Exhibit 10.1
LEASE
THIS LEASE (“Lease”), made and entered into this 28th day of August, 2009,
between NORTHBROOK COMMERCIAL PROPERTIES, LLC, an Illinois limited liability
company, with offices located at 1818 Skokie Blvd., Northbrook, Illinois, 60062,
(hereinafter called “Landlord”) and NANOSPHERE, INC., a Delaware corporation,
having an address at 4088 Commercial Ave., Northbrook, IL 60062 (hereinafter
called “Tenant”);
1. Premises.
A. Landlord desires to lease to Tenant, and Tenant desires to lease from
Landlord, 40,945 rentable square feet of space (including 145 square feet of
shared dock space) as depicted in the floor plan attached hereto has Exhibit A
(hereinafter the “Premises”) in the building owned by Landlord and located at
4080-4100 Commercial Avenue, Northbrook, IL, (hereinafter the “Building”), which
Building, consists of 83,172 rentable square feet.
B. Landlord hereby grants to Tenant, during the Term of this Lease or any
extension thereof, in a ratio of 3.5 parking spaces per 1,000 square feet of
rentable space leased by Tenant, the non-exclusive use in common with other
tenants or occupants of the Building of 143 parking spaces for use by Tenant’s
employees, invitees, visitors and agents of the parking spaces adjacent to the
Building.
2. Term.
The term of this Lease shall be for a period of four (4) years, which term shall
commence on June 1, 2010 (hereinafter “Commencement Date”) and end on May 31,
2014; (hereinafter “Term”) said Term subject to extensions pursuant to agreement
of the parties or any option hereinafter set forth.
3. Base Rent.
Tenant shall pay to Landlord a late charge equal to One Thousand Two Hundred and
00/100 Dollars ($1,200.00) for any installment of monthly Base Rent (defined
below) or any other amount payable under this Lease that is paid late as
liquidated damages to compensate Landlord for costs and inconveniences of
special handling and disruption of cash flow. Late charges and interest in the
amount of the higher of either ten percent (10%) per annum or prime rate plus
two points per annum as declared from time to time by The Northern Trust Bank
located in Chicago, Illinois shall commence on the fifth business day of each
calendar month. In any two (2) year period during the Lease Term, Tenant shall
not be charged late fees or interest on two (2) late payments so long as Tenant
pays the late amount within three (3) days after receipt of a notice indicating
a late payment.
A. Base Rent — Initial Term.
During the initial Term of the Lease, Tenant will pay to Landlord, in advance
and without demand at the office of the Landlord or at such other place as
Landlord from time to time may notify Tenant in writing, monthly base rent,
(hereinafter “Base Rent”) payable on the first day of each calendar month
pursuant to the following schedule:

 

 

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

 

                          Lease Years   Months     Annual Bas Rent Rate    
Monthly Base Rent  
1
    1-12     $ 10.25/s.f     $ 34,956.77  
2
    13-24     $ 10.55/s.f     $ 35,979.90  
3
    25-36     $ 10.85/s.f     $ 37,003.02  
4
    37-48     $ 11.15/s.f     $ 38,026.15  

with appropriate proration of Base Rent if the initial Term or any portion of
the Term hereof should commence on a date other than the first day of a calendar
month. The first day of month one (1) shown above is the Base Rent Commencement
Date per Section 3 B below. For purposes of this Lease, the term “Lease Year”
means the one year period beginning on the Commencement Date and ending 364 days
thereafter and the anniversary thereof each year.
B. Rent Commencement Dates.
Tenant shall commence paying Base Rent to Landlord for the Premises on the
Commencement Date of June 1, 2010 (hereinafter the “Base Rent Commencement
Date”). Tenant shall commence paying Additional Rent to Landlord for the
Premises on the Commencement Date, (hereinafter the “Additional Rent
Commencement Date”).
C. Additional Rent.
In addition to the Base Rent required to be paid by Tenant under this Section 3,
Tenant shall pay to Landlord as additional rent all other amounts required to be
paid under the terms of this Lease and required to be paid by Tenant under
Section 50 below, which amounts constitute costs for real estate taxes,
insurance and common area maintenance. All amounts payable to Landlord under
this Lease constitute rent and shall be payable without notice, demand,
deduction or offset, except as set forth in this Lease, to such person and at
such place as Landlord may from time to time designate by written notice to
Tenant.
4. Condition of Premises/Landlord’s Work.
A. Tenant has occupied the Premises since on or about March 24, 2003 under a
written lease agreement dated March 24, 2003. Landlord shall have no obligation
to make any improvements or alterations to the Premises or the Building
whatsoever prior to the Commencement Date, and Tenant accepts the Premises in an
“AS IS” condition, with all faults; the foregoing, however, shall not relieve
Landlord of its maintenance and repair obligations with respect to the Building
as otherwise set forth in this Lease.
B. Tenant Improvements. With respect to “Tenant Improvements”, Tenant agrees
that all construction has been performed in a workmanlike manner with valid
permits. If any improvements to the Building or Premises are required by the
local municipality due to the Tenant Improvements or alterations requested by
Tenant, such additional improvements shall be at Tenant’s expense.
5. Use.
Tenant shall have the right to use the Premises for any lawful purpose permitted
by applicable zoning ordinances. Tenant in its use and occupancy of the Premises
shall not

 

2

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

 

commit waste, nor overload the floors or structure, nor subject the Premises to
any use which would tend to damage any portion thereof, provided such tendency
to cause damage is reasonably foreseeable.
All of the portions of the Building made available by Landlord for use in common
to tenants and their employees and invitees (“Common Areas”) shall at all times
remain subject to Landlord’s exclusive control and Landlord shall be entitled to
make such changes in the Common Areas as it deems appropriate, so long as access
to the Premises is not materially changed and Tenant’s occupancy of the Premises
for its desired use is not interrupted.
6. Security Deposit.
Tenant has deposited the sum of Seventy Five Thousand and 00/100 Dollars
($75,000.00) (hereinafter the “Security Deposit”) with Landlord. This Security
Deposit will be returned to Tenant without interest within thirty (30) days
after the expiration or earlier termination of the Lease and upon return of the
Premises to Landlord in full compliance with the terms -of this Lease. In the
event Tenant defaults under any provision of this Lease, Landlord may, after
written notice to Tenant and after the expiration of applicable cure periods,
apply all, or any part of the Security Deposit to amounts owed by Tenant
hereunder. In the event Landlord elects to apply the Security Deposit as
provided for above, Tenant shall promptly restore such deposit to the original
amount. Landlord may, at its discretion, commingle such funds with its other
funds.
7. Compliance.
Tenant shall, during the Term of this Lease conform the use Tenant makes of the
Premises to all applicable laws, statutes, orders, ordinances, rules and
regulations of all federal, state or political subdivisions having jurisdiction
over the Premises, now in force or that may be enacted hereafter, provided that
the provisions of this Paragraph 7 shall not require the Tenant to structurally
rebuild, the Premises and/or the improvements forming a part of the Premises to
make said Premises and/or improvements comply with any such laws, statutes,
orders, ordinances, rules or regulations, unless such structural improvements
are required due to the specific use that Tenant makes of the Premises. To
Landlord’s knowledge, since the date that is two (2) years prior to the
Commencement Date, Landlord has not received any written notice from any
governmental body that the Building violates in any material respect any
governmental law or regulation, which remains unresolved with the issuing
governmental body.
8. No Waste or Damage.
Tenant shall not commit any waste upon or do any damage to the Premises. Tenant
shall not use or permit the use of the Premises for any unlawful purpose. Tenant
shall not permit any rubbish, refuse or garbage to accumulate or create a fire
hazard in or about the Premises. In connection with its occupancy of the
Premises, Tenant shall not use the Premises in violation of any laws,
ordinances, regulations or orders of any duly constituted authorities of the
city, county, state and federal government.
9. Changes, Alterations and Additions.

 

3

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

 

(a) No material changes, alterations or additions shall be made to the Premises
by Tenant without the prior approval of Landlord, which approval shall not be
unreasonably withheld. For purposes of this Section 9, a “material” change,
alteration or addition shall be a change that requires the expenditure of a sum
in excess of Twenty-Five Thousand and 00/100 Dollars ($25,000.00). Prior to
making any such changes, alterations or additions, Tenant shall submit written
plans and drawings respecting same to Landlord and Landlord shall approve or
disapprove same within fifteen (15) days after receipt thereof. All changes,
alterations and additions shall comply with the applicable City, County and
State laws, statutes, orders, ordinances, rules and regulations. Landlord
agrees, if necessary, to join in any applications to governmental authorities
for such permits as may be required to do the work contemplated in this
Paragraph 9. Any Tenant Improvements, permanent additions to or alterations of
the Premises, except removable paneling and wall fixtures and furniture and
trade fixtures (and further excluding all signs, and goods and materials used in
the Tenant’s business) shall become a part of the realty and belong to Landlord
unless otherwise agreed by Landlord and Tenant. If Landlord so requests at least
three (3) months before the expiration of the Lease, Tenant shall remove its
Tenant Improvements and other alterations to the Premises at the expiration of
the Lease and restore the Premises to an office condition or to such condition
as existed immediately before the installation of the Tenant Improvements or
alterations. In no event will Tenant be required to remove the labs existing in
the Premises upon the Commencement Date. Tenant’s removable paneling and wall
fixtures and furniture, trade fixtures, signs, laboratory equipment, goods and
materials used in Tenant’s business shall at all times remain personal property
and may be removed from time to time by Tenant provided, however, that Tenant
shall be responsible for the cost of repair and restoration of any physical
injury to the Premises caused by the removal of any such property. The furniture
listed in Exhibit C to this Lease (the “Conveyed Furniture”) has been conveyed
to Tenant and is the sole property of Tenant. The items listed in Exhibit D and
in Exhibit E (collectively, the “Landlord Equipment Inventory”) to this Lease
including the HVAC equipment not installed by Tenant, generators, UPS equipment,
security system and fume hoods shall at all times remain the property of
Landlord. Provided, however, all additional HVAC and Lab Infrastructure and
Equipment (the “Tenant’s Equipment Inventory”) which is scheduled and identified
in Exhibit E-1 attached hereto and which Tenant has previously installed in the
Premises shall remain the property of Tenant. Tenant shall not be required to
remove Tenant’s Equipment Inventory, provided, however, to the extent that
Tenant elects to and actually does remove Tenant’s Equipment Inventory, Tenant
shall be responsible for the cost of repair and restoration of any physical
injury to the Premises caused by the removal of Tenant’s Equipment Inventory,
subject to ordinary wear and tear. A detailed schedule of all of Tenant’s
Equipment Inventory, signed and dated by Landlord and Tenant, is attached as
Exhibit F.
(b) Attached hereto as Exhibit G is a complete inventory, signed and dated by
Landlord and Tenant (the “Furniture Inventory”), of the Conveyed Furniture and
of all laboratory furniture which has been purchased and installed by Tenant
since March, 2003 (the “Tenant’s Furniture”). All of Tenant’s Furniture
scheduled on the Furniture Inventory shall remain the property of Tenant. Tenant
shall not be required to remove Tenant’s Furniture; provided, however, to the
extent Tenant elects to and actually does remove any Tenant’s Furniture, Tenant
shall be responsible for the cost of repair and restoration of any physical
injury to the Premises caused by the removal of Tenant’s Furniture, subject to
ordinary wear and tear.

 

4

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

 

(c) The Landlord and Tenant agree that the inventory items set forth in Exhibits
C, D, E, F and G may be expanded and supplemented by either Landlord or Tenant,
as applicable, to the extent either party can demonstrate, to the reasonable
satisifaction of the other party, that such inventory is owned by and has been
acquired and installed by such party. To the extent Tenant or Landlord acquires
and installs any future inventory itmes in the Premises or the Building (the
“Additional Inventory Items”), such Additional Inventory Items shall be added by
amending the appropriate Exhibit and attaching such amended Exhibit to the Lease
(d) Tenant has installed certain cables and wires for its phones, data and other
systems (the “Cabling”) in the Premises. Tenant agrees to identify and label all
existing Cabling and shall provide landlord with a schematic diagram of all such
Cabling within ninety (90) days after the Commencement Date. Provided Tenant has
labeled all such Cabling and has provided Landlord with the schematic diagram,
Tenant shall not be required to remove the Cabling upon termination of the
Lease. Landlord and Tenant acknowledge that significant cabling existed in the
Premises prior to Tenant’s lease of the Premises, and Tenant shall not be
required to remove, identify or label the pre-existing cabling.
10. Ingress and Egress.
The Landlord grants to Tenant the nonexclusive right to ingress and egress to
the Premises over (a) the existing streets and highways adjoining the Premises
and (b) any and all portions of the property and the Building of which the
Premises are a part. Tenant shall have full and unimpaired access to the
Premises at all times, twenty-four (24) hours a day, seven (7) days a week,
except as provided in Paragraphs 12, 16 and 17. The Landlord will not
unreasonably interrupt or disturb any entrances, and will use all reasonable
means to prevent any interruption, disturbance or deprivation by any third
party.
11. Services.
In addition to the repairs set forth in Section 12, Landlord shall perform or
provide the following services with respect to the Building;
(a) Maintenance of all Common Areas, including, without limitation, interior
lobbies, loading dock, hallways, landscaping, the fire alarm system and parking
areas;
(b) Water to the Premises;
(c) Snow and ice removal from outdoor common areas; and
(d) Access to the Premises at all times.
Notwithstanding anything contained herein to the contrary, in the event of any
interruption of services (which interruption is within Landlord’s control)
rendering all or any portion of the Premises untenantable, Tenant shall be
entitled to an abatement of rent for the affected portion of the Premises at
such time as the interruption exceeds five (5) business days.
12. Repairs.

 

5

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

 

(a) Landlord Repairs. Landlord, during the Term of this Lease and any extension
thereof, shall make (i) all repairs and replacements to all structural portions
of the Premises and Building, including, but not limited to, the exterior walls
(including doors), roof and foundations, pipes and conduits, and utility
installations, serving the Building and Premises, (ii) all repairs and
replacements to all Common Areas, including without limitation all sidewalks,
driveways, service areas and curbs (irrespective of any duty on the part of any
governmental agency to make or order such repairs and replacements), and
(iii) all repairs and replacements necessary to put and maintain the exterior of
the Building and parking area (including, but not limited to, filling holes and
resealing as necessary, but subject to normal wear and tear), including all
improvements now or hereafter thereon, and all appurtenances thereto (including
sewer and sewer connections, water and gas pipes and connections, electrical
wires and connections) in a safe and tenantable condition and in good order and
repair as expected for a comparable single story office flex building in the
Northern Suburbs of Chicago, Illinois, except for those repairs made necessary
by the negligent acts of the Tenant or its employees to the extent those repairs
are not covered by Landlord’s insurance. Landlord shall make all repairs to the
interior of the Premises which may be of a structural nature or which are caused
by structural failures or movement, repairs to the interior of the Premises made
necessary by leakage of the roof, or by leakage of any utility installation;
provided, however, that Landlord shall not be obligated to make repairs for any
structural damage caused by Tenant, its employees, invitees or agents. Upon the
necessity for any of the foregoing repairs and/or replacements, whether Landlord
learns of such necessity via notice from Tenant or otherwise, Landlord agrees to
expeditiously make such repairs and/or replacements at Landlord’s sole cost and
expense (i.e., not to be charged back to Tenant as part of common area cost).
Landlord shall commence such repairs and/or replacements not later than five
(5) business days after (or immediately after, in the event of imminent threat
to person or property) Landlord learns or is notified of the need therefor, and
shall diligently pursue such repairs and/or replacements to completion. Lawns,
landscaping and shrubbery care and snow removal shall be the responsibility of
Landlord and shall be a common area maintenance cost of which Tenant shall pay
its proportionate share.
(b) Tenant Repairs. Tenant, during the Term of this Lease and any extension
thereof, agrees to keep in good order and repair all interior portions of the
Premises (including overhead doors, docks contained within the Premises and the
electric operators thereof,), except such repairs as under this Lease Landlord
is required to make and except repairs which are made necessary because of
faulty construction and except repairs which are the obligation of Landlord
under Paragraph 16 of this Lease. Tenant shall also provide ordinary maintenance
for the plumbing and light fixtures (within the Premises) and shall replace any
interior glass (not part of the outside walls) which may be damaged or broken
with glass of the same quality. Tenant, at Tenant’s cost, will be responsible
for trash removal, janitorial and security for the Premises. In addition, Tenant
shall (at Tenant’s cost and expense, but subject to the following paragraph
12(c)) maintain and repair (but not insure) the items listed in Exhibit D and
Exhibit E as the Landlord Equipment Inventory that are being utilized by Tenant
during the Term of this Lease. Tenant shall be solely responsible for repair,
maintenance and replacement of Tenant’s Equipment Inventory (including, without
limitation, HVAC equipment previously installed by Tenant and which in the
future may be installed by Tenant) and Tenant’s Furniture. During the full term
of this Lease and any renewal, Tenant, at Tenant’s sole cost and expense, shall
obtain and keep in force, an annual maintenance contract (the “Maintenance
Contract”) for service and routine maintenance of the HVAC systems and
facilities serving the Premises. The Maintenance Contract shall be with a
company reasonable acceptable to Landlord.

 

6

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

 

(c) Capital Repair and Replacement of Landlord Equipment Inventory. In the event
that capital repairs or replacements are required to be made to any of Landlord
Equipment Inventory, or if this equipment requires repairs or replacement of
parts, or both, of a major or substantial nature (i.e., in excess of proper,
periodic and normal maintenance and inspection), these repairs or replacements,
or both, shall be made by Landlord, at Landlord’s initial expense. Examples of
“parts of a major or substantial nature” are compressors, boilers and fan units.
Upon Landlord’s completion of and payment in full of the cost of the repairs
and/or replacements in question, Landlord may invoice Tenant for Tenant’s Share
(defined below) of such cost, which invoice will be accompanied with reasonable
substantiating backup material. Tenant shall pay such amount, as Additional
Rent, within thirty (30) days after receipt of the invoice and backup materials.
“Tenant’s Share” is a fraction, the numerator of which is the number of years
(including partial years) remaining in the then-current term of the Lease, and
the denominator of which is the useful life (as defined by MACRS IRS Tables) of
such capital item.
(d) Self Help. Notwithstanding anything in Section 19(c) of this Lease to the
contrary, in the event Landlord (i) fails to timely commence, or thereafter, to
diligently pursue to completion, the repair or replacement of those items which
are Landlord’s responsibility under Section 12(a) within five (5) business days
after receiving written notice from Tenant of the need for such repair,
replacement or maintenance or (ii) fails to consistently provide any of
Landlord’s other maintenance obligations under this Lease within five
(5) business days after receiving written notice from Tenant of the need for
such repair, replacement or maintenance, Tenant shall have the right to
undertake such repair, replacement or maintenance and submit the invoices for
same to Landlord. Upon Landlord’s receipt and approval of the invoices for same
(which approval may be withheld only if and to the extent that Landlord
demonstrates that the cost for same is ten (10%) percent or more in excess of
commercially reasonable cost; alternatively, and at Tenant’s sole election,
approval shall be presumed if Tenant obtains competitive bids from at least
three qualified contractors and engages the lowest bidder), and verification of
payment by Tenant (the “Approved Invoice”), Tenant shall receive a credit
against the amount of Base Rent and Additional Rent due for the next full
succeeding month or months in the amount of such Approved Invoice. Provided, if
Landlord has commenced with such repair, replacement or maintenance within said
five (5) business day period and diligently continues with same, Tenant shall
not be entitled to undertake any such repair, replacement or maintenance.
13. Intentionally Deleted.
14. Utilities and Services.
Tenant shall pay for all water, heat, gas, fuel, electricity, telephone service,
janitorial services and all other services in the nature of utility services
supplied to the Premises for use by Tenant as well as services supplied to
Tenant in the operation of its business, together with any taxes thereon. If any
of such services are interrupted due to the fault of Landlord, its agents,
employees, contractors or other tenants and such interruption continues for
three (3) consecutive business days, and if, as a result of such interruption
Tenant is unable to reasonably conduct its business in the Premises, then
Tenant’s obligation to pay rent shall prospectively abate as to the portion of
Tenant’s Premises which become untenantable until such services are restored.
15. Inspection.

 

7

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

 

Tenant will allow Landlord, upon twenty-four (24) hour notice from Landlord,
(except no notice shall be required in the case of an emergency), access to the
Premises at reasonable times during normal working hours for the purpose of
examining or exhibiting the same or making repairs Landlord is required to make
or exhibiting same to lenders and prospective purchasers. Unless Tenant has
given notice to Landlord to extend the Term of this Lease, Landlord may exhibit
the Premises to prospective tenants at any time within one (1) year prior to the
expiration of the lease Term or any extension thereof.
16. Damage or Destruction of Premises.
A. In the event of minor damage (less than fifty percent (50%) to the Premises
by fire or any other cause which renders the Premises untenantable in part but
Tenant is able in its reasonable judgment to conduct its business therein, and
Tenant continues to occupy them in part, the rent shall be apportioned and
reduced from the date the damage occurs in the proportion that the unoccupied
portion of the Premises bears to the entire Premises until the damage has been
repaired.
B. In the event of substantial damage (fifty percent (50%) or more) (including
destruction) to the Premises by fire or any other cause which renders the
Premises untenantable in whole or in such part that Tenant in its reasonable
judgment deems it impracticable to conduct its business therein, the rent shall
wholly abate and be apportioned from the date the damage occurs until the damage
has been repaired.
C. In the event of either minor or substantial damage, unless this Lease is
terminated as hereafter provided in Paragraph 16.D, hereof, Landlord shall
commence within ten (10) days after the date the damage occurs (or within ten
(10) days after receipt of such notice is given) to repair the Premises to the
condition in which they were immediately prior to such damage, and Landlord
shall complete such repair with due diligence and dispatch. If the damage is not
repaired within a reasonable time or in any event within sixty (60) days from
the date the damage occurs in the case of minor damage and one hundred twenty
(120) days from the date the damage occurs in the case of substantial damage,
Tenant shall have the right to terminate this Lease by giving Landlord written
notice (served no later than thirty (30) days after such right to cancel and
terminate arises) of termination.
D. In the event the Premises are damaged at any time during the last twelve
(12) months of the initial lease Term or at any time during the last twelve
(12) months of any extension term by fire or any other cause to the extent of
fifty percent (50%) or more of the replacement value thereof as of the date such
damage occurs, this Lease, hereof, may be terminated at the election of either
Landlord or Tenant by giving notice in writing of such election to the other
party within ten (10) days from the date the damage occurs. Upon such
termination, any unearned rent or other payments paid in advance beyond the date
of damage shall immediately he refunded to Tenant.
17. Condemnation.
A. If the whole or any substantial part (fifty percent (50%) or more) of the
Premises shall be taken or condemned by any competent authority for any public
use or purpose, the Term of this Lease shall end upon, and not before, the date
when the possession of the part so

 

8

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

 

taken shall actually be required for such use or purpose. Current rent shall
thereupon be apportioned as of the date of such termination.
B. If only an insubstantial part (less than fifty percent (50%) of the Premises
shall be taken or condemned, and Tenant is able, in its reasonable judgment, to
continue to operate its business in the Premises, and such taking or
condemnation does not give Tenant the right to terminate this Lease, this Lease
shall continue in full force and effect, and the rental due thereunder shall
abate proportionately to the extent that Tenant is deprived of usable area
either in the Premises or otherwise, and as of the date of such deprivation. If
Tenant is not able, in its reasonable judgment, to continue normal business
operation, Tenant may terminate this Lease immediately upon written notice to
Landlord. In the event this Lease is not terminated under this Paragraph,
Landlord shall, at Landlord’s sole cost and expense, restore the remaining
portion of the Premises to the extent necessary to render them reasonably
suitable for the purposes for which they were leased, and shall make all repairs
to the Premises to the extent necessary to constitute the Premises a complete
architectural unit.
C. In any such case, whether this Lease is terminated or not, each party shall
be entitled to claim and receive an award of damages suffered by it by reason of
such taking. Landlord shall be entitled to receive and retain the entire award
or consideration for the affected lands and improvements and Tenant shall not
have or advance any claims against Landlord for the value of its property or its
leasehold estate or the unexpired term of this Lease or for costs of removal or
relocation or business interruption expense or any other damages arising out of
the taking or purchase. Nothing herein shall give Landlord any interest in, or
preclude Tenant from seeking and recovering on its own account from the
condemning authority, any award of compensation attributable to the taking or
purchase of Tenant’s chattels or trade fixtures or attributable to Tenant’s
relocation expense or loss of goodwill provided that any such separate claim by
Tenant shall not reduce or adversely affect the amount of Landlord’s award. If
any such award made or compensation paid to Tenant specifically includes an
award or amount for Landlord, Tenant shall promptly account therefor to
Landlord.
18. Landlord’s and Tenant’s Liability.
Landlord shall not be liable for damage to property of Tenant in the Premises
and the common areas or for injury to person unless such damage or injury is
caused by (A) Landlord’s failure to make repairs or perform any obligations
which Landlord is obligated to make under this Lease or (B) is caused by the
fault or negligence of Landlord, Landlord’s agents, employees, contractors,
subcontractors, licensees or other authorized representatives.
Tenant shall not be liable for damage to property of Landlord in or around the
Building (but excluding the Premises) and the common areas or for injury to
person unless such damage or injury is caused by (A) Tenant’s failure to make
repairs it is obligated to make under this Lease or (B) is caused by the fault
or negligence of Tenant, its agent, employees, contractors, subcontractors,
licensee or other representatives.
19. Default.
A. If any default of Tenant continues uncorrected for thirty (30) days (seven
(7) days in the case of a default in the payment of rent or other amount due
hereunder) after

 

9

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

 

receipt of written notice from the Landlord, stating with particularity the
nature and extent of the default, the Landlord may cancel this Lease by written
notice of cancellation; provided, however, that in the case of a non-monetary
default which cannot be reasonably cured by Tenant within thirty (30) days,
Tenant shall be granted an additional period of time within which to effect a
cure so long as Tenant has commenced and is diligently pursuing a cure within
the initial thirty (30) day period. No delay or omission of Landlord in
exercising any right accruing upon any default of Tenant shall impair any such
right or be construed to be a waiver thereof; and every such right may be
exercised at any time during the continuance of such default. A waiver by
Landlord of a breach or a default by Tenant under any of the terms and
conditions of this Lease may be exercised at any time during the continuance of
such default. A waiver by Landlord of a breach or a default under any of the
terms and conditions of this Lease by Tenant shall not be construed to be a
waiver of any subsequent breach or default or of any other term or condition of
this Lease.
B. In the event of any default or breach of this Lease by Tenant, which
continues beyond applicable cure periods, Landlord may, at any time thereafter,
with or without notice or demand, and without limiting Landlord in the exercise
of any right or remedy which Landlord may have by reason of such default:
(i) terminate Tenant’s right to possession of the Premises by any lawful means,
in which case this Lease and the Term hereof shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. If Landlord
terminates this Lease, Landlord may recover from Tenant (A) the worth at the
time of award of the unpaid rent which had been earned at the time of
termination; (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 value of the Premises for the balance of the Lease Term
reduced to present value using the interest rate of ten percent (10%) per year;
and (C) any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant’s failure to perform its obligations under the
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, the cost of recovering possession of
the Premises, expenses of releasing, including necessary renovation and
alteration of the Premises, reasonable attorneys’ fees, any real estate
commissions actually paid by Landlord. For purposes of this section, “rent”
shall be deemed to be all monetary obligations required to be paid by Tenant
pursuant to the terms of this Lease.
(ii) maintain Tenant’s right of possession in which event Landlord shall have
the remedy which permits Landlord to continue this Lease in effect after
Tenant’s breach and abandonment and recover rent as it becomes due,
(iii) collect sublease rents (or appoint a receiver to collect such rent) and
otherwise perform Tenant’s obligations at the Premises, it being agreed,
however, that the appointment of a receiver for Tenant shall not constitute an
election by Landlord to terminate this Lease.
(iv) pursue any other remedy now or hereafter available to Landlord under the
laws or judicial decisions of the state in which the Premises are located.

 

10

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

 

(v) No remedy or election hereunder shall be deemed exclusive, but shall,
wherever possible, be cumulative with all other remedies at law or in equity.
(vi) Suit or suits for the recovery of such damages, or any installments
thereof, may be brought by Landlord from time to time at its election, and
nothing contained herein shall be deemed to require Landlord to postpone suit
until the date when the term of this Lease would have expired if it had not been
terminated hereunder.
C. Landlord shall not be in default under this Lease unless Landlord fails to
perform obligations required of Landlord within thirty (30) days after written
notice by Tenant (except in the case of an emergency, where Landlord must
commence performance within twenty-four (24) hours after notice) to Landlord and
to the holder of any mortgage or deed of , trust encumbering the Building whose
name and address shall have theretofore been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such obligation; provided,
however, that if the nature of Landlord’s obligation is such that more than
thirty (30) days are required for its cure, then Landlord shall not be in
default if Landlord commences performance within such thirty (30) day period (or
in the case of an emergency within twenty-four (24) hours after notice) and
thereafter diligently pursues the same to completion. This Lease and the
obligations of Tenant hereunder shall not be affected or impaired because
Landlord is unable to fulfill any of its obligations hereunder or is delayed in
doing so, if such inability or delay is caused by reason of strike or other
labor problems, acts of God, riot, insurrection, governmental actions or
requirements, or any other cause beyond the reasonable control of Landlord, and
the time for Landlord’s performance shall be extended for the period of any such
delay.
D. In the event of a dispute between the parties which requires a party hereto
to seek redress through an action at law or in equity (or to seek redress
through a form of Alternative Dispute Resolution) the losing party shall pay,
upon demand, all of the prevailing party’s costs, charges and expenses,
including reasonable attorneys’ fees, incurred by such prevailing party in
connection with the resolution of such dispute; provided, however, attorneys’
fees shall be due and payable only if the prevailing party is required to file
suit due to default by the losing party. For purposes of this Paragraph, the
term “losing party” shall mean the party which obtains substantially less relief
than originally sought by such party in the legal or equitable action (or
Alternative Dispute Resolution forum) and the term “prevailing party” shall mean
the party which obtained substantially the relief sought by such party in the
legal or equitable action (or Alternative Dispute Resolution forum).
20. Bankruptcy.
In the event the estate created hereby shall be taken in execution or by other
process of law, or if Tenant shall be adjudicated insolvent or bankrupt pursuant
to the provisions of any state or federal insolvency or bankruptcy law, or if a
receiver or trustee of the property of Tenant shall be appointed by reason of
Tenant’s insolvency or inability to pay its debts, or if any assignment shall be
made of Tenant’s property for the benefit of creditors, then and in any of such
events, Landlord may terminate this Lease by written notice to Tenant; provided,
however, if the order of the court creating any of such disabilities shall not
be final by reason of pendency of such proceeding, or appeal from such order,
then Landlord shall not have the right to terminate this Lease so long as Tenant
performs its obligations hereunder.

 

11

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

 

21. Indemnification.
Tenant shall indemnify and hold Landlord harmless from all loss, damage, cost,
expense or liability (including reasonable attorneys’ fees, expenses and
disbursements) incurred by Landlord arising out of or in connection with any
injury to, or death of, any person, or damage to, or destruction of, property
occurring in, on, or about the Premises, the Building in which the Premises are
located and/or the property, and which injury, death, damage or destruction is
caused by the acts or omissions of Tenant or Tenant’s employees, agents,
contractors, subcontractors, licensees or other authorized representatives;
except that Landlord shall be liable to Tenant for all loss, damage, cost,
expense or liability (including reasonable attorneys’ fees, expenses and
disbursements) incurred by Tenant arising out of or in connection with any
injury to, or death of, any person, or damage to, or destruction of, property
occurring in, on, or about the Premises, the Building in which the Premises are
located, and the property, and which injury, death, damage or destruction is
caused by the acts or omissions of Landlord or Landlord’s employees, agents,
contractors, subcontractors, licensees or other authorized representatives, and
shall indemnify and hold Tenant harmless therefor. A party’s obligation under
this Paragraph to indemnify and hold the other party harmless shall be limited
to the sum that exceeds the amount of insurance proceeds, if any, received by
the party being indemnified. This Section 21 is expressly subject to, and
modified by Section 22E below.
22. Insurance.
A. Landlord shall keep in effect, during the Term of this Lease:
(1) Insurance against damage to the Premises and the Building by fire and other
risks now or hereafter embraced in extended coverage, in amounts sufficient to
prevent Landlord from becoming a co-insurer, but in no event less than full
replacement value (exclusive of the cost of excavations, foundations and
footings);
(2) Insurance against such other hazards as, from time to time, are then
commonly insured against for Premises similarly situated (due regard being given
to the Premises’ height, type, construction and use), in the amount of at least
Two Million Dollars ($2,000,000) in any one occurrence upon or in connection
with the use or occupancy of the Premises resulting in bodily injury or death.
B. Tenant shall, at its expense, keep in effect during the Term of this Lease or
any extension thereof, the following insurance in standard form policies, with
an insurance company authorized to do business in the State in which the
Premises are situated.
(1) Comprehensive public liability insurance in the amount of at least Two
Million Dollars ($2,000,000) in any one occurrence upon or in connection with
the use or occupancy of the Premises resulting in bodily injury or death.
(2) Comprehensive property damage insurance covering liability or damage in any
one occurrence occurring upon or in connection with the use or occupancy of the
Premises to all property in at least the sum of Two Million Dollars
($2,000,000).

 

12

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

 

(3) All risk contents coverage (or Tenant may act as a self-insurer with respect
to such all risk insurance) on Tenant’s personal property, equipment,
furnishings, fixtures, and other chattels located or to be located in the
Premises.
(4) The required statutory amount of worker’s compensation insurance.
C. All policies of insurance required to be maintained by Landlord and Tenant
pursuant to this Lease other than B(4) above, shall name the other party as an
additional insured as their respective interests may appear (and if requested by
Landlord shall bear appropriate endorsements to protect Landlord’s mortgagee).
D. Landlord and Tenant shall each furnish, a certificate or certificates of
insurance evidencing the existence the required coverage.
E. The parties release each other, and their respective authorized
representatives, from any claims for damage to any person or to the Premises and
the Building and other improvements in which the Premises are located, and to
the fixtures, personal property, Tenant’s improvements, and alterations of
either Landlord or Tenant in or on the Premises and the Building and other
improvements in which the Premises are located that are caused by or result from
risks insured against under any insurance policies carried by the parties and in
force at the time of any such damage.
Each party shall cause each insurance policy obtained by it to provide that the
insurance company waives all right of recovery by way of subrogation against
either party in connection with any damage covered by any policy. Neither party
shall be liable to the other for any damage caused by fire or any of the risks
insured against under any insurance policy required by this Lease.
Landlord and Tenant intend, and hereby agree, that the risk of loss or damage to
property shall be borne by the parties’ insurance carriers. It is hereby agreed
that Landlord and Tenant shall look solely to, and seek recovery from, only
their respective insurance carriers in the event a loss is sustained for which
Property Insurance is carried or is required to be carried under this Lease.
Landlord and Tenant expressly waive any and all claims against each other with
respect to claims, damages or losses for which Property Insurance is carried or
is required to be carried hereunder. For this purpose, applicable deductible
amounts shall be treated as though they were recoverable under such policies. If
Landlord or Tenant elects to self-insure any of the insurance required of
Landlord or Tenant hereunder, the party electing to self insure shall be
considered an insurance carrier for purposes of this paragraph.
23. Mechanic’s Liens.
The Tenant will not permit any mechanic’s or other liens to stand against the
Premises for any labor or material furnished the Tenant in connection with work
of any character performed on said Premises by or at the direction of the
Tenant; and the Landlord will not permit any such liens for work or material
furnished the Landlord to stand against such Premises. However, the Landlord and
the Tenant shall respectively have the right to contest the validity or

 

13

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

 

amount of any such lien, but upon the final determination of such questions
shall immediately pay any adverse judgment rendered with all proper costs and
charges and shall have the lien released at the contestant’s own expense. If
Landlord or Tenant desires to contest any such lien, then prior to commencing
such contest it will furnish the other party with a bond, if requested, to
secure the payment of such obligation.
24. Assignment or Subletting.
A. If Tenant requests Landlord’s consent to an assignment of the Lease or
subletting of all or a portion of the Premises, it shall submit to Landlord, in
writing, (i) the name and legal composition of the proposed assignee or
subtenant, (ii) the use to which the proposed assignee or subtenant intends to
put the Premises, (iii) the terms and conditions of the proposed assignment or
sublease and of any related transaction between Tenant and the proposed assignee
or subtenant; (iv) information related to the experience, integrity and
financial resources of the proposed assignee or subtenant; (v) such publicly
disclosed information as Landlord may reasonably request to explain the
transaction; (vi) reimbursement for all reasonable out of pocket costs incurred
by Landlord, including actual attorneys’ fees, in connection with evaluating the
request and preparing any related documentation, which shall not exceed Two
Thousand Dollars ($2,000.00); and (vii) the nature and character of the business
of the proposed assignee or subtenant.
B. Landlord’s consent to any such proposed assignment or subletting shall not be
unreasonably withheld. Landlord shall be considered to have reasonably denied
its consent to a proposed assignment or sublease if:
(i) The assignee or sublessee does not meet the minimum net worth and
creditworthiness standards utilized at the Building for tenants of a similar
size and use;
(ii) Tenant has not given Landlord thirty (30) days’ prior written notice of
such assignment or sublease, which notice shall include all information and
documentation reasonably required to satisfy the above conditions;
(iii) Tenant is in default beyond any applicable cure period at the time of the
assignment or sublease (but at such time as any default is cured, the assignment
or sublease may proceed); and
(iv) The assignee or sublessee fails to furnish Landlord at least ten (10) days
prior to the effective date of the assignment or sublease, a written assignment
instrument in which assignee or sublessee agrees to assume and be bound by all
of the conditions, obligations and agreements of Tenant contained in this Lease.
C. This Paragraph shall not apply in the case of an assignment or sublease by
Tenant to a corporation which is the parent or subsidiary of or is controlled by
Tenant, or to a corporation, resulting from any reorganization or merger to
which Tenant or its parent or any of its subsidiaries Or any corporation
controlled by it is a party.
D. In no event will Tenant be released from its obligations under the Lease. If
consent to an assignment or sublease is given, Tenant shall pay to Landlord, as

 

14

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

 

Additional Rent fifty percent (50%) of all amounts received from the assignee or
subtenant in excess of the amounts otherwise payable by Tenant to Landlord with
respect to the space involved calculated on a per square foot basis, less
Tenant’s cost of commissions and legal fees. Profits on an assignment or
sublease by Tenant shall be computed after deduction of all expenses incurred by
Tenant in connection with any such sublease or assignment including
(a) brokerage; (b) reasonable legal fees; (c) construction costs; (4d) market
financial concessions granted to subtenant; (e) depreciation of any laboratory
equipment owned by Tenant and used by subtenant and (f) any other costs
reasonably incurred by Tenant applicable to the sublease or assignment.
E. Notwithstanding anything to the contrary in this Section 24, Tenant shall be
prohibited from subleasing any portion of the Premises to (i) an existing tenant
of the Building or (ii) a prospective tenant of the Building with whom Landlord
or its representatives are actively negotiating, as evidenced by a current term
sheet or written proposal between the prospective tenant and Landlord.
25. Delays.
In the event that either party hereto shall be delayed or hindered in or
prevented from the performance of any of their or its respective provisions
anywhere herein contained, by reason of (i) the destruction, in whole or in
part, of any building or improvement forming a part of the entire Premises, or
(ii) strikes, or (iii) lockouts, or (iv) labor troubles, or (v) war, whether
declared or undeclared, or (vi) riot, or (vii) Act of God, or (viii) embargoes,
or (ix) delays in transportation, or (x) inability to procure materials and/or
labor, or (xi) failure of power, or (xii) restrictive governmental laws or
regulations, whether valid or not, or (xiii) insurrection, or (xiv) acts of
terrorism or (xv) any other reason other than financial, beyond the reasonable
control of such party, and not the fault of the party so delayed or hindered in
or prevented from performing work or doing acts otherwise required under this
Lease, then performance of such work or doing of such acts shall be excused for
the period of the delay, and the period for the performance of such work or
doing such acts shall be extended for a period equivalent to the period of such
delay; provided, however, that the provisions of this Paragraph shall not
operate so as to excuse or release Tenant from the prompt payment of rent or
other sums required to be paid by Tenant to Landlord or to other payees anywhere
hereunder.
26. Right of Refusal.
A. In the event (i) that all or any portion of the Building not occupied by
Tenant (the “Adjacent Space”) becomes available on and after the Commencement
Date and (ii) Landlord receives a formal proposal for lease of the Adjacent
Space from another Third party tenant (the “Adjacent Space Proposal”), Landlord
agrees to provide Tenant with a complete copy of the Adjacent Space Proposal.
Upon delivery of the Adjacent Space Proposal to Tenant (which Proposal must
contain, at minimum, the rental rate, escalation, abatement, tenant improvements
and length of term), Tenant shall have the right of first refusal (the “Right of
First Refusal”) to lease the Adjacent Space upon the same terms and conditions
contained in the Adjacent Space Proposal. Tenant shall have five (5) days from
delivery of the Adjacent Space Proposal within which to accept the Adjacent
Space Proposal and exercise its Right of First Refusal by delivery of written
notice (the “Notice”) of such acceptance to Landlord. Upon receipt of the
Notice,

 

15

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

 

Landlord shall prepare an amendment to this Lease reflecting Tenant’s lease of
the Adjacent Space (the “Adjacent Space Amendment”) for review by Tenant. Except
as otherwise set forth in the Adjacent Space Proposal, Tenant’s lease of the
Adjacent Space shall be on all of the terms and conditions of this Lease.
Landlord and Tenant shall diligently and expeditiously agree upon the Adjacent
Space Amendment and execute same incorporating the Adjacent Space. In the event
Landlord and Tenant cannot, in good faith, agree upon the terms of the Adjacent
Space Amendment and execute the same within five (5) business days after
delivery of Tenant’s Notice, Tenant’s Right of First Refusal shall be deemed to
be irrevocably waived and Landlord shall be entitled to lease the Adjacent Space
to the third party tenant upon the terms contained in the Adjacent Space
Proposal.
B. If Tenant does not give the Notice within said five (5) business day period,
then Tenant’s Right of First Refusal shall be deemed to be irrevocably waived
and Landlord shall be entitled to lease the Adjacent Space to the third party
tenant upon the terms contained in the Adjacent Space Proposal. However, if the
transaction contemplated in the Adjacent Space Proposal is not consummated, then
Tenant’s Right of First Refusal shall be reinstated. Moreover, if the terms
contained in the Adjacent Space Proposal are modified so as to be more
advantageous to the tenant, Landlord must provide to Tenant a new Adjacent Space
Proposal, setting forth the modified terms, and Tenant shall again have five
(5) business days within which to exercise its Right of First Refusal with
respect thereto. If an Adjacent Space is leased to a third party, after Tenant
has failed or declined to exercise its Right of First Refusal, and such space
subsequently during the term of this Lease or any extension thereof becomes
available, Tenant’s Right of First Refusal shall again apply to any re-leasing
of such space.
27. Option to Renew.
Tenant is hereby granted two (2) successive options to renew this Lease on the
following terms and conditions:
A. At the time of the exercise of an option to renew and at the time of the
commencement of the said renewal, the Tenant shall not be in default in
accordance with the terms and provisions of this Lease (all required notices
having been given and all relevant cure periods having expired), and shall be in
possession of the entire Premises pursuant to this Lease.
B. Notice of the exercise of each option shall be sent to the Landlord, in
writing, at least nine (9) months before the expiration of the then current Term
of this Lease.
C. Each renewal term (hereinafter “Renewal Term”) shall be for a period of three
(3) years to commence at the expiration of the initial Term or the then current
Term of this Lease, and all of the terms and conditions of this Lease shall
apply during the respective Renewal Term except (i) that Base Rent payable for
the first Renewal Term shall escalate at $0.30 per square foot per year (i.e.
Base rent for year one of the first Renewal Term shall be $11.45/s.f., year two
at $11.75/s.f, and year three at $12.05/s.f. and (ii) that Base Rent payable for
the second Renewal Term shall be at “Fair Market Rent”.

 

16

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

 

D. If Tenant fails to exercise the first renewal option for the Premises the
later renewal option shall be considered null and void and of no further force
and effect.
E. Fair Market Rent shall be a rental rate equal to the then current market
rate, for comparable space in other buildings comparable to the Premises in the
submarket taking into account all relevant factors including the size and cost
of the building in question when compared to the Premises and the amenity
package available for the building in question when compared to the Premises,
the creditworthiness of the Tenant, all concessions which are being offered to
renewal tenants as new tenant improvements, size and location of the space and
the rate shall specifically exclude amounts previously attributed to Tenant’s
original Tenant Improvements (collectively the “Market Rate”).
Upon receiving notice of Tenant’s intent to extend the term of the Lease for the
second Renewal Option, Landlord shall notify Tenant in writing of its
determination of Market Rate. In the event Tenant rejects Landlord’s
determination of the Market Rate, Tenant shall include with its notice of
rejection, Tenant’s determination of Market Rate. Landlord and Tenant shall then
negotiate in good faith for thirty (30) days following the delivery of Tenant’s
notice to Landlord in an attempt to reach an agreement as to the Market Rate.
If, however, Landlord and Tenant are unable to reach an agreement as to the
Market Rate, then Tenant shall have the option within five (5) days following
the end of such thirty (30) day period to (1) revoke its election to extend the
term for the second Renewal Option period of this Lease, or (2) to request
non-binding mediation. In the event that Tenant shall revoke its notice to
extend the term of this Lease, the Lease shall expire per its terms. In the
event that Tenant shall elect the non-binding mediation, then Landlord and
Tenant shall, within ten (10) days thereafter, each designate a qualified real
estate professional. The two (2) such appointees shall within five (5) days
thereafter, designate a third real estate professional having substantially
similar qualifications.
After a third real estate professional has been designated in accordance with
the above paragraph, then within twenty (20) days after the appointment of the
third representative, the group shall present their findings regarding the
issues of market terms and conditions to both the Landlord and Tenant. If, at
that time, Landlord and Tenant are in agreement with the mediation group’s
findings, then the Lease shall be modified under those terms and conditions. If,
at the time of the mediation group’s presentation, no agreement can be reached
then, Tenant’s sole option is to cancel the option to renew or to agree to
Landlord’s determination of Market Rate.
28. Intentionally Deleted.
29. Subordination.
This Lease shall be subject and subordinated at all times to the liens of any
mortgages or deeds of trust in any amount or amounts whatsoever now existing or
hereafter encumbering the Premises, without the necessity of having further
instruments executed by Tenant to effect such subordination. Notwithstanding the
foregoing, Tenant covenants and agrees to execute and deliver upon demand, such
further instruments evidencing such subordination of this Lease to such liens of
mortgages or deeds of trust as may be reasonably requested by Landlord. So long
as Tenant shall pay the rent reserved and comply with, abide by and discharge

 

17

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

 

the terms, conditions, covenants and obligations on its part, to be kept and
performed herein and shall attorn to any successor in title, the peaceable
possession of the Tenant in and to the Premises for the Term of this Lease,
shall not be disturbed, in the event of the foreclosure of any such mortgage or
deed of trust, by the purchaser at such foreclosure sale or such purchaser’s
successor in title. Notwithstanding the foregoing provisions of this
Paragraph 29, Tenant shall not be obligated to subordinate its interest in this
Lease unless the mortgagee agrees in writing pursuant to a subordination,
non-disturbance and attornment agreement or the like, in a form reasonably
acceptable to Tenant, not to disturb Tenant’s lawful possession of the Premises
and to recognize Tenant’s rights under this Lease so long as Tenant is not in
default beyond applicable cure periods under the terms of this Lease.
30. Holdover.
If Tenant holds over after the expiration of the Term of this Lease or any
extension thereof, the Base Rent shall be one hundred fifty percent (150%) of
the base monthly rental as paid during the last month of the initial Term or any
renewal term hereof, and shall otherwise be on the terms and conditions herein
specified so far as applicable.
31. Intentionally Deleted.
32. Alternative Dispute Resolution.
Landlord and Tenant shall attempt to settle any claim or controversy arising out
of this Lease through consultation and negotiation in the spirit of mutual
friendship and cooperation. If such attempts fail, then the dispute shall first
be submitted to a mutually acceptable neutral advisor for mediation,
fact-finding or other form of alternate dispute resolution. Neither of the
parties may unreasonably withhold acceptance of such an advisor, and his or her
selection will be made within 30 days after notice by the other party demanding
such mediation. Cost of such mediation or any other alternate dispute resolution
agreed upon by the parties shall be shared equally by Landlord and Tenant. Any
dispute which cannot be so resolved between the parties within sixty (60) days
of the date of the initial demand by either party for such mediation, shall be
finally determined by the courts. The use of such a procedure shall not be
construed to affect adversely the rights of either party under the doctrines of
laches, waiver or estoppel. Nothing in this Paragraph shall prevent either party
from pursuing judicial proceedings if (a) good faith efforts to resolve a
dispute under these procedures have been unsuccessful or (b) interim resort to a
court is necessary to prevent serious and irreparable injury to a party or to
others.
33. Environmental.
For purposes of this paragraph:
(1) “Environmental Conditions” shall mean the environmental conditions at the
Premises, including the presence of any Hazardous Materials, as of the
commencement of the term of this Lease.
(2) “Environmental Requirement” shall mean any law, regulations or legal
requirement relating to health, safety or the environment, now in effect or
hereinafter enacted, including but not limited to the Comprehensive
Environmental Response

 

18

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

 

Compensation and Liability Act (“CERCLA”), the Toxic Substances Control Act
(“TSCA”), the Federal Insecticide Fungicide and Rodenticide Act (“FIFRA”), the
Resource Conservation and Recovery Act (“RCRA”), the Clean Air Act (“CAA”) and
the Clean Water Act (“CWA”), the Occupational Safety and Health Act (“OSHA”) and
all similar state and local laws, rules, regulations and guidance, now in
existence ‘ or hereinafter enacted, as each such law, rule or regulation may be
amended from time to time.
(3) “Environmental Hazard” shall mean Hazardous Materials (as defined
hereinafter), or the storage, handling, production, disposal, treatment or
release thereof.
(4) “Hazardous Material” shall mean (a) any hazardous waste, any extremely
hazardous waste or any restricted hazardous waste, or words of similar import,
as defined in the Resource Conservation and Recovery Act (42 U.S. C.
Section 6901 et seq.); (b) any hazardous substances as defined in the
Comprehensive Environmental Response Compensation and Liability Act (42 U.S. C.
Section 9601 et seq.); (c) any toxic substances as defined in the Toxic
Substances Control Act (15 U.S.C. Section 2601 et seq.; (d) any pollutant as
defined in the Clean Water Act (33 U.S.C. Section 1251 et seq.); (e) gasoline,
petroleum or other hydrocarbon products or by-products; (f) asbestos;
(g) bio-hazardous substances or constituents; or (h) any other materials,
substances or wastes subject to environmental regulation under any applicable
federal, state or local law, regulation, or ordinance now or hereafter in
effect.
(5) “Environmental Release” shall mean any release, spill, leak, discharge,
injection, disposal, or emission of any Hazardous Materials on, under, in or at
the Premises or environment.
(6) A. Tenant agrees to indemnify and save harmless Landlord’s successors and
assigns and Landlord’s present and future officers, directors, employees and
agents (collectively “Landlord’s Indemnitees”) from and against any and all
liabilities, penalties, fines, forfeitures, demands, damages, losses, claims,
causes of action, suits, judgments, and costs and expenses incidental thereto
(including cost of defense, settlement, reasonable attorneys’ fees, reasonable
consultant’s fees and reasonable expert fees), which Landlord or any or all of
Landlord’s Indemnitees may hereafter suffer, incur, be responsible for or
disburse as a result of:
(1) any governmental action, order, directive, administrative proceeding or
ruling;
(2) personal or bodily injuries (including death) or damage (including loss of
use) to any premises (public or private);
(3) cleanup, remediation, investigation or monitoring of any pollution or
contamination of or adverse effects on human health or the environment; or
(4) any violation or alleged violation of laws, statutes, ordinances, orders,
rules or regulations of any governmental entity or agency (collectively
“Environmental Liabilities”) directly or indirectly caused by or arising out of

 

19

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

 

any Environmental Hazards existing on or about the premises but only to the
extent that any such existence is caused by Tenant’s presence or activities on
the Premises.
B. At all times during the term of the Lease, Tenant shall conduct its
activities at the Premises in strict compliance with all applicable
Environmental Requirements.
C. Tenant shall notify Landlord immediately of any Environmental Release at, on,
under, or from the Premises. Unless directed otherwise by the Landlord, Tenant
shall act immediately to investigate the extent of, and to take appropriate
action to abate and remediate, such Environmental Release, whether or not
ordered or otherwise directed to do so by any governmental entity or otherwise
obligated to do so by any Environmental Requirement, unless to do so would
require the approval of a government entity.
D. Landlord shall have the right to make inquiries concerning all environmental
matters and Tenant will cooperate with such inquiries. Such inquiries may
include physical inspections, including tests and sampling, at the Premises, or
otherwise, and interviews with personnel of Tenant.
E. To the best of Landlord’s knowledge, there are no Hazardous Materials present
at the Building that would give rise to a violation of any applicable
environmental requirements.
F. The provision of this paragraph shall survive the termination of this Lease.
34. Brokers.
The parties agree that Cushman & Wakefield, representing the Landlord and CB
Richard Ellis, representing the Tenant (collectively “Broker”) are the sole
brokers who brought about this Lease. Tenant represents and warrants that Tenant
did not negotiate with respect to the leasing of the Premises through any other
broker and that no other broker was instrumental in bringing about this Lease.
Tenant shall indemnify Landlord against any and all claims of any other brokers
with whom Tenant has had any dealings, and shall hold Landlord harmless from all
losses and expenses in connection therewith, including reasonable legal
expenses. Landlord represents and warrants that Landlord has not dealt with any
other real estate broker in connection with the leasing of the Premises, and
Landlord agrees to indemnify and hold Tenant harmless from all losses and
expenses in connection with the claims of any real estate broker claiming by,
under or through Landlord, including reasonable legal expenses. Landlord shall
pay the commission, if any, which is due to Cushman & Wakefield, and the
commission which is due to CB Richard Ellis, Tenant’s Broker, in the amount of
$81,850.00 which shall be payable (i) 50% upon execution of this Lease and
(ii) 50% on or before December 18, 2009 pursuant to the terms of a separate
agreement between Landlord and CB Richard Ellis.
35. Notices.
All notices, approvals or requests in connection with this Lease shall be sent
by certified mail, or via overnight carrier with delivery charges prepaid or
with delivery not

 

20

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

 

conditioned upon payment of charges, except notices concerning repairs and
replacements which may be given orally or by any other means which might
reasonably be expected to give the other party notice; provided, however, that
no notice other than by certified mail or overnight carrier shall constitute a
notice of default authorizing cancellation of this Lease. Notices to the
Landlord shall be addressed and sent as follows:
Northbrook Commercial Properties LLC
1818 Skokie Blvd.
Northbrook, IL 60062
Attention: Jamal Alwattar
With a copy to:
Peter C. Economos, Esq.
Harrison & Held, LLP
333 West Wacker Drive
Suite 1700
Chicago, IL 60606-1247
Notices to the Tenant shall be addressed and sent as follows:
Nanosphere, Inc.
4088 Commercial Avenue
Northbrook, IL 60062
Attention: Chief Financial Officer
With a copy to:
Esteban A. Ferrer
SEYFARTH SHAW LLP
620 Eighth Avenue
New York, New York 10018-1405
The effective date of any such notice, approval, request, demand or
communication shall be three (3) business days after the date on which the same
is deposited in the mail, if delivered by certified or registered mail, or shall
be upon receipt if delivered by overnight courier or by personal delivery.
Either party may at any time designate by written notice to the other a change
of address for notice purposes.
36. Waiver.
Failure or delay on the part of Landlord or Tenant to exercise any right,
remedy, power or privilege hereunder shall not operate as a waiver thereof. A
waiver, to be effective, must be in writing and must be signed by the party
making the waiver. A written waiver of a default shall not operate as a waiver
of any other default or of the same type of default on a future occasion.
37. Amendments.

 

21

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

 

No revision, modification or amendment of this Lease shall be valid unless made
in writing and signed by duly authorized representatives of both parties.
38. Quiet Enjoyment.
If Tenant performs the terms of this Lease, Landlord will warrant and defend
Tenant in the quiet and peaceful enjoyment and possession of the Premises during
the Term hereof and any extension without interruption by Landlord or any person
claiming under Landlord.
39. Conveyance by Landlord.
Upon a sale or other transfer of the Building by Landlord, Landlord’s interest
in this Lease shall automatically be transferred to the transferee, the
transferee shall automatically assume all of Landlord’s obligations under this
Lease accruing from and after the date of the transfer, and, provided Landlord
shall have delivered Tenant’s Security Deposit to such transferee pursuant to a
written assignment of which Tenant has received notice, Landlord shall be
released of, all obligations under this Lease arising after the transfer.
Subject to the provisions of Paragraph 29, Tenant shall upon request attorn in
writing to the transferee.
40. Intentionally Deleted.
41. Construction of Language.
The terms Lease, lease agreement or agreement shall be inclusive of each other,
and include renewals, extensions or modifications of the Lease. Words of any
gender used in this Lease shall be held to include any other gender, and words
in the singular shall be held to include the plural and the plural to include
the singular, when the sense requires. Paragraph headings and titles are not a
part of the Lease and shall have no effect upon the construction or
interpretation of any part hereof.
42. Marginal Headings.
The headings in this Lease are used only for convenience in finding the subject
matters, and are not to be taken as part of this Lease, or to be used in
determining the intent of the parties.
43. Entire Agreement.
This Lease constitutes the final expression of the agreement of the parties; it
is intended as a complete and exclusive statement of their agreement, and it
supersedes all prior and concurrent promises, representations, negotiations,
discussions and agreements that may have been made with respect to the subject
matter hereof.
44. Severability.
If any provision of this Lease, or the application thereof to any person or
circumstance, shall be held invalid or unenforceable by any court of competent
jurisdiction, the

 

22

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

 

remainder of this Lease or the application of such provisions to persons or
circumstances, other than those as to which it is held invalid or unenforceable,
shall not be affected thereby.
45. Estoppel Certificate.
Tenant shall, from time to time upon not less than ten (10) business days’ prior
written request by Landlord, deliver to Landlord a statement in writing
certifying, if true: (a) that this Lease is unmodified and in full force and
effect or, that there have been modifications, that the Lease as modified is in
full force and effect; (b) the dates to which Rent and other charges have been
paid; (c) that Landlord is not in default under any provision of this Lease or,
if in default, a detailed description thereof and (d) such other matters as
reasonably requested by Landlord or its mortgagee. Any estoppel certificate
given in good faith by Tenant, shall not waive any of Tenant’s rights hereunder
to audit and correct Additional Rents charged to Tenant.
46. Signs.
As permitted by law, Tenant shall be entitled to exterior Building and/or ground
signage as reasonably approved by Landlord. Tenant shall not exhibit, inscribe,
paint or affix any sign on the exterior of the Building or the property or in
any window of the Premises without Landlord’s prior written consent. In the
event of Tenant’s uncured default as set forth above, Landlord, in addition to
its other remedies available hereunder, may remove such signs without any
liability to Tenant and Tenant shall reimburse Landlord for the cost of such
removal immediately upon demand therefor,
47. Intentionally Deleted.
48. Rules and Regulations.
Tenant agrees for itself, its employees, agents, clients, customers, invitees
and guests, to comply fully with the following reasonable rules and regulations
and with such reasonable modifications thereof and additions thereto as Landlord
may make for the Building.
A. Tenant shall not use the name of the Building for any purpose other than that
of the business address of Tenant, nor shall Tenant advertise its business or
profession in any manner that violates the codes of ethics adopted by any
recognized association or organization pertaining to such business or
profession. Any use by Tenant of any picture or likeness of the Building does
not constitute the granting by Landlord of any rights to the use of the design
of the Building by any party nor a waiver of any rights with respect thereto.
B. Tenant shall not obstruct or permit the obstruction in any manner of the
sidewalks, driveways, docks, dock areas, walks, parking areas and other common
areas of the property, except as reasonably required for immediate loading or
unloading, nor shall Tenant place objects against glass partitions, doors or
windows which would be unsightly from the exterior of the Building.
C. Except for guide dogs, no animals or pets shall be brought or permitted to be
in the Building or on the Premises.

 

23

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

 

D. Tenant shall not make noises, cause disturbances or vibrations, or use or
operate any electrical or electronic devices or other devices that emit anything
which may disturb or annoy other tenants or occupants of the Building or
interfere with their use of any device, or play any loud musical equipment or
instruments that will disturb other tenants or occupants of the Building.
E. Tenant shall not create any odors which may be offensive to other tenants or
occupants of the Building.
F. Except upon prior permission of Landlord, no additional locks or similar
devices shall be attached to any door and no locks shall be changed except by
Landlord. No keys for any door other than those provided by Landlord shall be
made. If more than two keys for one lock are desired by Tenant, Landlord shall
provide the same upon payment of a reasonable fee by Tenant. Upon termination of
this Lease or of Tenant’s possession of the Premises, Tenant shall surrender all
keys for door locks and other locks in or about the Premises and shall make
known to Landlord the combination of all locks, safes, cabinets and vaults which
are not removed by Tenant.
G. Tenant assumes full responsibility for protecting the Premises from theft,
robbery and pilferage. Except during Tenant’s normal business hours, Tenant
shall keep all doors to the Premises locked and other means of entry to the
Premises closed and secured.
H. Tenant shall not overload any driveway, parking area or any floor and shall
not install any heavy objects, safes, machines or other equipment without having
received Landlord’s prior written consent as to size, maximum weight, routing
and location thereof.
I. 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 electric wiring in the Building 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.
J. Tenant shall not burn any trash or refuse in the Building or on the property.
Tenant shall be responsible for the observance of all of the foregoing rules and
regulations by Tenant’s employees, agents, clients, customers, invitees and
guests. Landlord and Tenant agree that Landlord’s remedy for violation of any of
the foregoing rules and regulations by Tenant (or any person or entity under
Tenant’s authority or control) shall be a payment by Tenant to Landlord an
amount equal to the reasonably substantiated actual damages suffered or incurred
by Landlord on account of such violation. In the event of any inconsistency
between the Lease and the rules and regulations, the Lease shall prevail and
control. Any violation of the rules and regulations by any individual that is
not under Tenant’s control shall not constitute a default under

 

24

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

 

the Lease. Landlord shall enforce the rules and regulations in a
non-discriminatory manner but in any event to provide Tenant quiet enjoyment of
the Premises for the use permitted by the Lease.
49. Counterparts.
This Lease may be executed in counterparts, which together shall constitute a
single instrument.
50. Additional Rent — Operating Expenses and Real Estate Taxes.
For purposes of this Paragraph and this Lease, the term “Tenant’s Percentage
Share” shall mean a percentage which is equal to the number of the rentable
square footage of the Premises divided by the total number of rentable square
footage contained in the Building of which the Premises are a part. The parties
hereby agree that: (1) the Premises consist of 40,945 rentable square feet of
area; (2) the Building of which the Premises are a part consists of a total of
83,172 rentable square feet of area; and (3) the Tenant’s Percentage Share is
forty-nine and 22/100 percent (49.22%) in reference to the Building of which the
Premises are a part. Landlord and Tenant each acknowledge that the Base Rent
specified in Paragraph 3 of the Lease does not provide for Operating Expenses
and Real Estate Taxes which may hereafter pertain to the Building of which the
Premises are a part. Tenant shall pay as Additional Rent its proportionate share
of Real Estate Taxes and Operating Expenses as follows:
A. Real Estate Taxes. Tenant shall pay to Landlord, Tenant’s Percentage Share of
the Real Estate Taxes assessed against the land and improvements of the Building
of which the Premises form a part. The Additional Rent imposed hereby shall be
paid by Tenant to Landlord together with Tenant’s Percentage Share of Operating
Expenses in installments on a monthly basis with Tenant’s Base Rent payments.
Should the taxing authorities include in such Real Estate Taxes the value of any
improvements made by Tenant, or include machinery, equipment, fixtures,
inventory or other personal property or assets of Tenant, the Tenant shall also
pay the entire taxes for such items. The term “Real Estate Taxes” shall mean all
general and special real and personal property taxes and assessments for the
Building and expenses incurred in efforts to reduce taxes or assessments.
B. Operating Expenses. In addition to the monthly Base Rent, Tenant shall pay to
the parties respectively entitled thereto all impositions (including any taxes
on rentals paid to Landlord), insurance premiums, operating charges, maintenance
charges, construction costs, and any other charges, costs and expenses which
arise or may be contemplated under any provisions of this Lease as being
Tenant’s responsibility and cost, during the Term. The specific responsibility
of Landlord and Tenant for repairs, replacements and maintenance is more fully
described in Section 12 above. Tenant shall pay to Landlord, Tenant’s Percentage
Share of the Operating Expenses pertaining to the land and improvements of the
Building of which the Premises form a part. For purposes of this Lease, the term
“Operating Expenses” shall consist of all costs of operating, maintaining,
replacing and repairing the Building, including without limitation, the
following:

 

25

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

 

(i) Premiums for property, casualty, liability, rent interruption or other
insurance.
(ii) Salaries, wages and other amounts paid or payable for personnel including
the property manager, superintendent, operation ad maintenance staff, and other
employees of Landlord involved in the maintenance and operation of the Building,
at or below the level of property manager (to the extent a property manager is
shared with other facilities, the Building is charged only a corresponding
percentage of this cost), including contributions and premiums towards fringe
benefits, unemployment and worker’s compensation insurance, pension plan
contributions and similar premiums and contributions and the total charges of
any independent contractors or managers engaged in the repair, care, maintenance
and cleaning of any portion of the Building.
(iii) Cleaning, including sweeping of parking and sidewalk areas and removal of
snow and ice.
(iv) Landscaping, including irrigating, trimming, mowing, fertilizing, seeding
and replacing of plants, shrubs and trees.
(v) Utilities, including fuel, gas, electricity, water, sewer, telephone,
generator and other services for the common areas of the Building.
(vi) Maintaining, operating, repairing and replacing equipment servicing the
common areas of the Building.
(vii) Other items of repair or maintenance of the Building.
(viii) The cost of the rental of any equipment and the cost of supplies used in
the maintenance and operation of the Building.
(ix) Audit fees and the cost of accounting services incurred in the preparation
of statements referred to in this Lease and financial statements, and in the
computation of the rents and charges payable by tenants of the Building
(x) Intentionally deleted
(xi) A fee (not to exceed two percent (2%) of all gross rents collected at the
Building) for the administration and management of the Building appropriate to
the nature of the Building as reasonably determined by the Landlord from time to
time.
(xii) Costs of alterations or modifications to the Building.
(xiii) Costs of maintenance, repair and replacement (but not the cost of
separation itself) of the fire alarm system until separated.
The Additional Rent imposed hereby shall be paid by Tenant to Landlord upon
submission by Landlord of an invoice and backup.

 

26

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

 

C. Notwithstanding anything to the contrary, the following shall be excluded
from “Operating Expenses”:
(i) Amounts reimbursed by other sources, such as insurance proceeds, equipment
warranties, judgments or settlements.
(ii). Utilities or other expenses paid directly by tenants to suppliers or paid
by tenants to Landlord for separately metered or special services such as after
hours air conditioning expenses.
(iii). Costs of initial improvements to, or alterations of any tenant premises.
(iv). The cost of any repairs, alterations, additions, improvements, changes,
replacements or other items which under generally accepted accounting principles
are properly classified as capital expenses. Notwithstanding the foregoing,
Operating expenses may include: (i) the cost of capital improvements to the
Building expended by Landlord to comply with laws and regulations passed after
the date of this Lease (“Compliance Capital Costs”); Compliance Capital Costs
shall be amortized over the useful life of the improvements in accordance with
generally accepted accounting principles and shall not exceed in any year an
amount equal to three percent (3%) of the total Operating Expenses, excluding
taxes, for such year; and (ii) to the extent that any such repairs, alterations,
additions, etc. result in a reduction of Operating Expenses, Landlord may charge
annually a prorated amount of such cost amortized over the useful life of the
item in question based on generally accepted accounting principles, but in. an
amount which does not exceed the savings in operating expenses which has been
realized for that year.
(v). Lease payments for rental equipment (other than equipment for which
depreciation is properly chargeable as Operating Expenses) which would
constitute a capital expenditure if the equipment were purchased.
(vi). The cost of repairing, replacing, maintaining or otherwise correcting
initial defects in the design, construction or equipment of the Building or any
latent defect in the Building discovered during the Term of this Lease.
(vii). Wages, salaries, benefits and compensation paid or given to (a)
executives, shareholders, officers, directors or partners of Landlord; (b) any
principal or partner of the entity for time to time comprising Landlord; (c)
off-site employees at the Building above the level of property manager,
(viii). Payments of principal, interest and other charges of any nature made on
any indebtedness (secured or unsecured) applicable to the Building including any
mortgage, debt, ground rent, or other sums payable under any ground or
underlying lease or leases for the building and all costs paid or incurred to
obtain, close, record, modify, combine, recast consolidate, extend, refinance
and replace in whole or in part any financing or ground or underlying lease.

 

27

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

 

(ix). Any fees, including attorneys’ fees, costs, and commissions incurred in
(a) procuring or attempting to procure other tenants (including Tenant) or other
occupants of space in the Building including, but not necessarily limited to
brokerage commissions, finders fees, attorneys’ fees and expenses, entertainment
costs, travel expenses and advertising and production costs; (b) negotiations
for leases with tenants, other occupants or prospective tenants of the Building;
(c) disputes or lease defaults of any nature of Tenant, other occupants, or
prospective tenants or; (d) negotiations or disputes with employees, management
agents, purchasers, ground lessors or mortgagees of the Building.
(x). Any cost included in Operating Expenses representing an amount paid to a
person, firm, corporation, affiliate, subsidiary or other entity related to
Landlord, or any employee or agent of the same, which is in excess of the amount
which would have been paid on an arms-length basis in the absence of such
relationship.
(xi). Costs, fines, interest, penalties, legal fees, liens or costs of
litigation incurred due to the late payments of taxes, utility bills, or other
costs (including ground rents) incurred by Landlord’s failure to make such
payments when due;
(xii). Any insurance deductible in excess of $25,000;
(xiii). Non-cash items, such as deductions for depreciation and amortization of
the Building and the Building equipment, or interest on capital invested; and
(xiv). Reserves for repairs, maintenance and replacements.
If Landlord desires Tenant to pay its proportionate share of Real Estate Taxes
and Operating Expenses on a monthly basis, at the beginning of each calendar
year, Landlord shall supply to Tenant an estimate, certified by an authorized
agent or officer of Landlord, setting forth in detail Landlord’s reasonable
estimate of Operating Expenses and Real Estate Taxes for the Building for such
calendar year, and Tenant’s Percentage Share of same. The Additional Rent
imposed hereby shall be paid by Tenant to Landlord in monthly installments, in
advance, as the Operating Expenses and Real Estate Taxes components of the total
monthly rent. Each such monthly installment of Operating Expenses and Real
Estate Taxes shall be equal to one-twelfth (1/12) of Tenant’s Percentage Share
of the Landlord’s reasonable estimate of the Operating Expenses and Real Estate
Taxes for the Building for such calendar year. Within one hundred eighty
(180) days after the end of each calendar year Landlord shall provide to Tenant
a detailed statement, certified by an authorized agent or officer of Landlord,
setting forth in reasonable detail the actual Operating Expenses and Real Estate
Taxes for the preceding calendar year. Such statement shall also include a
calculation or reconciliation of estimated Operating Expenses to actual
Operating Expenses and of any overpayment or underpayment made by Tenant to
Landlord with respect to the Operating Expenses for such preceding calendar
year. In the event Tenant underpaid Landlord for Tenant’s Percentage Share of
Operating Expenses for such preceding calendar year, Tenant shall pay the amount
of such underpayment to Landlord within thirty (30) days of Tenant’s receipt of
Landlord’s certified statement. In the event Tenant

 

28

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

 

overpaid Landlord for Tenant’s Percentage Share of Operating Expenses and Real
Estate Taxes of such year, Landlord shall credit Tenant an amount equal to such
overpayment amount against Tenant’s future monthly Operating Expense and Real
Estate Tax obligations until such credit is exhausted. (If such overpayment by
Tenant is made in the last year of the Lease Term, Landlord shall remit to
Tenant the amount of the overpayment due hereunder within thirty (30) days of
the expiration or termination date of the Lease.) If a dispute arises between
Landlord and Tenant as to whether any item or items shall be properly included
in such statement, the matter shall be determined in accordance with
Paragraph 32 of the Lease, and the determination of such matter as therein
provided shall be final and binding upon Landlord and Tenant. Landlord shall
provide a statement not later than July 1st following the close of any calendar
year reconciling Tenant’s estimated payments for Operating Expenses and the
actual amounts owed by Tenant for such year (“Annual Statement”). Furthermore,
Landlord shall not increase the amount of estimated payments for Operating
Expenses in a current year until the Operating Expenses for the previous year
has been reconciled by an Annual Statement.
Tenant, or its certified professional accountant, shall have the right to
examine Landlord’s books and records showing Operating Expenses and Real Estate
Taxes at Tenant’s sole cost and expense. Such examination will be upon
reasonable prior notice to Landlord and during normal business hours at any time
within four (4) months following the furnishing by Landlord to Tenant of
Landlord’s annual statement reconciling estimated operating expenses to actual
operating expenses. Tenant shall pay its cost incurred in connection with the
audit and shall not be reimbursed by Landlord unless Tenant elects to dispute
the statement of Additional Rent and/or Operating Expenses and such statement
determined to be in error in Landlord’s favor (i.e., Landlord has overcharged)
by more than four percent (4%), in which case, Landlord shall reimburse Tenant
the amount of any such error and shall pay Tenant’s reasonable audit costs
within thirty (30) days after notice thereof. If such statement is determined to
be in error in Landlord’s favor by four percent (4%) or less, Landlord shall
reimburse Tenant the amount of such error. Tenant shall have the right to use an
auditor of its choice as long as the auditor is a certified professional
accountant and whose fee is computed on a contingency basis, if Tenant so
chooses.
51. Landlord’s Right of Entry.
Upon reasonable notice to Tenant, Landlord shall have access to the Premises for
purposes of showing the Premises to current or prospective lenders, to
prospective purchasers of the Building and, during the twelve-month period
preceding the expiration of the term of this Lease, to prospective tenants.
52. Surrender.
Upon the expiration or termination of this Lease or of Tenant’s right to
possession, Tenant shall surrender the Premises in a clean undamaged condition,
in good working order, reasonable wear and tear and damage by casualty expected,
and shall remove all of Tenant’s equipment, fixtures, Tenant Improvements and
property and repair all damage caused by the removal and restore the Premises.
53. Landlord Liability.

 

29

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

 

Notwithstanding anything to the contrary in this Lease, neither Landlord nor
Landlord’s directors, officers, shareholders, employees, agents, constituent
partners, beneficiaries, trustees, representatives, successors or assigns
(collectively “Landlord’s Affiliates”) shall be personally responsible or liable
for any representation, warranty, covenant, undertaking or agreement contained
in the Lease, and the sole right and remedy of the Tenant or any subsequent
sublessee or assignee shall be against Landlord’s interest in the Building.
Neither Tenant nor any subsequent sublessor or assignee shall seek to obtain any
judgment imposing personal liability against Landlord, Landlord’s Affiliates, or
their successors or assigns nor execute any judgment or place any lien against
any property other than Landlord’s interest in the Building. In addition to
Tenant’s rights contained herein or available in law or in equity, in the event
Tenant obtains a judgment against Landlord (which is not appealed by Landlord)
arising out of Landlord’s default under the Lease, Tenant may, to the extent the
judgment is not paid by Landlord, elect to set off the amount of the judgment,
plus any statutory interest per year, against the next due installments of Rent.
Election by Tenant to set off against Rent shall not constitute an election of
remedies and Tenant may pursue all remedies available at law and equity to
enforce the judgment against Landlord.
54. No Party To Be Deemed Drafter.
Landlord and Tenant have both had the opportunity to have counsel examine this
Lease and to propose changes to clarify any ambiguities. Accordingly, in any
interpretation of this Lease, an ambiguity shall not be resolved by interpreting
the Lease against the drafter. The language of this Lease shall be interpreted
according to the fair meaning and not for or against either party.
55. No Intended Third Party Beneficiary.
Landlord and Tenant may each, separately, deal with other persons in connection
with the Premises or with other matters that may also relate to or be the
subject of this Lease. Landlord and Tenant do not intend to make any such third
person with whom each of them may deal an intended third party beneficiary under
this Lease. There is no third person who is an intended third party beneficiary
under this Lease. No incidental beneficiary (whatever relationship such person
may have with Landlord or Tenant) shall have any right to bring an action or
suit, or to assert any claim against Landlord or Tenant under this Lease.
56. No Offer.
The submission of this Lease for examination does not constitute a reservation
of an option to lease the Premises, and this Lease becomes effective as a lease
only upon its execution, delivery by Landlord and Tenant and the payment of the
Security Deposit by Tenant within five (5) days after execution.
57. Time is of the Essence.
Time is of the essence as to each and every provision of this Lease.
58. Miscellaneous.

 

30

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

 

A. Emergency Generators. Tenant shall have the exclusive right to utilize the
two (2) existing emergency generators designated on Exhibit D as part of the
Landlord Equipment Inventory. Responsibility for maintenance, repair and
replacement of the generators allocated in Section 12.
B. Intentionally deleted.
C. Fire Alarm System. The parties hereto acknowledge that the current fire alarm
system jointly services various suites within the Building. Landlord shall be
responsible for the maintenance of the fire alarm system (as an Operating
Expense for the Building appropriately allocated).
D. Governing Law. This Lease shall be governed by and construed in accordance
with the internal laws of the State of Illinois.
[SIGNATURE PAGE IS ATTACHED]

 

31

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

 

IN WITNESS WHEREOF, the parties hereto have executed these presents, in
duplicate, the day and year first above-written.

                          TENANT       LANDLORD        
 
                        NANOSPHERE, INC.
a Delaware corporation   NORTHBROOK COMMERCIAL
PROPERTIES LLC
an Illinois limited liability company    
 
                       
By:
  /s/ Roger Moody       By:   /s/ Jamal Alwattar        
 
                       
 
              Manager         
Attest:
  /s/ Jamie Abrams                  
 
                       

 

32

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

 

EXHIBIT A
EXHIBIT B
(INTENTIONALLY DELETED)

 

33

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

 

EXHIBIT C
CONVEYED FURNITURE INVENTORY

•   Private Offices: 7 complete with furniture & seating including credenza,
return, d-top, 4-hi file, hutch and whiteboard

•   8’ X 8’ Cubicles: 72 comprised of a 3’ corner and two 5’ work surfaces &
seating

•   8’ X 12’ Cubicles: 21 comprised of a 3’ corner and two 5’ wood work surfaces
& seating

•   Small Conference Rooms: 3 laminate and wood tables

•   Large Conference Rooms: 2 with conference room tables and 12 to 14 chairs,
credenza and whiteboards

•   Reception Center: 1 with wood reception center desk and seating

 

34

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

 

EXHIBIT D
LANDLORD EQUIPMENT INVENTORY

     
1.
  (2) 150 kw 480/277 volt, Cummins Model natural gas fired generators
2.
  (1) 20 ton Liebert down flow computer room DA Air II a/c unit (RM 183)
3.
  (1) 100 kva computer room UPS unit, Power ware 9315 Model (RM 183)
4.
  (1) 30 kva computer room UPS unit, Power ware-Plus (RM 183)
5.
  (1) 8’X9’ Kolpar walk-in cooler (RM 352)
6.
  (4) Chemical fume hoods, (2 units located in RM 312 & 2 units in RM314)
7.
  (2) Champion Oil-less Air Compressors (RM 345)
8.
  Security system and card reader (excluding security system enhancements made
by Tenant and included on Tenant’s Equipment Inventory schedule — Exhibit 9(a)

      *   Tenant shall not use the security system or card readers but shall not
remove them from the Premises.

     
9.
  13 Bottle Halon Fire Suppression system for computer room (RM 189)
10.
  (1) Waste Drain Collection tank and attached pumps (RM 326)
11.
  (1) Portable Bulk Gas Manifold, Nitrogen (N2) (RM 326)
12.
  (1) Nortec Humdifier, model NHMC-100 (RM 305)
13.
  (1) 900 KW Electric Boiler, Model HW300-9000-480, Mfg. 1993 (RM325)
14.
  (1) Clean Room and Sliding door (RM 329) (Excluding Tenant’s Free Standing
Equipment and installed equipment)
15.
  (3) DA-Lite Projection Screens (Units located in RM 104, RM 178, RM 207)

 

35

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

 

EXHIBIT E
EXISTING HVAC EQUIPMENT
HVAC Equipment — Nanosphere space

                                                  Refrig.   Capacity   Date of  
    A/C Unit No.   Mfgr.   Model No.   A/C Tons   Type   (Lbs.)   Mfr.  
Location   Only 14   Carrier  
48HJE006531
  5   R22   12.0   1998   4096     15   Carrier  
48HD006500
  5   R22   7.2   1983   4096     16   Carrier  
48HD006500
  5   R22   12.0   1999   4096 Lab     17   Carrier  
48HD006500
  5   R22   12.0   1999   4092     18   Carrier  
48HD006500
  5   R22   7.2   1983   4092     19   Carrier  
48HD006500
  5   R22   12.0   1999   4090     20   Carrier  
48HD006500
  5   R22   7.2   1983   4090     21   Carrier  
48HD006500
  5   R22   7.2   1983   4090     22   Carrier  
48HD006500
  5   R22   7.2   1983   4088   X 24   Carrier  
48HD006500
  5   R22   7.2   1983   4088     25   Carrier  
48HD006500
  5   R22   7.2   1983   4084     26   Carrier  
48HD006500
  5   R22   7.2   1999   4084     27   Carrier  
48HD006500
  5   R22   7.2   1983   4084     28   Carrier  
48HD006500
  5   R22   12.0   1999   4084     29   Carrier  
48HD006500
  5   R22   12.0   1999   4084     30   Carrier  
48HD006500
  5   R22   12.0   1999   4084     31   Carrier  
48HD006500
  5   R22   12.0   1999   4084     32   Carrier  
48HD006500
  5   R22   7.2   1983   4084         Multistack  
 
  250   R22   1200   1993   MES   X 48   Carrier  
48TJE006-501GA
  5   R22   5.8   1993   4096     49   Carrier  
48TJE006-501GA
  5   R22   5.8   1993   4096     52   Carrier  
50TJ-0120611GA
  10   R22   9   1996   4088   X 53   Liebert  
DMC067A-YL2
  5   R22   5   1996   4090   X 54   Liebert  
DMC067A-YL2
  5   R22   5   1996   4090   X

 

36

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

 

EXHIBIT E-1
Tenants HVAC Equipment

                  Location   Component   Mfg.   Qty   Model 4092  
Munters HVAC & Dehumidifier Unit
  Munters   1   HCD-1125-DGA-SMFCBPFCS 4092  
5 ton Pre-Cool Condenser Unit
  York   2   H1RA060S46A 4092  
4 ton Post-Cool Condenser Unit
  York   1   H1RA048S46G RM 305  
Liebert 5 ton a/c Unit
  Liebert   1   BU420A-AAE11488 4092  
Liebert Condenser
  Liebert   1   DCSF083 -Z 4096  
HVAC Unit 5 ton
  Trane   1   TTA120B400FA 4096  
RTU A/C Unit
  Reznor   1   506B00120000MAAA 4096  
HVAC Unit 10 Ton
  Trane   1   THC072A4RNA26H1 4096  
HVAC Unit 5 ton
  Trane   1   YS036A4RHAZYDZ

 

37

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

 

EXHIBIT F
Tenants Equipment Inventory Schedule

                      Location   Component   Mfg.   Qty   Model
 
                   
RM 183
  Component Rack   Chatsworth Products Inc.     4     Mega Frame Cabinet Systems
RM 183
  Phone System   Avaya     2      
RM 183
  Phone system modules   Avaya     8      
RM 183
  Patch Panel   Ortronics     5      
RM 183
  Patch Panel   Leviton     9      
RM 183
  Switch Panel   Cisco     2      
RM 183
  Firewall   Cisco     1      
RM 183
  Firewall   Barracuda     1      
RM 183
  Computer Server   Dell     2      
RM 183
  Cubical Furnishings                
RM 183
  Security Camera Computer system   Vicon     2      
RM 183
  Security Camera power supply   Altronix     11      
various
  Security Camera   Pelco     17      
RM 183
  Security Key Card Access system   U-access     1      
RM 183
  RS2 Card Reader interface   RS2     7      
RM 183
  RS2 Linear Power Supply (Card Reader)   RS2     6      
various
  Proximity detector (card swipes)   HID Corp.     33      
 
                    RM 197   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 197
  Wall Mounted Cabinets                
RM 197
  1/2 H.P. Automatic Drain Pump   Liberty Pumps     1     Model 405
 
                    RM 205   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 205
  1/2 H.P. Automatic Drain Pump   Liberty Pumps     1     Model 405
RM 205
  Wall Mounted Cabinets                
RM 206
  Wall Mounted Cabinets                
 
                    RM 207   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 207
  Wall Mounted Cabinets                
RM 207
  Chemical fume Hood   Kawaunee     1     H505472-00
 
                    RM 303   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 303
  1/2 H.P. Automatic Drain Pump   Liberty Pumps     1     Model 405
 
                    RM 304   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 304
  Wall Mounted Cabinets                

 

38

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

 

EXHBIT F (Continued)
Page 2 of 4

                      Location   Component   Mfg.   Qty   Model
 
                    RM 305   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 305
  1/2 H.P. Automatic Drain Pump   Liberty Pumps     2     Model 405
RM 305
  Humidifier   Nortec     1     NHSC-045
RM 305
  UNC 500 Main Controller   Niagara     1     Invensys I/A Series
RM 305
  Controllers   Niagara     4     MNL-800
RM 305
  Portable Clean Room (RM 361)         1     14’ft x 15’ft
RM 305
  Pass-Thru   Clean Air Products Inc     1     60”x54”x48”
 
                   
306 Hall
  Process Grade Water system   Millipore     1     Milli-Q
 
  Ice machine   Hoshizki     1     F-300BAF
 
                   
308 Hall
  Automatic Electronic Defibrillator — AED   Zoll     1     AED+Plus
Various
  First Aid Kits   Able     5      
 
                    RM 309   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 309
  Wall Mounted Cabinets                
RM 309
  Chemical Fume Hood (Walk-in)   Kawaunee     1     H50K5472-00
RM 309
  Flammable Storage Cabinet (90 Gal)   Justrite     1     25862
RM 309
  Acids & Corrosives storage Cabinet (4 Gal)   Justrite     2     SC29042
RM 309
  1/2 H.P. Automatic Drain Pump   Liberty Pumps     2     Model 405
 
                    RM 312   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 312
  Wall Mounted Cabinets                
RM 312
  1/2 H.P. Automatic Drain Pump   Liberty Pumps     1     Model 405
RM 312
  Super-Q PGW Filtration system   Millipore     1      
RM 312
  Wall Mounted Ventilation Extraction System   Alsident     1     System 100
 
                    RM 314   Black Epoxy Resin Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 314
  Wall Mounted Cabinets                
RM 314
  Counter top mounted Cabinets (Top)                
RM 314
  Chemical Fume Hood   Kawaunee     1     H52K5472B00019932-72
RM 314
  1/2 H.P. Automatic Drain Pump   Liberty Pumps     3     Model 405
RM 314
  Flammable Storage Cabinet (90 Gal)   Justrite     1     25862
 
                    RM 315   Stainless Steel Counter tops & Base cabinets
(includes sinks, eye wash & hardware)
RM 315
  Wall Mounted Cabinets                

 

39

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

 

EXHBIT F (Continued)
Page 3 of 4

                      Location   Component   Mfg.   Qty   Model
RM 315
  Chemical Fume Hood   Kawaunee     1     H50K5472-00
RM 315
  Glass Washing Machine   Miele     1     G 7883 CD
RM 315
  HEPA Filter system (Ceiling)                

                      Location   Component   Mfg.   Qty   Model
 
                    RM 316   Black Epoxy Resin Counter tops & Base Cabinets
RM 316
  Wall Mounted Cabinets                
RM 316
  Floor Mounted Cabinets                
RM 316
  HEPA Filter System (Ceiling)                
 
                    RM 318   Black Epoxy Resin Counter tops & Base cabinets
RM 318
  Wall Mounted Cabinets                
RM 318
  Stainless Steel Pass-Thru         1     36“x36“x36”
RM 318
  Flammable Storage Cabinets (90 Gal)   Justrite     2     SC29042
RM 318
  Movable Storage-Rack System                
 
                    RM 320   Flammable Storage Cabinets (90 Gal)   Justrite    
2     SC29042
RM 320
  Wall Mounted Cabinet                
RM 320
  Chemical Fume Hood   Kawaunee     1     H50K5448-00
 
                    RM 321   Patch Panel   Levitron 5e     11     GigaMax 5e
RM 321
  Switch Panel   Cisco Systems     6     Catalyst 2960G series
RM 321
  Fiber Optics Panel   Siecor     1      
 
                    RM 326   Specialty Gas Manifold (Argon Gas System)   Western
Innovators     1     MCM-7695
RM 326
  5HP Air Compressor   Powerex     1     PH682
 
                    RM 327   Process Grade Water System   Millipore     1    
RIO’s 100 
RM 327
  Super-Q PGW Filtration system   Millipore     1      
RM 327
  UV Water Treatment Equipment   Aquafine     1      
 
                    RM 331   Stainless Steel Counter tops with Base cabinets
RM 331
  Wall Mounted Cabinets                
RM 331
  Chemical Fume Hood   Kawaunee     1     H50K5448-00
RM 331
  HEPA Filter System (Ceiling)                
 
                    RM 333   Stainless Steel Counter tops with Base cabinets and
sink RM 333   Black Epoxy Resin Counter tops & Base cabinets
RM 333
  Wall Mounted Cabinets                
RM 333
  HEPA Filter System (Ceiling)                

 

40

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

 

EXHBIT F (Continued)
Page 4 of 4

                      Location   Component   Mfg.   Qty   Model
 
                    RM 334   Black Epoxy Resin Counter tops & Base cabinets
RM 334
  Wall Mounted Cabinets                
RM 334
  Stainless Steel Pass-Thru         1     36”x36”x36”
RM 334
  HEPA Filter System (Ceiling)                
RM 334
  Steel Barrier Fencing with door   McMaster Carr.     1      
 
                    RM 339   Black Epoxy Resin Counter tops & Base cabinets
RM 339
  Wall Mounted Cabinets                
RM 339
  Chemical Fume Hood   Kawaunee     1     H50K5496-00
RM 339
  HEPA Filter System (Ceiling)                
RM 339
  Stainless Steel Pass-Thru               36”x36”x36”
RM 339
  Wall Mounted Ventilation Extraction System   Alsident     2     System 100
 
                    RM 345   Vertical 120 Gal Air Receiver Tank   Industrial Air
Inc.     2     92-24-120-200
RM 345
  Refrigeration Air Dryer   Sullair     1     3288430002
RM 345
  Desiccant Air Dryer   Sullair     1     61928A
 
                    RM 346   Black Epoxy Resin Sink Counter top & Base cabinet
RM 346
  Wall Mounted Cabinets                
 
                    RM 357   Storage Cage   McMaster Carr.     4     8’ft x 8’ft
x 8’ft
 
                    RM 359   Clean Room       1     11’ft x 33’ft
 
                    RM 360   Clean Room   Terra Universal     1     7’ft x 14’ft
 
                    RM 362   Black Epoxy Resin Counter tops, sinks & Base
cabinets
RM 362
  Wall Mounted Cabinets              
 
                    RM 364   Clean Room   Clean Rooms International     1    
15’x30’FT 
RM 364
  Chemical Fume Hood (Walk-In)   Kawaunee     1     H505496-00
RM 364
  Stainless Teel Pass-Thru 24” x 24”         1      
RM 364
  Flammable Storage Cabinets (90 Gal)   Justrite     1     SC29042 RM 365  
Black Epoxy Resin Counter tops & Base cabinets (includes sinks, eye wash &
hardware)
RM 365
  Wall Mounted Cabinets                
RM 365
  Chemical Fume Hood (Walk-In)   Kawaunee     1     H505496-00
RM 365
  Super-Q PGW Filtration system   Millipore     1      
RM 365
  Flammable Storage Cabinet (90 Gal)   Justrite     1     25862
RM 365
  Acids & Corrosives storage Cabinet (4 Gal)   Justrite     2     SC29042
 
                    Dock B   Safety Storage Shed   Safety Storage Inc.     1    
10’x19’ft

 

41

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

 

EXHIBIT G
Tenants Office and Cubical Furniture Inventory

          Qty   Item   Mfg.
34
  Cubicles: Various size configurations, comprised of a 3’ft corner, 3’ft & 5’ft
working surfaces and seating   Haworth, Inc
 
       
4
  Private Offices: Complete with furniture & seating including credenza, return,
d-top, 4-hi file, hutch and white board    
 
       
1
  Small Conference Room: Wood table & wood enclosed whiteboard 5 — 8 Chairs    
 
       
5
  Circular Cubical Conference Tables    
 
       
130
  3’ft Flipper Door with shelf    
 
       
130
  5’ft Flipper Door with shelf    
 
       
130
  Stationary 3 Drawer desk drawer w/lock   Haworth, Inc
 
       
130
  Two Drawer Steel Lateral File w/lock    
 
       
25
  Three Drawer Steel Lateral file w/lock    
 
       
33
  Four Drawer Steal Lateral file    
 
       
15
  Five Drawer Steel Lateral file    
 
       
11
  Four Drawer “Fire Proof” Lateral file   Fire King Inc
 
       
6
  Six drawer “Fire Proof” Standard File   Fire King Inc
 
       
18
  Standing Two Door lockable Cabinets    
 
       
100
  Stackable chairs    
 
       
3
  4’ft x 5’ft laminate tables    

 

42