Exhibit 10.2

LEASE

BETWEEN

THE IRVINE COMPANY LLC

AND

OTIC PHARMA, INC.

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LEASE

(Short Form)

THIS LEASE is made as of September 2, 2015, by and between THE IRVINE COMPANY
LLC, a Delaware limited liability company, hereafter called “Landlord,” and OTIC
PHARMA, INC., a Delaware corporation, hereafter called “Tenant.”

ARTICLE 1. BASIC LEASE PROVISIONS

Each reference in this Lease to the “Basic Lease Provisions” shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

 

1.

  

Tenant’s Trade Name:

  

N/A

2.

  

Premises:

  

Suite No. 550

  

Address of Building:

  

19900 MacArthur Boulevard, Irvine, CA 92612

  

Project Description:

  

Newport Gateway

(The Premises are more particularly described in Section 2.1).

 

3. Use of Premises: General office and for no other use.

 

4. Estimated Commencement Date: September 1, 2015

 

5. Lease Term: 36 months, plus such additional days as may be required to cause
this Lease to expire on the final day of the calendar month.

 

6. Basic Rent:

 

Months of Term

or Period

   Monthly Rate Per Rentable
Square Foot      Monthly Basic Rent (rounded to
the nearest dollar)  

1 to 12

   $ 2.50      $ 12,782.00  

13 to 24

   $ 2.61      $ 13,345.00  

25 to 36

   $ 2.73      $ 13,958.00  

 

7. Property Tax Base: The Property Taxes per rentable square foot incurred by
Landlord and attributable to the twelve month period ending June 30, 2016 (the
“Base Year”).

Project Cost Base: The Project Costs per rentable square foot incurred by
Landlord and attributable to the Base Year.

Expense Recovery Period: Every twelve month period during the Term (or portion
thereof during the first and last Lease years) ending June 30.

 

8. Floor Area of Premises: approximately 5,113 rentable square feet (Landlord
and Tenant stipulate and agree that the Floor Area of Premises is correct).

Floor Area of Building: approximately 275,703 rentable square feet

 

9. Security Deposit: $54,265.00, as more fully described in Section 4.3 of this
Lease

 

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Guarantor(s): OTIC PHARMA LTD, an Israel company. Concurrent with Tenant’s
execution and delivery of this Lease, Tenant shall cause each Guarantor, if any,
to execute and deliver a guarantee in favor of Landlord on a form provided by
Landlord.

 

10. Broker(s): Irvine Realty Company (“Landlord’s Broker”) is the agent of
Landlord exclusively and CBRE, Inc./Newport Beach (“Tenant’s Broker”) is the
agent of Tenant exclusively.

 

11. Parking: up to 17 parking passes in accordance with the provisions set forth
in Exhibit F to this Lease.

 

12. Address for Payments and Notices:

 

 

LANDLORD

   TENANT  

Payment Address:

   OTIC PHARMA, INC.      19900 MacArthur Boulevard, Suite 550  

THE IRVINE COMPANY LLC

   Irvine, CA 92612  

PO Box #846333

   Attn: Michael Cruse  

Los Angeles, CA 90084-6333

 

Notice Address:

 

THE IRVINE COMPANY LLC

19900 MacArthur Boulevard, Suite 100

Irvine, CA, 92612

Attn:    Property Manager

 

with a copy of notices to:

 

THE IRVINE COMPANY LLC

550 Newport Center Drive

Newport Beach, CA 92660

Attn:    Senior Vice President, Property Operations

             Irvine Office Properties

 

13. List of Lease Exhibits (all exhibits, riders and addenda attached to this
Lease are hereby incorporated into and made a part of this Lease):

 

Exhibit A    Description of Premises Exhibit B    Operating Expenses Exhibit C
   Utilities and Services Exhibit D    Tenant’s Insurance Exhibit E    Rules and
Regulations Exhibit F    Parking Exhibit G    Additional Provisions Exhibit X   
Work Letter

 

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ARTICLE 2. PREMISES

 

  2.1. LEASED PREMISES. Landlord leases to Tenant and Tenant leases from
Landlord the Premises shown in Exhibit A (the “Premises”), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions
(the “Floor Area”). The Premises are located in the building identified in Item
2 of the Basic Lease Provisions (the “Building”), which is a portion of the
project described in Item 2 (the “Project”).

 

  2.2. ACCEPTANCE OF PREMISES. Tenant acknowledges that neither Landlord nor any
representative of Landlord has made any representation or warranty with respect
to the Premises, the Building or the Project or the suitability or fitness of
either for any purpose, except as set forth in this Lease. The taking of
possession or use of the Premises by Tenant for any purpose other than
construction shall conclusively establish that the Premises and the Building
were in satisfactory condition and in conformity with the provisions of this
Lease in all respects. Nothing contained in this Section 2.2 shall affect the
commencement of the Term or the obligation of Tenant to pay rent.

ARTICLE 3. TERM

 

  3.1. GENERAL. The term of this Lease (“Term”) shall commence (“Commencement
Date”) on the earlier of (a) the date the Premises are deemed “ready for
occupancy” (as hereinafter defined) and possession thereof is delivered to
Tenant, or (b) the date Tenant commences its business activities within the
Premises and shall expire (“Expiration Date”) at the end of the period set forth
in Item 5 of the Basic Lease Provisions. Promptly following request by Landlord,
the parties shall memorialize on a form provided by Landlord (the “Commencement
Memorandum”) the actual Commencement Date and the Expiration Date of this Lease;
should Tenant fail to execute and return the Commencement Memorandum to Landlord
within 5 business days (or provide specific written objections thereto within
that period), then Landlord’s determination of the Commencement and Expiration
Dates as set forth in the Commencement Memorandum shall be conclusive. The
Premises shall be deemed “ready for occupancy” if and when Landlord, to the
extent applicable, (i) has substantially completed all the work required to be
completed by Landlord pursuant to the Work Letter (if any) attached to this
Lease but for minor punch list matters, and has obtained the requisite
governmental approvals for Tenant’s occupancy in connection with such work,
(ii) has provided reasonable access to the Premises for Tenant so that the
Premises may be used without unreasonable interference, and (iii) has put into
operation all building services required to be provided by Landlord under this
Lease and essential for the use of the Premises by Tenant.

 

  3.2. DELAY IN POSSESSION. If Landlord, for any reason whatsoever, cannot
deliver possession of the Premises to Tenant on or before the Commencement Date
set forth in Item 4 of the Basic Lease Provisions, this Lease shall not be void
or voidable nor shall Landlord be liable to Tenant for any resulting loss or
damage. However, Tenant shall not be liable for any rent until the Commencement
Date occurs as provided in Section 3.1 above, except that if Landlord’s failure
to substantially complete all work required of Landlord pursuant to
Section 3.1(i) above is attributable to any action or inaction by Tenant
(including without limitation any Tenant Delay described in the Work Letter, if
any, attached to this Lease), then the Premises shall be deemed ready for
occupancy, and Landlord shall be entitled to full performance by Tenant
(including the payment of rent), as of the date Landlord would have been able to
substantially complete such work and deliver the Premises to Tenant but for
Tenant’s delay(s).

ARTICLE 4. RENT AND OPERATING EXPENSES

 

  4.1.

BASIC RENT. From and after the Commencement Date, Tenant shall pay to Landlord
without deduction or offset a Basic Rent for the Premises in the total amount
shown (including subsequent adjustments, if any) in Item 6 of the Basic Lease
Provisions (the “Basic Rent”). If the Commencement Date is other than the first
day of a calendar month, any rental adjustment

 

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  shown in Item 6 shall be deemed to occur on the first day of the next calendar
month following the specified monthly anniversary of the Commencement Date. The
Basic Rent shall be due and payable in advance commencing on the Commencement
Date and continuing thereafter on the first day of each successive calendar
month of the Term, as prorated for any partial month. No demand, notice or
invoice shall be required. An installment in the amount of 1 full month’s Basic
Rent at the initial rate specified in Item 6 of the Basic Lease Provisions shall
be delivered to Landlord concurrently with Tenant’s execution of this Lease.

 

  4.2. OPERATING EXPENSES. Tenant shall pay Tenant’s Share of Operating Expenses
in accordance with Exhibit B of this Lease.

 

  4.3. SECURITY DEPOSIT. Concurrently with Tenant’s delivery of this Lease,
Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of the
Basic Lease Provisions (the “Security Deposit”), to be held by Landlord as
security for the full and faithful performance of Tenant’s obligations under
this Lease, to pay any rental sums, including without limitation such additional
rent as may be owing under any provision hereof, and to maintain the Premises as
required by this Lease. Upon any breach of the foregoing obligations by Tenant,
Landlord may apply all or part of the Security Deposit as full or partial
compensation. If any portion of the Security Deposit is so applied, Tenant shall
within 5 business days after written demand by Landlord deposit cash with
Landlord in an amount sufficient to restore the Security Deposit to its original
amount. Landlord shall not be required to keep this Security Deposit separate
from its general funds, and Tenant shall not be entitled to interest on the
Security Deposit. In no event may Tenant utilize all or any portion of the
Security Deposit as a payment toward any rental sum due under this Lease. Any
unapplied balance of the Security Deposit shall be returned to Tenant or, at
Landlord’s option, to the last assignee of Tenant’s interest in this Lease if
Tenant consents to the same within 30 days following the termination of this
Lease and Tenant’s vacation of the Premises. Tenant hereby waives the provisions
of Section 1950.7 of the California Civil Code, or any similar or successor laws
now or hereafter in effect. Notwithstanding the foregoing, the Security Deposit
may be reduced in one of the following manner: (a) Tenant has achieved a cash
balance of at least $12,000,000.00 as evidenced by Tenant’s audited financial
statements in which case the Security Deposit shall be reduced to $15,354.00 or
(b) Landlord shall reduce the Security Deposit in the amounts of $12,783.00 as
of the first day of the 6th full calendar month following the Commencement Date
of this Lease, $12,783.00 as of the first day of the 12th full calendar month
following the Commencement Date of this Lease, and $13,345.00 as of the first
day of the 18th full calendar month following the Commencement Date of this
Lease (each (a) and (b) shall be the “Security Reduction”). Tenant’s Security
Reduction is conditioned upon the following (i) Tenant shall provide Landlord
with written notice requesting the Security Deposit be reduced as provided above
(the “Security Reduction Notice”) and (ii) Tenant has not been in Default
hereunder. If Tenant is entitled to a Security Reduction, then Landlord shall
credit any applicable portion of the Security Reduction against the Basic Rent
next due hereunder.

ARTICLE 5. USES

 

  5.1. USE. Tenant shall use the Premises only for the purposes stated in Item 3
of the Basic Lease Provisions and for no other use whatsoever. Tenant shall not
do or permit anything to be done in or about the Premises which will in any way
interfere with the rights or quiet enjoyment of other occupants of the Building
or the Project, or use or allow the Premises to be used for any unlawful
purpose, nor shall Tenant permit any nuisance in the Premises or the Project.
Tenant shall comply at its expense with all present and future laws, ordinances
and requirements of all governmental authorities that pertain to Tenant or its
use of the Premises, and with all energy usage reporting requirements of
Landlord. As of the date of this Lease, there has been no inspection of the
Building and Project by a Certified Access Specialist as referenced in
Section 1938 of the California Civil Code. As of the date hereof, Landlord has
not received notice from any governmental agencies that the Building is in
violation of Title III of the Americans with Disabilities Act.

 

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  5.2. SIGNS. Landlord shall affix and maintain a sign (restricted solely to
Tenant’s name as set forth herein or such other name as Landlord may consent to
in writing) adjacent to the entry door of the Premises, together with a
directory strip listing Tenant’s name as set forth herein in the lobby directory
of the Building. Tenant shall not place or allow to be placed any other sign,
decoration or advertising matter of any kind that is visible from the exterior
of the Premises.

 

  5.3. HAZARDOUS MATERIALS. Tenant shall not generate, handle, store or dispose
of hazardous or toxic materials (as such materials may be identified in any
federal, state or local law or regulation) in the Premises or Project without
the prior written consent of Landlord. Tenant acknowledges that it has read,
understands and, if applicable, shall comply with the provisions of Exhibit H to
this Lease, if that Exhibit is attached.

ARTICLE 6. LANDLORD SERVICES

 

  6.1. UTILITIES AND SERVICES. Landlord and Tenant shall be responsible to
furnish those utilities and services to the Premises to the extent provided in
Exhibit C, subject to the conditions and payment obligations and standards set
forth in this Lease. Landlord’s failure to furnish, or any interruption,
diminishment or termination of, services due to the application of laws, the
failure of any equipment, the performance of repairs, improvements or
alterations, utility interruptions or the occurrence of an event of force
majeure (defined in Section 20.8) shall not render Landlord liable to Tenant,
constitute a constructive eviction of Tenant, give rise to an abatement of Rent,
nor relieve Tenant from the obligation to fulfill any covenant or agreement.

 

  6.2. OPERATION AND MAINTENANCE OF COMMON AREAS. During the Term, Landlord
shall operate all Common Areas within the Building and the Project in a first
class manner. The term “Common Areas” shall mean all areas within the Building,
Project and other buildings in the Project which are not held for exclusive use
by persons entitled to occupy space.

 

  6.3. USE OF COMMON AREAS. The occupancy by Tenant of the Premises shall
include the use of the Common Areas in common with Landlord and with all others
for whose convenience and use the Common Areas may be provided by Landlord,
subject, however, to compliance with Rules and Regulations described in Article
17 below. Landlord shall at all times during the Term have exclusive control of
the Common Areas, and may restrain or permit any use or occupancy. Landlord may
temporarily close any portion of the Common Areas for repairs, remodeling and/or
alterations, to prevent a public dedication or the accrual of prescriptive
rights, or for any other reasonable purpose.

ARTICLE 7. REPAIRS AND MAINTENANCE

 

  7.1. TENANT’S MAINTENANCE AND REPAIR. Subject to Articles 11 and 12, Tenant at
its sole expense shall make all repairs necessary to keep the Premises and all
improvements and fixtures therein in good condition and repair, excepting
ordinary wear and tear. Tenant’s maintenance obligation shall include without
limitation all appliances, interior glass, doors, door closures, hardware,
fixtures, electrical, plumbing, fire extinguisher equipment and other equipment
installed in the Premises, together with any supplemental HVAC equipment
servicing only the Premises. Should Landlord or its management agent agree to
make a repair on behalf of Tenant and at Tenant’s request, Tenant shall promptly
reimburse Landlord as additional rent for all reasonable costs incurred
(including the standard supervision fee) upon submission of an invoice.

 

  7.2.

LANDLORD’S MAINTENANCE AND REPAIR. Subject to Articles 11 and 12, Landlord shall
provide service, maintenance and repair with respect to the heating, ventilating
and air conditioning (“HVAC”) equipment of the Building (exclusive of any
supplemental HVAC equipment servicing only the Premises) and shall maintain in
good repair the Common Areas, roof, foundations, footings, the exterior surfaces
of the exterior walls of the Building (including exterior glass), and the
structural, electrical, mechanical and plumbing systems of the Building
(including elevators, if any, serving the Building), except to the extent
provided in Section 7.1

 

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  above. Notwithstanding any provision of the California Civil Code or any
similar or successor laws to the contrary, Tenant understands that it shall not
make repairs at Landlord’s expense or by rental offset. Except as provided in
Section 11.1 and Article 12 below, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant’s
business arising from the making of any repairs, alterations or improvements to
any portion of the Building, including repairs to the Premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction.
Tenant hereby waives any and all rights under and benefits of subsection 1 of
Section 1932, and Sections 1941 and 1942 of the California Civil Code, or any
similar or successor laws now or hereafter in effect.

 

  7.3. ALTERATIONS. Tenant shall make no alterations, additions, or improvements
(collectively referred to as “Alterations”) to the Premises without the prior
written consent of Landlord which consent shall not be unreasonably withheld or
delayed. Landlord may impose, as a condition to its consent, any requirements
that Landlord in its discretion may deem reasonable or desirable. Tenant shall
use Landlord’s designated mechanical and electrical contractors, obtain all
required permits for the Alterations and shall perform the work in compliance
with all applicable laws, regulations and ordinances with contractors reasonably
acceptable to Landlord. Except for cosmetic Alterations not requiring a permit,
Landlord shall be entitled to a supervision fee in the amount of 5% of the cost
of the Alterations. Landlord may elect to cause its architect to review Tenant’s
architectural plans, and the reasonable cost of that review shall be reimbursed
by Tenant. Should the Alterations proposed by Tenant and consented to by
Landlord change the floor plan of the Premises, then Tenant shall, at its
expense, furnish Landlord with as-built drawings and CAD disks compatible with
Landlord’s systems. Unless Landlord otherwise agrees in writing, all Alterations
affixed to the Premises, including without limitation all Tenant Improvements
constructed pursuant to the Work Letter (except as otherwise provided in the
Work Letter), but excluding moveable trade fixtures and furniture, shall become
the property of Landlord and shall be surrendered with the Premises at the end
of the Term, except that Landlord may, by notice to Tenant given at least 30
days prior to the Expiration Date, require Tenant to remove by the Expiration
Date, or sooner termination date of this Lease, all or any Alterations
(including without limitation all telephone and data cabling) installed either
by Tenant or by Landlord at Tenant’s request (collectively, the “Required
Removables”). In connection with its removal of Required Removables, Tenant
shall repair any damage to the Premises arising from that removal and shall
restore the affected area to its preexisting condition, reasonable wear and tear
excepted.

 

  7.4. MECHANIC’S LIENS. Tenant shall keep the Premises free from any liens
arising out of any work performed, materials furnished, or obligations incurred
by or for Tenant. In the event that Tenant shall not, within 15 days following
the imposition of any lien, cause the lien to be released of record by payment
or posting of a proper bond in accordance with California Civil Code
Section 8424 or any successor statute, Landlord shall have, in addition to all
other available remedies, the right to cause the lien to be released by any
means it deems proper, including payment of or defense against the claim giving
rise to the lien. All expenses so incurred by Landlord shall be reimbursed by
Tenant promptly following Landlord’s demand. Tenant shall give Landlord no less
than 20 days’ prior notice in writing before commencing construction of any kind
on the Premises.

 

  7.5. ENTRY AND INSPECTION. Landlord shall at all reasonable times and with
reasonable prior verbal notice, except in emergencies or to provide Building
services, have the right to enter the Premises to inspect them, to supply
services in accordance with this Lease, to make repairs and renovations as
reasonably deemed necessary by Landlord, and to submit the Premises to
prospective or actual purchasers or encumbrance holders (or, during the final
twelve months of the Term or when an uncured Default exists, to prospective
tenants), all without being deemed to have caused an eviction of Tenant and
without abatement of rent except as provided elsewhere in this Lease; provided,
however, that in making repairs, alterations or improvements, Landlord shall, if
such work would adversely affect Tenant’s use and occupancy, give reasonable
notice and interfere as little as reasonably practicable with the conduct of
Tenant’s business in the Premises.

 

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ARTICLE 8. SPACE PLANNING AND SUBSTITUTION

Landlord shall have the right, upon providing not less than 60 days written
notice, to move Tenant to other space of comparable size in the Building or in
the Project on or above the 4th floor. The new space shall be provided with
improvements of comparable quality to those within the Premises. The total
monthly Basic Rent for the new space shall in no event exceed the total monthly
Basic Rent for the Premises prior to the relocation and Tenant’s Share for the
new space shall in no event exceed Tenant’s Share for the Premises prior to the
relocation. Landlord shall pay the reasonable out-of-pocket costs to relocate
and reconnect Tenant’s personal property and equipment within the new space.
Landlord shall also reimburse Tenant for such other reasonable out-of-pocket
costs that Tenant may incur in connection with the relocation. Within 10 days
following request by Landlord, Tenant shall execute an amendment to this Lease
prepared by Landlord to memorialize the relocation. Notwithstanding the
foregoing, if Landlord provides Tenant with a notice of relocation and Tenant,
in its reasonable judgment, determines that the new space is not of reasonably
comparable size and utility when compared to the Premises, Tenant shall have the
right to terminate this Lease by giving written notice of termination to
Landlord within 10 days after the date of Landlord’s notice of relocation to
Tenant. Tenant’s notice of termination shall set forth the reasons why Tenant
believes the new space is not comparable to the Premises. Such termination shall
be effective 60 days after the date of Landlord’s notice of relocation, provided
that Landlord, within 10 days after receipt of Tenant’s notice of termination,
shall have the right to withdraw its notice of relocation. In such event, this
Lease shall continue in full force and effect as if Landlord had never provided
Tenant with a notice of relocation.

ARTICLE 9. ASSIGNMENT AND SUBLETTING

 

  9.1. RIGHTS OF PARTIES. Tenant shall not, directly or indirectly, assign,
sublease, transfer or encumber any interest in this Lease or allow any third
party to use any portion of the Premises (collectively or individually, a
“Transfer”) without the prior written consent of Landlord, which consent shall
not be unreasonably withheld if Landlord does not exercise its recapture rights.
Tenant agrees that it is not unreasonable for Landlord to withhold consent to a
Transfer to a proposed assignee or subtenant who is an existing tenant or
occupant of the Building or Project or to a prospective tenant with whom
Landlord or Landlord’s affiliate has been actively negotiating within the prior
6 months. Within 20 days after receipt of executed copies of the transfer
documentation and such other information as Landlord may request, Landlord shall
either: (a) consent to the Transfer by execution of a consent agreement in a
form reasonably designated by Landlord; (b) refuse to consent to the Transfer;
or (c) recapture the portion of the Premises that Tenant is proposing to
Transfer. Tenant hereby waives the provisions of Section 1995.310 of the
California Civil Code, or any similar or successor Laws, now or hereinafter in
effect, and all other remedies, including, without limitation, any right at law
or equity to terminate this Lease, on its own behalf and, to the extent
permitted under all applicable laws, on behalf of the proposed transferee. In no
event shall any Transfer release or relieve Tenant from any obligation under
this Lease, as same may be amended. Tenant shall pay Landlord a review fee of
$1,000.00 for Landlord’s review of any requested Transfer. Tenant shall pay
Landlord, as additional Rent, 50% of all rent and other consideration which
Tenant receives as a result of a Transfer that is in excess of the Rent payable
to Landlord for the portion of the Premises and Term covered by the Transfer. If
Tenant is in Default, Landlord may require that all sublease payments be made
directly to Landlord, in which case Tenant shall receive a credit against Rent
in the amount of Tenant’s share of payments received by Landlord.

 

  9.2.

PERMITTED TRANSFER. Notwithstanding the foregoing, Tenant may assign this Lease
to a successor to Tenant by merger, consolidation or the purchase of
substantially all of Tenant’s assets, or assign this Lease or sublet all or a
portion of the Premises to an Affiliate (defined below), without the consent of
Landlord, provided that all of the following conditions are satisfied (a
“Permitted Transfer”): (i) Tenant is not then in Default hereunder; (ii) Tenant
gives Landlord confidential written notice prior to such Permitted Transfer; and
(iii) the successor entity resulting from any merger or consolidation of Tenant
or the sale of all or substantially all of the assets of Tenant, has a net worth
at the time of the Permitted Transfer that is at least equal to the net worth

 

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  of Tenant immediately before the Permitted Transfer. “Affiliate” shall mean an
entity controlled by, controlling or under common control with Tenant.

ARTICLE 10. INSURANCE AND INDEMNITY

 

  10.1. TENANT’S INSURANCE. Tenant, at its sole cost and expense, shall provide
and maintain in effect the insurance described in Exhibit D. Evidence of that
insurance must be delivered to Landlord prior to the Commencement Date.

 

  10.2. TENANT’S INDEMNITY. To the fullest extent permitted by law, but subject
to Section 10.4 below, Tenant shall defend, indemnify and hold harmless Landlord
and Landlord’s agents, employees, lenders, and affiliates, from and against any
and all negligence, claims, liabilities, damages, costs or expenses arising
either before or after the Commencement Date which arise from or are caused by
Tenant’s use or occupancy of the Premises, the Building or the Common Areas of
the Project, or from the conduct of Tenant’s business, or from any activity,
work, or thing done, permitted or suffered by Tenant or Tenant’s agents,
employees, subtenants, vendors, contractors, invitees or licensees in or about
the Premises, the Building or the Common Areas of the Project, or from any
Default in the performance of any obligation on Tenant’s part to be performed
under this Lease, or from any act, omission or negligence on the part of Tenant
or Tenant’s agents, employees, subtenants, vendors, contractors, invitees or
licensees. Landlord may, at its option, require Tenant to assume Landlord’s
defense in any action covered by this Section 10.2 through counsel reasonably
satisfactory to Landlord. Notwithstanding the foregoing, Tenant shall not be
obligated to indemnify Landlord against any liability or expense to the extent
it is ultimately determined that the same was caused by the sole negligence or
willful misconduct of Landlord, its agents, contractors or employees.

 

  10.3. LANDLORD’S NONLIABILITY. Landlord shall not be liable to Tenant, its
employees, agents and invitees, and Tenant hereby waives all claims against
Landlord, its employees and agents for loss of or damage to any property, or any
injury to any person, resulting from any condition including, but not limited
to, acts or omissions (criminal or otherwise) of third parties and/or other
tenants of the Project, or their agents, employees or invitees, fire, explosion,
falling plaster, steam, gas, electricity, water or rain which may leak or flow
from or into any part of the Premises or from the breakage, leakage, obstruction
or other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, electrical works or other fixtures in the Building, whether the
damage or injury results from conditions arising in the Premises or in other
portions of the Building, regardless of the negligence of Landlord, its agents
or any and all affiliates of Landlord in connection with the foregoing.
Notwithstanding anything to the contrary contained in this Lease, in no event
shall Landlord be liable for Tenant’s loss or interruption of business or income
(including without limitation, Tenant’s consequential damages, lost profits or
opportunity costs), or for interference with light or other similar intangible
interests.

 

  10.4. WAIVER OF SUBROGATION. Landlord and Tenant each hereby waives all rights
of recovery against the other on account of loss and damage occasioned to the
property of such waiving party to the extent that the waiving party is entitled
to proceeds for such loss and damage under any property insurance policies
carried or otherwise required to be carried by this Lease; provided however,
that the foregoing waiver shall not apply to the extent of Tenant’s obligation
to pay deductibles under any such policies and this Lease.

ARTICLE 11. DAMAGE OR DESTRUCTION

 

  11.1. RESTORATION.

(a)    If the Building of which the Premises are a part is damaged as the result
of an event of casualty, then subject to the provisions below, Landlord shall
repair that damage as soon as reasonably possible unless Landlord reasonably
determines that: (i) the Premises have been materially damaged and there is less
than 1 year of the Term remaining on the date of the casualty; (ii) any
Mortgagee

 

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(defined in Section 13.1) requires that the insurance proceeds be applied to the
payment of the mortgage debt; or (iii) proceeds necessary to pay the full cost
of the repair are not available from Landlord’s insurance, including without
limitation earthquake insurance. Should Landlord elect not to repair the damage
for one of the preceding reasons, Landlord shall so notify Tenant in the
“Casualty Notice” (as defined below), and this Lease shall terminate as of the
date of delivery of that notice.

(b)    As soon as reasonably practicable following the casualty event but not
later than 60 days thereafter, Landlord shall notify Tenant in writing
(“Casualty Notice”) of Landlord’s election, if applicable, to terminate this
Lease. If this Lease is not so terminated, the Casualty Notice shall set forth
the anticipated period for repairing the casualty damage. If the anticipated
repair period exceeds 270 days and if the damage is so extensive as to
reasonably prevent Tenant’s substantial use and enjoyment of the Premises, then
either party may elect to terminate this Lease by written notice to the other
within 10 days following delivery of the Casualty Notice. If Tenant was entitled
to but elected not to exercise its right to terminate the Lease and Landlord
does not substantially complete the repair and restoration of the Premises
within 2 months after expiration of the estimated period of time set forth in
the Casualty Notice, which period shall be extended to the extent of any
Reconstruction Delays (defined below), then Tenant may terminate this Lease by
written notice to Landlord within 15 days after the expiration of such period,
as the same may be extended. For purposes of this Lease, the term
“Reconstruction Delays” shall mean: (i) any delays caused by the insurance
adjustment process; (ii) any delays caused by Tenant; and (iii) any delays
caused by events of force majeure.

(c)    In the event that neither Landlord nor Tenant terminates this Lease
pursuant to Section 11.1(b), Landlord shall repair all material damage to the
Premises or the Building as soon as reasonably possible and this Lease shall
continue in effect for the remainder of the Term. Upon notice from Landlord,
Tenant shall assign or endorse over to Landlord (or to any party designated by
Landlord) all property insurance proceeds payable to Tenant under Tenant’s
insurance with respect to any Alterations. Within 15 days of demand, Tenant
shall also pay Landlord for any additional excess costs that are determined
during the performance of the repairs to such Alterations. However,
notwithstanding the foregoing, if Tenant has maintained the insurance required
to be maintained by Tenant pursuant to the terms of Exhibit D of this Lease
throughout the Term, and if the proceeds from the insurance required to be
maintained by Tenant with respect to the Alterations have been paid to Landlord
prior to Landlord commencing repair of the Alterations, then Landlord agrees
Tenant shall not be required to pay any deficiency between the estimated or
actual Alteration repair costs and the insurance proceeds received by Landlord
from Tenant’s insurance until after substantial completion of the repairs to the
Alterations, and such sums shall be payable by Tenant within 15 days after
demand of Landlord.

(d)    From and after the casualty event, the rental to be paid under this Lease
shall be abated in the same proportion that the Floor Area of the Premises that
is rendered unusable by the damage from time to time bears to the total Floor
Area of the Premises.

(e)    Notwithstanding the provisions of subsections (a), (b) and (c) of this
Section 11.1, but subject to Section 10.4, the cost of any repairs shall be
borne by Tenant, and Tenant shall not be entitled to rental abatement or
termination rights, if the damage is due to the fault or neglect of Tenant or
its employees, subtenants, contractors, invitees or representatives.

 

  11.2. LEASE GOVERNS. Tenant agrees that the provisions of this Lease,
including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.

ARTICLE 12. EMINENT DOMAIN

Either party may terminate this Lease if any material part of the Premises is
taken or condemned for any public or quasi-public use under Law, by eminent
domain or private purchase in lieu thereof (a “Taking”). Landlord shall also
have the right to terminate this Lease if there is a Taking of any portion of
the Building or Project which would have a material adverse effect on Landlord’s
ability to profitably operate the remainder of the Building. The termination
shall be effective as of the effective date of any

 

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order granting possession to, or vesting legal title in, the condemning
authority. All compensation awarded for a Taking shall be the property of
Landlord. Tenant agrees that the provisions of this Lease shall govern any
Taking and shall accordingly supersede any contrary statute or rule of law.

ARTICLE 13. SUBORDINATION; ESTOPPEL CERTIFICATE

 

  13.1. SUBORDINATION. Tenant accepts this Lease subject and subordinate to any
mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or
subsequently arising upon the Premises, the Building or the Project, and to
renewals, modifications, refinancings and extensions thereof (collectively
referred to as a “Mortgage”). The party having the benefit of a Mortgage shall
be referred to as a “Mortgagee.” This clause shall be self-operative, but upon
request from a Mortgagee, Tenant shall execute a commercially reasonable
subordination and attornment agreement in favor of the Mortgagee, provided such
agreement provides a non-disturbance covenant benefitting Tenant. Alternatively,
a Mortgagee shall have the right at any time to subordinate its Mortgage to this
Lease. Upon request, Tenant, without charge, shall attorn to any successor to
Landlord’s interest in this Lease in the event of a foreclosure of any mortgage.
Tenant agrees that any purchaser at a foreclosure sale or lender taking title
under a deed in lieu of foreclosure shall not be responsible for any act or
omission of a prior landlord, shall not be subject to any offsets or defenses
Tenant may have against a prior landlord, and shall not be liable for the return
of the Security Deposit not actually recovered by such purchaser nor bound by
any rent paid in advance of the calendar month in which the transfer of title
occurred; provided that the foregoing shall not release the applicable prior
landlord from any liability for those obligations. Tenant acknowledges that
Landlord’s Mortgagees and their successors-in-interest are intended third party
beneficiaries of this Section 13.1.

 

  13.2. ESTOPPEL CERTIFICATE. Tenant shall, within 10 business days after
receipt of a written request from Landlord, execute and deliver a commercially
reasonable estoppel certificate in favor of those parties as are reasonably
requested by Landlord (including a Mortgagee or a prospective purchaser of the
Building or the Project).

ARTICLE 14. DEFAULTS AND REMEDIES

 

  14.1. TENANT’S DEFAULTS. In addition to any other event of default set forth
in this Lease, the occurrence of any one or more of the following events shall
constitute a “Default” by Tenant:

(a)    The failure by Tenant to make any payment of Rent required to be made by
Tenant, as and when due, where the failure continues for a period of 5 business
days after written notice from Landlord to Tenant. The term “Rent” as used in
this Lease shall be deemed to mean the Basic Rent and all other sums required to
be paid by Tenant to Landlord pursuant to the terms of this Lease.

(b)    Except where a specific time period is otherwise set forth for Tenant’s
performance in this Lease (in which event the failure to perform by Tenant
within such time period shall be a Default), the failure or inability by Tenant
to observe or perform any of the covenants or provisions of this Lease to be
observed or performed by Tenant, other than as specified in any other subsection
of this Section 14.1, where the failure continues for a period of 30 days after
written notice from Landlord to Tenant.

The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law, and Landlord shall not be required to give any
additional notice under California Code of Civil Procedure Section 1161, or any
successor statute, in order to be entitled to commence an unlawful detainer
proceeding.

 

  14.2. LANDLORD’S REMEDIES.

(a)    Upon the occurrence of any Default by Tenant, then in addition to any
other remedies available to Landlord, Landlord may exercise the following
remedies:

 

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(i)    Landlord may terminate Tenant’s right to possession of the Premises by
any lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. Such termination
shall not affect any accrued obligations of Tenant under this Lease. Upon
termination, Landlord shall have the right to reenter the Premises and remove
all persons and property. Landlord shall also be entitled to recover from
Tenant:

(1)    The worth at the time of award of the unpaid Rent which had been earned
at the time of termination;

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

(3)    The worth at the time of award of the amount by which the unpaid Rent for
the balance of the Term after the time of award exceeds the amount of such loss
that Tenant proves could be reasonably avoided;

(4)    Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result from
Tenant’s default, including, but not limited to, the cost of recovering
possession of the Premises, commissions and other expenses of reletting,
including necessary repair, renovation, improvement and alteration of the
Premises for a new tenant, reasonable attorneys’ fees, and any other reasonable
costs; and

(5)    At Landlord’s election, all other amounts in addition to or in lieu of
the foregoing as may be permitted by law. Any sum, other than Basic Rent, shall
be computed on the basis of the average monthly amount accruing during the 24
month period immediately prior to Default, except that if it becomes necessary
to compute such rental before the 24 month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period. As used in subparagraphs (1) and (2) above, the “worth at the
time of award” shall be computed by allowing interest at the rate of 10% per
annum. As used in subparagraph (3) above, the “worth at the time of award” shall
be computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus 1%.

(ii)    Employ the remedy described in California Civil Code § 1951.4 (Landlord
may continue this Lease in effect after Tenant’s breach and abandonment and
recover Rent as it becomes due, if Tenant has the right to sublet or assign,
subject only to reasonable limitations).

(b)    The various rights and remedies reserved to Landlord in this Lease or
otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same time.
No delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any breach or Default by
Tenant. The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or Default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord’s knowledge of the preceding breach or Default at the time of
acceptance of rent, or (ii) a waiver of Landlord’s right to exercise any remedy
available to Landlord by virtue of the breach or Default. No payment by Tenant
or receipt by Landlord of a lesser amount than the rent required by this Lease
shall be deemed to be other than a partial payment on account of the earliest
due stipulated rent, nor shall any endorsement or statement on any check or
letter be deemed an accord and satisfaction and Landlord shall accept the check
or payment without prejudice to Landlord’s right to recover the balance of the
rent or pursue any other remedy available to it. Tenant hereby waives any right
of redemption or relief from forfeiture under California Code of Civil Procedure
Section 1174 or 1179, or under any successor statute, in the event this Lease is
terminated by reason of any Default by Tenant. No act or thing done by Landlord
or Landlord’s agents during the Term shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender shall be valid
unless in writing and signed by Landlord.

 

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  14.3. LATE PAYMENTS. Any Rent due under this Lease that is not paid to
Landlord within 5 days of the date when due shall bear interest at the maximum
rate permitted by law from the date due until fully paid and if any Rent due
from Tenant shall not be received by Landlord or Landlord’s designee within 5
days after the date due, then Tenant shall pay to Landlord, in addition to the
interest, a late charge for each delinquent payment equal to the greater of (i)
5% of that delinquent payment or (ii) $100.00.

 

  14.4. DEFAULT BY LANDLORD. Landlord shall not be deemed to be in default in
the performance of any obligation under this Lease unless and until it has
failed to perform the obligation within 30 days after written notice by Tenant
to Landlord specifying in reasonable detail the nature and extent of the
failure; provided, however, that if the nature of Landlord’s obligation is such
that more than 30 days are required for its performance, then Landlord shall not
be deemed to be in default if it commences performance within the 30 day period
and thereafter diligently pursues the cure to completion.

 

  14.5. EXPENSES AND LEGAL FEES. Should either Landlord or Tenant bring any
action in connection with this Lease, the prevailing party shall be entitled to
recover as a part of the action its reasonable attorneys’ fees, and all other
reasonable costs. The prevailing party for the purpose of this paragraph shall
be determined by the trier of the facts.

 

  14.6. WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.

(a)    LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS HAD THE
ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT TO TRIAL BY JURY, AND
EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER
PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST ITS OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY MATTERS
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE
OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE.

(b)    In the event that the jury waiver provisions of Section 14.6(a) are not
enforceable under California law, then, unless otherwise agreed to by the
parties, the provisions of this Section 14.6(b) shall apply. Landlord and Tenant
agree that any disputes arising in connection with this Lease (including but not
limited to a determination of any and all of the issues in such dispute, whether
of fact or of law) shall be resolved (and a decision shall be rendered) by way
of a general reference as provided for in Part 2, Title 8, Chapter 6 (§§ 638 et.
seq.) of the California Code of Civil Procedure, or any successor California
statute governing resolution of disputes by a court appointed referee. Nothing
within this Section 14.6 shall apply to an unlawful detainer action.

 

  14.7. SATISFACTION OF JUDGMENT. The obligations of Landlord do not constitute
the personal obligations of the individual partners, trustees, directors,
officers, members or shareholders of Landlord or its constituent partners or
members. Should Tenant recover a money judgment against Landlord, such judgment
shall be satisfied only from the interest of Landlord in the Project and out of
the rent or other income from such property receivable by Landlord, and no
action for any deficiency may be sought or obtained by Tenant.

ARTICLE 15. END OF TERM

 

  15.1.

HOLDING OVER. If Tenant holds over for any period after the Expiration Date (or
earlier termination of the Term), such tenancy shall constitute a tenancy at
sufferance only and possession shall be subject to all of the terms of this
Lease, except that the monthly rental shall be 150% of the total monthly rental
for the month immediately preceding the date of termination. The acceptance by
Landlord of monthly hold-over rental in a lesser amount shall not constitute a
waiver of Landlord’s right to recover the full amount due unless otherwise
agreed in writing by

 

12

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  Landlord. If Tenant fails to surrender the Premises upon the expiration of
this Lease despite demand to do so by Landlord, Tenant shall indemnify and hold
Landlord harmless from all loss or liability, including without limitation, any
claims made by any succeeding tenant relating to such failure to surrender. The
foregoing provisions of this Section 15.1 are in addition to and do not affect
Landlord’s right of re-entry or any other rights of Landlord under this Lease or
at law.

 

  15.2. SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the Expiration Date or
upon any earlier termination of this Lease, Tenant shall quit and surrender
possession of the Premises to Landlord in as good order, condition and repair as
when received or as hereafter may be improved by Landlord or Tenant, reasonable
wear and tear and repairs which are Landlord’s obligation excepted, and shall
remove or fund to Landlord the cost of removing all wallpapering, voice and/or
data transmission cabling installed by or for Tenant and Required Removables,
together with all personal property and debris, and shall perform all work
required under Section 7.3 of this Lease. If Tenant shall fail to comply with
the provisions of this Section 15.2, Landlord may effect the removal and/or make
any repairs, and the cost to Landlord shall be additional rent payable by Tenant
upon demand.

ARTICLE 16. PAYMENTS AND NOTICES

All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing. Unless this Lease expressly provides
otherwise, all payments shall be due and payable within 5 days after demand. All
payments requiring proration shall be prorated on the basis of the number of
days in the pertinent calendar month or year, as applicable. Any notice,
election, demand, consent or approval to be given or other document to be
delivered by either party to the other may be delivered to the other party, at
the address set forth in Item 12 of the Basic Lease Provisions, by personal
service or by any courier or “overnight” express mailing service. Either party
may, by written notice to the other, served in the manner provided in this
Article, designate a different address. The refusal to accept delivery of a
notice, or the inability to deliver the notice (whether due to a change of
address for which notice was not duly given or other good reason), shall be
deemed delivery and receipt of the notice as of the date of attempted delivery.

ARTICLE 17. RULES AND REGULATIONS

Tenant agrees to comply with the Rules and Regulations attached as Exhibit E,
and any reasonable and nondiscriminatory amendments, modifications and/or
additions as may be adopted by Landlord from time to time.

ARTICLE 18. BROKER’S COMMISSION

The parties recognize as the broker(s) who negotiated this Lease the firm(s)
whose name(s) is (are) stated in Item 10 of the Basic Lease Provisions, and
agree that Landlord shall be responsible for the payment of brokerage
commissions to those broker(s) unless otherwise provided in this Lease. Tenant
agrees to indemnify and hold Landlord harmless from any cost, expense or
liability (including reasonable attorneys’ fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by Tenant in connection with
the negotiation of this Lease.

ARTICLE 19. TRANSFER OF LANDLORD’S INTEREST

Landlord shall have the right to transfer and assign, in whole or in part, all
of its ownership interest, rights and obligations in the Building, Project or
Lease, including the Security Deposit, and upon transfer Landlord shall be
released from any further obligations hereunder, and Tenant agrees to look
solely to the successor in interest of Landlord for the performance of such
obligations and the return of any Security Deposit.

 

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ARTICLE 20. INTERPRETATION

 

  20.1. NUMBER. Whenever the context of this Lease requires, the words
“Landlord” and “Tenant” shall include the plural as well as the singular.

 

  20.2. JOINT AND SEVERAL LIABILITY. If more than one person or entity is named
as Tenant, the obligations imposed upon each shall be joint and several and the
act of or notice from, or notice or refund to, or the signature of, any one or
more of them shall be binding on all of them with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, termination or
modification of this Lease.

 

  20.3. SUCCESSORS. The expiration of the Term, whether by lapse of time,
termination or otherwise, shall not relieve either party of any obligations
which accrued prior to or which may continue to accrue after the expiration or
termination of this Lease.

 

  20.4. TIME OF ESSENCE. Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.

 

  20.5. CONTROLLING LAW/VENUE. This Lease shall be governed by and interpreted
in accordance with the laws of the State of California.

 

  20.6. SEVERABILITY. If any term or provision of this Lease, the deletion of
which would not adversely affect the receipt of any material benefit by either
party or the deletion of which is consented to by the party adversely affected,
shall be held invalid or unenforceable to any extent, the remainder of this
Lease shall not be affected and each term and provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.

 

  20.7. WAIVER. One or more waivers by Landlord or Tenant of any breach of any
term, covenant or condition contained in this Lease shall not be a waiver of any
subsequent breach of the same or any other term, covenant or condition. Consent
to any act by one of the parties shall not be deemed to render unnecessary the
obtaining of that party’s consent to any subsequent act. No breach of this Lease
shall be deemed to have been waived unless the waiver is in a writing signed by
the waiving party.

 

  20.8. INABILITY TO PERFORM. In the event that either party shall be delayed or
hindered in or prevented from the performance of any work or in performing any
act required under this Lease by reason of any cause beyond the reasonable
control of that party, then the performance of the work or the doing of the act
shall be excused for the period of the delay and the time for performance shall
be extended for a period equivalent to the period of the delay. The provisions
of this Section 20.8 shall not operate to excuse Tenant from the prompt payment
of Rent.

 

  20.9. ENTIRE AGREEMENT. This Lease constitutes the entire agreement between
the parties and supersedes all prior agreements and understandings related to
the Premises. This Lease may be modified only by a written agreement signed by
Landlord and Tenant.

 

  20.10. QUIET ENJOYMENT. Upon the observance and performance of all the
covenants, terms and conditions on Tenant’s part to be observed and performed,
and subject to the other provisions of this Lease, Tenant shall have the right
of quiet enjoyment and use of the Premises for the Term without hindrance or
interruption by Landlord or any other person claiming by or through Landlord.

 

  20.11. SURVIVAL. All covenants of Landlord or Tenant which reasonably would be
intended to survive the expiration or sooner termination of this Lease,
including without limitation any warranty or indemnity hereunder, shall so
survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.

 

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ARTICLE 21. EXECUTION

 

  21.1. COUNTERPARTS; DIGITAL SIGNATURES. This Lease may be executed in one or
more counterparts, each of which shall constitute an original and all of which
shall be one and the same agreement. The parties agree to accept a digital image
(including but not limited to an image in the form of a PDF, JPEG, GIF file, or
other e-signature) of this Lease, if applicable, reflecting the execution of one
or both of the parties, as a true and correct original.

 

  21.2. CORPORATE AND PARTNERSHIP AUTHORITY. Tenant represents and warrants to
Landlord, and agrees, that each individual executing this Lease on behalf of
Tenant is authorized to do so on behalf of Tenant.

 

  21.3. EXECUTION OF LEASE; NO OPTION OR OFFER. The submission of this Lease to
Tenant shall be for examination purposes only, and shall not constitute an offer
to or option for Tenant to lease the Premises unless and until Landlord has
executed and delivered this Lease to Tenant.

 

  21.4. BROKER DISCLOSURE. By the execution of this Lease, each of Landlord and
Tenant hereby acknowledge and confirm (a) receipt of a copy of a Disclosure
Regarding Real Estate Agency Relationship conforming to the requirements of
California Civil Code 2079.16, and (b) the agency relationships specified in
Section 10 of the Basic Lease Provisions, which acknowledgement and confirmation
is expressly made for the benefit of Tenant’s Broker identified in Section 10 of
the Basic Lease Provisions. If there is no Tenant’s Broker so identified in
Section 10 of the Basic Lease Provisions, then such acknowledgement and
confirmation is expressly made for the benefit of Landlord’s Broker. By the
execution of this Lease, Landlord and Tenant are executing the confirmation of
the agency relationships set forth in Section 10 of the Basic Lease Provisions.

ARTICLE 22. MISCELLANEOUS

 

  22.1. MORTGAGEE PROTECTION. No act or failure to act on the part of Landlord
which would otherwise entitle Tenant to be relieved of its obligations hereunder
or to terminate this Lease shall result in such a release or termination unless
(a) Tenant has given notice by registered or certified mail to any Mortgagee of
a Mortgage covering the Building whose address has been furnished to Tenant and
(b) such Mortgagee is afforded a reasonable opportunity to cure the default by
Landlord. Tenant shall comply with any written directions by any Mortgagee to
pay Rent due hereunder directly to such Mortgagee without determining whether a
default exists under such Mortgagee’s Mortgage.

 

  22.2. SDN LIST. Tenant hereby represents and warrants that neither Tenant nor
any officer, director, employee, partner, member or other principal of Tenant
(collectively, “Tenant Parties”) is listed as a Specially Designated National
and Blocked Person (“SDN”) on the list of such persons and entities issued by
the U.S. Treasury Office of Foreign Assets Control (OFAC). In the event Tenant
or any Tenant Party is or becomes listed as an SDN, Tenant shall be deemed in
breach of this Lease and Landlord shall have the right to terminate this Lease
immediately upon written notice to Tenant.

 

LANDLORD:      TENANT: THE IRVINE COMPANY LLC,      OTIC PHARMA, INC.,

a Delaware limited liability company

 

    

a Delaware corporation

 

/s/ Steven M. Case      /s/ Gregory J. Flesher By: Steven M. Case      By:
Gregory J. Flesher Title: EVP      Title: Chief Executive Officer

 

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/s/ Christopher J. Popma      /s/ Erez Chimovits

By: Christopher J. Popma

Title: VP Operations

    

By: Erez Chimovits

Title: Chairman

 

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EXHIBIT A

DESCRIPTION OF PREMISES

19900 MacArthur Blvd., Suite 550

 

LOGO [g406704g0801121501193.jpg]

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EXHIBIT B

Operating Expenses and Taxes

(Base Year)

(a)    Tenant shall pay Landlord, as additional rent, for Tenant’s Share of the
amount, if any, by which “Project Costs” (defined below) for each Expense
Recovery Period during the Term exceed Project Costs for the Project Cost Base
and the amount, if any, by which “Property Taxes” (defined below) for each
Expense Recovery Period during the Term exceed Property Taxes for the Property
Tax Base. Property Taxes and Project Costs are mutually exclusive and may be
billed separately or in combination as determined by Landlord. “Tenant’s Share”
shall mean that portion of any Operating Expenses determined by multiplying the
cost of such item by a fraction, the numerator of which is the Floor Area and
the denominator of which is the total rentable square footage, as determined
from time to time by Landlord, of (i) the Floor Area of the Building as defined
in Item 8 of the Basic Lease Provisions, for expenses determined by Landlord to
benefit or relate substantially to the Building rather than the entire Project,
or (ii) all or some of the buildings in the Project, for expenses determined by
Landlord to benefit or relate substantially to all or some of the buildings in
the Project rather than any specific building. Tenant acknowledges Landlord’s
rights to make changes or additions to the Building and/or Project from time to
time, in which event the total rentable square footage within the Building
and/or Project may be adjusted. For convenience of reference, Property Taxes and
Project Costs may sometimes be collectively referred to as “Operating Expenses.”
Notwithstanding the foregoing, Landlord hereby agrees that Tenant shall not be
responsible for Tenant’s Share of Operating Expense excess accruing during the
12 month period commencing as of the Commencement Date.

(b)    Commencing prior to the start of the first full “Expense Recovery Period”
of the Lease (as defined in Item 7 of the Basic Lease Provisions) following the
Base Year, and prior to the start of each full or partial Expense Recovery
Period thereafter, Landlord shall give Tenant a written estimate of the amount
of Tenant’s Share of Project Costs and Property Taxes for the Expense Recovery
Period or portion thereof. Tenant shall pay the estimated amounts to Landlord in
equal monthly installments, in advance, with Basic Rent. Landlord may from time
to time change the Expense Recovery Period to reflect a calendar year or a new
fiscal year of Landlord, as applicable, in which event Tenant’s share of
Operating Expenses shall be equitably prorated for any partial year. From time
to time during an Expense Recovery Period, Landlord may revise the estimate
based on increases in any of the Operating Expenses.

(c)    Within 180 days after the end of each Expense Recovery Period, Landlord
shall furnish to Tenant a statement setting forth the actual or prorated
Property Taxes and Project Costs attributable to that period, and the parties
shall within 30 days thereafter make any payment or allowance necessary to
adjust Tenant’s estimated payments, if any, to Tenant’s actual Tenant’s Share as
shown by the annual statement. If actual Property Taxes or Project Costs
allocable to Tenant during any Expense Recovery Period are less than the
Property Tax Base or the Project Cost Base, respectively, Landlord shall not be
required to pay that differential to Tenant, although Landlord shall refund any
applicable estimated payments collected from Tenant. Should Tenant fail to
object in writing to Landlord’s determination of actual Operating Expenses
within 60 days following delivery of Landlord’s expense statement, Landlord’s
determination of actual Operating Expenses for the applicable Expense Recovery
Period shall be conclusive and binding on Tenant.

(d)    Even though the Lease has terminated and the Tenant has vacated the
Premises, when the final determination is made of Tenant’s share of Property
Taxes and Project Costs for the Expense Recovery Period in which the Lease
terminates, Tenant shall upon notice pay the entire increase due over the
estimated expenses paid; conversely, any overpayment made in the event expenses
decrease shall be rebated by Landlord to Tenant.

(e)    The term “Project Costs” shall include all charges and expenses
pertaining to the operation, management, maintenance and repair of the Building
and the Project, together with all appurtenant

 

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Common Areas (as defined in Section 6.2), and shall include the following
charges by way of illustration but not limitation: water and sewer charges;
insurance premiums and deductibles and/or reasonable premium equivalents and
deductible equivalents should Landlord elect to self-insure any risk that
Landlord is authorized to insure hereunder; license, permit, and inspection
fees; heat; light; power; janitorial services; the cost of equipping, staffing
and operating an on-site and/or off-site management office for the Building and
Project; all labor and labor-related costs for personnel applicable to the
Building and Project, including both Landlord’s personnel and outside personnel;
a commercially reasonable Landlord overhead/management fee; reasonable fees for
consulting services; access control/security costs, inclusive of the reasonable
cost of improvements made to enhance access control systems and procedures;
repairs; air conditioning; supplies; materials; equipment; tools; tenant
services; programs instituted to comply with transportation management
requirements; any expense incurred pursuant to Sections 6.1, 6.2, 7.2, and
Exhibits C and F below; costs incurred (capital or otherwise) on a regular
recurring basis every 3 or more years for normal maintenance projects (e.g.,
parking lot slurry coat or replacement of lobby, corridor and elevator cab
carpets and coverings); and the amortized cost of capital improvements (as
distinguished from replacement parts or components installed in the ordinary
course of business) which are intended to reduce other operating costs or
increases thereof, or upgrade Building and/or Project security, or which are
required to bring the Building and/or Project into compliance with applicable
laws and building codes. Landlord shall amortize the cost of capital
improvements on a straight-line basis over the lesser of the Payback Period (as
defined below) or the useful life of the capital improvement as reasonably
determined by Landlord. Any amortized Project Costs item may include, at
Landlord’s option, an actual or imputed interest rate that Landlord would
reasonably be required to pay to finance the cost of the item, applied on the
unamortized balance. “Payback Period” shall mean the reasonably estimated period
of time that it takes for the cost savings, if any, resulting from a capital
improvement item to equal the total cost of the capital improvement. It is
understood that Project Costs shall include competitive charges for direct
services provided by any subsidiary or division of Landlord. If any Project
Costs are applicable to one or more buildings or properties in addition to the
Building, then that cost shall be equitably prorated and apportioned among the
Building and such other buildings or properties. The term “Property Taxes” as
used herein shall include the following: (i) all real estate taxes or personal
property taxes, as such property taxes may be increased from time to time due to
a reassessment or otherwise; and (ii) other taxes, charges and assessments which
are levied with respect to this Lease or to the Building and/or the Project, and
any improvements, fixtures and equipment and other property of Landlord located
in the Building and/or the Project, except that general net income and franchise
taxes imposed against Landlord shall be excluded; and (iii) any tax, surcharge
or assessment which shall be levied in addition to or in lieu of real estate or
personal property taxes; and (iv) costs and expenses incurred in contesting the
amount or validity of any Property Tax by appropriate proceedings. A copy of
Landlord’s unaudited statement of expenses shall be made available to Tenant
upon request. The Project Costs, inclusive of those for the Base Year, shall be
extrapolated by Landlord to reflect at least 95% occupancy of the rentable area
of the Building.

 

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EXHIBIT C

UTILITIES AND SERVICES

The following standards for utilities and services shall be in effect at the
Building. Landlord reserves the right to adopt nondiscriminatory modifications
and additions to these standards. In the case of any conflict between these
standards and the Lease, the Lease shall be controlling. Subject to all of the
provisions of the Lease, the following shall apply:

1.    Landlord shall make available to the Premises during the hours of 8:00
a.m. to 6:00 p.m., Monday through Friday (“Building Hours”), generally
recognized national holidays excepted, reasonable HVAC services. Subject to the
provisions set forth below, Landlord shall also furnish the Building with
elevator service (if applicable), reasonable amounts of electric current for
normal lighting by Landlord’s standard overhead fluorescent and incandescent
fixtures and for the operation of office equipment consistent in type and
quantity with that utilized by typical office tenants of the Building and
Project, and water for lavatory purposes. Tenant will not, without the prior
written consent of Landlord, connect any apparatus, machine or device with water
pipes or electric current (except through existing electrical outlets in the
Premises) for the purpose of using electric current or water.

2.    Upon written request from Tenant delivered to Landlord at least 24 hours
prior to the period for which service is requested, but during normal business
hours, Landlord will provide any of the foregoing building services to Tenant at
such times when such services are not otherwise available. Tenant agrees to pay
Landlord for those after-hour services at rates that Landlord may establish from
time to time. If Tenant requires electric current in excess of that which
Landlord is obligated to furnish under this Exhibit C, Tenant shall first obtain
the consent of Landlord, and Landlord may cause an electric current meter to be
installed in the Premises to measure the amount of electric current consumed.
The cost of installation, maintenance and repair of the meter shall be paid for
by Tenant, and Tenant shall reimburse Landlord promptly upon demand for all
electric current consumed for any special power use as shown by the meter.

3.    Landlord shall furnish water for drinking, personal hygiene and lavatory
purposes only.

4.    In the event that any utility service to the Premises is separately
metered or billed to Tenant, Tenant shall pay all charges for that utility
service to the Premises and the cost of furnishing the utility to tenant suites
shall be excluded from the Operating Expenses as to which reimbursement from
Tenant is required in the Lease.

5.    Landlord shall provide janitorial services 5 days per week, equivalent to
that furnished in comparable buildings, and window washing as reasonably
required; provided, however, that Tenant shall pay for any additional or unusual
janitorial services.

6.    Tenant shall have access to the Building 24 hours per day, 7 days per
week, 52 weeks per year; provided that Landlord may install access control
systems as it deems advisable for the Building. Landlord may impose a reasonable
charge for access control cards and/or keys issued to Tenant.

7.    The costs of operating, maintaining and repairing any supplemental air
conditioning unit serving only the Premises shall be borne solely by Tenant.
Such installation shall be subject to Landlord’s prior written approval, at
Tenant’s sole expense and shall include installation of a separate meter for the
operation of the unit. Landlord may require Tenant to remove at Lease expiration
any such unit installed by or for Tenant and to repair any resulting damage to
the Premises or Building.

 

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EXHIBIT D

TENANT’S INSURANCE

The following requirements for Tenant’s insurance shall be in effect during the
Term, and Tenant shall also cause any subtenant to comply with the requirements.
Landlord reserves the right to adopt reasonable nondiscriminatory modifications
and additions to these requirements.

1.    Tenant shall maintain, at its sole cost and expense, during the entire
Term: (i) commercial general liability insurance with respect to the Premises
and the operations of Tenant in, on or about the Premises, on a policy form that
is at least as broad as Insurance Service Office (ISO) CGL 00 01 (if alcoholic
beverages are sold on the Premises, liquor liability shall be explicitly
covered), which policy(ies) shall be written on an “occurrence” basis and for
not less than $2,000,000 combined single limit per occurrence for bodily injury,
death, and property damage liability; (ii) workers’ compensation insurance
coverage as required by law, together with employers’ liability insurance
coverage of at least $1,000,000 each accident and each disease; (iii) with
respect to Alterations constructed by Tenant under this Lease, builder’s risk
insurance, in an amount equal to the replacement cost of the work; and
(iv) insurance against fire, vandalism, malicious mischief and such other
additional perils as may be included in a standard “special form” policy,
insuring all Alterations, trade fixtures, furnishings, equipment and items of
personal property in the Premises, in an amount equal to not less than 90% of
their replacement cost (with replacement cost endorsement), which policy shall
also include business interruption coverage in an amount sufficient to cover 1
year of loss. In no event shall the limits of any policy be considered as
limiting the liability of Tenant under this Lease.

2.    All policies of insurance required to be carried by Tenant pursuant to
this Exhibit D shall be written by insurance companies authorized to do business
in the State of California and with a general policyholder rating of not less
than “A-” and financial rating of not less than “VIII” in the most current
Best’s Insurance Report. The deductible or other retained limit under any policy
carried by Tenant shall be commercially reasonable, and Tenant shall be
responsible for payment of such deductible or retained limit with waiver of
subrogation in favor of Landlord. Any insurance required of Tenant may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy. A certificate of insurance, certifying that the policy has been issued,
provides the coverage required by this Exhibit and contains the required
provisions, together with endorsements acceptable to Landlord evidencing the
waiver of subrogation and additional insured provisions required below, shall be
delivered to Landlord prior to the date Tenant is given the right of possession
of the Premises. Proper evidence of the renewal of any insurance coverage shall
also be delivered to Landlord not less than thirty (30) days prior to the
expiration of the coverage. In the event of a loss covered by any policy under
which Landlord is an additional insured, Landlord shall be entitled to review a
copy of such policy.

3.    Tenant’s commercial general liability insurance shall contain a provision
that the policy shall be primary to and noncontributory with any policies
carried by Landlord, together with a provision including Landlord and any other
parties in interest designated by Landlord as additional insureds. Tenant’s
policies described in Subsections 1 (ii), (iii) and (iv) above shall each
contain a waiver by the insurer of any right to subrogation against Landlord,
its agents, employees, contractors and representatives. Tenant also waives its
right of recovery for any deductible or retained limit under same policies
enumerated above. All of Tenant’s policies shall contain a provision that the
insurer will not cancel or change the coverage provided by the policy without
first giving Landlord 30 days prior written notice. Tenant shall also name
Landlord as an additional insured on any excess or umbrella liability insurance
policy carried by Tenant.

NOTICE TO TENANT: IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST
PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD’S MANAGEMENT AGENT PRIOR
TO BEING AFFORDED ACCESS TO THE PREMISES.

 

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EXHIBIT E

RULES AND REGULATIONS

The following Rules and Regulations shall be in effect at the Building. Landlord
reserves the right to adopt reasonable nondiscriminatory modifications and
additions at any time. In the case of any conflict between these regulations and
the Lease, the Lease shall be controlling.

1.    The sidewalks, halls, passages, elevators, stairways, and other common
areas shall not be obstructed by Tenant or used by it for storage, for
depositing items, or for any purpose other than for ingress to and egress from
the Premises. Should Tenant have access to any balcony or patio area, Tenant
shall not place any furniture other personal property in such area without the
prior written approval of Landlord.

2.    Neither Tenant nor any employee or contractor of Tenant shall go upon the
roof of the Building without the prior written consent of Landlord.

3.    Tenant shall, at its expense, be required to utilize the third party
contractor designated by Landlord for the Building to provide any telephone
wiring services from the minimum point of entry of the telephone cable in the
Building to the Premises.

4.    No antenna or satellite dish shall be installed by Tenant without the
prior written agreement of Landlord.

5.    The sashes, sash doors, windows, glass lights, solar film and/or screen,
and any lights or skylights that reflect or admit light into the halls or other
places of the Building shall not be covered or obstructed. If Landlord, by a
notice in writing to Tenant, shall object to any curtain, blind, tinting, shade
or screen attached to, or hung in, or used in connection with, any window or
door of the Premises, the use of that curtain, blind, tinting, shade or screen
shall be immediately discontinued and removed by Tenant. No awnings shall be
permitted on any part of the Premises.

6.    The installation and location of any unusually heavy equipment in the
Premises, including without limitation file storage units, safes and electronic
data processing equipment, shall require the prior written approval of Landlord.
The moving of large or heavy objects shall occur only between those hours as may
be designated by, and only upon previous notice to, Landlord. No freight,
furniture or bulky matter of any description shall be received into or moved out
of the lobby of the Building or carried in any elevator other than the freight
elevator (if available) designated by Landlord unless approved in writing by
Landlord.

7.    Any pipes or tubing used by Tenant to transmit water to an appliance or
device in the Premises must be made of copper or stainless steel, and in no
event shall plastic tubing be used for that purpose.

8.    Tenant shall not place any lock(s) on any door in the Premises or Building
without Landlord’s prior written consent, which consent shall not be
unreasonably withheld. Upon the termination of its tenancy, Tenant shall deliver
to Landlord all the keys to offices, rooms and toilet rooms and all access cards
which shall have been furnished to Tenant or which Tenant shall have had made.

9.    Tenant shall not install equipment requiring electrical or air
conditioning service in excess of that to be provided by Landlord under the
Lease without prior written approval from Landlord.

10.    Tenant shall not use space heaters within the Premises.

11.    Tenant shall not do or permit anything to be done in the Premises, or
bring or keep anything in the Premises, which shall in any way increase the
insurance on the Building, or on the property kept in the Building, or interfere
with the rights of other tenants, or conflict with any government rule or
regulation.

 

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12.    Tenant shall not use or keep any foul or noxious gas or substance in the
Premises.

13.    Tenant shall not permit the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or other occupants of the Building by
reason of noise, odors and/or vibrations, or interfere in any way with other
tenants or those having business with other tenants.

14.    Tenant shall not permit any pets or animals in or about the Building.
Bona fide service animals are permitted provided such service animals are
pre-approved by Landlord, remain under the direct control of the individual they
serve at all times, and do not disturb or threaten others.

15.    Neither Tenant nor its employees, agents, contractors, invitees or
licensees shall bring any firearm, whether loaded or unloaded, into the Project
at any time.

16.    Smoking, including via personal vaporizers or other electronic
cigarettes, anywhere within the Premises or Building is strictly prohibited, and
Landlord may enforce such prohibition pursuant to Landlord’s leasehold remedies.
Smoking is permitted outside the Building and within the project only in areas
designated by Landlord.

17.    Tenant shall not install an aquarium of any size in the Premises unless
otherwise approved by Landlord.

18.    Tenant shall not utilize any name selected by Landlord from time to time
for the Building and/or the Project as any part of Tenant’s corporate or trade
name. Landlord shall have the right to change the name, number or designation of
the Building or Project without liability to Tenant. Tenant shall not use any
picture of the Building in its advertising, stationery or in any other manner.

19.    Tenant shall, upon request by Landlord, supply Landlord with the names
and telephone numbers of personnel designated by Tenant to be contacted on an
after-hours basis should circumstances warrant.

20.    Landlord may from time to time grant tenants individual and temporary
variances from these Rules, provided that any variance does not have a material
adverse effect on the use and enjoyment of the Premises by Tenant.

21.    Fitness Center Rules. Tenant shall cause its employees (whether members
or prospective members of the Fitness Center) to comply with the following
Fitness Center rules and regulations (subject to change from time to time as
Landlord may solely determine):

(a)    Membership in the Fitness Center is open to the tenants of Landlord or
its affiliates only. No guests will be permitted to use the Fitness Center
without the prior written approval of Landlord or Landlord’s representative.

(b)    Fitness Center users are not allowed to be in the Fitness Center other
than the hours designated by Landlord from time to time. Landlord shall have the
right to alter the hours of use of the Fitness Center, at Landlord’s sole
discretion.

(c)    All Fitness Center users must execute Landlord’s Waiver of Liability
prior to use of the Fitness Center and agree to all terms and conditions
outlined therein.

(d)    Individual membership and guest keycards to the Fitness Center shall not
be shared and shall only be used by the individual to whom such keycard was
issued. Failure to abide by this rule may result in immediate termination of
such Fitness Center user’s right to use the Fitness Center.

(e)    All Fitness Center users and approved guests must have a pre-authorized
keycard to enter the Fitness Center. A pre-authorized keycard shall not be
issued to a prospective Fitness Center user

 

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until receipt by Landlord of Landlord’s initial fee, if any, for use of the
Fitness Center by such Fitness Center user(s).

(f)    Use of the Fitness Center is a privilege and not a right. Failure to
follow gym rules or to act inappropriately while using the facilities shall
result in termination of Tenant’s Fitness Center privileges.

 

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EXHIBIT F

PARKING

The following parking regulations shall be in effect at the Building In the case
of any conflict between these regulations and the Lease, the Lease shall be
controlling.

1.    Landlord agrees to maintain, or cause to be maintained, an automobile
parking area (“Parking Area”) in reasonable proximity to the Building for the
benefit and use of the visitors and patrons and, except as otherwise provided,
employees of Tenant, and other tenants and occupants of the Building. Landlord
shall have the right to determine the nature and extent of the automobile
Parking Area, and of making such changes to the Parking Area from time to time
which in its opinion are desirable. Landlord shall not be liable for any damage
to motor vehicles of visitors or employees, for any loss of property from within
those motor vehicles, or for any injury to Tenant, its visitors or employees,
unless ultimately determined to be caused by the sole active negligence or
willful misconduct of Landlord. Landlord shall also have the right to establish,
and from time to time amend, and to enforce against all users of the Parking
Area all reasonable rules and regulations (including the designation of areas
for employee parking) as Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of the Parking Area.

2.    Landlord may, if it deems advisable in its sole discretion, charge for
parking and may establish for the Parking Area a system or systems of permit
parking for Tenant, its employees and its visitors. In no event shall Tenant or
its employees park in reserved stalls leased to other tenants or in stalls
within designated visitor parking zones, nor shall Tenant or its employees
utilize more than the number of Parking Passes (defined below) allotted in this
Lease to Tenant. Tenant shall, upon request of Landlord from time to time,
furnish Landlord with a list of its employees’ names and of Tenant’s and its
employees’ vehicle license numbers. Parking access devices, if applicable, shall
not be transferable. Landlord may impose a reasonable fee for access devices and
a replacement charge for devices which are lost or stolen. Each access device
shall be returned to Landlord promptly following the Expiration Date or sooner
termination of this Lease.

3.    Washing, waxing, cleaning or servicing of vehicles, or the parking of any
vehicle on an overnight basis, in the Parking Area (other than emergency
services) by any parker or his or her agents or employees is prohibited unless
otherwise authorized by Landlord.

4.    It is understood that the employees of Tenant and the other tenants of
Landlord within the Building and Project shall not be permitted to park their
automobiles in the portions of the Parking Area which may from time to time be
designated for patrons of the Building and/or Project. Tenant shall be obligated
to purchase from Landlord for the Term of this Lease, up to the total number of
parking passes set forth in Item 11 of the Basic Lease Provisions (the “Parking
Passes”) for unreserved parking, in the amount of $35.00 per Parking Pass
utilized per month during the initial Term. Thereafter, the stall charge shall
be at Landlord’s scheduled parking rates from time to time. Should any monthly
parking charge not be paid within 5 business days following the date due, then a
late charge shall be payable by Tenant equal to the greater of (i) 5% of the
delinquent installment or (ii) $100.00, which late charge shall be separate and
in addition to any late charge that may be assessed pursuant to Section 14.3 of
the Lease for other than delinquent monthly parking charges.

5.    Landlord shall be entitled to pass on to Tenant its proportionate share of
any charges or parking surcharge or transportation management costs levied by
any governmental agency and Tenant shall cooperate in any voluntary or mandated
transportation management programs.

6.    Tenant shall not assign or sublet any of the Parking Passes, either
voluntarily or by operation of law, without the prior written consent of
Landlord, except in connection with an authorized assignment of this Lease or
subletting of the Premises.

 

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EXHIBIT G

ADDITIONAL PROVISIONS

 

1. FITNESS CENTER AND SHOWER FACILITY. Subject to the provisions of this
Section, so long as Tenant is not in Default under this Lease, and provided
Tenant’s employees execute Landlord’s standard waiver of liability form and pay
the applicable one time or monthly fee, if any, then Tenant’s employees (the
“Fitness Center Users”) shall be entitled to use the fitness center (the
“Fitness Center”) and the shower facility (the “Shower Facility”) located at the
Project. No separate charges shall be assessed to Fitness Center Users for the
use of the Fitness Center (with the exception of towel/laundry fees, if any)
during the initial Term of this Lease, provided, however, that the costs of
operating, maintaining and repairing the Fitness Center shall be included as
part of Operating Expenses. The use of the Fitness Center and Shower Facility
shall be subject to the reasonable rules and regulations (including rules
regarding hours of use) established from time to time by Landlord. Landlord and
Tenant acknowledge that the use of the Fitness Center by the Fitness Center
Users shall be at their own risk and that the terms and provisions of
Section 10.2 of this Lease shall apply to Tenant and the Fitness Center User’s
use of the Fitness Center. Tenant acknowledges that the provisions of this
Section shall not be deemed to be a representation by Landlord that Landlord
shall continuously maintain the Fitness Center (or any other fitness facility)
and Shower Facility throughout the Term of this Lease, and Landlord shall have
the right, at Landlord’s sole discretion, to expand, contract, eliminate or
otherwise modify the Fitness Center. No expansion, contraction, elimination or
modification of the Fitness Center, and no termination of Tenant’s or the
Fitness Center Users’ rights to the Fitness Center shall entitle Tenant to an
abatement or reduction in Basic Rent constitute a constructive eviction, or
result in an event of default by Landlord under this Lease. Tenant hereby
voluntarily releases, discharges, waives and relinquishes any and all actions or
causes of action for personal injury or property damage occurring to Tenant or
its employees or agents arising as a result of the use of the Fitness Center and
Shower Facility, or any activities incidental thereto, wherever or however the
same may occur, and further agrees that Tenant will not prosecute any claim for
personal injury or property damage against Landlord or any of its officers,
agents, servants or employees for any said causes of action. It is the intention
of Tenant with respect to the Fitness Center and Shower Facility to exempt and
relieve Landlord from liability for personal injury or property damage caused by
negligence. Tenant’s right to use the Fitness Center shall belong solely to
Tenant and may not be transferred or assigned without Landlord’s prior written
consent, which may be withheld by Landlord in Landlord’s sole discretion.

 

2. CONFERENCE CENTER. Landlord currently provides a conference center (the
“Conference Room”) in the Building capable of accommodating groups of people for
use by Building tenants (including Tenant) on a reserved basis. Tenant shall,
subject to availability, have the use of the Conference Center subject to
Landlord’s procedures and charges, if any. The use of the Common Area Conference
Room shall be subject to the reasonable rules and regulations (including rules
regarding hours of use and priorities for the tenants of the particular building
in which a Common Area Conference Room is located, set up and clean up charges,
etc.) established from time to time by Landlord for the Common Area Conference
Room. Landlord and Tenant acknowledge that the terms and provisions of
Section 10.2 (Tenant’s Indemnity) of this Lease shall apply to Tenant’s use of
the Conference Room. Further, Landlord shall have no liability whatsoever with
respect to the existence, condition or availability of any Common Area
Conference Room(s) nor shall Landlord have any obligation whatsoever to enforce
or make reservations thereof, and Tenant hereby expressly waives all claims
against Landlord with respect to the same. No expansion, contraction,
elimination, unavailability or modification of the Common Area Conference
Room(s), and no termination of or interference with Tenant’s rights to the
Common Area Conference Room(s), shall entitle Tenant to an abatement or
reduction in rent or constitute a constructive eviction or an event of default
by Landlord under this Lease. Tenant’s right to use the Conference Room shall
belong solely to Tenant and may not be transferred or assigned without
Landlord’s prior written consent, which may be withheld by Landlord in
Landlord’s sole discretion.

 

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3. GAME ROOM. Landlord currently provides a game room (the “Game Room”) in the
Building capable of accommodating groups of people for use by Building tenants
(including Tenant) on a reserved basis. Tenant shall, subject to availability,
have the use of the Game Room subject to Landlord’s procedures and charges, if
any. The use of the Game Room shall be subject to the reasonable rules and
regulations (including rules regarding hours of use and priorities for the
tenants of the particular building in which a Game Room is located, set up and
clean up charges, etc.) established from time to time by Landlord for the Game
Room. Landlord and Tenant acknowledge that the terms and provisions of
Section 10.2 (Tenant’s Indemnity) of this Lease shall apply to Tenant’s use of
the Game Room. Further, Landlord shall have no liability whatsoever with respect
to the existence, condition or availability of any Game Room nor shall Landlord
have any obligation whatsoever to enforce or make reservations thereof, and
Tenant hereby expressly waives all claims against Landlord with respect to the
same. No expansion, contraction, elimination, unavailability or modification of
the Game Room, and no termination of or interference with Tenant’s rights to the
Game Room, shall entitle Tenant to an abatement or reduction in rent or
constitute a constructive eviction or an event of default by Landlord under this
Lease. Tenant’s right to use the Game Room shall belong solely to Tenant and may
not be transferred or assigned without Landlord’s prior written consent, which
may be withheld by Landlord in Landlord’s sole discretion.

 

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EXHIBIT X

WORK LETTER

BUILD TO SUIT

Landlord shall cause its contractor to construct the tenant improvements (the
“Tenant Improvements”) for the Premises as shown in the space plan (the “Plan”)
prepared by Gensler and dated July 17, 2015. Any additional cost resulting from
changes requested by Tenant shall be borne solely by Tenant and paid to Landlord
prior to the commencement of construction. Unless otherwise specified in the
Plan or hereafter agreed in writing by Landlord, all materials and finishes
utilized in constructing the Tenant Improvements shall be Landlord’s building
standard. Should Landlord submit any additional plans, equipment specification
sheets, or other matters to Tenant for approval or completion, Tenant shall
respond in writing, as appropriate, within 5 business days unless a shorter
period is provided herein. Tenant shall not unreasonably withhold its approval
of any matter, and any disapproval shall be limited to items not previously
approved by Tenant in the Plan or otherwise. Landlord shall be entitled to a
supervision fee in the amount of 3% of the cost of the Tenant Improvements.

In the event that Tenant requests in writing a revision in the Plan or in any
other plans hereafter approved by Tenant, then provided such change request is
acceptable to Landlord, Landlord shall advise Tenant by written change order of
any additional cost and/or Tenant Delay (as defined below) such change would
cause. Tenant shall approve or disapprove such change order in writing within 2
business days following its receipt. Tenant’s approval of a change order shall
not be effective unless accompanied by payment in full of the additional cost of
the tenant improvement work resulting from the change order. It is understood
that Landlord shall have no obligation to interrupt or modify the tenant
improvement work pending Tenant’s approval of a change order.

Notwithstanding any provision in the Lease to the contrary, if Tenant fails to
comply with any of the time periods specified in this Work Letter, requests any
changes to the work, fails to make timely payment of any sum due hereunder,
furnishes inaccurate or erroneous specifications or other information, or
otherwise delays in any manner the completion of the Tenant Improvements or the
issuance of an occupancy certificate (any of the foregoing being referred to in
this Lease as a “Tenant Delay”), then Tenant shall bear any resulting additional
construction cost or other expenses and the Commencement Date shall be deemed to
have occurred for all purposes, including Tenant’s obligation to pay Rent, as of
the date Landlord reasonably determines that it would have been able to deliver
the Premises to Tenant but for the collective Tenant Delays.

Landlord shall permit Tenant and its agents to enter the Premises up to 10 days
prior to the Commencement Date of the Lease in order that Tenant may install its
furniture, fixtures and equipment and data cabling, subject to Landlord’s prior
written approval, and in a manner and upon terms and conditions and at times
satisfactory to Landlord’s representative. The foregoing license to enter the
Premises prior to the Commencement Date is, however, conditioned upon Tenant’s
contractors and their subcontractors and employees working in harmony and not
interfering with the work being performed by Landlord. If at any time that entry
shall cause disharmony or interfere with the work being performed by Landlord,
this license may be withdrawn by Landlord upon 24 hours written notice to
Tenant. That license is further conditioned upon the compliance by Tenant’s
contractors with all requirements imposed by Landlord on third party
contractors, including without limitation the maintenance by Tenant and its
contractors and subcontractors of workers’ compensation and public liability and
property damage insurance in amounts and with companies and on forms
satisfactory to Landlord, with certificates of such insurance being furnished to
Landlord prior to proceeding with any such entry. The entry shall be deemed to
be under all of the provisions of the Lease except as to the covenants to pay
Rent unless Tenant commences business activities within the Premises. Landlord
shall not be liable in any way for any injury, loss or damage which may occur to
any such work being performed by Tenant, the same being solely at Tenant’s risk.
In no event shall the failure of Tenant’s contractors to complete any work in
the Premises extend the Commencement Date of this Lease.

 

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Tenant hereby designates Michael Cruse, Telephone No. (858) 472-6630, as its
representative, agent and attorney-in-fact for the purpose of receiving notices,
approving submittals and issuing requests for changes, and Landlord shall be
entitled to rely upon authorizations and directives of such person(s) as if
given by Tenant. Tenant may amend the designation of its construction
representative(s) at any time upon delivery of written notice to Landlord.

 

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