Exhibit 10.1

 

LEASE AGREEMENT

 

THIS LEASE AGREEMENT (this “Lease”) is made this 31 day of December, 2014,
between ARE-SD REGION NO. 18, LLC, Delaware limited liability company
(“Landlord”), and ONCOSEC MEDICAL INCORPORATED, a Nevada corporation (“Tenant”).

 

Building:

5820 Nancy Ridge Drive, San Diego, California

 

 

Premises:

That portion of the Project consisting of the entire Building, containing
approximately 33,928 rentable square feet, as determined by Landlord, as shown
on Exhibit A.

 

 

Project:

The real property on which the Building in which the Premises are located,
together with all improvements thereon and appurtenances thereto as described on
Exhibit B.

 

 

Base Rent:

$2.65 per rentable square foot of the Premises per month

 

Rentable Area of Premises:  33,928 sq. ft.

 

Rentable Area of Project:  82,146 sq. ft.

 

Tenant’s Share of Operating Expenses for the Building:  100%

 

Tenant’s Share of Operating Expenses for the Project:  41.30%

 

Security Deposit: $89,909.20

Target Commencement Date: October 1, 2015

 

Rent Adjustment Percentage:  3%

 

Base Term:

Beginning on the Commencement Date and ending 120 months from the first day of
the first full month of the Term (as defined in Section 2) hereof (unless
otherwise terminated pursuant to the terms of Section 41 hereof).

 

 

Permitted Use:

Research and development laboratory, office and other uses consistent with the
character of the Project and otherwise in compliance with the provisions of
Section 7 hereof.

 

Address for Rent Payment:

Landlord’s Notice Address:

P.O. Box 79840

385 E. Colorado Boulevard, Suite 299

Baltimore, MD 21279-0840

Pasadena, CA 91101

 

Attention: Corporate Secretary

 

 

Tenant’s Notice Address

Tenant’s Notice Address

Prior to the Commencement Date:

After the Commencement Date:

9810 Summers Ridge Road, Suite 110

5820 Nancy Ridge Drive

San Diego, California 92121

San Diego, California 92121

Attention: Chief Financial Officer

Attention: Chief Financial Officer

 

The following Exhibits and Addenda are attached hereto and incorporated herein
by this reference:

 

x EXHIBIT A - PREMISES DESCRIPTION

x EXHIBIT B - DESCRIPTION OF PROJECT

x EXHIBIT C - WORK LETTER

x EXHIBIT D - COMMENCEMENT DATE

 

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x  EXHIBIT E - RULES AND REGULATIONS

x  EXHIBIT F - TENANT’S PERSONAL PROPERTY

 

1.                                      Lease of Premises.  Upon and subject to
all of the terms and conditions hereof, Landlord hereby leases the Premises to
Tenant and Tenant hereby leases the Premises from Landlord.  The portions of the
Project which are for the non-exclusive use of tenants of the Project are
collectively referred to herein as the “Common Areas.”  Landlord reserves the
right to modify Common Areas, provided that such modifications do not materially
adversely affect Tenant’s use of the Premises for the Permitted Use.  During the
Term, Tenant shall have access to the Premises and the Project 24 hours a day, 7
days a week, except in the case of emergencies, as the result of Legal
Requirements, the performance by Landlord of any installation, maintenance or
repairs, or any other temporary interruptions, and otherwise subject to the
terms of this Lease.

 

2.                                      Delivery; Acceptance of Premises;
Commencement Date.  Landlord shall use reasonable efforts to deliver the
Premises to Tenant on or before the Target Commencement Date, with Landlord’s
Work Substantially Completed (“Delivery” or “Deliver”).  If Landlord fails to
timely Deliver the Premises, Landlord shall not be liable to Tenant for any loss
or damage resulting therefrom, and this Lease shall not be void or voidable
except as provided herein.  If Landlord does not Deliver the Premises within 120
days of the Target Commencement Date for any reason other than Force Majeure
delays and Tenant Delays, this Lease may be terminated by Tenant by written
notice to Landlord, and if so terminated by Tenant:  (a) the Security Deposit,
or any balance thereof (i.e., after deducting therefrom all amounts to which
Landlord is entitled under the provisions of this Lease), shall be returned to
Tenant, (b) any prepaid Base Rent actually delivered by Tenant to Landlord shall
be returned to Tenant, and (c) neither Landlord nor Tenant shall have any
further rights, duties or obligations under this Lease, except with respect to
provisions which expressly survive termination of this Lease.  As used herein,
the terms “Landlord’s Work,”“Tenant Delays” and “Substantially Completed” shall
have the meanings set forth for such terms in the Work Letter.  If Tenant does
not elect to void this Lease within 5 business days of the lapse of such 120 day
period, such right to void this Lease shall be waived and this Lease shall
remain in full force and effect.

 

The “Commencement Date” shall be the earlier of:  (i) the date Landlord Delivers
the Premises to Tenant; or (ii) the date Landlord could have Delivered the
Premises but for Tenant Delays; provided, however, that in no event shall the
Commencement Date occur before September 1, 2015.  The “Rent Commencement Date”
shall be the date that is 12 months after the Commencement Date.  Upon request
of Landlord, Tenant shall execute and deliver a written acknowledgment of the
Commencement Date, the Rent Commencement Date and the expiration date of the
Base Term when such are established in the form of the “Acknowledgement of
Commencement Date” attached to this Lease as Exhibit D; provided, however,
Tenant’s failure to execute and deliver such acknowledgment shall not affect
Landlord’s rights hereunder.  The “Term” of this Lease shall be the Base Term,
as defined above on the first page of this Lease and, if Tenant elects to
exercise its Extension Right (as defined in Section 39) pursuant to Section 39
hereof, the Extension Term (as defined in Section 39) which Tenant may elect
pursuant to Section 39  hereof.

 

For the period of 180 consecutive days after the Commencement Date, Landlord
shall, at its sole cost and expense (which shall not constitute an Operating
Expense), be responsible for any repairs that are required to be made to the
Building or Building Systems (as defined in Section 13), unless Tenant or any
Tenant Party was responsible for the cause of such repair, in which case Tenant
shall pay the cost.  Also, Tenant shall be entitled to receive the benefit of
all construction warranties and manufacturers equipment warranties obtained by
Landlord in connection with Landlord’s Work pursuant to the Work Letter.

 

Except as set forth in the Work Letter:  (i) Tenant shall accept the Premises in
their “as-is” condition as of the Commencement Date, subject to all applicable
Legal Requirements (as defined in Section 7 hereof); and (ii) Landlord shall
have no obligation for any defects in the Premises.  Any occupancy of the
Premises by Tenant before the Commencement Date shall be subject to all of the
terms and conditions of this Lease, excluding the obligation to pay Base Rent.

 

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Tenant agrees and acknowledges, except as otherwise expressly set forth in this
Lease, that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the condition of all or any portion
of the Premises or the Project, and/or the suitability of the Premises or the
Project for the conduct of Tenant’s business, and Tenant waives any implied
warranty that the Premises or the Project are suitable for the Permitted Use. 
This Lease constitutes the complete agreement of Landlord and Tenant with
respect to the subject matter hereof and supersedes any and all prior
representations, inducements, promises, agreements, understandings and
negotiations which are not contained herein.  Landlord in executing this Lease
does so in reliance upon Tenant’s representations, warranties, acknowledgments
and agreements contained herein.

 

3.                                      Rent.

 

(a)                                 Base Rent.  Base Rent for the month in which
the Rent Commencement Date occurs and the Security Deposit shall be due and
payable on delivery of an executed copy of this Lease to Landlord.  Tenant shall
pay to Landlord in advance, without demand, abatement, deduction or set-off,
monthly installments of Base Rent on or before the first day of each calendar
month during the Term hereof after the Rent Commencement Date, in lawful money
of the United States of America, at the office of Landlord for payment of Rent
set forth above, or to such other person or at such other place as Landlord may
from time to time reasonably designate in writing.  Payments of Base Rent for
any fractional calendar month shall be prorated.  The obligation of Tenant to
pay Base Rent and other sums to Landlord and the obligations of Landlord under
this Lease are independent obligations.  Tenant shall have no right at any time
to abate, reduce, or set-off any Rent (as defined in Section 5) due hereunder
except for any abatement as may be expressly provided in this Lease.

 

(b)                                 Additional Rent.  In addition to Base Rent,
Tenant agrees to pay to Landlord as additional rent (“Additional Rent”): 
(i) commencing on the Commencement Date, Tenant’s Share of “Operating Expenses”
(as defined in Section 5), and (ii) any and all other amounts Tenant assumes or
agrees to pay to Landlord under the provisions of this Lease, including, without
limitation, any and all other sums that may become due by reason of any default
of Tenant or failure to comply with the agreements, terms, covenants and
conditions of this Lease to be performed by Tenant, after any applicable notice
and cure period.

 

4.                                      Base Rent Adjustments.

 

(a)                                 Annual Adjustments.  Base Rent shall be
increased on each annual anniversary of the first day of the first full month
during the Term of this Lease (each an “Adjustment Date”) by multiplying the
Base Rent payable immediately before such Adjustment Date by the Rent Adjustment
Percentage and adding the resulting amount to the Base Rent payable immediately
before such Adjustment Date.  Base Rent, as so adjusted, shall thereafter be due
as provided herein.  For the avoidance of any doubt, the Base Rent payable from
and after the Rent Commencement Date (i.e., the first Adjustment Date) shall be
equal to $2.73 per rentable square foot of the Premises per month.  Base Rent
adjustments for any fractional calendar month shall be prorated.

 

(b)                                 Additional TI Allowance.  In addition to the
Tenant Improvement Allowance (as defined in the Work Letter), Landlord shall,
subject to the terms of the Work Letter, make available to Tenant the Additional
Tenant Improvement Allowance (as defined in the Work Letter). Commencing on the
Commencement Date and continuing thereafter on the first day of each month
during the Base Term, Tenant shall pay the amount necessary to fully amortize
(i) 50% of the first $10.00 per rentable square foot of the Additional Tenant
Improvement Allowance disbursed by Landlord, if any, and (ii) 100% of any
additional portion of the Additional Tenant Improvement Allowance actually
disbursed by Landlord, if any, in equal monthly payments with interest at a rate
of 8% per annum over the Base Term, which interest shall begin to accrue on the
date that Landlord first disburses such Additional Tenant Improvement Allowance
or any portion(s) thereof (collectively, “TI Rent”). Notwithstanding the
foregoing, Tenant may pay the outstanding and unamortized portion of the
Additional Tenant Improvement Allowance that was actually funded by Landlord in
full at any time without penalty.  Any of the Additional Tenant Improvement
Allowance and applicable interest payable by Tenant pursuant to this
Section 4(b) (including, without limitation, the amounts set forth in subsection
(i) above) remaining unpaid as of the expiration or earlier termination of this
Lease shall be paid to Landlord in a lump sum at the expiration or earlier
termination of this Lease.

 

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5.                                      Operating Expense Payments.  Landlord
shall deliver to Tenant a written estimate of Operating Expenses for each
calendar year during the Term (the “Annual Estimate”), which may be revised by
Landlord from time to time during such calendar year.  Commencing on the
Commencement Date and continuing thereafter on the first day of each month
during the Term, Tenant shall pay Landlord an amount equal to 1/12th of Tenant’s
Share of the Annual Estimate.  Payments for any fractional calendar month shall
be prorated.

 

The term “Operating Expenses” means all costs and expenses of any kind or
description whatsoever actually incurred or accrued each calendar year by
Landlord with respect to the Building (including the Building’s Share of all
costs and expenses of any kind or description incurred or accrued by Landlord
with respect to the Project which are not specific to the Building or any other
building located in the Project) (including, without duplication, Taxes (as
defined in Section 9), capital repairs and improvements amortized over the
lesser of 10 years and the useful life of such capital items, and the costs of
Landlord’s third party property manager or, if there is no third party property
manager, administration rent in the amount of 3.0% of Base Rent (or, prior to
the Rent Commencement Date, 3.0% of the Base Rent that would have been payable
during such period if Tenant had been required to pay Base Rent, which amount
shall be equal to $2.65 per rentable square foot of the Premises per month),
excluding only:

 

(a)                                 the original construction costs of the
Project and renovation prior to the date of the Lease and costs of correcting
defects in such original construction or renovation;

 

(b)                                 capital expenditures for expansion of the
Project;

 

(c)                                  interest, principal payments of Mortgage
(as defined in Section 27) debts of Landlord, financing costs and amortization
of funds borrowed by Landlord, whether secured or unsecured;

 

(d)                                 depreciation of the Project (except for
capital improvements, the cost of which are  includable in Operating Expenses
pursuant to and in accordance with the terms of this Section 5);

 

(e)                                  advertising, legal and space planning
expenses and leasing commissions and other costs and expenses incurred in
procuring and leasing space to tenants for the Project, including any leasing
office maintained in the Project, free rent and construction allowances for
tenants;

 

(f)                                   legal and other expenses incurred in the
negotiation or enforcement of leases;

 

(g)                                  completing, fixturing, improving,
renovating, painting, redecorating or other work, which Landlord pays for or
performs for other tenants within their premises, and costs of correcting
defects in such work;

 

(h)                                 costs to be reimbursed by other tenants of
the Project or Taxes to be paid directly by Tenant or other tenants of the
Project, whether or not actually paid;

 

(i)                                     salaries, wages, benefits and other
compensation paid to officers and employees of Landlord who are not assigned in
whole or in part to the operation, management, maintenance or repair of the
Project (which costs shall be prorated if such officers and employees are
assigned to the Project only in part in proportion to the amount of time spent
by such officers and employees on the Project) and any salaries of any
individuals who hold a position which is generally considered to be higher in
rank than the position of the vice-president (for the avoidance of any doubt,
the salaries, wages, benefits and other compensation paid to any asset manager
or chief engineer of the Project are not excluded);

 

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(j)                                    general organizational, administrative
and overhead costs relating to maintaining Landlord’s existence, either as a
corporation, partnership, or other entity, including general corporate, legal
and accounting expenses;

 

(k)                                 costs (including attorneys’ fees and costs
of settlement, judgments and payments in lieu thereof) incurred in connection
with disputes with tenants, other occupants, or prospective tenants, and costs
and expenses, including legal fees, incurred in connection with negotiations or
disputes with employees, consultants, management agents, leasing agents,
purchasers or mortgagees of the Building;

 

(l)                                     costs incurred by Landlord due to the
violation by Landlord, its employees, agents or contractors or any tenant of the
terms and conditions of any lease of space in the Project or any Legal
Requirement (as defined in Section 7);

 

(m)                             penalties, fines or interest incurred as a
result of Landlord’s inability or failure  to make payment of Taxes and/or to
file any tax or informational returns when due, or from Landlord’s failure to
make any payment of Taxes required to be made by Landlord hereunder before
delinquency;

 

(n)                                 overhead and profit increment paid to
Landlord or to subsidiaries or affiliates of Landlord for goods and/or services
in or to the Project to the extent the same exceeds the costs of such goods
and/or services rendered by unaffiliated third parties on a competitive basis;

 

(o)                                 costs of Landlord’s charitable or political
contributions, or of fine art maintained at the Project;

 

(p)                                 costs in connection with services (including
electricity), items or other benefits of a type which are not standard for the
Project and which are not available to Tenant without specific charges therefor,
but which are provided to another tenant or occupant of the Project, whether or
not such other tenant or occupant is specifically charged therefor by Landlord;

 

(q)                                 costs incurred in the sale or refinancing of
the Project;

 

(r)                                    net income taxes of Landlord or the owner
of any interest in the Project, franchise, capital stock, gift, estate or
inheritance taxes or any federal, state or local documentary taxes imposed
against the Project or any portion thereof or interest therein;

 

(s)                                   costs arising from the gross negligence or
intentional misconduct of Landlord or Landlord Parties;

 

(t)                                    any costs incurred to remove, study, test
or remediate Hazardous Materials in or about the Building or the Project
(provided, however, that the foregoing is in no event intended to limit Tenant’s
obligations under Section 28 or Section 30 of this Lease);

 

(u)                                 the cost of capital repairs and replacements
of Structural Items (as defined in Section 13), unless Tenant or any Tenant
Party is responsible for the cause of the repairs or replacements;

 

(v)                                 costs in connection with the Franklin Yard
Amenities (as defined in Section 40) other than the Amenities Fee (as defined in
Section 40) and other costs payable by Tenant pursuant to Section 40;

 

(w)                               reserves for future capital replacements;

 

(x)                                 costs occasioned by condemnation;

 

(y)                                 insurance deductibles in excess of
deductibles that Tenant can demonstrate are in excess of customary deductible
amounts carried by institutional owners of comparable projects in the Sorrento
Mesa area of San Diego; and

 

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(z)                                  any expenses otherwise includable within
Operating Expenses to the extent actually reimbursed by persons other than
tenants of the Project under leases for space in the Project.

 

For the avoidance of doubt, capital costs incurred by Landlord prior to the
Commencement Date may not be included as Operating Expenses.

 

Notwithstanding anything to the contrary contained herein, any earthquake
deductible payable by Tenant under this Lease shall be amortized with interest
in equal monthly installments over the remaining Term.

 

Notwithstanding anything to the contrary contained herein, in no event shall
Landlord be entitled to make any profit from Landlord’s collection of Operating
Expenses.

 

Within 90 days after the end of each calendar year (or such longer period as may
be reasonably required), Landlord shall furnish to Tenant a statement (an
“Annual Statement”) showing in reasonable detail:  (a) the total and Tenant’s
Share of actual Operating Expenses for the previous calendar year, and (b) the
total of Tenant’s payments in respect of Operating Expenses for such year.  If
Tenant’s Share of actual Operating Expenses for such year exceeds Tenant’s
payments of Operating Expenses for such year, the excess shall be due and
payable by Tenant as Rent within 30 days after delivery of such Annual Statement
to Tenant.  If Tenant’s payments of Operating Expenses for such year exceed
Tenant’s Share of actual Operating Expenses for such year Landlord shall pay the
excess to Tenant within 30 days after delivery of such Annual Statement, except
that after the expiration, or earlier termination of the Term or if Tenant is
delinquent in its obligation to pay Rent, Landlord shall pay the excess to
Tenant after deducting all other amounts due Landlord.

 

The Annual Statement shall be final and binding upon Tenant unless Tenant,
within 90 days after Tenant’s receipt thereof, shall contest any item therein by
giving written notice to Landlord, specifying each item contested and the reason
therefor.  If, during such 90 day period, Tenant reasonably and in good faith
questions or contests the accuracy of Landlord’s statement of Tenant’s Share of
Operating Expenses, Landlord will provide Tenant with access to Landlord’s books
and records relating to the operation of the Project and such information as
Landlord reasonably determines to be responsive to Tenant’s questions (the
“Expense Information”).  If after Tenant’s review of such Expense Information,
Landlord and Tenant cannot agree upon the amount of Tenant’s Share of Operating
Expenses, then Tenant shall have the right to have an independent regionally
recognized public accounting firm, working pursuant to a fee arrangement other
than a contingent fee (at Tenant’s sole cost and expense) and approved by
Landlord (which approval shall not be unreasonably withheld or delayed), audit
and/or review the Expense Information for the year in question (the “Independent
Review”).  The results of any such Independent Review shall be binding on
Landlord and Tenant.  If the Independent Review shows that the payments actually
made by Tenant with respect to Operating Expenses for the calendar year in
question exceeded Tenant’s Share of Operating Expenses for such calendar year,
Landlord shall at Landlord’s option either (i) credit the excess amount to the
next succeeding installments of Rent, or (ii) pay the excess to Tenant within 30
days after delivery of such statement, except that after the expiration or
earlier termination of this Lease or if Tenant is delinquent in its obligation
to pay Rent, Landlord shall pay the excess to Tenant after deducting all other
amounts due Landlord.  If the Independent Review shows that Tenant’s payments
with respect to Operating Expenses for such calendar year were less than
Tenant’s Share of Operating Expenses for the calendar year, Tenant shall pay the
deficiency to Landlord within 30 days after delivery of such statement.  If the
Independent Review shows that Tenant has overpaid with respect to Operating
Expenses by more than 5% then Landlord shall reimburse Tenant for all costs
incurred by Tenant for the Independent Review.  Operating Expenses for the
calendar years in which Tenant’s obligation to share therein begins and ends
shall be prorated.

 

The rentable square footage of the Premises shall be adjusted prior to the
Commencement  Date, using the 2010 Standard Method of Measuring Floor Area in
Office Buildings for single tenant buildings as adopted by the Building Owners
and Managers Association (ANSI/BOMA Z65.1-2010)(the “Measurement Standard”).  A
copy of the letter or report from Gensler setting forth its calculation of the

 

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actual Rentable Area of the Premises based upon the construction drawings for
the Building Shell (and using the Measurement Standard), together with all
documentary support therefor, shall be furnished to Tenant (the “Notice of
Re-determination of RSF”).  If the actual rentable square footage of the
Premises as set forth in the Notice of Re-determination of RSF deviates from the
amount specified in the definitions of “Premises” and “Rentable Area of
Premises” on page 1 of this Lease, then, promptly after such recalculation, this
Lease shall be amended so as to (i) reflect the actual rentable square footage
as set forth in the Notice of Re-determination of RSF in the definitions of
“Premises” and “Rentable Area of Premises” and “Rentable Area of Project”, and
(ii) appropriately adjust the amount set forth in the definition of “Tenant’s
Share of Operating of the Project” which was calculated based on the square
footages set forth on page 1 of this Lease.  Notwithstanding the foregoing, in
no event shall the rentable square footage of the Premises be increased by more
than 5% over the rentable square footage of the Premises on Page 1 of this
Lease.

 

“Tenant’s Share” shall be the percentage set forth on the first page of this
Lease as Tenant’s Share as reasonably adjusted by Landlord for changes in the
physical size of the Premises or the Project occurring thereafter.  If Landlord
has a reasonable basis for doing so, Landlord may equitably increase Tenant’s
Share for any item of expense or cost reimbursable by Tenant that relates to a
repair, replacement, or service that benefits only the Premises or only a
portion of the Project that includes the Premises or that varies with occupancy
or use.  Base Rent, Tenant’s Share of Operating Expenses and all other amounts
payable by Tenant to Landlord hereunder are collectively referred to herein as
“Rent.”

 

6.                                      Security Deposit.  Tenant shall deposit
with Landlord, upon delivery of an executed copy of this Lease to Landlord, a
security deposit (the “Security Deposit”) for the performance of all of Tenant’s
obligations hereunder in the amount set forth on page 1 of this Lease, which
Security Deposit shall be in the form of an unconditional and irrevocable letter
of credit (the “Letter of Credit”):  (i) in form and substance reasonably
satisfactory to Landlord, (ii) naming Landlord as beneficiary, (iii) expressly
allowing Landlord to draw upon it at any time from time to time by delivering to
the issuer notice that Landlord is entitled to draw thereunder, (iv) issued by
an FDIC-insured financial institution reasonably satisfactory to Landlord, and
(v) redeemable by presentation of a sight draft in the state of Landlord’s
choice.  If Tenant does not provide Landlord with a substitute Letter of Credit
complying with all of the requirements hereof at least 10 days before the stated
expiration date of any then current Letter of Credit, Landlord shall have the
right to draw the full amount of the current Letter of Credit and hold the funds
drawn in cash without obligation for interest thereon as the Security Deposit;
provided, however, that Tenant may at any time thereafter deliver a substitute
Letter of Credit, at which time Landlord shall promptly release the funds drawn
to Tenant.  The Security Deposit shall be held by Landlord as security for the
performance of Tenant’s obligations under this Lease.  The Security Deposit is
not an advance rental deposit or a measure of Landlord’s damages in case of
Tenant’s default.  Upon each occurrence of a Default (as defined in Section 20),
Landlord may use all or any part of the Security Deposit to pay delinquent
payments due under this Lease, future rent damages under California Civil Code
Section 1951.2, and the cost of any damage, injury, expense or liability caused
by such Default, without prejudice to any other remedy provided herein or
provided by law.  Landlord’s right to use the Security Deposit under this
Section 6 includes the right to use the Security Deposit to pay future rent
damages following the termination of this Lease pursuant to
Section 21(c) below.  Upon any use of all or any portion of the Security
Deposit, Tenant shall pay Landlord within 10 days after written demand the
amount that will restore the Security Deposit to the amount set forth on Page 1
of this Lease.  Tenant hereby waives the provisions of any law, now or hereafter
in force, including, without limitation, California Civil Code Section 1950.7,
which provide that Landlord may claim from a security deposit only those sums
reasonably necessary to remedy defaults in the payment of Rent, to repair damage
caused by Tenant or to clean the Premises, it being agreed that Landlord may, in
addition, claim those sums reasonably necessary to compensate Landlord for any
other loss or damage, foreseeable or unforeseeable, caused by the act or
omission of Tenant or any officer, employee, agent or invitee of Tenant.  Upon
bankruptcy or other debtor-creditor proceedings against Tenant, the Security
Deposit shall be deemed to be applied first to the payment of Rent and other
charges due Landlord for periods prior to the filing of such proceedings.  If
Tenant shall fully perform every provision of this Lease to be performed by
Tenant, the Security Deposit, or any balance thereof (i.e., after deducting
therefrom all amounts to which Landlord is entitled under the provisions of this
Lease), shall be returned to Tenant (or, at Landlord’s option, to the last
assignee of Tenant’s interest hereunder) within 60 days after the expiration or
earlier termination of this Lease.

 

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Tenant has advised Landlord that Tenant requires additional time to obtain the
Letter of Credit.  Notwithstanding anything to the contrary contained herein,
Landlord and Tenant hereby agree that, upon delivery of an executed copy of this
Lease to Landlord, Tenant may deposit the sum of $89,909.20 in cash with
Landlord as the Security Deposit under the Lease until such time as Tenant
delivers to Landlord the Letter of Credit, in form approved by Landlord, which
shall be no later than January 31, 2015.  Promptly upon the delivery of the
approved and effective Letter of Credit, Landlord shall return the cash security
deposit to Tenant.  Tenant’s failure to deliver a Letter of Credit, in a form
approved by Landlord, as required pursuant to this Section 6, on or before
January 31, 2015, shall constitute a Default under this Lease.

 

If Landlord transfers its interest in the Project or this Lease, Landlord shall
either (a) transfer any Security Deposit then held by Landlord to a person or
entity assuming Landlord’s obligations under this Section 6, or (b) return to
Tenant any Security Deposit then held by Landlord and remaining after the
deductions permitted herein.  Upon such transfer to such transferee or the
return of the Security Deposit to Tenant, Landlord shall have no further
obligation with respect to the Security Deposit, and Tenant’s right to the
return of the Security Deposit shall apply solely against Landlord’s
transferee.  The Security Deposit is not an advance rental deposit or a measure
of Landlord’s damages in case of Tenant’s default.  Landlord’s obligation
respecting the Security Deposit is that of a debtor, not a trustee, and no
interest shall accrue thereon.

 

7.                                      Use.  The Premises shall be used solely
for the Permitted Use set forth in the basic lease provisions on page 1 of this
Lease, and in compliance with all laws, orders, judgments, ordinances,
regulations, codes, directives, permits, licenses, covenants and restrictions
now or hereafter applicable to the Premises, and to the use and occupancy
thereof, including, without limitation, the Americans With Disabilities Act, 42
U.S.C. § 12101, et seq. (together with the regulations promulgated pursuant
thereto, “ADA”) (collectively, “Legal Requirements” and each, a “Legal
Requirement”).  Tenant shall, upon 10 days’ written notice from Landlord,
discontinue any use of the Premises which is declared by any Governmental
Authority (as defined in Section 9) having jurisdiction to be a violation of a
Legal Requirement; provided, however, that if the applicable Governmental
Authority grants to Tenant time in addition to such 10 day period to discontinue
its use of the Premises, Tenant may continue to operate in the Premises for such
additional period granted by the applicable Governmental Authority.  Tenant will
not use or permit the Premises to be used for any purpose or in any manner that
would void Tenant’s or Landlord’s insurance, increase the insurance risk, or
cause the disallowance of any sprinkler or other credits.  Tenant shall not
permit any part of the Premises to be used as a “place of public accommodation”,
as defined in the ADA or any similar legal requirement.  Tenant shall reimburse
Landlord promptly upon demand for any additional premium charged for any such
insurance policy by reason of Tenant’s failure to comply with the provisions of
this Section or otherwise caused by Tenant’s particular use of the Premises. 
Tenant will use the Premises in a careful, safe and proper manner and will not
commit or permit waste, overload the floor or structure of the Premises, subject
the Premises to use that would damage the Premises or obstruct or interfere with
the rights of Landlord or other tenants or occupants of the Project, including
conducting or giving notice of any auction, liquidation, or going out of
business sale on the Premises, or using or allowing the Premises to be used for
any unlawful purpose.  Tenant shall cause any equipment or machinery to be
installed in the Premises so as to reasonably prevent sounds or vibrations from
the Premises from extending into Common Areas, or other space in the Project. 
Tenant shall not place any machinery or equipment weighing 500 pounds or more in
or upon the Premises or transport or move such items through the Common Areas of
the Project or in the Project elevators without the prior written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed.  Except as may be provided under the Work Letter, Tenant shall not,
without the prior written consent of Landlord, use the Premises in any manner
which will require ventilation, air exchange, heating, gas, steam, electricity
or water beyond the existing capacity of the Building (unless Tenant agrees to
pay the cost of any increase in capacity).

 

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Landlord shall be responsible, at Landlord’s cost and expense, for the
compliance of the Premises and the Common Areas of the Project with Legal
Requirements as of the Commencement Date.  Following the Commencement Date,
Landlord shall, as an Operating Expense (to the extent such Legal Requirement is
generally applicable to similar buildings in the area in which the Project is
located) and at Tenant’s expense (to the extent such Legal Requirement is
triggered by reason of Tenant’s, as compared to other tenants of the Project,
particular use of the Premises or Tenant’s Alterations) make any alterations or
modifications to the Common Areas or the exterior of the Building that are
required by Legal Requirements.  Except as provided in the two immediately
preceding sentences, Tenant, at its sole expense, shall make any alterations or
modifications to the interior of the Premises that are required by Legal
Requirements (including, without limitation, compliance of the Premises with the
ADA) related to Tenant’s particular use or occupancy of the Premises or any
Tenant Alterations.  Notwithstanding any other provision herein to the contrary,
Tenant shall be responsible for any and all demands, claims, liabilities,
losses, costs, expenses, actions, causes of action, damages or judgments, and
all reasonable expenses incurred in investigating or resisting the same
(including, without limitation, reasonable attorneys’ fees, charges and
disbursements and costs of suit) (collectively, “Claims”) arising out of or in
connection with Legal Requirements related to Tenant’s particular use or
occupancy of the Premises or Tenant’s Alterations, and Tenant shall indemnify,
defend, hold and save Landlord harmless from and against any and all Claims
arising out of or in connection with any failure of the Premises to comply with
any Legal Requirement related to Tenant’s particular use or occupancy of the
Premises or Tenant’s Alterations. For purposes of Section 1938 of the California
Civil Code, as of the date of this Lease, the Project has not been inspected by
a certified access specialist.

 

8.                                      Holding Over.  If, with Landlord’s
express written consent, Tenant retains possession of the Premises after the
termination of the Term, (i) unless otherwise agreed in such written consent,
such possession shall be subject to immediate termination by Landlord at any
time, (ii) all of the other terms and provisions of this Lease (including,
without limitation, the adjustment of Base Rent pursuant to Section 4 hereof)
shall remain in full force and effect (excluding any expansion or renewal option
or other similar right or option) during such holdover period, (iii) Tenant
shall continue to pay Base Rent in the amount payable upon the date of the
expiration or earlier termination of this Lease or such other amount as to which
Landlord and Tenant mutually agree in such written consent, and (iv) all other
payments shall continue under the terms of this Lease.  If Tenant remains in
possession of the Premises after the expiration or earlier termination of the
Term without the express written consent of Landlord, (A) Tenant shall become a
tenant at sufferance upon the terms of this Lease except that the monthly rental
shall be equal to 150% of Rent in effect during the last 30 days of the Term,
and (B) Tenant shall be responsible for all damages suffered by Landlord
resulting from or occasioned by Tenant’s holding over, including consequential
damages.  No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend this Lease except as otherwise expressly
provided, and this Section 8 shall not be construed as consent for Tenant to
retain possession of the Premises.  Acceptance by Landlord of Rent after the
expiration of the Term or earlier termination of this Lease shall not result in
a renewal or reinstatement of this Lease.

 

9.                                      Taxes.  Landlord shall pay, as part of
Operating Expenses, all taxes, levies, fees, assessments and governmental
charges of any kind, existing as of the Commencement Date or thereafter enacted
(collectively referred to as “Taxes”), imposed by any federal, state, regional,
municipal, local or other governmental authority or agency, including, without
limitation, quasi-public agencies (collectively, “Governmental Authority”)
during the Term, including, without limitation, all Taxes:  (i) imposed on or
measured by or based, in whole or in part, on rent payable to (or gross receipts
received by) Landlord under this Lease and/or from the rental by Landlord of the
Project or any portion thereof, or (ii) based on the square footage, assessed
value or other measure or evaluation of any kind of the Premises or the Project,
or (iii) assessed or imposed by or on the operation or maintenance of any
portion of the Premises or the Project, including parking, or (iv) assessed or
imposed by, or at the direction of, or resulting from Legal Requirements, or
interpretations thereof, promulgated by any Governmental Authority, or
(v) imposed as a license or other fee, charge, tax, or assessment on Landlord’s
business or occupation of leasing space in the Project.  Landlord may contest by
appropriate legal proceedings the amount, validity, or application of any Taxes
or liens securing Taxes.  Notwithstanding anything to the contrary contained
herein, Landlord shall only charge Tenant for

 

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assessments as if those assessments were paid by Landlord over the longest
possible term which Landlord is permitted to pay for the applicable assessments
without additional charge other than interest, if any, provided under the terms
of the underlying assessments.  Taxes shall not include (a) any net income taxes
imposed on Landlord except to the extent such net income taxes are in
substitution for any Taxes payable hereunder, (b) excess profit taxes, franchise
taxes, transfer taxes, capital stock taxes, gift taxes or estate, inheritance or
succession taxes imposed on or payable by Landlord, (c) any tax, assessment or
charge levied on Landlord’s rental income, unless such taxes or assessments are
in substitution for any Taxes payable hereunder, (d) any taxes or assessments in
excess of the amount which would be payable if such tax or assessment were paid
in installments over the longest possible term, or (e) any tax, assessment or
charge imposed on land or improvements other than the Project.  Tenant shall
pay, prior to delinquency, any and all Taxes levied or assessed against any
personal property or trade fixtures placed by Tenant in the Premises, whether
levied or assessed against Landlord or Tenant.  If any Taxes on Tenant’s
personal property or trade fixtures are levied against Landlord or Landlord’s
property, or if the assessed valuation of the Project is increased by a value
attributable to improvements in or alterations to the Premises, whether owned by
Landlord or Tenant and whether or not affixed to the real property so as to
become a part thereof, higher than the base valuation on which Landlord from
time-to-time allocates Taxes to all tenants in the Project, Landlord shall have
the right, but not the obligation, to pay such Taxes.  Landlord’s reasonable
determination of any excess assessed valuation shall be binding and conclusive,
absent manifest error.  The amount of any such payment by Landlord shall
constitute Additional Rent due from Tenant to Landlord immediately upon demand.

 

10.                               Parking.  Subject to Force Majeure, a Taking
(as defined in Section 19 below) and the exercise by Landlord of its rights
hereunder, Tenant shall have the right at no additional rental charge during the
Term, in common with other tenants of the Project to use 2.5 parking spaces per
1,000 rentable square feet of the Premises, which shall be located in those
areas designated for non-reserved parking, subject in each case to Landlord’s
rules and regulations.  Up to ten (10) of the parking spaces, as determined by
Tenant, which Tenant is entitled to use pursuant to the first sentence of this
Section 10 shall be marked as being reserved for Tenant in a manner consistent
with Landlord’s program at the Project with respect to the reservation of
parking spaces and in a location reasonably acceptable to Landlord and Tenant.
Landlord shall not be responsible for enforcing Tenant’s parking rights against
any third parties, including other tenants of the Project or for enforcing any
reservation of parking spaces.

 

11.                               Utilities, Services.  Landlord shall provide,
subject to the terms of this Section 11, water, electricity, heat, light, power,
HVAC, sewer, and other utilities (including gas and fire sprinklers), refuse and
trash collection and janitorial services (collectively, “Utilities”).  Landlord
shall pay, as Operating Expenses or subject to Tenant’s reimbursement obligation
below, for all Utilities used on the Premises, all maintenance charges for
Utilities, and any storm sewer charges or other similar charges for Utilities
imposed by any Governmental Authority or Utility provider, and any taxes,
penalties, surcharges or similar charges thereon.  Landlord may cause, at
Tenant’s reasonable expense, any Utilities to be separately metered or charged
directly to Tenant by the provider.  Tenant shall pay directly to the Utility
provider, prior to delinquency, any separately metered Utilities and services
which may be furnished to Tenant or the Premises during the Term.  Tenant shall
pay, as part of Operating Expenses, its share of all charges for jointly metered
Utilities based upon consumption, as reasonably determined by Landlord.  No
interruption or failure of Utilities, from any cause whatsoever other than
Landlord’s willful misconduct, shall result in eviction or constructive eviction
of Tenant, termination of this Lease or the abatement of Rent.  Tenant agrees to
limit use of water and sewer with respect to Common Areas to normal restroom
use.  Tenant shall be responsible for obtaining and paying for its own
janitorial services for the Premises.  Subject to the other provisions of this
Lease, Tenant shall have the ability during the Term, through the building
management systems, to control the HVAC systems serving only the Premises solely
for the purpose of controlling the temperatures within the Premises.  Utilities
shall be available to the Premises 24 hours per day, 7 days per week, except in
the case of emergencies, as the result of Legal Requirements, the failure of any
Utility provider to provide such Utilities, the performance by Landlord or any
Utility provider of any installation, maintenance or repairs, or any other
temporary interruptions.

 

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Notwithstanding anything to the contrary set forth herein, if (i) a stoppage of
an Essential Service (as defined below) to the Premises shall occur and such
stoppage is due solely to the gross negligence or  willful misconduct of
Landlord or any Landlord Party and not due in any part to any act or omission on
the part of Tenant or any Tenant Party or any matter beyond Landlord’s
reasonable control (any such stoppage of an Essential Service being hereinafter
referred to as a “Service Interruption”), and (ii) such Service Interruption
continues for more than 5 consecutive days after Landlord shall have received
written notice thereof from Tenant, and (iii) as a result of such Service
Interruption, the conduct of Tenant’s normal operations in the Premises are
materially and adversely affected, then, there shall be an abatement of one
day’s Base Rent for each day during which such Service Interruption continues
after such 5 day period; provided, however, that if any part of the Premises is
reasonably useable for Tenant’s normal business operations or if Tenant conducts
all or any part of its operations in any portion of the Premises notwithstanding
such Service Interruption, then the amount of each daily abatement of Base Rent
shall only be proportionate to the nature and extent of the interruption of
Tenant’s normal operations or ability to use the Premises.  Except as expressly
provided in the immediately preceding paragraph, the rights granted to Tenant
under this paragraph shall be Tenant’s sole and exclusive remedy resulting from
a failure of Landlord to provide services, and Landlord shall not otherwise be
liable for any loss or damage suffered or sustained by Tenant resulting from any
failure or cessation of services.  For purposes hereof, the term “Essential
Services” shall mean the following services:  HVAC service, water, sewer and
electricity, but in each case only to the extent that Landlord has an obligation
to provide same to Tenant under this Lease.  This paragraph shall not apply to
any events described in Section 18 or 19.

 

12.                               Alterations and Tenant’s Property.  Any
alterations, additions, or improvements made to the Premises by or on behalf of
Tenant (other than Landlord’s Work), including additional locks or bolts of any
kind or nature upon any doors or windows in the Premises, but excluding
installation, removal or realignment of furniture systems (other than removal of
furniture systems owned or paid for by Landlord) not involving any modifications
to the structure or connections (other than by ordinary plugs or jacks) to
Building Systems (as defined in Section 13) (“Alterations”) shall be subject to
Landlord’s prior written consent, which may be given or withheld in Landlord’s
sole discretion if any such Alteration materially and/or adversely affects the
structure or Building Systems and shall not be otherwise unreasonably withheld. 
Tenant may construct nonstructural Alterations in the Premises without
Landlord’s prior approval if the aggregate cost of all such work in any 12 month
period does not exceed $100,000 (a “Notice-Only Alteration”), provided Tenant
notifies Landlord in writing of such intended Notice-Only Alteration, and such
notice shall be accompanied by plans, specifications, work contracts and such
other information concerning the nature and cost of the Notice-Only Alteration
as may be reasonably requested by Landlord, which notice and accompanying
materials shall be delivered to Landlord not less than 15 business days in
advance of any proposed construction.  If Landlord approves any Alterations,
Landlord may impose such conditions on Tenant in connection with the
commencement, performance and completion of such Alterations as Landlord may
deem appropriate in Landlord’s reasonable discretion.  Any request for approval
shall be in writing, delivered not less than 15 business days in advance of any
proposed construction, and accompanied by plans, specifications, bid proposals,
work contracts and such other information concerning the nature and cost of the
alterations as may be reasonably requested by Landlord, including the identities
and mailing addresses of all persons performing work or supplying materials. 
Landlord’s right to review plans and specifications and to monitor construction
shall be solely for its own benefit, and Landlord shall have no duty to ensure
that such plans and specifications or construction comply with applicable Legal
Requirements.  Tenant shall cause, at its sole cost and expense, all Alterations
to comply with applicable insurance requirements and with Legal Requirements and
shall implement at its sole cost and expense any alteration or modification
required by Legal Requirements as a result of any Alterations.  Other than in
connection with a Notice-Only Alteration (with respect to which no fee shall be
payable), Tenant shall pay to Landlord, as Additional Rent, on demand an amount
equal to 3% of all charges incurred by Tenant or its contractors or agents in
connection with any Alteration to cover Landlord’s overhead and expenses for
plan review, coordination, scheduling and supervision.  Before Tenant begins any
Alteration, Landlord may post on and about the Premises notices of
non-responsibility pursuant to applicable law.  Tenant shall reimburse Landlord
for, and indemnify and hold Landlord harmless from, any expense incurred by
Landlord by reason of faulty work done by Tenant or its contractors, delays
caused by such work, or inadequate cleanup.

 

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Tenant shall furnish security or make other arrangements reasonably satisfactory
to Landlord to assure payment for the completion of all Alterations work free
and clear of liens, and shall provide (and cause each contractor or
subcontractor to provide) certificates of insurance for workers’ compensation
and other coverage in amounts and from an insurance company reasonably
satisfactory to Landlord protecting Landlord against liability for personal
injury or property damage during construction.  Upon completion of any
Alterations, Tenant shall deliver to Landlord:  (i) sworn statements setting
forth the names of all contractors and subcontractors who did the work and final
lien waivers from all such contractors and subcontractors; and (ii) “as built”
plans for any such Alteration.

 

Except for Removable Installations (as hereinafter defined), all Installations
(as hereinafter defined) shall be and shall remain the property of Landlord
during the Term and following the expiration or earlier termination of the Term,
shall not be removed by Tenant at any time during the Term, and shall remain
upon and be surrendered with the Premises as a part thereof.  Notwithstanding
the foregoing, Landlord may, at the time its approval of any such Installation
is requested, or at the time it receives notice of a Notice-Only Alteration,
notify Tenant that Landlord requires that Tenant remove such Installation upon
the expiration or earlier termination of the Term, in which event Tenant shall
remove such Installation in accordance with the immediately succeeding
sentence.  Upon the expiration or earlier termination of the Term, Tenant shall
remove (i) all wires, cables or similar equipment which Tenant has installed in
the Premises or in the risers or plenums of the Building, (ii) any Installations
for which Landlord has given Tenant notice of removal in accordance with the
immediately preceding sentence, and (iii) all of Tenant’s Property (as
hereinafter defined), and Tenant shall restore and repair any damage caused by
or occasioned as a result of such removal, including, without limitation,
capping off all such connections behind the walls of the Premises and repairing
any holes.  During any restoration period beyond the expiration or earlier
termination of the Term, Tenant shall pay Rent to Landlord as provided herein as
if said space were otherwise occupied by Tenant.  If Landlord is requested by
Tenant or any lender, lessor or other person or entity claiming an interest in
any of Tenant’s Property to waive any lien Landlord may have against any of
Tenant’s Property, Landlord shall execute a lien waiver on Landlord’s customary
form or another form of lien waiver reasonably acceptable to Landlord, and then
Landlord shall be entitled to be paid as administrative rent a fee of $1,000 per
occurrence for its time and effort in preparing and negotiating such a waiver of
lien.

 

For purposes of this Lease, (x) “Removable Installations” means any items listed
on Exhibit F attached hereto and any items agreed by Landlord in writing to be
included on Exhibit F in the future, (y) “Tenant’s Property” means Removable
Installations and, other than Installations, any personal property or equipment
of Tenant that may be removed without material damage to the Premises, and
(z) “Installations” means all property of any kind paid for with the TI Fund,
all Alterations, all fixtures, and all partitions, hardware, built-in machinery,
built-in casework and cabinets and other similar additions, equipment, property
and improvements built into the Premises so as to become an integral part of the
Premises, including, without limitation, fume hoods which penetrate the roof or
plenum area, built-in cold rooms, built-in warm rooms, walk-in cold rooms,
walk-in warm rooms, deionized water systems, glass washing equipment,
autoclaves, chillers, built-in plumbing, electrical and mechanical equipment and
systems, and any power generator and transfer switch.

 

Tenant shall not be required to remove any Landlord’s Work at the expiration or
earlier termination of the Term nor shall Tenant have the right to remove any
Landlord’s Work at any time.

 

13.                               Landlord’s Repairs.  Landlord shall, at
Landlord’s sole expense (and not as an Operating Expense), be responsible for
capital repairs and replacements of the roof (not including the roof membrane),
exterior walls, structural walls, concrete flooring and foundation of the
Building (“Structural Items”) unless the need for such repairs or replacements
is caused by Tenant or any Tenant Parties (reasonable wear and tear excluded),
in which case Tenant shall, subject to Section 17, bear the full cost to repair
or replace such Structural Items.  Landlord shall, as an Operating Expense
(except to the extent the cost thereof is expressly excluded from Operating
Expenses pursuant to Section 5 hereof), be responsible for the routine
maintenance and repairs of such Structural Items.  In addition, Landlord, as an
Operating Expense (except to the extent the cost thereof is expressly excluded
from Operating Expenses pursuant to Section 5 hereof), shall maintain the roof
membrane and all of the exterior, parking and other Common Areas of the Project,
including HVAC, plumbing, fire sprinklers, elevators and all other building
systems serving the Premises and other portions of the Project (“Building
Systems”), in good

 

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repair, reasonable wear and tear excluded.  Subject to the terms of Section 17
hereof, losses and damages caused by Tenant, or by any of Tenant’s agents,
servants, employees, invitees and contractors (collectively, “Tenant Parties”)
shall be repaired by Landlord, to the extent not covered by insurance, at
Tenant’s sole cost and expense.  Landlord reserves the right to stop Building
Systems services when reasonably necessary (i) by reason of accident or
emergency, or (ii) for planned repairs, alterations or improvements, which are,
in the reasonable judgment of Landlord, desirable or necessary to be made, until
said repairs, alterations or improvements shall have been completed.  Landlord
shall have no responsibility or liability for failure to supply Building Systems
services during any such period of interruption; provided, however, that
Landlord shall, except in case of emergency, make a commercially reasonable
effort to give Tenant 24 hours advance notice of any planned stoppage of
Building Systems services for routine maintenance, repairs, alterations or
improvements.  Tenant shall promptly give Landlord written notice of any repair
required by Landlord pursuant to this Section, after which Landlord shall make a
commercially reasonable effort to effect such repair.  Landlord shall use
reasonable efforts to minimize interference with Tenant’s operations in the
Premises during the performance of Landlord’s repair and maintenance obligations
under this Lease.  Landlord shall not be liable for any failure to make any
repairs or to perform any maintenance unless such failure shall persist for an
unreasonable time after Tenant’s written notice of the need for such repairs or
maintenance.  Tenant waives its rights under any state or local law to terminate
this Lease or to make such repairs at Landlord’s expense and agrees that the
parties’ respective rights with respect to such matters shall be solely as set
forth herein.  Repairs required as the result of fire, earthquake, flood,
vandalism, war, or similar cause of damage or destruction shall be controlled by
Section 18.

 

14.                               Tenant’s Repairs.  Subject to Section 13
hereof, Tenant, at its expense, shall repair, replace and maintain in good
condition (subject to normal wear and tear, casualty and condemnation) all
portions of the Premises, including, without limitation, entries, doors,
ceilings, interior windows, interior walls, and the interior side of demising
walls.  Should Tenant fail to make any such repair or replacement or fail to
maintain the Premises, Landlord shall give Tenant notice of such failure.  If
Tenant fails to commence cure of such failure within 30 days of Landlord’s
notice, and thereafter diligently prosecute such cure to completion, Landlord
may perform such work and shall be reimbursed by Tenant for the actual costs
incurred by Landlord with respect thereto within 30 days after Tenant’s receipt
of a reasonably detailed invoice; provided, however, that if such failure by
Tenant creates or could create an emergency, Landlord may immediately commence
cure of such failure and shall thereafter be entitled to recover the actual
costs of such cure from Tenant within 30 days after written demand therefor. 
Subject to Sections 17 and 18, Tenant shall bear the cost of any repair or
replacement to any part of the Project to the extent that results from damage
caused by Tenant or any Tenant Party.  Landlord shall use reasonable efforts to
minimize interference with Tenant’s operations in the Premises during the
performance of repair and maintenance of the Premises pursuant to this
Section 14.  Notwithstanding anything to the contrary contained herein, Tenant
shall not be required to perform or construct any capital repairs or
replacements, but Tenant shall be required to pay for capital repairs and
replacements performed or constructed by Landlord in accordance with the other
provisions of this Lease.

 

15.                               Mechanic’s Liens.  Tenant shall discharge, by
bond or otherwise, any mechanic’s lien filed against the Premises or against the
Project for work claimed to have been done for, or materials claimed to have
been furnished to, Tenant within 15 days after Tenant receives notice of the
filing thereof, at Tenant’s sole cost and shall otherwise keep the Premises and
the Project free from any liens arising out of work performed, materials
furnished or obligations incurred by Tenant.  Should Tenant fail to discharge
any lien described herein, Landlord shall have the right, but not the
obligation, to pay such claim or post a bond or otherwise provide security to
eliminate the lien as a claim against title to the Project and the cost thereof
shall be due from Tenant as Additional Rent within 10 days after Tenant’s
receipt of written demand therefor.  If Tenant shall lease or finance the
acquisition of office equipment, furnishings, or other personal property of a
removable nature utilized by Tenant in the operation of Tenant’s business,
Tenant warrants that any Uniform Commercial Code Financing Statement filed as a
matter of public record by any lessor or creditor of Tenant will upon its face
or by exhibit thereto indicate that such Financing Statement is applicable only
to removable personal property of Tenant located within the Premises.  In no
event shall the address of the Project be furnished on the statement without
qualifying language as to applicability of the lien only to removable personal
property, located in an identified suite held by Tenant.

 

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16.                               Indemnification.  Tenant hereby indemnifies
and agrees to defend, save and hold Landlord harmless from and against any and
all Claims for injury or death to persons or damage to property occurring within
or about the Premises, arising directly or indirectly out of use or occupancy of
the Premises or a breach or default by Tenant in the performance of any of its
obligations hereunder, except to the extent caused by the willful misconduct or
gross negligence of Landlord or Landlord’s employees or agents, or defaults by
Landlord under this Lease.  Landlord shall not be liable to Tenant for, and
Tenant assumes all risk of damage to, personal property (including, without
limitation, loss of records kept within the Premises).  Tenant further waives
any and all Claims for injury to Tenant’s business or loss of income relating to
any such damage or destruction of personal property (including, without
limitation, any loss of records).  Landlord shall not be liable for any damages
arising from any act, omission or neglect of any tenant in the Project or of any
other third party.

 

17.                               Insurance.  Landlord shall maintain all risk
property and, if applicable, sprinkler damage insurance covering the full
replacement cost of the Project (including Landlord’s Work).  Landlord shall
further procure and maintain commercial general liability insurance with a
single loss limit of not less than $2,000,000 for bodily injury and property
damage with respect to the Project.  Landlord may, but is not obligated to,
maintain such other insurance and additional coverages as it may deem reasonably
necessary, including, but not limited to, flood, environmental hazard and
earthquake, loss or failure of building equipment, errors and omissions, rental
loss during the period of repair or rebuilding, workers’ compensation insurance
and fidelity bonds for employees employed to perform services and insurance for
any improvements installed by Tenant or which are in addition to the standard
improvements customarily furnished by Landlord without regard to whether or not
such are made a part of the Project.  All such insurance shall be included as
part of the Operating Expenses (except to the extent the cost thereof is
expressly excluded from Operating Expenses pursuant to Section 5 hereof).  The
Project may be included in a blanket policy (in which case the cost of such
insurance allocable to the Project will be reasonably determined by Landlord
based upon the insurer’s cost calculations).  Tenant shall also reimburse
Landlord for any actual increased premiums or additional insurance which
Landlord reasonably deems necessary as a result of Tenant’s particular use of
the Premises.

 

Tenant, at its sole cost and expense, shall maintain during the Term:  all risk
property insurance with business interruption and extra expense coverage,
covering the full replacement cost of all property and Alterations installed or
placed in the Premises by Tenant at Tenant’s expense; workers’ compensation
insurance with no less than the minimum limits required by law; employer’s
liability insurance with such limits as required by law; and commercial general
liability insurance, with a minimum limit of not less than $2,000,000 per
occurrence for bodily injury and property damage with respect to the Premises. 
The commercial general liability insurance policy shall name Alexandria Real
Estate Equities, Inc., and Landlord, its officers, directors, employees,
managers, agents, invitees and contractors (collectively, “Landlord Parties”),
as additional insureds; insure on an occurrence and not a claims-made basis; be
issued by insurance companies which have a rating of not less than policyholder
rating of A and financial category rating of at least Class VIII in “Best’s
Insurance Guide”; not contain a hostile fire exclusion; contain a contractual
liability endorsement; and provide primary coverage to Landlord (any policy
issued to Landlord providing duplicate or similar coverage shall be deemed
excess over Tenant’s policies). Tenant shall (i) provide Landlord with 30 days’
advance written notice of cancellation of such commercial general liability
policy, and (ii) request that its insurer to endeavor to provide 10 days’
advance written notice of cancellation of such commercial general liability
policy.  Certificates of insurance showing the limits of coverage required
hereunder and showing Landlord as an additional insured, along with reasonable
evidence of the payment of premiums for the applicable period, shall be
delivered to Landlord by Tenant prior to (i) the earlier to occur of  (x) the
Commencement Date, or (y) the date that Tenant accesses the Premises under this
Lease, and (ii) each renewal of said insurance.  Tenant’s policy may be a
“blanket policy” with an aggregate per location endorsement which specifically
provides that the amount of insurance shall not be prejudiced by other losses
covered by the policy.  Tenant shall, at least 5 days prior to the expiration of
such policies, furnish Landlord with renewal certificates.

 

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In each instance where insurance is to name Landlord as an additional insured,
Tenant shall upon written request of Landlord also designate and furnish
certificates so evidencing Landlord as additional insured to:  (i) any lender of
Landlord holding a security interest in the Project or any portion thereof,
(ii) the landlord under any lease wherein Landlord is tenant of the real
property on which the Project is located, if the interest of Landlord is or
shall become that of a tenant under a ground or other underlying lease rather
than that of a fee owner, and/or (iii) any management company retained by
Landlord to manage the Project.

 

The property insurance obtained by Landlord and Tenant shall include a waiver of
subrogation by the insurers and all rights based upon an assignment from its
insured, against Landlord or Tenant, and their respective officers, directors,
employees, managers and agents (“Related Parties”), in connection with any loss
or damage thereby insured against.  Notwithstanding anything to the contrary
contained in this Lease, neither party nor its respective Related Parties shall
be liable to the other for loss or damage caused by any risk insured against
under property insurance required to be maintained hereunder, and each party
waives any claims against the other party, and its respective Related Parties,
for such loss or damage.  The failure of a party to insure its property shall
not void this waiver.  Landlord and its respective Related Parties shall not be
liable for, and Tenant hereby waives all claims against such parties for,
business interruption and losses occasioned thereby sustained by Tenant or any
person claiming through Tenant resulting from any accident or occurrence in or
upon the Premises or the Project from any cause whatsoever.  If the foregoing
waivers shall contravene any law with respect to exculpatory agreements, the
liability of Landlord or Tenant shall be deemed not released but shall be
secondary to the other’s insurer.

 

Landlord may require insurance policy limits to be raised to conform with
requirements of Landlord’s lender and/or to bring coverage limits to levels then
being generally required of new tenants within the Project; provided, however,
that the increased amount of coverage is consistent with coverage amounts then
being required by institutional owners of similar projects with tenants
occupying similar size premises in the geographical area in which the Project is
located.

 

18.                               Restoration.  If, at any time during the Term,
the Project or the Premises are damaged or destroyed by a fire or other insured
casualty, Landlord shall notify Tenant within 60 days after discovery of such
damage as to the amount of time Landlord reasonably estimates it will take to
restore the Project or the Premises, as applicable (the “Restoration Period”). 
If the Restoration Period is estimated to exceed 9 months (the “Maximum
Restoration Period”), Landlord may, in such notice, elect to terminate this
Lease as of the date that is 75 days after the date of discovery of such damage
or destruction; provided, however, that notwithstanding Landlord’s election to
restore, Tenant may elect to terminate this Lease by written notice to Landlord
delivered within 20 business days of receipt of a notice from Landlord
estimating a Restoration Period for the Premises longer than the Maximum
Restoration Period.  Unless either Landlord or Tenant so elects to terminate
this Lease, Landlord shall, subject to receipt of sufficient insurance proceeds
(with any deductible to be treated as a current Operating Expense), promptly
restore the Premises (excluding any Alterations installed by Tenant or by
Landlord and paid for by Tenant), subject to delays arising from the collection
of insurance proceeds, from Force Majeure events or as needed to obtain any
license, clearance or other authorization of any kind required to enter into and
restore the Premises issued by any Governmental Authority having jurisdiction
over the use, storage, handling, treatment, generation, release, disposal,
removal or remediation of Hazardous Materials (as defined in Section 30) in, on
or about the Premises (collectively referred to herein as “Hazardous Materials
Clearances”); provided, however, that if repair or restoration of the Premises
is not substantially complete as of the end of the Maximum Restoration Period
or, if longer, the Restoration Period, Landlord may, in its sole and absolute
discretion, elect not to proceed with such repair and restoration, or Tenant may
by written notice to Landlord delivered within 10 business days of the
expiration of the Maximum Restoration Period or, if longer, the Restoration
Period, elect to terminate this Lease, in which event Landlord shall be relieved
of its obligation to make such repairs or restoration and this Lease shall
terminate as of the date that is 75 days after the later of:  (i) discovery of
such damage or destruction, or (ii) the date all required Hazardous Materials
Clearances are obtained, but Landlord shall retain any Rent paid and the right
to any Rent payable by Tenant prior to such election by Landlord or Tenant.  If
this Lease has not been terminated pursuant to this Section 18, after the date
that is 4.5

 

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months after the discovery of the damage or destruction, Tenant may deliver to
Landlord a written request of Landlord’s determination of the time remaining to
restore the Project or the Premises, as applicable.  Landlord shall deliver a
response to Tenant within 10 days after Landlord’s receipt of Tenant’s written
request indicating Landlord’s reasonable estimate of the time remaining to
restore the Project or the Premises.  If the time estimated by Landlord exceeds
the Restoration Period or, if applicable, the Maximum Restoration Period, Tenant
may by written notice to Landlord delivered within 10 business days after
Tenant’s receipt of Landlord’s response, elect to terminate this Lease and this
Lease shall terminate as provided above.

 

Notwithstanding the foregoing, either Landlord or Tenant may terminate this
Lease upon written notice to the other if the Premises are damaged during the
last year of the Term (which, if Tenant has elected to exercise its Extension
Right pursuant to Section 39, shall be the last year of the Extension Term) and
Landlord reasonably estimates that it will take more than 2 months to repair
such damage; provided, however, that such notice is delivered within 10 business
days after the date that Landlord provides Tenant with written notice of the
estimated Restoration Period.  Landlord shall also have the right to terminate
this Lease if insurance proceeds are not available for such restoration. 
Notwithstanding the foregoing, Landlord shall have no right to terminate this
Lease pursuant to the immediately preceding sentence if insurance proceeds are
not available as a result of Landlord’s failure to maintain insurance required
to be maintained by Landlord pursuant to the terms of this Lease.  Rent shall be
abated from the date all required Hazardous Material Clearances are obtained
until the Premises are repaired and restored, in the proportion which the area
of the Premises, if any, which is not usable by Tenant bears to the total area
of the Premises, unless Landlord provides Tenant with other space reasonably
acceptable to Tenant during the period of repair that is suitable for the
temporary conduct of Tenant’s business.  In the event that no Hazardous Material
Clearances are required to be obtained by Tenant with respect to the Premises,
rent abatement shall commence on the date of discovery of the damage or
destruction.  Such abatement shall be the sole remedy of Tenant, and except as
provided in this Section 18, Tenant waives any right to terminate the Lease by
reason of damage or casualty loss.

 

The provisions of this Lease, including this Section 18, constitute an express
agreement between Landlord and Tenant with respect to any and all damage to, or
destruction of, all or any part of the Premises, or any other portion of the
Project, and any statute or regulation which is now or may hereafter be in
effect shall have no application to this Lease or any damage or destruction to
all or any part of the Premises or any other portion of the Project, the parties
hereto expressly agreeing that this Section 18 sets forth their entire
understanding and agreement with respect to such matters.

 

19.                               Condemnation.  If the whole or any material
part of the Premises or the Project is taken for any public or quasi-public use
under governmental law, ordinance, or regulation, or by right of eminent domain,
or by private purchase in lieu thereof (a “Taking” or “Taken”), and the Taking
would, in Landlord’s reasonable judgment, impair Landlord’s ownership or
operation of the Project or would in the reasonable judgment of Landlord and
Tenant either prevent or materially interfere with Tenant’s use of the Premises
(as resolved, if the parties are unable to agree, by arbitration by a single
arbitrator with the qualifications and experience appropriate to resolve the
matter and appointed pursuant to and acting in accordance with the rules of the
American Arbitration Association), then upon written notice by Landlord or
Tenant to the other this Lease shall terminate and Rent shall be apportioned as
of said date.  If part of the Premises shall be Taken, and this Lease is not
terminated as provided above, Landlord shall promptly restore the Premises and
the Project as nearly as is commercially reasonable under the circumstances to
their condition prior to such partial Taking and the rentable square footage of
the Building, the rentable square footage of the Premises, Tenant’s Share of
Operating Expenses and the Rent payable hereunder during the unexpired Term
shall be reduced to such extent as may be fair and reasonable under the
circumstances.  Upon any such Taking, Landlord shall be entitled to receive the
entire price or award from any such Taking without any payment to Tenant, and
Tenant hereby assigns to Landlord Tenant’s interest, if any, in such award. 
Tenant shall have the right, to the extent that same shall not diminish
Landlord’s award, to make a separate claim against the condemning authority (but
not Landlord) for such compensation as may be separately awarded or recoverable
by Tenant for moving expenses and damage to Tenant’s trade fixtures, if a
separate award for such items is made to Tenant.  Tenant hereby waives any and
all rights it might otherwise have pursuant to any provision of state law to
terminate this Lease upon a partial Taking of the Premises or the Project.

 

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20.                               Events of Default.  Each of the following
events shall be a default (“Default”) by Tenant under this Lease:

 

(a)                                 Payment Defaults.  Tenant shall fail to pay
any installment of Rent or any other payment hereunder when due; provided,
however, that Landlord will give Tenant notice and an opportunity to cure any
failure to pay Rent within 5 days of any such notice not more than once in any
12 month period and Tenant agrees that such notice shall be in lieu of and not
in addition to, or shall be deemed to be, any notice required by law.

 

(b)                                 Insurance.  Any insurance required to be
maintained by Tenant pursuant to this Lease shall be canceled or terminated or
shall expire or shall be reduced or materially changed, or Landlord or Tenant
shall receive a notice of nonrenewal of any such insurance and Tenant shall fail
to obtain replacement insurance at least 5 days before the expiration of the
current coverage.

 

(c)                                  Abandonment.  Tenant shall abandon the
Premises.  Tenant shall not be deemed to have abandoned the Premises if
(i) Tenant provides Landlord with reasonable advance notice prior to vacating
and, at the time of vacating the Premises, Tenant completes Tenant’s obligations
with respect to the Surrender Plan in compliance with Section 28, (ii) Tenant
has made reasonable arrangements with Landlord for the security of the Premises
for the balance of the Term, and (iii) Tenant continues during the balance of
the Term to satisfy all of its obligations under the Lease as they come due.

 

(d)                                 Improper Transfer.  Tenant shall assign,
sublease or otherwise transfer or attempt to transfer all or any portion of
Tenant’s interest in this Lease or the Premises except as expressly permitted
herein, or Tenant’s interest in this Lease shall be attached, executed upon, or
otherwise judicially seized and such action is not released within 90 days of
the action.

 

(e)                                  Liens.  Tenant shall fail to discharge or
otherwise obtain the release of any lien placed upon the Premises in violation
of this Lease within 10 days after Tenant receives notice any such lien is filed
against the Premises.

 

(f)                                   Insolvency Events.  Tenant or any
guarantor or surety of Tenant’s obligations hereunder shall:  (A) make a general
assignment for the benefit of creditors; (B) commence any case, proceeding or
other action seeking to have an order for relief entered on its behalf as a
debtor or to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or its
debts or seeking appointment of a receiver, trustee, custodian or other similar
official for it or for all or of any substantial part of its property
(collectively a “Proceeding for Relief”); (C) become the subject of any
Proceeding for Relief which is not dismissed within 90 days of its filing or
entry; or (D) die or suffer a legal disability (if Tenant, guarantor, or surety
is an individual) or be dissolved or otherwise fail to maintain its legal
existence (if Tenant, guarantor or surety is a corporation, partnership or other
entity).

 

(g)                                  Estoppel Certificate or Subordination
Agreement.  Tenant fails to execute any document required from Tenant under
Sections 23 or 27 within 5 business days after a second notice requesting such
document.

 

(h)                                 Other Defaults.  Tenant shall fail to comply
with any provision of this Lease other than those specifically referred to in
this Section 20, and, except as otherwise expressly provided herein, such
failure shall continue for a period of 30 days after written notice thereof from
Landlord to Tenant.

 

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Any notice given under Section 20(h) hereof shall:  (i) specify the alleged
default, (ii) demand that Tenant cure such default, (iii) be in lieu of, and not
in addition to, or shall be deemed to be, any notice required under any
provision of applicable law, and (iv) not be deemed a forfeiture or a
termination of this Lease unless Landlord elects otherwise in such notice;
provided that if the nature of Tenant’s default pursuant to Section 20(h) is
such that it cannot be cured by the payment of money and reasonably requires
more than 30 days to cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said 30 day period and thereafter diligently
prosecutes the same to completion; provided, however, that, upon request by
Landlord from time to time, Tenant shall provide Landlord with detailed written
status reports regarding the status of such cure and the actions being taken by
Tenant.

 

21.                               Landlord’s Remedies.

 

(a)                                 Payment By Landlord; Interest.  Upon a
Default by Tenant hereunder, Landlord may, without waiving or releasing any
obligation of Tenant hereunder, make such payment or perform such act.  All sums
so paid or incurred by Landlord, together with interest thereon, from the date
such sums were paid or incurred, at the annual rate equal to 12% per annum or
the highest rate permitted by law (the “Default Rate”), whichever is less, shall
be payable to Landlord on demand as Additional Rent.  Nothing herein shall be
construed to create or impose a duty on Landlord to mitigate any damages
resulting from Tenant’s Default hereunder.

 

(b)                                 Late Payment Rent.  Late payment by Tenant
to Landlord of Rent and other sums due will cause Landlord to incur costs not
contemplated by this Lease, the exact amount of which will be extremely
difficult and impracticable to ascertain.  Such costs include, but are not
limited to, processing and accounting charges and late charges which may be
imposed on Landlord under any Mortgage covering the Premises.  Therefore, if any
installment of Rent due from Tenant is not received by Landlord within 5 days
after the date such payment is due, Tenant shall pay to Landlord an additional
sum equal to 6% of the overdue Rent as a late charge.  Notwithstanding the
foregoing, before assessing a late charge the first time in any calendar year,
Landlord shall provide Tenant written notice of the delinquency and will waive
the right if Tenant pays such delinquency within 5 days thereafter.  The parties
agree that this late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of late payment by Tenant.  In addition to
the late charge, Rent not paid when due shall bear interest at the Default Rate
from the 5th day after the date due until paid.

 

(c)                                  Remedies.  Upon the occurrence of a
Default, Landlord, at its option, shall have in addition to all other rights and
remedies provided in this Lease, at law or in equity, the option to pursue any
one or more of the following remedies, each and all of which shall be cumulative
and nonexclusive, without any notice or demand whatsoever.

 

(i)                                     Terminate this Lease, or at Landlord’s
option and to the extent permitted by applicable Legal Requirements, Tenant’s
right to possession only upon no less than 5 days’ advance written notice to
Tenant, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy which it may have for possession or arrearages in rent, enter upon
and take possession of the Premises and expel or remove Tenant and any other
person who may be occupying the Premises or any part thereof, without being
liable for prosecution or any claim or damages therefor;

 

(ii)                                  Upon any termination of this Lease,
whether pursuant to the foregoing Section 21(c)(i) or otherwise, Landlord may
recover from Tenant the following:

 

(A)                               The worth at the time of award of any unpaid
rent which has been earned at the time of such termination; plus

 

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

 

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(C)                               The worth at the time of award of the amount
by which the unpaid rent for the balance of the Term after the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus

 

(D)                               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 therefrom, specifically including, but not limited to,
brokerage commissions attributable to the remainder of the Term of this Lease
and, to the extent permitted by applicable Legal Requirements, advertising
expenses incurred, expenses of remodeling the Premises or any portion thereof
for a new tenant, whether for the same or a different use, and any special
concessions made to obtain a new tenant; and

 

(E)                                At Landlord’s election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by
applicable law.

 

The term “rent” as used in this Section 21 shall be deemed to be and to mean all
sums of every nature required to be paid by Tenant pursuant to the terms of this
Lease.  As used in Sections 21(c)(ii)(A) and (B), above, the “worth at the time
of award” shall be computed by allowing interest at the Default Rate.  As used
in Section 21(c)(ii)(C) above, the “worth at the time of award” shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus 1%.

 

(iii)                               Landlord may continue this Lease in effect
after Tenant’s Default and recover rent as it becomes due (Landlord and Tenant
hereby agreeing that Tenant has the right to sublet or assign hereunder, subject
only to reasonable limitations).  Accordingly, if Landlord does not elect to
terminate this Lease following a Default by Tenant, Landlord may, from time to
time, without terminating this Lease, enforce all of its rights and remedies
hereunder, including the right to recover all Rent as it becomes due.

 

(iv)                              Whether or not Landlord elects to terminate
this Lease following a Default by Tenant, Landlord shall have the right to
terminate any and all subleases, licenses, concessions or other consensual
arrangements for possession entered into by Tenant and affecting the Premises or
may, in Landlord’s sole discretion, succeed to Tenant’s interest in such
subleases, licenses, concessions or arrangements.  Upon Landlord’s election to
succeed to Tenant’s interest in any such subleases, licenses, concessions or
arrangements, Tenant shall, as of the date of notice by Landlord of such
election, have no further right to or interest in the rent or other
consideration receivable thereunder.

 

(v)                                 Independent of the exercise of any other
remedy of Landlord hereunder or under applicable law, Landlord may conduct an
environmental test of the Premises as generally described in
Section 30(d) hereof, at Tenant’s expense.

 

(d)                                 Effect of Exercise.  Exercise by Landlord of
any remedies hereunder or otherwise available shall not be deemed to be an
acceptance of surrender of the Premises and/or a termination of this Lease by
Landlord, it being understood that such surrender and/or termination can be
effected only by the express written agreement of Landlord and Tenant.  Any law,
usage, or custom to the contrary notwithstanding, Landlord shall have the right
at all times to enforce the provisions of this Lease in strict accordance with
the terms hereof; and the failure of Landlord at any time to enforce its rights
under this Lease strictly in accordance with same shall not be construed as
having created a custom in any way or manner contrary to the specific terms,
provisions, and covenants of this Lease or as having modified the same and shall
not be deemed a waiver of Landlord’s right to enforce one or more of its rights
in connection with any subsequent default.  A receipt by Landlord of Rent or
other payment with knowledge of the breach of any covenant hereof shall not be
deemed a waiver of such breach, and no waiver by Landlord of any provision of
this Lease shall be deemed to have been made unless expressed in writing

 

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and signed by Landlord.  To the greatest extent permitted by law, Tenant waives
the service of notice of Landlord’s intention to re-enter, re-take or otherwise
obtain possession of the Premises as provided in any statute, or to institute
legal proceedings to that end, and also waives all right of redemption in case
Tenant shall be dispossessed by a judgment or by warrant of any court or judge. 
Any reletting of the Premises or any portion thereof shall be on such terms and
conditions as Landlord in its sole discretion may determine.  Landlord shall not
be liable for, nor shall Tenant’s obligations hereunder be diminished because
of, Landlord’s failure to relet the Premises or collect rent due in respect of
such reletting or otherwise to mitigate any damages arising by reason of
Tenant’s Default.

 

22.                               Assignment and Subletting.

 

(a)                                 General Prohibition.  Without Landlord’s
prior written consent subject to and on the conditions described in this
Section 22, Tenant shall not, directly or indirectly, voluntarily or by
operation of law, assign this Lease or sublease the Premises or any part thereof
or mortgage, pledge, or hypothecate its leasehold interest or grant any
concession or license within the Premises, and any attempt to do any of the
foregoing shall be void and of no effect.  If Tenant is a corporation,
partnership or limited liability company, the shares or other ownership
interests thereof which are not actively traded upon a stock exchange or in the
over-the-counter market, a transfer or series of transfers whereby 50% or more
of the issued and outstanding shares or other ownership interests of such entity
are, or voting control is, transferred (but excepting transfers upon deaths of
individual owners) from a person or persons or entity or entities which were
owners thereof at time of execution of this Lease to persons or entities who
were not owners of shares or other ownership interests of the corporation,
partnership or limited liability company at time of execution of this Lease,
shall be deemed an assignment of this Lease requiring the consent of Landlord as
provided in this Section 22.

 

(b)                                 Permitted Transfers.  If Tenant desires to
assign, sublease, hypothecate or otherwise transfer this Lease or sublet the
Premises other than pursuant to a Permitted Assignment (as defined below), then
at least 15 business days, but not more than 45 business days, before the date
Tenant desires the assignment or sublease to be effective (the “Assignment
Date”), Tenant shall give Landlord a notice (the “Assignment Notice”) containing
such information about the proposed assignee or sublessee, including the
proposed use of the Premises and any Hazardous Materials proposed to be used,
stored handled, treated, generated in or released or disposed of from the
Premises, the Assignment Date, any relationship between Tenant and the proposed
assignee or sublessee, and all material terms and conditions of the proposed
assignment or sublease, including a copy of any proposed assignment or sublease
in its final form, and such other information as Landlord may deem reasonably
necessary or appropriate to its consideration whether to grant its consent.
Landlord may, by giving written notice to Tenant within 15 business days after
receipt of the Assignment Notice:  (i) grant such consent, (ii) refuse such
consent, in its reasonable discretion; or (iii) only if such proposed transfer
is not a Permitted Assignment and is an assignment of Tenant’s entire interest
under this Lease or a sublease of over 50% of the Premises for the remainder of
the Term, terminate this Lease with respect to the space described in the
Assignment Notice as of the Assignment Date (an “Assignment Termination”). Among
other reasons, it shall be reasonable for Landlord to withhold its consent in
any of these instances:  (1) the proposed assignee or subtenant is a
governmental agency; (2) in Landlord’s reasonable judgment, the use of the
Premises by the proposed assignee or subtenant would entail any alterations that
would materially lessen the value of the leasehold improvements in the Premises,
or would require materially increased services by Landlord; (3) in Landlord’s
reasonable judgment, the proposed assignee or subtenant is engaged in areas of
scientific research or other business concerns that are controversial such that
they may (i) attract or cause negative publicity for or about the Building or
the Project, (ii) negatively affect the reputation of the Building, the Project
or Landlord, (iii) attract protestors to the Building or the Project, or
(iv) lessen the attractiveness of the Building or the Project to any tenants or
prospective tenants, purchasers or lenders; (4) in Landlord’s reasonable
judgment, the proposed assignee or subtenant lacks the creditworthiness to
support the financial obligations it will incur under the proposed assignment or
sublease; (5) in Landlord’s reasonable judgment, the character, reputation, or
business of the proposed assignee or subtenant is inconsistent with the desired
tenant-mix or the quality of other tenancies in the Project or is inconsistent
with the type and quality of the nature of the Building; (6) Landlord has
received from any prior landlord to the proposed assignee or subtenant a
negative report

 

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concerning such prior landlord’s experience with the proposed assignee or
subtenant; (7) Landlord has experienced previous defaults by or is in litigation
with the proposed assignee or subtenant; (8) the use of the Premises by the
proposed assignee or subtenant will violate any applicable Legal Requirement;
(9) the proposed assignee or subtenant is an entity with whom Landlord is then
negotiating to lease comparable space in the Project; or (10) the assignment or
sublease is prohibited by Landlord’s lender. If Landlord delivers notice of its
election to exercise an Assignment Termination, Tenant shall have the right to
withdraw such Assignment Notice by written notice to Landlord of such election
within 5 business days after Landlord’s notice electing to exercise the
Assignment Termination.  If Tenant withdraws such Assignment Notice, this Lease
shall continue in full force and effect.  If Tenant does not withdraw such
Assignment Notice, this Lease, and the term and estate herein granted, shall
terminate as of the Assignment Date with respect to the space described in such
Assignment Notice.  No failure of Landlord to exercise any such option to
terminate this Lease, or to deliver a timely notice in response to the
Assignment Notice, shall be deemed to be Landlord’s consent to the proposed
assignment, sublease or other transfer.  Tenant shall pay to Landlord a fee
equal to One Thousand Five Hundred Dollars ($1,500) in connection with its
consideration of any Assignment Notice and/or its preparation or review of any
consent documents.  Notwithstanding the foregoing, Landlord’s consent to an
assignment of this Lease or a subletting of any portion of the Premises to any
entity controlling, controlled by or under common control with Tenant (a
“Control Permitted Assignment”) shall not be required, provided that Landlord
shall have the right to approve the form of any such sublease or assignment
(which approval shall not be unreasonably withheld or delayed).  In addition,
Tenant shall have the right to assign this Lease, upon 30 days prior written
notice to Landlord ((x) unless Tenant is prohibited from providing such notice
by applicable Legal Requirements in which case Tenant shall notify Landlord
promptly thereafter, and (y) if the transaction is subject to confidentiality
requirements, Tenant’s advance notification shall be subject to Landlord’s
execution of a non-disclosure agreement reasonably acceptable to Landlord and
Tenant) but without obtaining Landlord’s prior written consent, to a corporation
or other entity which is a successor-in-interest to Tenant, by way of merger,
consolidation or corporate reorganization, or by the purchase of all or
substantially all of the assets or the ownership interests of Tenant provided
that (i) such merger or consolidation, or such acquisition or assumption, as the
case may be, is for a good business purpose and not principally for the purpose
of transferring the Lease, and (ii) the net worth (as determined in accordance
with generally accepted accounting principles (“GAAP”)) of the assignee is not
less than the greater of the net worth (as determined in accordance with GAAP)
of Tenant as of (A) the Commencement Date, or (B) as of the date of Tenant’s
most current quarterly or annual financial statements, and (iii) such assignee
shall agree in writing to assume all of the terms, covenants and conditions of
this Lease (a “Corporate Permitted Assignment”)  Control Permitted Assignments
and Corporate Permitted Assignments are hereinafter referred to as “Permitted
Assignments.

 

(c)           Additional Conditions.  As a condition to any such assignment or
subletting, whether or not Landlord’s consent is required, Landlord may require:

 

(i)            that any assignee or subtenant agree, in writing at the time of
such assignment or subletting, that if Landlord gives such party notice that
Tenant is in default under this Lease, such party shall thereafter make all
payments otherwise due Tenant directly to Landlord, which payments will be
received by Landlord without any liability except to credit such payment against
those due under the Lease, and any such third party shall agree to attorn to
Landlord or its successors and assigns should this Lease be terminated for any
reason; provided, however, in no event shall Landlord or its successors or
assigns be obligated to accept such attornment; and

 

(ii)           A list of Hazardous Materials, certified by the proposed assignee
or sublessee to be true and correct, which the proposed assignee or sublessee
intends to use, store, handle, treat, generate in or release or dispose of from
the Premises, together with copies of all documents relating to such use,
storage, handling, treatment, generation, release or disposal of Hazardous
Materials by the proposed assignee or subtenant in the Premises or on the
Project, prior to the proposed assignment or subletting, including, without
limitation:  permits; approvals; reports and correspondence; storage and
management plans; plans relating to the installation of any storage tanks to be
installed in or under the Project (provided, said installation of tanks shall
only be permitted after Landlord has given its written consent to do so, which
consent may be

 

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withheld in Landlord’s sole and absolute discretion); and all closure plans or
any other documents required by any and all federal, state and local
Governmental Authorities for any storage tanks installed in, on or under the
Project for the closure of any such tanks.  Neither Tenant nor any such proposed
assignee or subtenant is required, however, to provide Landlord with any
portion(s) of the such documents containing information of a proprietary nature
which, in and of themselves, do not contain a reference to any Hazardous
Materials or hazardous activities.

 

(d)           No Release of Tenant, Sharing of Excess Rents.  Notwithstanding
any assignment or subletting, Tenant and any guarantor or surety of Tenant’s
obligations under this Lease shall at all times remain fully and primarily
responsible and liable for the payment of Rent and for compliance with all of
Tenant’s other obligations under this Lease.  Other than in connection with a
Permitted Assignment, if the Rent due and payable by a sublessee or assignee (or
a combination of the rental payable under such sublease or assignment plus any
bonus or other consideration therefor or incident thereto in any form) exceeds
the sum of the Rent payable under this Lease, and actual and reasonable
brokerage fees, legal costs and any design or construction fees directly related
to and required pursuant to the terms of any such sublease) (“Excess Rent”),
then Tenant shall be bound and obligated to pay Landlord as Additional Rent
hereunder 50% of such Excess Rent within 30 days following receipt thereof by
Tenant.  If Tenant shall sublet the Premises or any part thereof, Tenant hereby
immediately and irrevocably assigns to Landlord, as security for Tenant’s
obligations under this Lease, all rent from any such subletting, and Landlord as
assignee, or a receiver for Tenant appointed on Landlord’s application, may
collect such rent and apply it toward Tenant’s obligations under this Lease;
except that, until the occurrence of a Default, Tenant shall have the right to
collect such rent.

 

(e)           No Waiver.  The consent by Landlord to an assignment or subletting
shall not relieve Tenant or any assignees of this Lease or any sublessees of the
Premises from obtaining the consent of Landlord to any further assignment or
subletting nor shall it release Tenant or any assignee or sublessee of Tenant
from full and primary liability under the Lease.  The acceptance of Rent
hereunder, or the acceptance of performance of any other term, covenant, or
condition thereof, from any other person or entity shall not be deemed to be a
waiver of any of the provisions of this Lease or a consent to any subletting,
assignment or other transfer of the Premises.

 

(f)            Prior Conduct of Proposed Transferee.  Notwithstanding any other
provision of this Section 22, other than in connection with a Permitted
Assignment, if (i) the proposed assignee or sublessee of Tenant has been
required by any prior landlord, lender or Governmental Authority to take
remedial action in connection with Hazardous Materials contaminating a property,
where the contamination resulted from such party’s action or use of the property
in question, (ii) the proposed assignee or sublessee is subject to an
enforcement order issued by any Governmental Authority in connection with the
use, storage, handling, treatment, generation, release or disposal of Hazardous
Materials (including, without limitation, any order related to the failure to
make a required reporting to any Governmental Authority), or (iii) because of
the existence of a pre-existing environmental condition in the vicinity of or
underlying the Project, the risk that Landlord would be targeted as a
responsible party in connection with the remediation of such pre-existing
environmental condition would be materially increased or exacerbated by the
proposed use of Hazardous Materials by such proposed assignee or sublessee,
Landlord shall have the absolute right to refuse to consent to any assignment or
subletting to any such party.

 

23.          Estoppel Certificate.  Tenant shall, within 15 business days of
written notice from Landlord, execute, acknowledge and deliver a statement in
writing in any form reasonably requested by a proposed lender or purchaser,
(i) certifying that this Lease is unmodified and in full force and effect (or,
if modified, stating the nature of such modification and certifying that this
Lease as so modified is in full force and effect) and the dates to which the
rental and other charges are paid in advance, if any, (ii) acknowledging, to
Tenant’s knowledge, that there are not any uncured defaults on the part of
Landlord hereunder, or specifying such defaults if any are claimed, and
(iii) setting forth such further information with respect to the status of this
Lease or the Premises as may be reasonably requested thereon.  Any such
statement may be relied upon by any prospective purchaser or encumbrancer of all
or any portion of the real property of which the Premises are a part.  Tenant’s
failure to deliver such statement within 5

 

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days after Tenant’s receipt of a second notice from Landlord requesting such
statement after the expiration of the aforementioned 15 business day period
shall, at the option of Landlord, constitute a Default under this Lease, and, in
any event, shall be conclusive upon Tenant that the Lease is in full force and
effect and without modification except as may be represented by Landlord in any
certificate prepared by Landlord and delivered to Tenant for execution.

 

24.          Quiet Enjoyment.  So long as Tenant is not in Default under this
Lease, Tenant shall, subject to the terms of this Lease, at all times during the
Term, have peaceful and quiet enjoyment of the Premises against any person
claiming by, through or under Landlord.

 

25.          Prorations.  All prorations required or permitted to be made
hereunder shall be made on the basis of a 360 day year and 30 day months.

 

26.          Rules and Regulations.  Tenant shall, at all times during the Term
and any extension thereof, comply with all reasonable rules and regulations at
any time or from time to time established by Landlord covering use of the
Premises and the Project.  The current rules and regulations are attached hereto
as Exhibit E.  If there is any conflict between said rules and regulations and
other provisions of this Lease, the terms and provisions of this Lease shall
control.  Landlord shall not have any liability or obligation for the breach of
any rules or regulations by other tenants in the Project and shall not enforce
such rules and regulations in a discriminatory manner.

 

27.          Subordination.  This Lease and Tenant’s interest and rights
hereunder are hereby made and shall be subject and subordinate at all times to
the lien of any Mortgage now existing or hereafter created on or against the
Project or the Premises, and all amendments, restatements, renewals,
modifications, consolidations, refinancing, assignments and extensions thereof,
without the necessity of any further instrument or act on the part of Tenant;
provided, however that so long as there is no Default hereunder, Tenant’s right
to possession of the Premises and Tenant’s other rights and interests to the
Premises and the Project under this Lease shall not be disturbed by the Holder
of any such Mortgage.  Tenant agrees, at the election of the Holder of any such
Mortgage, to attorn to any such Holder.  Tenant agrees upon demand to execute,
acknowledge and deliver such commercially reasonable instruments, confirming
such subordination, and such instruments of attornment as shall be requested by
any such Holder, provided any such instruments contain appropriate
non-disturbance provisions assuring Tenant’s quiet enjoyment of the Premises as
set forth in Section 24 hereof.  Notwithstanding the foregoing, any such Holder
may at any time subordinate its Mortgage to this Lease, without Tenant’s
consent, by notice in writing to Tenant, and thereupon this Lease shall be
deemed prior to such Mortgage without regard to their respective dates of
execution, delivery or recording and in that event such Holder shall have the
same rights with respect to this Lease as though this Lease had been executed
prior to the execution, delivery and recording of such Mortgage and had been
assigned to such Holder.  The term “Mortgage” whenever used in this Lease shall
be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the “Holder” of a Mortgage shall be deemed to
include the beneficiary under a deed of trust.  As of the date of this Lease,
there is no existing Mortgage encumbering  the Project.

 

28.          Surrender.  Upon the expiration of the Term or earlier termination
of Tenant’s right of possession, Tenant shall surrender the Premises to Landlord
in the same condition as received, subject to any Alterations or Installations
permitted by Landlord to remain in the Premises, free of Hazardous Materials
brought upon, kept, used, stored, handled, treated, generated in, or released or
disposed of from, the Premises by any person other than a Landlord Party
(collectively, “Tenant HazMat Operations”) and released of all Hazardous
Materials Clearances, broom clean, ordinary wear and tear and casualty loss and
condemnation covered by Sections 18 and 19 excepted.  At least 3 months prior to
the surrender of the Premises, Tenant shall deliver to Landlord a narrative
description of the actions proposed (or required by any Governmental Authority)
to be taken by Tenant in order to surrender the Premises (including any
Installations permitted by Landlord to remain in the Premises) at the expiration
or earlier termination of the Term, free from any residual impact from the
Tenant HazMat Operations and otherwise released for unrestricted use and
occupancy (the “Surrender Plan”).  Such Surrender Plan

 

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shall be accompanied by a current listing of (i) all Hazardous Materials
licenses and permits held by or on behalf of any Tenant Party with respect to
the Premises, and (ii) all Hazardous Materials used, stored, handled, treated,
generated, released or disposed of from the Premises, and shall be subject to
the review and approval of Landlord’s environmental consultant, which approval
shall not be unreasonably withheld.  In connection with the review and approval
of the Surrender Plan, upon the request of Landlord, Tenant shall deliver to
Landlord or its consultant such additional non-proprietary information
concerning Tenant HazMat Operations as Landlord shall reasonably request.  On or
before such surrender, Tenant shall deliver to Landlord evidence that the
approved Surrender Plan shall have been satisfactorily completed and Landlord
shall have the right, subject to reimbursement at Tenant’s expense as set forth
below, to cause Landlord’s environmental consultant to inspect the Premises and
perform such additional procedures as may be deemed reasonably necessary to
confirm that the Premises are, as of the effective date of such surrender or
early termination of the Lease, free from any residual impact from Tenant HazMat
Operations.  Tenant shall reimburse Landlord, as Additional Rent, for the
reasonable actual out-of pocket expense incurred by Landlord for Landlord’s
environmental consultant to review and approve the Surrender Plan and to visit
the Premises and verify satisfactory completion of the same, which cost shall
not exceed $5,000.  Landlord shall have the unrestricted right to deliver such
Surrender Plan and any report by Landlord’s environmental consultant with
respect to the surrender of the Premises to third parties.

 

If Tenant shall fail to prepare or submit a Surrender Plan approved by Landlord,
or if Tenant shall fail to complete the approved Surrender Plan, or if such
Surrender Plan, whether or not approved by Landlord, shall fail to adequately
address any residual effect of Tenant HazMat Operations in, on or about the
Premises, Landlord shall have the right to take such actions as Landlord may
deem reasonable or appropriate to assure that the Premises and the Project are
surrendered free from any residual impact from Tenant HazMat Operations, the
cost of which actions shall be reimbursed by Tenant as Additional Rent within 30
days following Tenant’s receipt of a reasonably documented invoice therefor,
without regard to the limitation set forth in the first paragraph of this
Section 28.

 

Tenant shall immediately return to Landlord all keys and/or access cards to
parking, the Project, restrooms or all or any portion of the Premises furnished
to or otherwise procured by Tenant.  If any such access card or key is lost,
Tenant shall pay to Landlord, at Landlord’s election, either the reasonable
actual cost of replacing such lost access card or key or the reasonable actual
cost of reprogramming the access security system in which such access card was
used or changing the lock or locks opened by such lost key.  Any Tenant’s
Property, Alterations and property not so removed by Tenant as permitted or
required herein shall be deemed abandoned and may be stored, removed, and
disposed of by Landlord at Tenant’s expense, and Tenant waives all claims
against Landlord for any damages resulting from Landlord’s retention and/or
disposition of such abandoned property.  All obligations of Tenant hereunder not
fully performed as of the termination of the Term, including the obligations of
Tenant under Section 30 hereof, shall survive the expiration or earlier
termination of the Term, including, without limitation, indemnity obligations,
payment obligations with respect to Rent and obligations concerning the
condition and repair of the Premises.

 

29.          Waiver of Jury Trial.  TO THE EXTENT PERMITTED BY LAW, TENANT AND
LANDLORD WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN
LANDLORD AND TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT,
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED HERETO.

 

30.          Environmental Requirements.

 

(a)           Prohibition/Compliance/Indemnity.  Tenant shall not cause or
permit any Hazardous Materials (as hereinafter defined) to be brought upon,
kept, used, stored, handled, treated, generated  in or about, or released or
disposed of from, the Premises or the Project in violation of applicable
Environmental Requirements (as hereinafter defined) by Tenant or any Tenant
Party.  If Tenant breaches

 

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the obligation stated in the preceding sentence, or if the presence of Hazardous
Materials in the Premises during the Term or any holding over results in
contamination of the Premises, the Project or any adjacent property or if
contamination of the Premises, the Project or any adjacent property by Hazardous
Materials brought into, kept, used, stored, handled, treated, generated in or
about, or released or disposed of from, the Premises by anyone other than
Landlord and Landlord’s employees, agents and contractors otherwise occurs
during the Term or any holding over, Tenant hereby indemnifies and shall defend
and hold Landlord, its officers, directors, employees, agents and contractors
harmless from any and all actions (including, without limitation, remedial or
enforcement actions of any kind, administrative or judicial proceedings, and
orders or judgments arising out of or resulting therefrom), costs, claims,
damages (including, without limitation, punitive damages and damages based upon
diminution in value of the Premises or the Project, or the loss of, or
restriction on, use of the Premises or any portion of the Project), expenses
(including, without limitation, attorneys’, consultants’ and experts’ fees,
court costs and amounts paid in settlement of any claims or actions), fines,
forfeitures or other civil, administrative or criminal penalties, injunctive or
other relief (whether or not based upon personal injury, property damage, or
contamination of, or adverse effects upon, the environment, water tables or
natural resources), liabilities or losses (collectively, “Environmental Claims”)
which arise during or after the Term as a result of such contamination.  This
indemnification of Landlord by Tenant includes, without limitation, costs
incurred in connection with any investigation of site conditions or any cleanup,
treatment, remedial, removal, or restoration work required by any federal, state
or local Governmental Authority because of Hazardous Materials present in the
air, soil or ground water above, on, or under the Premises.  Without limiting
the foregoing, if the presence of any Hazardous Materials on the Premises, the
Building, the Project or any adjacent property caused or permitted by Tenant or
any Tenant Party results in any contamination of the Premises, the Building, the
Project or any adjacent property, Tenant shall promptly take all actions at its
sole expense and in accordance with applicable Environmental Requirements as are
necessary to return the Premises, the Building, the Project or any adjacent
property to the condition existing prior to the time of such contamination,
provided that Landlord’s approval of such action shall first be obtained, which
approval shall not unreasonably be withheld so long as such actions would not
potentially have any material adverse long-term or short-term effect on the
Premises, the Building or the Project.  Notwithstanding anything to the contrary
contained in Section 28 or this Section 30, Tenant shall not be responsible for,
and the indemnification and hold harmless obligation set forth in this paragraph
shall not apply to (i) contamination in the Premises which Tenant can prove
existed in the Premises immediately prior to the Commencement Date, (ii) the
presence of any Hazardous Materials in the Premises which Tenant can prove
migrated from outside of the Premises into the Premises, or (iii) the presence
of any Hazardous Materials in the Premises caused by Landlord or any Landlord’s
employees, agents and contractors,  unless in any case, the presence of such
Hazardous Materials (x) is the result of a breach by Tenant of any of its
obligations under this Lease, or (y) was caused, contributed to or exacerbated
by Tenant or any Tenant Party.

 

(b)           Business.  Landlord acknowledges that it is not the intent of this
Section 30 to prohibit Tenant from using the Premises for the Permitted Use. 
Tenant may operate its business according to prudent industry practices so long
as the use or presence of Hazardous Materials is strictly and properly monitored
according to all then applicable Environmental Requirements.  As a material
inducement to Landlord to allow Tenant to use Hazardous Materials in connection
with its business, Tenant agrees to deliver to Landlord prior to the
Commencement Date a list identifying each type of Hazardous Materials to be
brought upon, kept, used, stored, handled, treated, generated on, or released or
disposed of from, the Premises and setting forth any and all governmental
approvals or permits required in connection with the presence, use, storage,
handling, treatment, generation, release or disposal of such Hazardous Materials
on or from the Premises (“Hazardous Materials List”).  Tenant shall deliver to
Landlord an updated Hazardous Materials List any time that Tenant is required to
deliver a Hazardous Materials List to any Governmental Authority (e.g. the fire
department) in connection with its use or occupancy of the Premises.  Tenant
shall deliver to Landlord true and correct copies of the following documents
(the “Haz Mat Documents”) relating to the use, storage, handling, treatment,
generation, release or disposal of Hazardous Materials prior to the Commencement
Date, or if unavailable at that time, concurrent with the receipt from or
submission to a Governmental Authority:  permits; approvals; reports and
correspondence; storage and management plans, notice of violations of any Legal
Requirements; plans relating to the installation of any storage tanks to be
installed in or under the Project (provided, said installation of tanks

 

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shall only be permitted after Landlord has given Tenant its written consent to
do so, which consent may be withheld in Landlord’s sole and absolute
discretion); all closure plans or any other documents required by any and all
federal, state and local Governmental Authorities for any storage tanks
installed in, on or under the Project for the closure of any such tanks; and a
Surrender Plan (to the extent surrender in accordance with Section 28 cannot be
accomplished in 3 months).  Tenant is not required, however, to provide Landlord
with any portion(s) of the Haz Mat Documents containing information of a
proprietary nature which, in and of themselves, do not contain a reference to
any Hazardous Materials or hazardous activities.  It is not the intent of this
Section to provide Landlord with information which could be detrimental to
Tenant’s business should such information become possessed by Tenant’s
competitors.

 

(c)           Tenant Representation and Warranty.  Tenant hereby represents and
warrants to Landlord that (i) neither Tenant nor, to Tenant’s actual knowledge,
any of its legal predecessors has been required by any prior landlord, lender or
Governmental Authority at any time to take remedial action in connection with
Hazardous Materials contaminating a property which contamination was permitted
by Tenant of such predecessor or resulted from Tenant’s or such predecessor’s
action or use of the property in question, and (ii) Tenant is not subject to any
enforcement order issued by any Governmental Authority in connection with the
use, storage, handling, treatment, generation, release or disposal of Hazardous
Materials (including, without limitation, any order related to the failure to
make a required reporting to any Governmental Authority).

 

(d)           Testing.  Landlord shall have the right to conduct annual tests of
the Premises to determine whether any contamination of the Premises or the
Project has occurred as a result of Tenant’s use.  Tenant shall be required to
pay the reasonable actual cost of such annual test of the Premises if there is
violation of this Section 30 or if contamination for which Tenant is responsible
under this Section 30 is identified; provided, however, that if Tenant conducts
its own tests of the Premises using third party contractors and test procedures
reasonably acceptable to Landlord which tests are certified to Landlord,
Landlord shall accept such tests in lieu of the annual tests to be paid for by
Tenant.  In addition, at any time, and from time to time, prior to the
expiration or earlier termination of the Term, Landlord shall have the right to
conduct appropriate tests of the Premises and the Project to determine if
contamination has occurred as a result of Tenant’s use of the Premises.  In
connection with such testing, upon the reasonably written request of Landlord,
Tenant shall deliver to Landlord or its consultant such non-proprietary
information concerning the use of Hazardous Materials (other than Hazardous
Materials contained in products customarily used by tenants in de minimis
quantities for ordinary cleaning and office purposes) in or about the Premises
by Tenant or any Tenant Party.  If contamination has occurred for which Tenant
is liable under this Section 30, Tenant shall pay all costs to conduct such
tests.  If no such contamination is found, Landlord shall pay the costs of such
tests (which shall not constitute an Operating Expense).  Landlord shall provide
Tenant with a copy of all third party, non-confidential reports and tests of the
Premises made by or on behalf of Landlord during the Term without representation
or warranty and subject to a confidentiality agreement.  Tenant shall, at its
sole cost and expense, promptly and satisfactorily remediate any environmental
conditions identified by such testing and for which Tenant is responsible under
this Section 30 in accordance with all Environmental Requirements.  Landlord’s
receipt of or satisfaction with any environmental assessment in no way waives
any rights which Landlord may have against Tenant.

 

(e)           Control Areas.  Tenant shall be allowed to utilize up to its pro
rata share of the Hazardous Materials inventory within any control area or zone
(located within the Premises), as designated by the applicable building code,
for chemical use or storage.  As used in the preceding sentence, Tenant’s pro
rata share of any control areas or zones located within the Premises shall be
determined based on the rentable square footage that Tenant leases within the
applicable control area or zone.  For purposes of example only, if a control
area or zone contains 10,000 rentable square feet and 2,000 rentable square feet
of a tenant’s premises are located within such control area or zone (while such
premises as a whole contains 5,000 rentable square feet), the applicable
tenant’s pro rata share of such control area would be 20%.  For the avoidance of
doubt, Tenant shall have the use of 100% of the control areas in the Building.

 

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(f)            Underground Tanks.  If underground or other storage tanks storing
Hazardous Materials located on the Premises or the Project are used by Tenant or
are hereafter placed on the Premises or the Project by Tenant, Tenant shall
install, use, monitor, operate, maintain, upgrade and manage such storage tanks,
maintain appropriate records, obtain and maintain appropriate insurance,
implement reporting procedures, properly close any underground storage tanks,
and take or cause to be taken all other actions necessary or required under
applicable state and federal Legal Requirements, as such now exists or may
hereafter be adopted or amended in connection with the installation, use,
maintenance, management, operation, upgrading and closure of such storage tanks.

 

(g)           Tenant’s Obligations.  Landlord’s and Tenant’s obligations under
this Section 30 shall survive the expiration or earlier termination of the
Lease.  During any period of time after the expiration or earlier termination of
this Lease required by Tenant or Landlord to complete the removal from the
Premises of any Hazardous Materials (including, without limitation, the release
and termination of any licenses or permits restricting the use of the Premises
and the completion of the approved Surrender Plan), Tenant shall continue to pay
the full Rent in accordance with this Lease for any portion of the Premises not
relet by Landlord in Landlord’s sole discretion, which Rent shall be prorated
daily.

 

(h)           Definitions.  As used herein, the term “Environmental
Requirements” means all applicable present and future statutes, regulations,
ordinances, rules, codes, judgments, orders or other similar enactments of any
Governmental Authority regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the Project, or the
environment, including without limitation, the following:  the Comprehensive
Environmental Response, Compensation and Liability Act; the Resource
Conservation and Recovery Act; and all state and local counterparts thereto, and
any regulations or policies promulgated or issued thereunder.  As used herein,
the term “Hazardous Materials” means and includes any substance, material,
waste, pollutant, or contaminant listed or defined as hazardous or toxic, or
regulated by reason of its impact or potential impact on humans, animals and/or
the environment under any Environmental Requirements, asbestos and petroleum,
including crude oil or any fraction thereof, natural gas liquids, liquefied
natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and
such synthetic gas).  As defined in Environmental Requirements, Tenant is and
shall be deemed to be the “operator” of Tenant’s “facility” and the “owner” of
all Hazardous Materials brought on the Premises by Tenant or any Tenant Party,
and the wastes, by-products, or residues generated, resulting, or produced
therefrom.

 

31.          Tenant’s Remedies/Limitation of Liability.  Landlord shall not be
in default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then after such period of time as
is reasonably necessary).  Upon any default by Landlord, Tenant shall give
notice by registered or certified mail to any Holder of a Mortgage covering the
Premises and to any landlord of any lease of property in or on which the
Premises are located and Tenant shall offer such Holder and/or landlord a
reasonable opportunity to cure the default, including time to obtain possession
of the Project by receivership or power of sale or a judicial action if such
should prove necessary to effect a cure; provided Landlord shall have furnished
to Tenant in writing the names and addresses of all such persons who are to
receive such notices.  All obligations of Landlord hereunder shall be construed
as covenants, not conditions; and, except as may be otherwise expressly provided
in this Lease, Tenant may not terminate this Lease for breach of Landlord’s
obligations hereunder.

 

Notwithstanding the foregoing, if any claimed Landlord default hereunder will
immediately, materially and adversely affect Tenant’s ability to conduct its
business in the Premises (a “Material Landlord Default”), Tenant shall, as soon
as reasonably possible, but in any event within 5 business days of obtaining
knowledge of such claimed Material Landlord Default, give Landlord written
notice of such claim which notice shall specifically state that a Material
Landlord Default exists and telephonic notice to Tenant’s principal contact with
Landlord.  Landlord shall then have 2 business days to commence cure of such
claimed Material Landlord Default and shall diligently prosecute such cure to
completion.  If Landlord fails to commence cure of any claimed Material Landlord
Default as provided above, Tenant may commence and prosecute such cure to
completion provided that it does not impact or

 

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adversely affect any other tenants at the Project, the Building structure or 
Common Areas, and shall be entitled to recover the costs of such cure (but not
any consequential or other damages) from Landlord by way of reimbursement from
Landlord with no right to offset against Rent, to the extent of Landlord’s
obligation to cure such claimed Material Landlord Default hereunder, subject to
the limitations set forth in the immediately following sentence of this
paragraph and the other provisions of this Lease.  If such claimed Material
Landlord Default is not a default by Landlord hereunder, or if Tenant failed to
give Landlord the notice required hereunder prior to commencing Tenant’s cure of
any alleged Material Landlord Default, Landlord shall be entitled to recover
from Tenant, as Additional Rent, any costs incurred by Landlord in connection
with such cure in excess of the costs, if any, that Landlord would otherwise
have been liable to pay hereunder.

 

All obligations of Landlord under this Lease will be binding upon Landlord only
during the period of its ownership of the Premises and not thereafter, provided
that any person or entity succeeding to the interest of Landlord assumes in
writing all of the obligations of Landlord under this Lease arising during such
person’s or entity’s period of ownership of the Premises. The term “Landlord” in
this Lease shall mean only the owner for the time being of the Premises.  Upon
the transfer by such owner of its interest in the Premises, such owner shall
thereupon be released and discharged from all obligations of Landlord thereafter
accruing, but such obligations shall be binding during the Term upon each new
owner for the duration of such owner’s ownership.

 

32.          Inspection and Access.  Landlord and its agents, representatives,
and contractors may enter the Premises at any reasonable time to inspect the
Premises and to make such repairs as may be required or permitted pursuant to
this Lease and for any other business purpose.  Landlord and Landlord’s
representatives may enter the Premises during business hours on not less than 48
hours advance written notice (except in the case of emergencies in which case no
such notice shall be required and such entry may be at any time) for the purpose
of effecting any such repairs, inspecting the Premises, showing the Premises to
prospective purchasers and, during the last year of the Term, to prospective
tenants or for any other business purpose.  Landlord shall use reasonable
efforts to minimize interference with Tenant’s operations in the Premises in
connection with Landlord’s activities conducted pursuant to this paragraph. 
Landlord may erect a suitable sign on the Premises stating the Premises are
available to let or that the Project is available for sale.  Landlord may grant
easements, make public dedications, designate Common Areas and create
restrictions on or about the Premises, provided that no such easement,
dedication, designation or restriction materially, adversely affects Tenant’s
use or occupancy of the Premises for the Permitted Use (including Tenant’s
access to and use of the parking spaces which Tenant is entitled to use pursuant
to Section 10).  At Landlord’s written request, Tenant shall execute such
instruments as may be necessary for such easements, dedications or restrictions,
provided that such instruments do not materially increase Tenant’s obligations
or materially decrease Tenant’s rights under this Lease.  Tenant shall at all
times, except in the case of emergencies, have the right to escort Landlord or
its agents, representatives, contractors or guests while the same are in the
Premises, provided such escort does not materially and adversely affect
Landlord’s access rights hereunder.  Landlord shall comply with Tenant’s
reasonable security and safety requirements with respect to entering the
Premises; provided, however, that Tenant has notified Landlord of such security
and safety requirements simultaneously with or prior to Landlord’s entry into
the Premises.

 

Tenant agrees that Landlord may from time to time during the Term,  conduct
third party tours of the Premises (“Tours”) which may be held with less than 24
hours advance notice; provided, however, that Tenant shall have the right to
delay any Tours for which it receives notice from Landlord for up to 24 hours if
Tenant plans to conduct proprietary meetings at the Premises during the time of
such Tours and Tenant delivers written notice to Landlord of such proprietary
meetings within 8 hours of receiving Landlord’s notice of such Tours.  Landlord
shall endeavor to minimize disruption to Tenant’s operations in the Premises
during such Tours.

 

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33.          Security.  Tenant acknowledges and agrees that security devices and
services, if any, while intended to deter crime may not in given instances
prevent theft or other criminal acts and that Landlord is not providing any
security services with respect to the Premises.  Tenant agrees that Landlord
shall not be liable to Tenant for, and Tenant waives any claim against Landlord
with respect to, any loss by theft or any other damage suffered or incurred by
Tenant in connection with any unauthorized entry into the Premises or any other
breach of security with respect to the Premises.  Tenant shall be solely
responsible for the personal safety of Tenant’s officers, employees, agents,
contractors, guests and invitees while any such person is in, on or about the
Premises and/or the Project.  Tenant shall at Tenant’s cost obtain insurance
coverage to the extent Tenant desires protection against such criminal acts.

 

34.          Force Majeure.  Except for the payment of Rent, neither Landlord
nor Tenant shall be held responsible or liable for delays in the performance of
its obligations hereunder when caused by, related to, or arising out of acts of
God, sinkholes or subsidence, strikes, lockouts, or other labor disputes,
embargoes, quarantines, weather, national, regional, or local disasters,
calamities, or catastrophes, inability to obtain labor or materials (or
reasonable substitutes therefor) at reasonable costs or failure of, or inability
to obtain, utilities necessary for performance, governmental restrictions,
orders, limitations, regulations, or controls, national emergencies, delay in
issuance or revocation of permits, enemy or hostile governmental action,
terrorism, insurrection, riots, civil disturbance or commotion, fire or other
casualty, and other causes or events beyond their reasonable control (“Force
Majeure”).

 

35.          Brokers.  Landlord and Tenant each represents and warrants that it
has not dealt with any broker, agent or other person (collectively, “Broker”) in
connection with this transaction and that no Broker brought about this
transaction, other than Cushman and Wakefield and Hughes Marino.  Landlord and
Tenant each hereby agree to indemnify and hold the other harmless from and
against any claims by any Broker, other than the broker, if any named in this
Section 35, claiming a commission or other form of compensation by virtue of
having dealt with Tenant or Landlord, as applicable, with regard to this leasing
transaction.  Landlord shall be responsible for all fees of Cushman and
Wakefield and Hughes Marino arising out of the execution of this Lease in
accordance with the terms of separate written agreements between Landlord, on
the one hand, and Cushman and Wakefield and Hughes Marino, respectively, on the
other hand.

 

36.          Limitation on Landlord’s Liability.  NOTWITHSTANDING ANYTHING SET
FORTH HEREIN OR IN ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT TO THE
CONTRARY:  (A) LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OTHER PERSON FOR
(AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS, DAMAGE OR
INJURY, WHETHER ACTUAL OR CONSEQUENTIAL TO:  TENANT’S PERSONAL PROPERTY OF EVERY
KIND AND DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES,
EQUIPMENT, INVENTORY, SCIENTIFIC RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORY
ANIMALS, PRODUCT, SPECIMENS, SAMPLES, AND/OR SCIENTIFIC, BUSINESS, ACCOUNTING
AND OTHER RECORDS OF EVERY KIND AND DESCRIPTION KEPT AT THE PREMISES AND ANY AND
ALL INCOME DERIVED OR DERIVABLE THEREFROM; (B) THERE SHALL BE NO PERSONAL
RECOURSE TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR
ARISING IN ANY WAY UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND
TENANT WITH RESPECT TO THE SUBJECT MATTER HEREOF AND ANY LIABILITY OF LANDLORD
HEREUNDER SHALL BE STRICTLY LIMITED SOLELY TO LANDLORD’S INTEREST IN THE PROJECT
OR ANY PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY INSURANCE PROCEEDS
PAYABLE IN RESPECT OF LANDLORD’S INTEREST IN THE PROJECT OR IN CONNECTION WITH
ANY SUCH LOSS; AND (C) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED
AGAINST LANDLORD IN CONNECTION WITH THIS LEASE NOR SHALL ANY RECOURSE BE HAD TO
ANY OTHER PROPERTY OR ASSETS OF LANDLORD OR ANY OF LANDLORD’S OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS.  UNDER NO CIRCUMSTANCES SHALL
LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
CONTRACTORS BE LIABLE FOR INJURY TO TENANT’S BUSINESS OR FOR ANY LOSS OF INCOME
OR PROFIT THEREFROM.

 

37.          Severability.  If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this Lease shall
not be affected thereby.  It is also the intention of the parties to this Lease
that in lieu of each clause or provision of this Lease that is illegal, invalid
or unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in effect to such illegal, invalid or unenforceable clause or
provision as shall be legal, valid and enforceable.

 

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38.          Signs; Exterior Appearance.  Tenant shall not, without the prior
written consent of Landlord, which may be granted or withheld in Landlord’s
reasonable discretion:  (i) attach any awnings, exterior lights, decorations,
balloons, flags, pennants, banners, painting or other projection to any outside
wall of the Project, (ii) use any curtains, blinds, shades or screens other than
Landlord’s standard window coverings, (iii) coat or otherwise sunscreen the
interior or exterior of any windows, (iv) place any bottles, parcels, or other
articles on the window sills, (v) place any equipment, furniture or other items
of personal property on any exterior balcony, or (vi) paint, affix or exhibit on
any part of the Premises or the Project any signs, notices, window or door
lettering, placards, decorations, or advertising media of any type which can be
viewed from the exterior of the Premises.  Interior signs on doors and the
directory tablet shall be inscribed, painted or affixed for Tenant by Landlord
at the sole cost and expense of Tenant, and shall be of a size, color and type
reasonably acceptable to Landlord.  Nothing may be placed on the exterior of
corridor walls or corridor doors other than Landlord’s standard lettering.

 

Tenant shall have the exclusive right to display, at Tenant’s cost and expense,
a sign bearing Tenant’s name and/or logo (“Building Sign”) at a location on the
top of the Building selected by Tenant and reasonably acceptable to Landlord. 
Notwithstanding the foregoing, Tenant acknowledges and agrees that the Building
Sign including, without limitation, the size, color and type, shall be subject
to Landlord’s prior written approval, which shall not be unreasonably withheld,
shall be consistent with Landlord’s signage program at the Project and shall be
subject to any and all other required approvals and applicable Legal
Requirements.  Tenant shall be responsible, at Tenant’s sole cost and expense,
for the maintenance of the Building Sign, for the removal of the Building Sign
at the expiration or earlier termination of this Lease and for the repair of all
damage resulting from such removal.

 

Tenant shall, at Tenant’s sole cost and expense, have the non-exclusive right to
install a sign bearing Tenant’s name on the Monument Sign serving the Project
(“Monument Sign”).  Tenant acknowledges and agrees that Tenant’s signage on the
Monument Sign including, without limitation, the location, size, color and type
shall be subject to Landlord’s prior written approval, which shall not be
unreasonably withheld, shall be subject to and consistent with Landlord’s
signage program at the Project and shall be subject to any and all other
required approvals and applicable Legal Requirements.  Tenant shall be
responsible, at Tenant’s sole cost and expense, for the maintenance of Tenant’s
signage on the Monument Sign, for the removal of Tenant’s signage from the
Monument Sign at the expiration or earlier termination of this Lease and for the
repair of all damage resulting from such removal.

 

39.          Right to Extend Term.  Tenant shall have the right to extend the
Term of the Lease upon the following terms and conditions:

 

(a)           Extension Rights.  Tenant shall have 1 right (the “Extension
Right”) to extend the term of this Lease for 5 years (the “Extension Term”) on
the same terms and conditions as this Lease (other than with respect to Base
Rent and the Work Letter) by giving Landlord written notice of its election to
exercise the Extension Right at least 12 months prior to the expiration of the
Base Term of the Lease.

 

Upon the commencement of the Extension Term, Base Rent shall be payable at the
Market Rate (as defined below).  As used herein, “Market Rate” shall mean the
rate (including any adjustments during the Term) that comparable landlords of
comparable buildings have accepted in current transactions from non-equity
(i.e., not being offered equity in the buildings) and nonaffiliated tenants of
similar financial strength for space of comparable size, quality (including all
Tenant Improvements, Alterations and other improvements) and floor height in
Class A laboratory/office buildings in the Sorrento Mesa area of San Diego for a
comparable term, with the determination of the Market Rate to take into account
all relevant factors, including tenant inducements, percentage of laboratory and
office space, views, project amenities, parking costs, leasing commissions,
allowances or concessions, if any.

 

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If, on or before the date which is 240 days prior to the expiration of the Base
Term of this Lease, Tenant has not agreed with Landlord’s determination of the
Market Rate during the Extension Term after negotiating in good faith, Tenant
shall be deemed to have elected arbitration as described in Section 39(b). 
Tenant acknowledges and agrees that, if Tenant has elected to exercise the
Extension Right by delivering notice to Landlord as required in this
Section 39(a), Tenant shall have no right thereafter to rescind or elect not to
extend the term of the Lease for the Extension Term.

 

(b)           Arbitration.

 

(i)            Within 10 days of Tenant’s notice to Landlord of its election (or
deemed election) to arbitrate Market Rate, each party shall deliver to the other
a proposal containing the Market Rate that the submitting party believes to be
correct (“Extension Proposal”).  If either party fails to timely submit an
Extension Proposal, the other party’s submitted proposal shall determine the
Base Rent for the Extension Term.  If both parties submit Extension Proposals,
then Landlord and Tenant shall meet within 7 days after delivery of the last
Extension Proposal and make a good faith attempt to mutually appoint a single
Arbitrator (and defined below) to determine the Market Rate.  If Landlord and
Tenant are unable to agree upon a single Arbitrator, then each shall, by written
notice delivered to the other within 10 days after the meeting, select an
Arbitrator.  If either party fails to timely give notice of its selection for an
Arbitrator, the other party’s submitted proposal shall determine the Base Rent
for the Extension Term.  The 2 Arbitrators so appointed shall, within 5 business
days after their appointment, appoint a third Arbitrator.  If the 2 Arbitrators
so selected cannot agree on the selection of the third Arbitrator within the
time above specified, then either party, on behalf of both parties, may request
such appointment of such third Arbitrator by application to any state court of
general jurisdiction in the jurisdiction in which the Premises are located, upon
10 days prior written notice to the other party of such intent.

 

(ii)           The decision of the Arbitrator(s) shall be made within 30 days
after the appointment of a single Arbitrator or the third Arbitrator, as
applicable.  The decision of the single Arbitrator shall be final and binding
upon the parties.  The average of the decisions of the two closest Arbitrators
in a three Arbitrator panel shall be final and binding upon the parties.  Each
party shall pay the fees and expenses of the Arbitrator appointed by or on
behalf of such party and the fees and expenses of the third Arbitrator shall be
borne equally by both parties.  If the Market Rate are not determined by the
first day of the Extension Term, then Tenant shall pay Landlord Base Rent in an
amount equal to the Base Rent in effect immediately prior to the Extension Term
and increased by the Rent Adjustment Percentage until such determination is
made.  After the determination of the Market Rate, the parties shall make any
necessary adjustments to such payments made by Tenant.  Landlord and Tenant
shall then execute an amendment recognizing the Market Rate for the Extension
Term.

 

(iii)          An “Arbitrator” shall be any person appointed by or on behalf of
either party or appointed pursuant to the provisions hereof and:  (i) shall be
(A) a member of the American Institute of Real Estate Appraisers with not less
than 10 years of experience in the appraisal of improved office and high tech
industrial real estate in the  Sorrento Mesa area of San Diego, or (B) a
licensed commercial real estate broker with not less than 15 years experience
representing landlords and/or tenants in the leasing of high tech or life
sciences space in the  Sorrento Mesa area of San Diego, (ii) devoting
substantially all of their time to professional appraisal or brokerage work, as
applicable, at the time of appointment and (iii) be in all respects impartial
and disinterested.

 

(c)           Rights Personal.  The Extension Right is personal to Tenant and is
not assignable without Landlord’s consent, which may be granted or withheld in
Landlord’s sole discretion separate and apart from any consent by Landlord to an
assignment of Tenant’s interest in the Lease, except that they may be assigned
in connection with any Permitted Assignment of this Lease.

 

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(d)           Exceptions.  Notwithstanding anything set forth above to the
contrary, the Extension Right shall, at Landlord’s option, not be in effect and
Tenant may not exercise the Extension Right:

 

(i)            during any period of time that Tenant is in Default (beyond any
applicable notice and cure period) under any provision of this Lease; or

 

(ii)           if Tenant has been in Default under any provision of this Lease 3
or more times, whether or not the Defaults are cured, during the 12 month period
immediately prior to the date that Tenant intends to exercise the Extension
Right, whether or not the Defaults are cured.

 

(e)           No Extensions.  The period of time within which the Extension
Right may be exercised shall not be extended or enlarged by reason of Tenant’s
inability to exercise the Extension Right.

 

(f)            Termination.  The Extension Right shall, at Landlord’s option,
terminate and be of no further force or effect even after Tenant’s due and
timely exercise of the Extension Right, if, after such exercise, but prior to
the commencement date of the Extension Term, Tenant has Defaulted 3 or more
times during the period from the date of the exercise of an Extension Right to
the date of the commencement of the Extension Term, whether or not such Defaults
are cured.

 

40.          Franklin Yard Amenities.

 

(a)           Generally.  Subject to the provisions of this Section 40,
Landlord’s affiliate, ARE-SD Region No. 17, LLC, a Delaware limited liability
company (“Franklin Yard Landlord”) may construct amenities at the property owned
by Franklin Yard Landlord located at 10996 Torreyana Road, San Diego, California
(“Franklin Yard Project”), which may include, without limitation, shared
conference facilities (“Shared Conference Facilities”), a fitness center and
restaurant (collectively, the “Franklin Yard Amenities”) for non-exclusive use
by (a) Tenant, (b) other tenants of the Project, (c) Landlord, (d) the tenants
of Franklin Yard Landlord, (e) Franklin Yard Landlord, (e) other affiliates of
Landlord, Franklin Yard Landlord and Alexandria Real Estate Equities, Inc.
(“ARE”), (f) the tenants of such other affiliates of Landlord, Franklin Yard
Landlord and ARE, and (g) any other parties permitted by Franklin Yard Landlord
(collectively, “Users”).  Landlord, Franklin Yard Landlord, ARE, and all
affiliates of Landlord, Franklin Yard Landlord and ARE may be referred to
collectively herein as the “ARE Parties.”  Notwithstanding anything to the
contrary contained herein, Tenant acknowledges and agrees that Franklin Yard
Landlord shall have the right, at the sole discretion of Franklin Yard Landlord,
to construct any Amenities desired by Franklin Yard Landlord at the Franklin
Yard Project but not make such constructed Franklin Yard Amenities available for
use by some or all currently contemplated Users.  Franklin Yard Landlord shall
have the sole right to determine all matters related to the Franklin Yard
Amenities including, without limitation, relating to the design and construction
thereof.  Tenant acknowledges and agrees that Landlord has not made any
representations or warranties regarding the development of any of the Franklin
Yard Amenities and that Tenant is not entering into this Lease relying on the
construction and completion of the Franklin Yard Amenities or with an
expectation that the Franklin Yard Amenities will ever be constructed and/or
made available to Tenant.

 

(b)           License.  Following the delivery of written notice from Landlord
to Tenant that the Franklin Yard Amenities are available for use by Tenant
(“Amenity Availability Notice”), if at all, and so long as the Franklin Yard
Project and the Project continue to be owned by affiliates of ARE, Tenant shall
have the non-exclusive right to the use of the available Franklin Yard Amenities
for up to 45 employees (so long as such employees are employed at the Premises)
in common with other Users pursuant to the terms of this Section 40.  If
Landlord delivers an Amenity Availability Notice to Tenant, Tenant shall, upon
the date (“Amenities Commencement Date”) set forth in the Amenity Availability
Notice (provided that Tenant is actually permitted to commence using the
Franklin Yard Amenities as of such date), commence paying Landlord a fixed fee
during the Base Term equal to $0.08 per rentable square foot of the Premises per
month (“Amenities Fee”), which Amenities Fee shall by payable on the first day
of each month during the Term whether or not Tenant elects to use any or all of
the Franklin Yard Amenities.  The Amenities Fee shall be increased annually on
each anniversary of the Amenities Commencement Date by the Rent

 

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Adjustment Percentage (and, for the avoidance of any doubt, if Tenant elects to
exercise its Extension Right, Tenant shall continue to be required to pay a
separate Amenities Fee in an amount to be determined when the Market Rate is
determined; provided, however, that in no event shall such Amenities Fee be less
than the Amenities Fee being paid by Tenant immediately prior to the Extension
Term with 3% annual increases on first day of the Extension Term and thereafter
on each anniversary thereof).  In the event that the Franklin Yard Amenities are
not constructed or if they are constructed but not made available for use by
Tenant, Tenant shall have no right to use the Franklin Yard Amenities, if any,
nor shall Tenant be required to pay the Amenities Fee.

 

(c)           Shared Conference Facilities.  Use by Tenant of the Shared
Conference Facilities and restaurant at the Franklin Yard Project shall be in
common with other Users with scheduling procedures reasonably determined by
Franklin Yard Landlord.  Franklin Yard Landlord reserves the right to exercise
its reasonable discretion in the event of conflicting scheduling requests among
Users.

 

Any vendors engaged by Tenant in connection with Tenant’s use of the Shared
Conference Facilities shall be professional licensed vendors.  Franklin Yard
Landlord shall have the right to reasonably approve any vendors utilized by
Tenant in connection with Tenant’s use of the Shared Conference Facilities. 
Prior to any entry by any such vendor onto the Franklin Yard Project, Tenant
shall deliver to Landlord a copy of the contract between Tenant and such vendor
and certificates of insurance from such vendor evidencing industry standard
commercial general liability, automotive liability, and workers’ compensation
insurance.  Tenant shall cause all such vendors utilized by Tenant to provide a
certificate of insurance naming Landlord, ARE, and Franklin Yard Landlord as
additional insureds under the vendor’s liability policies.  Notwithstanding the
foregoing, Tenant shall be required to use the food service operator used by
Franklin Yard Landlord at the Franklin Yard Project for any food service or
catered events held by Tenant in the Shared Conference Facilities.

 

Tenant shall, at Tenant’s sole cost and expense, (i) be responsible for the
set-up of the Shared Conference Facilities in connection with Tenant’s use
(including, without limitation ensuring that Tenant has a sufficient number of
chairs and tables and the appropriate equipment), and (ii) surrender the Shared
Conference Facilities after each time that Tenant uses the Shared Conference
Facilities free of Tenant’s personal property, in substantially the same set up
and same condition as received, subject to casualty, and free of any debris and
trash.  If Tenant fails to restore and surrender the Shared Conference
Facilities as required by sub-section (ii) of the immediately preceding
sentence, such failure shall constitute a “Shared Facilities Default.”  Each
time that Landlord reasonably determines that Tenant has committed a Shared
Facilities Default, Tenant shall be required to pay Landlord a fee within 5 days
after notice from Landlord of such Shared Facilities Default.  The fee payable
by Tenant in connection with the first Shared Facilities Default shall be $200. 
The fee payable shall increase by $50 for each subsequent Shared Facilities
Default (for the avoidance of doubt, the fee shall be $250 for the second Shared
Facilities Default, shall be $300 for the third Shared Facilities
Default, etc.).  In addition to the foregoing, Tenant shall be responsible for
reimbursing Franklin Yard Landlord or Landlord, as applicable, for all costs
expended by Franklin Yard Landlord or Landlord, as applicable, in repairing any
damage to the Shared Conference Facilities, the Franklin Yard Amenities, or the
Franklin Yard Project caused by Tenant or any Tenant Related Party.  The
provisions of this Section 40(c) shall survive the expiration or earlier
termination of this Lease.

 

(d)           Rules and Regulations.  Tenant shall be solely responsible for
paying for any and all ancillary services (e.g., audio visual equipment)
provided to Tenant, all food services operators  and any other third party
vendors providing services to Tenant at the Franklin Yard Project.  Tenant shall
use the Franklin Yard Amenities (including, without limitation, the Shared
Conference Facilities) in compliance with all applicable Legal Requirements and
any reasonable rules and regulations imposed by Franklin Yard Landlord or
Landlord from time to time (which rules shall not be enforced in a
discriminatory manner) and in a manner that will not interfere with the rights
of other Users.  The use of Franklin Yard Amenities other than the Shared
Conference Facilities by employees of Tenant shall be in accordance with the
terms and conditions of the standard licenses, indemnification and waiver
agreement required by Franklin Yard Landlord or the operator of the Franklin
Yard Amenities to be executed by all persons wishing to use such Franklin Yard
Amenities.  Neither Franklin Yard Landlord nor Landlord (nor, if

 

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applicable, any other affiliate of Landlord) shall have any liability or
obligation for the breach of any rules or regulations by other Users with
respect to the Franklin Yard Amenities.  Tenant shall not make any alterations,
additions, or improvements of any kind to the Shared Conference Facilities, the
Franklin Yard Amenities or the Franklin Yard Project.

 

Tenant acknowledges and agrees that Franklin Yard Landlord shall have the right
at any time and from time to time to reconfigure, relocate, modify or remove any
of the Franklin Yard Amenities at the Franklin Yard Project and/or to revise,
expand or discontinue any of the services (if any) provided in connection with
the Franklin Yard Amenities.

 

(e)           Waiver of Liability and Indemnification.  Tenant warrants that it
will use reasonable care to prevent damage to property and injury to persons
while on the Franklin Yard Project.  To the extent permitted by applicable law,
except to the extent caused by the negligence or willful misconduct of any ARE
Party, Tenant waives any claims it or any Tenant Parties may have against any
ARE Parties relating to, arising out of or in connection with the Franklin Yard
Amenities and any entry by Tenant and/or any Tenant Parties onto the Franklin
Yard Project, and Tenant releases and exculpates all ARE Parties from any
liability relating to, arising out of or in connection with the Franklin Yard
Amenities and any entry by Tenant and/or any Tenant Parties onto the Franklin
Yard Project.  Except to the extent caused by the negligence or willful
misconduct of any ARE Party, Tenant hereby agrees to indemnify, defend, and hold
harmless the ARE Parties from any claim of damage to property or injury to
person relating to, arising out of or in connection with (i) the use of the
Franklin Yard Amenities by Tenant or any Tenant Parties, and (ii) any entry by
Tenant and/or any Tenant Parties onto the Franklin Yard Project.  The provisions
of this Section 40 shall survive the expiration or earlier termination of this
Lease.

 

(f)            Insurance.  As of the Franklin Yard Amenities Commencement Date,
Tenant shall cause Franklin Yard Landlord to be named as an additional insured
under the commercial general liability policy of insurance that Tenant is
required to maintain pursuant to Section 17 of this Lease.

 

41.          Termination Right.  Tenant shall have the right, subject to the
provisions of this Section 41, to terminate this Lease (“Termination Right”)
with respect to the entire Premises only as of expiration of the 84th month
after the Rent Commencement Date (“Early Termination Date”), so long as Tenant
delivers to Landlord (i) a written notice (“Termination Notice”), of its
election to exercise its Termination Right no less than 12 months in advance of
the Early Termination Date, and (ii) concurrent with Tenant’s delivery of the
Termination Notice to Landlord, an early termination payment equal to the sum of
(1) the unamortized amount of the Tenant Improvement Allowance as of the Early
Termination Date with amortization calculated on a straight line basis from the
Rent Commencement Date through the Base Term, (2) all of the unamortized leasing
commissions paid by Landlord in connection with this Lease as of the Early
Termination Date, with amortization calculated on a straight line basis from the
Rent Commencement Date through the Base Term, and (3) the unamortized amount as
of the Early Termination Date of the Additional Tenant Improvement Allowance
actually disbursed by Landlord to Tenant, if any, with amortization calculated
on a straight line basis from the Rent Commencement Date through the Base Term
(all calculated using an 8% annual interest rate) (collectively, the “Early
Termination Payment”).  If Tenant timely and properly exercises the Termination
Right, Tenant shall vacate the Premises and deliver possession thereof to
Landlord in the condition required by the terms of this Lease on or before the
Early Termination Date and Tenant shall have no further obligations under this
Lease except for those accruing prior to the Early Termination Date and those
which, pursuant to the terms of this Lease, survive the expiration or early
termination of this Lease.  If Tenant does not deliver to Landlord the
Termination Notice and the Early Termination Payment within the time period
provided in this paragraph, Tenant shall be deemed to have waived its
Termination Right and the provisions of this Section 41 shall have no further
force or effect.

 

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42.          Emergency Generator.  Subject to Tenant complying with all of the
provisions of this Lease including, without limitation, Section 12 hereof, and
all applicable Legal Requirements and Landlord’s rules and regulations, Tenant
shall have the right, at Tenant’s sole cost and expense, to install an emergency
generator and related tanks and equipment (collectively, “Emergency Generator”)
in a location at the Project reasonably acceptable to both Landlord and Tenant
(“Generator Area”).  All such improvements to the Generator Area shall be of a
design and type and with screening acceptable to Landlord, in Landlord’s
reasonable discretion.  Landlord shall have the right, in its sole and absolute
discretion, to require Tenant to remove any such Emergency Generator installed
by Tenant and restore the Generator Area to its original use and condition, free
of any debris and trash and free of any Hazardous Materials, upon the expiration
or earlier termination of the Term.  The number of parking spaces available to
Tenant under this Lease may be reduced by the number of parking spaces impacted,
if any, by the Emergency Generator.  Landlord shall have no obligation to make
any repairs or improvements to the Emergency Generator or the Generator Area and
Tenant shall maintain the same, at Tenant’s sole cost and expense, in good
repair and condition during the Term as though the same were part of the
Premises.  Tenant shall have the right to use a portion of the TI Allowance (as
defined in the Work Letter) for the purchase and installation of the Emergency
Generator.

 

43.          Roof Equipment.  As long as Tenant is not in default under this
Lease, Tenant shall have the right at its sole cost and expense, subject to
compliance with all Legal Requirements, to install, maintain, and remove on the
top of the roof of the Building directly above the Premises one satellite dish
(up to 20 inches in diameter and weighing up to 50 pounds), communication
antennae, or other equipment (all of which a diameter and height reasonably
acceptable to Landlord) for the transmission or reception of communication of
signals as Tenant may from time to time desire in connection with Tenant’s
Permitted Use of the Premises (collectively, the “Roof Equipment”) on the
following terms and conditions:

 

(a)           Requirements.  Tenant shall submit to Landlord (i) the plans and
specifications for the installation of the Roof Equipment, (ii) copies of all
required governmental and quasi-governmental permits, licenses, and
authorizations that Tenant will and must obtain at its own expense, with the
cooperation of Landlord, if necessary for the installation and operation of the
Roof Equipment, and (iii) an insurance policy or certificate of insurance
evidencing insurance coverage as required by this Lease and any other insurance
as reasonably required by Landlord for the installation and operation of the
Roof Equipment.  Landlord shall not unreasonably withhold or delay its approval
for the installation and operation of the Roof Equipment; provided, however,
that Landlord may reasonably withhold its approval if the installation or
operation of the Roof Equipment (A) may damage the structural integrity of the
Building, (B) may void, terminate, or invalidate any applicable roof warranty,
or (C) is not properly screened from the viewing public.

 

(b)           No Damage to Roof.  If installation of the Roof Equipment requires
Tenant to make any roof cuts or perform any other roofing work, such cuts shall
only be made in the manner reasonably  designated in writing by Landlord; and
any such installation work (including any roof cuts or other roofing work) shall
be performed by Tenant, at Tenant’s sole cost and expense by a roofing
contractor reasonably designated by Landlord and reasonably acceptable to
Tenant.  If Tenant or its agents shall otherwise cause any damage to the roof
during the installation, operation, and removal of the Roof Equipment such
damage shall be repaired promptly at Tenant’s expense and the roof shall be
restored in substantially the same condition it was in before the damage. 
Landlord shall not charge Tenant Additional Rent for the installation and use of
the Roof Equipment.  If, however, Landlord’s insurance premium or Tax assessment
increases as a result of the Roof Equipment, Tenant shall pay such increase as
Additional Rent within 30 days after receipt of a reasonably detailed invoice
from Landlord.  Tenant shall not be entitled to any abatement or reduction in
the amount of Rent payable under this Lease if for any reason Tenant is unable
to use the Roof Equipment.  In no event whatsoever shall the installation,
operation, maintenance, or removal of the Roof Equipment by Tenant or its agents
void, terminate, or invalidate any applicable roof warranty.

 

(c)           Protection.  The installation, operation, and removal of the Roof
Equipment shall be at Tenant’s sole risk.  Tenant shall indemnify, defend, and
hold Landlord harmless from and against any and all claims, costs, damages,
liabilities and expenses (including, but not limited to, attorneys’ fees) of
every kind and description that may arise out of or be connected in any way with
Tenant’s installation, operation, or removal of the Roof Equipment.

 

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(d)           Removal.  At the expiration or earlier termination of this Lease,
Tenant shall, at its sole cost and expense, remove the Roof Equipment from the
Building.  Tenant shall leave the portion of the roof where the Roof Equipment
was located in good order and repair, reasonable wear and tear excepted.  If
Tenant does not so remove the Roof Equipment, Tenant hereby authorizes Landlord
to remove and dispose of the Roof Equipment and charge Tenant as Additional Rent
for all costs and expenses reasonably and actually  incurred by Landlord in such
removal and disposal.  Tenant agrees that Landlord shall not be liable for any
Roof Equipment or related property disposed of or removed by Landlord after the
expiration or earlier termination of this Lease.

 

(e)           Relocation.  Landlord shall have the right, at its expense and
after 60 days prior notice to Tenant, to relocate the Roof Equipment to another
site on the roof of the Building as long as such site reasonably meets Tenant’s
sight line and interference requirements and does not unreasonably interfere
with Tenant’s use and operation of the Roof Equipment.

 

(f)            Access.  Landlord grants to Tenant the right of ingress and
egress on a 24 hour 7 day per week basis to install, operate, and maintain the
Roof Equipment.  Before receiving access to the roof of the Building, Tenant
shall give Landlord at least 24 hours’ advance written or oral notice, except in
emergency situations, in which case 2 hours’ advance oral notice shall be given
by Tenant.  Landlord shall supply Tenant with the name, telephone, and pager
numbers of the contact individual(s) responsible for providing access during
emergencies.

 

(g)           Appearance.  If permissible by Legal Requirements, the Roof
Equipment shall be painted the same color as the Building so as to render the
Roof Equipment virtually invisible from ground level.

 

(h)           No Assignment.  The right of Tenant to use and operate the Roof
Equipment shall be personal solely to Oncosec Medical Incorporated, and (i) no
other person or entity shall have any right to use or operate the Roof
Equipment, and (ii) Tenant shall not assign, convey, or otherwise transfer to
any person or entity any right, title, or interest in all or any portion of the
Roof Equipment or the use and operation thereof, other than in connection with
any Permitted Assignment.

 

44.          LEED Certification.  Tenant agrees to reasonably cooperate with
Landlord and to use commercially reasonable efforts to comply with measures
reasonably implemented by Landlord with respect to the Building and/or the
Project in connection with Landlord’s efforts, if any, to obtain a Leadership in
Energy and Environmental Design (LEED) certificate for the Project, provided
that such cooperation and efforts (i) shall be at no material additional cost or
liability to Tenant whether as part of Operating Expenses or otherwise, and
(ii) shall not materially interfere with Tenant’s use of the Premises for the
Permitted Use.

 

45.          Miscellaneous.

 

(a)           Notices.  All notices or other communications between the parties
shall be in writing and shall be deemed duly given upon delivery or refusal to
accept delivery by the addressee thereof if delivered in person, or upon actual
receipt if delivered by reputable overnight guaranty courier, addressed and sent
to the parties at their addresses set forth above.  Landlord and Tenant may from
time to time by written notice to the other designate another address for
receipt of future notices.

 

(b)           Joint and Several Liability.  If and when included within the term
“Tenant,” as used in this instrument, there is more than one person or entity,
each shall be jointly and severally liable for the obligations of Tenant.

 

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(c)           Financial Information.  Tenant shall furnish Landlord  with true
and complete copies of (i) Tenant’s most recent unaudited (or the extent
available, audited) annual financial statements within 90 days of the end of
each of Tenant’s fiscal years during the Term, (ii) Tenant’s most recent
unaudited quarterly financial statements within 45 days of the end of each of
Tenant’s first three fiscal quarters of each of Tenant’s fiscal years during the
Term, (iii) at Landlord’s request from time to time (but no more than once per
year), updated business plans, including cash flow projections and/or pro forma
balance sheets and income statements, all of which shall be treated by Landlord
as confidential information belonging to Tenant, (iv) corporate brochures and/or
profiles prepared by Tenant for prospective investors, and (v) any other
financial information or summaries that Tenant typically provides to its lenders
or shareholders. So long as Tenant is a “public company” and its financial
information is publicly available, then the foregoing requirements of this
Section 45(c) shall not apply.  Notwithstanding the foregoing, in no event shall
Tenant be required to provide any financial information to Landlord which Tenant
does not otherwise prepare (or cause to be prepared) for its own purposes.

 

(d)           Recordation.  Neither this Lease nor a memorandum of lease shall
be filed by or on behalf of Tenant in any public record.  Landlord may prepare
and file, at Landlord’s sole cost and expense and upon written request by
Landlord Tenant will execute, a memorandum of lease with respect to this Lease.

 

(e)           Interpretation.  The normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Lease or any exhibits or amendments
hereto.  Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.  The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.

 

(f)            Not Binding Until Executed.  The submission by Landlord to Tenant
of this Lease shall have no binding force or effect, shall not constitute an
option for the leasing of the Premises, nor confer any right or impose any
obligations upon either party until execution of this Lease by both parties.

 

(g)           Limitations on Interest.  It is expressly the intent of Landlord
and Tenant at all times to comply with applicable law governing the maximum rate
or amount of any interest payable on or in connection with this Lease.  If
applicable law is ever judicially interpreted so as to render usurious any
interest called for under this Lease, or contracted for, charged, taken,
reserved, or received with respect to this Lease, then it is Landlord’s and
Tenant’s express intent that all excess amounts theretofore collected by
Landlord be credited on the applicable obligation (or, if the obligation has
been or would thereby be paid in full, refunded to Tenant), and the provisions
of this Lease immediately shall be deemed reformed and the amounts thereafter
collectible hereunder reduced, without the necessity of the execution of any new
document, so as to comply with the applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder.

 

(h)           Choice of Law.  Construction and interpretation of this Lease
shall be governed by the internal laws of the state in which the Premises are
located, excluding any principles of conflicts of laws.

 

(i)            Time.  Time is of the essence as to the performance of Tenant’s
and Landlord’s obligations under this Lease.

 

(j)            OFAC.  Tenant and Landlord are currently (a) in compliance with
and shall at all times during the Term of this Lease remain in compliance with
the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S.
Department of Treasury and any statute, executive order, or regulation relating
thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not
during the term of this Lease be listed on, the Specially Designated Nationals
and Blocked Persons List maintained by OFAC and/or on any other similar list
maintained by OFAC or other governmental authority pursuant to any authorizing
statute, executive order, or regulation, and (c) not a person or entity with
whom a U.S. person is prohibited from conducting business under the OFAC Rules.

 

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(k)           Incorporation by Reference.  All exhibits and addenda attached
hereto are hereby incorporated into this Lease and made a part hereof.  If there
is any conflict between such exhibits or addenda and the terms of this Lease,
such exhibits or addenda shall control.

 

(l)            Entire Agreement.  This Lease, including the exhibits attached
hereto, constitutes the entire agreement between Landlord and Tenant pertaining
to the subject matter hereof and supersedes all prior and contemporaneous
agreements, understandings, letters of intent, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements, express or implied, made to either party by
the other party in connection with the subject matter hereof except as
specifically set forth herein.

 

(m)          No Accord and Satisfaction.  No payment by Tenant or receipt by
Landlord of a lesser amount than the monthly installment of Base Rent or any
Additional Rent will be other than on account of the earliest stipulated Base
Rent and Additional Rent, nor will any endorsement or statement on any check or
letter accompanying a check for payment of any Base Rent or Additional Rent be
an accord and satisfaction.  Landlord may accept such check or payment without
prejudice to Landlord’s right to recover the balance of such Rent or to pursue
any other remedy provided in this Lease.

 

(n)           Hazardous Activities.  Notwithstanding any other provision of this
Lease, Landlord, for itself and its employees, agents and contractors, reserves
the right to refuse to perform any repairs or services in any portion of the
Premises which, pursuant to Tenant’s routine safety guidelines, practices or
custom or prudent industry practices, require any form of protective clothing or
equipment other than safety glasses.  In any such case, Tenant shall contract
with parties who are acceptable to Landlord, in Landlord’s reasonable
discretion, for all such repairs and services, and Landlord shall, to the extent
required, equitably adjust Tenant’s Share of Operating Expenses in respect of
such repairs or services to reflect that Landlord is not providing such repairs
or services to Tenant.

 

(o)           Redevelopment of Project.  Tenant acknowledges that Landlord, in
its sole discretion, may from time to time expand, renovate and/or reconfigure
the Project as the same may exist from time to time and, in connection therewith
or in addition thereto, as the case may be, from time to time without
limitation:  (a) change the shape, size, location, number and/or extent of any
improvements, buildings, structures, lobbies, hallways, entrances, exits,
parking and/or parking areas relative to any portion of the Project; (b) modify,
eliminate and/or add any buildings, improvements, and parking
structure(s) either above or below grade, to the Project, the Common Areas
and/or any other portion of the Project and/or make any other changes thereto
affecting the same; and (c) make any other changes, additions and/or deletions
in any way affecting the Project and/or any portion thereof as Landlord may
elect from time to time, including without limitation, additions to and/or
deletions from the land comprising the Project, the Common Areas and/or any
other portion of the Project.  If, at any time during the Term, Landlord elects
to construct another building and/or parking structure at the Project, Landlord
shall have the right, exercisable upon written notice to Tenant to relocate all
or any portion of the parking spaces which Tenant has a right to use pursuant to
Section 10 during the construction period to another location in reasonable
proximity to the Project.  Notwithstanding anything to the contrary contained in
this Lease, Tenant shall have no right to seek damages (including abatement of
Rent) or to cancel or terminate this Lease because of any proposed changes,
expansion, renovation or reconfiguration of the Project nor shall Tenant have
the right to restrict, inhibit or prohibit any such changes, expansion,
renovation or reconfiguration; provided, however, Landlord shall not change the
size, dimensions, location or Tenant’s Permitted Use of the Premises.  Landlord
shall use reasonable efforts to cause the redevelopment contemplated pursuant to
this Section 45(o) to be performed in a manner that does not materially and
adversely affect Tenant’s beneficial use and occupancy of the Premises and/or
access to or use of parking at the Project, other than on a temporary basis
while construction and related work may be ongoing.  No expansion, renovation
and/or reconfiguring of the Project pursuant to this paragraph will result in
Tenant having fewer parking spaces available for its use other than on a
temporary basis while construction and related work may be ongoing, and during
such periods Landlord shall provide substitute parking in reasonable proximity
to the Project.

 

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(p)           Discontinued Use.  If, at any time following the Rent Commencement
Date, Tenant does not continuously conduct business operations in the Premises
for a period of 180 consecutive days, Landlord may, but is not obligated to,
elect to terminate this Lease upon 30 days’ written notice to Tenant, whereupon
this Lease shall terminate 30 days’ after Landlord’s delivery of such written
notice (“Termination Date”), and Tenant shall vacate the Premises and deliver
possession thereof to Landlord in the condition required by the terms of this
Lease on or before the Termination Date and Tenant shall have no further
obligations under this Lease except for those accruing prior to the Termination
Date and those which, pursuant to the terms of the Lease, survive the expiration
or early termination of the Lease.

 

(q)           Energy Use Disclosure Requirements.  Tenant acknowledges and
agrees that as of the date of this Lease, (i) the Building is undergoing a
substantial renovation which shall include, without limitation, changes to the
rentable square footage of the Building existing as of the date of this Lease
and the installation of new Building Systems which will not have been previously
operated prior to the date of this Lease (collectively, the “Renovation”), and
(ii) that because of such Renovation, the energy performance of the Building
following the Commencement Date shall be materially different than the
historical energy performance of the Building prior to such Renovation.  As a
result, there are no existing disclosures for Landlord to provide to Tenant in
connection with the California Nonresidential Building Energy Use Disclosure
regulations (“Energy Disclosure Information”) that would be applicable to the
Building’s performance following such Renovation.  Tenant’s execution of this
Lease shall constitute Tenant’s waiver of any right Tenant may have to receive
from Landlord information concerning the energy performance of the Building
pursuant to California Public Resources Code Section 25402.10 and the
regulations adopted pursuant thereto.  Tenant hereby releases Landlord from any
liability Landlord may have to Tenant relating to the Energy Disclosure
Information, including, without limitation, any liability arising as a result of
Landlord’s failure to disclose the Energy Disclosure Information to Tenant prior
to or after the execution of this Lease.

 

(r)            Consents.  Except as otherwise specified in this Lease as being
subject to a party’s sole and absolute discretion, whenever this Lease requires
approval, consent, designation, determination, selection or judgment by either
Landlord or Tenant, such approval, consent, designation, determination,
selection or judgment and any conditions imposed thereby shall be reasonable and
shall not be unreasonably withheld or delayed and, in exercising any right or
remedy hereunder, each party shall at all times act reasonably in good faith.

 

[ Signatures on next page ]

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.

 

 

TENANT:

 

 

 

ONCOSEC MEDICAL INCORPORATED,

 

a Nevada corporation

 

 

 

 

 

 

 

By:

/s/ Punit Dhillon

 

Its:

CEO

 

 

 

 

 

 

 

LANDLORD:

 

 

 

 

ARE-SD REGION NO. 18, LLC,

 

a Delaware limited liability company

 

 

 

 

By:

ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

 

 

a Delaware limited partnership,
managing member

 

 

 

 

 

By:

ARE-QRS CORP.,

 

 

 

a Maryland corporation,

 

 

 

general partner

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Gary Dean

 

 

 

Its:

Vice President RE Legal Affairs

 

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EXHIBIT A TO LEASE

 

DESCRIPTION OF PREMISES

 

GRAPHIC [g269391kg09i001.jpg]

 

 

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GRAPHIC [g269391kg09i002.jpg]

 

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EXHIBIT B TO LEASE

 

DESCRIPTION OF PROJECT

 

GRAPHIC [g269391kg09i003.jpg]

 

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EXHIBIT C TO LEASE

 

WORK LETTER

 

THIS WORK LETTER dated December 31, 2014 (this “Work Letter”) is made and
entered into by and between ARE-SD REGION NO. 18, LLC, Delaware limited
liability company (“Landlord”), and ONCOSEC MEDICAL INCORPORATED, a Nevada
corporation (“Tenant”), and is attached to and made a part of the Lease
Agreement dated December 31, 2014 (the “Lease”), by and between Landlord and
Tenant.  Any initially capitalized terms used but not defined herein shall have
the meanings given them in the Lease.

 

1.                                      General Requirements.

 

(a)                                 Tenant’s Authorized Representative.  Tenant
designates Veronica Vallejo and Tu Diep (either such individual acting alone,
“Tenant’s Representative”) as the only persons authorized to act for Tenant
pursuant to this Work Letter.  Landlord shall not be obligated to respond to or
act upon any request, approval, inquiry or other communication (“Communication”)
from or on behalf of Tenant in connection with this Work Letter unless such
Communication is in writing from Tenant’s Representative.  Tenant may change
either Tenant’s Representative at any time upon not less than 5 business days
advance written notice to Landlord.  Neither Tenant nor Tenant’s Representative
shall be authorized to direct Landlord’s contractors in the performance of
Landlord’s Work (as hereinafter defined).

 

(b)                                 Landlord’s Authorized Representative. 
Landlord designates Jenny Gardner and Steve Pomerenke (either such individual
acting alone, “Landlord’s Representative”) as the only persons authorized to act
for Landlord pursuant to this Work Letter.  Tenant shall not be obligated to
respond to or act upon any request, approval, inquiry or other Communication
from or on behalf of Landlord in connection with this Work Letter unless such
Communication is in writing from Landlord’s Representative.  Landlord may change
either Landlord’s Representative at any time upon not less than 5 business days
advance written notice to Tenant. Landlord’s Representative shall be the sole
persons authorized to direct Landlord’s contractors in the performance of
Landlord’s Work.

 

(c)                                  Architects, Consultants and Contractors. 
Landlord and Tenant hereby acknowledge and agree that:  (i) the general
contractor for the Tenant Improvements shall be Level 10 Construction,
(ii) McFarlane Architects shall be the architect (the “TI Architect”) for the
Tenant Improvements and the Base Building Improvements, and (iii) any
subcontractors for the Tenant Improvements shall be selected, subject to the
terms of this paragraph, by Landlord, subject to Tenant’s approval, which
approval shall not be unreasonably withheld, conditioned or delayed.  The
general contractor shall (a) obtain at least 3 bids from subcontractors
reasonably approved in advance by Tenant for the work of the major trades of the
Tenant Improvements (comprising the mechanical, electrical and plumbing work,
each a “Major Trade Subcontractor”), and (b) select the lowest bid from among
such Major Trade Subcontractors, unless otherwise reasonably approved by Tenant
and Landlord.  All bids for the Tenant Improvements will be made available to
Tenant on an “open book” basis.

 

2.                                      Tenant Improvements.

 

(a)                                 Definition of Base Building Improvements,
Tenant Improvements.  As used herein, the term, “Base Building Improvements”
shall mean the improvements to the Building reflected on Annex 1 attached to
this Work Letter (“Base Building Specifications”), which Base Building
Improvements shall be performed by Landlord at Landlord’s sole cost and
expense.  Landlord shall deliver to Tenant a copy of the drawings for the Base
Building Improvements when such drawings become available. Notwithstanding
anything to the contrary contained herein, Landlord is under no obligation to
make any changes that may be requested by Tenant to the Base Building
Improvements.  As used herein, the term “Tenant Improvements” shall mean all
improvements to the Premises of a fixed and permanent nature as shown on the TI
Construction Drawings, as defined in Section 2(c) below.

 

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Notwithstanding anything to the contrary contained in this Work Letter, Landlord
shall cause, at Landlord’s sole cost and expense, the remediation prior to the
Commencement Date, in a manner acceptable to Landlord in its sole and absolute
discretion and otherwise in compliance with Legal Requirements, of Hazardous
Materials discovered in the Premises during the construction of Landlord’s Work
requiring remediation.

 

Tenant shall be solely responsible for ensuring that the Base Building
Improvements and the Tenant Improvements design and specifications for the
Premises are consistent with Tenant’s requirements.  Tenant shall be solely
responsible for all costs incurred by Landlord to alter the Base Building
Improvements as a result of Tenant’s requested changes.  Notwithstanding
anything to the contrary contained herein, Landlord is under no obligation to
make any changes to the Base Building Improvements.  Landlord shall have no
obligation to, and shall not, secure any permits, approvals or entitlements
related to Tenant’s specific use of the Premises or Tenant’s business operations
therein.  Other than its obligation to perform the Base Building Improvements
and the Tenant Improvements, Landlord shall not have any obligation whatsoever
with respect to the finishing of the Premises for Tenant’s use and occupancy. 
The current schedule for Landlord’s Work (which remains subject to change) is
attached to this Work Letter as Annex 2 (“Schedule”).  Subject to Tenant Delays
and Force Majeure delays, Landlord shall use reasonable efforts to perform
Landlord’s Work in accordance with the Schedule, as such schedule may be
modified for any Changes requested by Tenant pursuant to Section 4.

 

(b)                                 Tenant’s Space Plans.  Landlord and Tenant
acknowledge and agree that the space plan prepared by the TI Architect attached
hereto as Annex 3 (the “Space Plan”) and the tenant improvements specifications
attached hereto as Annex 4 (the “TI Specifications”) have been approved by both
Landlord and Tenant.

 

(c)                                  Working Drawings.  Landlord shall cause the
TI Architect to prepare and deliver to Tenant for review and comment
construction plans, specifications and drawings for the Tenant Improvements (“TI
Construction Drawings”), which TI Construction Drawings shall be prepared
substantially in accordance with the Space Plan and the TI Specifications. 
Tenant shall be solely responsible for ensuring that the TI Construction
Drawings reflect Tenant’s requirements for the Tenant Improvements.  Tenant
shall deliver its written comments on the TI Construction Drawings to Landlord
not later than 10 business days after Tenant’s receipt of the same; provided,
however, that Tenant may not disapprove any matter that is consistent with the
Space Plan and/or the TI Specifications without submitting a Change Request. 
Landlord and the TI Architect shall consider all such comments in good faith and
shall, within 10 business days after receipt, notify Tenant how Landlord
proposes to respond to such comments, but Tenant’s review rights pursuant to the
foregoing sentence shall not delay the design or construction schedule for the
Tenant Improvements.  Any disputes in connection with such comments shall be
resolved in accordance with Section 2(d) hereof.  Provided that the TI
Construction Drawings are consistent with the Space Plan and the TI
Specifications, Tenant shall approve the TI Construction Drawings submitted by
Landlord, unless Tenant submits a Change Request.  Once approved by Tenant,
subject to the provisions of Section 4 below, Landlord shall not materially
modify the TI Construction Drawings except as may be reasonably required in
connection with the issuance of the TI Permit (as defined in
Section 3(b) below).

 

(d)                                 Approval and Completion.  It is hereby
acknowledged by Landlord and Tenant that the TI Construction Drawings must be
completed and approved not later than the date reflected in the attached
Schedule for completion of the TI Construction Drawings, in order for the
Landlord’s Work to be Substantially Complete by the Target Commencement Date (as
defined in the Lease).  Upon any dispute regarding the design of the Tenant
Improvements, which is not settled within 10 business days after notice of such
dispute is delivered by one party to the other, Tenant may make the final
decision regarding the design of the Tenant Improvements, provided (i) Tenant
acts reasonably and such final decision is either consistent with or a
compromise between Landlord’s and Tenant’s positions with respect to such
dispute, (ii) that all costs and expenses resulting from any such decision by
Tenant shall be payable out of the TI Fund (as defined in Section 5(d) below),
and (iii) Tenant’s decision will not affect the base Building, structural
components of the Building or any Building Systems.  Any changes to the TI
Construction Drawings following Landlord’s and Tenant’s approval of same
requested by Tenant shall be processed as provided in Section 4 hereof.

 

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3.                                      Performance of Landlord’s Work.

 

(a)                                 Definition of Landlord’s Work.  As used
herein, the term “Landlord’s Work” shall mean collectively the work of
constructing the Base Building Improvements and the Tenant Improvements.  In
addition, as part of Landlord’s Work, Landlord shall, at Landlord’s sole cost
and expense, (i) conduct certain tests and inspections, as reasonably determined
by Landlord, to determine whether there exist moisture levels in the first floor
laboratory of the Premises which, in Landlord’s reasonable discretion, require
mitigation, and (ii) if Landlord so determines that there exist moisture levels
in such first floor laboratory which require mitigation, Landlord shall take the
appropriate action, as reasonably determined by Landlord, to mitigate such
moisture levels, which mitigation may, in Landlord’s reasonable discretion,
include the installation of a moisture barrier on the floor of such first floor
laboratory.

 

(b)                                 Commencement and Permitting.  Landlord shall
use reasonable efforts to obtain building permits for the construction of the
Base Building Improvements and the Tenant Improvements in accordance with the
Schedule.  Landlord shall commence construction of the Tenant Improvements upon
obtaining a building permit (the “TI Permit”) authorizing the construction of
the Tenant Improvements consistent with the TI Construction Drawings approved by
Tenant.  The cost of obtaining the TI Permit shall be payable from the TI Fund. 
If reasonably necessary, upon Landlord’s request, Tenant shall reasonably assist
Landlord in obtaining the TI Permit, at no material cost or expense to Tenant. 
If any Governmental Authority having jurisdiction over the construction of
Landlord’s Work or any portion thereof shall impose terms or conditions upon the
construction thereof that:  (i) are inconsistent with Landlord’s obligations
hereunder, (ii) increase the cost of constructing Landlord’s Work, or (iii) will
materially delay the construction of Landlord’s Work, Landlord and Tenant shall
reasonably and in good faith seek means by which to mitigate or eliminate any
such adverse terms and conditions.

 

(c)                                  Completion of Landlord’s Work.  Landlord
shall substantially complete or cause to be substantially completed Landlord’s
Work in a good and workmanlike manner, in accordance with the TI Permit, the
Base Building Specifications, the TI Construction Drawings, applicable Legal
Requirements and Changes implemented in accordance with Section 4 below,
subject, in each case, to Minor Variations and normal “punch list” items of a
non-material nature that do not interfere with Tenant’s access to or use of the
Premises and with a certificate or temporary certificate of occupancy (or an
equivalent approval having been issued) for the Premises permitting lawful
occupancy of the Premises as improved by Landlord’s Work (but specifically
excluding any permits, licenses or other governmental approvals required to be
obtained in connection with Tenant’s operations in the Premises)(“Substantial
Completion” or “Substantially Complete”).  Upon Substantial Completion of
Landlord’s Work, Landlord shall require the TI Architect and the general
contractor to execute and deliver, for the benefit of Tenant and Landlord, a
Certificate of Substantial Completion in the form of the American Institute of
Architects (“AIA”) document G704.  For purposes of this Work Letter, “Minor
Variations” shall mean any modifications reasonably required:  (i) to comply
with all applicable Legal Requirements and/or to obtain or to comply with any
required permit (including the TI Permit); (ii) to comply with any Change
Request by Tenant for modifications to Landlord’s Work; (iii) to comport with
good design, engineering, and construction practices that are not material; or
(iv) to make reasonable adjustments for field deviations or conditions
encountered during the construction of Landlord’s Work.

 

(d)                                 Selection of Materials.  Where more than one
type of material or structure is indicated on the TI Construction Drawings
approved by Landlord and Tenant, the option will be selected at Landlord’s
reasonable discretion.  As to all building materials and equipment that Landlord
is obligated to supply under this Work Letter, Landlord shall select the
manufacturer thereof in its reasonable discretion.

 

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(e)                                  Delivery of the Premises.  When Landlord’s
Work is Substantially Complete, subject to the remaining terms and provisions of
this Section 3(e), Tenant shall accept the Premises.  Tenant’s taking possession
and acceptance of the Premises shall not constitute a waiver of:  (i) any
warranty with respect to workmanship (including installation of equipment) or
material (exclusive of equipment provided directly by manufacturers), (ii) any
non-compliance of Landlord’s Work with applicable Legal Requirements, (iii) any
claim that the Tenant Improvements were not completed substantially in
accordance with the TI Construction Drawings (subject to Minor Variations and
such other changes as are permitted hereunder), or (iv) any claim that the Base
Building Improvements were not completed substantially in accordance with the
Base Building Specifications (subject to Minor Variations and such other changes
as are permitted hereunder)(collectively, a “Construction Defect”).  Tenant
shall have one year after Substantial Completion within which to notify Landlord
of any such Construction Defect discovered by Tenant, and Landlord shall use
reasonable efforts to remedy or cause the responsible contractor to remedy any
such Construction Defect within 30 days thereafter.  Notwithstanding the
foregoing, Landlord shall not be in default under the Lease if the applicable
contractor, despite Landlord’s reasonable efforts, fails to remedy such
Construction Defect within such 30-day period. If the contractor fails to remedy
such Construction Defect within a reasonable time, Landlord shall use reasonable
efforts to remedy the Construction Defect within a reasonable period.

 

Tenant shall be entitled to receive the benefit of all construction warranties
and manufacturer’s equipment warranties relating to equipment installed in the
Premises.  If requested by Tenant, Landlord shall attempt to obtain extended
warranties from manufacturers and suppliers of such equipment, but the cost of
any such extended warranties shall be borne solely out of the TI Fund.  Landlord
shall promptly undertake and complete, or cause to be completed, all punch list
items.

 

(f)                                   Commencement Date Delay.  Except as
otherwise provided in the Lease, Delivery of the Premises shall occur when
Landlord’s Work has been Substantially Completed and Landlord has delivered
possession of the Premises to Tenant, except to the extent that completion of
Landlord’s Work shall have been actually delayed by any one or more of the
following causes (“Tenant Delay”):

 

(i)                                     Tenant’s Representative was not
available to give or receive any Communication or to take any other action
required to be taken by Tenant hereunder within a reasonable period of time (not
to exceed 3 business days) after written request from Landlord;

 

(ii)                                  Tenant’s request for Change Requests (as
defined in Section 4(a) below) whether or not any such Change Requests are
actually performed;

 

(iii)                               Construction of any Change Requests (as
defined in Section 4(a);

 

(iv)                              Tenant’s request for materials, finishes or
installations requiring unusually long lead times (provided Landlord will
request that the general contractor inform Tenant of any long lead time items
and identify substitutes for such items as soon as reasonably possible);

 

(v)                                 Tenant’s delay in reviewing, revising or
approving plans and specifications beyond the periods set forth herein;

 

(vi)                              Tenant’s delay in providing information
critical to the normal progression of Landlord’s Work.  Tenant shall provide
such information as soon as reasonably possible, but in no event longer than 5
business days after receipt of any request for such information from Landlord;

 

(vii)                           Tenant’s delay in making payments to Landlord
for Excess TI Costs (as defined in Section 5(d) below); or

 

(viii)                        Any other act or omission by Tenant or any Tenant
Party (as defined in the Lease), or persons employed by any of such persons that
continues for more than 2 business day after Landlord’s notice thereof to
Tenant.

 

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If Delivery is delayed for any of the foregoing reasons, then Landlord shall
cause the TI Architect to certify the date on which the Tenant Improvements
would have been Substantially Completed but for such Tenant Delay and such
certified date shall be the date of Delivery.

 

4.                                      Changes.  Any changes requested by
Tenant to the design of the Tenant Improvements after the delivery and approval
by Landlord and Tenant of the Space Plan or the TI Construction Drawings,
respectively, shall be requested and instituted in accordance with the
provisions of this Section 4 and shall be subject to the written approval of
Landlord and the TI Architect, such approval not to be unreasonably withheld,
conditioned or delayed.

 

(a)                                 Tenant’s Request For Changes.  If Tenant
shall request changes to the Tenant Improvements (“Changes”), Tenant shall
request such Changes by notifying Landlord in writing in substantially the same
form as the AIA standard change order form (a “Change Request”), which Change
Request shall detail the nature and extent of any such Change.  Such Change
Request must be signed by Tenant’s Representative.  Landlord shall, before
proceeding with any Change, use commercially reasonable efforts to respond to
Tenant as soon as is reasonably possible with an estimate of:  (i) the time it
will take, and (ii) the architectural and engineering fees and costs that will
be incurred, to analyze such Change Request (which costs shall be paid from the
TI Fund to the extent actually incurred, whether or not such change is
implemented).  Landlord shall thereafter submit to Tenant in writing, within 5
business days of receipt of the Change Request (or such longer period of time as
is reasonably required depending on the extent of the Change Request), an
analysis of the additional cost or savings involved, including, without
limitation, architectural and engineering costs and the period of time, if any,
that the Change will extend the date on which Landlord’s Work will be
Substantially Complete.  Any such delay in the completion of Landlord’s Work
caused by a Change, including any suspension of Landlord’s Work while any such
Change is being evaluated and/or designed, shall be Tenant Delay to the extent
that such delay actually delays Substantial Completion of Landlord’s Work beyond
the date specified therefor on the Schedule.

 

(b)                                 Implementation of Changes.  If Tenant: 
(i) approves in writing the cost or savings and the estimated extension in the
time for completion of Landlord’s Work, if any, and (ii) deposits with Landlord
any Excess TI Costs required in connection with such Change, Landlord shall
cause the approved Change to be instituted.  Notwithstanding any approval or
disapproval by Tenant of any estimate of the delay caused by such proposed
Change, the TI Architect’s determination of the amount of Tenant Delay in
connection with such Change shall be final and binding on Landlord and Tenant.

 

5.                                      Costs.

 

(a)                                 Budget For Tenant Improvements.  Landlord
and Tenant have approved a detailed breakdown by trade of the costs incurred or
that will be incurred in connection with the design and construction of the
Tenant Improvements (the “Budget”).  The Budget approved by Tenant and Landlord
includes (i) a payment to Tenant’s construction consultant Hughes Marino equal
to 3% of the Tenant Improvement Allowance (as hereinafter defined) (the “Hughes
Marino Fee”), and (ii) a payment to Landlord of administrative rent
(“Administrative Rent”) equal to 1% of the TI Costs, for monitoring and
inspecting the construction of the Tenant Improvements and Changes, all of which
shall be payable from the TI Fund (as defined in Section 5(d)).  Landlord shall
not charge any fees other than the Administrative Rent for monitoring and
inspecting the construction of the Tenant Improvements and Changes. If the
Budget is greater than the TI Allowance, Tenant shall deposit with Landlord the
difference, in cash, prior to the commencement of construction of the Tenant
Improvements or Changes, for disbursement by Landlord as described in
Section 5(d).

 

(b)                                 TI Allowance.  Landlord shall provide to
Tenant a tenant improvement allowance (collectively, the “TI Allowance”) as
follows:

 

1.                                      a “Tenant Improvement Allowance” in the
maximum amount of $180.00 per rentable square foot in the Premises; and

 

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2.                                      to the extent elected to be used by
Tenant, an “Additional Tenant Improvement Allowance” in the maximum amount of
$15.00 per rentable square foot in the Premises, which shall, to the extent
used, result in the payment of TI Rent as set forth in the Section 4(b) of the
Lease.  Within 10 days after Landlord’s delivery of the Budget to Tenant, Tenant
shall notify Landlord how much of the Additional Tenant Improvement Allowance
Tenant has elected to receive from Landlord.  Such election shall be final and
binding on Tenant, and may not thereafter be modified without Landlord’s
consent, which may be granted or withheld in Landlord’s sole and absolute
discretion.

 

The TI Allowance shall be disbursed in accordance with this Work Letter. Except
as otherwise expressly provided in this Work Letter, Tenant shall have no right
to the use or benefit (including any reduction to Base Rent) of any portion of
the TI Allowance not required for the construction of the Tenant Improvements
described in the TI Construction Drawings approved pursuant to Section 2(d) or
(iii) any Changes pursuant to Section 4.  Tenant shall have no right to any
portion of the TI Allowance that is not disbursed before the last day of the
month that is 6 months after the date of the Substantial Completion of the
Tenant Improvements.

 

(c)                                  Costs Includable in TI Fund.  The TI Fund
shall be used solely for the payment of design, permits and construction costs
in connection with the construction of the Tenant Improvements, including,
without limitation, the cost of electrical power and other utilities used in
connection with the construction of the Tenant Improvements, the cost of
preparing the Space Plan and the TI Construction Drawings, the Hughes Marino
Fee, Landlord’s Administrative Rent, Landlord’s out-of-pocket expenses, costs
resulting from Tenant Delays and the cost of Changes (collectively, “TI
Costs”).  Notwithstanding anything to the contrary contained herein, the TI Fund
shall not be used to purchase any furniture, personal property or other
non-Building system materials or equipment, including, but not limited to,
Tenant’s voice or data cabling, non-ducted biological safety cabinets and other
scientific equipment not incorporated into the Tenant Improvements; provided,
however, that, to the extent that any portion of the TI Allowance remains unused
following the payment in full for the cost of the Tenant Improvements reflected
in the Construction Drawings, Tenant may utilize up to $7.00 per rentable square
foot of the TI Allowance for network cabling, fixtures and other costs and
expenses reasonably acceptable to Landlord, which items shall be the property of
Landlord and shall not be removed from the Premises by Tenant during the Term of
the Lease or at the expiration or earlier termination of the Lease unless
replaced by items of equal or better quality.

 

(d)                                 Excess TI Costs.  Except as otherwise
provided in this Work Letter, Landlord shall have no obligation to bear any
portion of the cost of any of the Tenant Improvements except to the extent of
the TI Allowance.  If at any time the remaining TI Costs under the Budget exceed
the remaining unexpended TI Allowance, Tenant shall deposit with Landlord, as a
condition precedent to Landlord’s obligation to complete the Tenant
Improvements, 100% of the then current TI Cost in excess of the remaining TI
Allowance (“Excess TI Costs”).  If Tenant fails to deposit any Excess TI Costs
with Landlord within 10 days after receipt of written notice, Landlord shall
have all of the rights and remedies set forth in the Lease for nonpayment of
Rent (including, but not limited to, the right to interest at the Default Rate
and the right to assess a late charge).  For purposes of any litigation
instituted with regard to such amounts, those amounts will be deemed Rent under
the Lease.  The TI Allowance and Excess TI Costs are herein referred to as the
“TI Fund.”  Funds deposited by Tenant shall be the first disbursed to pay TI
Costs.  Notwithstanding anything to the contrary set forth in this Section 5(d),
Tenant shall be fully and solely liable for TI Costs and the cost of Minor
Variations in excess of the TI Allowance.  If upon completion of the Tenant
Improvements and the payment of all sums due in connection therewith there
remains any undisbursed portion of the TI Fund, Tenant shall be entitled to such
undisbursed TI Fund solely to the extent of any Excess TI Costs deposit Tenant
has actually made with Landlord.

 

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6.                                      Tenant Access.

 

(a)                                 Tenant’s Access Rights.  Landlord hereby
agrees to permit Tenant access, at Tenant’s sole risk and expense, to the
Building (i) commencing on the date that Landlord commences constructing the
Tenant Improvements (and during the performance of Landlord’s Work) to perform
any work (including, but not limited to, installation of voice/data cabling,
security and audio/visual equipment reasonably approved by Landlord)(“Tenant’s
Work”) required by Tenant other than Landlord’s Work, provided that such
Tenant’s Work is coordinated with the TI Architect and the general contractor,
and complies with the Lease and all other reasonable restrictions and conditions
Landlord may impose, and (ii) prior to the completion of Landlord’s Work, to
inspect and observe work in process; all such access shall be during normal
business hours or at such other times as are reasonably designated by Landlord. 
Notwithstanding the foregoing, Tenant shall have no right to enter onto the
Premises or the Project unless and until Tenant shall deliver to Landlord
evidence reasonably satisfactory to Landlord demonstrating that any insurance
reasonably required by Landlord in connection with such pre-commencement access
(including, but not limited to, any insurance that Landlord may require pursuant
to the Lease) is in full force and effect.  Any entry by Tenant shall comply
with all established safety practices of Landlord’s contractor and Landlord
until completion of Landlord’s Work and acceptance thereof by Tenant.

 

(b)                                 No Interference.  Neither Tenant nor any
Tenant Party (as defined in the Lease) shall interfere with the performance of
Landlord’s Work, nor with any inspections or issuance of final approvals by
applicable Governmental Authorities, and upon any such interference, Landlord
shall have the right to exclude Tenant and any Tenant Party from the Premises
and the Project until Substantial Completion of Landlord’s Work.

 

(c)                                  No Acceptance of Premises.  The fact that
Tenant may, with Landlord’s consent, enter into the Project prior to the date
Landlord’s Work is Substantially Complete for the purpose of performing Tenant’s
Work shall not be deemed an acceptance by Tenant of possession of the Premises,
but in such event Tenant shall defend with counsel reasonably acceptable by
Landlord, indemnify and hold Landlord harmless from and against any loss of or
damage to Tenant’s property, completed work, fixtures, equipment, materials or
merchandise, and from liability for death of, or injury to, any person, caused
by the act or omission of Tenant or any Tenant Party.

 

7.                                      Miscellaneous.

 

(a)                                 Consents.  Whenever consent or approval of
either party is required under this Work Letter, that party shall not
unreasonably withhold, condition or delay such consent or approval, unless
expressly set forth herein to the contrary.

 

(b)                                 Modification.  No modification, waiver or
amendment of this Work Letter or of any of its conditions or provisions shall be
binding upon Landlord or Tenant unless in writing signed by Landlord and Tenant.

 

(c)                                  Default.  Notwithstanding anything set
forth herein or in the Lease to the contrary, Landlord shall not have any
obligation to perform any work hereunder or to fund any portion of the TI Fund
during any period Tenant is in Default under the Lease.

 

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EXHIBIT D TO LEASE

 

ACKNOWLEDGMENT OF COMMENCEMENT DATE

 

This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this       day of
              ,     , between ARE-SD REGION NO. 18, LLC, Delaware limited
liability company (“Landlord”), and ONCOSEC MEDICAL INCORPORATED, a Nevada
corporation (“Tenant”), and is attached to and made a part of the Lease dated
              ,       (the “Lease”), by and between Landlord and Tenant.  Any
initially capitalized terms used but not defined herein shall have the meanings
given them in the Lease.

 

Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease,
that the Commencement Date of the Base Term of the Lease is               ,
     , the Rent Commencement Date is               ,      , and the termination
date of the Base Term of the Lease shall be midnight on               ,      . 
In case of a conflict between the terms of the Lease and the terms of this
Acknowledgment of Commencement Date, this Acknowledgment of Commencement Date
shall control for all purposes.

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this ACKNOWLEDGMENT OF
COMMENCEMENT DATE to be effective on the date first above written.

 

 

TENANT:

 

 

 

ONCOSEC MEDICAL INCORPORATED,

 

a Nevada corporation

 

 

 

 

 

By:

/s/ Punit Dhillon

 

Its:

CEO

 

 

 

 

 

LANDLORD:

 

 

 

ARE-SD REGION NO. 18, LLC,

 

a Delaware limited liability company

 

 

 

By:

ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

 

 

a Delaware limited partnership,

 

 

managing member

 

 

 

 

 

By:

ARE-QRS CORP.,

 

 

 

a Maryland corporation,

 

 

 

general partner

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

Its:

 

 

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EXHIBIT E TO LEASE

 

Rules and Regulations

 

1.             The sidewalk, entries, and driveways of the Project shall not be
obstructed by Tenant, or any Tenant Party, or used by them for any purpose other
than ingress and egress to and from the Premises.

 

2.             Except as otherwise provided in the Lease, Tenant shall not place
any objects, including antennas, outdoor furniture, etc., in the parking areas,
landscaped areas or other areas outside of its Premises, or on the roof of the
Project.

 

3.             Except for animals assisting the disabled, no animals shall be
allowed in the offices, halls, or corridors in the Project.

 

4.             Tenant shall not disturb the occupants of the Project or
adjoining buildings by the use of any radio or musical instrument or by the
making of loud or improper noises.

 

5.             If Tenant desires telegraphic, telephonic or other electric
connections in the Premises, Landlord or its agent will direct the electrician
as to where and how the wires may be introduced; and, without such direction, no
boring or cutting of wires will be permitted.  Any such installation or
connection shall be made at Tenant’s expense.

 

6.             Tenant shall not install or operate any steam or gas engine or
boiler, or other mechanical apparatus in the Premises, except as specifically
approved in the Lease.  The use of oil, gas or inflammable liquids for heating,
lighting or any other purpose is expressly prohibited.  Explosives or other
articles deemed extra hazardous shall not be brought into the Project.

 

7.             Parking any type of recreational vehicles is specifically
prohibited on or about the Project.  Except for the overnight parking of
operative vehicles, no vehicle of any type shall be stored in the parking areas
at any time.  In the event that a vehicle is disabled, it shall be removed
within 48 hours.  There shall be no “For Sale” or other advertising signs on or
about any parked vehicle.  All vehicles shall be parked in the designated
parking areas in conformity with all signs and other markings.  All parking will
be open parking, and no reserved parking, numbering or lettering of individual
spaces will be permitted except as specified by Landlord.

 

8.             Tenant shall maintain the Premises free from rodents, insects and
other pests.

 

9.             Landlord reserves the right to exclude or expel from the Project
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs or who shall in any manner do any act in violation
of the Rules and Regulations of the Project.

 

10.          Tenant shall not cause any unnecessary labor by reason of Tenant’s
carelessness or indifference in the preservation of good order and cleanliness. 
Landlord shall not be responsible to Tenant for any loss of property on the
Premises, however occurring, or for any damage done to the effects of Tenant by
the janitors or any other employee or person.

 

11.          Tenant shall give Landlord prompt notice of any defects in the
water, lawn sprinkler, sewage, gas pipes, electrical lights and fixtures,
heating apparatus, or any other service equipment affecting the Premises.

 

12.          Tenant shall not permit storage outside the Premises, including
without limitation, outside storage of trucks and other vehicles, or dumping of
waste or refuse or permit any harmful materials to be placed in any drainage
system or sanitary system in or about the Premises.

 

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13.          All moveable trash receptacles provided by the trash disposal firm
for the Premises must be kept in the trash enclosure areas, if any, provided for
that purpose.

 

14.          No auction, public or private, will be permitted on the Premises or
the Project.

 

15.          No awnings shall be placed over the windows in the Premises except
with the prior written consent of Landlord.

 

16.          The Premises shall not be used for lodging, sleeping or cooking or
for any immoral or illegal purposes or for any purpose other than that specified
in the Lease.  No gaming devices shall be operated in the Premises.

 

17.          Tenant shall ascertain from Landlord the maximum amount of
electrical current which can safely be used in the Premises, taking into account
the capacity of the electrical wiring in the Project and the Premises and the
needs of other tenants, and shall not use more than such safe capacity. 
Landlord’s consent to the installation of electric equipment shall not relieve
Tenant from the obligation not to use more electricity than such safe capacity.

 

18.          Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage.

 

19.          Tenant shall not install or operate on the Premises any machinery
or mechanical devices of a nature not directly related to Tenant’s ordinary use
of the Premises and shall keep all such machinery free of vibration, noise and
air waves which may be transmitted beyond the Premises.

 

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EXHIBIT F TO LEASE

 

TENANT’S PERSONAL PROPERTY

 

None.

 

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