenant's obligation for the
calendar year, then Tenant shall pay the deficiency to Landlord within thirty
(30) days after delivery of such results.  If the Independent Review reveals or
the Accountant(s) determine that the Operating Expenses billed to Tenant by
Landlord and paid by Tenant to Landlord for the applicable calendar year in
question exceeded by more than five percent (5%) what Tenant should have been
billed during such calendar year, then Landlord shall pay the reasonable cost of
the Independent Review. In all other cases, Tenant shall pay the cost of the
Independent Review. In all instances, Tenant shall pay the cost of the
Accountant(s).

 

9.5.Tenant shall not be responsible for Operating Expenses with respect to any
time period prior to the Term Commencement Date; provided, however, that
Landlord may annualize certain Operating Expenses incurred prior to the Term
Commencement Date over the course of the budgeted year during which the Term
Commencement Date occurs, and Tenant shall be responsible for the annualized
portion of such Operating Expenses corresponding to the number of days during
such year, commencing with the Term Commencement Date, for which Tenant is
otherwise liable for Operating Expenses pursuant to this Lease. 
Tenant's responsibility for Tenant's Adjusted Share of Operating Expenses shall
continue to the latest of (a) the date of termination of the Lease, (b) the date
Tenant has fully vacated the Premises and (c) if termination of the Lease is due
to a default by Tenant, the date of rental commencement of a replacement tenant.

 

9.6.Operating Expenses for the calendar year in which Tenant's obligation to
share therein commences and for the calendar year in which such obligation
ceases shall be prorated on a basis reasonably determined by Landlord.  Expenses
such as taxes, assessments and insurance premiums that are incurred for an
extended time period shall be prorated based upon the time periods to which they
apply so that the amounts attributed to the Premises relate in a reasonable
manner to the time period wherein Tenant has an obligation to share in Operating
Expenses.

 

12

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9.7.Within thirty (30) days after the end of each calendar month, Tenant shall
submit to Landlord an invoice, or, in the event an invoice is not available, an
itemized list, of all costs and expenses that (a) Tenant has incurred (either
internally or by employing third parties) during the prior month and (b) for
which Tenant reasonably believes it is entitled to reimbursements from Landlord
pursuant to the terms of this Lease or the Work Letter.

 

9.8.In the event that the Building is less than fully occupied during a calendar
year, Tenant acknowledges that Landlord may extrapolate Operating Expenses that
vary depending on the occupancy of the Building to equal Landlord's reasonable
estimate of what such Operating Expenses would have been had the Building been
ninety-five percent (95%) occupied during such calendar year; provided, however,
that Landlord shall not recover more than one hundred percent (100%) of
Operating Expenses.

 

10.         Taxes on Tenant's Property.

 

10.1.Tenant shall be solely responsible for the payment of any and all taxes
levied upon (a) personal property and trade fixtures located at the Premises and
(b) any gross or net receipts of or sales by Tenant, and shall pay the same
prior to delinquency.

 

10.2.If any such taxes on Tenant's personal property or trade fixtures are
levied against Landlord or Landlord's property or, if the assessed valuation of
the Building, the Property or the Project is increased by inclusion therein of a
value attributable to Tenant's personal property or trade fixtures, and if
Landlord, after written notice to Tenant, pays the taxes based upon any such
increase in the assessed value of the Building, the Property or the Project,
then Tenant shall, upon demand, repay to Landlord the taxes so paid by Landlord.

 

I 0.3.If any improvements in or alterations to the Premises, whether owned by
Landlord or Tenant and whether or not affixed to the real property so as to
become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which improvements conforming to
Landlord's building standards (the "Building Standard") in other spaces in the
Building are assessed, then the real property taxes and assessments levied
against Landlord or the Building, the Property or the Project by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Section I
0.2.  Any such excess assessed valuation due to improvements in or alterations
to space in the Project leased by other tenants at the Project shall not be
included in Operating Expenses. If the records of the applicable governmental
assessor's office are available and sufficiently detailed to serve as a basis
for determining whether such Tenant improvements or alterations are assessed at
a higher valuation than the Building Standard, then such records shall be
binding on both Landlord and Tenant.

 

11.          Security Deposit.

 

11.  1.Tenant shall deposit with Landlord on or before the Execution Date the
sum set forth in Section 2.6 (the "Security Deposit"), which sum shall be held
by Landlord as security for the faithful performance by Tenant of all of the
terms, covenants and conditions of this Lease to be kept and performed by Tenant
during the Term.  If Tenant Defaults (as defined below) with respect to any
provision of this Lease, including any provision relating to the payment of
Rent,

 

13

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then Landlord may (but shall not be required to) use, apply or retain all or any
part of the Security Deposit for the payment of any Rent or any other sum in
default, or to compensate Landlord for any other loss or damage that Landlord
may suffer by reason of Tenant's default.  If any portion of the Security
Deposit is so used or applied, then Tenant shall, within ten (10) days following
demand therefor, deposit cash with Landlord in an amount sufficient to restore
the Security Deposit to its original amount, and Tenant's failure to do so shall
be a material breach of this Lease.  The provisions of this Article shall
survive the expiration or earlier termination of this Lease.  TENANT HEREBY
WAIVES THE REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME.

 

11.2.      In the event of bankruptcy or other debtor-creditor proceedings
against Tenant, the Security Deposit shall be deemed to be applied first to the
payment of Rent and other charges due Landlord for all periods prior to the
filing of such proceedings.

 

11.3.     Landlord may deliver to any purchaser of Landlord's interest in the
Premises the funds deposited hereunder by Tenant, and thereupon Landlord shall
be discharged from any further liability with respect to such deposit.  This
provision shall also apply to any subsequent transfers.

 

11.4.      If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, then the Security Deposit, or any balance thereof,
shall be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest hereunder) within thirty (30) days after the expiration or
earlier termination of this Lease.

 

11.5.     If the Security Deposit shall be in cash, Landlord shall hold the
Security Deposit in an account at a banking organization selected by Landlord;
provided, however, that Landlord shall not be required to maintain a separate
account for the Security Deposit, but may intermingle it with other funds of
Landlord.  Landlord shall be entitled to all interest and/or dividends, if any,
accruing on the Security Deposit.   Landlord shall not be required to credit
Tenant with any interest for any period during which Landlord does not receive
interest on the Security Deposit.

 

11.6.     The Security Deposit may be in the form of cash, a letter of credit or
any other security instrument acceptable to Landlord in its sole discretion.
Tenant may at any time, except when Tenant is in Default (as defined below),
deliver a letter of credit (the "LIC Securitv") as the entire Security Deposit,
as follows:

 

(a)          If Tenant elects to deliver LIC Security, then Tenant shall provide
Landlord, and maintain in full force and effect throughout the Term and until
the date that is four (4) months after the then-current Term Expiration Date, a
letter of credit in the form of Exhibit E issued by an issuer reasonably
satisfactory to Landlord, in the amount of the Security Deposit, with an initial
term of at least one year. Landlord may require the LIC Security to be re-issued
by a different issuer at any time during the Term if Landlord reasonably
believes that the issuing bank of the LIC Security is or may soon become
insolvent; provided, however, Landlord shall return the existing LIC Security to
the existing issuer immediately upon receipt of the substitute LIC Security.  If
any issuer of the LIC Security shall become insolvent or placed into FDIC
receivership, then Tenant shall immediately deliver to Landlord (without the
requirement of

 

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notice from Landlord) substitute L!C Security issued by an issuer reasonably
satisfactory to Landlord, and otherwise conforming to the requirements set forth
in this Article. As used herein with respect to  the issuer of the LIC Security,
"insolvent" shall mean the determination of insolvency as made by such issuer's
primary bank regulator (i.e., the state bank supervisor for state chartered
banks; the OCC or OTS, respectively, for federally chartered banks or thrifts;
or the Federal Reserve for its member banks).  If, at the Term Expiration Date,
any Rent remains uncalculated or unpaid, then (i) Landlord shall with reasonable
diligence complete any necessary calculations, (ii) Tenant shall extend the
expiry date of such LIC Security from time to time as Landlord reasonably
requires and (iii) in such extended period, Landlord shall not unreasonably
refuse to consent to an appropriate reduction of the LIC Security.   Tenant
shall reimburse Landlord's legal costs (as reasonably estimated by Landlord's
counsel) in handling Landlord's acceptance of LIC Security or its replacement or
extension.

 

(b)          If Tenant delivers to Landlord satisfactory L!C Security in place
of the entire Security Deposit, Landlord shall remit to Tenant any cash Security
Deposit Landlord previously held.

 

(c)          Landlord  may  draw  upon  the  LIC
Security,  and  hold  and  apply  the proceeds in the same manner and for the
same purposes as the Security Deposit, if (i) an uncured Default (as defined
below) exists, (ii) as of the date forty-five (45) days before any LIC Security
expires (even if such scheduled expiry date is after the Term Expiration Date)
Tenant has not delivered to Landlord an amendment or replacement for such L!C
Security, reasonably satisfactory to Landlord, extending the expiry date to the
earlier of (I) six (6) months after the then-current Term Expiration Date or (2)
the date one year after the then-current expiry date of the L!C Security, (iii)
the L!C Security provides for automatic renewals, Landlord asks the issuer to
confirm the current LIC Security expiry date, and the issuer fails to do so
within ten (I 0) business days, (iv) Tenant fails to pay (when and as Landlord
reasonably requires) any bank charges for Landlord's transfer of the L!C
Security or (v) the issuer of the L!C Security ceases, or announces that it will
cease, to maintain an office in the city where Landlord may present drafts under
the LIC Security (and fails to permit drawing upon the L!C Security by overnight
courier or facsimile).  This Section does not limit any other provisions of this
Lease allowing Landlord to draw the LIC Security under specified circumstances.

 

(d)          Tenant shall  not  seek  to  enjoin,  prevent, or  otherwise
interfere with Landlord's draw under L!C Security, even if it violates this
Lease. Tenant acknowledges that the only effect of a wrongful draw would be to
substitute a cash Security Deposit for LIC Security, causing Tenant no legally
recognizable damage.  Landlord shall hold the proceeds of any draw in the same
manner and for the same purposes as a cash Security Deposit.   In the event of a
wrongful draw, the parties shall cooperate to allow Tenant to post replacement
LIC Security simultaneously with the return to Tenant of the wrongfully drawn
sums, and Landlord shall upon request confirm in writing to the issuer of the
LIC Security that Landlord's draw was erroneous.

 

(e)          If  Landlord transfers  its  interest in the Premises, then Tenant
shall at Tenant's expense, within five (5) business days after receiving a
request from Landlord, deliver (and, if the issuer requires, Landlord shall
consent to) an amendment to the LIC Security naming Landlord's grantee as
substitute beneficiary.  If the required Security Deposit changes while LIC

 

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Security is in force, then Tenant shall deliver (and, if the issuer requires,
Landlord shall consent to) a corresponding amendment to the LIC Security.

 

12.          Use.

 

12.1.Tenant shall use  the  Premises for  the  Permitted  Use, and
shall  not  use  the Premises, or permit or suffer the Premises to be used, for
any other purpose without Landlord's prior written consent, which consent
Landlord may withhold in its sole and absolute discretion. Tenant shall, subject
to Landlord's reasonable security requirements, Force Majeure, casualty and de
minimus interruptions, have access to the Premises twenty-four (24) hours per
day, seven (7) days per week.

 

12.2.Tenant shall not use or occupy the Premises in violation of Applicable
Laws; zoning ordinances; or the certificate of occupancy issued for the Building
or the Project, and shall, upon five (5) days' written notice from Landlord,
discontinue any use of the Premises that is declared or claimed by any
Governmental Authority having jurisdiction to be a violation of any of the
above, or that in Landlord's reasonable opinion violates any of the
above.  Tenant shall comply with any direction of any Governmental Authority
having jurisdiction that shall, by reason of the nature of Tenant's use or
occupancy of the Premises, impose any duty upon Tenant or Landlord with respect
to the Premises or with respect to the use or occupation thereof, and shall
indemnifY, save, defend (at Landlord's option and with counsel reasonably
acceptable to Landlord) and hold Landlord and its affiliates, employees, agents
and contractors; and any lender, mortgagee, ground lessor or beneficiary (each,
a "Lender" and, collectively with Landlord and its affiliates, employees, agents
and contractors, the "Landlord Indemnitees") harmless from and against any and
all demands, claims, liabilities, losses, costs, expenses, actions, causes of
action, damages, suits or judgments, and all reasonable expenses (including
reasonable attorneys' fees, charges and disbursements, regardless of whether the
applicable demand, claim, action, cause of action or suit is voluntarily
withdrawn or dismissed) incurred in investigating or resisting the same
(collectively, "Claims") of any kind or nature that arise before, during or
after the Term as a result of Tenant's breach of this Section.

 

12.3.Tenant shall not do or pennit to be done anything that will invalidate or
increase the cost of any fire, environmental, extended coverage or any other
insurance policy covering the Building or the Project, and shall comply with all
rules, orders, regulations and requirements of the insurers of the Building and
the Project, and Tenant shall promptly, upon demand, reimburse Landlord for any
additional premium charged for such policy by reason of Tenant's failure to
comply with the provisions of this Article.

 

12.4.Tenant shall keep all doors opening onto public corridors closed, except
when in use for ingress and egress.

 

12.5.No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by Tenant, nor shall any changes be made to existing locks or
the mechanisms thereof without Landlord's prior written consent.  Tenant shall,
upon termination of this Lease, return to Landlord all keys to offices and
restrooms either furnished to or otherwise procured by Tenant. In the event any
key so furnished to Tenant is lost, Tenant shall pay to Landlord the cost of
replacing the same or of changing the lock or locks opened by such lost key if
Landlord shall

 

16

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deem it necessary to make such change.  Notwithstanding the foregoing, Landlord
and Tenant acknowledge and agree that Tenant may, at Tenant's cost and expense,
install its own integrated security system in the Premises (the "Tenant
Security System"); provided, however, that Tenant shall obtain Landlord's prior
written consent to such Tenant Security System and shall coordinate the
installation and operation of any the Tenant Security System with Landlord to
assure that the Tenant Security System (a) can accommodate multiple tenants
within the Building and (b) integrates and does not interfere with (i) any
Landlord security system in place as of the Term Commencement Date, for which
Landlord makes no warranties about the functionality or integration of any such
Landlord security system, and (ii) the Building's systems and equipment. Tenant
shall be solely responsible, at Tenant's sole cost and expense, for monitoring
and operating Tenant's Security System.  Tenant may configure the Tenant
Security System to control access to a full floor leased by Tenant such that
Tenant has exclusive (as between Tenant and other occupants of the Building)
access to such full floor; provided that Landlord will at all times (subject to
the terms and conditions of this Lease) be permitted access to the Premises and
will be provided with a card key or other method required to achieve such
access.

 

12.6.No awnings or other projections shall be attached to any outside wall of
the Building.  No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Premises other
than Landlord's standard window coverings.  Neither the interior nor exterior of
any windows shall be coated or otherwise sunscreened without Landlord's prior
written consent, nor shall any bottles, parcels or other articles be placed on
the windowsills or items attached to windows that are visible from outside the
Premises. Notwithstanding anything herein to the contrary, the solar
installations (i.e., tint or film) existing on the windows as of the Execution
Date will be permitted to remain in place
during the Term, and Landlord will not umeasonably withhold its consent to Tenant's
installation, at Tenant's sole cost, of additional substantially similar solar
installations as determined to be desirable by Tenant to insulate the North- and
South-facing windows of the Premises.  No equipment, furniture or other items of
personal property shall be placed on any exterior balcony without Landlord's
prior written consent.

 

12.7.Except as set forth in Section 12.7(a), no sign, advertisement or notice
("Signage") shall be exhibited, painted or affixed by Tenant on any part of the
Premises or the Building without Landlord's prior written consent.  Signage
shall conform to Landlord's design criteria. For any Signage, Tenant shall, at
Tenant's own cost and expense, (a) acquire all permits for such Signage in
compliance with Applicable Laws and (b) design, fabricate, install and maintain
such Signage in a first-class condition.  Tenant shall be responsible for
reimbursing
Landlord for costs incurred by Landlord in removing any of Tenant's Signage upon
the expiration or earlier termination of the Lease.  Interior signs on entry
doors to the Premises and the directory tablet shall be inscribed, painted or
affixed for Tenant by Landlord at Tenant's sole cost and expense, and shall be
of a size, color and type and be located in a place acceptable to Landlord.  The
directory tablet shall be provided exclusively for the display of the name and
location of tenants only.  Tenant shall not place anything on the exterior of
the corridor walls or corridor doors other than Landlord's standard
lettering.  Tenant shall have the right to Building standard lobby,
suite identification signage and elevator lobby signage on any floor fully
occupied by Tenant.

 

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(a)       Subject to the terms, conditions and provisions of this Section
12.7(a), Tenant shall be entitled to maintain, at its sole cost and expense, its
one (1) existing exterior Building Sign and its listing on the shared monument
sign existing as of the Execution Date (collectively, the "Existing
Signage").  In the event Tenant wishes to change the Existing Signage at any
time, the graphics, materials, size, color, design, lettering, lighting (if
any), specifications and exact location of the replacement Signage
(collectively, the "Signage Specifications") shall be subject to the prior
written approval of Landlord, which approval shall not be unreasonably withheld.
In addition, the Signage and all Signage Specifications therefor shall be
subject to Tenant's receipt of all required permits and approvals from
Governmental Authorities, and shall be subject to any CC&Rs (as defined
below).  In the event Tenant does not receive the necessary permits and
approvals for the Signage, Tenant's and Landlord's rights and obligations under
the remaining provisions of this Lease shall not be affected. The cost of
installation of all of Tenant's Signage, as well as all costs of design and
construction of such Signage and all other costs associated with such Signage,
including permits, maintenance and repair, shall be the sole responsibility of
Tenant.  Should the Signage require maintenance or repairs, as determined in
Landlord's reasonable judgment, Landlord shall have the right to provide written
notice thereof to Tenant and Tenant shall cause such repairs and/or maintenance
to be performed within thirty (30) days after receipt of such notice from
Landlord at Tenant's sole cost and expense.  Should Tenant fail to perform such
maintenance and repairs within the period described in the immediately preceding
sentence, Landlord shall have the right to cause such work to be performed and
to charge Tenant, as Additional Rent, for the cost of such work.  Upon the
expiration or earlier termination of this Lease, Tenant shall, at Tenant's sole
cost and expense, cause all Signage installed by or on behalf of Tenant to be
removed from the Building's exterior and shall cause the Building to be restored
to the condition existing prior to the placement of such Signage.  If Tenant
fails to restore the Building as provided in the immediately preceding sentence
on or before the expiration or earlier termination of this Lease, then Landlord
may perform such work, and all costs and expenses incurred by Landlord in so
performing such work shall be reimbursed by Tenant to Landlord within ten (10)
days after Tenant's receipt of invoice therefor.  The immediately preceding
sentence shall survive the expiration or earlier termination of this Lease.
Should the name of the original Tenant change, then the Existing Signage may be
modified at Tenant's sole cost and expense to reflect the new name, but only if
the new name does not (i) relate to an entity that is of a character or
reputation, or is associated with a political orientation or a faction that is
inconsistent with the quality of the Building or would otherwise reasonably
offend an institutional landlord of a project comparable to the Building, taking
into consideration the level and visibility of such Existing Signage, or (ii)
cause Landlord to be in default under any lease or license with another tenant
of the Project.

 

12.8.Tenant may only place equipment within the Premises with floor loading
consistent with the Building's structural design unless Tenant obtains
Landlord's prior written approval.  Tenant may place such equipment only in a
location designed to carry the weight of such equipment.

 

12.9.Tenant shall cause any equipment or machinery to be installed in the
Premises so as to reasonably prevent sounds or vibrations therefrom from
extending into the Common Area or other offices in the Project.

 

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12.10.Tenant shall not (a) do or permit anything to be done in or about the
Premises that shall in any way obstruct or interfere with the rights of other
tenants or occupants of the Project, or injure or annoy them, (b) use or allow
the Premises to be used for immoral, unlawful or objectionable  purposes, (c)
cause, maintain or permit any nuisance or waste in, on or about the Project or
(d) take any other action that would in Landlord's  reasonable determination  in
any manner adversely affect other tenants' quiet use and enjoyment of their
space or adversely impact
their  ability  to  conduct  business  in  a  professional  and  suitable  work  environment.
Notwithstanding   anything  in  this  Lease  to  the  contrary, Tenant  may
not  install  any security systems (including cameras) outside the Premises or
that record sounds or images outside the Premises without Landlord's  prior
written consent, which Landlord may withhold in its sole and absolute
discretion.

 

12.11.Notwithstanding any other provision herein to the contrary, Tenant shall
be responsible for all liabilities, costs and expenses arising out of or in
connection with the compliance of the Premises with the Americans with
Disabilities Act, 42 U.S.C. § 12101, et seq., and any state and local
accessibility laws, codes, ordinances and rules (collectively, and together with
regulations promulgated pursuant thereto, the "ADA"), and Tenant shall
indemnify, save, defend (at Landlord's option and with counsel reasonably
acceptable to Landlord) and hold the Landlord Indemnitees harmless from and
against Claims arising out of any such failure of the Premises to comply with
the ADA.  The Premises have not undergone inspection by a Certified Access
Specialist (as defined in California Civil Code Section 55.52).  For the
avoidance of doubt, "Lenders" shall also include historic tax credit investors
and new market tax credit investors.  The provisions of this Section shall
survive the expiration or earlier termination of this Lease.  Landlord will be
responsible (at Landlord's expense and not as an Operating Expense) for causing
the Common Areas to comply with the ADA in effect and applicable to the Common
Areas as of the Execution Date.  Any cost incurred by Landlord to cause the
Common Areas to continue to comply with the ADA, including due to changes to the
Common Areas or the ADA after the Execution Date, may be included in Operating
Expenses to the extent permitted by A rticle 9 above.

 

13.          Rules and Regulations. CC&Rs. Parking Facilities and Common Area.

 

13.1.Tenant shall have the non-exclusive right, in common with others, to use
the Common Area in conjunction with Tenant's use of the Premises for the
Permitted Use, and such use of the Common Area and Tenant's use of the Premises
shall be subject to the rules and regulations adopted by Landlord and attached
hereto as Exhibit F, together with such other reasonable and nondiscriminatory
rules and regulations as are hereafter promulgated by Landlord in its sole and
absolute discretion (the "Rules and Regulations"), so long as the Rules and
Regulations do not materially increase Tenant's obligations or materially
decrease Tenant's rights under this Lease.  Tenant shall and shall ensure that
its contractors, subcontractors,
employees,  subtenants  and  invitees  faithfully  observe  and  comply  with  the  Rules  and
Regulations.  Landlord shall not be responsible to Tenant for the violation or
non-performance by any other tenant or any agent, employee or invitee thereof of
any of the Rules and Regulations.

 

13.2.This Lease is subject to any recorded covenants, conditions or restrictions
on the Project or Property, as the same may be amended, amended and restated,
supplemented or

 

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otherwise modified from time to time (the "CC&Rs"); provided that any such
amendments, restatements, supplements or modifications do not materially modify
Tenant's  rights or obligations hereunder.

 

13.3.Tenant shall have a non-exclusive, irrevocable license to use three (3)
parking spaces for every one thousand (I,000)  square feet of Rentable Area
within the Premises then leased by Tenant within the parking facilities serving
the Project in common on an unreserved basis with other tenants of the Project
during the Term at no additional cost.

 

13.4.       Tenant agrees not to unreasonably overburden the parking facilities
and agrees to cooperate with Landlord and other tenants in the use of the
parking facilities. Landlord reserves the right to determine that parking
facilities are becoming overcrowded and to limit Tenant's use thereof.  Upon
such determination, Landlord may reasonably allocate parking spaces among Tenant
and other tenants of the Building or the Project. Nothing in this Section,
however, is intended to create an affirmative duty on Landlord's part to monitor
parking.

 

13.5.Subject to the terms of this Lease including the Rules and Regulations and
the rights of other tenants of the Project, Tenant shall have the non-exclusive
right to access the freight loading dock, at no additional cost.

 

13.6.Subject to providing reasonable prior notice to Landlord or its Property
Manager and compliance with reasonable scheduling and security requirements
established by Landlord, Tenant will have the right to access the mechanical
room located within Suite 420/450 of the Building for the purpose of viewing the
Building system controls affecting the Premises, and will be given "read only"
access to the Building management system for this purpose.  For clarity, Tenant
will not be permitted to adjust the Building management system, and any
necessary adjustments will be made by Landlord.

 

14.         Project Control by Landlord.

 

14.1.Landlord reserves full control over the Building and the Project to the
extent not inconsistent with Tenant's enjoyment of the Premises as provided by
this Lease.  This reservation includes Landlord's right to subdivide the
Project; convert the Building to condominium units; change the size of the
Project by selling all or a portion of the Project or adding real property and
any improvements thereon to the Project; grant easements and licenses to third
parties; maintain or establish ownership of the Building separate from fee title
to the Property; make additions to or reconstruct portions of the Building and
the Project; install, use, maintain, repair, replace and relocate for service to
the Premises and other parts of the Building or the Project pipes, ducts,
conduits, wires and appurtenant fixtures, wherever located in the Premises, the
Building or elsewhere at the Project; and alter or relocate any other Common
Area or facility, including private drives, lobbies, entrances and landscaping;
provided, however, that such rights shall be exercised in a way that does not
materially adversely affect Tenant's beneficial use and occupancy of the
Premises, including the Permitted Use and Tenant's access to the
Premises.  Tenant acknowledges that Landlord specifically reserves the right to
allow the exclusive use of corridors and restroom facilities located on specific
floors to one or more tenants occupying such floors; provided, however, that
Tenant shall not be deprived of the use of the corridors

 

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reasonably required to serve the Premises or of restroom facilities serving the
floor upon which the Premises are located.

 

14.2.Possession of areas of the Premises necessary for utilities, services,
safety and operation of the Building is reserved to Landlord.

 

14.3.Tenant shall, at Landlord's request, promptly execute such further
documents as may be reasonably appropriate to assist Landlord in the performance
of its obligations hereunder; provided that Tenant need not execute any document
that creates additional liability for Tenant or that deprives Tenant of the
quiet enjoyment and use of the Premises as provided for in this Lease.

 

14.4.        Landlord may, at any and all reasonable times during non-business
hours (or during business hours, if (a) with respect to Subsections 14.4(u)
through 14.4(y), Tenant so requests, and (b) with respect to Subsection 14.4(z),
if Landlord so requests), and upon twenty­ four (24) hours'  prior notice (which
may be oral or by email to the office manager or other Tenant-designated
individual at the Premises; but provided that no time restrictions shall apply
or advance notice be required if an emergency necessitates immediate entry),
enter the Premises to (u) inspect the same and to determine whether Tenant is in
compliance with its obligations hereunder, (v) supply any service Landlord is
required to provide hereunder, (w) alter, improve or repair any portion of the
Building other than the Premises for which access to the Premises is reasonably
necessary, (x) post notices of nonresponsibility, (y) access the telephone
equipment, electrical substation and fire risers and (z) show the Premises to
prospective tenants during the final year of the Term and current and
prospective purchasers and lenders at any time.  In connection with any such
alteration, improvement or repair as described in Subsection 14.4(w), Landlord
may erect in the Premises or elsewhere in the Project scaffolding and other
structures reasonably required for the alteration, improvement or repair work to
be performed.  In no event shall Tenant's Rent abate as a result of Landlord's
activities pursuant to this Section; provided, however, that all such activities
shall be conducted in a commercially reasonable manner so as not to cause
unreasonable interference with Tenant's use and occupancy to the extent
reasonably possible.   Landlord shall at all times retain a key with which to
unlock all of the doors in the Premises.   If an emergency necessitates
immediate access to the Premises, Landlord may use whatever force is necessary
to enter the Premises, and any such entry to the Premises shall not constitute a
forcible or unlawful entry to the Premises, a detainer of the Premises, or an
eviction of Tenant from the Premises or any portion thereof.

 

14.5.Landlord and Tenant acknowledge that there is a mechanical room within the
Premises that contains equipment serving the third (3'd) and fourth (4'h) floors
of the Building (the "Mechanical Room").  The Mechanical Room is identified on
Exhibit A attached hereto.  Landlord and its contractors, employees
and agents shall at all times have access to the Mechanical Room for the purpose
of repairing and maintaining equipment in the Mechanical
Room and otherwise as required in the exercise of good property
management practices; provided that Landlord will endeavor to provide Tenant
with reasonable prior notice (which notice may be oral) of any scheduled access
to the Mechanical Room (with no such notice required for emergency entries). 
All costs to repair, maintain and replace (if required) the Mechanical Room and
the equipment located therein will be equitably allocated among the tenants
whose premises are served by the Mechanical Room, based on the proportionate
usage by

 

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each tenant of the equipment located within the Mechanical Room, as determined
by Landlord.  All such amounts will be paid by Tenant to Landlord as Additional
Rent within thirty (30) days after invoicing therefor.  In no event will Tenant
make any alterations or perform any work within the Mechanical Room, and such
Mechanical Room is reserved to Landlord for its exclusive use and access.

 

15.          Quiet Enjoyment.  Landlord covenants that Tenant, upon paying the
Rent and performing its obligations contained in this Lease, may peacefully and
quietly have, hold and enjoy the Premises, free from any claim by Landlord or
persons claiming under Landlord, but subject to all of the terms and provisions
hereof, provisions of Applicable Laws and rights of record to which this Lease
is or may become subordinate.  This covenant is in lieu of any other quiet
enjoyment covenant, either express or implied.

 

16.          Utilities and Services.

 

16.1.Tenant shall pay for all water (including the cost to service, repair and
replace reverse osmosis, de-ionized and other treated water), gas, heat, light,
power, telephone, internet service, cable television, other telecommunications
and other utilities supplied to the Premises, together with any fees, surcharges
and taxes thereon.  If any such utility is not separately metered to Tenant,
Tenant shall pay Tenant's Adjusted Share of all charges of such utility jointly
metered with other premises as Additional Rent or, in the alternative, Landlord
may, at its option, monitor the usage of such utilities by Tenant and in the
event Landlord determines that Tenant's use is over-standard, charge Tenant with
the cost of purchasing, installing and monitoring such metering equipment, which
cost shall be paid by Tenant as Additional Rent.  Landlord may base its bills
for utilities on reasonable estimates; provided that Landlord adjusts such
billings promptly thereafter or as part of the next Landlord's Statement to
reflect the actual cost of providing utilities to the Premises.  To the extent
that Tenant uses more than Tenant's Pro Rata Share of any utilities, then Tenant
shall pay Landlord for Tenant's Adjusted Share of such utilities to reflect such
excess.  In the event that the Building or Project is less than fully occupied
during a calendar year, Tenant acknowledges that Landlord may extrapolate
utility usage that varies depending on the occupancy of the Building or Project
(as applicable) to equal Landlord's reasonable estimate of what such utility
usage would have been had the Building or Project, as applicable, been
ninety-five percent (95%) occupied during such calendar year; provided, however,
that Landlord shall not recover more than one hundred percent (100%) of the cost
of such utilities.

 

16.2.Landlord shall not be liable for, nor shall any eviction of Tenant result
from, the failure to furnish any utility or service, whether or not such failure
is caused by accidents; breakage; casualties (to the extent not caused by the
party claiming Force Majeure); Severe Weather Conditions (as defined below);
physical natural disasters (but excluding weather conditions that are not Severe
Weather Conditions); strikes, lockouts or other labor disturbances or labor
disputes (other than labor disturbances and labor disputes resulting solely from
the acts or omissions of the party claiming Force Majeure); acts of terrorism;
riots or civil disturbances; wars or insurrections; shortages
of materials (which shortages are not unique to the party claiming Force
Majeure); government regulations, moratoria or other governmental actions,
inactions or delays; failures by third parties to deliver gas, oil or another
suitable fuel supply, or

 

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inability of the party claiming Force Majeure, by exercise of reasonable
diligence, to obtain gas, oil or another suitable fuel; or other causes beyond
the reasonable control of the party claiming that Force Majeure has occurred
(collectively, "Force Majeure").  In the event of such failure, Tenant shall not
be entitled to termination of this Lease or any abatement or reduction of Rent,
nor shall Tenant be relieved from the operation of any covenant or agreement of
this Lease, except as set forth below.  "Severe Weather Conditions" means
weather conditions that are materially worse than those that reasonably would be
anticipated for the Property at the applicable time based on historic
meteorological records.  Notwithstanding anything to the contrary in this Lease,
if, for more than five (5) consecutive business days following written notice to
Landlord and as a direct result of Landlord's gross negligence or willful
misconduct (and except to the extent that such failure is caused by any other
factor, including any action or inaction of a Tenant Party (as defined below)),
the provision of utilities to all or a material portion of the Premises that
Landlord must provide pursuant to this Lease is interrupted (a "Material
Services Failure"), then Tenant's Base Rent (or, to the extent that less than
all of the Premises are affected, a proportionate amount (based on the Rentable
Area of the Premises that is rendered unusable) of Base Rent) shall thereafter
be abated until the Premises are again usable by Tenant for the Permitted Use;
provided, however, that, if Landlord is diligently pursuing the restoration of
such utilities and Landlord provides substitute utilities reasonably suitable
for Tenant's continued use and occupancy of the Premises for the Permitted Use
(e.g., supplying potable water or portable air conditioning  equipment), then
Base Rent shall not be abated. During any Material Services Failure, Tenant will
cooperate with Landlord to arrange for the provision of any interrupted utility
services on an interim basis via temporary measures until final corrective
measures can be accomplished, and Tenant will permit Landlord the necessary
access to the Premises to remedy such Material Service Failure.  In the event of
any interruption of utilities that Landlord must provide pursuant to this Lease,
regardless of the cause, Landlord shall diligently pursue the restoration of
such other utilities. Notwithstanding anything in this Lease to the contrary,
but subject to Article 24 (which shall govern in the event of a casualty), the
provisions of this Section shall be Tenant's sole recourse and remedy in the
event of an interruption of utilities to the Premises.

 

16.3.Tenant shall pay for, prior to delinquency of payment therefor, any
utilities and services that may be furnished to the Premises during or, if
Tenant occupies the Premises after the expiration or earlier termination of the
Term, after the Term, beyond those utilities provided by Landlord, including
telephone, internet service, cable television and other telecommunications,
together with any fees, surcharges and taxes thereon. Upon Landlord's demand,
utilities and services provided to the Premises that are separately metered
shall be paid by Tenant directly to the supplier of such utilities or services.

 

16.4.Tenant shall not, without Landlord's prior written consent, use any device
in the Premises (including data processing machines) that will in any way (a)
increase the amount of ventilation, air exchange, gas, steam, electricity or
water required or consumed in the Premises based upon Tenant's Pro Rata Share of
the Building or Project (as applicable) beyond the existing capacity of the
Building or the Project usually furnished or supplied for the Permitted Use or
(b) exceed Tenant's Pro Rata Share of the Building's or Project's (as
applicable) capacity to provide such utilities or services.

 

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16.5.If Tenant shall require utilities or services in excess of those usually
furnished or supplied for tenants in similar spaces in the Building or the
Project by reason of Tenant's equipment or extended hours of business
operations, then Tenant shall first procure Landlord's consent for the use
thereof, which consent Landlord may condition upon the availability of such
excess utilities or services, and Tenant shall pay as Additional Rent an amount
equal to the cost of providing such excess utilities and services.

 

16.6.Landlord shall provide water in Common Area for lavatory and landscaping
purposes only, which water shall be from the local municipal or similar source; provided,
however, that if Landlord determines that Tenant requires, uses or
consumes water provided to the Common Area for any purpose other than ordinary
lavatory purposes, Landlord may install a water meter ("Tenant Water Meter") and
thereby measure Tenant's water consumption for all purposes. Tenant shall pay
Landlord for the costs of any Tenant Water Meter and the installation and
maintenance thereof during the Term.  If Landlord installs a Tenant Water Meter,
Tenant shall pay for water consumed, as shown on such meter, as and when bills
are rendered. If Tenant fails to timely make such payments, Landlord may pay
such charges and collect the same from Tenant.    Any such costs or
expenses incurred or payments made by Landlord for any of the
reasons or purposes stated in this Section shall be deemed to be
Additional Rent payable by Tenant and collectible by Landlord as such.

 

16.7.Landlord reserves the right to stop service of the elevator, plumbing,
ventilation, air conditioning and utility systems, when Landlord deems necessary
or desirable, due to accident, emergency or the need to make repairs,
alterations or improvements, until such repairs, alterations or improvements
shall have been completed, and Landlord shall further have no responsibility or
liability for failure to supply elevator facilities, plumbing, ventilation, air
conditioning or utility service when prevented from doing so by Force Majeure
or, to the extent permitted by Applicable Laws, Landlord's negligence.  Without
limiting the foregoing, it is expressly understood and agreed that any covenants
on Landlord's part to furnish any service pursuant to any of the terms,
covenants, conditions, provisions or agreements of this Lease, or to perform any
act or thing for the benefit of Tenant, shall not be deemed breached if Landlord
is unable to furnish or perform the same by virtue of Force Majeure.

 

16.8.There are two (2) generators currently servicing the Premises.  The "North
Building Generator" serves portions of the Premises, excluding the Intrexon
Space, and is also used by other occupants of the Building.  The "South Building
Generator” serves only those portions of the Premises identified as the Intrexon
Space and is not shared with other occupants of the Building.  The North
Building Generator and South Building Generator may be collectively referred to
herein as the "Generators." From and after the Term Commencement Date, Landlord
will maintain the North Building Generator.  Tenant shall be entitled to use up
to 100 kW of electricity produced by the Generator during power outages.  In the
event Tenant determines that it requires additional generator capacity, Landlord
will either (a) if there is excess capacity in the North Building Generator,
which excess capacity is not needed for Common Areas or existing or future
tenants or occupants of the Project (as determined by Landlord in its sole
discretion), then Landlord may increase the above-referenced 100 kW capacity
allocation to accommodate Tenant's increased requirement, or (b) identify a
location at the Project where Tenant can install a separate back-up generator,
which separate generator will be subject to the

 

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terms and conditions of this Lease, including this Section and Article 17, and
all obligations and costs to purchase, install, maintain and repair or replace
any additional generator will be borne by Tenant.  The cost of maintaining,
repairing and replacing the North Building Generator shall be equitably
allocated by Landlord among the tenants entitled to use the North Building
Generator. Landlord will have the right to audit the use of the North Building
Generator to confirm that Tenant is not using more than its allocated portion of
the capacity of the North Building Generator.  In the event it is found that
Tenant is using more than its allocated portion of the capacity of the North
Building Generator, Tenant will immediately reduce its use so that it does not
exceed 100 kW and will pay the cost of Landlord's audit.  Tenant shall maintain,
repair and (if necessary) replace the South Building Generator at its sole cost
and expense. Tenant will not install any underground fuel storage tanks and any
Hazardous Materials used in connection with the South Building Generator will be
Tenant's responsibility and subject to the terms and conditions of this Lease,
including all surrender obligations.  Landlord expressly disclaims any
warranties with regard to the Generators or the installation or condition
thereof, including any warranty of merchantability or fitness for a particular
purpose. Landlord shall maintain the North Building Generator in good working
condition, but shall not be liable for any failure to make any repairs or to
perform any maintenance that is an obligation of Landlord unless such failure
shall persist for an unreasonable time after Tenant provides Landlord with
written notice of the need for such repairs or maintenance.  The provisions of
Section 16.2 of this Lease shall apply to the Generators. The terms and
conditions of this Lease, including Tenant's insurance and indemnity
obligations, shall apply to such Generators which shall be a part of the
Premises for such purposes.   In no event shall Landlord have any liability to
Tenant in connection with the Generators or their failure to operate in an
emergency situation.  Tenant shall surrender (but not remove) the South Building
Generator in good working order upon the expiration or earlier termination of
this Lease, fully decommissioned and free of any residual Hazardous Materials.

 

16.9.For the Premises, Landlord shall maintain and operate those HVAC systems
which serve other tenants of the Building and also serve the Premises and are
used for the Permitted Use and exist as of the Execution Date only ("Base
HVAC").  For those HVAC systems which exclusively serve the Premises (e.g., the
HVAC systems serving the Intrexon Space) (collectively, the "Dedicated HVAC"),
Tenant shall have sole responsibility to repair,
maintain and replace such Dedicated HVAC, as necessary,
and Landlord shall have no obligations with respect thereto (except as provided
below). Tenant shall, at its sole cost and expense, maintain and keep the
Dedicated HVAC in good condition and repair and shall otherwise be solely
responsible for any repair, replacement and maintenance costs with respect to
the Dedicated HVAC. Tenant shall keep in full force and effect during the Term
(and occupancy by Tenant, if any, after termination of this Lease) a
preventative maintenance contract for quarterly, semi-annual, and annual HVAC
inspections and maintenance of the Dedicated HVAC using a qualified, licensed,
bonded service provider reasonably approved by Landlord.  If requested in
writing by Landlord, Tenant shall provide to Landlord copies of the Dedicated
HVAC maintenance contracts and the Dedicated HVAC maintenance reports on a
quarterly basis.  In the event Landlord so elects, Landlord may take over
Tenant's responsibilities with respect to the Dedicated HVAC, in which case all
costs incurred to repair, maintain and replace (as required) such Dedicated HVAC
will be paid by Tenant to Landlord as Additional Rent within thirty (30) days
after invoicing therefor. Notwithstanding anything to the contrary in this

 

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Section, Landlord shall have no liability, and Tenant shall have no right or
remedy, on account of any interruption or impairment in HVAC services; provided
that as to the Base HVAC only, Landlord diligently endeavors to cure any such
interruption or impairment.

 

16.10.For any utilities serving the Premises for which Tenant is billed directly
by such utility provider, Tenant agrees to furnish to Landlord (a) any invoices
or statements for such utilities within thirty (30) days after Tenant's  receipt
thereof, (b) within thirty (30) days after Landlord's request, any other utility
usage information reasonably requested by Landlord, and (c) within thirty (30)
days after each calendar year during the Term, authorization to allow Landlord
to access Tenant's usage information necessary for Landlord to complete an
ENERGY STAR® Statement of Performance (or similar comprehensive utility usage
report (e.g., related to Labs 21), if requested by Landlord) and any other
information reasonably requested by Landlord for the immediately preceding year;
and Tenant shall comply with any other energy usage or consumption requirements
required by Applicable Laws.  Tenant shall retain records of utility usage at
the Premises, including invoices and statements from the utility provider, for
at least sixty (60) months, or such other period of time as may be requested by
Landlord.  Tenant acknowledges that any utility information for the Premises,
the Building and the Project may be shared with third parties, including
Landlord's consultants and Governmental Authorities. In the event that Tenant
fails to comply with this Section, Tenant hereby authorizes Landlord to collect
utility usage information directly from the applicable utility providers.  In
addition to the foregoing, Tenant shall comply with all Applicable Laws related
to the disclosure and tracking of energy consumption at the Premises.  The
provisions of this Section shall survive the expiration or earlier termination
of this Lease.

 

16.11.     Tenant will perform all janitorial and trash removal service at the
Premises using a vendor reasonably approved by Landlord, at Tenant's sole cost
and expense.   Tenant will ensure that the Premises are kept and maintained in a
manner consistent with a Class A lab and office building at all times.

 

17.         Alterations.

 

17.1.Tenant shall make no alterations, additions or improvements other than the
Tenant Improvements in or to the Premises or engage in any construction,
demolition, reconstruction, renovation or other work (whether major or minor) of
any kind in, at or serving the Premises ("Alterations") without
Landlord's  prior written approval, which approval Landlord shall not
unreasonably withhold; provided, however, that, in the event any proposed
Alteration affects (a) any structural portions of the Building, including
exterior walls, the roof, the foundation or slab systems (including barriers and
subslab systems) or the core of the Building, or (b) the exterior of the
Building, then Landlord may withhold its approval in its sole and absolute
discretion. Tenant shall, in making any Alterations, use only those architects,
contractors, suppliers and mechanics of which Landlord has given prior written
approval, which approval shall be in Landlord's reasonable discretion; provided
that Landlord may require that any architects, contractors, suppliers and
mechanics who will perform services at the Building satisfy Landlord's standard
qualification requirements for contractors.  In seeking Landlord's approval,
Tenant shall provide Landlord, at least fifteen (15) business days in advance of
any proposed construction, with plans, specifications,
bid  proposals,  certified  stamped  engineering  drawings  and  calculations  by

 

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Tenant's  engineer of record or architect of record (including connections
to  the Building's structural system, modifications to the Building's envelope,
non-structural penetrations in slabs or walls, and modifications or tie-ins to
life safety systems), work contracts, requests for laydown areas and such other
information concerning the nature and cost of the Alterations as Landlord may
reasonably request.  In no event shall Tenant use or Landlord be required to
approve any architects, consultants, contractors, subcontractors or material
suppliers that Landlord reasonably believes could cause labor disharmony or may
not have sufficient experience, in Landlord's reasonable opinion, to perform
work in an occupied Class "A" laboratory research building and in
tenant-occupied lab areas.  Notwithstanding the foregoing, Tenant may make
strictly cosmetic changes to the Premises that do not require any permits or
more than three (3) total contractors and subcontractors ("Cosmetic
Alterations") without Landlord's consent; provided that (y) the cost of any
Cosmetic Alterations does not exceed One Hundred Thousand Dollars ($100,000) in
any one instance or annually in the aggregate, (z) such Cosmetic Alterations do
not (i) require any structural or other substantial modifications to the
Premises, (ii) require any changes to or adversely affect the Building systems,
(iii) affect the exterior of the Building or (iv) trigger any requirement under
Applicable Laws that would require Landlord to make any alteration or
improvement to the Premises, the Building or the Project.  Landlord will notify
Tenant, at the time of Landlord's consent to such Alterations (provided Tenant
requests that Landlord make such determination at the time it requests consent),
which of the Alterations Landlord will require Tenant to remove upon the
expiration or earlier termination of this Lease.

 

17.2.Tenant shall not construct or permit to be constructed partitions or other
obstructions that might interfere with free access to mechanical installation or
service facilities of the Building or with other tenants' components located
within the Building, or interfere with the moving of Landlord's equipment to or
from the enclosures containing such installations or facilities.

 

17.3.Tenant shall accomplish any work performed on the Premises or the Building
in such a manner as to permit any life safety systems to remain fully operable
at all times.

 

17.4.Any work performed on the Premises, the Building or the Project by Tenant
or Tenant's contractors shall be done at such times and in such manner as
Landlord may from time to time designate.   Tenant covenants and agrees that all
work done by Tenant or Tenant's contractors shall be performed in full
compliance with Applicable Laws. Within thirty (30) days after completion of any
Alterations, Tenant shall provide Landlord with complete "as built" drawing
print sets and electronic CADD files on disc (or files in such other current
format in common use as Landlord reasonably approves or requires) showing any
changes in the Premises, as well as a commissioning report prepared by a
licensed, qualified commissioning agent hired by Tenant and approved by Landlord
for all new or affected mechanical, electrical and plumbing systems.  Any such
"as built" plans shall show the applicable Alterations as an overlay on the
Building as-built plans; provided that Landlord provides the Building "as built"
plans to Tenant.

 

17.5.Before commencing any Alterations or Tenant Improvements, Tenant shall give
Landlord at least fifteen (15) business days' prior written notice of the
proposed commencement of such work and the names and addresses of the persons
supply labor or materials therefor so that Landlord may enter the Premises to
post and keep posted thereon and therein notices or to

 

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take  any  further  action  that  Landlord  may  reasonably  deem  proper
for  the  protection of Landlord's interest in the Project.

 

17.6.Tenant shall repair any damage to the Premises caused by Tenant's removal
of any property from the Premises.  During any such restoration period, Tenant
shall pay Rent to Landlord as provided herein as if such space were otherwise
occupied by Tenant. The provisions of this Section shall survive the expiration
or earlier termination of this Lease.

 

17.7.The Premises plus any Alterations (not previously required by Landlord to
be removed); Tenant Improvements (not previously required by Landlord to be
removed); attached equipment, attached fixtures; and other additions and
improvements attached to or built into the Premises made by either of the
parties (including all floor and wall coverings; paneling; sinks and related
plumbing fixtures; laboratory benches; exterior venting fume hoods; walk-in
freezers and  walk-in  refrigerators  (cold  rooms);  ductwork;  conduits;
electrical  panels  and  circuits; attached machinery and equipment; and
built-in furniture and cabinets, in each case, together with all additions and
accessories thereto), shall (unless, prior to such construction or installation,
Landlord elects otherwise in writing) at all times remain the property of
Landlord, shall remain in the  Premises and shall  (unless, prior to
construction or installation thereof, Landlord elects otherwise in writing) be
surrendered to Landlord upon the expiration or earlier termination of this
Lease.  For the avoidance of doubt, the items listed on Exhibit H attached
hereto (which Exhibit
H  may  be  updated  by  Tenant  from  and  after  the  Term  Commencement Date,
subject to Landlord's written consent) and Tenant's  trade fixtures and movable
furniture and equipment constitute Tenant's property and shall be removed by
Tenant upon the expiration or earlier termination of the Lease.

 

17.8.Notwithstanding any other provision of this Article to the contrary, in no
event shall Tenant remove any improvement from  the Premises as to which
Landlord contributed payment, including the Tenant Improvements, without
Landlord's prior written consent, which consent Landlord may withhold in its
sole and absolute discretion.

 

17.9.If Tenant shall fail to remove any of its property from the Premises prior
to the expiration or earlier termination of this Lease, then Landlord may, at
its option, remove the same in any manner that Landlord shall choose and store
such effects without liability to Tenant for loss thereof or damage thereto, and
Tenant shall pay Landlord, upon demand, any costs and expenses incurred due to
such removal and storage or Landlord may, at its sole option and without notice
to Tenant, sell such property or any portion thereof at private sale and without
legal process for such price as Landlord may obtain and apply the proceeds of
such sale against any (a) amounts due by Tenant to Landlord under this Lease and
(b) any expenses incident to the removal, storage and sale of such personal
property.

 

17.10.Tenant shall pay to Landlord an amount equal to five percent (5%) of the
cost to Tenant of all Alterations to cover Landlord's overhead and expenses for
plan review, engineering review, coordination, scheduling and supervision
thereof.  For purposes of payment of such sum, Tenant shall submit to Landlord
copies of all bills, invoices and statements covering the costs of such charges,
accompanied by payment to Landlord of the fee set forth in this Section.  Tenant
shall reimburse Landlord for any extra expenses incurred by Landlord by reason
of faulty work

 

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done by Tenant or its contractors, or by reason of delays caused by such work,
or by reason of inadequate clean-up.

 

17.11.Within sixty (60) days after final completion of the Tenant Improvements
or any Alterations performed by Tenant with respect to the Premises, Tenant
shall submit to Landlord documentation showing the amounts expended by Tenant
with respect to such Tenant Improvements and Alterations, together with
supporting documentation reasonably acceptable to Landlord.

 

17.12.Tenant shall take, and shall cause its contractors to take, commercially
reasonable steps to protect the Premises during the performance of any
Alterations or Tenant Improvements, including covering or temporarily removing
any window coverings so as to guard against dust, debris or damage.

 

17.13.Tenant shall require its contractors and subcontractors performing work on
the Premises  to  name  Landlord and  its  affiliates  and  Lenders
as  additional  insureds on  their respective insurance policies.

 

18.         Repairs and Maintenance.

 

18.1.Subject to Section 18.2 below, Landlord shall repair and maintain the
structural and exterior portions and Common Area of the Building and the
Project, including roofing and covering materials; foundations (excluding any
architectural slabs, but including any structural slabs); exterior walls;
plumbing; fire sprinkler systems (if any); Base HVAC systems; elevators; and
electrical systems installed or furnished by Landlord.

 

18.2.Except as otherwise set forth in this Lease, Tenant shall at Tenant's sole
cost and expense maintain and keep the interior of the Premises and every part
thereof (and all equipment, systems and facilities serving the Premises,
regardless of where such equipment, systems and facilities are located) in good
condition and repair, damage thereto from ordinary wear and tear excepted, and
shall, within ten (10) days after receipt of written notice from Landlord,
provide to Landlord any maintenance records that Landlord reasonably
requests.   Landlord may elect to perform repairs, maintenance and replacements
as required for any mechanical, electrical or plumbing or process systems (such
as any RO/DI system, electric steam boilers, or similar equipment) serving the
Premises, or may elect to require Tenant to repair and maintain all or any of
such systems that exclusively serve the Premises.  As to any systems that
Landlord elects to repair and maintain, all costs to repair, maintain and
replace (if required) such system or equipment will be payable by Tenant to
Landlord as Additional Rent within thirty (30) days after invoicing
therefor.  In the event any such systems or equipment serve multiple tenants,
the cost of repair, maintenance and replacement will be equitably allocated
among the tenants using the applicable system or equipment based on their
relative usage, as determined by Landlord. In the event Landlord elects to have
Tenant perform all repairs, maintenance and replacement of any such systems or
equipment exclusively serving the Premises, Tenant will perform such repairs,
maintenance  and  replacement  required  to  keep  such  systems  in  good  working  order  and
condition, at Tenant's sole cost.  Tenant will be required to engage contractors
for such purposes that are reasonably approved by Landlord and will provide
Landlord with copies of all repair and maintenance records relating to such
systems or equipment.  Tenant shall, upon the expiration or

 

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sooner  termination  of  the Term,  surrender  the Premises  and  all  systems
and equipment  that Tenant is required to maintain hereunder to Landlord in as
good a condition as when received
and  with  the  Tenant  Improvements   in  substantially  the  same  condition  as  existed   when
completed,  ordinary wear and tear excepted; and shall, at Landlord's  request
and Tenant's sole cost and expense, remove all telephone and data systems,
wiring and equipment installed or used by Tenant from the Premises, and repair
any damage to the Premises caused thereby.  Landlord shall have no obligation to
alter, remodel, improve, repair, decorate or paint the Premises or any part
thereof

 

18.3.Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance that is Landlord's  obligation pursuant to this Lease
unless such failure shall persist for an unreasonable  time after Tenant
provides Landlord with written notice of the need of such repairs  or
maintenance.  Tenant waives its rights under Applicable Laws now or hereafter in
effect to make repairs at Landlord's expense

 

18.4.If any excavation shall be made upon land adjacent to or under the
Building, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause such excavation, license to enter the Premises
for the purpose of performing such work as such person shall deem necessary or
desirable to preserve and protect the Building from injury or
damage and to support the same by proper foundations, without any claim for damages or
liability against Landlord and without reducing or otherwise affecting Tenant's
obligations under this Lease.    Landlord will cause any parties performing work
pursuant to this Section 18.4 to use commercially reasonable efforts to minimize
any interference with Tenant's use and occupancy of the Premises.

 

18.5.This Article relates to repairs and maintenance arising in the ordinary
course of operation of the Building and the Project.  In the event of a casualty
described in Article 24, Article 24 shall apply in lieu of this Article.  In the
event of eminent domain, Article 25 shall apply in lieu of this Article.

 

18.6.Costs incurred by Landlord pursuant to
this Article shall constitute Operating Expenses, unless expressly excluded by
this Lease or otherwise payable by Tenant as Additional Rent.

 

19.          Liens.

 

19.1.Subject to the immediately succeeding sentence, Tenant shall keep the
Premises, the Building and the Project free from any
liens arising out of work or services performed, materials furnished to or
obligations incurred by Tenant.  Tenant further covenants and agrees that any
mechanic's or materialman's lien filed against the Premises, the Building or the
Project for work or services claimed to have been done for, or materials claimed
to have been furnished to, or obligations incurred by Tenant shall be discharged
or bonded by Tenant within ten (10) days after Tenant's receipt of notice of the
filing thereof, at Tenant's sole cost and expense.

 

19.2.Should Tenant fail to discharge or bond against any lien of the nature
described in Section 19.1, Landlord may, at Landlord's election, pay such claim
or post a statutory lien bond or
otherwise provide security to eliminate the lien as a claim against title, and
Tenant shall

 

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immediately reimburse Landlord for the costs thereof as Additional Rent.  Tenant
shall indemnify, save, defend (at Landlord's option and with counsel reasonably
acceptable to Landlord) and hold the Landlord Indemnitees harmless from and
against any Claims arising from any such liens, including any administrative,
court or other legal proceedings related to such liens.

 

19.3.In the event that Tenant leases or finances the acquisition of office
equipment, furnishings or other personal property of a removable nature utilized
by Tenant in the operation of Tenant's business, Tenant warrants that any
Uniform Commercial Code financing statement shall, upon its face or by exhibit
thereto, indicate that such financing statement is applicable only to removable
personal property of Tenant located within the Premises.  In no event shall the
address of the Premises, the Building or the Project be furnished on a financing
statement without qualifying language as to applicability of the lien only to
removable personal property located in an identified suite leased by Tenant.
Should any holder of a financing statement record or place of record a financing
statement that appears to constitute a lien against any interest of Landlord or
against equipment that may be located other than within an identified suite
leased by Tenant, Tenant shall, within ten (10) days after filing such financing
statement, cause (a) a copy of the lender security agreement or other documents
to which the financing statement pertains to be furnished to Landlord to
facilitate Landlord's  ability to demonstrate that the lien of such financing
statement is not applicable to Landlord's  interest and (b) Tenant's  lender to
amend such financing statement and any other documents of record to clarify that
any liens imposed thereby are not applicable to any interest of Landlord in the
Premises, the Building or the Project.

 

20.          Estoppel Certificate.   Tenant shall, within ten (I0)  days after
receipt of written notice from Landlord, execute, acknowledge and deliver a
statement in writing substantially in the form attached to this Lease as Exhibit
I, or on any other commercially reasonable form reasonably requested by a
current or proposed Lender or encumbrancer or proposed purchaser, (a) certifying
that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease as so
modified is in full force and effect) and the dates to which rental and other
charges are paid in advance, if any, (b) acknowledging that there are not, to
Tenant's  knowledge, any uncured defaults on the part of Landlord hereunder, or
specifying such defaults if any are claimed, and (c) setting forth such further
information with respect to this Lease or the Premises as may be requested
thereon.  Any such statements may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the Property. Tenant's failure to deliver
any such statement within such prescribed time, after a second notice and two
(2) business day cure period, shall, at Landlord's option, constitute a Default
(as defined below) under this Lease, and, in any event, shall be binding upon
Tenant that the Lease is in full force and effect and without modification
except as may be represented by Landlord in any certificate prepared by Landlord
and delivered to Tenant for execution.

 

21.         Hazardous Materials.

 

21.1.Tenant has not and shall not cause or permit any Hazardous Materials (as
defined below) to be brought upon, kept or used in or about the Premises, the
Building or the Project in violation of Applicable Laws by Tenant or any of its
employees, agents, contractors or invitees (collectively with Tenant, each a
"Tenant Party").  If (a) Tenant breaches such obligation, (b) the

 

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presence of Hazardous Materials as a result of such a breach results in
contamination of the Project, any portion thereof, or any adjacent property,
(c) contamination of the Premises otherwise occurs during the Term or any prior
occupancy or extension or renewal hereof or holding over hereunder or (d)
contamination of the Project occurs as a result of Hazardous Materials that are
placed on or under or are released into the Project by a Tenant Party, then
Tenant shall indemnify, save, defend (at Landlord's option and with counsel reasonably
acceptable to Landlord) and hold the Landlord Indemnitees harmless from and
against any and all Claims of any kind or nature, including (w) diminution in
value of the Project or any portion thereof, (x) damages for the loss or
restriction on use of rentable or usable space or of any amenity of the Project,
(y) damages arising from any adverse impact on marketing of space in the Project
or any portion thereof and (z) sums paid in settlement of Claims that arise
before, during or after the Term as a result of such breach or
contamination. This indemnification by Tenant includes costs incurred in
connection with any investigation of site conditions or any clean-up, remedial,
removal or restoration work required by any Governmental Authority because of
Hazardous Materials present in the air, soil or groundwater above, on, under or
about the Project. Without limiting the foregoing, if the presence of any
Hazardous Materials in, on, under or about the Project, any portion thereof or
any adjacent property caused or permitted by any Tenant Party results in any
contamination of the Project, any portion thereof or any adjacent property, then
Tenant shall promptly take all actions at its sole cost and expense as are
necessary to return the Project, any portion thereof or any adjacent property to
a condition as close as commercially practicable to its condition existing prior
to the time of such contamination; provided that Landlord's written approval of
such action shall first be obtained, which approval Landlord shall not
unreasonably withhold; and provided, further, that it shall be reasonable for
Landlord to withhold its consent if such actions could have a material adverse
long-term or short-term effect on the Project, any portion thereof or any
adjacent property. Tenant's obligations under this Section shall not be
affected, reduced or limited by any limitation on the amount or type of damages,
compensation or benefits payable by or for Tenant under workers' compensation
acts, disability benefit acts, employee benefit acts or similar legislation. 
Notwithstanding the
foregoing, Landlord shall indemnify, save, defend (at Tenant's 
option and with counsel reasonably acceptable to Tenant) and hold the Tenant
Parties harmless from and against any and all Claims resulting from the presence
of Hazardous Materials at the Project in violation of Applicable Laws as of the
Execution Date, unless placed at the Project by a Tenant Party.

 

21.2.Landlord acknowledges that it is not the intent of this Article to prohibit
Tenant from operating its business for the Permitted Use. Tenant may operate its
business according to the custom of Tenant's industry so long as the use or
presence of Hazardous Materials is strictly and properly monitored in accordance
with Applicable Laws.  As a material inducement to Landlord to allow Tenant to
use Hazardous Materials in connection with its business, Tenant agrees to
deliver to Landlord (a) a list identifying each type of Hazardous Material to be
present at the Premises that is subject to regulation under any environmental
Applicable Laws (other than customary amounts of typical office cleaning
supplies used and stored in compliance with all Applicable Laws), (b) a list of
any and all approvals or permits from Governmental Authorities required in
connection with the presence of such Hazardous Material at the Premises and (c)
correct and complete copies of (i) notices of violations of Applicable Laws
related to Hazardous Materials and (ii) plans relating to the installation of
any storage tanks to be installed in, on,

 

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under or about the Project (provided that installation of storage tanks shall
only be permitted after Landlord has given Tenant its written consent to do so,
which consent Landlord may withhold in its sole and absolute discretion) and
closure plans or any other documents required by any and all Governmental
Authorities for any storage tanks installed in, on, under or about the Project
for the closure of any such storage tanks (collectively, "Hazardous Materials
Documents"). Tenant shall deliver to Landlord updated Hazardous Materials
Documents, within fourteen (14) days after receipt of a written request therefor
from Landlord, not more often than once per year, unless (m) there are any
changes to the Hazardous Materials Documents or (n) Tenant initiates any
Alterations or changes its business, in either case in a way that involves any
material increase in the types or amounts of Hazardous Materials. For each type
of Hazardous Material listed, the Hazardous Materials Documents shall include
(t) the chemical name, (u) the material state (e.g., solid, liquid, gas or
cryogen), (v) the concentration, (w) the storage amount and storage condition
(e.g., in cabinets or not in cabinets), (x) the use amount and use condition
(e.g., open use or closed use), (y) the location (e.g., room number or other
identification) and (z) if known, the chemical abstract service number. 
Notwithstanding anything in this Section to the contrary, Tenant shall not be
required to provide Landlord with any documents containing information of a
proprietary nature, unless such documents contain a reference to Hazardous
Materials or activities related to Hazardous Materials.  Landlord may, at
Landlord's expense, cause the Hazardous Materials Documents to be reviewed by a
person or firm qualified to analyze
Hazardous Materials to confirm compliance with the provisions of this Lease and with
Applicable Laws. In the event that a review of the Hazardous Materials Documents
indicates non-compliance with this Lease or Applicable Laws, Tenant shall, at
its expense, diligently take steps to bring its storage and use of Hazardous
Materials into compliance. Notwithstanding anything in this Lease to the
contrary or Landlord's review into Tenant's Hazardous Materials Documents or use
or disposal of hazardous materials, however, Landlord shall not have and
expressly disclaims any liability related to Tenant's or other tenants' use or disposal of
Hazardous Materials, it being acknowledged by Tenant that Tenant is best suited
to evaluate the safety and efficacy of its Hazardous Materials usage and
procedures.

 

21.3.Tenant  represents  and  warrants  to  Landlord
that  is  not  nor  has  it  been,  in connection with the use, disposal or
storage of Hazardous Materials, (a) subject to a material enforcement order
issued by any Governmental Authority or (b) required to take any remedial
action.

 

21.4.At any time, and from time to time,  prior to the expiration of the Term,
Landlord shall have the right to conduct appropriate tests of the Project or any
portion thereof to demonstrate that Hazardous Materials are present or that
contamination has occurred due to the acts or omissions of a Tenant
Party.  Tenant shall pay all reasonable costs of such tests if such tests reveal
that Hazardous Materials exist at the Project in violation of this Lease.

 

21.5.If underground or other storage tanks storing Hazardous Materials installed
or utilized by Tenant are located on the Premises, or are hereafter placed on
the Premises by Tenant (or by any other party, if such storage tanks are
utilized by Tenant), then Tenant shall monitor the storage tanks, maintain
appropriate records, implement reporting procedures, properly close any
underground storage tanks, and take or cause to be taken all other steps
necessary or required under the Applicable Laws.  Tenant shall have no
responsibility or liability for underground or

 

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other storage tanks installed by anyone other than Tenant unless Tenant utilizes
such tanks, in which case Tenant's responsibility for such tanks shall be as set
forth in this Section.

 

21.6.Tenant shall promptly report to Landlord any actual or suspected presence
of mold or water intrusion at the Premises.

 

21.7.Tenant's obligations under this Article shall survive the expiration or
earlier termination of the Lease.    During any period of time needed by Tenant
or Landlord after the termination of this Lease to complete the removal from the
Premises of any such Hazardous Materials, Tenant shall be deemed a holdover
tenant and subject to the provisions of Article 27.

 

21.8.As used herein, the term "Hazardous Material" means any toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous substance, material or waste that is or becomes regulated by
Applicable Laws or any Governmental Authority.

 

21.9.Notwithstanding anything to the contrary in this Lease, Landlord shall have
sole control over the equitable allocation of fire control areas (as defined in
the Uniform Building Code as adopted by the city or municipality(ies) in which
the Project is located (the "UBC")) within the Project for the storage of
Hazardous Materials.  Notwithstanding anything to the contrary in this Lease,
the quantity of Hazardous Materials allowed by this Section is specific to
Tenant and shall not run with the Lease in the event of a Transfer (as defined
in Article 29). In the event of a Transfer, if the use of Hazardous Materials by
such new tenant ("New Tenant") is such that New Tenant utilizes fire control
areas in the Project in excess of New Tenant's Pro Rata Share of the Building,
then New Tenant shall, at its sole cost and expense and upon Landlord's written
request, establish and maintain a separate area of the Premises classified by
the UBC as an "H" occupancy area for the use and storage of Hazardous Materials,
or take such other action as is necessary to ensure that its share of the fire
control areas of the Building is not greater than New Tenant's Pro Rata Share of
the Building. Notwithstanding anything in this Lease to the contrary, Landlord
shall not have and expressly disclaims any liability related to Tenant's or
other tenants' use or disposal of fire control areas, it being acknowledged by
Tenant that Tenant and other tenants are best suited to evaluate the safety and
efficacy of its Hazardous Materials usage and procedures.

 

22.         Odors and Exhaust. Tenant acknowledges that Landlord would not enter
into this Lease
with Tenant unless Tenant assured Landlord that under no circumstances
will any other occupants of the Building or the Project (including persons
legally present in any outdoor areas of the Project) be subjected to odors or
fumes (whether or not noxious), and that the Building and the Project will not
be damaged by any exhaust, in each case from Tenant's operations.  Landlord and
Tenant therefore agree as follows:

 

22.1.Tenant shall not cause or permit (or conduct any activities that would
cause) any release of any objectionable odors or fumes of any kind from the
Premises.

 

22.2.If the Building has a ventilation system that, in Landlord's judgment, is
adequate, suitable, and appropriate to vent the Premises in a manner that does
not release odors affecting

 

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any indoor or outdoor part of the Project, Tenant shall vent the Premises
through such system.  If Landlord at any time determines that any existing
ventilation system is inadequate, or if no ventilation system exists, Tenant
shall in compliance with Applicable Laws vent all fumes and odors from the
Premises (and remove odors from Tenant's exhaust stream) as Landlord requires. 
The placement and configuration of all ventilation exhaust pipes, louvers and
other equipment shall be subject to Landlord's approval.  Tenant acknowledges
Landlord's legitimate desire to maintain the Project (indoor and outdoor areas)
in an odor-free manner, and Landlord may require Tenant to abate and remove all
odors in a manner that goes beyond the requirements of Applicable Laws.

 

22.3.Tenant shall, at Tenant's sole cost and expense, provide odor eliminators
and other devices (such as filters, air cleaners, scrubbers and whatever other
equipment may in Landlord's judgment be necessary or appropriate from time to
time) to completely remove, eliminate and abate any odors, fumes or other
substances in Tenant's exhaust stream that, in Landlord's judgment, emanate from
Tenant's Premises.    Any work Tenant performs under this Section shall
constitute Alterations.

 

22.4.Tenant's responsibility to remove, eliminate and abate odors, fumes and
exhaust shall continue throughout the Term.  Landlord's approval of the Tenant
Improvements shall not preclude Landlord from requiring additional measures to
eliminate odors, fumes and other adverse impacts of Tenant's  exhaust stream (as
Landlord may designate in Landlord's discretion).  Tenant shall install
additional equipment as Landlord requires from time to time under the preceding
sentence.  Such installations shall constitute Alterations.

 

22.5.If Tenant fails to install satisfactory odor control equipment within
twenty (20) business days after Landlord's demand made at any time, then
Landlord may, without limiting Landlord's other rights and remedies, require
Tenant to cease and suspend any operations in the Premises that, in
Landlord's determination, cause odors, fumes or exhaust.  For example, if
Landlord determines that Tenant's production of a certain type of product causes
odors, fumes or exhaust, and Tenant does not install satisfactory odor control
equipment within twenty (20) business days after Landlord's request, then
Landlord may require Tenant to stop producing such type of product in the
Premises unless and until Tenant has installed odor control equipment
satisfactory to Landlord.

 

23.         Insurance; Waiver of Subrogation.

 

23.1.Landlord shall maintain insurance for the Building and the Project in
amounts equal to full replacement cost (exclusive of the costs of excavation,
foundations and footings, engineering costs or such other costs to the extent
the same are not incurred in the event of a rebuild and without reference to
depreciation taken by Landlord upon its books or tax returns), provided that
such coverage shall not be less than the amount of such insurance Landlord's
Lender, if any, requires Landlord to maintain, providing protection against any
peril generally included within the classification "Fire and Extended Coverage,"
together with insurance against sprinkler damage (if applicable), vandalism and
malicious mischief.  Landlord, subject to availability thereof, shall further
insure, if Landlord deems it appropriate, coverage against flood, environmental
hazard, earthquake, loss or failure of building equipment, rental loss during
the

 

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period of repairs or rebuilding, Workers' Compensation insurance and fidelity
bonds for employees employed to perform services.  Notwithstanding the
foregoing, Landlord may, but shall not be deemed required to, provide insurance
for any improvements installed by Tenant or that are in addition to the standard
improvements customarily furnished by Landlord, without regard to whether or not
such are made a part of or are affixed to the Building.

 

23.2.     In addition, Landlord shall carry Commercial General Liability
insurance with limits of not less than One Million Dollars ($1,000,000) per
occurrence/general aggregate for bodily injury (including death), or property
damage with respect to the Project.

 

23.3.      Tenant shall, at its own cost and expense, procure and maintain
during the Term the following insurance for the benefit of Tenant and Landlord
(as their interests may appear) with insurers financially acceptable and
lawfully authorized to do business in the state where the Premises are located:

 

(a)       Commercial General Liability insurance on a broad-based occurrence
coverage form,  with coverages including but not limited to  bodily injury
(including death), property damage (including loss of use resulting therefrom),
premises/operations, personal &  advertising injury, and contractual liability
with limits of liability of not less than $2,000,000 for bodily injury and
property damage per occurrence, $2,000,000 general aggregate, which limits may
be met by use of excess and/or umbrella liability insurance provided that such
coverage is at least as broad as the primary coverages required herein.

 

(b)        Commercial Automobile Liability insurance covering liability arising
from the use or operation of any auto, including those owned, hired or otherwise
operated or used by or on behalf of the Tenant.   The coverage shall be on a
broad-based occurrence form with combined single limits of not less than
$1,000,000 per accident for bodily injury and property damage.

 

(c)        Commercial Property insurance covering property damage to the full
replacement cost value and business interruption. Covered property shall include
all tenant improvements in the Premises (to the extent not insured by Landlord
pursuant to Section 23.1) and Tenant's Property including personal property,
furniture, fixtures, machinery, equipment, stock, inventory and improvements and
betterments, which may be owned by Tenant or Landlord and required to be insured
hereunder, or which may be leased, rented, borrowed or in the care custody or
control of Tenant, or Tenant's agents, employees or subcontractors. Such
insurance, with respect only to all Tenant Improvements, Alterations or other
work performed on the Premises by Tenant (collectively, "Tenant Work"), shall
name Landlord and Landlord's current and future mortgagees as loss payees as
their interests may appear. Such insurance shall be written on an "all risk" of
physical loss or damage basis including the perils of fire, extended coverage,
electrical injury, mechanical breakdown, windstorm, vandalism, malicious
mischief, sprinkler leakage, back-up of sewers or drains, flood, earthquake,
terrorism and such other risks Landlord may from time to time designate, for the
full replacement cost value of the covered items with an agreed amount
endorsement with no co-insurance. Business interruption coverage shall have
limits sufficient to cover Tenant's lost profits and necessary continuing
expenses, including rents due Landlord under the Lease. The minimum period of
indemnity for business

 

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interruption coverage shall be twelve (12) months plus twelve (12) months'
extended period of indemnity.

 

(d)        Workers' Compensation insurance as is required by statute or law, or
as may be available on a voluntary basis and Employers' Liability insurance with
limits of not less than the following:   each accident, Five Hundred Thousand
Dollars ($500,000); disease ($500,000); disease (each employee), Five Hundred
Thousand Dollars ($500,000).

 

(e)        [Intentionally Omitted].

 

(f)        Pollution Legal Liability insurance is required if Tenant stores,
handles, generates or treats Hazardous Materials, as determined solely by
Landlord, on or about the Premises.  Such coverage shall include bodily injury,
sickness, disease, death or mental anguish or shock sustained by any person;
property damage including physical injury to or destruction of tangible property
including the resulting loss of use thereof, clean-up costs, and the loss of use
of tangible property that has not been physically injured or destroyed; and
defense costs, charges
and  expenses  incurred  in  the  investigation,  adjustment  or  defense  of  claims  for  such
compensatory damages.   Coverage shall apply to both sudden and non-sudden
pollution conditions including the discharge, dispersal, release or escape of
smoke, vapors, soot, fumes, acids, alkalis, toxic chemicals, liquids or gases,
waste materials or other irritants, contaminants or pollutants into or upon
land, the atmosphere or any watercourse or body of water.  Claims-made coverage
is permitted, provided the policy retroactive date is continuously maintained
prior to the commencement date of this agreement, and coverage is continuously
maintained during all periods in which Tenant occupies the Premises.  Coverage
shall be maintained with limits of not less than $1,000,000 per incident with a
$2,000,000 policy aggregate and for a period of two (2) years thereafter.

 

(g)        During all construction by Tenant at the Premises, with respect to
tenant improvements being constructed (including the Tenant Improvements and any
Alterations), insurance required in Exhibit B-1 must be in place.

 

23.4.      The insurance required of Tenant by this Article shall be with
companies at all times having a current rating of not less than A- and financial
category rating of at least Class VII in "A.M. Best's Insurance Guide" current
edition. Tenant shall obtain for Landlord from the insurance companies/broker or
cause the insurance companies/broker to furnish certificates of insurance
evidencing all coverages required herein to Landlord. Landlord reserves the
right to require complete, certified copies of all required insurance policies
including any endorsements. No such policy shall be cancelable or subject to
reduction of coverage or other modification or cancellation except after twenty
(20) days' prior written notice to Landlord from Tenant or its insurers (except
in the event of non-payment of premium, in which case ten (10) days' written
notice shall be given). All such policies shall be written as primary policies,
not contributing with and not in excess of the coverage that Landlord may
carry. Tenant's required policies shall contain severability of interests
clauses stating that, except with respect to limits of insurance, coverage shall
apply separately to each insured or additional insured. Tenant shall, at least
twenty-five (25) days prior to the expiration of such policies, furnish Landlord
with renewal certificates of insurance or binders. Tenant agrees that if Tenant
does not take out and maintain

 

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such insurance, Landlord may (but shall not be required to) procure such
insurance on Tenant's behalf and at its cost to be paid by Tenant as Additional
Rent.  Commercial General Liability, Commercial Automobile Liability, Umbrella
Liability and Pollution Legal Liability insurance as required above shall name
Landlord, BioMed Realty, L.P., and BioMed Realty Trust, Inc., and their
respective officers, employees, agents, general partners, members, subsidiaries,
affiliates and Lenders ("Landlord Parties") as additional insureds as respects
liability arising from work or operations performed by or on behalf of Tenant,
Tenant's  use or occupancy of Premises, and ownership, maintenance or use of
vehicles by or on behalf of Tenant.

 

23.5.In each instance where insurance is to name Landlord Parties as additional
insureds, Tenant shall, upon Landlord's written request, also designate and
furnish certificates evidencing such Landlord Parties as additional insureds to
(a) any Lender of Landlord holding a security interest in the Building or the
Project, (b) the landlord under any lease whereunder Landlord is a tenant of the
real property upon which the Building is located if the interest of Landlord is
or shall become that of a tenant under a ground lease rather than that of a fee
owner and (c) any management company retained by Landlord to manage the Project.

 

23.6.Tenant assumes the risk of damage to any fixtures, goods, inventory,
merchandise, equipment and leasehold improvements, and Landlord shall not be
liable for injury to Tenant's business or any loss of income therefrom, relative
to such damage, all as more particularly set forth within this Lease. Tenant
shall, at Tenant's sole cost and expense, carry such insurance as Tenant desires
for Tenant's protection with respect to personal property of Tenant or business
interruption.

 

23.7.Landlord and Tenant and their insurers hereby waive any and all rights of
recovery or subrogation against the other party and their respective officers,
directors, employees, agents, general partners, members, subsidiaries,
affiliates and lenders, with respect to any loss, damage, claims, suits or
demands, howsoever caused, that are covered, or should have been covered, by
valid and collectible insurance, including any deductibles or self-insurance
maintained thereunder. If necessary, each party agrees to endorse the required
insurance policies to permit waivers of subrogation as required hereunder and
hold harmless and indemnify the other party and its officers, directors,
employees, agents, general partners, members, subsidiaries, affiliates and
lenders, for any loss or expense incurred as a result of a failure to obtain
such waivers of subrogation from insurers. Such waivers shall continue so long
as such party's insurer's so permit. Any termination of such a waiver shall be
by written notice to the other party, containing a description of the
circumstances hereinafter set forth in this Section. Landlord and Tenant, upon
obtaining the policies of insurance required or permitted under this Lease,
shall give notice to their respective insurance carriers that the foregoing
waiver of subrogation is contained in this Lease. If such policies shall not be
obtainable with such waiver or shall be so obtainable only at a premium over
that chargeable without such waiver, then such party shall notify the other
party of such conditions, in which event, if applicable, the notified party
shall have the option to pay such premium.

 

23.8.Landlord may require insurance policy limits required under this Lease to
be raised to conform with requirements of Landlord's Lender or to bring coverage
limits to levels then being required of new tenants within the Project.

 

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23.9.      Any costs incurred by Landlord pursuant to this Article shall
constitute a portion of Operating Expenses.

 

23.10.    The provisions of this Article shall survive the expiration or earlier
termination of this Lease.

 

24.         Damage or Destruction.

 

24.1.      In the event of a partial destruction of (a) the Premises or (b)
Common Area of the Building or the Project ((a) and (b) together, the "Affected
Areas") by fire or other perils covered by extended coverage insurance not
exceeding twenty-five percent (25%) of the full insurable value thereof, and
provided that (x) the damage thereto is such that the Affected Areas may be
repaired, reconstructed or restored within a period of six (6) months from the
date of the happening of such casualty, (y) Landlord shall receive insurance
proceeds sufficient to cover the cost of such repairs, reconstruction and
restoration (except for any commercially reasonable deductible amount provided
by Landlord's policy, which deductible amount, if paid by Landlord, shall
constitute an Operating Expense) and (z) such casualty was not intentionally
caused by a Tenant Party, then Landlord shall commence and proceed diligently
with the work of repair, reconstruction and restoration of the Affected Areas
and this Lease shall continue in full force and effect.

 

24.2.     In the event of any damage to or destruction of the Building or the
Project other than as described in Section 24.1, Landlord may elect to repair,
reconstruct and restore the Building or the Project, as applicable, in which
case this Lease shall continue in full force and effect. If Landlord elects not
to repair, reconstruct and restore the Building or the Project, as applicable,
then this Lease shall terminate as of the date of such damage or destruction. In
the event of any damage or destruction (regardless of whether such damage is
governed by Section 24.1 or this Section), if (a) in Landlord's determination as
set forth in the Damage Repair Estimate (as defined below), the Affected Areas
cannot be repaired, reconstructed or restored within twelve (12) months after
the date of the Damage Repair Estimate, (b) subject to Section 24.6, the
Affected Areas are not actually repaired, reconstructed and restored within
eighteen (18) months after the date of the Damage Repair Estimate, or (c) the
damage and destruction occurs within the last twelve (12) months of the
then-current Term, then Tenant shall have the right to terminate this Lease,
effective as of the date of such damage or destruction, by delivering to
Landlord its written notice of termination (a "Termination Notice") (y) with
respect to Subsections 24.2(a) and (£2, no later than fifteen (15) days after
Landlord delivers to Tenant Landlord's Damage Repair Estimate and (z) with
respect to Subsection 24.2(b), no later than fifteen (15) days after such twelve
(12) month period (as the same may be extended pursuant to Section 24.6)
expires. If Tenant provides Landlord with a Termination Notice pursuant to
Subsection 24.2(z), Landlord shall have an additional thirty (30) days after
receipt of such Termination Notice to complete the repair, reconstruction and
restoration. If Landlord does not complete such repair, reconstruction and
restoration within such thirty (30) day period, then Tenant may terminate this
Lease by giving Landlord written notice within ten (10) business days after the
expiration of such thirty (30) day period. If Landlord does complete such
repair, reconstruction and restoration within such thirty (30) day period, then
this Lease shall continue in full force and effect.

 

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24.3.As soon as reasonably practicable, but in any event within sixty (60) days
following the date of damage or destruction, Landlord shall notify Tenant of
Landlord's good faith estimate of the period of time in which the repairs,
reconstruction and restoration will be completed (the "Damage Repair Estimate"),
which estimate shall be based upon the opinion of a contractor reasonably
selected by Landlord and experienced in comparable repair, reconstruction and
restoration of similar buildings.    Additionally, Landlord shall give written
notice to Tenant within sixty (60) days following the date of damage or
destruction of its election not to repair, reconstruct or restore the Building
or the Project, as applicable.

 

24.4.Upon any termination of this Lease under any of the provisions of this
Article, the parties shall be released thereby without further obligation to the
other from the date possession of the Premises is surrendered to Landlord,
except with regard to (a) items occurring prior to the damage or destruction and
(b) provisions of this Lease that, by their express terms, survive the
expiration or earlier termination hereof.

 

24.5.In the event of repair, reconstruction and restoration as provided in this
Article, all Rent to be paid by Tenant under this Lease shall be abated
proportionately based on the extent to which Tenant's use of the Premises is
impaired during the period of such repair, reconstruction or restoration, unless
Landlord provides Tenant with other space during the period of repair,
reconstruction and restoration that, in Tenant's reasonable opinion, is suitable
for the temporary conduct of Tenant's business; provided, however, that the
amount of such abatement shall be reduced by the amount of Rent that is received
by Tenant for rental loss with respect to the Premises from the proceeds of
business interruption or loss of rental income insurance.

 

24.6.Notwithstanding anything to the contrary contained in this Article, should
Landlord be delayed or prevented from completing the repair, reconstruction or
restoration of the damage or destruction to the Premises after the occurrence of
such damage or destruction by Force Majeure or delays caused by a Tenant Party,
then the time for Landlord to commence or complete repairs, reconstruction and
restoration shall be extended on a day-for-day basis; provided, however, that,
at Landlord's election, Landlord shall be relieved of its obligation to make
such repairs, reconstruction and restoration.

 

24.7.If Landlord is obligated to or elects to repair, reconstruct or restore as
herein provided, then Landlord shall be obligated to make such repairs,
reconstruction or restoration only with regard to (a) those portions of the
Premises that were originally provided at Landlord's expense and (b) the Common
Area portion of the Affected Areas.    The repairs, reconstruction or
restoration of improvements not originally provided by Landlord or at Landlord's
expense shall be the obligation of Tenant.    In the event Tenant has elected to
upgrade certain improvements from the Building Standard, Landlord shall, upon
the need for replacement due to an insured loss, provide only the Building
Standard, unless Tenant again elects to upgrade such improvements and pay any
incremental costs related thereto, except to the extent that excess insurance
proceeds, if received, are adequate to provide such upgrades, in addition to
providing for basic repairs, reconstruction and restoration of the Premises, the
Building and the Project.

 

24.8.Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises if the damage

 

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resulting from any casualty covered under this Article occurs during the last
twenty-four (24) months of the Term or any extension thereof ( provided that, in
the event Landlord notifies Tenant that it will not repair, reconstruct or
restore the Premises pursuant to this Section 24.8, and that Tenant has a
remaining Option to extend this Lease pursuant to Article 41 below, then Tenant
may deliver an exercise notice exercising its remaining Option within ten (10)
days after receipt of Landlord's notice and provided that, after giving effect
to the exercise of the Option, there will be more than twenty-four (24) months
remaining in the Term after the completion of Landlord's repair, reconstruction
or restoration of the Premises, Landlord will proceed to perform such repair,
reconstruction or restoration of the Premises so long as insurance proceeds are
available therefor).    If Landlord elects not to repair, reconstruct and
restore the Premises, then this Lease shall terminate as of the date of such
damage or destruction.

 

24.9.Landlord's obligation, should it elect or be obligated to repair,
reconstruct or restore, shall be limited to the Affected Areas, and shall be
conditioned upon Landlord receiving any permits or authorizations required by
Applicable Laws.  Tenant shall, at its expense, replace or fully repair all of
Tenant's personal property and any Alterations installed by Tenant existing at
the time of such damage or destruction.    If Affected Areas are to be repaired,
reconstructed or restored in accordance with the foregoing, Landlord shall make
available to Tenant any portion of insurance proceeds it receives that are
allocable to the Alterations constructed by Tenant pursuant to this Lease;
provided Tenant is not then in default under this Lease, and subject to the
requirements of any Lender of Landlord.

 

24.10.This Article sets forth the terms and conditions upon which this Lease may
terminate in the event of any damage or destruction.    Accordingly, the parties
hereby waive the provisions of California Civil Code Sections 1932(2) and
1933(4) (and any successor statutes) permitting the parties to terminate this
Lease as a result of any damage or destruction.

 

25.         Eminent Domain.

 

25.1.In the event (a) the whole of all Affected Areas or (b) such part thereof
as shall substantially interfere with Tenant's use and occupancy of the Premises
for the Permitted Use shall be taken for any public or quasi-public purpose by
any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, Tenant
or Landlord may terminate this Lease effective as of the date possession is
required to be surrendered to such authority, except with regard to (y) items
occurring prior to the taking and (z) provisions of this Lease that, by their
express terms, survive the expiration or earlier termination hereof.

 

25.2.In the event of a partial taking of (a) the Building or the Project or (b)
drives, walkways or parking areas serving the Building or the Project for any
public or quasi-public purpose by any lawful power or authority by exercise of
right of appropriation, condemnation, or eminent domain, or sold to prevent such
taking, then, without regard to whether any portion of the Premises occupied by
Tenant was so taken, Landlord may elect to terminate this Lease (except with
regard to (y) items occurring prior to the taking and (z) provisions of this
Lease that, by their express terms, survive the expiration or earlier
termination hereof) as of such taking if

 

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such taking is, in Landlord's sole opinion, of a material nature such as to make
it uneconomical to continue use of the unappropriated portion for purposes of
renting office or laboratory space.

 

25.3.Tenant shall be entitled to any award that is specifically awarded as
compensation for (a) the taking of Tenant's personal property that was installed
at Tenant's expense and (b) the costs of Tenant moving to a new location.  
 Except as set forth in the previous sentence, any award for such taking shall
be the property of Landlord.

 

25.4.If, upon any taking of the nature described in this Article, this Lease
continues in effect, then Landlord shall promptly proceed to restore the
Affected Areas to substantially their same condition prior to such partial
taking.    To the extent such restoration is infeasible, as determined by
Landlord in its sole and absolute discretion, the Rent shall be decreased
proportionately to reflect the loss of any portion of the Premises no longer
available to Tenant.

 

25.5.This Article sets forth the terms and conditions upon which this Lease may
terminate in the event of any damage or destruction.    Accordingly, the parties
hereby waive the provisions of California Code of Civil Procedure Section
1265.130 (and any successor statutes) permitting the parties to terminate this
Lease as a result of any damage or destruction.

 

26.         Surrender.

 

26.1.At least thirty (30) days prior to Tenant's surrender of possession of any
part of the Premises, Tenant shall provide Landlord with a facility
decommissioning and Hazardous Materials closure plan for the Premises ("Exit
Survey") prepared by an independent third party state-certified professional
with appropriate expertise, which Exit Survey must be reasonably acceptable to
Landlord.  The Exit Survey shall comply with the American National Standards
Institute's Laboratory Decommissioning guidelines (ANSI/AIHA Z9.11-2008) or any
successor standards published by ANSI or any successor organization (or, if ANSI
and its successors no longer exist, a similar entity publishing similar
standards).  In addition, at least ten (10) days prior to Tenant's surrender of
possession of any part of the Premises, Tenant shall (a) provide Landlord with
written evidence of all appropriate governmental releases obtained by Tenant in
accordance with Applicable Laws, including laws pertaining to the surrender of
the Premises, (b) place Laboratory Equipment Decontamination Forms on all
decommissioned equipment to assure safe occupancy by future users and (c)
conduct a site inspection with Landlord.  In addition, Tenant agrees to remain
responsible after the surrender of the Premises for the remediation of any
recognized environmental conditions set forth in the Exit Survey and comply with
any recommendations set forth in the Exit Survey.  Tenant's obligations under
this Section shall survive the expiration or earlier termination of the Lease.

 

26.2.No surrender of possession of any part of the Premises shall release Tenant
from any of its obligations hereunder, unless such surrender is accepted in
writing by Landlord.

 

26.3.The voluntary or other surrender of this Lease by Tenant shall not effect a
merger with Landlord's fee title or leasehold interest in the Premises, the
Building, the Property or the
Project, unless Landlord consents in writing, and shall, at Landlord's option, operate as
an assignment to Landlord of any or all subleases.

 

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26.4.The voluntary or other surrender of any ground or other underlying lease
that now exists or may hereafter be executed affecting the Building or the
Project, or a mutual cancellation thereof or of Landlord's interest therein by
Landlord and its lessor shall not effect a merger with Landlord's fee title or
leasehold interest in the Premises, the Building or the Property and shall, at
the option of the successor to Landlord's interest in the Building or the
Project, as applicable, operate as an assignment of this Lease.

 

27.         Holding Over.

 

27.1.If, with Landlord's prior written consent, Tenant holds possession of all
or any part of the Premises after the Term, Tenant shall become a tenant from
month to month after the expiration or earlier termination of the Term, and in
such case Tenant shall continue to pay (a) Base Rent in accordance with Article
7 and (b) any amounts for which Tenant would otherwise be
liable under this Lease if the Lease were still in
effect, including payments for Tenant's Adjusted Share of Operating Expenses. 
Any such month-to-month tenancy shall be subject to every other term, covenant
and agreement contained herein.

 

27.2.Notwithstanding the foregoing, if Tenant remains in possession of the
Premises after the expiration or earlier termination of the Term without
Landlord's prior written consent, (a) Tenant shall become a tenant at sufferance
subject to the terms and conditions of this Lease, except that the monthly rent
shall be equal to one hundred fifty percent (!50%) of the Rent in effect during
the last thirty (30) days of the Term, and (b) Tenant shall be liable to
Landlord for any and all damages suffered by Landlord as a result of such
holdover, including any lost rent or consequential, special and indirect damages
(in each case, regardless of whether such damages are foreseeable).

 

27.3.Acceptance by Landlord of Rent after the expiration or earlier
termination of the Term shall not result in an extension, renewal or
reinstatement of this Lease.

 

27.4.The foregoing provisions of this Article are in addition to and do not affect
Landlord's right of reentry or any other rights of Landlord hereunder or as
otherwise provided by Applicable Laws.

 

27.5.The provisions of this Article shall survive the expiration or earlier
termination of this Lease.

 

28.         Indemnification and Exculpation.

 

28.1.Tenant agrees to indemnify, save, defend (at Landlord's option and with
counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees
harmless from and against any and all Claims of any kind or nature, real or
alleged, to the extent arising from injury to or death of any person or damage
to any property occurring within or about the Premises, the Building, the
Property or the Project, arising directly or indirectly out of (a) the presence
at or use or occupancy of the Premises or Project by a Tenant Party, (b) any
negligent act or omission on the part of any Tenant Party, (c) a breach or
default by Tenant in the performance of any of its obligations hereunder or (d)
injury to or death of persons or damage to or loss of any property, real or
alleged, arising from the serving of alcoholic beverages at the Premises or
Project,

 

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including liability under any dram shop law, host liquor law or similar
Applicable Law, except to the extent directly caused by Landlord's negligence or
willful misconduct. Tenant's obligations under this Section shall not be
affected, reduced or limited by any limitation on the amount or type of damages,
compensation or benefits payable by or for Tenant under workers' compensation
acts, disability benefit acts, employee benefit acts or similar legislation.
Tenant's obligations under this Section shall survive the expiration or earlier
termination of this Lease. Subject to Sections 23.6, 28.2 and 31.12, Landlord
agrees to indemnify, save, defend (at Tenant's option and with counsel
reasonably acceptable to Tenant) and hold the Tenant Parties harmless from and
against any and all Claims arising from injury to or death of any person or
damage to or loss of any physical property occurring within or about the
Premises, the Building, the Property or the Project to the extent directly
arising out of Landlord's gross negligence or willful misconduct.

 

28.2.Notwithstanding anything in
this Lease to the contrary, Landlord shall not be liable to Tenant for and
Tenant assumes all risk of (a) damage or losses caused by fire, electrical
malfunction, gas explosion or water damage of any type (including broken water lines,
malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless
any such loss is due to Landlord's willful disregard of written notice by Tenant
of need for a repair that Landlord is responsible to make for an
unreasonable period of time, and (b) damage to personal property or
scientific research, including loss of records kept by Tenant within the
Premises (in each case, regardless of whether such damages are
foreseeable). Tenant further waives any claim for injury to Tenant's business or
loss of income relating to any such damage or destruction of personal property
as described in this Section. Notwithstanding anything in the foregoing or this
Lease to the contrary, except (x) as otherwise provided herein
(including Section 27.2), (y) as may be provided by Applicable Laws or (z) in
the event of Tenant's breach of Article 21 or Section 26.1, in no
event shall Landlord or Tenant be liable to the other for any
consequential, special or indirect damages arising out of this Lease,
including lost profits (provided that this Subsection 28.2(z) shall not limit
Tenant's liability for Base Rent or Additional Rent pursuant to this Lease).

 

28.3.Landlord shall not be liable for any damages arising from any act, omission
or neglect of any other tenant in the Building or the Project, or of any other
third party.

 

28.4.Tenant acknowledges that security devices and services, if any, while
intended to deter crime, may not in given instances prevent theft or other
criminal acts. Landlord shall not be liable for injuries or losses caused by
criminal acts of third parties, and Tenant assumes the risk that any security
device or service may malfunction or otherwise be circumvented by a criminal. If
Tenant desires protection against such criminal acts, then Tenant shall, at
Tenant's sole cost and expense, obtain appropriate insurance coverage. Tenant's
security programs and equipment
for the Premises shall be coordinated with Landlord and subject to Landlord's reasonable
approval.

 

28.5.The provisions of this Article shall survive the expiration or earlier
termination of this Lease.

 

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29.         Assignment or Subletting.

 

29.1.Except as hereinafter expressly permitted, none of the following (each, a
"Transfer"), either voluntarily or by operation of Applicable Laws, shall be
directly or indirectly performed without Landlord's prior written consent (which
shall not be unreasonably withheld): (a) Tenant selling, hypothecating,
assigning, pledging, encumbering or otherwise transferring this Lease or
subletting the Premises or (b) a controlling interest in Tenant being sold,
assigned or otherwise transferred (other than as a result of shares in Tenant
being sold on a public stock exchange). For purposes of the preceding sentence,
"control" means (a) owning (directly or indirectly) more than fifty percent
(50%) of the stock or other equity interests of another person or (b)
possessing, directly or indirectly, the power to direct or cause the direction
of the management and policies of such person. Notwithstanding the foregoing,
Tenant shall have the right to Transfer, without Landlord's prior written
consent, Tenant's interest in this Lease or the Premises or any part thereof to
any person that as of the date of determination and at all times thereafter
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with Tenant ("Tenant's Affiliate");
provided that Tenant shall notifY Landlord in writing at least fifteen (15)
business days prior to the effectiveness of such Transfer to Tenant's Affiliate
(an "Exempt Transfer") and otherwise comply with the requirements of this Lease
regarding such Transfer; and provided, further, that the person that will be the
tenant under this Lease after the Exempt Transfer has a net worth (as of both
the day immediately prior to and the day immediately after the Exempt Transfer)
that is equal to or greater than the net worth (as of both the Execution Date
and the date of the Exempt Transfer) of the transferring Tenant. For purposes of
the immediately preceding sentence, "control" requires both (a) owning (directly
or indirectly) more than fifty percent (50%) of the stock or other equity
interests of another person and (b) possessing, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
person. In no event shall Tenant perform a Transfer to or with an entity that is
a tenant at the Project or that is in discussions or negotiations with Landlord
or an affiliate of Landlord to lease premises at the Project or a property owned
by Landlord or an affiliate of Landlord. Notwithstanding anything in this Lease
to the contrary, if(a) Tenant or any proposed transferee, assignee or sublessee
of Tenant has been required by any prior landlord, Lender or Governmental
Authority to take material remedial action in connection with Hazardous
Materials contaminating a property if the contamination resulted from such
party's action or omission or use of the property in question or (b) Tenant or
any proposed transferee, assignee or sublessee is subject to a material
enforcement order issued by any Governmental Authority in connection with the
use, disposal or storage of Hazardous Materials, then Landlord shall have the
right to terminate this Lease in Landlord's sole and absolute discretion (with
respect to any such matter involving Tenant), and it shall not be unreasonable
for Landlord to withhold its consent to any proposed transfer, assignment or
subletting (with respect to any such matter involving a proposed transferee,
assignee or sublessee).

 

29.2.In the event Tenant desires to effect a Transfer, then, at least fifteen
(15) business days prior to the date when Tenant desires the Transfer to be
effective (the "Transfer Date"), Tenant shall provide written notice to Landlord
(the "Transfer Notice") containing information (including references)
concerning the character of the proposed transferee, assignee or sublessee;
the Transfer Date; the most recent unconsolidated financial statements of
Tenant and of the proposed transferee, assignee or sublessee satisfying the
requirements of Section 40.2 ("Required

 

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Financials"); any ownership or commercial relationship between Tenant and the
proposed transferee, assignee or sublessee; and the consideration and all other
material terms and conditions of the proposed Transfer, all in such detail as
Landlord shall reasonably require.

 

29.3.       Landlord, in determining whether consent should be given to a
proposed Transfer, may give consideration to (a) the financial strength of
Tenant and of such transferee, assignee or sublessee (notwithstanding Tenant
remaining liable for Tenant's performance), (b) any change in use that such
transferee, assignee or sublessee proposes to make in the use of the Premises
and (c) Landlord's desire to exercise its rights under Section 29.7 to cancel
this Lease. In no event shall Landlord be deemed to be unreasonable
for declining to consent to a Transfer to a transferee, assignee or sublessee of
poor reputation, lacking financial qualifications or seeking a change in the
Permitted Use, or jeopardizing directly or indirectly the status of Landlord or
any of Landlord's affiliates as a Real Estate Investment Trust under the
Internal Revenue Code of 1986 (as the same may be amended from time to time, the
"Revenue Code"). Notwithstanding anything contained in this Lease to the
contrary, (w) no Transfer shall be consummated on any basis such that the rental
or other amounts to be paid by the occupant, assignee, manager or other
transferee thereunder would be based, in whole or in part, on the income or
profits derived by the business activities of such occupant, assignee, manager
or other transferee; (x) Tenant shall not furnish or render any services to an
occupant, assignee, manager or other transferee with respect to whom transfer
consideration is required to be paid, or manage or operate the Premises or any
capital additions so transferred, with respect to which transfer consideration
is being paid; (y) Tenant shall not consummate a Transfer with any person in
which Landlord owns an interest, directly or indirectly (by applying
constructive ownership rules set forth in Section 856(d)(5) of the Revenue
Code); and (z) Tenant shall not consummate a Transfer with any person or in any
manner that could cause any portion of the amounts received by Landlord pursuant
to this Lease or any sublease, license or other arrangement for the right to
use, occupy or possess any portion of the Premises to fail to qualify as "rents
from real property" within the meaning of Section 856(d) of the Revenue Code, or
any similar or successor provision thereto or which could cause any other income
of Landlord to fail to qualify as income described in Section 856(c)(2) of the

Revenue Code.

 

29.4.       The following are conditions precedent to a Transfer or to Landlord
considering a request by Tenant to a Transfer:

 

(a)         Tenant shall remain fully liable under this Lease. Tenant agrees
that it shall not be (and shall not be deemed to be) a guarantor or surety of
this Lease, however, and waives its right to claim that is it is a guarantor or
surety or to raise in any legal proceeding any guarantor or surety defenses
permitted by this Lease or by Applicable Laws;

 

(b)         If Tenant or the proposed transferee, assignee or sublessee does not
or carmot deliver the Required Financials, then Landlord may elect to have
either Tenant's ultimate parent company or the proposed transferee's, assignee's
or sublessee's ultimate parent company provide a guaranty of the applicable
entity's obligations under this Lease, in a form acceptable to
Landlord, which guaranty shall be executed and delivered to Landlord by the applicable
guarantor prior to the Transfer Date;

 

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(c)         In the case of an Exempt Transfer, Tenant shall provide Landlord
with evidence reasonably satisfactory to Landlord that the Transfer qualifies as
an Exempt Transfer;

 

(d)         Tenant shall provide Landlord with evidence reasonably satisfactory
to Landlord that the value of Landlord's interest under this Lease shall not be
diminished or reduced by the proposed Transfer. Such evidence shall include
evidence respecting the relevant business experience and financial
responsibility and status of the proposed transferee, assignee or sublessee;

 

(e)         Tenant shall reimburse Landlord for Landlord's actual costs and
expenses, including reasonable attorneys' fees, charges and disbursements
incurred in connection with the review, processing and documentation of such
request, which fees shall not exceed Two Thousand Five Hundred Dollars ($2,500),
unless Tenant requests any modification to this Lease, in which case the
foregoing cap will not apply;

 

(f)         Except with respect to an Exempt Transfer, if Tenant's transfer of
rights or sharing of the Premises provides for the receipt by, on behalf of or
on account of Tenant of any consideration of any kind whatsoever (including a
premium rental for a sublease or lump sum payment for an assignment, but
excluding Tenant's reasonable costs in marketing and subleasing the Premises) in
excess of the rental and other charges due to Landlord under this Lease, Tenant
shall pay fifty percent (50%) of all of such excess to Landlord, after making
deductions for any reasonable marketing expenses, tenant improvement funds
expended by Tenant, alterations, cash concessions, brokerage commissions,
attorneys' fees and free rent actually paid by Tenant.   If such consideration
consists of cash paid to Tenant, payment to Landlord shall be made upon receipt
by Tenant of such cash payment;

 

(g)         The proposed transferee, assignee or sublessee shall agree that, in
the event Landlord gives such proposed transferee, assignee or sublessee notice
that Tenant is in default under this Lease, such proposed transferee, assignee
or sublessee shall thereafter make all payments otherwise due Tenant directly to
Landlord, which payments shall be received by Landlord without any liability
being incurred by Landlord, except to credit such payment against those due by
Tenant under this Lease, and any such proposed transferee, assignee or sublessee
shall agree to attorn to Landlord or its successors and assigns should this
Lease be terminated for any reason; provided, however, that in no event shall
Landlord or its Lenders, successors or assigns be obligated to accept such
attornment; forms;

 

(h)         Landlord's consent to any such Transfer shall be effected on
Landlord's

 

(i)         Tenant shall not then be in Default hereunder in any respect;

 

(j)         Such proposed transferee, assignee or sublessee's use of the
Premises shall be the same as the Permitted Use;

 

(k)         Landlord shall not be bound by any provision of any agreement
pertaining to the Transfer, except for Landlord's written consent to the same;

 

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(I)          Tenant  shall  pay  all  transfer  and  other  taxes  (including  interest  and
penalties) assessed or payable for any Transfer;

 

(m)         Landlord's consent (or waiver of its  rights) for any Transfer shall
not waive Landlord's right to consent or refuse consent to any later Transfer;

 

(n)          Tenant shall deliver to Landlord one executed copy of any and all
written instruments evidencing or relating to the Transfer; and

 

(o)          Tenant shall deliver to Landlord a list of Hazardous Materials (as
defined below), certified by the proposed transferee, assignee or sublessee to
be true and correct, that the proposed transferee, assignee or sublessee intends
to use or store in the Premises.  Additionally, Tenant shall deliver to
Landlord, on or before the date any proposed transferee, assignee or sublessee
takes occupancy of the Premises, all of the items relating to Hazardous
Materials of such proposed transferee, assignee or sublessee as described in
Section 21.2.

 

29.5.       Any Transfer that is not in compliance with the provisions of this
Article or with respect to which Tenant does not fulfill its obligations
pursuant to this Article shall be void and shall, at the option of Landlord,
terminate this Lease.

 

29.6.       Notwithstanding any Transfer, Tenant shall remain fully and
primarily liable for the payment of all Rent and other sums due or to become due
hereunder, and for the full performance of all other terms, conditions and
covenants to be kept and performed by Tenant. The acceptance of Rent or any
other sum due hereunder, or the acceptance of performance of any other term,
covenant or condition thereof, from any person or entity other than Tenant shall
not be deemed a waiver of any of the provisions of this Lease or a consent to
any Transfer.

 

29.7.       If Tenant delivers to Landlord a Transfer Notice indicating a desire
to transfer this Lease to a proposed transferee, assignee or sublessee other
than pursuant to an Exempt Transfer, then Landlord shall have the option,
exercisable by giving notice to Tenant at any time within ten (10) days after
Landlord's receipt of such Transfer Notice, to terminate this Lease as of the
date specified in the Transfer Notice as the Transfer Date, except for those
provisions that, by their express terms, survive the expiration or earlier
termination hereof.  If Landlord exercises such option, then Tenant shall have
the right to withdraw such Transfer Notice by delivering to Landlord written
notice of such election within five (5) days after Landlord's delive1y of notice
electing to exercise Landlord's option to terminate this Lease. In the event
Tenant withdraws the Transfer Notice as provided in this Section, this Lease
shall continue in full force and effect. No failure of Landlord to exercise its
option to terminate this Lease shall be deemed to be Landlord's consent to a
proposed Transfer.

 

29.8.       If Tenant sublets the Premises or any portion thereof, Tenant hereby
immediately and irrevocably assigns to Landlord, as security for Tenant's
obligations under this Lease, all rent from any such subletting, and appoints
Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a
receiver for Tenant appointed on Landlord's  application) may collect such rent
and apply it toward Tenant's obligations under this Lease; provided that, until
the occurrence of a Default (as defined below) by Tenant, Tenant shall have the
right to collect such rent.

 

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29.9.In the event that Tenant enters into a sublease for the entire Premises in
accordance with this Article that expires within two (2) days of the Term
Expiration Date, the term expiration date of such sublease shall,
notwithstanding anything in this Lease, the sublease or any consent to the
sublease to the contrary, be deemed to be the date that is two (2) days prior to
the Term Expiration Date.

 

30.         Subordination and Attornment.

 

30.1.This Lease shall be subject and subordinate to the lien of any mortgage,
deed of trust, or lease in which Landlord is tenant now or hereafter in force
against the Building or the Project and to all advances made or hereafter to be
made upon the security thereof without the necessity of the execution and
delivery of any further instruments on the part of Tenant to effectuate such
subordination; provided that such lienholder agrees not to disturb Tenant's
occupancy of the Premises under this Lease so long as Tenant is not in default
hereunder. As of the Execution Date, there are no deeds of trust encumbering the
Project.

 

30.2.Notwithstanding the foregoing, Tenant shall execute and deliver upon demand
such further commercially reasonable instrument or instruments evidencing such
subordination and non-disturbance of this Lease to the lien of any such mortgage
or mortgages or deeds of trust or lease in which Landlord is tenant as may be
required by Landlord. If any such mortgagee, beneficiary or landlord under a
lease wherein Landlord is tenant (each, a "Mortgagee") so elects, however, this
Lease shall be deemed prior in lien to any such lease, mortgage, or deed of
trust upon or including the Premises regardless of date and Tenant shall execute
a statement in writing to such effect at Landlord's request. For the avoidance
of doubt, "Mortgagees" shall also include historic tax credit investors and new
market tax credit investors.

 

30.3.Upon written request of Landlord and opportunity for Tenant to review,
Tenant agrees to execute any Lease amendments not materially altering the terms
of this Lease, if required by a Mortgagee incident to the financing of the real
property of which the Premises constitute a part.

 

30.4.In the event any proceedings are brought for foreclosure, or in the event
of the exercise of the power of sale under any mortgage or deed of trust made by
Landlord covering the Premises, Tenant shall at the election of the purchaser at
such foreclosure or sale attorn to the purchaser upon any such foreclosure or
sale and recognize such purchaser as Landlord under this Lease.

 

31.         Defaults and Remedies.

 

31.1.Late payment by Tenant to Landlord of Rent and other sums due shall cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which shall be extremely difficult and impracticable to ascertain. Such costs
include processing and accounting charges and late charges that may be imposed
on Landlord by the terms of any mortgage or trust deed covering the
Premises. Therefore, if any installment of Rent due from Tenant is not received
by Landlord within five (5) days after the date such payment is due, Tenant
shall pay to Landlord (a) an additional sum of three percent (3%) of the overdue
Rent as a late charge plus (b) interest at an annual rate (the "Default Rate")
equal to the lesser of (a) twelve percent (12%) and

 

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(b) the highest rate permitted by Applicable Laws.  The parties agree that this
late charge represents a fair and reasonable estimate of the costs that Landlord
shall incur by reason of late payment by Tenant and shall be payable as
Additional Rent to Landlord due with the next installment of  Rent or within
five (5)  business days after Landlord's  demand, whichever is
earlier.   Landlord's  acceptance of any Additional Rent (including a late
charge or any other amount hereunder) shall not be deemed an extension of the
date that Rent is due or prevent Landlord from pursuing any other rights or
remedies under this Lease, at law or in equity. Notwithstanding the foregoing,
Tenant shall not be obligated to pay a late charge pursuant to this Section for
the first (I'') late payment of Rent during any twelve (12) month period during
the Term, unless Tenant fails to make such payment within five (5) days after
Tenant's receipt of notice from Landlord regarding such late payment.

 

31.2.       No payment by Tenant or receipt by Landlord of a lesser amount than
the Rent payment herein stipulated shall be deemed to be other than on account
of the Rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to
Landlord's  right to recover the balance of such Rent or pursue any other remedy
provided in this Lease or in equity or at law.  If a dispute shall arise as to
any amount or sum of money to be paid by Tenant to Landlord hereunder, Tenant
shall have the right to make payment "under protest," such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of Tenant to institute suit for recovery of the payment paid under protest.

 

31.3.       If Tenant fails to pay any sum of money required to be paid by it
hereunder or perform any other act on its part to be performed hereunder, in
each case within the applicable cure period (if any) described in Section 31.4,
then Landlord may (but shall not be obligated to), without waiving or releasing
Tenant from  any obligations of Tenant, make such payment or perform such act;
provided that such failure by Tenant unreasonably interfered with the use of the
Building or the Project by any other tenant or with the efficient operation of
the Building or the Project, or resulted or could have resulted in a violation
of Applicable Laws or the cancellation of an insurance policy maintained by
Landlord.  Notwithstanding the foregoing, in the event of an emergency, Landlord
shall have the right to enter the Premises and act in accordance with its rights
as provided elsewhere in this Lease.  In addition to the late charge described
in Section 31.1, Tenant shall pay to Landlord as Additional Rent all sums so
paid or incurred by Landlord, together with interest at the Default Rate,
computed from the date such sums were paid or incurred.

 

31.4.       The occurrence of any one or more of the following events shall
constitute a "Default" hereunder by Tenant:

 

(a)       Tenant abandons (as defined in California Civil Code Section 1951.3)
or vacates the Premises;

 

(b)       Tenant fails to make any payment of Rent, as and when due, or to
satisfY its obligations under Article 19, where such failure shall continue for
a period of three (3) days after written notice thereof from Landlord to Tenant;

 

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(c)       Tenant fails to observe or perform any obligation or covenant
contained herein (other than described in Sections 31.4(a) and 31.4(b)) to be
performed by Tenant, where such failure continues for a period of ten (I0) days
after written notice thereof from Landlord to Tenant; provided that, if the
nature of Tenant's default is such that it reasonably requires more than ten
(I0) days to cure, Tenant shall not be deemed to be in Default if Tenant
commences such cure within such ten (10) day period and thereafter diligently
prosecutes the same to completion; and provided, further, that such cure is
completed no later than sixty (60) days after Tenant's receipt of written notice
from Landlord;

 

(d)       Tenant makes an assignment for the benefit of creditors;

 

(e)       A receiver,  trustee or custodian  is appointed 
to or does take title, possession or control of all or substantially all of
Tenant's assets;

 

(f)       Tenant files a voluntary petition under the United States Bankruptcy
Code or any successor statute (as the same may be amended from time to time, the
"Bankruptcy Code") or an order for relief is entered against Tenant pursuant to
a voluntary or involuntary proceeding commenced under any chapter of the
Bankruptcy Code;

 

(g)       Any involuntary petition is filed against Tenant under any chapter of
the Bankruptcy Code and is not dismissed within one hundred twenty (120)
days; 20; or

 

(h)       Tenant fails to deliver an estoppel certificate in accordance with
Article

 

(i)       Tenant's  interest in this Lease is
attached, executed upon or otherwise judicially seized and such action is not
released within one hundred twenty (120) days of the action.

 

Notices given under this Section shall specify the alleged default and shall
demand that Tenant perform the provisions of this Lease or pay the Rent that is
in arrears, as the case may be, within the applicable period of time, or quit
the Premises.  No such notice shall be deemed a forfeiture or a termination of
this Lease unless Landlord elects otherwise in such notice.

 

31.5.    In the event of a Default by Tenant, and at any time thereafter, with
or without notice or demand and without limiting Landlord in the exercise of any
right or remedy that Landlord may have, Landlord has the right to do any or all
of the following:

 

(a)       Halt any Tenant Improvements and Alterations and order Tenant's
contractors, subcontractors, consultants, designers and material suppliers to
stop work;

 

(b)      Terminate Tenant's right to possession of the Premises by written
notice to Tenant or by any lawful means, in which case Tenant shall immediately
surrender possession of the Premises to Landlord. In such event, Landlord shall
have the immediate right to re-enter and
remove all persons and property, and such property may be removed and stored in
a public warehouse or elsewhere at the cost and for the account of Tenant, all
without service of notice or

 

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resort to legal process and without being deemed guilty of trespass or becoming
liable for any loss or damage that may be occasioned thereby; and

 

(c)       Terminate this Lease, in which event Tenant shall immediately
surrender possession of the Premises to Landlord.  In such event, Landlord shall
have the immediate right to re-enter and remove all persons and property, and
such property may be removed and stored in a public warehouse or elsewhere at
the cost and for the account of Tenant, all without service of notice or resort
to legal process and without being deemed guilty of trespass or becoming liable
for any loss or damage that may be occasioned thereby.  In the event that
Landlord shall elect to so terminate this Lease, then Landlord shall be entitled
to recover from Tenant all damages incurred by Landlord by reason of Tenant's
default, including

 

(i)          The sum of:

 

A.         The worth at the time of award of any unpaid Rent that had accrued at
the time of such termination; plus

 

B.         The worth at the time of award of the amount by which the unpaid Rent
that would have accrued during the period commencing with termination of the
Lease and ending at the time of award exceeds that portion of the loss of
Landlord's rental income from the Premises that Tenant proves to Landlord's
reasonable satisfaction could have been reasonably avoided; plus

 

C.         The worth at the time of award of the amount by which the unpaid Rent
for the balance of the Term after the time of award exceeds that portion of the
loss of Landlord's rental income from the Premises that Tenant proves to
Landlord's reasonable satisfaction could have been reasonably avoided; plus

 

D.       Any other amount necessary to compensate Landlord for all the detriment
caused by Tenant's failure to perform its obligations under this Lease or that
in the ordinary course of things would be likely to result therefrom, including
the cost of restoring the Premises to the condition required under the terms of
this Lease, including any rent payments not otherwise chargeable to Tenant
(e.g., during any "free" rent period or rent holiday); plus

 

E.        At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by Applicable Laws; or

 

(ii)         At  Landlord's  election,  as minimum liquidated damages in
addition to any (A) amounts paid or payable to Landlord pursuant to Section
31.5(c)(i)(A) prior to such election and (B) costs of restoring the Premises to
the condition required under the terms of this Lease, an amount (the "Election
Amount") equal to either (Y) the positive difference (if any, and measured at
the time of such termination) between (I) the then-present value of the total
Rent and other benefits that would have accrued to Landlord under this Lease for
the remainder of the Term if Tenant had fully complied with the Lease minus (2)
the then-present cash rental value of the Premises as determined by Landlord for
what would be the then-unexpired Term if the Lease remained in effect, computed
using the discount rate of the Federal Reserve Bank of

 

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San Francisco at the time of the award plus one (I) percentage point (the
"Discount Rate") or (Z) twelve (12) months (or such lesser number of months as
may then be remaining in the Term) of Base Rent and Additional Rent at the rate
last payable by Tenant pursuant to this Lease, in either case as Landlord
specifies in such election. Landlord and Tenant agree that the Election Amount
represents a reasonable forecast of the minimum damages expected to occur in the
event of a breach, taking into account the uncertainty, time and cost of
determining elements relevant to actual damages, such as fair market rent, time
and costs that may be required to re-lease the Premises, and other factors; and
that the Election Amount is not a penalty.

 

As used in Sections 31.5(c)(i)(A) and .(ID, "worth at the time of award" shall
be computed by allowing interest at the Default Rate. As used in Section
31.5(c)(i)(C), the "worth at the time of the award" shall be computed by taking
the present value of such amount, using the Discount Rate.

 

31.6.        In addition to any other remedies available to Landlord at law or
in equity and under this Lease, Landlord shall have the remedy described in
California Civil Code Section 1951.4 and may continue this Lease in effect after
Tenant's Default or abandonment and recover Rent as it becomes due, provided
Tenant has the right to sublet or assign, subject only to reasonable
limitations. In addition, Landlord shall not be liable in any way whatsoever for
its failure or refusal to relet the Premises. For purposes of this Section, the
following acts by Landlord will not constitute the termination of Tenant's right
to possession of the Premises:

 

(a)     Acts of maintenance or preservation or efforts to relet the Premises,
including alterations, remodeling, redecorating, repairs, replacements or
painting as Landlord shall consider advisable for the purpose of reletting the
Premises or any part thereof; or

 

(b)       The appointment of a receiver upon the initiative of Landlord to
protect Landlord's interest under this Lease or in the Premises.

 

Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may
elect at any time to terminate this Lease and to recover damages to which
Landlord is entitled.

 

31.7.      If Landlord does not elect to terminate this Lease as provided in
Section 31.5, then Landlord may, from time to time, recover all Rent as it
becomes due under this Lease. At any time thereafter, Landlord may elect to
terminate this Lease and to recover damages to which Landlord is entitled.

 

31.8.      In the event Landlord elects to terminate this Lease and relet
the Premises, Landlord may execute any new lease in its own name. Tenant
hereunder shall have no right or authority whatsoever to collect any Rent from
such tenant. The proceeds of any such reletting shall be applied as follows:

 

(a)     First, to the payment of any indebtedness other than Rent due hereunder
from Tenant to Landlord, including storage charges or brokerage commissions
owing from Tenant to Landlord as the result of such reletting;

 

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(b)     Second, to the payment of the costs and expenses of reletting the
Premises, including (i) alterations and repairs that Landlord deems reasonably
necessary and advisable and (ii) reasonable attorneys' fees, charges and
disbursements incurred by Landlord in connection with the retaking of the
Premises and such reletting; and

 

(c)     Third, to the payment of Rent and other charges due and unpaid
hereunder;

 

(d)     Fourth, to the payment of future Rent and other damages payable
by Tenant under this Lease. 31.9. All of Landlord's rights, options and remedies
hereunder shall be construed and held to be nonexclusive and cumulative.
Landlord shall have the right to pursue any one or all of such remedies, or any
other remedy or relief that may be provided by Applicable Laws, whether or not
stated in this Lease. No waiver of any default of Tenant hereunder shall be
implied from any acceptance by Landlord of any Rent or other payments due
hereunder or any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect defaults other than as specified in such waiver. Notwithstanding any
provision of this Lease to the contrary, in no event shall Landlord be required
to mitigate its damages with respect to any default by Tenant, except as
required by Applicable Laws. Any such obligation imposed by Applicable Laws upon
Landlord to relet the Premises after any termination of this Lease shall be
subject to the reasonable requirements of Landlord to (a) lease to high quality
tenants on such terms as Landlord may from time to time deem appropriate in its
discretion and (b) develop the Project in a harmonious manner with a mix of
uses, tenants, floor areas, terms of tenancies, etc., as determined by
Landlord. Landlord shall not be obligated to relet the Premises to (y) any
Tenant's Affiliate or (z) any party (i) unacceptable to a Lender, (ii) that
requires Landlord to make improvements to or re-demise the Premises, (iii) that
desires to change the Permitted Use, (iv) that desires to lease the Premises for
more or less than the remaining Term or (v) to whom Landlord or an affiliate of
Landlord may desire to lease other available space in the Project or at another
property owned by Landlord or an affiliate of Landlord.

 

31.10.    Landlord's termination of(a) this Lease or (b) Tenant's right to
possession of the Premises shall not relieve Tenant of any liability to Landlord
that has previously accrued or that shall arise based upon events that occurred
prior to the later to occur of (y) the date of Lease termination and (z) the
date Tenant surrenders possession of the Premises.

 

31.11.    To the extent permitted by Applicable Laws, Tenant waives any and all
rights of redemption granted by or under any present or future Applicable Laws
if Tenant is evicted or dispossessed for any cause, or if Landlord obtains
possession of the Premises due to Tenant's default hereunder or otherwise.

 

31.12.    Landlord shall not be in default or liable for damages under this
Lease unless Landlord fails to perform obligations required of Landlord within a
reasonable time, but in no event shall such failure continue for more than
thirty (30) days after written notice from Tenant specifying the nature of
Landlord's failure; provided, however, that if the nature of Landlord's

 

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obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be in default if Landlord commences
performance within such thirty (30) day period and thereafter diligently
prosecutes the same to completion.  In no event shall Tenant have the right to
terminate or cancel this Lease or to withhold or abate rent or to set off any
Claims against Rent as a result of any default or breach by Landlord of any of
its covenants, obligations, representations, warranties or promises hereunder,
except as may otherwise be expressly set forth in this Lease.

 

31.13.In the event of any default by Landlord, Tenant shall give notice by
registered or certified mail to any (a) beneficiary of a deed of trust or (b)
mortgagee under a mortgage covering the Premises, the Building or the Project
and to any landlord of any lease of land upon or within which the Premises, the
Building or the Project is located, and shall offer such beneficiary, mortgagee
or landlord a reasonable opportunity to cure the default, including time to
obtain possession of the Building or the Project by power of sale or a judicial
action if such should prove necessary to effect a cure; provided that Landlord
shall furnish to Tenant in writing, upon written request by Tenant, the names
and addresses of all such persons who are to receive such notices.

 

32.        Bankruptcy.  In the event a debtor, trustee or debtor in possession
under the Bankruptcy Code, or another person with similar rights, duties and
powers under any other Applicable Laws, proposes to cure any default under this
Lease or to assume or assign this Lease and is obliged to provide adequate
assurance to Landlord that (a) a default shall be cured, (b) Landlord shall be
compensated for its damages arising from any breach of this Lease and (c) future
performance of Tenant's  obligations under this Lease shall occur, then such
adequate assurances shall include any or all of the following, as designated by
Landlord in its sole and absolute discretion:

 

32.1.Those acts specified in the Bankruptcy Code or other Applicable Laws as
included within the meaning of "adequate assurance," even if this Lease does not
concern a shopping center or other facility described in such Applicable Laws;

 

32.2.A prompt cash payment to compensate Landlord for any monetary defaults or
actual damages arising directly from a breach of this Lease;

 

32.3.A cash deposit in an amount at least equal to the then-current amount of
the

Security Deposit; or

 

32.4.The assumption or assignment of all of Tenant's interest and obligations
under this Lease.

 

33.Brokers.

 

33.1.Tenant represents and warrants that it has had no dealings with any real
estate broker or agent in connection with the negotiation of this Lease other
than Jones Lang LaSalle ("Broker"), and that it knows of no other real estate
broker or agent that is or might be entitled to a commission in connection with
this Lease.  Landlord shall compensate Broker in relation to this Lease pursuant
to a separate agreement between Landlord and Broker.

 

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33.2.Tenant represents and warrants that no broker or agent has made any
representation or warranty relied upon by Tenant in Tenant's decision to enter
into this Lease, other than as contained in this Lease.

 

33.3.Tenant acknowledges and agrees that the employment of brokers by Landlord
is for the purpose of solicitation of offers of leases from prospective tenants
and that no authority is granted to any broker to furnish any
representation (written or oral) or warranty from Landlord unless expressly
contained within this Lease. Landlord is executing this Lease in reliance upon
Tenant's representations, warranties and agreements contained within Sections
33.1 and 33.2.

 

33.4.Tenant agrees to indemnifY, save, defend (at Landlord's option and with
counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees
harmless from any and all cost or liability for compensation claimed by any
broker or agent, other than Broker, employed or engaged by Tenant or claiming to
have been employed or engaged by Tenant.

 

34.       Definition of Landlord. With regard to obligations imposed upon
Landlord pursuant to this Lease, the term "Landlord," as used in this Lease,
shall refer only to Landlord or Landlord's then-current successor-in-interest.
In the event of any transfer, assignment or conveyance of Landlord's interest in
this Lease or in Landlord's fee title to or leasehold interest in the Property,
as applicable, Landlord herein named (and in case of any subsequent transfers or
conveyances, the subsequent Landlord) shall be automatically freed and relieved,
from and after the date of such transfer, assignment or conveyance, from all
liability for the performance of any covenants or obligations contained in this
Lease thereafter to be performed by Landlord and, without further agreement, the
transferee, assignee or conveyee of Landlord's in this Lease or in Landlord's
fee title to or leasehold interest in the Property, as applicable, shall be
deemed to have assumed and agreed to observe and perform any and all covenants
and obligations of Landlord hereunder during the tenure of its interest in the
Lease or the Property. Landlord or any subsequent Landlord may transfer its
interest in the Premises or this Lease without Tenant's consent.

 

35.         Limitation of Landlord's Liability.

 

35.1.If Landlord is in default under this Lease and, as a consequence, Tenant
recovers a monetary judgment against Landlord, the judgment shall be satisfied
only out of (a) the proceeds of sale received on execution of the judgment and
levy against the right, title and interest of Landlord in the Building and the
Project, (b) rent or other income from such real property receivable by Landlord
or (c) the consideration received by Landlord from the sale, financing,
refinancing or other disposition of all or any part of Landlord's right, title
or interest in the Building or the Project.

 

35.2.Neither Landlord nor any of its affiliates, nor any of their respective
partners, shareholders, directors, officers, employees, members or agents shall
be personally liable for Landlord's obligations or any deficiency under this
Lease, and service of process shall not be made against any shareholder,
director, officer, employee or agent of Landlord or any of Landlord's
affiliates. No partner, shareholder, director, officer, employee, member or
agent of Landlord or any of its affiliates shall be sued or named as a party in
any suit or action, and service of process shall not be made against any partner
or member of Landlord except as may be necessary to secure jurisdiction of the
partnership, joint venture or limited liability company, as

 

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applicable. No partner, shareholder, director, officer, employee, member or
agent of Landlord or any of its affiliates shall be required to answer or
otherwise plead to any service of process, and no judgment shall be taken or
writ of execution levied against any partner, shareholder, director, officer,
employee, member or agent of Landlord or any of its affiliates.

 

35.3.Each of the covenants and agreements of this Article shall be applicable to
any covenant or agreement either expressly contained in this Lease or imposed by
Applicable Laws and shall survive the expiration or earlier termination of this
Lease.

 

36.         Joint and Several Obligations. If more than one person or entity
executes this Lease as Tenant, then:

 

36.1.Each of them is jointly and severally liable for the keeping, observing and
performing of all of the terms, covenants, conditions, provisions and agreements
of this Lease to be kept, observed or performed by Tenant, and such terms,
covenants, conditions, provisions and agreements shall be binding with the same
force and effect upon each and all of the persons executing this Agreement as
Tenant; and

 

36.2.The term "Tenant," as used in this Lease, shall mean and include each of
them, jointly and severally. The act of, notice from, notice to, refund to, or
signature of any one or more of them with respect to the tenancy under this
Lease, including any renewal, extension, expiration, termination or modification
of this Lease, shall be binding upon each and all of the persons executing this
Lease as Tenant with the same force and effect as if each and all of them had so
acted, so given or received such notice or refund, or so signed.

 

37.         Representations. Tenant guarantees, warrants and represents that (a)
Tenant is duly incorporated or otherwise established or formed and validly
existing under the laws of its state of incorporation, establishment or
formation, (b) Tenant has and is duly qualified to do business in the state in
which the Property is located, (c) Tenant has full corporate, partnership,
trust, association or other appropriate power and authority to enter into this
Lease and to perform all Tenant's obligations hereunder, (d) each person (and
all of the persons if more than one signs) signing this Lease on behalf of
Tenant is duly and validly authorized to do so and (e) neither (i) the
execution, delivery or performance of this Lease nor (ii) the consummation of
the transactions contemplated hereby will violate or conflict with any provision
of documents or instruments under which Tenant is constituted or to which Tenant
is a party. In addition, Tenant guarantees, warrants and represents that none of
(x) it, (y) its affiliates or partners nor (z) to the best of its knowledge, its
members, shareholders or other equity owners or any of their respective
employees, officers, directors, representatives or agents is a person or entity
with whom U.S. persons or entities are restricted from doing business under
regulations of the Office of Foreign Asset Control ("OFAC") of the Department of
the Treasury (including those named on OFAC's Specially Designated and Blocked
Persons List) or under any statute, executive order (including the September 24,
2001, Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar
governmental action.

 

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38.         Confidentiality. Tenant shall keep the terms and conditions of this
Lease and any information provided to Tenant or its employees, agents or
contractors pursuant to A rticle 9 confidential and shall not (a) disclose to
any third party any terms or conditions of this Lease or any other Lease-related
document (including subleases, assignments, work letters, construction
contracts, letters of credit, subordination agreements, non-disturbance
agreements, brokerage agreements or estoppels) or (b) provide to any third party
an original or copy of this Lease (or any Lease-related document). Landlord
shall not release to any third party any non-public financial information or
non-public information about Tenant's ownership structure that Tenant gives
Landlord. Notwithstanding the foregoing, confidential information under this
Section may be released by Landlord or Tenant under the following
circumstances: (x) if required by Applicable Laws or in any judicial proceeding;
provided that the releasing party has given the other party reasonable notice of
such requirement, if feasible, (y) to a party's attorneys, accountants, brokers
and other bona fide consultants or advisers (with respect to this Lease only);
provided such third parties agree to be bound by this Section or (z) to bona
fide prospective assignees or subtenants of this Lease; provided they agree in
writing to be bound by this Section.

 

39.         Notices. Except as otherwise stated in this Lease, any notice,
consent, demand, invoice, statement or other communication required or permitted
to be given hereunder shall be in writing and shall be given by (a) personal
delivery, (b) overnight delivery with a reputable international overnight
delivery service, such as FedEx, or (c) facsimile or email transmission, so long
as such transmission is followed within one (1) business day by delivery
utilizing one of the methods described in Subsection 39(a) or {hl. Any such
notice, consent, demand, invoice, statement or other communication shall be
deemed delivered (x) upon receipt, if given in accordance with Subsection 39(a);
(y) one (I) business day after deposit with a reputable international overnight
delivery service, if given if given in accordance with Subsection 39(b); or (z)
upon transmission, if given in accordance with Subsection 39(c). Except as
otherwise stated in this Lease, any notice, consent, demand, invoice, statement
or other communication required or permitted to be given pursuant to this Lease
shall be addressed to Landlord or Tenant at the addresses shown in Sections 2.9
and 2.10 or 2.11, respectively. Either party may, by notice to the other given
pursuant to this Section, specify additional or different addresses for notice
purposes.

 

40.         Miscellaneous.

 

40.1.Landlord reserves the right to change the name of the Building or the
Project in its sole discretion.

 

40.2.To induce Landlord to enter into this Lease, Tenant agrees that it shall
furnish to Landlord, from time to time, within ten (10) business days after
receipt of Landlord's written request (not more often than once per year), the
most recent year-end unconsolidated financial statements reflecting Tenant's
current financial condition audited by a nationally recognized accounting
firm. Tenant represents and warrants that all financial statements, records and
information furnished by Tenant to Landlord in connection with this Lease are
true, correct and complete in all respects. If audited financials are not
otherwise prepared, unaudited financials complying with generally accepted
accounting principles and certified by the chief financial officer of Tenant as
true, correct and complete in all respects shall suffice for purposes of this
Section. If Tenant fails to deliver to Landlord any financial statement within
the time period

 

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required under this Section, then Tenant shall be required to pay to Landlord an
administrative fee equal to One Thousand Dollars ($1,000) within five (5)
business days after receiving written notice from Landlord advising Tenant of
such failure (provided, however, that Landlord's acceptance of such fee shall
not prevent Landlord from pursuing any other rights or remedies under this
Lease, at law or in equity). The provisions of this Section shall not apply at
any time while Tenant is a corporation whose shares are traded on any nationally
recognized stock exchange.

 

40.3.Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or option for a lease, and shall not be
effective as a lease or otherwise until execution by and delivery to both
Landlord and Tenant.

 

40.4.The terms of this Lease are intended by the parties as a
final, complete and exclusive expression of their agreement with respect to the
terms that are included herein, and may not be contradicted or supplemented by
evidence of any other prior or contemporaneous agreement.

 

40.5.Landlord may, but shall not be obligated to, record a short form or
memorandum hereof without Tenant's consent. Within ten (10) days
after receipt of written request from
Landlord, Tenant shall execute a termination of any short form or memorandum of lease
recorded with respect hereto. Tenant shall be responsible for the cost of
recording any short form or memorandum of this Lease, including any transfer or
other taxes incurred in connection with such recordation. Neither party shall
record this Lease.

 

40.6.Where applicable in this Lease, the singular includes the plural and the
masculine or neuter includes the masculine, feminine and neuter. The words
"include," "includes," "included" and "including" mean "'include,' etc., without
limitation." The word "shall" is mandatory and the word "may" is permissive. The
section headings of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part of this Lease.
Landlord and Tenant have each participated in the drafting and negotiation of
this Lease, and the language in all parts of this Lease shall be in all cases
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.

 

40.7.Except as otherwise expressly set forth in this Lease, each party shall pay
its own costs and expenses incurred in connection with this Lease and such
party's performance under
this Lease; provided that, if either party commences an action, proceeding, demand, claim,
action, cause of action or suit against the other party arising out of or in
connection with this
Lease, then the substantially prevailing party shall be reimbursed by
the other party for all reasonable costs and expenses, including reasonable
attorneys' fees and expenses, incurred by the substantially prevailing party in
such action, proceeding, demand, claim, action, cause of action or suit, and in
any appeal in connection therewith (regardless of whether the applicable action,
proceeding, demand, claim, action, cause of action, suit or appeal is
voluntarily withdrawn or dismissed).

 

40.8.Time is of the essence with respect to the performance of every provision
of this Lease.

 

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40.9.       Each provision of this Lease performable by Tenant shall be deemed
both a covenant and a condition.

 

40.10.      Notwithstanding anything to the contrary contained in this Lease,
Tenant's obligations under this Lease are independent and shall not be
conditioned upon performance by Landlord.

 

40.11.     Whenever consent or approval of either party is required, that party
shall not unreasonably withhold, condition or delay such consent or approval,
except as may be expressly set forth to the contrary.

 

40.12.      Any provision of this Lease that shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision hereof,
and all other provisions of this Lease shall remain in full force and effect and
shall be interpreted as if the invalid, void or illegal provision did not exist.

 

40.13.Each of the covenants, conditions and agreements herein contained shall
inure to the benefit of and shall apply to and be binding upon the parties
hereto and their respective heirs; legatees; devisees; executors;
administrators; and permitted successors and assigns. This Lease is for the sole
benefit of the parties and their respective heirs, legatees, devisees,
executors, administrators and permitted successors and assigns, and nothing in
this Lease shall give or be construed to give any other person or entity any
legal or equitable rights. Nothing in this Section shall in any way alter the
provisions of this Lease restricting assignment or subletting.

 

40.14.This Lease shall be governed by, construed and enforced in accordance with
the laws of the state in which the Premises are located, without regard to such
state's conflict oflaw principles.

 

40.15.Tenant guarantees, warrants and represents that the individual or
individuals signing this Lease have the power, authority and legal capacity to
sign this Lease on behalf of and to bind all entities, corporations,
partnerships, limited liability companies, joint venturers or other
organizations and entities on whose behalf such individual or individuals have
signed.

 

40.16.This Lease may be executed in one or more counterparts, each of which,
when taken together, shall constitute one and the same document.

 

40.17.No provision of this Lease may be modified, amended or supplemented except
by an agreement in writing signed by Landlord and Tenant.

 

40.18.No waiver of any term, covenant or condition of this Lease shall be
binding upon either party unless executed in writing by the waiving party. The
waiver by Landlord or Tenant of any breach or default of any term, covenant or
condition contained in this Lease shall not be deemed to be a waiver of any
preceding or subsequent breach or default of such term, covenant or condition or
any other term, covenant or condition of this Lease.

 

40.19.To the extent permitted by Applicable Laws, the parties waive trial by
jury in any action, proceeding or counterclaim brought by the other party hereto
related to matters arising out

 

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of or in any way connected with this Lease;
the relationship between Landlord and Tenant; Tenant's use or occupancy of the
Premises; or any claim of injury or damage related to this Lease or the
Premises.

 

41.         Rooftop Installation Area.

 

41.1.Tenant may use those portions of the Building identified as a "Rooftop
Installation Area" on Exhibit A attached hereto (the "Rooftop Installation Area") solely to
operate, maintain, repair and replace rooftop antennae, mechanical equipment,
communications antennas and other equipment installed by Tenant in the Rooftop
Installation Area in accordance with this Article ("Tenant's Rooftop
Equipment"). Tenant's Rooftop Equipment shall be only for Tenant's use of the
Premises for the Permitted Use.

 

41.2.Tenant shall install Tenant's Rooftop Equipment at its sole cost and
expense, at such times and in such manner as Landlord may reasonably designate,
and in accordance with this Article and the applicable provisions of this Lease
regarding Alterations. Tenant's Rooftop Equipment and the installation thereof
shall be subject to Landlord's prior written approval, which approval shall not
be unreasonably withheld. Among other reasons, Landlord may withhold approval if
the installation or operation of Tenant's Rooftop Equipment could reasonably be
expected to damage the structural integrity of the Building or to transmit
vibrations or noise or cause other adverse effects beyond the Premises to an
extent not customary in first class laboratory buildings, unless Tenant
implements measures that are acceptable to Landlord in its reasonable discretion
to avoid any such damage or transmission.

 

41.3.Tenant shall comply with any roof or roof-related warranties. Tenant shall
obtain a letter from Landlord's roofing contractor within thirty (30) days after
completion of any Tenant work on the rooftop stating that such work did not
affect any such warranties. Tenant, at its sole cost and expense, shall inspect
the Rooftop Installation Area at least annually, and correct any loose bolts,
fittings or other appurtenances and repair any damage to the roof caused by the
installation or operation of Tenant's Rooftop Equipment. Tenant shall not permit
the installation, maintenance or operation of Tenant's Rooftop Equipment to
violate any Applicable Laws or constitute a nuisance. Tenant shall pay Landlord
within thirty (30) days after demand (a) all applicable taxes, charges, fees or
impositions imposed on Landlord by Governmental Authorities as the result of
Tenant's use of the Rooftop Installation Areas in excess of those for which
Landlord would otherwise be responsible for the use or installation of Tenant's
Rooftop Equipment and (b) the amount of any increase in Landlord's insurance
premiums as a result of the installation of Tenant's Rooftop Equipment. Upon
Tenant's written request to Landlord, Landlord shall use commercially reasonable
efforts to cause other tenants to remedy any interference in the operation of
Tenant's Rooftop Equipment caused by any such tenants' equipment installed after
the applicable piece of Tenant's Rooftop Equipment; provided, however, that
Landlord shall not be required to request that such tenants waive their rights
under their respective leases.

 

41.4.If Tenant's Equipment (a) causes physical damage to the structural
integrity of the Building, (b) interferes with any telecommunications,
mechanical or other systems located at or
near or servicing the Building or the Project that were installed prior to the installation of

 

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Tenant's Rooftop Equipment, (c) interferes with any other service provided to
other tenants in the Building or the Project by rooftop or penthouse
installations that were installed prior to the installation of Tenant's Rooftop
Equipment or (d) interferes with any other tenants' business, in each case in
excess of that permissible under Federal Communications Commission regulations,
then Tenant shall cooperate with Landlord to determine the source of the damage
or interference and promptly repair such damage and eliminate such interference,
in each case at Tenant's sole cost and expense, within ten (I0) days after
receipt of notice of such damage or interference (which notice may be oral;
provided that Landlord also delivers to Tenant written notice of such damage or
interference within twenty-four (24) hours after providing oral notice).

 

41.5.Landlord reserves the right to cause Tenant to relocate Tenant's Rooftop
Equipment to comparably functional space on the roof or in the penthouse of the
Building by giving Tenant prior written notice thereof. Landlord agrees to pay
the reasonable costs thereof. Tenant shall arrange for the relocation of
Tenant's Rooftop Equipment within sixty (60) days after receipt of Landlord's
notification of such relocation. In the event Tenant fails to arrange for
relocation within such sixty (60)-day period, Landlord shall have the right to
arrange for the relocation of Tenant's Rooftop Equipment in a manner that does
not unnecessarily interrupt or interfere with Tenant's use of the Premises for
the Permitted Use.

 

42.       Option to Extend Term. Tenant shall have the option ("Option") to
extend the Term by five (5) years as to the entire Premises (and no less than
the entire Premises) upon the following terms and conditions. Any extension of
the Term pursuant to the Option shall be on all the same terms and conditions as
this Lease, except as follows:

 

42.1.Base Rent at the commencement of the Option term shall equal the greater
of(a) one hundred three percent (103%) of the then-current Base Rent and (b) the
then-current fair market value for comparable office and laboratory space in the
Peninsula submarket of comparable age, quality, level of finish and proximity to
amenities and public transit ("FMV"), and in each case shall be further
increased on each annual anniversary of the Option term commencement date by
three percent (3%). Tenant may, no more than fifteen (15) months prior to the
date the Term is then scheduled to expire (and no less than twelve (12) months
prior to the date upon which the Term is then scheduled to expire), request
Landlord's estimate of the FMV for the Option term. Landlord shall, within
fifteen (15) days after receipt of such request, give Tenant a written proposal
of such FMV. If Tenant gives written notice to exercise the Option, such notice
shall specifY whether Tenant accepts Landlord's proposed estimate of FMV. If
Tenant does not accept the FMV, then the parties shall endeavor to agree upon
the FMV, taking into account all relevant factors, including (v) the size of the
Premises, (w) the length of the Option term, (x) rent in comparable buildings in
the relevant submarket, including concessions
offered to new tenants, such as free rent, tenant improvement allowances and moving
allowances, (y) Tenant's creditw01ihiness and (z) the quality and location of
the Building and the Project. In the event that the parties are unable to agree
upon the FMV within thirty (30) days after Tenant notifies Landlord that Tenant
is exercising the Option, then either party may request that the same be
determined as follows: a senior officer of a nationally recognized leasing
brokerage firm with local knowledge of the Peninsula laboratory/research and
development leasing submarket (the "Baseball Arbitrator") shall be selected and
paid for jointly by Landlord and Tenant. If Landlord and Tenant are unable to
agree upon the Baseball Arbitrator, then the

 

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same shall be designated by the local chapter of the Judicial Arbitration and
Mediation Services or any successor organization thereto (the "JAMS"). The
Baseball Arbitrator selected by the parties or designated by JAMS shall (y) have
at least ten (I 0) years' experience in the leasing of laboratory/research and
development space in the Peninsula submarket and (z) not have been employed or
retained by either Landlord or Tenant or any affiliate of either for a period of
at least ten (10) years prior to appointment pursuant hereto. Each of Landlord
and Tenant shall submit to the Baseball Arbitrator and to the other party its
determination of the FMV. The Baseball Arbitrator shall grant to Landlord and
Tenant a hearing and the right to submit evidence. The Baseball Arbitrator shall
determine which of the two (2) FMV determinations more closely represents the
actual FMV. The arbitrator may not select any other FMV for the Premises other
than one submitted by Landlord or Tenant. The FMV selected by the Baseball
Arbitrator shall be binding upon Landlord and Tenant and shall serve as the
basis for determination of Base Rent payable for the Option term. If, as of the
commencement date of the Option term, the amount of Base Rent payable during the
Option term shall not have been determined, then, pending such determination,
Tenant shall pay Base Rent equal to the Base Rent payable with respect to the
last year of the then-current Term. After the final determination of Base Rent
payable for the Option term, the parties shall promptly execute a written
amendment to this Lease specifying the amount of Base Rent to be paid during the
Option term. Any failure of the parties to execute such amendment shall not
affect the validity of the FMV determined pursuant to this Section.

 

42.2.      The Option is not assignable separate and apart from this Lease.

 

42.3.     The Option is conditional upon Tenant giving Landlord written notice
of its election to exercise the Option at least twelve (12) months prior to the
end of the expiration of the then-current Term. Time shall be of the essence as
to Tenant's exercise of the Option. Tenant assumes full responsibility for
maintaining a record of the deadlines to exercise the Option. Tenant
acknowledges that it would be inequitable to require Landlord to accept any
exercise of the Option after the date provided for in this Section.

 

42.4.     Notwithstanding anything contained in this Article to the contrary,
Tenant shall not have the right to exercise the Option:

 

(a)       During the time commencing from the date Landlord delivers to Tenant a
written notice that Tenant is in default under any provisions of this Lease and
continuing until Tenant has cured the specified default to Landlord's reasonable
satisfaction; or

 

(b)       At any time after any Default as described in Article 31 of the Lease
(provided, however, that, for purposes of this Section 42.4(b), Landlord shall
not be required to provide Tenant with notice of such Default) and continuing
until Tenant cures any such Default, if such Default is susceptible to being
cured; or

 

(c)       In the event that Tenant has defaulted in the performance of its
obligations under this Lease during the twelve (12)-month period immediately
prior to the date that Tenant intends to exercise the Option, whether or not
Tenant has cured such defaults.

 

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42.5.The period of time within which Tenant may exercise the Option shall not be
extended or enlarged by reason of Tenant's inability to exercise such Option
because of the provisions of Section 42.4.

 

42.6.All of Tenant's rights under the provisions of the Option shall terminate
and be of no further force or effect even after Tenant's due and timely exercise
of the Option if, after such exercise, but prior to the commencement date of the
new term, (a) Tenant fails to pay to Landlord a monetary obligation of Tenant
for a period of twenty (20) days after written notice from Landlord to Tenant,
(b) Tenant fails to commence to cure a default (other than a monetary default)
within thirty (30) days after the date Landlord gives notice to Tenant of such
default or (c) Tenant has Defaulted under this Lease and a service or late
charge under Section 31.1 has become payable for any such Default, whether or
not Tenant has cured such defaults.

 

43.           Right of First Refusal. For so long as Tenant leases and
personally occupies more Rentable Area in the Building than any other tenant,
Tenant shall have a right of first refusal ("ROFR") as to any rentable premises
in the Building for which Landlord is seeking a tenant ("Available ROFR
Premises"); provided, however, that in no event shall Landlord be required to
lease any Available ROFR Premises to Tenant if Landlord has not received
Tenant's Election Notice (as defined below) within thirty-six (36) months after
the Execution Date (i.e., this ROFR will expire thirty-six (36) months after the
Execution Date). In the event the expiration date for the term of such Available
ROFR Premises would be later than the date of the expiration or earlier
termination of this Lease, then the Term for the existing Premises will be
extended to such later expiration date, and Base Rent for the existing Premises
during such extended Term will be equal to the FMV as determined pursuant to
Section 42.1 above. This ROFR will not apply to the lease currently being
negotiated by Landlord for a portion of the third (3rd) floor with Novartis
Pharmaceuticals Corporation or its designee. Landlord covenants not to amend any
currently existing lease with any tenant of any space subject to this ROFR in a
manner that would provide such tenant a renewal option or allow such tenant to
extend its lease in a manner that would circumvent Tenant's ability to exercise
the ROFR, without first obtaining Tenant's prior written consent. In the event
Landlord receives from a third party a bona fide offer to lease Available ROFR
Premises, Landlord shall provide written notice thereof to Tenant (the "Notice
of Offer"), specifying the terms and conditions of a proposed lease to Tenant of
the Available ROFR Premises.

 

43.1.Within ten (10) business days following its receipt of a Notice of Offer,
Tenant shall advise Landlord in writing whether Tenant elects to lease all (not
just a portion) of the Available ROFR Premises on the terms and conditions set
forth in the Notice of Offer ("Tenant's Election Notice"). If Tenant fails to
provide Tenant's Election Notice to Landlord within such ten (10) business day
period, then Tenant shall be deemed to have elected not to lease the Available
ROFR Premises.

 

43.2.If Tenant timely provides Tenant's Election Notice to Landlord that Tenant
elects to lease the Available ROFR Premises on the terms and conditions set
forth in the Notice of Offer, then Landlord shall lease the Available ROFR
Premises to Tenant upon the terms and conditions set forth in the Notice of
Offer.

 

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43.3.If Tenant timely provides Tenant's Election Notice to Landlord that Tenant
elects not to lease the Available ROFR Premises on the terms and conditions set
forth in the Notice of Offer, or if Tenant fails to provide Tenant's Election
Notice to Landlord within the ten (10) business day period described above, then
Landlord shall have the right to consummate the lease of the Available ROFR
Premises on the same terms as set forth in the Notice of Offer following
Tenant's election (or deemed election) not to lease the Available ROFR
Premises. If Landlord does not lease the Available ROFR Premises within one
hundred eighty (180) days after Tenant's election (or deemed election) not to
lease the Available ROFR Premises, then the ROFR shall be fully reinstated
(subject to the terms of this Article), and Landlord shall not thereafter lease
the Available ROFR Premises without first complying with the procedures set
forth in this Article.

 

43.4.Notwithstanding anything in this Article to the contrary, Tenant shall not
exercise the ROFR during such period of time that Tenant is in Default under any
provision of this Lease. Any attempted exercise of the ROFR during a period of
time in which Tenant is so in Default shall be void and of no effect. In
addition, Tenant shall not be entitled to exercise the ROFR if Landlord has
given Tenant two (2) or more notices of default under this Lease, whether or not
the defaults are cured, during the twelve (12) month period prior to the date on
which Tenant seeks to exercise the ROFR.

 

43.5.Notwithstanding anything in this Lease to the contrary, Tenant shall not
assign or transfer the ROFR, either separately or in conjunction with an
assignment or transfer of Tenant's interest in the Lease, without Landlord's
prior written consent, which consent Landlord may withhold in its sole and
absolute discretion.

 

43.6.If Tenant exercises the ROFR, Landlord does not guarantee that the
Available ROFR Premises will be available on the anticipated commencement date
for the Lease as to such Premises due to a holdover by the then-existing
occupants of the Available ROFR Premises or for any other reason beyond
Landlord's reasonable control.

 

43.7.Notwithstanding anything in this Lease to the contrary, the ROFR shall
expire on the date that is thirty-six (36) months following the Execution Date.

 

44.         Storage Area. Commencing as of the Term Commencement Date,
and continuing throughout the initial Term, as the same may be extended pursuant
to the Option, Tenant shall have the right to use that certain storage area
located in a portion of the ground floor surface parking lot serving the
Building containing approximately four (4) parking stalls ("Storage Space") at
the initial location shown on Exhibit A. Landlord will have the right to cause
Tenant to relocate the Storage Space, at Tenant's cost, at any time by providing
not less than sixty (60) days' prior written notice. Tenant agrees to accept the
Storage Space in its "as-is" condition, and Tenant hereby acknowledges that
Landlord shall not be obligated to provide or pay for any improvement work or
services related to the improvement of the Storage Space. Tenant also
acknowledges that Landlord has made no representation or warranty regarding the
condition of the Storage Space. The parking stalls occupied by the Storage Space
will be counted toward the number of parking stalls to which Tenant is entitled
pursuant to this Lease.

 

44.1.Indemnification. Tenant hereby absolves Landlord from any and all Claims,
from any cause whatsoever, that Tenant may suffer to its personal property
located anywhere in the

 

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Storage Space or that it or its agents, employees, principals, invitees or
licensees may suffer as a direct or indirect consequence of Tenant's lease of or
use of the Storage Space or access areas to the Storage Space. In addition,
Tenant hereby agrees to indemnify, defend, protect and hold Landlord harmless
from and against any Claims, whether foreseeable or not, resulting as a direct
or indirect consequence of Tenant's lease or use of the Storage Space or access
areas to the Storage Space.

 

44.2.Use of Storage Space. Tenant agrees not to store any flammable or highly
combustible materials in the Storage Space. Tenant also agrees not to store
waste in the Storage Space. Tenant agrees to use the Storage Space solely for
storage purposes and not as office space. Tenant agrees that Landlord and its
agents may enter and inspect the Storage Space and any goods stored therein at
any time during regular business hours upon giving twenty-four (24) hours' prior
notice to Tenant and so long as Tenant is provided with an opportunity to have a
representative of Tenant present. Tenant shall, at its sole cost and expense,
deliver to Landlord a key for any locks installed by Tenant for Landlord's
maintenance and inspection and emergency entrance purposes. Landlord will not be
required to notify Tenant before entry into the Storage Space in the event of an
emergency or for regularly scheduled service and maintenance of the fire
sprinkler system serving the Storage Space. Tenant accepts the Storage Space
without any warranties or representations and shall maintain and repair the
Storage Space at its sole cost and expense. Any improvements or alterations that
Tenant desires to make to the Storage Space will be subject to Article 17.

 

44.3.Assignment and Sublease. The Storage Space may not be assigned or subleased
by Tenant or otherwise transferred by Tenant.

 

44.4.Incorporation of Lease Provisions. The provisions of this Lease with regard
to the Premises, to the extent applicable and not inconsistent with the
provisions of this Article, shall be deemed to apply to the Storage Space as
though the Storage Space is part of the Premises.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
first above written.

 

LANDLORD:

 

 

 

BMR-201 INDUSTRIAL ROAD LP,

 

a Delaware limited partnership

 

 

 

 

 

 

 

Picture 4 [ntra20151231ex1023d40a6001.jpg]

 

 

 

 

 

 

TENANT:

 

 

 

NATERA, INC.,

 

a Delaware corporation

 

 

 

 

 

Picture 1 [ntra20151231ex1023d40a6002.jpg]

 

 

 

 

 

 

 

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EXIITBIT A

 

PREMISES.STORAGE SPACE AND MECHANICAL ROOM

 

 

Picture 2 [ntra20151231ex1023d40a6003.jpg]

 

 

 

 

A-1

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Picture 11 [ntra20151231ex1023d40a6004.jpg]

 

 

 

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EXlllBIT A-1

 

INTREXON SPACE

 

Picture 12 [ntra20151231ex1023d40a6005.jpg]

 

 

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EXHIBIT B

 

WORK LETTER

 

This Work Letter (this “Work Letter”) is made and entered into as of the 26th
day of October, 2015, by and between BMR-201 INDUSTRIAL ROAD LP, a Delaware
limited partnership (“Landlord”), and NATERA, INC., a Delaware corporation
(“Tenant”), and is attached to and made a part of that certain Lease dated as of
October 26, 2015 (as the same may be amended, amended and restated, supplemented
or otherwise modified from time to time, the “Lease”), by and between Landlord
and Tenant for the Premises located at 201 Industrial Road, San Carlos,
California.  All capitalized terms used but not otherwise defined herein shall
have the meanings given them in the Lease.

 

1.           General Requirements.

 

1.1.Authorized Representatives.

 

(a)    Landlord designates, as Landlord’s authorized representative (“Landlord’s
Authorized Representative”), (i) Joel Leong as the person authorized to initial
plans, drawings, approvals and to sign change orders pursuant to this Work
Letter and (ii) an officer of Landlord as the person authorized to sign any
amendments to this Work Letter or the Lease. Tenant shall not be obligated to
respond to or act upon any such item until such item has been initialed or
signed (as applicable) by the appropriate Landlord’s Authorized Representative.
Landlord may change either Landlord’s Authorized Representative upon one (1)
business day’s prior written notice to Tenant.

 

(b)      Tenant designates David Cutler (“Tenant’s Authorized Representative”)
as the person authorized to initial and sign all plans, drawings, change orders
and approvals pursuant to this Work Letter. Landlord shall not be obligated to
respond to or act upon any such item until such item has been initialed or
signed (as applicable) by Tenant’s Authorized Representative. Tenant may change
Tenant’s Authorized Representative upon one (1) business day’s prior written
notice to Landlord.

 

1.2.Schedule. The schedule for design and development of the Tenant
Improvements, including the time periods for preparation and review of
construction documents, approvals and performance, shall be in accordance with a
schedule to be prepared by Tenant (the “Schedule”). Tenant may prepare multiple
Schedules for multiple scopes of work, all of which must be completed prior to
September 30, 2017. Tenant shall prepare each Schedule so that it is a
reasonable schedule for the completion of the applicable Tenant
Improvements. The Schedule(s) shall clearly identify all activities requiring
Landlord participation, including specific dates and time periods when Tenant’s
contractor will require access to areas of the Project outside of the
Premises. As soon as each Schedule is completed, Tenant shall deliver the same
to Landlord for Landlord’s approval, which approval shall not be unreasonably
withheld, conditioned or delayed. Each Schedule shall be approved or disapproved
by Landlord within ten (10) business days after delivery to Landlord. Landlord’s
failure to respond within such ten (10) business day period shall be deemed
approval by Landlord. If Landlord disapproves a Schedule, then Landlord shall

 

 

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notifY Tenant in writing of its objections to such Schedule, and the parties
shall confer and negotiate in good faith to reach agreement on the
Schedule. Each Schedule shall be subject to adjustment as mutually agreed upon
in writing by the parties, or as provided in this Work Letter.

 

1.3.Tenant's Architects. Contractors and Consultants.  The architect,
engineering consultants, design team, general contractor and subcontractors
responsible for the construction of the Tenant Improvements shall be selected by
Tenant and approved by Landlord, which approval Landlord shall not unreasonably
withhold, condition or delay. Landlord may refuse to consent to the use of any
architects, consultants, contractors, subcontractors or material suppliers that
do not meet Landlord's standard criteria for qualification of vendors and
contractors. All Tenant contracts related to the Tenant Improvements shall
provide that Tenant may assign such contracts and any warranties with respect to
the Tenant Improvements to Landlord at any time.

 

2.           Tenant Improvements.    All Tenant Improvements
shall be performed by Tenant's contractor, at Tenant's sole cost and expense
(subject to Landlord's obligations with respect to payment of the TI Allowance)
and in accordance with the Approved Plans (as defined below), the Lease and this
Work Letter.  To the extent that the total projected cost of the applicable
Tenant Improvements (as reasonably projected by Landlord) exceeds the TI
Allowance (such excess, the "Excess TI Costs"), Tenant shall pay the costs of
the Tenant Improvements on a pari passu basis with Landlord as such costs become
due, in the proportion of Excess TI Costs payable by Tenant to the TI Allowance.
If the actual Excess TI Costs are less than the Excess TI Costs paid by Tenant
to Landlord, Landlord shall promptly return such excess to Tenant after Landlord
has completed the final accounting for the Tenant Improvements. If the cost of
the Tenant Improvements (as projected by Landlord) increases over Landlord's
initial projection, then Landlord may notify Tenant and Tenant shall deposit any
additional Excess TI Costs with Landlord in the same way that Tenant deposited
the initial Excess TI Costs. If Tenant fails to pay, or is late in paying, any
sum due to Landlord under this Work Letter, then Landlord shall have all of the
rights and remedies set forth in the Lease for nonpayment of Rent (including the
right to interest and the right to assess a late charge), and for purposes of
any litigation instituted with regard to such amounts the same shall be
considered Rent.  All material and equipment furnished by Tenant or its
contractors as the Tenant Improvements shall be new or "like new;" the Tenant
Improvements shall be performed in a first-class, workmanlike manner; and the
quality of the Tenant Improvements shall be of a nature and character not less
than the Building Standard. Tenant shall take, and shall require its contractors
to take, commercially reasonable steps to protect the Premises during the
performance of any Tenant Improvements, including covering or temporarily
removing any window coverings so as to guard against dust, debris or damage. 
All Tenant Improvements shall be performed in accordance with Article 17 of the
Lease; provided that, notwithstanding anything in the Lease or this Work Letter
to the contrary, in the event of a conflict between this Work Letter and Article
17 of the Lease, the terms of this Work Letter shall govern.

 

2.1.Work Plans. Tenant shall prepare and submit to Landlord for approval
schematics covering the Tenant Improvements prepared in conformity with the
applicable provisions of this Work Letter (the "Draft Schematic Plans"). The
Draft Schematic Plans shall contain sufficient information and detail to
accurately describe the proposed design to Landlord and such other information
as Landlord may reasonably request. Landlord shall notify Tenant in writing
within

 

 

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ten (I0) business days after receipt of the Draft Schematic Plans whether
Landlord approves or objects to the Draft Schematic Plans and of the manner, if
any, in which the Draft Schematic Plans are unacceptable. Landlord's failure to
respond within such ten (I0) business day period shall be deemed approval by
Landlord. If Landlord reasonably objects to the Draft Schematic Plans, then
Tenant shall revise the Draft Schematic Plans and cause Landlord's objections to
be remedied in the revised Draft Schematic Plans.  Tenant shall then resubmit
the revised Draft Schematic Plans to Landlord for approval, such approval not
to be unreasonably withheld, conditioned or delayed. Landlord's approval of or
objection to revised Draft Schematic Plans and Tenant's correction of the same
shall be in accordance with this Section until Landlord has approved the Draft
Schematic Plans in writing or been deemed to have approved them.  The iteration
of the Draft Schematic Plans that is approved or deemed approved by Landlord
without objection shall be referred to herein as the "Approved Schematic Plans."

 

2.2.        Construction Plans.  Tenant shall prepare final plans and
specifications for the Tenant Improvements that (a) are consistent with and are
logical evolutions of the Approved Schematic Plans and (b) incorporate any other
Tenant-requested (and Landlord-approved) Changes (as defined below).  As soon as
such final plans and specifications ("Construction Plans") are completed, Tenant
shall deliver the same to Landlord for Landlord's approval, which approval shall
not be unreasonably withheld, conditioned or delayed. All such Construction
Plans shall be submitted by Tenant to Landlord in electronic .pdf, CADD and
full-size hard copy formats, and shall be approved or disapproved by Landlord
within ten (10) business days after delivery to Landlord.  Landlord's failure to
respond within such ten (10) business day period shall be deemed approval by
Landlord. If the Construction Plans are disapproved by Landlord, then Landlord
shall notify Tenant in writing of its objections to such Construction Plans, and
the parties shall confer and negotiate in good faith to reach agreement on the
Construction Plans. Promptly after the Construction Plans are approved by
Landlord and Tenant, two (2) copies of such Construction Plans shall be
initialed and dated by Landlord and Tenant, and Tenant shall promptly submit
such Construction Plans to all appropriate Governmental Authorities for
approval. The Construction Plans so approved, and all change orders specifically
permitted by this Work Letter, are referred to herein as the "Approved
Plans." Landlord will notifY Tenant, at the time of Landlord's consent to the
Construction Plans (provided Tenant requests that Landlord make sure
determination at the time it requests consent), which of the Tenant Improvements
Landlord will require to be removed upon the expiration or earlier termination
of this Lease.

 

2.3.        Changes to the Tenant Improvements. Any changes to the Approved
Plans (each, a "Change") shall be requested and instituted in accordance with
the provisions of this A rticle 2 and shall be subject to the written approval
of the non-requesting party in accordance with this Work Letter.

 

(a)         Change Request.  Either Landlord or Tenant may request Changes after
Landlord approves the Approved Plans by notifying the other party
thereof in writing in substantially the same form as the AlA standard change
order form (a "Change Request"), which Change Request shall detail the nature
and extent of any requested Changes, including (a) the Change, (b) the party
required to perform the Change and (c) any modification of the Approved Plans
and the Schedule, as applicable, necessitated by the Change.  If the nature of a
Change requires revisions to the Approved Plans, then the requesting party shall
be solely responsible for

 

 

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the cost and expense of such revisions and any increases in the cost of the
Tenant Improvements as a result of such Change. Change Requests shall
be signed by the requesting party's Authorized Representative.

 

(b)         Approval of Changes. All Change Requests shall be subject to the
other party's prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed. The non-requesting party shall have five (5)
business days after receipt of a Change Request to notify the requesting party
in writing of the non-requesting party's decision either to approve or object to
the Change Request. The non-requesting party's failure to respond within such
five (5) business day period shall be deemed approval by the non-requesting
party.

 

2.4.Preparation of Estimates. Tenant shall, before proceeding with any Change,
using its commercially reasonable efforts, prepare as soon as is reasonably
practicable (but in no event more than five (5) business days after delivering a
Change Request to Landlord or receipt of a Change Request) an estimate of the
increased costs or savings that would result from such Change, as well as an
estimate of such Change's effects on the Schedule. Landlord shall have five (5)
business days after receipt of such information from Tenant to (a) in the case
of a Tenant­ initiated Change Request, approve or reject such Change Request in
writing, or (b) in the case of a Landlord-initiated Change Request, notify
Tenant in writing of Landlord's decision either to proceed with or abandon the
Landlord-initiated Change Request.

 

2.5.Quality Control Program; Coordination. Tenant shall provide Landlord with
information regarding the following (together, the "QCP"): (a) Tenant's general
contractor's quality control program and (b) evidence of subsequent monitoring
and action plans. The QCP shall be subject to Landlord's reasonable review and
approval and shall specifically address the Tenant
Improvements. Tenant shall ensure that the QCP is regularly implemented on a
scheduled basis and shall provide Landlord with reasonable prior notice and
access to attend all inspections and meetings between Tenant and its general
contractor. At the conclusion of the Tenant Improvements, Tenant shall deliver
the quality control log to Landlord, which shall include all records of quality
control meetings and testing and of inspections held in the field, including
inspections relating to concrete, steel roofing, piping pressure testing and
system comm1sswmng.

 

3.           Completion of Tenant Improvements. Tenant, at its sole cost and
expense (except for the TI Allowance), shall cause its general contractor to
perform and complete the Tenant Improvements in all respects (a) in substantial
conformance with the Approved Plans, (b) otherwise in compliance with provisions
of the Lease and this Work Letter and (c) in accordance with Applicable Laws,
the requirements of Tenant's insurance carriers, the requirements of Landlord's
insurance carriers (to the extent Landlord provides its insurance carriers'
requirements to Tenant) and the board of fire underwriters having jurisdiction
over the Premises. The Tenant Improvements shall be deemed completed at such
time as Tenant shall furnish to Landlord (t) evidence satisfactory to Landlord
that (i) all Tenant Improvements have been completed and paid for in full (which
shall be evidenced by the architect's certificate of completion and the general
contractor's and each subcontractor's and material supplier's final
unconditional waivers and releases of liens, each in a form acceptable to
Landlord and complying with Applicable Laws, and a Certificate of Substantial
Completion in the form of the American

 

 

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Institute of Architects document G704, executed by the project architect and the
general contractor, together with a statutory notice of substantial completion
from the general contractor), (ii) all Tenant Improvements have been accepted by
Landlord, (iii) any and all liens related to the Tenant Improvements have either
been discharged of record (by payment, bond, order of a court of competent
jurisdiction or otherwise) or waived by the party filing such lien and (iv) no
security interests relating to the Tenant Improvements are outstanding, (u) all
certifications and approvals with respect to the Tenant Improvements that may be
required from any Governmental Authority and any board of fire underwriters or
similar body for the use and occupancy of the Premises (including a certificate
of occupancy for the Premises for the Permitted Use), (v) certificates of
insurance required by the Lease to be purchased and maintained by Tenant, (w) an
affidavit from Tenant's architect certifying that all work performed in, on or
about the Premises is in accordance with the Approved Plans, (x) complete "as
built" drawing print sets, project specifications and shop drawings and
electronic CADD files on disc (showing the Tenant Improvements as an overlay on
the Building "as built" plans (provided that Landlord provides the Building
"as-built" plans provided to Tenant) of all contract documents for work
performed by their architect and engineers in relation to the Tenant
Improvements, (y) a commissioning report prepared by a licensed, qualified
commissioning agent hired by Tenant and approved by Landlord for all new or
affected mechanical, electrical and plumbing systems (which report Landlord may
hire a licensed, qualified commissioning agent to peer review, and whose
reasonable recommendations Tenant's commissioning agent shall perform and
incorporate into a
revised report) and (z) such other "close out" materials as Landlord reasonably
requests consistent with Landlord's own requirements for its contractors, such
as copies of manufacturers' warranties, operation and maintenance manuals and
the like.

 

4.           Insurance.

 

4.1.Property Insurance. At all times during the period beginning with
commencement of construction of the Tenant Improvements and ending with final
completion of the Tenant Improvements, Tenant shall cause its contractor to
maintain (in addition to the insurance required of Tenant pursuant to the
Lease), property insurance insuring Landlord and the Landlord Parties, as their
interests may appear.  Such policy shall, on a completed values basis for the
full insurable value at all times, insure against loss or damage by fire,
vandalism and malicious mischief and other such risks as are customarily covered
by the so-called "broad form extended coverage endorsement" upon all Tenant
Improvements and the general contractor's and any subcontractors' machinery,
tools and equipment, all while each forms a part of, or is contained in, the
Tenant Improvements or any temporary structures on the Premises, or is adjacent
thereto; provided that, for the avoidance of doubt, insurance coverage with
respect to the general contractor's and any subcontractors' machinery, tools and
equipment shall be carried on a primary basis by such general contractor or the
applicable subcontractor(s). Tenant agrees to pay any deductible, and Landlord
is not responsible for any deductible, for a claim under such insurance. Such
property insurance shall contain an express waiver of any right of subrogation
by the insurer against Landlord and the Landlord Parties, and shall name
Landlord and its affiliates as loss payees as their interests may appear.

 

 

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

 

4.2.Workers' Compensation Insurance. At all times during the period of
construction of the Tenant Improvements, Tenant shall, or shall cause its
contractors or subcontractors to, maintain statutory workers' compensation
insurance as required by Applicable Laws.

 

5.         Liability. Tenant assumes sole responsibility and liability for any
and all injuries or the death of any persons, including Tenant's contractors and
subcontractors and their respective employees, agents and invitees, and for any
and all damages to property caused by, resulting from or arising out of any act
or omission on the part of Tenant, Tenant's contractors or subcontractors, or
their respective employees, agents and invitees in the prosecution of the Tenant
Improvements. Tenant agrees to indemnify, save, defend (at Landlord's option and
with counsel reasonably acceptable to Landlord) and hold the Landlord
Indemnitees harmless from and against all Claims due to, because of or arising
out of any and all such injuries, death or damage, whether real or alleged, and
Tenant and Tenant's contractors and subcontractors shall assume and defend at
their sole cost and expense all such Claims; provided, however, that nothing
contained in this Work Letter shall be deemed to indemnify or otherwise hold
Landlord harmless from or against liability caused by Landlord's negligence or
willful misconduct. Any deficiency in design or construction of the Tenant
Improvements shall be solely the responsibility of Tenant, notwithstanding the
fact that Landlord may have approved of the same in writing.

 

6.           TI Allowance.

 

6.1.Application of TI Allowance. Landlord shall contribute the TI Allowance and
any of Tenant's pari passu payment of Excess TI Costs advanced by Tenant to
Landlord toward the costs and expenses incurred in connection with the
performance of the Tenant Improvements, in accordance with Article 4 of the
Lease. If the entire TI Allowance is not applied toward or reserved for the
costs of the Tenant Improvements, then Tenant shall not be entitled to a credit
of such unused portion of the TI Allowance. Tenant may apply the TI Allowance
for the payment of design, construction and other costs in accordance with the
terms and provisions of the Lease.

 

6.2.Approval of Budget for the Tenant Improvements. Notwithstanding anything to
the contrary set forth elsewhere in this Work Letter or the Lease, Landlord
shall not have any obligation to expend any portion of the TI Allowance until
Landlord and Tenant shall have approved in writing the budget for the applicable
Tenant Improvements (the "Approved Budget"). Prior to Landlord's approval of the
Approved Budget, Tenant shall pay all of the costs and expenses incurred in
connection with the applicable Tenant Improvements as they become due. Landlord
shall not be obligated to reimburse Tenant for costs or expenses relating to the
Tenant Improvements that exceed the amount of the TI Allowance. Landlord shall
not unreasonably withhold, condition or delay its approval of any budget for
Tenant Improvements that is proposed by Tenant.

 

6.3.Fund Requests. Upon submission by Tenant to Landlord of (a) a statement (a
"Fund Request") setting forth the total amount of the TI Allowance requested,
(b) a summary of the Tenant Improvements performed using AlA standard form
Application for Payment (G 702) executed by the general contractor and by the
architect, (c) invoices from the general contractor, the architect, and any
subcontractors, material suppliers and other parties requesting payment with
respect to the amount of the TI Allowance then being requested, and (d)
unconditional lien

 

 

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

 

releases from the general contractor and each subcontractor and material
supplier with respect to previous payments made by either Landlord or Tenant for
the Tenant Improvements in a form acceptable to Landlord and complying with
Applicable Laws and (e) conditional lien releases from the general contractor
and each subcontractor and material supplier with respect to the Tenant
Improvements performed that correspond to the Fund Request each in a form
acceptable to Landlord and complying with Applicable Laws, then Landlord shall,
within thirty (30) days following receipt by Landlord of a Fund Request and the
accompanying materials required by this Section, pay to (as elected by Landlord)
the applicable contractors, subcontractors and
material suppliers or Tenant (for reimbursement for payments made by Tenant to such
contractors, subcontractors or material suppliers either prior to Landlord's
approval of the Approved TI Budget or as a result of Tenant's decision to pay
for the Tenant Improvements itself and later seek reimbursement from Landlord in
the form of one lump sum payment in accordance with the Lease and this Work
Letter), the amount of Tenant Improvement costs set forth in such Fund Request
(or Landlord's pari passu share thereof if Excess TI Costs exist based on the
Approved Budget); provided, however, that Landlord shall not be obligated to make any
payments under this Section until the budget for the applicable Tenant
Improvements is approved in accordance with Section 6.2, and any Fund Request
under this Section shall be subject to the payment limits set forth in Section
6.2 above and Article 4 of the Lease. Notwithstanding anything in this Section
to the contrary, Tenant shall not submit a Fund Request more often than every
thirty (30) days. Any additional Fund Requests submitted by Tenant shall be void
and of no force or effect.

 

6.4.Accrual Information. In addition to the other requirements of this Section
6, Tenant shall, no later than the second (2"d) business day of each month until
the Tenant Improvements are complete, provide Landlord with an estimate of (a)
the percentage of design and other soft cost work that has been completed, (b)
design and other soft costs spent through the end of the previous month, both
from commencement of the Tenant Improvements and solely for the previous month,
(c) the percentage of construction and other hard cost work that has been
completed, (d) construction and other hard costs spent through the end of the
previous month, both from commencement of the Tenant Improvements and solely for
the previous month, and (e) the date of Substantial Completion of the Tenant
Improvements.

 

7.           Miscellaneous.

 

7.1.Incorporation of Lease Provisions. Sections 40.6 through 40.19 of the Lease
are incorporated into this Work Letter by reference, and shall apply to this
Work Letter in the same way that they apply to the Lease.

 

7.2.General. Except as otherwise set forth in the Lease or this Work Letter,
this Work Letter shall not apply to improvements performed in any additional
premises added to the Premises at any time or from time to time, whether by any
options under the Lease or otherwise; or to any portion of the Premises or any
additions to the Premises in the event of a renewal or extension of the original
Term, whether by any options under the Lease or otherwise, unless the Lease or
any amendment or supplement to the Lease expressly provides that such additional
premises are to be delivered to Tenant in the same condition as the initial
Premises.

 

 

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

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to be
effective on the date first above written.

 

 

 

 

 

LANDLORD:

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

TENANT:

 

 

 

 

NATERA, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

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

 

IN WITNESS WHEREOF, Landlord and Tenant  have executed  this Work Letter to be
effective on the date first above written.

 

 

 

 

LANDLORD:

 

 

 

BMR-201 INDUSTRIAL ROAD LP, a

 

Delaware limited partnership

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

TENANT:

 

 

 

 

NATERA, INC.,

 

a Delaware corporation

 

 

 

Picture 13 [ntra20151231ex1023d40a6006.jpg]

 

 

 

 

 

 

 

 

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EXHIBITB-1

 

TENANT WORK INSURANCE SCHEDULE

 

Tenant shall be responsible for requiring all of Tenant contractors doing
construction or renovation work to purchase and maintain such insurance as shall
protect it from the claims set forth below which may arise out of or result from
any Tenant Work whether such Tenant Work is completed by Tenant or by any Tenant
contractors or by any person directly or indirectly employed by Tenant or any
Tenant contractors, or by any person for whose acts Tenant or any Tenant
contractors may be liable:

 

I.         Claims  under  workers'  compensation,
disability  benefit  and  other  similar  employee benefit acts which are
applicable to the Tenant Work to be performed.

 

2.         Claims for damages because of bodily injury, occupational sickness or
disease, or death of employees under any applicable employer's liability law.

 

3.         Claims for damages because of bodily injury, or death of any person
other than Tenant's or any Tenant contractors' employees.

 

4.         Claims  for  damages  insured  by  usual  personal  injury  liability  coverage  which  are
sustained (a) by any person as a result of an offense directly or indirectly
related to the employment of such person by Tenant or any Tenant contractors or
(b) by any other person.

 

5.         Claims for  damages,
other  than  to  the  Tenant  Work  itself,  because of injury to  or
destruction of tangible property, including loss of use therefrom.

 

6.         Claims for damages because of bodily injury or death of any person or
property damage arising out of the ownership, maintenance or use of any motor
vehicle.

 

Tenant contractors' Commercial General Liability Insurance shall include
premises/operations (including explosion, collapse and underground coverage if
such Tenant Work involves any underground work), elevators, independent
contractors, products and completed operations, and blanket contractual
liability on all written contracts, all including broad form property damage
coverage.

 

Tenant contractors' Commercial General, Automobile, Employers and Umbrella
Liability Insurance shall be written for not less than limits of liability as
follows:

 

 

 

 

a.       Commercial General Liability:

  

Commercially reasonable amounts, but in

 

 

any event no less than $1,000,000 per

Bodily Injury and Property

 

occurrence and $2,000,000 general

Damage

 

aggregate, with $2,000,000 products and

 

 

completed operations aggregate.

 

 

 

B-1-1

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

 

 

 

 

 

b.       Commercial Automobile Liability:

  

$1,000,000 per accident

 

 

 

Bodily Injury and Property

 

 

Damage

 

 

 

 

 

c.       Employer's Liability:

 

 

 

 

 

Each Accident

 

$500,000

Disease- Policy Limit

 

$500,000

Disease - Each Employee

 

$500,000

 

 

 

d.       Umbrella Liability:

 

Commercially    reasonable    amounts

 

 

(excess of coverages a, b and c above),

Bodily Injury and Property

 

but in any event no less than $5,000,000

Damage

 

per occurrence I  aggregate.

 

All subcontractors for Tenant contractors shall carry the same coverages and
limits as specified above, unless different limits are reasonably approved by
Landlord.  The foregoing policies shall contain a provision that coverages
afforded under the policies shall not be canceled or not renewed until at least
thirty (30) days' prior written notice has been given to the Landlord.
Certificates of insurance including required endorsements showing such coverages
to be in force shall be filed with Landlord prior to the commencement of any
Tenant Work and prior to each renewal.  Coverage for completed operations must
be maintained for the lesser of ten (I0) years and the applicable statue of
repose following completion of the Tenant Work, and certificates evidencing this
coverage must be provided to Landlord.  The minimum A.M. Best's  rating of each
insurer shall be A- VII.   Landlord and its mortgagees shall be named as an
additional insureds under Tenant contractors' Commercial General Liability,
Commercial Automobile Liability and Umbrella Liability Insurance policies as
respects liability arising from work or operations performed, or ownership,
maintenance or use of autos, by or on behalf of such contractors.  Each
contractor and its insurers shall provide waivers of subrogation with respect to
any claims covered or that should have been covered by valid and collectible
insurance, including any deductibles or self-insurance maintained thereunder.

 

If any contractor's work involves the handling or removal of asbestos (as
determined by Landlord in its sole and absolute discretion), such contractor
shall also carry Pollution Legal Liability insurance.  Such coverage shall
include bodily injury, sickness, disease, death or mental anguish or shock
sustained by any person; property damage, including physical injury to or
destruction of tangible property (including the resulting loss of use thereof),
clean-up costs and the loss of use of tangible property that has not been
physically injured or destroyed; and defense costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such damages.
Coverage  shall  apply  to  both  sudden  and  non-sudden  pollution  conditions  including  the
discharge,  dispersal,  release  or  escape  of  smoke,  vapors,  soot,  fumes,
acids, alkalis,  toxic chemicals, liquids or gases, waste materials or other
irritants, contaminants or pollutants into or upon land, the atmosphere or any
watercourse or body of water. Claims-made coverage is permitted, provided the
policy retroactive date is continuously maintained prior to the Term
Commencement Date, and coverage is continuously maintained during all  periods
in which

 

B-1-2

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

 

Tenant occupies the  Premises. Coverage shall be maintained with limits of  not
less than $1,000,000 per incident with a $2,000,000 policy aggregate.

 

 

 

B-1-3

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EXHIBITC

 

ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE
AND TERM EXPIRATION DATE

 

THIS ACKNOWLEDGEMENT OF TERM COMMENCEMENT  DATE AND TERM
EXPIRATION  DATE  is  entered  into  as of [            ], 20[    ],
with  reference  to  that certain Lease (the "Lease")  dated as of October
[   ], 2015, by NATERA, INC., a Delaware corporation ("Tenant"), in favor of
BMR-201  INDUSTRIAL ROAD LP, a Delaware limited partnership ("Landlord"). 
All capitalized terms used herein without definition shall have the meanings
ascribed to them in the Lease.

 

Tenant hereby confirms the following:

 

1.           Tenant accepted possession of the Premises for use in accordance
with the Permitted Use on [               ], 20[   ].  Tenant first occupied the
Premises for the Permitted Use on [               ], 20[   ].  Tenant first
occupied the Premises for the Permitted Use on [

 

2.           The Premises are in good order, condition and repair.

 

3.           The Tenant Improvements are Substantially Complete.

 

4.           All  conditions  of  the  Lease  to  be  performed  by  Landlord  as  a  condition  to  the
full effectiveness of the Lease have been satisfied, and Landlord has fulfilled
all of its duties in the nature of inducements offered to Tenant to lease the
Premises.

 

5.           In accordance  with the provisions  of Article  4 of the Lease, the
Term Commencement Date is [              ], 20[  ], and, unless the Lease is
terminated prior to the Term Expiration Date pursuant to its terms, the Term
Expiration Date shall be [              ], 20[  ].

 

6.           The  Lease  is  in  full  force  and  effect,  and  the  same  represents  the  entire  agreement
between Landlord and Tenant concerning the Premises[, except [              ]].

 

7.           To Tenant's knowledge, Tenant has no existing defenses against the
enforcement of the Lease by Landlord, and there exist no offsets or credits
against Rent owed or to be owed by Tenant.

 

8.           The obligation  to pay Rent is presently  in effect and all Rent
obligations  on the part of Tenant under the Lease commenced to accrue on
[              ], 20[  ], with Base Rent payable on the dates and amounts set
forth in the chart below:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dates

Approximate
Square Feet of
Rentable Area

Base Rent Per Square
Foot of Rentable Area

Monthly
Base Rent

Annual
Base Rent

[                   ]

[                   ]

$[            ]

$[            ]

$[                    ]

 

 

 

C-1

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

 

 

 

 

 

 

[  ]/[ ]/[ ]

 

[monthly][OR][annually]

 

 

9.The undersigned Tenant has not made any prior assignment,  transfer,
hypothecation  or pledge of the Lease or of the rents thereunder or sublease of
the Premises or any portion thereof.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

C-2

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

 

IN   WITNESS   WHEREOF,   Tenant   has   executed   this   Acknowledgment of
Term Commencement Date and Term Expiration Date as of the date first written
above.

 

TENANT:

 

 

 

NATERA, INC.,

 

a Delaware corporation

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

C-3

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EXHIBITD

 

[Intentionally omitted]

 

 

 

D-1

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EXHIBIT E

 

FORM OF LETTER OF CREDIT

 

[On letterhead or L/C letterhead of lssuer]

 

LETTER OF CREDIT

 

 

 

 

 

Date:

           , 20  

 

 

 

 

 

(the "Beneficiary")

 

 

 

 

Attention:

 

 

LIC. No.:

 

 

Loan No.:

 

 

 

Ladies and Gentlemen:

 

We establish in favor of Beneficiary our irrevocable and unconditional Letter of
Credit numbered as identified above (the "L/C") for an aggregate amount of
$     , expiring at      :00 p.m. on                or, if such day is not a
Banking Day, then the next succeeding Banking Day (such date, as extended from
time to time, the "Expiry Date"). "Banking Day" means a weekday except a weekday
when commercial banks  in                            are  authorized  or
required to close.

 

We authorize Beneficiary to draw on us (the "Issuer") for the account
of (the "Account Party"), under the terms and conditions of this L/C.

 

Funds under this L/C are available by presenting the following documentation
(the "Drawing Documentation"): (a) the original L/C and (b) a sight draft
substantially in the form of Attachment I, with blanks filled in and bracketed
items provided as appropriate. No other evidence of authority, certificate, or
documentation is required.

 

Drawing Documentation must be presented at Issuer's office
at                   on or
before the Expiry Date by personal presentation, courier or messenger service, or fax.
Presentation by fax shall be effective upon electronic confirmation of
transmission as evidenced by a printed report from the sender's fax machine.
After any fax presentation, but not as a condition to its effectiveness,
Beneficiary shall with reasonable promptness deliver the original Drawing
Documentation by any other means. Issuer will on request issue a receipt for
Drawing Documentation.

 

We agree, irrevocably, and irrespective of any claim by any other person, to
honor drafts drawn under and in conformity with this L/C, within the maximum
amount of this L/C, presented to us on or before the Expiry Date, provided we
also receive (on or before the Expiry Date) any other Drawing Documentation this
L/C requires.

 

 

 

E-1

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

 

We shall pay this LIC only from our own funds by check or wire transfer, in
compliance with the Drawing Documentation.

 

If Beneficiary presents proper Drawing Documentation to us on or before the
Expiry Date, then we shall pay under this LIC at or before the following time
(the "Payment Deadline"): (a) if presentment is made at or before noon of any
Banking Day, then the close of such Banking Day; and (b) otherwise, the close of
the next Banking Day. We waive any right to delay payment beyond the Payment
Deadline. If we determine that Drawing Documentation is not proper, then we
shall so advise Beneficiary in writing, specifying all grounds for our
determination, within one Banking Day after the Payment Deadline.

 

Partial drawings are permitted. This LIC shall, except to the extent reduced
thereby, survive any partial drawings.

 

We shall have no duty or right to inquire into the validity of or basis for any
draw under this LIC or any Drawing Documentation.  We waive any defense based on
fraud or any claim of fraud.

 

The Expiry Date shall automatically be extended by one year (but never
beyond (the "Outside Date")) unless, on or before the date 90 days before any
Expiry Date, we have given Beneficiary notice that the Expiry Date shall not be
so extended (a "Nonrenewal Notice"). We shall promptly upon request confirm any
extension of the Expiry Date under the preceding sentence by issuing an
amendment to this LIC, but such an amendment is not required for the extension
to be effective. We need not give any notice of the Outside Date.

 

Beneficiary may from time to time without charge transfer this L/C, in whole but
not in part, to any transferee (the "Transferee").  Issuer shall look solely to
Account Party for payment of any fee for any transfer of this LIC.   Such
payment is not a condition to any such transfer. Beneficiary or Transferee shall
consummate such transfer by delivering to Issuer the original of this LIC and a
Transfer Notice substantially in the form of Attachment 2, purportedly signed by
Beneficiary, and designating Transferee.  Issuer shall promptly reissue or amend
this L/C in favor of Transferee as Beneficiary. Upon any transfer, all
references to Beneficiary shall automatically refer to Transferee, who may then
exercise all rights of Beneficiary. Issuer expressly consents to any transfers
made from time to time in compliance with this paragraph.

 

Any notice to Beneficiary shall be in writing and delivered by hand with receipt
acknowledged or by overnight delivery service such as FedEx (with proof of
delivery) at the above address, or such other address as Beneficiary may specify
by written notice to Issuer. A copy of any such notice shall also be delivered,
as a condition to the effectiveness of such notice,
to:                         (or such replacement as Beneficiary designates from
time to time by written notice).

 

No amendment that adversely affects Beneficiary shall be effective without
Beneficiary's written consent.

 

E-2

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This LIC is subject to and incorporates by reference: (a) the International
Standby Practices 98 ("ISP 98"); and (b) to the extent not inconsistent with ISP
98, Article 5 of the Uniform Commercial Code of the State of New York.

 

 

Very truly yours,

 

 

 

[Issuer Signature]

 

 

 

E-3

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ATTACHMENT 1 TO EXHIBIT E

 

FORM OF SIGHT DRAFT

 

[BENEFICIARY LETTERHEAD)

 

TO:

 

[Name and Address of lssuer]

 

SIGHT DRAFT

 

AT SIGHT, pay to the Order of                , the sum of           United
States                    Dollars ($      .  Drawn under [Issuer] Letter of
Credit No.           dated          

 

[Issuer is hereby directed to pay the proceeds of this Sight Draft solely to the
following account:             .]

 

[Name and signature block, with signature or purported signature of Beneficiary]

 

Date:                          

 

 

 

E-1

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ATTACHMENT 2 TO EXHIBIT E

 

FORM OF TRANSFER NOTICE

 

[BENEFICIARY LETTERHEAD)

 

TO:

 

[Name and Address of lssuer] (the "Issuer")

 

TRANSFER NOTICE

 

By signing below, the undersigned, Beneficiary (the "Beneficiary") under
Issuer's Letter of Credit No.              dated                   (the
"L/C"),  transfers the  LIC to  the following transferee (the 'Transferee"):

 

[Transferee Name and Address]

 

The original LIC is enclosed. Beneficiary directs Issuer to reissue or amend the
LIC in favor of Transferee as Beneficiary. Beneficiary represents and warrants
that Beneficiary has not transferred, assigned, or encumbered the LIC or any
interest in the LIC, which transfer, assignment, or encumbrance remains in
effect.

 

[Name and signature block, with signature or purported signature of Beneficiary]

 

Date:                            

 

 

 

E-2

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EXHIBITF

 

RULES AND REGULATIONS

 

NOTHING IN THESE RULES AND REGULATIONS ("RULES AND REGULATIONS") SHALL SUPPLANT
ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN
THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.

 

1.No Tenant Party shall encumber or obstruct the common entrances, lobbies,
elevators, sidewalks and stairways of the Building(s) or the Project or use them
for any purposes other than ingress or egress to and from the Building(s) or the
Project.

 

2.Except as specifically provided in the Lease, no sign, placard, picture,
advertisement, name or notice shall be installed or displayed on any part of the
outside of the Premises or the Building(s) without Landlord's prior written
consent. Landlord shall have the right to remove, at Tenant's sole cost and
expense and without notice, any sign installed or displayed in violation of this
rule.

 

3.Except as set forth in Section 12.6 of the Lease, if Landlord objects in
writing to any curtains, blinds, shades, screens, hanging plants or other
similar objects attached to or used in connection with any window or door of the
Premises or placed on any windowsill, and (a) such window, door or windowsill is
visible from the exterior of the Premises and (b) such curtain, blind, shade,
screen, hanging plant or other object is not included in plans approved by
Landlord, then Tenant shall promptly remove such curtains, blinds, shades,
screens, hanging plants or other similar objects at its sole cost and expense.

 

4.No deliveries shall be made that impede or interfere with other tenants in or
the operation of the Project.  Movement of furniture, office equipment or any
other large or bulky material(s) through the Common Area shall be restricted to
such hours as Landlord may designate and shall be subject to reasonable
restrictions that Landlord may impose.

 

5.Tenant shall not place a load upon any floor of the Premises that exceeds the
load per square foot that (a) such floor was designed to carry or (b) is allowed
by Applicable Laws. Fixtures and equipment that cause noises or vibrations that
may be transmitted to the structure of the Building(s) to such a degree as to be
objectionable to other tenants shall be placed and maintained by Tenant, at
Tenant's sole cost and expense, on vibration eliminators or other devices
sufficient to eliminate such noises and vibrations to levels reasonably
acceptable to Landlord and the affected tenants of the Project.

 

6.Tenant shall not use any method of HVAC other than that present at the Project
and serving the Premises as of the Execution Date.

 

7.Tenant   shall not install   any radio,
television  or   other  antennae;  cell   or  other communications equipment; or
other devices on the roof or exterior walls of the Premises except in accordance
with the Lease.  Tenant shall not interfere with radio, television or other
digital or electronic communications at the Project or elsewhere.

F-1

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8.Canvassing, peddling, soliciting and distributing handbills or any other
written material within, on or around the Project (other than within the
Premises) are prohibited.  Tenant shall cooperate with Landlord to prevent such
activities by any Tenant Party.

 

9.Tenant shall store all of its trash, garbage and Hazardous Materials in
receptacles within its Premises or in receptacles designated by Landlord outside
of the Premises.  Tenant shall not place  in  any  such  receptacle any material
that  cannot be disposed  of  in  the  ordinary and
customary  manner  of  trash,  garbage  and  Hazardous  Materials  disposal.    Any
Hazardous Materials transported through Common Area shall be held in secondary
containment devices. Tenant shall be responsible, at its sole cost and expense,
for Tenant's removal of its trash, garbage and Hazardous Materials.  Tenant is
encouraged to participate in the waste removal and recycling program in place at
the Project.

 

10.The Premises shall not be used for lodging or for any improper, immoral or
objectionable purpose.  No cooking shall be done or permitted in the Premises;
provided, however, that Tenant may use (a) equipment approved in accordance with
the requirements of insurance policies that Landlord or Tenant is required to
purchase and maintain pursuant to the Lease for brewing coffee, tea, hot
chocolate and similar beverages, (b) microwave ovens for employees' use and (c)
equipment shown on Tenant Improvement plans approved by Landlord; provided,
further, that any such equipment and microwave ovens are used in accordance with
Applicable Laws.

 

11.Tenant shall not, without Landlord's prior written consent, use the name of
the Project, if any, in connection with or in promoting or advertising Tenant's
business except as Tenant's address.

 

12.Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any Governmental
Authority.

 

13.Tenant assumes any and all responsibility for protecting the Premises from
theft, robbery and pilferage, which responsibility includes keeping doors locked
and other means of entry to the Premises closed.

 

14.Tenant shall not modify any locks to the  Premises without Landlord's  prior
written consent, which consent Landlord shall not unreasonably withhold,
condition or delay.  Tenant
shall  furnish  Landlord  with  copies  of  keys,  pass cards or  similar
devices for  locks to the Premises.

 

15.Tenant shall cooperate and participate in all reasonable security programs
affecting the Premises.

 

16.Tenant shall not permit any animals in the Project, other than for service
animals or for use in laboratory experiments.

 

17.Bicycles shall not be taken into the Building(s) (including the elevators and
stairways of the Building) except into areas designated by Landlord.

F-2

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18.The water and wash closets and other plumbing fixtures shall  not  be used
for  any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be deposited therein.

 

19.Discharge of industrial sewage shall only be permitted if Tenant, at its sole
expense, first obtains all necessary permits and licenses therefor from all
applicable Governmental Authorities.

 

20.Smoking is prohibited inside the Building, except in designated outdoor areas
of the Project (if any).

 

21.The Project's hours of operation are currently 24 hours a day, seven days a
week.

 

22.Tenant  shall  comply with all  orders,  requirements and  conditions
now  or  hereafter
imposed  by  Applicable  Laws  or  Landlord  ("Waste  Regulations")  regarding
the  collection, sorting, separation and  recycling of  waste products, garbage,
refuse and trash generated by Tenant (collectively, "Waste Products"), including
(without limitation) the separation of Waste Products into receptacles
reasonably approved by Landlord and the removal of such receptacles in
accordance with any collection schedules prescribed by Waste Regulations.

 

23.Tenant, at Tenant's sole cost and expense, shall cause the Premises to be
exterminated on an as-needed basis, but at a minimum quarterly, to Landlord's
reasonable satisfaction and shall cause all portions of the Premises used for
the storage, preparation, service or consumption of food or beverages to be
cleaned daily in a manner reasonably satisfactory to Landlord, and to be treated
against infestation by insects, rodents and other vermin and  pests whenever
there is evidence of any infestation.   Tenant shall not permit any person to
enter the Premises or the Project for the purpose of providing such
extermination services, unless such persons have been approved by Landlord.  If
requested by Landlord, Tenant shall, at Tenant's sole cost and expense, store
any refuse generated in the Premises by the consumption of food or beverages in
a cold box or similar facility.

 

24.If Tenant desires to use any portion of the Common Area for a Tenant-related
event, Tenant must notify Landlord in writing at least ten (10) business days
prior to such event on the form attached as Attachment 1 to this Exhibit, which
use shall be subject to Landlord's prior written consent, not to be unreasonably
withheld, conditioned or delayed.  Notwithstanding anything in this Lease or the
completed and executed Attachment to the contrary, Tenant shall be solely
responsible for setting up and taking down any equipment or other materials
required for the event, and shall promptly pick up any litter and report any
property damage to Landlord related to the event.  Any use of the Common Area
pursuant to this Section shall be subject to the provisions of Article 28 of the
Lease.

 

Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Project, including
Tenant.   These Rules and Regulations are in addition to, and shall not be
construed to in any way modifY or amend, in whole or in part, the terms
covenants, agreements 

F-3

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and conditions of the Lease. Landlord reserves the right to make such other and
reasonable additional rules and regulations as, in its judgment, may from time
to time be needed for safety and security, the care and cleanliness of the
Project, or the preservation of good order therein; provided, however, that
Tenant shall not be obligated to adhere to such additional rules or regulations
until Landlord has provided Tenant with written notice thereof. Tenant agrees to
abide by these Rules and Regulations and any such additional rules and
regulations issued or adopted by Landlord. Tenant shall be responsible for the
observance of these Rules and Regulations by all Tenant Parties.

 

 

 

F-4

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ATTACHMENT 1 TO EXHIBIT F

 

REQUEST FOR USE OF COMMON AREA

 

REQUEST FOR USE OF COMMON AREA

 

 

 

 

Date of Request:

 

 

 

Landlord/Owner:

 

 

 

Tenant/Requestor:

 

 

 

Property Location:

 

 

 

Event Description:

 

 

 

 

 

Proposed Plan for Security& Cleaning:

 

 

 

 

 

Date of Event:

 

 

 

Hours of Event: (to include set-up and take down):

 

 

 

Location at Property (see attachedmap):

 

 

 

 

 

Number of Attendees:

 

Open

 

 

to the Public?     [_] YES      [_]NO

 

 

Food and/or Beverages?        [_]YES       [_]NO

 

 

If YES:

 

 

 

●        Will food be prepared on site?    [_] YES    [_]NO

 

 

●        Please describe:

 

 

 

●        Will alcohol be served?    [_] YES    [_]NO

 

 

●        Please describe:

 

 

 

Will attendees be charged for alcohol?    [_]YES    [_]NO

 

F-1-1

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●        Is alcohol license or permit required? L    j  YES    L    j  NO

 

 

●        Does caterer have alcohol license or permit: L    j  YES    L    j
 NOL    j  N/A

 

 

Other Amenities (tent, booths, band, food trucks, bounce house, etc.):

 

 

 

 

 

 

 

 

 

Other Event Details or Special Circumstances:

 

 

 

 

 

 

 

 

 

 

The undersigned certifies that the foregoing is true, accurate and complete and
he/she is duly authorized to sign and submit this request on behalf of the
Tenant/Requestor named above.

 

 

 

 

[INSERT NAME OF TENANT/REQUESTOR]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

Drue:

 

 

 

 

 

F-1-2

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EXHIBIT G

 

[Intentionally omitted]

 

 

 

G-1

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EXHIBITH TENANT'S

 

PROPERTY

 

 

 

H-1

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EXHIBIT I

 

FORM OF ESTOPPEL CERTIFICATE

 

To:         BMR-201 Industrial Road LP

17190 Bernardo Center Drive

San Diego, California  92128

Attention: Vice President, Real Estate Legal

 

BioMed Realty, L.P.

17190 Bernardo Center Drive

San Diego, California  92128

 

Re:         Approximately 88,392 Square Feet of Rentable Area on the Fourth
Floor (the "Premises") at 201 Industrial Road, San Carlos, California (the
"Property")

 

The undersigned tenant ("Tenant") hereby certifies to you as follows:

 

I.Tenant is a tenant at the Property under a lease (the "Lease") for the
Premises dated as of October [  ], 2015.  The Lease has not been cancelled,
modified, assigned, extended or amended [except as follows:   [              ]],
and there are no other agreements, written or oral, affecting or relating to
Tenant's lease  of the Premises  or any other space at the Property.   The lease
term expires on [              ], 20[  ].

 

2.Tenant took possession of the Premises, currently consisting of
[              ] square feet, on [              ], 20[  ], and commenced to pay
rent on [              ], 20[  ]. Tenant has full possession of the Premises,
has not assigned the Lease or sublet any part of the Premises, and does not hold
the Premises under an assignment or sublease [, except as follows: 
[            ]].

 

3.All base rent, rent escalations and additional rent under the Lease have been
paid through [              ], 20[  ]. There is no prepaid rent [, except
$[              ]], and the amount of security deposit is $[              ] [in
cash][OR][in  the form of a letter of credit].   Tenant currently has no right
to any future rent abatement under the Lease.

 

4.Base rent is currently payable in the amount of $ L[
                                  _j] per month.

 

5.Tenant is currently paying estimated payments of additional rent of $[        
 ] per month  on account  of real estate  taxes, insurance,  management 
fees and Common  Area maintenance expenses.

 

6.All work to be performed  for Tenant  under the Lease  has been performed  as
required under the Lease and has been accepted by Tenant[,  except
[              ]], and all allowances to be paid to Tenant, including
allowances  for tenant improvements,  moving expenses or other items, have been
paid.

 

7.To Tenant's  knowledge,  the Lease is in full force and effect, free from
default and free from any event that could become a default under the Lease, and
Tenant has no claims against

 

 

 

I-1

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The landlord or offsets or defenses against rent, and there are no disputes with
the landlord. Tenant has received no notice of prior sale, transfer, assignment,
hypothecation or pledge of the Lease or of the rents payable thereunder[, except
[              ]].

 

8.Tenant has the following expansion rights or options for leasing additional
space at the Property:  Picture 4 [ntra20151231ex1023d40a6007.jpg]

 

9.To Tenant's  knowledge, no hazardous wastes have been generated, treated,
stored or disposed of by or on behalf of Tenant in, on or around the Premises or
the Project in violation of any environmental laws.

 

I0.The  undersigned  has  executed  this  Estoppel  Certificate  with  the  knowledge  and
understanding that [INSERT NAME OF LANDLORD, PURCHASER OR LENDER, AS
APPROPRIATE] or  its  assignee  is  [acquiring  the  Property/making
a  loan  secured  by  the Property] in reliance on this certificate and that the
undersigned shall be bound by this certificate. The statements contained herein
may be relied upon by [INSERT NAME OF PURCHASER OR LENDER, AS APPROPRIATE],
BMR-201 Industrial Road LP, BioMed Realty, L.P., BioMed Realty Trust, Inc., and
any [other] mortgagee of the Property and their respective successors and
assigns.

 

Any capitalized terms not defined herein shall have the respective meanings
given in the Lease.

 

Dated this day of                                                 20[  ]

 

 

 

 

 

NATERA, INC.,

 

 

a Delaware corporation

 

 

 

 

 

 

 

 

By:

 

 

 

Name

 

 

 

Title:

 

 

 

 

I-2

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