Exhibit 10.9

 

LEASE AGREEMENT

 

BETWEEN

 

POINTE CAMINO WINDELL, LLC

 

(“LANDLORD”)

 

AND

 

CDX, Inc.

 

(“TENANT”)

 

 

 

  

LEASE AGREEMENT

 

TABLE OF CONTENTS

 

    Page       1. TERMS AND DEFINITIONS. 1 2. PREMISES AND COMMON AREAS. 2 3.
TERM. 3 4. POSSESSION. 4 5. MONTHLY BASIC RENT. 4 6. OPERATING EXPENSES. 5 7.
SECURITY DEPOSIT. 7 8. USE. 8 9. NOTICES. 8 10. BROKERS. 9 11. HOLDING OVER. 9
12. TAXES ON TENANT’S PROPERTY. 9 13. CONDITION OF PREMISES. 10 14. ALTERATIONS.
10 15. REPAIRS. 11 16. LIENS. 11 17. ENTRY BY LANDLORD. 12 18. UTILITIES AND
SERVICES. 12 19. BANKRUPTCY. 12 20. INDEMNIFICATION AND EXCULPATION OF LANDLORD.
13 21. DAMAGE TO TENANT’S PROPERTY. 13 22. TENANT’S INSURANCE. 13 23. DAMAGE OR
DESTRUCTION. 15 24. EMINENT DOMAIN 16 25. DEFAULTS AND REMEDIES. 17 26.
ASSIGNMENT AND SUBLETTING. 19 27. SUBORDINATION. 21 28. ESTOPPEL CERTIFICATE. 22
29. HAZARDOUS MATERIALS. 22 30. RULES AND REGULATIONS. 26 31. CONFLICT OF LAWS.
26

 

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32. SUCCESSORS AND ASSIGNS. 26 33. SURRENDER OF PREMISES. 26 34. ATTORNEYS’
FEES. 26 35. PERFORMANCE BY TENANT. 26 36. MORTGAGEE PROTECTION. 26 37.
DEFINITION OF LANDLORD. 27 38. WAIVER. 27 39. IDENTIFICATION OF TENANT. 27 40.
PARKING. 27 41. FORCE MAJEURE. 28 42. TERMS, HEADINGS AND CONSTRUCTION. 28 43.
TIME. 28 44. PRIOR AGREEMENT; AMENDMENTS. 28 45. SEVERABILITY. 28 46. RECORDING.
28 47. LIMITATION ON LIABILITY AND TIME. 28 48. TRAFFIC IMPACT. 29 49.
SUBSTITUTED PREMISES. 29 50. MODIFICATION FOR LENDER OR GOVERNMENT. 29 51.
FINANCIAL STATEMENTS. 29 52. QUIET ENJOYMENT. 29 53. TENANT’S SIGNS. 29 54. NO
LIGHT, AIR OR VIEW EASEMENT. 30 55. TENANT AS CORPORATION, PARTNERSHIP, OR
LIMITED LIABILITY COMPANY. 30 56. GUARANTY. 30 57. COUNTERPARTS. 30 58. JOINT
AND SEVERAL LIABILITY. 30 59. NO OFFER. 30 60. WAIVER OF JURY TRIAL/JUDICIAL
REFERENCE. 31

 

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EXHIBITS:

 

A-1 Outline of Floor Plan of Premises A-2 Site Plan B Premises Preparation
Agreement C Notice of Lease Term Dates D Standards for Utilities and Services E
Sample Form of Tenant Estoppel Certificate F Rules and Regulations G Traffic and
Parking Rules and Regulations

 

RIDERS:

1. Option to Extend Term

 

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LEASE AGREEMENT

 

THIS LEASE AGREEMENT (“Lease“) is made as of April 1, 2015, between Pointe
Camino Windell, LLC, a California limited liability company (“Landlord”), and
CDX, Inc., a Delaware Corporation (“Tenant”), for the space outlined on attached
Exhibit A-1 (the “Premises”) and contained within Suite B on the 1st and 2nd
floor(s) of a building located at 6335 Ferris Square, San Diego, California (the
“Building”). The Building is part of the Building site, which includes the
parking areas and other improvements depicted on attached Exhibit
A-2 (collectively, the “Project”).

 

1.    TERMS AND DEFINITIONS.

 

For the purposes of this Lease, the following terms shall have the following
definitions:

 

(a)  Addresses:

 

Landlord’s Address: 2525 Main Street, Suite 120, Irvine, CA 92614. ATTN: Sofia
Stieve, CFO; sofia.stieve@windell-investments.com

 

Tenant’s address until the commencement of the Term only: 4225 Executive Square,
Suite 600, La Jolla, CA 92037, and thereafter all notices hereunder shall be
delivered to the Premises.

 

(b)  Approximate Rentable Square Feet: 6,211 square feet (“Rentable Square
Foot/Feet”); which has been calculated substantially in accordance with the
guidelines for measuring rentable area of office space specified in the American
National Standard Institute Publication ANSI Z65.1-1996 (the “BOMA Standard”).

 

(c)          Broker: Randall LaChance – Voit Commercial (Landlord Broker) and
Jerry Johnson – Space Advisors (Tenant Broker).

 

(d)          Commencement Date: May 1, 2015

 

(i)          Upon mutual execution of the Lease and prior to the Commencement
Date, Tenant shall have early occupancy free of monthly rent. This provision is
subject to Landlords’ receipt of the Security Deposit and a certificate of
insurance pursuant to section 22 of the Lease.

 

(e)          Exhibits and Riders: “A-1” through “H” and Riders 1 and 2,
inclusive, all of which are attached to this Lease and are incorporated herein
by this reference. Defined or initially capitalized terms in the attached
documents have the same meaning as in this Lease unless otherwise expressly
provided in those documents.

 

(f)    Monthly Basic Rent:

 

Months  Rent Per Rentable
Square Foot   Monthly Basic Rent  Months 1 - 12  $1.25   $7,763.75  Months 13 -
24  $1.29   $8,012.19  Months 25 - 31  $1.33   $8,260.63 

 

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$ 49,936.44 shall be payable concurrently with Tenant signing this Lease and
consists of the following:

 

First Monthly Basic Rent  $7,763.75   Pre-Paid Rent (Mos 18 & 24)  $19,875.20 
Plus Operating Expenses  $1,925.41   2 x Last Mo Rent & OpEx Security Deposit 
$20,372.08  Total First Month Rent  $9,689.16   Total Security Deposit 
$40,247.28 

 

Notwithstanding the foregoing, Tenant’s obligation to pay Monthly Basic Rent
shall be abated for two (2) months. The two (2) months of abated rent shall be
the second (2nd ) and sixth (6th ) full calendar months of the Term
(collectively, the “Rent Abatement”) (which shall be amortized over the Term of
this Lease at an imputed interest rate of ten percent (10%) per annum). If
Tenant is in default under this Lease at any time during the Term, the
unamortized portion of the Rent Abatement shall immediately become due and
payable to Landlord. The unamortized portion of the Rent Abatement shall be
determined based upon the unexpired portion of the initial Term as of the date
of Tenant’s default.

 

(g)   Parking: Not more than 3.5 vehicle parking spaces per one thousand square
feet of Rentable Square Feet of the Premises.

 

(h)   Security Deposit: $40,247.28, to be paid as concurrently with Tenant
signing this Lease. As long as Tenant has not been in Default, then months 18
and 24 can be paid from the deposit up to $19,875.20.

 

(i)   Tenant Improvement Allowance: Subject to Exhibit B, the Premise
Preparation Agreement, Landlord will amortize up to $25,000 for Tenants
Additional Improvements at 8% over the remaining Lease Term not to exceed 30
months. Amortized Tenant Improvement billings are not subject to abatement. By
way of example, the monthly billing for $25,000 over 30 months would be $ 922.21
per month.

 

(j)   Intentionally omitted.

 

(k)   Tenant’s Percentage: 4.35%, based on the Rentable Square Feet contained in
the Premises set forth in Subparagraph 1(b) and the Rentable Square Feet
contained in the Project of 142,727 (“Project Rentable Square Feet”), which
shall be adjusted (and included in the Notice under Paragraph 3) upon the
determination of the exact number of Rentable Square Feet within the Premises to
equal a fraction whose numerator is the number of Rentable Square Feet within
the Premises and whose denominator is the Project Rentable Square Feet, both as
determined by Space Accountant.

 

(l)   Term: Thirty one (31) calendar months (plus the applicable fraction of a
month if the actual Commencement Date is other than the first day of a calendar
month).

 

(m)   Use: General administrative office, lab, sales, shipping, product storage
and related services for a science and technology company utilizing portable
testing for chemicals in organic materials. Lessee will be permitted to test
organic compounds including cannabis in minute samples, for which the Lessee has
been given permission and has permitting from the Federal DEA. The testing
conducted will detect any chemical residue already present as part of the growth
& cultivation of the organic substances submitted for testing. Lessee will not
introduce additional chemicals in the testing process.

 

2.    PREMISES AND COMMON AREAS.

 

(a)   Subject to all the provisions of this Lease, Landlord leases to Tenant and
Tenant leases from Landlord the Premises, which Premises are improved or to be
improved by Landlord with the Tenant Improvements described in the Premises
Preparation Agreement, those Premises being agreed to have the Approximate
Rentable Square Feet designated in Subparagraph 1(b) (the exact number of which
shall be determined in accordance with that subparagraph).

 

(b)   Tenant shall have the nonexclusive right to use, in common with other
present and future tenants in the Building, the following areas (“Common Areas”)
appurtenant to the Premises, subject to the Rules and Regulations referred to in
Paragraph 30 and to other reasonable rules and regulations which Landlord may
deem advisable for the Common Areas (including without limitation the hours
during which they are open for use):

 

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(i)          The Building’s common entrances, lobbies, rest rooms not within a
suite, stairways and accessways, loading docks, ramps, drives and platforms and
any passageways and serviceways thereto, and the common pipes, conduits, wires
and appurtenant equipment serving the Premises;

 

(ii)         Loading and unloading areas, trash areas, parking areas, and
similar areas and facilities appurtenant to the Building;

 

(iii)        The roadways, sidewalks, walkways, parkways, driveways and
landscaped areas and similar areas and facilities within the Project which are
made available for the use or benefit of all Project tenants and their invitees
and other visitors; and

 

(iv)        The parking areas, including driveways and alleys and other
improvements, as depicted on attached Exhibit A-2.

 

(c)   Landlord reserves the right from time to time without unreasonable
interference with Tenant’s use:

 

(i)          To install, use, maintain, repair and replace pipes, ducts,
conduits, wires and appurtenant meters and equipment for service to other parts
of the Building above the ceiling surfaces, below the floor surfaces, within the
walls and in the central core areas, and to relocate any pipes, ducts, conduits,
wires and appurtenant meters and equipment included in the Premises which are
located in the Premises or located elsewhere outside the Premises, and to expand
the Building and the Project;

 

(ii)         To make changes to the Common Areas, including, without limitation,
changes in the location, size, shape and number of driveways, entrances, parking
spaces, parking areas, loading and unloading areas, ingress, egress, direction
of traffic, landscaped areas and walkways;

 

(iii)        To temporarily close or designate for other uses any of the Common
Areas for purposes of improvement, maintenance or repair, so long as reasonable
access to the Premises remains available;

 

(iv)        To designate other land outside the boundaries of the Building to be
a part of the Common Areas;

 

(v)         To add additional buildings and improvements to the Common Areas or
the Project;

 

(vi)        To use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Building or the Project, or any
portion thereof; and

 

(vii)       To do and perform such other acts and make such other changes in, to
or with respect to the Common Areas as Landlord may deem to be appropriate.

 

The preceding reservation of rights to use the Common Areas shall not impose on
Landlord any obligation to maintain or repair the Common Areas or any other
portion of the Premises except as expressly set forth in this Lease.

 

3.   TERM.

 

The Term shall be for the period designated in Subparagraph 1(l), beginning on
the Commencement Date under Subparagraph 1(d) and ending on the expiration of
that period, unless the Lease shall be terminated sooner as hereinafter
provided. The Commencement Date and the date the Term ends will be as specified
in Landlord’s Notice of Lease Term Dates (“Notice”), substantially in the form
of attached Exhibit C, which Landlord shall serve on Tenant when Landlord
tenders possession of the Premises to the Tenant.

 

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4.   POSSESSION.

 

If Landlord is unable to tender possession of the Premises to Tenant on the
scheduled commencement date of the Term as set forth in the Premises Preparation
Agreement, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom except to the extent
caused by the gross negligence or willful misconduct of Landlord. However, if
commencement of the Term is delayed beyond the scheduled commencement, Tenant
shall not be liable for any rent until Landlord tenders possession of the
Premises to Tenant with the Tenant Improvements substantially completed, and the
expiration date of the Term may be correspondingly extended at Landlord’s sole
discretion by written notice to Tenant. If the Term has not commenced within one
hundred eighty (180) days after the scheduled term commencement, either Landlord
or Tenant may terminate this Lease by delivering written notice thereof to the
other within fifteen (15) days after the end of that 180-day period, without
prejudice to any rights either party may have against the other. However, to the
extent Landlord’s inability to tender possession of the Premises to Tenant in
accordance with (or earlier than provided for in) the Premises Preparation
Agreement is caused by Tenant’s negligence or breach of this Lease or of the
Premises Preparation Agreement, or by other delays caused by Tenant or its
agents or contractors (collectively, “Tenant Delays”), the commencement of the
Term for all purposes under this Lease shall be accelerated by the number of
days of those Tenant Delays.

 

5.   MONTHLY BASIC RENT.

 

(a)          Tenant agrees to pay Landlord as Monthly Basic Rent for the
Premises the Monthly Basic Rent designated in Subparagraph 1(f) (subject to
adjustment under Paragraph 6) in advance on the first day of each calendar month
during the Term. If the Term commences or ends on a day other than the first day
of a calendar month, then the Rent for such period shall be prorated in the
proportion that the number of days this Lease is in effect during such period
bears to the actual days in the calendar month. In addition to the Monthly Basic
Rent, Tenant agrees to pay as additional rental the amount of rental adjustments
and other charges required by this Lease (“Additional Rent”). Except as
otherwise provided for herein, all Rent shall be paid to Landlord, without prior
demand and without any deduction, offset or counterclaim of any kind, in lawful
money of the United States of America, at the address of Landlord designated in
Subparagraph 1(a) or to such other person or at such other place as Landlord may
from time to time designate in writing.

 

(b)   Rent and all other payments required to be made by Tenant to Landlord
under this Lease shall be deemed to be and treated as rent and payable and
recoverable as “rent”, and Landlord shall have the same rights against Tenant
for default in any such payment as in the case of nonpayment of Monthly Basic
Rent.

 

(c)   If Tenant fails to pay any installment of rent or if Tenant fails to make
any other payment for which Tenant is obligated under this Lease when due, then
Tenant shall pay to Landlord as additional rent a late charge equal to ten
percent (10%) of the amount due to compensate Landlord for the extra costs
incurred as a result of such late payment. The parties agree that such late
charge represents a fair and reasonable estimate of the costs that Landlord will
incur by reason of late payment by Tenant. Acceptance of any late charge shall
not constitute a waiver of the Tenant’s default with respect to the overdue
amount, or prevent Landlord from exercising any other rights and remedies
available to Landlord.

 

(d)   If the amount of rent or any other payment due under this Lease now or in
the future violates the terms of any governmental restrictions on such rent or
payment, then the rent or payment due during the period of such restrictions
shall be the maximum amount allowable under those restrictions. Upon termination
of the restrictions, Landlord shall, to the extent it is legally permitted,
recover from Tenant the difference between the amounts received during the
period of the restrictions and the amounts Landlord would have received had
there been no restrictions.

 

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6.   OPERATING EXPENSES.

 

(a) For purposes of this Lease, the following terms are defined as follows:

 

(i)          “Tenant’s Percentage” shall have the meaning set forth in
Subparagraph 1(l).

 

(ii)         “HVAC Costs” means all costs incurred in the operation, repair and
maintenance and replacement of the systems for heating, ventilating and air
conditioning the buildings in the Project including, without limitation,
supplies, materials, equipment, tools, and contracted services.

 

(iii)        “Taxes and Assessments” shall mean: (1) Real property taxes and
fees and expenses incurred in contesting the amount or validity of any real
property tax; (2) Any assessment, fee, tax, levy, charge, penalty or similar
imposition imposed by any authority, improvement district or special assessment
district upon or in respect of the Premises, Building, Project, or Common Areas,
or any portion thereof, including any such charges imposed for the use or
occupancy of the Building, Project, or Premises, or upon this transaction or any
document to which Tenant is a party; (3) Any new or increased assessment, tax,
fee, levy or charge in substitution, partially or totally, of any assessment,
tax, fee, levy or charge previously included under Subparagraphs 6(a)(iii)(1)
and (2), including, without limitation, increases due to tax rate increases or
reassessment of the Premises, Building, Common Areas, or Project, or any portion
thereof, for any reason; (4) Any assessment Landlord must pay as owner of the
Building, Project, or Common Areas pursuant to any present or future covenants,
conditions or restrictions, easement agreements, tenancy in common agreements or
similar restrictions affecting the Building, Premises, Project, or Common Areas,
or any portion thereof; (5) Any tax or fee on personal property used in
connection with the Building, Project, or Common Areas.

 

(iv)        “Insurance Costs” means all costs of premiums for insurance that
Landlord procures under this Lease or for or in connection with the Project,
including, without limitation, any insurance which any beneficiary or mortgagee
with a lien affecting the Premises deems necessary or requires in connection
with the ownership or operation of the Building, Common Areas, or Project.

 

(v)         “Capital Costs” means all costs incurred to make any capital
improvements, repairs or replacements to the Building, Project, or Common Areas,
or any portion thereof, including, without limitation, structural additions or
repairs, which: (1) are now or may hereafter be required by any statute,
ordinance or regulation of any governmental or enforcement agency; or (2) are
needed to operate and maintain the Building, Project, or Common Areas, or any
portion thereof, at the same quality levels as prior to the improvement or
repair or to provide substantially the same level of services to tenants of the
Project as are provided to tenants of comparable buildings. All Capital Costs
shall be amortized over the useful life of the improvement, repair or
replacement as such useful life is determined by Landlord in its commercially
reasonable judgment at an imputed interest rate of eight percent (8%) per annum.

 

(b) “Operating Expenses“ shall consist of all direct costs of ownership,
operation, repair or maintenance (including necessary supplies, material, tools
and equipment) of the Building, Project, or Common Areas, including any
expansions of the Building, Project, or Common Areas by Landlord, or any portion
thereof, and all indirect costs that are reasonably attributable to the
operation, repair and maintenance of the Building, Project, and Common Areas, or
any portion thereof, for any calendar year (and if the Project is less than
ninety-five percent (95%) occupied, then the Operating Expenses will be
calculated assuming the Project is ninety-fine percent (95%) occupied for a full
calendar year), including costs for the following by way of illustration, but
not limitation:

 

HVAC Costs; Taxes and Assessments; Insurance Costs; Capital Costs; costs
connected with providing electrical, telephone, cable and other electronic data
transmission services (including, without limitation, any costs (whether or not
Capital Costs) arising from the maintenance, repair and/or replacement of all or
any component of electrical, plumbing, mechanical, lighting, HVAC or other
building systems, and/or the maintenance, repair and/or replacement of lighting
fixtures, light bulbs, air filtration or distribution devices (provided that
Landlord shall have no obligation to provide any utilities), window panes,
window coating and/or other energy-saving measures); janitorial service and
window cleaning; waste disposal; parking facilities; Common Areas signage;
landscaping and gardening; security; and accounting, legal, administrative and
consulting fees.

 

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Operating Expenses shall also include costs incurred in the management of the
Building, Project, and Common Areas (including, without limitation, wages and
salaries and related benefits for personnel to the extent used in the
management, operation and maintenance of the Building, Project, or Common Areas,
and Project management office rental and supplies) and a management fee equal to
the greater of (i) fifteen percent (15%) of the Operating Expenses incurred by
Landlord (excluding such management fee) for the calendar year or (ii) five
percent (5%) of all sources of Landlord’s gross revenue generated at the Project
for the calendar year, including, without limitation, Monthly Basic Rent and
Operating Expenses. For purposes of this Subparagraph 6(b), if the Project is
less than ninety-five percent (95%) occupied, Operating Expenses shall be deemed
to have been paid for ninety-five percent (95%) of the Rentable Square Feet in
the Project for a full calendar year

 

(c)   Except only for (i) any interest, points and fees on debts or amortization
on any mortgage or mortgages or other debt instrument evidencing indebtedness of
Landlord and (ii) costs arising from the payment of any claims against Landlord
(for which Tenant is not responsible) secured by judgments or liens against the
Premises, this Lease is and shall be construed as a “triple net” lease
arrangement, the Basic Monthly Rent shall be completely net to the Landlord, and
Tenant shall be directly responsible for and pay Tenant’s Percentage of all
Operating Expenses as set forth in clauses (i) through (v), below:

 

(i)          Beginning with the Commencement Date and on or before the
expiration of each one (1) year period thereafter (each, a “Lease Year”),
Landlord shall deliver to Tenant an estimate of Tenant’s Percentage of annual
Operating Expenses payable in twelve (12) equal monthly installments on the
first day of every month as additional rent together with Tenant’s payment of
Monthly Basic Rent. Landlord may from time to time during the Lease Year revise
Landlord’s estimate of annual Operating Expenses and Tenant’s monthly estimated
payments. If after the first Lease Year Landlord has not furnished Tenant with a
written estimate for any Lease Year, Tenant shall continue to pay monthly
installments of Tenant’s Percentage of Operating Expenses at the rate
established for the immediately preceding Lease Year (if applicable), provided
that, when a written estimate of Operating Expenses for the current Lease Year
is delivered to Tenant, Tenant shall, on or before the next monthly payment
date, pay all accrued and unpaid monthly estimates based on the new estimate.

 

(ii)         On or before May 1 of each Lease Year after the first Lease Year
(or as soon thereafter as is practical) Landlord shall deliver to Tenant a
statement (the “Statement”) setting out Tenant’s Percentage of actual Operating
Expenses for the immediately preceding Lease Year. If Tenant’s Percentage of
actual Operating Expenses for the previous Lease Year differs from the total
estimated monthly payments of Tenant’s Percentage of Operating Expenses made by
Tenant for such Lease Year, Tenant shall pay the amount of the deficiency within
ten (10) days of receipt of the Statement or Landlord shall credit the
difference, as the case may be; in the case of a credit due, Landlord shall
credit against Tenant’s next ensuing installment(s) of Monthly Basic Rent an
amount equal to the difference until the credit is exhausted. If a credit is due
from Landlord on the last day of the Term, Landlord shall credit against any
payments due from Tenant under this Lease an amount equal to the credit or, if
no payments are due, or may become due from Tenant, Landlord shall pay Tenant
the amount of the credit. The obligations of Tenant and Landlord to make
payments required under this Paragraph 6 shall survive the expiration or earlier
termination of this Lease.

 

(iii)        If any dispute arises as to the accuracy of Operating Expenses as
set forth in the Statement, Tenant shall nevertheless make the payment in
accordance with any notice given by Landlord, but Tenant shall have the right,
after reasonable notice and at reasonable times, to inspect Landlord’s
accounting records at Landlord’s accounting office and, if after such
inspection, Tenant still disputes the amount of Operating Expenses owed,
Landlord shall immediately refer the matter for prompt certification by
Landlord’s certified public accountants, who shall be deemed to be acting as
experts and not arbitrators, which certification shall be conclusive and binding
on both parties. Any adjustment required to any previous payment made by Tenant
or Landlord by reason of any such decision shall be made within ten (10) days of
such certification. Tenant agrees to pay the cost of such certification unless
it is determined that Landlord’s original Statement overstated Operating
Expenses by more than five percent (5%).

 

(iv)        Operating Expenses due from Tenant in any Lease Year which has less
than 365 days because the Term expires on other than the last day of that Lease
Year shall be prorated on a per-day basis.

 

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(v)         Without limiting the foregoing, including Landlord’s right to adjust
the estimate of Operating Expenses from time to time, should Landlord incur any
Capital Costs, Landlord may elect, in Landlord’s sole and absolute discretion,
to require payment of such Capital Costs within thirty (30) business days
following demand therefore together with such supporting documentation as Tenant
may reasonably require. All Capital Costs shall be amortized over the useful
life of the improvement, repair or replacement as such useful life is determined
by Landlord in its commercially reasonable judgment at an imputed interest rate
of eight percent (8%) per annum.

 

(d)   Notwithstanding anything to the contrary contained immediately above, as
to each specific category of expense which one or more tenants of the Project
either pays directly to third parties or actually reimburses Landlord (for
example, separately metered utilities, property taxes directly reimbursed to
Landlord, etc.) then each such expense which is actually paid or reimbursed
shall not be included in “Operating Expenses” for purposes of this Paragraph 6.
Tenant’s Percentage for each such category of expense shall be adjusted by
excluding from the denominator thereof the Rentable Square Feet of all such
tenants paying such category of expense directly to third parties or actually
reimbursing same directly to Landlord. Moreover, if Tenant directly pays a third
party or actually reimburses Landlord for any such category of expense, each
such category of expenses which is paid or actually reimbursed by Tenant shall
be excluded from the determination of Operating Expenses for Tenant to the
extent such expense (after deduction of that portion paid or directly reimbursed
by Tenant) was incurred with respect to space in the Project actually leased to
other tenants.

 

7.   SECURITY DEPOSIT.

 

The Security Deposit designated in Subparagraph 1(h) shall be held by Landlord
as security for the faithful performance by Tenant of all of Tenant’s
obligations under this Lease. If Tenant breaches any obligation under this
Lease, including, without limitation, under provisions relating to the payment
of rent, Landlord may (but shall not be required to) use, apply or retain all or
any part of the Security Deposit for the payment of any rent or any other sum in
default, or for the payment of any other amount which Landlord may spend or
become obligated to spend by reason of Tenant’s default or to help to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant’s default. If any portion of the Security Deposit is so used or applied,
Tenant shall, upon demand, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its original amount. Tenant’s failure to do so
within one (1) day after receipt of Landlord’s demand shall be a material breach
of this Lease. Upon any increase in Monthly Basic Rent, Tenant shall, upon
written notice from Landlord, deposit with Landlord such additional funds to be
added to the security deposit in an amount equal to the proportionate increase
in Monthly Basic Rent. Landlord shall not be required to keep the Security
Deposit separate from its general funds, and Tenant shall not be entitled to
interest on the Security Deposit. If Tenant shall fully and faithfully perform
all of its obligations under this Lease, the Security Deposit or any balance
thereof shall be returned to Tenant (or, at Landlord’s option, to the last
permitted assignee of Tenant’s interests under this Lease) at the expiration of
the Term, provided that Landlord may retain the Security Deposit until such time
as any amount due from Tenant in accordance with Paragraph 6 has been determined
and paid in full. Tenant shall not, under any circumstances or for any reason,
be permitted to apply any portion or all of the Security Deposit to the last
Monthly Basic Rent due or any other charges due from Tenant under the Lease. If
Landlord sells its interest in the Premises during the Term and if Landlord
deposits with the purchaser of the Premises the then unappropriated portion of
the Security Deposit, Landlord shall be discharged from any further liability
with respect to the Security Deposit. Tenant expressly waives the benefits of
California Civil Code Section 1950.7 (which provides that a landlord may claim
from a security deposit only those sums reasonably necessary to remedy defaults
in payment of rent, to repair damage caused by the tenant or to clean the
premises) and any other statute now or hereafter in effect which prevent
Landlord from applying all or any portion of the Security Deposit to offset any
future Rent owing to Landlord as of the expiration or earlier termination of
this Lease.

 

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8.   USE.

 

(a)   Tenant shall use the Premises only for the use set forth in Subparagraph
1(m), and shall not use or permit the Premises to be used for any other purpose
without Landlord’s prior written consent, which may be withheld in Landlord’s
sole and absolute discretion. Nothing contained herein shall be deemed to give
Tenant any exclusive right to such use in the Building or Project or shall be
deemed to be a warranty by Landlord that the Premises are suitable for a
particular use. Tenant shall not use or occupy the Premises in violation of any
present or future applicable law, and shall, upon written notice from Landlord,
discontinue any use of the Premises which is declared by any applicable
governmental authority to be a violation of law. Tenant shall comply with any
direction of any such governmental authority which shall, by reason of the
nature of Tenant’s use or occupancy of the Premises, impose any duty upon Tenant
or Landlord with respect to the Premises or with respect to the use or
occupation thereof. Notwithstanding any circumstantial factors judicially
developed as a means of allocating the obligation to make alterations to the
Premises in order to comply with present or future laws, it is the intention of
the parties that such obligations with respect to the Premises are those of the
Tenant and are accordingly reflected in rental payments and other consideration
under this Lease. Tenant shall comply with all rules, orders, regulations and
requirements of such generally recognized fire rating organization(s) as
Landlord may specify from time to time. Tenant shall promptly, upon demand,
reimburse Landlord for any additional insurance premium charged by reason of
Tenant’s failure to comply with the provisions of this Paragraph 8. Tenant shall
take all steps required to ensure that neither Tenant nor its contractors or
invitees (i) violate any governmental regulations, ordinances, or laws
applicable to the Premises, (ii) do or permit anything to be done in or about
the Premises which will in any way obstruct or interfere with the rights of
other tenants or occupants of the Building or Project, or injure or annoy them,
(iii) use or allow the Premises to be used for any improper, immoral, unlawful
or objectionable purpose, or (iv) cause, maintain or permit any nuisance in, on
or about the Premises. Tenant shall comply with all present and future
covenants, conditions, and restrictions or other restrictive covenants and
obligations, whether or not of record, which affect the use and operation of the
Premises, the Building, the Common Areas or the Project, or any portion thereof.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises and shall keep the Premises in first-class repair and appearance.
Tenant shall not place a load upon the Premises exceeding the average pounds of
live load per square foot of floor area specified for the Building by Landlord’s
architect, with partitions to be considered a part of the live load. Landlord
reserves the right to prescribe the weight and position of all files, safes and
heavy equipment which Tenant desires to place in the Premises so as to properly
distribute the weight thereof. Further, Tenant’s business machines and
mechanical equipment which cause vibration or noise that may be transmitted to
the Building structure or to any other space in the Building or Project shall be
so installed, maintained and used by Tenant as to eliminate such vibration or
noise. Tenant shall be responsible for all structural engineering required to
determine structural load in the Premises.

 

(b)   Landlord and Tenant acknowledge that the Americans With Disabilities Act
of 1990 (42 U.S.C. Section 12101 et seq.) and regulations and guidelines
promulgated thereunder, as all of the same may be amended and supplemented from
time to time (collectively, “ADA”) establish requirements for business
operations, accessibility and barrier removal, and that such requirements may or
may not apply to the Premises, the Building and the Project depending on, among
other things: (1) whether Tenant’s business is deemed a “public accommodation”
or “commercial facility”, (2) whether such requirements are “readily
achievable”, and (3) whether a given alteration affects a “primary function
area” or triggers “path of travel” requirements. Landlord makes no
representation or warranty as to the compliance of the Premises, the Building or
the Common Areas with the ADA. The parties hereby agree that: (a) Tenant shall
be responsible for ADA Title III compliance in the Premises, including any
tenant improvements or other work to be performed in the Premises under or in
connection with this Lease, (b) Landlord may perform or require that Tenant
perform, and Tenant shall be responsible for the cost of, ADA Title III “path of
travel” requirements triggered by Tenant Alterations in the Premises, and (c)
Landlord may perform, or require Tenant to perform, and Tenant shall be
responsible for the cost of, ADA Title III compliance in the Common Areas
necessitated by the Building being deemed to be a “public accommodation” instead
of “commercial facility” as a result of Tenant’s use of the Premises. Tenant
shall be solely responsible for requirements under Title I of the ADA relating
to Tenant’s employees.

 

(c)   In accordance with California Civil Code Section 1938, Landlord hereby
discloses to Tenant that neither the Building nor the Premises has undergone
inspection by a certified access specialist.

 

9.   NOTICES.

 

Any notice, request, consent, or approval required or permitted to be made or
given under this Lease must be in writing and may be given by personal delivery
or by mail, whether personally delivered or mailed by registered or certified
mail, if to Tenant at the address designated in Subparagraph 1(a) until the
commencement of the Term only, and thereafter at the Premises, and if to
Landlord at the addresses designated in Subparagraph 1(a). Any such notice,
request, consent, or approval will be deemed sufficiently given when actually
received by the intended party or when delivery is attempted in good faith
during usual business hours and either refused or otherwise unsuccessful due to
the acts or omissions of the intended recipient. Either party may specify a
different address for notice purposes by written notice to the other, except
that Landlord may in any event use the Premises as Tenant’s address for notice
purposes.

 

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10.   BROKERS.

 

Tenant warrants that it has had no dealings with any real estate broker or agent
in connection with the negotiation of this Lease, except the Broker(s) (named in
Subparagraph 1(c)). Tenant agrees to indemnify and defend Landlord from any
damages, cost, expense ,liability or claim for any compensation, fee, commission
or charge claimed by any other party claiming by, through or on behalf of Tenant
with respect to this Lease.

 

11.   HOLDING OVER.

 

Tenant shall vacate the Premises upon the expiration or earlier termination of
this Lease. Tenant shall reimburse Landlord for and indemnify Landlord against
all damages, costs and expenses (including attorneys’ fees), judgments, injury,
liability, claims and losses (collectively, “Claims”) that Landlord incurs from
Tenant’s delay in vacating the Premises, including, without limitation, claims
by and liability to any succeeding tenant founded on such delay and any
attorneys’ fees and costs. If Tenant holds over for any period after the
expiration or earlier termination of this Lease without the prior written
consent of Landlord, such possession shall constitute a tenancy at sufferance
only and a default under this Lease without further notice; such holding over
with the prior written consent of Landlord shall constitute a month-to-month
tenancy commencing on the first (1st) day following the expiration or earlier
termination of this Lease and terminating thirty (30) days following delivery of
written notice of termination by either Landlord or Tenant to the other. In
either of such events, possession shall be subject to all of the terms of this
Lease, except that the Monthly Basic Rent then in effect shall be increased by
one hundred percent (100%).

 

12.   TAXES ON TENANT’S PROPERTY.

 

(a)   Tenant shall be liable for and shall pay, at least ten (10) days before
delinquency, all taxes levied against any personal property or trade fixtures
placed by Tenant in or about the Premises. If any such taxes on Tenant’s
personal property or trade fixtures are levied against Landlord or Landlord’s
property or if the assessed value of the Premises is increased by the inclusion
therein of a value placed upon such personal property or trade fixtures of
Tenant and if Landlord, after written notice to Tenant, pays the taxes based
upon such increased assessment, which Landlord shall have the right to do
regardless of the validity thereof, but only under proper protest if requested
by Tenant, Tenant shall, upon demand, repay to Landlord the taxes so levied
against Landlord, or the portion of such taxes resulting from such increase in
the assessment.

 

(b)   If the Tenant Improvements in the Premises, whether installed by Landlord
or Tenant, or paid for by Landlord or Tenant and whether or not affixed to the
real property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant improvements
conforming to Landlord’s Standards (as defined in the Premises Preparation
Agreement) for other space in the Building are assessed, then the real property
taxes and assessments levied against the Building by reason of such higher
assessed valuation shall be deemed to be taxes levied against personal property
of Tenant and shall be governed by the provisions of Subparagraph 12(a). If the
records of the County Assessor are not available or sufficiently detailed to
serve as a basis for determining whether the Tenant Improvements are subject to
a higher valuation than improvements conforming to Landlord’s Standards, the
actual cost of construction shall be used.

 

(c)   Any assessment, tax, fee, levy or charge allocable to or measured by the
area of the Premises or by any payments to be made by Tenant under this Lease,
including, without limitation, any gross income tax or excise tax levied by any
governmental agency or political subdivision thereof with respect to the receipt
of rent or other payments under a lease, or upon or with respect to the
possession, leasing, operating, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises, or any portion thereof, shall be deemed
to be taxes levied against personal property of Tenant and shall be governed by
the provisions of Subparagraph 12(a).

 

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13.   CONDITION OF PREMISES.

 

Except as expressly set forth in this Lease (including construction of the
Tenant Improvements in accordance with the terms and conditions of the Premises
Preparation Agreement), Landlord’s lease of the Premises to Tenant shall be on
an “AS IS” basis without representations or warranties express or implied, and
Tenant’s taking of possession of the Premises shall conclusively establish that
the Premises and the Building were in satisfactory condition at the time of that
possession (excluding those items normally associated with a “punch list”).
Tenant accepts that from time to time there may be construction and improvement
work by Landlord on other space in the Building and to the Common Areas and
other portions of the Project, and that such work may cause intermittent noise,
vibrations, or other temporary inconveniences; provided, however, Landlord will
take steps deemed reasonably necessary and feasible by Landlord to minimize
inconveniences to Tenant and Tenant’s employees and visitors.

 

14.  ALTERATIONS.

 

(a)   Tenant shall make no alterations, additions, repairs or improvements to
the Premises (collectively, “Alteration(s)”) except as expressly permitted by
this Paragraph 14. Tenant shall have no right to make any Alterations to the
structural portions of the Building, which shall include the foundation,
floor/ceiling slabs, roof, curtain walls, exterior glass and mullions, columns,
beams, shafts, stairs, stairwells, escalators, plazas, artwork, sculptures,
washrooms, mechanical, electrical and telephone closets and all Common Areas and
public areas and the mechanical, electrical, life safety, plumbing, sprinkler
systems and HVAC systems (collectively, “Building Structure and Systems”).
Landlord’s consent to any other Alteration (i.e., other than to an Alteration to
any portion or component of the Building Structure and Systems or that, in
Landlord’s sole and absolute discretion, could adversely affect any portion of
the Building Structure and Systems) shall not be unreasonably withheld.
Notwithstanding the other provisions of this Paragraph 14, Tenant may install
normal office decorations (e.g., paintings) in the Premises without obtaining
Landlord’s consent.

 

(b)   Landlord may condition its consent to any type of Alteration (including
any Alterations Tenant shall make, or shall cause to be made, under the Premises
Preparation Agreement) on such requirements as Landlord may deem necessary in
its subjective, good faith discretion, including without limitation: (i) the
manner in which the work is to be done, (ii) the right of approval over the
entity which shall perform, or contract to perform, the work (which approval may
be withheld if, among other things, that entity is not properly licensed under
all applicable laws or if Landlord deems the insurance carried by that entity to
be inadequate), (iii) the times during which the work is to be accomplished,
(iv) the issuance at Tenant’s sole cost of a performance or labor and material
payment bond ensuring lien-free completion of the proposed Alterations, (v)
delivery to Landlord of preliminary and final sets of plans for the proposed
Alterations, or (vi) modification of the proposed Alterations to conform to
Landlord’s subjective opinion about the appearance of the proposed Alterations.
Tenant shall give Landlord at least ten (10) business days prior written notice
of the expected commencement date of any work related to the Premises. Tenant
shall be responsible for obtaining all permits required by law for all work done
by Tenant under this Lease (including work Tenant performs, or shall cause to be
performed, under the Premises Preparation Agreement) and Tenant warrants that
such work shall comply with all applicable governmental laws, codes, or
ordinances, including, without limitation, the ADA).

 

(c)   Upon the expiration or earlier termination of this Lease, (i) all or any
part of the Alterations to or in connection with the Premises under the Premises
Preparation Agreement shall become the property of Landlord and remain on and be
surrendered with the Premises, and (ii) all or any part of any Alterations to or
in connection with the Premises under this Paragraph 14 other than those
Alterations performed under the Premises Preparation Agreement shall, at the
option of Landlord, either (a) become the property of Landlord and remain and be
surrendered with the Premises, or (b) be removed from the Premises and the
Premises restored to their condition immediately before those Alterations were
made, all by and at the expense of Tenant.

 

(d)   All articles of personal property and all business and trade fixtures,
machinery and equipment, furniture and movable partitions owned by Tenant
(“Tenant’s Effects”) shall be and remain the property of Tenant and may be
removed by Tenant at any time during the Term when Tenant is not in default
under this Lease. If Tenant fails to remove all of Tenant’s Effects from the
Premises upon the expiration or earlier termination of this Lease, Landlord may,
at its option, remove Tenant’s Effects and store Tenant’s Effects without
liability to Tenant for loss of Tenant’s Effects. Tenant agrees to pay Landlord
upon demand any and all expenses incurred by Landlord in removing Tenant’s
Effects, including court costs, attorneys’ fees and storage charges on Tenant’s
Effects, for any length of time that Tenant’s Effects shall be in Landlord’s
possession. Landlord may, at its option, without notice, sell Tenant’s Effects,
or any of the same, at a private sale and without legal process, for such price
as Landlord may obtain, and apply the proceeds of such sale to any amounts due
under this Lease from Tenant to Landlord and to the expenses incident to the
removal and sale of Tenant’s Effects. Tenant waives the provisions of California
Civil Code sections 1980-1991.

 

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15.   REPAIRS.

 

(a)   Tenant shall keep, maintain and preserve the Premises in first-class
condition and repair, and shall, when and if needed, at Tenant’s sole cost and
expense, make all repairs to the Premises and every part thereof, including,
without limitation, the interior surfaces of the ceilings, walls and floors, all
doors, all interior windows, all non-Standard (as defined in the Premises
Preparation Agreement) plumbing, pipes, electrical wiring, light fixtures and
bulbs, switches, furnishings, signs and special items and equipment located
within or exclusively serving the Premises or installed by or at the expense of
Tenant. Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises or any part thereof. Tenant and Landlord affirm
that Landlord has made no representations to Tenant respecting the condition of
the Premises, the Building, the Common Areas, or the Project except as
specifically set forth in this Lease.

 

(b)   Anything contained in Paragraph 15(a) to the contrary notwithstanding,
Landlord shall repair and maintain the structural portions of the Building and
the Building Standard plumbing, heating, ventilating, air conditioning and
electrical systems, unless such maintenance and repairs are required in part or
in whole by the act, neglect or omission of Tenant, its agents, servants,
employees or invitees, in which case Tenant shall pay to Landlord, as additional
rent, the reasonable cost of such maintenance and repairs. Landlord shall not be
liable for any failure to make any such repairs or to perform any maintenance
unless such failure shall persist for an unreasonable time after written notice
of the need of such repairs or maintenance is given to Landlord by Tenant.
Except as provided in Paragraph 23, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant’s
business arising from the making of any repairs, alterations or improvements in
or to any portion of the Building, the Premises, the Common Areas, or the
Project or in or to fixtures, appurtenances and equipment therein. Tenant waives
the right to make repairs at Landlord’s expense under any law, statute or
ordinance now or hereafter in effect. No provision of this Lease shall be
construed as obligating Landlord to perform any repairs, alterations or
decorations except as otherwise expressly provided under this Lease.

 

(c)   As between Landlord and Tenant, Landlord is recognized as the owner of all
data, telephone, cable, and any fiber optic wiring serving the Premises
(collectively, the “Building Cable”) whether installed as of or following the
Commencement Date. Tenant shall be responsible for the maintenance of all
Building Cable. Tenant’s access to the Common Areas for the purposes of
installing and maintaining the Building Cable is conditioned upon Landlord’s
approval of Tenant’s service contract and appropriate insurance policies being
obtained by the entity installing the Building Cable. Landlord shall not be
responsible and shall have no liability for interruption in or failures of
telephone or electronic data transmission services. Tenant shall abide by all
reasonable, written and nondiscriminatory rules and regulations hereafter
promulgated by Landlord regarding access to the Building Cable. Tenant shall
indemnify, defend and hold Landlord harmless from and against any and all
claims, losses, liabilities, costs and expenses, including, without limitation,
actual attorneys’ fees, incurred by Landlord and related to Tenant’s access to
or work performed in connection with the Building Cable. Upon the expiration or
earlier termination of this Lease, Tenant shall leave all Building Cable unless
Landlord notifies Tenant, which notice shall not be required before the
expiration or earlier termination of this Lease, to remove all or any portion of
such Building Cable. All Building Cable installed and left by Tenant shall be
clearly labeled with all connectors intact and operable.

 

(d)   At Landlord’s election as part of Operating Expenses, Landlord may elect
from time to time to procure and keep in effect, as part of Operating Expenses,
the following maintenance and service contracts: (i) landscaping, (ii) heating,
ventilation and air conditioning equipment, (iii) boiler, fired or unfired
pressure vessels, (iv) fire sprinkler and/or standpipe and hose or other
automatic fire extinguishing systems, including fire alarm and/or smoke
detection systems, (v) roof covering and drain maintenance, (vii) asphalt and
parking lot maintenance, and (viii) janitorial service for the Project and the
Premises.

 

16.   LIENS.

 

Tenant shall not permit any mechanics’, materialmens’ or other liens to be filed
against any portion of the Building or the Project or against Tenant’s leasehold
interest in the Premises. Landlord shall have the right at all reasonable times
to post and keep posted on the Premises any notices which it deems necessary for
protection from such liens.

 

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If any such liens are filed, Landlord may, without waiving its rights and
remedies based on such breach of Tenant and without releasing Tenant from any of
its obligations, cause such liens to be released by any means it shall deem
proper, including payments in satisfaction of the claim giving rise to such
lien. Tenant shall pay to Landlord at once, upon notice by Landlord, any sum
paid by Landlord to remove such liens, together with interest on that sum at (a)
the maximum rate permitted by then-existing usury law, if applicable, or (b) if
the then-existing usury law is not applicable, one and one-half percent (1-1/2%)
per month (“Lease Interest Rate”) from the date of Landlord’s payment.

 

17.   ENTRY BY LANDLORD.

 

Landlord reserves and shall at all times have the right to enter the Premises to
inspect the same, to supply janitor service and any other service to be provided
by Landlord to Tenant under this Lease, to show the Premises to prospective
purchasers or tenants, to post notices of non-responsibility, to alter, improve
or repair the Premises or any other portion of the Building, without any such
act being deemed an eviction of Tenant and without abatement of rent. Landlord
shall have the right, but not the obligation, to enter upon the Premises and
into the Building for the purpose of performing any obligation on Tenant’s part
to be performed following a Tenant default pursuant to Paragraph 25, below, and
Tenant shall pay all costs incurred by Landlord at the Lease Interest Rate.
Landlord may, in order to carry out all such purposes, erect scaffolding and
other necessary structures where reasonably required by the character of the
work to be performed. Tenant waives any claim for damages for any injury or
inconvenience to or interference with Tenant’s business, any loss of occupancy
or quiet enjoyment of the Premises, and any other loss in, upon and about the
Premises resulting from any entry permitted under this paragraph. Landlord shall
at all times have and retain a key with which to unlock all doors in the
Premises, excluding Tenant’s vaults and safes. Landlord shall have the right to
use any and all means which Landlord may deem proper to open any door in an
emergency in order to obtain entry to or within the Premises. Any entry to the
Premises obtained by Landlord by any means shall not be deemed to be a forcible
or unlawful entry into the Premises, or an eviction of Tenant from the Premises
or any portion thereof, and any damages caused on account thereof shall be paid
by Tenant if that entry was caused by the acts or omissions of Tenant, its
agents or contractors.

 

18.   UTILITIES AND SERVICES.

 

Tenant represents that it is familiar with the standards for all utilities
servicing the Premises, including, without limitation, the capacity of the
feeders to the Building and the risers and wiring installations and standards
set forth in attached Exhibit D. Tenant shall contract directly with all utility
companies and similar providers for utilities and services to the Premises and
pay directly for all such services (which shall include, without limitation, all
water, sewer, electrical, cable and other electronic data transmission
services), and Landlord shall have no obligation to provide any such services.
Notwithstanding the foregoing, any installation of utility lines, including,
without limitation, Building Cable whether or not through any existing conduits
or risers, and any trenching over the Premises to install wiring or cable,
whether or not over existing utility easements, shall be considered an
alteration to the Building Structure and Systems. Unless directly caused by the
gross active negligence or the intentional misconduct of Landlord, the
interruption of any utilities or services to the Building shall not result in
any liability of Landlord, Tenant shall not be entitled to any abatement or
reduction of rent by reason of such failure (whether such failure affects HVAC
services or otherwise), no eviction of Tenant shall result from such failure,
and Tenant shall not be relieved from the performance of any covenant or
agreement in this Lease because of such failure. Any such interruption shall
include, without limitation, failure of services caused by (i) accident,
breakage or repairs; (ii) strikes, lockouts or other labor disturbance or labor
dispute of any character; (iii) governmental regulation, moratorium or other
governmental action; (iv) inability despite the exercise of reasonable diligence
to obtain electricity, water or fuel; or (v) any other cause beyond Landlord’s
reasonable control.

 

19.   BANKRUPTCY.

 

If Tenant shall file a petition in bankruptcy under any provision of the
Bankruptcy Code as then in effect, or if Tenant shall be adjudicated a bankrupt
in involuntary bankruptcy proceedings and such adjudication shall not have been
vacated within thirty (30) days from the date thereof, or if a receiver or
trustee of Tenant’s property shall be appointed and the order appointing such
receiver or trustee shall not be set aside or vacated within thirty (30) days
after the entry thereof, or if Tenant shall assign Tenant’s estate or effects
for the benefit of creditors (collectively, “Acts of Insolvency”), or if this
Lease shall, by operation of law or otherwise, pass to any person or persons
other than Tenant, then in any such event Landlord may terminate this Lease, if
Landlord so elects, with or without notice of such election and with or without
entry or action by Landlord. In such case, notwithstanding any other provisions
of this Lease, Landlord, in addition to any and all rights and remedies allowed
by law or equity, shall, upon such termination, be entitled to recover damages
in the amount provided in Subparagraph 25(b), and neither Tenant nor any person
claiming through or under Tenant or by virtue of any statute or order of any
court shall be entitled to possession of the Premises but shall immediately
surrender the Premises to Landlord. Nothing contained herein shall limit or
prejudice the right of Landlord to recover, by reason of any such termination,
damages equal to the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, such damages are to be
proved, whether or not such damages are greater, equal to or less than the
amount of damages otherwise recoverable under the provisions of this Paragraph
19.

 

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20.   INDEMNIFICATION AND EXCULPATION OF LANDLORD.

 

(a)   Tenant shall indemnify, defend and hold Landlord and its officers,
directors, shareholders, agents, employees, and contractors (the “Landlord
Parties” or, individually, a “Landlord Party”) harmless from all Claims arising
from Tenant’s use of the Premises or the conduct of its business or from any
activity, work or thing done, permitted or suffered by Tenant in or about the
Premises, the Building, the Common Areas, any portion thereof, or any other part
of the Project. Tenant shall further indemnify, defend and hold the Landlord
Parties harmless from all Claims arising from any breach or default in the
performance of any obligation to be performed by Tenant under this Lease, or
arising from any act, neglect, fault or omission of Tenant or of its agents,
employees, or contractors, and from and against all Claims incurred in, or
arising out of, such claim or any action or proceeding brought thereon. In case
any action or proceeding shall be brought against the Landlord Parties or any of
them by reason of any such Claim, Tenant, upon notice from Landlord, shall
defend the same at Tenant’s expense by counsel approved in writing by Landlord.
Tenant, as a material part of the consideration to Landlord, hereby assumes all
risk of damage to property or injury to persons in, upon or about the Premises
from any cause whatsoever except that which is caused by the gross active
negligence or willful misconduct of the Landlord Parties or any of them or
Landlord’s breach of this Lease. Tenant hereby waives all its Claims in respect
thereof against Landlord.

 

(b)   Neither Landlord nor any Landlord Party shall be liable to Tenant or its
partners, directors, officers, contractors, agents, employees, invitees,
sublessees or licensees for any loss, injury or damage to Tenant or to any other
person, or to its or their property, including, without limitation, if such
loss, injury or damage arises out of or in connection with Landlord’s active or
passive negligence except to the extent such loss, injury or damage is caused by
the gross active negligence or willful misconduct of Landlord or a Landlord
Party in the operation or maintenance of the Premises or the Building. Further,
neither Landlord nor any Landlord Party shall be liable (i) for any such damage
caused by other tenants or persons in or about the Building; or (ii) for
consequential or punitive damages arising out of any loss of the use of the
Premises or any equipment or facilities therein by Tenant or any person claiming
through or under Tenant.

 

21.   DAMAGE TO TENANT’S PROPERTY.

 

Subject to the provisions of Paragraph 20, neither Landlord nor any Landlord
Party shall be liable for (i) any damage to any property entrusted to employees
of the Building, (ii) loss or damage to any property by theft or otherwise, or
(iii) any injury or damage to persons or property resulting from fire,
explosion, falling plaster or other improvements, steam, gas, electricity, water
or rain which may leak from any part of the Building or from any latent defect
in the Premises or in the Building or any portion thereof, including, without
limitation, from the pipes, appliances or plumbing work in the Building or from
the roof, street or subsurface or from any other place or resulting from
dampness or any other cause whatsoever. Except as expressly provided otherwise
in this Lease, neither Landlord nor any Landlord Party shall be liable for
interference with light or other property rights. Tenant shall give prompt
notice to Landlord in case of fire or accidents in the Premises or in the
Building or of defects in the Premises or the Building or in any fixtures or
equipment.

 

22.    TENANT’S INSURANCE.

 

(a)   Tenant shall, during the Term and any other period of occupancy, at its
sole cost and expense, keep in full force the following insurance:

 

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(i)          Standard form property insurance insuring against all-risk perils
(“All-Risk”) and sprinkler leakage. This insurance policy shall be upon all
property owned by Tenant, for which Tenant is legally liable or that was
installed at Tenant’s expense, and which is located in the Building including,
without limitation, furniture, fittings, installations, fixtures (other than
tenant improvements installed by Landlord), and any other personal property, in
an amount not less than the full replacement cost thereof. If there is a dispute
as to the amount which comprises full replacement cost, the decision of Landlord
or any mortgagees of Landlord shall be conclusive. This insurance policy shall
also cover direct or indirect loss of Tenant’s earnings attributable to Tenant’s
inability to use fully or obtain access to the Premises or Building in an amount
which will properly reimburse Tenant. Such policy shall name Landlord and any
mortgagees of Landlord as insured parties, as their respective interests may
appear.

 

(ii)         Commercial General Liability Insurance insuring Tenant against any
liability arising out of the lease, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be in the
amount of $2,000,000 Combined Single Limit for injury to, or death of one or
more persons in an occurrence, and for damage to tangible property in an
occurrence. The policy shall insure the hazards of the Premises and Tenant’s
operations thereon, independent contractors, and contractual liability (covering
the indemnity contained in Paragraph 20), and shall (1) name Landlord and
Landlord’s lender(s) and mortgagee(s) as additional insureds, (2) contain a
cross-liability provision, and (3) contain a provision that the insurance
provided Landlord under this Subparagraph 22(a)(ii) shall be primary and
non-contributing with any other insurance available to Landlord.

 

(iii)        Workers’ Compensation and Employer’s Liability insurance as
required by state law.

 

(iv)        Business interruption insurance coverage for all Basic Monthly Rent
and Operating Expenses for a period of at least twelve (12) months.

 

(v)         Any other form or forms of insurance which Tenant or Landlord or any
mortgagees of Landlord may reasonably require from time to time in form, in
amounts, and for insurance risks against which a prudent tenant would protect
itself.

 

(b)   All policies to be procured by Tenant shall be written in a form
satisfactory to Landlord and shall be maintained with insurance companies
holding a General Policyholders Rating of “A” and a Financial Rating of “X” or
better, as set forth in the most current issue of Best’s Insurance Guide. Within
ten (10) days after the execution of this Lease and before occupying the
Premises, Tenant shall deliver to Landlord copies of policies or certificates
evidencing the existence of the amounts and forms of coverage satisfactory to
Landlord. No such policy shall be cancelable or reducible in coverage without at
least thirty (30) days prior written notice to Landlord. Tenant shall, at least
ten (10) days before the expiration of such policies, furnish Landlord with
renewals or “binders” thereof, or Landlord may order such insurance and charge
the cost thereof to Tenant as additional rent. If Landlord obtains any insurance
that is the responsibility of Tenant under this Paragraph 22, Landlord shall
deliver to Tenant a written statement setting forth the cost of any such
insurance and showing in reasonable detail the manner in which it has been
computed, and Tenant shall reimburse Landlord such amount at the Lease Interest
Rate until paid.

 

(c)   During the Term, Landlord shall insure the Building (excluding any
property which Tenant is obligated to insure under Subparagraphs 22(a)) against
damage with All-Risk insurance and public liability insurance, all in such
amounts and with such deductibles as Landlord considers appropriate. Landlord
may, but shall not be obligated to, obtain and carry earthquake insurance, flood
insurance, rental interruption insurance, or any other form or forms of
insurance as it or Landlord’s mortgagees may determine advisable. Tenant
acknowledges that Tenant’s insurance shall in any event provide primary coverage
and that it has no right to receive any proceeds from any insurance policies
carried by Landlord.

 

(d)   Tenant will not keep, use, sell or offer for sale in or upon the Premises
any article which may be prohibited by any insurance policy periodically in
force covering the Building. If Tenant’s use of the Premises, whether or not
Landlord has consented to the same, results in any increase in premiums for the
insurance periodically carried by Landlord with respect to the Building, Tenant
shall pay any such increase in premiums as additional rent within ten (10) days
after being billed therefore by Landlord. In determining whether increased
premiums are a result of Tenant’s use of the Premises, a schedule issued by the
organization computing the insurance rate on the Building or the Tenant
Improvements showing the various components of such rate shall be conclusive
evidence of the several items and charges which make up such rate. Tenant shall
promptly comply with all reasonable requirements of the insurance authority or
any present or future insurer relating to the Premises.

 

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(e)   If any of Landlord’s insurance policies shall be canceled or cancellation
shall be threatened or the premium or coverage thereunder changed or threatened
to be changed in any way because of the use of the Premises or any part thereof
by Tenant or any assignee or subtenant of Tenant or by anyone Tenant permits on
the Premises and, if Tenant fails to remedy the condition giving rise to such
threatened or actual cancellation, or threatened or actual change in coverage or
premiums, then, within forty-eight (48) hours after notice thereof, Landlord
may, at its option, either terminate this Lease or enter upon the Premises and
attempt to remedy such condition, and Tenant shall promptly pay the cost thereof
to Landlord as additional rent. Landlord shall not be liable for any damage or
injury caused to any property of Tenant or of others located on the Premises
resulting from such entry. If Landlord is unable or elects not to remedy such
condition, then Landlord shall have all of the remedies for a Tenant default
provided for in this Lease.

 

(f)   All policies of insurance required hereunder shall include a clause or
endorsement denying the insurer any rights of subrogation against the other
party to the extent rights have been waived by the insured before the occurrence
of injury or loss. Landlord and Tenant waive any rights of recovery against the
other for injury or loss due to hazards covered by policies of insurance
containing such a waiver of subrogation clause or endorsement to the extent of
the injury or loss covered thereby.

 

23.   DAMAGE OR DESTRUCTION.

 

(a)   If the Project, Building, or the Premises is damaged by fire or other
perils, Landlord shall:

 

(i)          In the event of total destruction, at Landlord’s option, (x) as
soon as reasonably possible after receipt of all insurance proceeds, approval by
local authorities of any and all required final building plans and
specifications and issuance of all required building permits and licenses,
commence repair, reconstruction and restoration of the Project, Building, or the
Premises and prosecute the same diligently to completion, in which event this
Lease shall remain in full force, or (y) within the later of (a) the date of
final insurance adjustment or (b) ninety (90) days after such damage, elect not
to so repair, reconstruct or restore the Project, Building, or the Premises, in
which latter event this Lease shall be deemed to have terminated as of the date
of such total destruction. In either event, Landlord shall give Tenant written
notice of its intention within ninety (90) days after the date of total
destruction.

 

(ii)         In the event of a partial destruction of the Project or Building to
an extent not exceeding twenty-five percent (25%) of the full insurable value of
the Project or Building or the Premises, and if the damage thereto is such that
the Project, Building, or the Premises may be repaired, reconstructed or
restored within a period of ninety (90) days from the date of such casualty, and
if Landlord has received insurance proceeds sufficient to cover the cost of such
repairs, then Landlord shall commence and proceed diligently with the work of
repair, reconstruction and restoration of the Building or Premises and this
Lease shall continue in full force (it being understood and agreed that Landlord
shall not be required to repair, reconstruct, or restore the other portions of
the Project unless Tenant’s use of or access to the Premises will be materially
affected by Landlord’s election to not repair, reconstruct or restore the
damaged portion of the Project). If (i) such work of repair, reconstruction and
restoration shall require a period longer than ninety (90) days after the date
of the casualty or exceeds twenty-five percent (25%) of the full insurable value
of the Building, (ii) such partial destruction is not insured, or (iii)
insurance proceeds will not be sufficient to cover the entire cost of such
repairs, then Landlord either may elect to so repair, reconstruct or restore and
the Lease shall continue in full force or Landlord may elect not to repair,
reconstruct or restore and the Lease shall be deemed to have terminated as of
the date of such partial destruction. Under any of the conditions of this
Subparagraph 23(a)(ii), Landlord shall give written notice to Tenant of its
intention within the later of (a) the date of final insurance adjustment or (b)
ninety (90) days after the date of partial destruction of the Project, Building,
or Premises.

 

(b) Except as provided otherwise in this Lease, upon any termination of this
Lease under any of the provisions of this Paragraph 23, the parties shall be
released without further obligation to the other from the date possession of the
Premises is surrendered to Landlord except for items which have previously
accrued and are then unpaid.

 

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(c)  In the event of repair, reconstruction or restoration by Landlord as
provided in this Paragraph 23, the rent payable under this Lease shall be abated
proportionately to the degree to which Tenant’s use of the Premises is impaired
during the period of such repair, reconstruction or restoration only to the
extent Landlord receives proceeds from any rent abatement insurance that may be
carried by Landlord or business interruption insurance carried by Tenant;
provided that there shall be no abatement of rent if such damage is the result
of the negligence or intentional wrongdoing of Tenant or its agents, employees,
contractors or invitees. Tenant shall not be entitled to any compensation or
damages for (i) loss in the use of the whole or any part of the Premises or (ii)
any inconvenience or annoyance occasioned by such damage, repair, reconstruction
or restoration.

 

(d)  Tenant shall not be released from any of its obligations under this Lease
except to the extent and upon the conditions expressly stated in this Paragraph
23. Notwithstanding anything to the contrary contained in this Paragraph 23, if
Landlord is delayed or prevented from repairing or restoring the damaged
Premises more than one (1) year after the occurrence of such damage or
destruction by reason of acts of God, war, governmental restrictions, inability
to procure the necessary labor or materials, or other cause beyond the control
of Landlord, Landlord, at its option, may terminate this Lease, whereupon
Landlord shall be relieved of its obligation to make such repairs or restoration
and Tenant shall be released from its obligations under this Lease as of the end
of the one-year period.

 

(e)  If Landlord is obligated to or elects to repair or restore as herein
provided, Landlord shall be obligated to make repair or restoration only of
those portions of the Building or the Premises which were originally provided at
Landlord’s expense, and the repair and restoration of items not provided at
Landlord’s expense shall be the obligation of Tenant.

 

(f)  Notwithstanding anything to the contrary contained in this Paragraph 23,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises when the damage resulting from any casualty covered under
this Paragraph 23 occurs during the last twelve (12) months of the Term. In the
event Landlord elects not to repair any such damage or destruction occurring
during the last twelve (12) months of the Term, then this Lease and the parties’
respective obligations hereunder (other than those that by their nature survive
Lease termination) shall terminate.

 

(g)  The provisions of Civil Code Section 1932, Subsection 2, and Section 1933,
Subsection 4, which permit termination of a lease upon destruction of the leased
premises, are hereby waived by Tenant, and the provisions of this Lease shall
govern in case of such destruction. Except as provided otherwise in this Lease,
Tenant shall not be released from any of its obligations under this Lease, the
rent and other expenses payable by Tenant under this Lease shall not abate, and
Landlord shall have no liability to Tenant for any damage or destruction to the
Premises or the Building or any inconvenience or injury to Tenant by reason of
any maintenance, repairs, alterations, decoration, additions or improvements to
the Premises, Building, or Project.

 

24.  EMINENT DOMAIN.

 

(a)  If all of the Project, Building, or Premises, or such part thereof as shall
materially and adversely interfere with Tenant’s use and occupancy thereof,
shall be taken for any public or quasi-public purpose by any lawful power or
authority by exercise of the right of appropriation, condemnation or eminent
domain, or sold to prevent such taking, either party shall have the right to
terminate this Lease effective as of the date possession is required to be
surrendered to such authority. In addition, if such part of the Project as
shall, in Landlord’s sole discretion, materially affect the continuing viability
of the Project as an industrial project shall be taken for any public or
quasi-public purpose by any lawful power or authority by exercise of the right
of appropriation, condemnation or eminent domain, or sold to prevent such
taking, the Landlord shall have the right to terminate this Lease effective as
of the date possession is required to be surrendered to such authority. Tenant
shall not assert any claim against Landlord or the taking authority for any
compensation because of such taking, and Landlord shall be entitled to receive
the entire amount of any award without deduction for any estate or interest of
Tenant. If the amount of property or the type of estate taken does not
substantially interfere with the conduct of Tenant’s business, Landlord shall be
entitled to the entire amount of the award without deduction for any estate or
interest of Tenant, Landlord shall restore the Premises to substantially their
same condition before the partial taking to the extent Landlord receives
condemnation proceeds (with any deficiency to be paid by Tenant as a condition
to Landlord’s obligation to restore). Notwithstanding the foregoing, Tenant
shall have the right to proceed against the condemning authority for any
damages, including rent paid to Landlord, during the time Tenant is deprived of
the use of the Premises on account of such taking and restoration, and nothing
contained in this Paragraph shall be deemed to give Landlord any interest in any
award made to Tenant for the taking of personal property and fixtures belonging
to Tenant. Rent during any such taking and restoration shall abate only to the
proportionate extent of Tenant’s inability to use the Premises and only to the
extent Landlord receives proceeds from any rent abatement insurance that may be
carried by Landlord or business interruption insurance carried by Tenant.

 

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(b)   In the event of taking of the Premises or any part thereof for temporary
use, (i) this Lease shall be and remain unaffected thereby and rent shall not
abate except to the proportionate extent of Tenant’s inability to use the
Premises and only to the extent Landlord receives proceeds from any rent
abatement insurance that may be carried by Landlord or business interruption
insurance carried by Tenant, and (ii) Tenant shall be entitled to receive for
itself such portion or portions of any award made for such use with respect to
the period of the taking which is within the Term, provided that if such taking
shall remain in force at the expiration or earlier termination of this Lease,
Tenant shall then pay to Landlord a sum equal to the reasonable cost of
performing Tenant’s obligations under Subparagraph 14(c) with respect to
surrender of the Premises and upon such payment shall be excused from such
obligations. For purpose of this Subparagraph 24(b), a temporary taking shall be
defined as a taking for a period of 270 days or less. Tenant expressly waives
the benefits of any statute now or hereafter in effect which would permit Tenant
to terminate or seek termination of this Lease in the event of condemnation,
including, without limitation, California Code of Civil Procedure sections
1265.110, 1265.120, and 1265.130.

 

25.  DEFAULTS AND REMEDIES.

 

(a)   The occurrence of any one or more of the following events shall constitute
a default hereunder by Tenant:

 

(i)          Abandonment of the Premises by Tenant. Notwithstanding the
provisions of Civil Code Section 1951.3, “abandonment” means any absence by
Tenant from the Premises for three (3) days or longer while in default of any
provision of this Lease.

 

(ii)         The failure by Tenant to make any payment of rent or additional
rent or any other payment required to be made by Tenant under this Lease, as and
when due, provided that Tenant may cure such default by making such payment to
Landlord within three (3) days after written notice thereof from Landlord to
Tenant; provided, however, that any such notice shall be in lieu of, and not in
addition to, any notice required under Code of Civil Procedure Section 1161
regarding unlawful detainer actions.

 

(iii)        The failure by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in Subparagraphs 25(a)(i) or (ii), provided that
Tenant may cure such default by curing such failure within ten (10) days after
written notice thereof from Landlord to Tenant. Any such notice shall be in lieu
of, and not in addition to, any notice required under Code of Civil Procedure
Section 1161 regarding unlawful detainer actions. If the nature of Tenant’s
default is such that it is reasonably capable of being cured but more than ten
(10) days are required for its cure, then Tenant shall be deemed to have cured
such default if Tenant shall commence such cure within the ten (10) day period
and thereafter diligently prosecutes such cure to completion, provided further
that such completion shall occur not later than sixty (60) days from the date of
such notice from Landlord.

 

(iv)        (1) Acts of Insolvency; or (2) the attachment, execution or other
judicial seizure of substantially all of Tenant’s assets located at the Premises
or of Tenant’s interest in this Lease, provided that such default shall be
deemed to be cured where such seizure is discharged within thirty (30) days.

 

(v)         The death, incapacity or Act of Insolvency of any Guarantor (as
defined in Paragraph 56 below) or the termination, cancellation or anticipatory
breach or repudiation in whole or in part of any Guaranty (as also defined in
Paragraph 56, below).

 

(vi)        The discovery by Landlord that any financial statement given to
Landlord by Tenant, or its successor in interest, or by any Transferee (defined
below) or sublessee pursuant to a Transfer or sublease, or by any Guarantor, is
materially false.

 

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(vii)       Any breach or repudiation by any Guarantor of the provisions of, or
obligations of such Guarantor under, any guaranty of this Lease.

 

(b)   If any such default by Tenant occurs, in addition to any other remedies
now or later available to Landlord at law or in equity, Landlord can terminate
Tenant’s right to possession of the Premises and terminate this Lease and all
rights of Tenant under this Lease. No act by Landlord other than giving notice
thereof to Tenant shall terminate this Lease. Upon termination, Landlord may
recover from Tenant:

 

(i)          the worth at the time of award of any unpaid rent which had been
earned at the time of such termination; plus

 

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

 

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

 

(iv)        any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform Tenant’s obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom.

 

As used in Subparagraphs 25(b)(i) and (ii), the “worth at the time of award” is
computed by allowing interest at the Lease Interest Rate. As used in
Subparagraph 25(b)(iii), the “worth at the time of award” is computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).

 

(c)   If any such default by Tenant occurs, Landlord may utilize the remedy
described in California Civil Code Section 1951.4 (which says landlord may
continue the lease in effect after a tenant’s breach and abandonment and recover
rent as it becomes due, if tenant has the right to sublet or assign subject to
reasonable limitations).

 

(d)   If an abandonment of the Premises by Tenant occurs or if Landlord elects
to reenter as provided above or shall take possession of the Premises pursuant
to legal proceeding or pursuant to any notice provided by law, then if Landlord
does not elect to terminate this Lease as provided above, Landlord may from time
to time, without terminating this Lease, either recover all rent as it becomes
due or relet the Premises or any part thereof for the Term on terms and
conditions as Landlord in its sole discretion may deem advisable with the right
to make alterations and repairs to the Premises.

 

If Landlord elects to so relet, then rentals received by Landlord from that
reletting shall be applied: first, to the payment of any indebtedness other than
rent due under this Lease from Tenant to Landlord; second, to the payment of any
cost of such reletting; third, to the payment of the cost of any alterations and
repairs to the Premises; fourth, to the payment of rent due and unpaid under
this Lease; and the residue, if any, shall be held by Landlord and applied to
payment of future rent as the same may become due and payable under this Lease.
Should that portion of such rentals received from such reletting during any
month, which is applied to the payment of rent under this Lease, be less than
the rent payable during that month by Tenant under this Lease, then Tenant shall
pay such deficiency to Landlord immediately upon demand therefore by Landlord.
Such deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in
such reletting or in making such alterations and repairs not covered by the
rentals received from such reletting.

 

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(e)   All rights, options and remedies of Landlord contained in this Lease shall
be construed and held to be cumulative, and no one of them shall be exclusive of
the other, and Landlord shall have the right to pursue any one or all of such
remedies or any other remedy or relief which may be provided by law, whether or
not stated in this Lease. Without limitation, Tenant acknowledges that Tenant’s
failure to timely comply with the requirements of Paragraphs 27, 28, 50 and 51
may result in a lender refusing to loan Landlord funds or a buyer refusing to
purchase the Building on favorable terms (or at all), causing Landlord
substantial monetary damages. No waiver of any default of Tenant under this
Lease shall be implied from any acceptance by Landlord of any rent or other
payments due under this Lease (whether that acceptance occurs before or after
(i) a default has occurred or (ii) a three-day or other notice of default has
been given) or from any omission by Landlord to take any action on account of
such default if such default persists or is repeated, and no express waiver
shall affect defaults other than as specified in the waiver. The consent or
approval of Landlord to or of any act by Tenant requiring Landlord’s consent or
approval shall not be deemed to waive or render unnecessary Landlord’s consent
or approval to or of any subsequent similar acts by Tenant.

 

(f)   Landlord shall be in default in the performance of any obligation required
to be performed by Landlord under the Lease if Landlord has failed to perform
such obligation within thirty (30) days after actual receipt of written notice
from Tenant specifying in detail Landlord’s failure to perform; provided,
however, that if the nature of Landlord’s obligation is such that more than
thirty (30) days are required for Landlord’s performance, Landlord shall not be
deemed in default if Landlord commences such performance within such thirty (30)
day period and thereafter diligently pursues the same to completion. Upon any
such default by Landlord, Tenant may exercise any of its rights provided at law
for a default by a landlord under a commercial lease; provided, however, in no
event shall Tenant have the right to terminate this Lease as a result of
Landlord’s default, and Tenant’s remedies shall be limited to damages and/or
injunctive relief.

 

(g)   If this Lease provides for postponement or suspension of monthly rental
payments or for one or more periods of “free” rent or other rent concessions
(collectively, “Abated Rent”), Tenant shall be credited with having paid all of
the Abated Rent on the expiration of the Term only if Tenant has (i) occupied
all or substantially all of the Premises for the entire Term, and (ii) fully,
faithfully and punctually performed all of Tenant’s obligations, including
without limitation the payment of all rent (other than the Abated Rent) and all
other monetary obligations, and has surrendered the Premises in the condition
required by this Lease. Upon the occurrence of a Tenant default (as set forth in
this Paragraph 25), the Abated Rent shall immediately become due and payable in
full, and the Lease shall be enforced as if there were no Abated Rent or other
rent concession. In such case, Abated Rent shall be calculated based on the full
initial rent payable under the Lease.

 

26.   ASSIGNMENT AND SUBLETTING.

 

(a)   Tenant shall not assign, encumber, or otherwise transfer (collectively,
“Transfer”) all or any part of its interest in this Lease or in the Premises or
sublease all or any part of the Premises, or allow any other person or entity to
occupy or use all or any part of the Premises, without obtaining Landlord’s
prior written consent as set forth below, which shall not be unreasonably
withheld. Any Transfer or sublease without Landlord’s prior written consent
shall be voidable at Landlord’s election and shall constitute a default.

 

(b)    If Tenant is a partnership or a limited liability company, a withdrawal
or change, in one or more transactions, of partners or members owning in the
aggregate a fifty percent (50%) or more interest in the profits of the
partnership or limited liability company, or any transaction or event which
results in a change in control of the partnership or limited liability company,
or if Tenant is a corporation, any change or transfer in the aggregate of fifty
percent (50%) or more of its voting stock or beneficial interest, whether in one
or more transactions, shall constitute a Transfer and shall be subject to these
provisions. If Tenant is a corporation, partnership, or limited liability
company a sale, encumbrance or other transfer of fifty percent (50%) or more of
its assets in the aggregate, in one or more transactions, shall also be a
Transfer under this Lease and in addition shall be void as to Landlord without
Landlord’s prior written consent, which shall not be unreasonably withheld. No
consent to a Transfer or sublease shall constitute a future waiver of the
provisions of this Paragraph 26.

 

(c)   Tenant shall notify Landlord in writing of Tenant’s intent to Transfer or
sublease all or part of this Lease or the Premises, the name of the proposed
assignee or sublessee, information concerning the financial responsibility of
the proposed assignee or sublessee and all the terms of the proposed Transfer or
subletting; within thirty (30) days after receipt of all such information and
all additional information requested by Landlord concerning the proposed
Transfer or sublease, Landlord shall elect by notice to Tenant (“Landlord’s
Election”) to do one of the following: (a) consent to such proposed Transfer or
sublease; (b) refuse such consent, which refusal shall be on reasonable grounds;
or, (c) effective within sixty (60) days after the date Landlord gives its
notice, terminate this Lease, or in the case of a partial sublease, terminate
this Lease as to the portion of the Premises proposed to be sublet. However, if
within thirty (30) days after Landlord gives Landlord’s Election of the
alternative in clause “(C)” Landlord receives written notice from Tenant that
Tenant has rescinded its proposed Transfer or sublease, this Lease shall
continue in effect.

 

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(d) Each request for consent to a Transfer or subletting shall be in writing,
accompanied by information relevant to Landlord’s determination as to the
financial and operational responsibility and appropriateness of the proposed
assignee or sublessee including, but not limited to, the intended use and/or
required modification of the Premises, if any, together with a non-refundable
deposit of $1,000 or ten percent (10%) of the Monthly Basic Rent applicable to
the portion of the Premises which is the subject of the proposed Transfer or
sublease, whichever is greater, as reasonable consideration for Landlord’s
considering and processing the request for consent.

 

As conditions to granting its consent to any Transfer or sublease, Landlord may
require:

 

(i)          delivery to and approval by Landlord of a true copy of the fully
executed instrument of Transfer or sublease, and the delivery to Landlord of an
agreement executed by the transferee or sublessee in form and substance
satisfactory to Landlord and expressly enforceable by Landlord, whereby the
transferee or sublessee assumes and agrees to be bound by all of the terms and
provisions of this Lease and to perform all of the obligations of Tenant under
this Lease;

 

(ii)         that any sublease provide that it is subject and subordinate to
this Lease and to all mortgages, that Landlord may enforce the provisions of the
sublease, including collection of rent, and that in the event of termination of
this Lease for any reason, including without limitation a voluntary surrender by
Tenant, or in the event of any reentry or repossession of the Premises by
Landlord, Landlord may, at its option, either (x) terminate the sublease or (y)
take over all of the right, title and interest of Tenant, as sublessor, under
such sublease, in which latter case such sublessee shall attorn to Landlord, but
that nevertheless Landlord shall not (1) be liable for any previous act or
omission of Tenant under such sublease, (2) be subject to any defense or offset
previously accrued in favor of the sublessee against Tenant, or (3) be bound by
any previous modification of any sublease made without Landlord’s written
consent, or by any previous prepayment by sublessee of any rent or other
payments.

 

(e)   Landlord shall have the right to approve or disapprove any proposed
assignee or subtenant. In exercising such right of approval or disapproval,
Landlord shall be entitled to take into account any fact or factor which
Landlord reasonably deems relevant to such decision, including but not
necessarily limited to the following, all of which are agreed to be reasonable
factors for Landlord’s consideration:

 

(i)          The financial strength of the proposed assignee or subtenant,
including the adequacy of its working capital to pay all expenses anticipated in
connection with any proposed remodeling of the Premises.

 

(ii)         The proposed use of the Premises by such proposed assignee or
subtenant and the compatibility of such proposed use within the quality and
nature of the other uses in the Project.

 

(iii)        Any violation which the proposed use by such proposed assignee or
subtenant would cause of any other rights granted by Landlord to other tenants
of the Project.

 

(iv)        Any adverse impact of the proposed use of the Premises by such
proposed assignee or subtenant upon the parking or other services provided for
Project tenants generally.

 

(v)         Whether there then exists any default by Tenant pursuant to this
Lease or any non-payment or non-performance by Tenant under this Lease which,
with the passage of time or the giving of notice, would constitute a default
under this Lease.

 

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(vi)        The business reputation, character, history and nature of the
business of the proposed assignee or subtenant.

 

(vii)       Whether the proposed assignee or subtenant is a tenant or existing
subtenant, or is an affiliate of or associated with any tenant or existing
subtenant of the Project or is a person with whom Landlord has negotiated for
space in the Project during the twelve (12) month period ending with the date
Landlord receives notice of such proposed assignment or subletting.

 

(viii)      Whether the proposed assignee or subtenant is a governmental entity
or agency.

 

Moreover, Landlord shall be entitled to be reasonably satisfied that each and
every covenant, condition or obligation imposed upon Tenant by this Lease and
each and every right, remedy or benefit afforded Landlord by this Lease is not
impaired or diminished by such assignment or subletting. Landlord and Tenant
acknowledge that the express standards and provisions set forth in this Lease
dealing with assignment and subletting, including those set forth in this
subparagraph (d) have been freely negotiated and are reasonable at the date
hereof taking into account Tenant’s proposed use of the Premises and the nature
and quality of the Building and Project. No withholding of consent by Landlord
for any reason deemed sufficient by Landlord shall give rise to any claim by
Tenant or any proposed assignee or subtenant or entitle Tenant to terminate this
Lease, to recover contract damages or to any abatement of rent. In this
connection, Tenant hereby expressly waives its rights under California Civil
Code Section 1995.310.

 

(f)  Whether or not Landlord shall consent to a Transfer or sublease under the
provisions of this Paragraph 26, (i) Tenant shall pay Landlord’s processing fees
and reasonable attorneys’ fees incurred in determining whether or not to so
consent, and (ii) Tenant shall not be relieved of any responsibility under this
Lease without Landlord’s express written release, which Landlord may grant or
withhold in its sole, subjective discretion. If Landlord shall consent to any
Transfer, Tenant shall pay to Landlord, as additional rent, one hundred percent
(100%) of all net sums or other consideration payable to and for the benefit of
Tenant by the transferee on account of the Transfer, as and when such sums and
other consideration are due and payable to or for the benefit of Tenant (or, if
Landlord so requires, and without any release of Tenant’s liability for the
same, Tenant shall instruct the transferee to pay such sums and other
consideration directly to Landlord). If in connection with any proposed sublease
Tenant receives net sums or other consideration, either initially or over the
term of the sublease, in excess of the rent called for under this Lease or, in
case of the sublease of a portion of the Premises, in excess of such rent fairly
allocable to such portion, after appropriate adjustments to assure that all
other payments called for under this Lease are taken into account, Tenant shall
pay to Landlord as additional rent one hundred percent (100%) of the net sums or
other consideration received by Tenant promptly after its receipt. As used in
this paragraph, “net sums or other consideration” shall include without
limitation the then fair value of any non-cash consideration and shall be
calculated after first deducting reasonable costs incurred by Tenant in
connection with the Transfer or sublease, including without limitation
commissions payable to a broker not affiliated with Tenant, space modification
costs in connection with the Transfer or sublease, reasonable legal costs, free
rent concessions to the transferee or sublessee, and lease take-over costs.
Landlord’s waiver of or consent to any Transfer or subletting shall not relieve
Tenant or any transferee or sublessee from any obligation under this Lease
whether or not accrued.

 

27.   SUBORDINATION.

 

Unless Landlord or any beneficiary or mortgagee with a lien on the Building or
any ground lessor with respect to the Building elects otherwise as provided
below in this Paragraph 27, this Lease shall be subject and subordinate at all
times to the following without the necessity of any additional document being
executed by Tenant for the purpose of effecting a subordination:

 

(a)   the lien and provisions of any mortgage, deed of trust, or declaration of
covenants, conditions and restrictions which may now exist or hereafter be
executed by which the Building, Project, any ground lease, or Landlord’s
interest or estate in any of those items, is encumbered; and

 

(b)   all ground leases which may now exist or hereafter be executed affecting
the Building.

 

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Landlord, any such beneficiary or mortgagee, or any such ground lessor, shall at
any time have the right to elect to subordinate or cause to be subordinated to
this Lease any such liens and provisions or ground lease. Any election under
this Paragraph 27 may be made by giving notice thereof to Tenant at least sixty
(60) days before the election is to become effective. If any ground lease
terminates for any reason or any mortgage or deed of trust is foreclosed or a
conveyance in lieu of foreclosure is made for any reason, Tenant shall, at the
election of any successor-in-interest to Landlord and regardless of any
subordination, attorn to and become the Tenant of the successor-in-interest to
Landlord. Tenant waives any right to declare this Lease terminated or otherwise
ineffectual because of any such foreclosure, conveyance or ground lease
termination. Tenant shall execute and deliver, upon demand by Landlord and in
the form and content requested by Landlord, any additional documents evidencing
the priority or subordination of this Lease and Tenant’s obligation to attorn to
and become the Tenant of any successor-in-interest to Landlord as provided for
under this Paragraph 27. Tenant’s failure to sign and return any such documents
within ten (10) days of request shall constitute a material default by Tenant
under this Lease and Landlord may, at Landlord’s option, terminate the Lease
provided written notice of such termination (which shall be in lieu of and not
in addition to the notice and cure period otherwise provided for under
Subparagraph 25(a)(iii)) is received by Tenant prior to Landlord’s receipt of
such documents. Tenant hereby irrevocably appoints Landlord as attorney-in-fact
of Tenant to execute, deliver and record any such document in the name and on
behalf of Tenant.

 

28.   ESTOPPEL CERTIFICATE.

 

(a)   Within ten (10) days following any written request which Landlord may make
from time to time, Tenant shall execute and deliver to Landlord a “Tenant
Estoppel Certificate”, in a form substantially similar to the form of attached
Exhibit E or in any other form reasonably required by Landlord. Landlord and
Tenant intend that any statement delivered pursuant to this Paragraph 28 may be
relied upon by any mortgagee, beneficiary, purchaser or prospective purchaser of
the Building or any interest therein.

 

(b)   Tenant’s failure to deliver such Tenant Estoppel Certificate within such
time shall be conclusive upon Tenant (i) that this Lease is in full force,
without modification except as may be represented by Landlord, (ii) that there
are no uncured defaults in Landlord’s performance, and (iii) that not more than
one (1) month’s rental has been paid in advance. Tenant’s failure to deliver the
Tenant Estoppel Certificate to Landlord within ten (10) days of receipt shall
constitute a material default under this Lease and Landlord may, at Landlord’s
option, terminate the Lease, provided written notice of such termination (which
shall be in lieu of and not in addition to the notice and cure period otherwise
provided for under Subparagraph 25(a)(iii)) is received by Tenant prior to
Landlord’s receipt of the Tenant Estoppel Certificate.

 

29.   HAZARDOUS MATERIALS.

 

(a)   As used in this Lease, the following words or phrases shall have the
following meanings:

 

(i)          “Agents” means Tenant’s partners, officers, directors,
shareholders, employees, agents, contractors and any other third parties
entering upon the Project at the request or invitation of Tenant.

 

(ii)         “Claims” means claims, liabilities, losses, actions, environmental
suits, causes of action, legal or administrative proceedings, damages, fines,
penalties, loss of rents, liens, judgments, costs and expenses (including,
without limitation, attorneys’ fees and costs of defense, and consultants’,
engineers’ and other professionals’ fees and costs).

 

(iii)        “Hazardous” means: (a) hazardous; (b) toxic; (c) reactive; (d)
corrosive; (e) ignitable; (f) carcinogenic; (g) reproductive toxic; (h) any
other attribute of a Substance now or in the future referred to in, or regulated
by, any Hazardous Materials Laws; and (i) potentially injurious to health,
safety or welfare, the environment, the Premises, the Building, the Project, or
any portion thereof.

 

(iv)        “Hazardous Materials” means any: (a) Substance which is Hazardous,
regardless of whether that Substance is Hazardous by itself or in combination
with any other Substance; (b) Substance which is regulated by any Hazardous
Material Laws; (c) asbestos and asbestos-containing materials; (d) urea
formaldehyde; (e) radioactive substance; (f) flammable explosives; (g)
petroleum, including crude oil or any fraction thereof; (h) polychlorinated
biphenyls; and (i) “hazardous substances,” “hazardous substances,” “hazardous
materials”, “hazardous wastes”, or “infectious agents” under any Hazardous
Materials Laws.

 

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(v)         “Hazardous Materials Laws” means: (a) any existing or future
federal, state or local law, ordinance, regulation or code which protects
health, safety or welfare, or the environment; (b) any existing or future
administrative or legal decision interpreting any such law, ordinance,
regulation or code; and (c) any common law theory which may result in Claims
against Landlord, the Premises or any portion thereof.

 

(vi)        “Permits” means any permit, authorization, license or approval
required by any applicable governmental agency.

 

(vii)       “Premises” for purposes of this Paragraph 29 only, shall mean the
Premises, the air about the Premises and the soil, surface water and ground
water under the surface of the Project.

 

(viii)      “Substance” means any substance, material, product, agent, organism,
chemical, waste, contaminant or pollutant.

 

(ix)         “Use” means use, generate, manufacture, produce, store, release or
discharge.

 

(b)  (i)  Without limiting the generality of Paragraph 8 of this Lease, and
except as provided in Paragraphs 29(b)(ii) and 29(b)(iii), Tenant covenants and
agrees that Tenant and its Agents shall not bring into, maintain upon, engage in
any activity involving the Use of, or Use in or about the Project, or transport
to or from the Project, any Hazardous Materials. Notwithstanding the provisions
of Paragraphs 29(b)(ii) or 29(b)(iii), in no event shall Tenant or its Agents
release or dispose of any Hazardous Materials in, on, under or about the
Project.

 

(ii)         Notwithstanding the provisions of Paragraph 29(b)(i), if Tenant or
its Agents proposes to Use any Hazardous Materials, or to install or operate any
equipment which will or may Use Hazardous Materials (“Equipment”), then Tenant
shall first obtain Landlord’s prior written consent, which consent may be given
or withheld by Landlord in its subjective, good faith judgment, within thirty
(30) days of Landlord’s receipt of the last of documents or information
requested by Landlord as set forth in this Paragraph. Tenant’s failure to
receive Landlord’s consent within such thirty (30) day period shall be
conclusively deemed Landlord’s withholding of consent. Tenant’s request for
Landlord’s consent shall include the following documents or information: (a) a
Hazardous Materials list pursuant to Paragraph 29(c) regarding the Hazardous
Materials Tenant proposes to Use or Equipment Tenant proposes to install and
operate; (b) reasonably satisfactory evidence that Tenant has obtained all
necessary Permits to Use those Hazardous Materials or to install and operate the
proposed Equipment; (c) reasonably satisfactory evidence that Tenant’s Use of
the Hazardous Materials or installation and operation of the Equipment shall
comply with all applicable Hazardous Materials Laws, Tenant’s permitted use
under this Lease and all restrictive covenants encumbering the Project; (d)
reasonably satisfactory evidence of Tenant’s financial capability and
responsibility for potential Claims associated with the Use of the Hazardous
Materials or installation and operation of the Equipment; and (e) such other
documents or information as Landlord may reasonably request. Landlord may, at
its option, condition its consent upon any terms that Landlord, in its
subjective, good faith judgment, deems necessary to protect itself, the public
and the Project against potential problems, Claims arising out of Tenant’s Use
of Hazardous Materials or installation and operation of Equipment including,
without limitation, (i) changes in the insurance provisions of the Lease, (ii)
installation of equipment, fixtures or personal property or alteration of the
Premises (all at Tenant’s sole cost) to minimize the likelihood of a violation
of Hazardous Materials Laws as a result of Tenant’s Use of the Hazardous
Materials or installation and operation of Equipment, or (iii) increasing the
amount of the security deposit. Neither Landlord’s consent nor Tenant’s
obtaining any Permits shall relieve Tenant of any of its obligations pursuant to
this Paragraph 29. Landlord’s granting of consent to one request to Use
Hazardous Materials or install and operate Equipment shall not be deemed
Landlord’s consent to any other such request. If Landlord grants its consent to
Tenant’s request, no subtenant, assignee or successor of Tenant shall have the
right to Use those Hazardous Materials or install or operate that Equipment
without again complying with the provisions of this Paragraph 29(b)(ii).

 

(iii)        Notwithstanding the provisions of Paragraphs 29(b)(i) and
29(b)(ii), Tenant may Use any Substance typically found or used in applications
of the type permitted by this Lease so long as: (a) any such Substance is
typically found only in such quantity as is reasonably necessary for Tenant’s
permitted use under Paragraph 8 of this Lease; (b) any such Substance and all
equipment necessary in connection with the Substance are Used strictly in
accordance with the manufacturers’ instructions therefor; (c) no such Substance
is released or disposed of in or about the Project; (d) any such Substance and
all equipment necessary in connection with the Substance are removed from the
Project and transported for Use or disposal by Tenant in compliance with any
applicable Hazardous Materials Laws upon the expiration or earlier termination
of this Lease; and (e) Tenant and its Agents comply with all applicable
Hazardous Materials Laws.

 

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(iv)        Tenant shall not use or install in or about the Premises any
asbestos or asbestos-

containing materials.

 

(c)   Tenant shall deliver to Landlord, within thirty (30) days after Tenant’s
receipt of Landlord’s written request, a written list identifying any Hazardous
Materials that Tenant or its Agents then Uses or has Used within the last twelve
(12) month period in the Project. Each such list shall state: (i) the use or
purpose of each such Hazardous Material; (ii) the approximate quantity of each
such Hazardous Material Used by Tenant; (iii) such other information as Landlord
may reasonably require; and (iv) Tenant’s written certification that neither
Tenant nor its Agents have released, discharged or disposed of any Hazardous
Materials in or about the Project, or transported any Hazardous Materials to or
from the Project, in violation of any applicable Hazardous Materials Laws.
Landlord shall not request Tenant to deliver a Hazardous Materials list more
often than once during each twelve (12) month period, unless Landlord reasonably
believes that Tenant or its Agents have violated the provisions of this
Paragraph 29 (in which case (a) Landlord may request such lists as often as
Landlord determines is necessary until such violation is cured, and (b) Tenant
shall provide such lists within ten (10) days of each of Landlord’s requests, or
if an emergency exists, such lists shall be immediately provided).

 

(d)   Tenant shall furnish to Landlord copies of all notices, claims, reports,
complaints, warnings, asserted violations, documents or other communications
received or delivered by Tenant, as soon as possible and in any event within
five (5) days of such receipt or delivery, with respect to any actual or alleged
Use, disposal or transportation of Hazardous Materials in or about the Premises,
the Building or the Project. Whether or not Tenant receives any such notice,
claim, report, complaint, warning, asserted violation, document or
communication, Tenant shall immediately notify Landlord, orally and in writing,
if Tenant or any of its Agents knows or has reasonable cause to believe that any
Hazardous Materials, or a condition involving or resulting from the same, is
present, in Use, has been disposed of, or transported to or from the Premises,
the Building or the Project other than as previously consented to by Landlord in
strict accordance with Paragraph 29(b).

 

(e)   Tenant acknowledges that it, and not Landlord, is in possession and
control of the Premises for purposes of all reporting requirements under any
Hazardous Materials Laws. If Tenant or its Agents violate any provision of this
Paragraph 29, then Tenant shall immediately notify Landlord in writing and shall
be obligated, at Tenant’s sole cost, to abate, remediate, clean-up or remove
from the Project, and dispose of, all in compliance with all applicable
Hazardous Materials Laws, all Hazardous Materials Used by Tenant or its Agents.
Such work shall include, but not be limited to, all testing and investigation
required by Landlord, Landlord’s lender or ground lessor, if any, and any
governmental authorities having jurisdiction, and preparation and implementation
of any remedial action plan required by any governmental authorities having
jurisdiction. All such work shall, in each instance, be conducted to the
satisfaction of Landlord and all governmental authorities having jurisdiction.
If at any time Landlord determines that Tenant is not complying with the
provisions of this Paragraph 29(e), then Landlord may, without prejudicing,
limiting, releasing or waiving Landlord’s rights under this Paragraph 29,
separately undertake such work, and Tenant shall reimburse all costs incurred by
Landlord upon demand.

 

(f)   Landlord’s right of entry pursuant to Paragraph 17 shall include the right
to enter and inspect the Premises, and the right to inspect Tenant’s books and
records, to verify Tenant’s compliance with, or violations of, the provisions of
this Paragraph 29. Furthermore, Landlord may conduct such investigations and
tests as Landlord or Landlord’s lender or ground lessor may require. If Landlord
determines that Tenant has violated the provisions of this Paragraph 29, or if
any applicable governmental agency requires any such inspection, investigation
or testing, then Tenant, in addition to its other obligations set forth in this
Paragraph 29, shall immediately reimburse Landlord for all costs incurred
therewith.

 

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(g)   (i) Tenant shall indemnify, protect, defend (with legal counsel acceptable
to Landlord in its subjective, good faith judgment) and hold harmless Landlord,
its partners and its and their respective successors, assigns, partners,
directors, officers, shareholders, employees, agents, lenders, ground lessors
and attorneys, and the Project, from and against any and all Claims incurred by
such indemnified persons, or any of them, in connection with, or as the result
of: (a) the presence, Use or disposal of any Hazardous Materials into or about
the Project, or the transportation of any Hazardous Materials to or from the
Project, by Tenant or its Agents; (b) any injury to or death of persons or
damage to or destruction of property resulting from the presence, Use or
disposal of any Hazardous Materials into or about the Project, or the
transportation of any Hazardous Materials to or from the Project, by Tenant or
its Agents; (c) any violation of any Hazardous Materials Laws; and (d) any
failure of Tenant or its Agents to observe the provisions of this Paragraph 29.
Payment shall not be a condition precedent to enforcement of the foregoing
indemnification provision. Tenant’s obligations hereunder shall include, without
limitation, and whether foreseeable or unforeseeable, all costs of any required
or necessary testing, investigation, studies, reports, repair, clean-up,
detoxification or decontamination of the Project, and the preparation and
implementation of any closure, removal, remedial action or other required plans
in connection therewith, and shall survive the expiration or earlier termination
of the term of this Lease. For purposes of these indemnity provisions, any acts
or omissions of Tenant, its assignees, sublessees, Agents or others acting for
or on behalf of Tenant (regardless of whether they are negligent, intentional,
willful, or unlawful) shall be strictly attributable to Tenant.

 

(ii)         If at any time after the initiation of any suit, action,
investigation or other proceeding which could create a right of indemnification
under Paragraph 29(g)(i) Landlord determines that Tenant is not complying with
the provisions of Paragraph 29(g)(i), then Landlord may, without prejudicing,
limiting, releasing or waiving the right of indemnification provided herein,
separately defend or retain separate counsel to represent and control the
defense as to Landlord’s interest in such suit, action, investigation or other
proceeding. Tenant shall pay all costs of Landlord’s separate defense or counsel
upon demand.

 

(iii)        Tenant waives, releases and discharges Landlord, its partners and
its and their respective officers, directors, shareholders, partners, employees,
agents, representatives, attorneys, lenders, ground lessors, attorneys,
successors and assigns from any and all Claims of whatever kind, known or
unknown, including any action under the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601 et seq.), as amended
(“CERCLA”) and the provisions of California Health & Safety Code Section 25100
et seq., as amended, which Tenant has or may have, based upon the Use,
migration, disposal of or transportation to or from the Premises or the Project
of any Hazardous Materials (unless caused by Landlord’s gross negligence or
willful misconduct) or the environmental condition of the Premises or the
Project (including without limitation all facilities, improvements, structures
and equipment thereon and soil and groundwater thereunder). Tenant agrees,
represents and warrants that the matters released herein are not limited to
matters which are known, disclosed or foreseeable, and Tenant waives any and all
rights and benefits which it now has, or may have, conferred upon Tenant by
virtue of the provisions of Section 1542 of the California Civil Code, which
provides:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”

 

Tenant agrees, represents and warrants that it is familiar with, has read,
understands, and has consulted legal counsel of its choosing with respect to
California Civil Code Section 1542 and Tenant realizes and acknowledges that
factual matters now unknown to it may have given, or may hereinafter give, rise
to Claims which are presently unknown, unanticipated and unsuspected.

 

(h)   Upon any violation of the provisions of this Paragraph 29, Landlord shall
be entitled to exercise any or all remedies available to a landlord against a
defaulting tenant including, but not limited to, those set forth in Paragraph
25.

 

(i)   By its signature to this Lease, Tenant confirms that: (i) Landlord has not
made any representation or warranty regarding the environmental condition of the
Premises, the Building or the Project; and (ii) Tenant has conducted its own
examination of the Premises, the Building and the Project with respect to
Hazardous Materials and accepts the same “AS IS”.

 

(j)   No termination, cancellation or release agreement entered into by Landlord
and Tenant shall release Tenant from its obligations under this Paragraph 29
unless specifically agreed to by Landlord in writing at the time of such
agreement.

 

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(k)   Tenant’s covenants and obligations under this Paragraph 29 shall also
apply to any assignee or sublessee of Tenant, and to any such assignee’s or
sublessee’s partners, officers, directors, shareholders, employees, agents,
contractors and any other third parties entering upon the Project at the request
or invitation of such assignee or sublessee.

 

30.   RULES AND REGULATIONS.

 

Tenant shall faithfully observe and comply with the “Rules and Regulations”
attached hereto as Exhibit F, and all reasonable and nondiscriminatory
modifications thereof and additions thereto from time to time put into effect by
Landlord. Landlord shall not be responsible to Tenant for the violation or
nonperformance by any other tenant or occupant of the Building or Project of any
of the Rules and Regulations.

 

31.   CONFLICT OF LAWS.

 

This Lease shall be governed by and construed pursuant to the laws of the State
of California.

 

32.   SUCCESSORS AND ASSIGNS.

 

Except as otherwise provided in this Lease, all of the covenants, conditions and
provisions of this Lease shall be binding upon and shall inure to the benefit of
the parties to this Lease and their respective heirs, personal representatives,
successors and assigns.

 

33.   SURRENDER OF PREMISES.

 

The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation of this Lease, shall not work a merger, and shall, at the option of
Landlord, operate as an assignment to it of any or all subleases or
subtenancies. Upon the expiration or termination of this Lease, Tenant shall
peaceably surrender the Premises and all Tenant Improvements, alterations and
additions to the Premises, broom clean the Premises, leave the Premises in good
order, repair and condition (including the due completion by that expiration or
termination of all repairs which Tenant is responsible for making under this
Lease), reasonable wear and tear excepted, and comply with the provisions of
Paragraph 14(c). The delivery of keys to any employee of Landlord or to
Landlord’s agent or any employee thereof shall not be sufficient to constitute a
termination of this Lease or a surrender of the Premises.

 

34.   ATTORNEYS’ FEES.

 

If any legal proceeding arises in connection with this Lease, in addition to any
other remedy at law or in equity sought or obtained by the prevailing party, the
losing party shall pay the reasonable legal and other fees and all costs of the
prevailing party incurred in connection with those proceedings.

 

35.   PERFORMANCE BY TENANT.

 

All covenants and agreements to be performed by Tenant under any of the terms of
this Lease shall be performed by Tenant at Tenant’s sole cost and expense and
without any abatement of rent. If Tenant shall fail to pay any sum of money owed
to any party other than Landlord, for which it is liable under this Lease, or if
Tenant shall fail to perform any other act on its part to be performed under
this Lease, Landlord may, without waiving or releasing Tenant from Tenant’s
obligations, but shall not be obligated to, make any such payment or perform any
such other act to be made or performed by Tenant. All sums so paid by Landlord
and all necessary incidental costs incurred by Landlord together with interest
thereon at the Lease Interest Rate, from the date of such payment by Landlord,
shall be payable to Landlord on demand. Landlord shall have (in addition to any
other right or remedy of Landlord) all rights and remedies in the event of the
nonpayment thereof by Tenant as are set forth in Paragraph 25.

 

36.   MORTGAGEE PROTECTION.

 

In the event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail to any beneficiary of a deed of trust or mortgage
covering the Premises whose address shall have been furnished to Tenant, and
shall offer such beneficiary or mortgagee a reasonable opportunity to cure the
default, including time to obtain possession of the Premises by power of sale or
a judicial foreclosure, if such should prove necessary to effect a cure.

 

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37.   DEFINITION OF LANDLORD.

 

The term “Landlord,” as used in this Lease, so far as covenants or obligations
on the part of Landlord are concerned, shall be limited to mean and include only
the owner or owners, at the time in question, of the fee title of the Building
or the lessees under any ground lease, if any. In the event of any transfer,
assignment or other conveyance or transfers of any such title, Landlord (and in
case of any subsequent transfers or conveyances, the then-grantor) shall be
automatically freed and relieved from and after the date of such transfer,
assignment or conveyance of all liability as respects the performance of any
covenants or obligations on the part of Landlord contained in this Lease
thereafter to be performed. The transferee of such title shall be deemed to have
assumed and agreed to observe and perform any and all obligations of Landlord
under this Lease during its ownership of the Premises. Landlord may transfer its
interest in the Premises without the consent of Tenant and such transfer or
subsequent transfer shall not be deemed a violation on Landlord’s part of any of
the terms and conditions of this Lease. With respect to any indemnity by Tenant
of Landlord under this Lease, “Landlord” shall include, and the indemnity shall
run to, Landlord and its respective partners, affiliates, shareholders,
directors, officers, agents, lenders, employees, partners, successors and
assigns.

 

38.   WAIVER.

 

The waiver by Landlord of any breach of any term, covenant or condition
contained in this Lease shall not be deemed to be a waiver of any subsequent
breach of the same or any other term, covenant or condition contained in this
Lease, nor shall any custom or practice to which the parties may have adhered in
the administration of the terms of this Lease be deemed a waiver of or in any
way affect the right of Landlord to insist upon the performance by Tenant in
strict accordance with the terms of this Lease. The subsequent acceptance of
rent under this Lease by Landlord shall not be deemed to be a waiver of any
preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to pay the particular rent so accepted,
regardless of Landlord’s knowledge of such preceding breach at the time of
acceptance of such rent. No acceptance by Landlord of a lesser sum than the sum
then due shall be deemed to be other than on account of the earliest installment
of such rent or other amount due, nor shall any endorsement or statement on any
check or any letter accompanying any check be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord’s
right to recover the balance of such installment or other amount or pursue any
other remedy available to Landlord.

 

39.   IDENTIFICATION OF TENANT.

 

If more than one person signs this Lease as Tenant, the act of or notice from,
or notice or refund to, or the signature of, any one or more of them with
respect to this Lease shall be binding upon Tenant.

 

40.   PARKING.

 

Unless Tenant is in default under this Lease, Tenant shall be entitled to use
the number of vehicle parking spaces designated in Subparagraph 1(g). Neither
Tenant nor its employees or invitees shall use more parking spaces than
designated in Subparagraph 1(g). If Landlord determines in its sole discretion
that it is necessary for orderly and efficient parking, all or any portion of
any unreserved or unassigned parking spaces may be assigned to, made available
to or reserved by Landlord for other tenants or users of the Building. If
Landlord has not assigned specific spaces to Tenant, neither Tenant nor its
employees shall use any spaces which have been so specifically assigned by
Landlord to other tenants or for other uses such as visitor parking or which
have been designated by Landlord or governmental entities as being restricted to
certain uses.

 

(a)   Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant’s employees, suppliers, shippers, contractors,
customers or invitees to be loaded, unloaded or parked in areas other than those
designated by Landlord for such activities.

 

(b)   If Tenant permits or allows any of the prohibited activities described in
this Paragraph 40, then Landlord shall have the right, without notice, in
addition to such other rights and remedies that it may have, to remove, tow
away, or impound the vehicle involved and charge the cost to Tenant, which cost
shall be immediately payable upon demand by Landlord with interest thereon at
the Lease Interest Rate from the date Landlord incurs that cost.

 

(c)   Landlord reserves the right at any time to charge visitors and invitees of
Tenant for parking in the parking areas to be used in connection with the
Building.

 

-27-

 

 

 

(d) The use by Tenant, its employees and invitees, of the parking facilities of
the Building shall be on the additional terms and conditions set forth in
attached Exhibit G, and shall be subject to such other agreement between
Landlord and Tenant as may hereinafter be established.

 

41.   FORCE MAJEURE.

 

Landlord shall have no liability whatsoever to Tenant on account of (a) the
inability of Landlord to fulfill, or delay in fulfilling, any of Landlord's
obligations under this Lease, the Premises Preparation Agreement, or any other
Lease attachment by reason of strike, other labor trouble, governmental
preemption or priorities or other controls in connection with a national or
other public emergency, or shortages of fuel, supplies or labor resulting
therefrom, governmental permitting, or any other cause, whether similar or
dissimilar to the above, beyond Landlord's reasonable control; or (b) any
failure or defect in the supply, quantity or character of electricity or water
furnished to the Premises, by reason of any requirement, act or omission of the
public utility or others furnishing the Building with electricity or water, or
for any other reason, whether similar or dissimilar to the above, beyond
Landlord's reasonable control. If this Lease or any Exhibit, Rider or Premises
Preparation Agreement specifies a time period for performance of an obligation
of Landlord, that time period shall be extended by the period of any delay in
Landlord's performance caused by any of the events of force majeure described
above.

 

42.   TERMS, HEADINGS AND CONSTRUCTION.

 

The title and paragraph headings are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part of this Lease. "Or"
is not exclusive. Unless stated otherwise, references to paragraphs and
subparagraphs are to those in this Lease. This Lease shall be strictly construed
neither against Landlord nor Tenant.

 

43.   TIME.

 

Time is of the essence with respect to the performance of every provision of
this Lease in which time of performance is a factor, including specifically and
without limitation, Tenant's obligation to make any payments, give any notices
and timely perform under the Premises Preparation Agreement.

 

44.   PRIOR AGREEMENT; AMENDMENTS.

 

This Lease contains all of the agreements of the parties hereto with respect to
any matter covered or mentioned in this Lease, and no prior agreements or
understanding or letter or proposal pertaining to any such matters shall be
effective for any purpose. No provisions of this Lease may be amended or added
to, whether by conduct, oral or written communication, or otherwise, except by
an agreement in writing signed by the parties hereto or their respective
successors-in-interest. No other provision of this Lease shall modify the effect
of this paragraph.

 

45.   SEVERABILITY.

 

Any provision of this Lease which shall prove to be invalid, void or illegal
shall in no way affect, impair or invalidate any other provision of this Lease,
and such other provisions shall remain in full force.

 

46.   RECORDING.

 

Neither this Lease nor a short form memorandum of this Lease shall be recorded.

 

47.   LIMITATION ON LIABILITY AND TIME.

 

In consideration of the benefits accruing under this Lease, Tenant and all
successors and assigns agree that, in the event of any actual or alleged
failure, breach or default under this Lease by Landlord: (a) the sole and
exclusive remedy shall be against the Landlord's interest in the Building; (b)
no partner of Landlord shall be named as a party in any suit or proceeding
(except as may be necessary to secure jurisdiction of the partnership, if
applicable); (c) no partner of Landlord shall be required to answer or otherwise
plead to any service of process; (d) no judgment will be taken against any
partner of Landlord (if applicable); (e) no writ of execution will ever be
levied against the assets of any partner of Landlord; (f) the obligations of
Landlord under this Lease do not constitute personal obligations of the
individual partners, directors, officers or shareholders of Landlord, and Tenant
shall not seek recourse against the individual partners, directors, officers or
shareholders of Landlord or any of their personal assets for satisfaction of any
liability in respect to this Lease; and (g) any claim, defense, or other right
of Tenant arising in connection with this Lease or negotiations before this
Lease was signed shall be barred unless Tenant files an action or interposes a
defense based thereon within one hundred eighty (180) days after the date of the
alleged event on which Tenant is basing its claim, defense or right. In the
event of a breach or default by Landlord under this Lease, in no event shall
Tenant have the right to terminate this Lease as a result of such breach or
default, and Tenant's remedies (subject to the provisions of this Paragraph 47)
shall be limited to damages and/or an injunction.

 

-28-

 

 

48.   TRAFFIC IMPACT.

 

Tenant agrees that Tenant and its employees, invitees, and contractors shall
comply with the provisions of Exhibit G (Traffic and Parking Rules and
Regulations).

 

49.   SUBSTITUTED PREMISES.

 

Landlord reserves the right without Tenant's consent, on thirty (30) days'
written notice to Tenant, to substitute other premises anywhere within the
Project for the Premises, at the same rental rate, provided that the substituted
premises contain at least ninety-five percent (95%) of the same Rentable Area as
the Premises. Landlord shall pay all reasonable moving expenses of Tenant
incidental to such substitution of premises, but only limited to (i) physical
movement of Tenant's furniture, furnishings, equipment, books and files from the
Premises to the substituted premises, (ii) installation and hook-up charges for
Tenant's telephone and PBX equipment, (iii) relocation and installation of
photocopy and word processing equipment located in the Premises, and (iv) a
reasonable supply of new stationery and business cards then held in stock by
Tenant, not in excess of a sixty (60) day supply, if Tenant's stationary and
business cards in use at the date of Landlord's notice identify Tenant's suite
number(s). In the event there is a substitution of premises, the parties shall
immediately execute an amendment to this Lease describing the location of new
premises and setting forth all adjustments to the Basic Annual Rent or the
Additional Rent, if any.

 

50.   MODIFICATION FOR LENDER OR GOVERNMENT.

 

If, in connection with obtaining construction, interim or permanent financing or
refinancing for the Building or all or part of the Project, a lender shall
request reasonable modifications in this Lease as a condition to such financing,
Tenant will not unreasonably withhold, delay or defer its consent thereto,
provided that such modifications do not increase the obligations of Tenant under
this Lease or materially adversely affect the leasehold interest hereby created
or Tenant's rights under this Lease. In addition, the parties agree to promptly
sign all documents reasonably required by any governmental agency from time to
time in connection with the Premises, provided that those documents do not
materially adversely affect the rights or obligations of the parties under this
Lease.

 

51.   FINANCIAL STATEMENTS.

 

When reasonably requested by Landlord, Tenant shall, upon ten (10) days notice
from Landlord, provide Landlord with a current financial statement and financial
statements of the two (2) years prior to the current financial statement year.
Such statement(s) shall be safeguarded by Landlord and shall be prepared in
accordance with generally accepted accounting principles and, if such is the
normal practice of Tenant, shall be audited by an independent certified public
accountant. The above ten-day notice is the only notice Landlord is required to
give Tenant in connection with Tenant's financial statements and shall be in
lieu of and not in addition to the notice and cure period otherwise provided for
under Subparagraph 25(a)(iii). Tenant's failure to comply with its obligations
under this Paragraph 51 shall constitute a material default under this Lease.

 

52.   QUIET ENJOYMENT.

 

Landlord covenants that upon Tenant paying the rent required under this Lease
and paying all other charges and performing all of the covenants and provisions
on Tenant's part to be observed and performed under this Lease, Tenant shall and
may peaceably and quietly have, hold and enjoy the Premises in accordance with
this Lease.

 

53.   TENANT’S SIGNS.

 

(a)   Tenant may, at its sole cost and expense, place its signs displaying its
logo and graphics on the entrance doors to the Premises and in Landlord
designated locations in the hallways on floors wholly leased by Tenant. On
partial floors leased by Tenant, Tenant, at its sole cost and expense, may place
its signs on entrance doors to the Premises, provided the number, size, color,
style, material and location of such signs conform to Landlord's graphics
program for the Building and Landlord shall place directional signs to the
Premises, at Tenant's expense, at a location determined by Landlord.

 

-29-

 

 

(b)    Unless specifically set forth to the contrary in an Addendum or Rider to
this Lease, Tenant shall not place any sign on the exterior of the Building, or
within the Building if such sign may be seen from outside of the Building or on
any Building sign monument or other device constructed for the placement of
tenant signs.

 

(c)    All Tenant signs installed by Landlord or Tenant shall comply with all
applicable requirements of all governmental authorities having jurisdiction and
shall be installed in a good and workmanlike manner. Such signs shall be
maintained and kept in good repair at Tenant's sole cost and expense, and, on
expiration or earlier termination of the Term, removed at Tenant's sole cost and
expense.

 

54.   NO LIGHT, AIR OR VIEW EASEMENT.

 

Any diminution or shutting off of light, air or view by any structure which may
be erected on lands adjacent to the Project shall in no way affect this Lease,
abate any payment owed by Tenant under the Lease, or otherwise impose any
liability on Landlord.

 

55.   TENANT AS CORPORATION, PARTNERSHIP, OR LIMITED LIABILITY COMPANY.

 

If Tenant executes this Lease as a corporation or limited liability company,
then Tenant and the persons executing this Lease on behalf of Tenant represent
and warrant that the individuals executing this Lease on Tenant's behalf are
duly authorized to execute and deliver this Lease on its behalf. If tenant is a
corporation, Tenant further represents and warrants that this Lease has been
authorized in accordance with a duly adopted resolution of the board of
directors of Tenant, a copy of which is to be delivered to Landlord on execution
of this Lease, and in accordance with the by-laws of Tenant and that this Lease
is binding upon Tenant in accordance with its terms. If Tenant executes this
Lease as a partnership, (a) each general partner shall be jointly and severally
liable for keeping, observing and performing all the provisions of this Lease to
be kept, observed or performed by Tenant and (b) the term "Tenant" shall mean
and include each general partner jointly and severally and the act of or notice
from, or notice or refund to, or the signature of, any one or more of them with
respect to this Lease shall be binding on Tenant and each and all of the general
partners of Tenant with the same effect as if each of them had so acted or so
given or received such notice or refund or so signed. Dissolution of any
partnership which is a Tenant under this Lease shall be deemed to be an
assignment jointly to all of the partners, who shall thereafter be subject to
the terms of this Lease as if each such former partners had initially signed
this Lease as individuals.

 

56.   GUARANTY – INTENTIONALLY DELETED.

 

57.   COUNTERPARTS.

 

This Lease may be executed in several counterparts, each of which shall be
deemed an original, but all of which shall constitute one and the same
instrument.

 

58.   JOINT AND SEVERAL LIABILITY.

 

This Lease and the obligations set forth herein shall be the joint and several
obligations of all persons, entities or parties to this Lease and shall be
binding upon them and their heirs, personal representatives, and permitted
successors and assigns, if any.

 

59.   NO OFFER.

 

The submission of this Lease and any ancillary documents to Tenant shall not
constitute an offer to Lease, and Landlord shall have no obligation of any kind,
express or implied, to lease the Premises to Tenant until Landlord has approved,
executed and returned to Tenant a fully signed copy of this Lease together with
any ancillary documents Landlord may require.

 

-30-

 

 

60.   WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.

 

TO THE FULLEST EXTENT NOW OR HEREAFTER PERMITTED BY LAW, EACH PARTY TO THIS
LEASE HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS LEASE OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (ii) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS LEASE OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY. NOTWITHSTANDING
THE FOREGOING TO THE CONTRARY, IF THE JURY TRIAL WAIVER CONTAINED HEREIN SHALL
BE HELD OR DEEMED TO BE UNENFORCEABLE, EACH PARTY HERETO HEREBY EXPRESSLY AGREES
TO SUBMIT TO JUDICIAL REFERENCE PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE
SECTIONS 638 THROUGH 645.1 ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
HEREUNDER FOR WHICH A JURY TRIAL WOULD OTHERWISE BE APPLICABLE OR AVAILABLE.
PURSUANT TO SUCH JUDICIAL REFERENCE, THE PARTIES AGREE TO THE APPOINTMENT OF A
SINGLE REFEREE AND SHALL USE THEIR BEST EFFORTS TO AGREE ON THE SELECTION OF A
REFEREE. IF THE PARTIES ARE UNABLE TO AGREE ON A SINGLE REFEREE, A REFEREE SHALL
BE APPOINTED BY THE COURT UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 638
AND 640 TO HEAR ANY DISPUTES HEREUNDER IN LIEU OF ANY SUCH JURY TRIAL. EACH
PARTY ACKNOWLEDGES AND AGREES THAT THE APPOINTED REFEREE SHALL HAVE THE POWER TO
DECIDE ALL ISSUES IN THE APPLICABLE ACTION OR PROCEEDING, WHETHER OF FACT OR
LAW, AND SHALL REPORT A STATEMENT OF DECISION THEREON; PROVIDED, HOWEVER, THAT
ANY MATTERS WHICH WOULD NOT OTHERWISE BE THE SUBJECT OF A JURY TRIAL WILL BE
UNAFFECTED BY THIS WAIVER AND THE AGREEMENTS CONTAINED HEREIN. THE PARTIES
HERETO HEREBY AGREE THAT THE PROVISIONS CONTAINED HEREIN HAVE BEEN FAIRLY
NEGOTIATED ON AN ARMS-LENGTH BASIS, WITH BOTH SIDES AGREEING TO THE SAME
KNOWINGLY AND BEING AFFORDED THE OPPORTUNITY TO HAVE THEIR RESPECTIVE COUNSEL
CONSENT TO THE MATTERS CONTAINED HEREIN. ANY PARTY TO THIS LEASE MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY AND THE AGREEMENTS CONTAINED HEREIN REGARDING THE APPLICATION OF
JUDICIAL REFERENCE IN THE EVENT OF THE INVALIDITY OF SUCH JURY TRIAL WAIVER. THE
PROVISIONS OF THIS PARAGRAPH 60 SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE. NOTWITHSTANDING THE FOREGOING, LANDLORD MAY ELECT, IN
ITS SOLE AND ABSOLUTE DISCRETION, THAT THE FOREGOING AGREEMENT TO REFER TO
JUDICIAL REFERENCE ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING AS
DESCRIBED IN CLAUSES (i) AND (ii) ABOVE SHALL NOT APPLY TO ANY ACTION FOR
UNLAWFUL DETAINER BROUGHT BY LANDLORD IN CONNECTION WITH THIS LEASE.

 

THEREFORE, the parties have executed this Lease as of the date first written
above.

 

LANDLORD:   TENANT: Pointe Camino Windell, LLC   CDX, Inc.                    
By: /s/ Sofia Stieve   Signature: /s/ Thomas L. Gruber   Sofia Stieve (Apr 1,
2015)     Thomas L. Gruber (Apr 1, 2015)           Name: Sofia Stieve   Email:
tom@cdxlife.com           Its: CFO   Title: Chief Financial Officer

 

-31-

 

 

[tex10-9_1.jpg]

 

 

 

 

 

[tex10-9_2.jpg]

 

 

 

 

PREMISES PREPARATION AGREEMENT

 

In connection with the lease to which this Premises Preparation Agreement is
attached (the “Lease”), and in consideration of the mutual covenants hereinafter
contained, Landlord and Tenant agree as follows:

 

1.          Notwithstanding any other provision of the Lease, Landlord shall,
prior to the Commencement

Date, cause only the following work (“Work”), and no other, to be performed in
the Premises at Landlord's sole cost and expense:

 

a)Touch up paint

 

b)Professionally clean carpets.

 

c)If the upstairs carpet in the bullpen area does not clean up to a satisfactory
level, then Landlord will replace that carpet with building standard
carpet/color that compliments the other carpeted areas

 

2.          Tenant shall accept the Premises upon Substantial Completion of the
Work. “Substantial

Completion” means that Landlord has satisfactorily completed the Work and the
Work shall be deemed complete notwithstanding the fact that minor details of the
Work which do not materially interfere with Tenant's use of the Premises remain
to be performed (items normally referred to as “punch-list” items), which items
shall be promptly completed or corrected by Landlord.

 

3.          If Tenant requests any changes to the Work prior to completion of
the Work, Landlord shall not

unreasonably withhold its consent to any such changes, providing that the
changes do not adversely affect the Building's structure, systems, equipment or
appearance, but if such changes increase the cost to Landlord of performing the
Work, Tenant shall pay such additional costs prior to Landlord's commencement of
the Work. In addition, to the extent Landlord's inability to tender possession
of the Premises to Tenant on the Commencement Date is caused by any of the
“Tenant Delays” listed below, then the date on which Tenant is to begin paying
rent under the Lease shall be the date that rent would have begun under the
terms of the Lease but for the following Tenant Delays:

 

a)Tenant's negligence or breach of this Lease;

 

b)A delay in Substantial Completion of the Work resulting from changes to the
Work requested by Tenant;

 

c)Tenant's request for materials, finishes or installations other than those
readily available;

 

d)Tenant's request to deviate from the standards for the Building (as determined
by Landlord); or

 

e)Tenant's failure to timely make any payment due from Tenant under the Lease.

 

Exhibit B
-1-

 

 

NOTICE OF LEASE TERM DATES

 

Date:_____________, 20__                        

 

To:                

 

Re:Lease dated _______________, 20__, between ________________________, a
___________________ ("Landlord") and __________ ("Tenant") (the "Lease")
concerning Suite(s) ____ on floor(s) ________ located at
__________________________ , California (the "Premises").

 

Tenant:

 

In accordance with Paragraph 3 of the Lease, we wish to confirm as follows:

 

1.          That the Premises have been tendered herewith to Tenant as being
substantially complete in accordance with the Lease and that the construction of
the Premises is not deficient in any way except for punch list items.

 

2.          That Tenant has been delivered possession of the Premises and
acknowledges that under the provisions of the Lease the Term commenced on
__________________ and will end on ________________________________.

 

3.          That in accordance with the Lease Monthly Basic Rent commenced to
accrue on ______________________.

 

4.          Under Subparagraph 1(b) and 1(l) of the Lease, the exact number of
Rentable Square Feet within the Premises is ____________ square feet and
Tenant's Percentage is ___________________________.

 

5.          Except as otherwise set forth in the Lease, rent is due and payable
in advance every month during the Term of the Lease. Your rent checks should be
made payable to __________________________ at _________.

 

    , a

 

     

 

  By:       Its:  

  

Exhibit C
-1-

 

 

STANDARDS FOR UTILITIES AND SERVICES

 

The following standards for utilities and services are in effect. Landlord
reserves the right to adopt nondiscriminatory modifications and additions
hereto.

 

1.          The air conditioning system achieves maximum cooling when the window
coverings are extended to the full width of the window opening. Landlord shall
not be responsible for room temperatures if Tenant does not keep all window
coverings in the Premises fully extended whenever the system is in operation.
Tenant agrees to cooperate fully at all times with Landlord, and to abide by all
reasonable regulations and requirements which Landlord may prescribe for the
proper functioning and protection of the air conditioning system. Tenant agrees
not to connect any apparatus, device, conduit or pipe to any Building system
without Landlord's prior written approval. Tenant further agrees that neither
Tenant nor its servants, employees, agents, visitors, licensees or contractors
shall at any time enter, adjust, tamper with, touch or otherwise in any manner
affect the mechanical installations or facilities of the Building or the
Project. The cost of maintenance and service calls to adjust and regulate the
air conditioning system shall be charged to Tenant if the need for maintenance
work results from either Tenant's adjustment of room thermostats or Tenant's
failure to comply with its obligations under this Exhibit, including keeping
window coverings fully extended.

 

2.          Tenant's use of electric current shall never exceed the capacity of
the feeders to the Building, or the risers or wiring installation.

 

3.          Tenant shall keep the meter and installation equipment in good
working order and repair at Tenant's sole cost and expense, in default of which
Landlord may cause such meter and equipment to be replaced or repaired and
collect the cost thereof from Tenant. Tenant agrees to pay for water consumed,
as shown on the meter, as and when bills are rendered, and on default in making
such payment, Landlord may pay such charges and collect the charges from Tenant.
Any such costs or expenses incurred, or payments made by Landlord for any of the
reasons or purposes set forth in this Paragraph, shall be deemed to be
additional rent payable by Tenant and collectible by Landlord as such.

 

4.          Tenant shall pay to Landlord the cost of removal of any of Tenant's
refuse and rubbish to the extent that the amount of Tenant's refuse and rubbish
exceeds that usually generated by other offices in the Building.

 

5.          Landlord reserves the right to stop service of the plumbing,
ventilation, air conditioning, telephone and electrical systems, when necessary,
by reason of accident or emergency, or for repairs, alterations or improvements,
when in the judgment of Landlord such actions are desirable or necessary to be
made, until the repairs, alterations or improvements shall have been completed,
and Landlord shall have no responsibility or liability for failure to supply
plumbing, ventilating, air conditioning, telephone or electric service, when
prevented from so doing by strike or accident or by any cause beyond Landlord's
reasonable control, or by laws, rules, orders, ordinances, directions,
regulations or by reason of the requirements of any federal, state, county or
municipal authority or failure of gas, oil or other suitable fuel supply or
inability by exercise of reasonable diligence to obtain gas, oil or other
suitable fuel supply. Any obligations of Landlord to furnish any services
pursuant to any of the provisions of this Lease, or to perform any act or thing
for the benefit of Tenant, shall not be deemed breached if Landlord is unable to
furnish or perform the same by virtue of a strike or labor trouble or any other
cause whatsoever beyond Landlord's control.

  

Exhibit D
-1-

 

 

SAMPLE FORM OF

 

TENANT ESTOPPEL CERTIFICATE

 

TO:        _________________________________, a
_________________________________ ("Landlord") and
_________________________________________, a_______________________.

 

The undersigned, __________________________ ("Tenant"), hereby certify to
_______________________ a _________________________, as follows:

 

1.          Attached hereto is a true, correct and complete copy of that certain
lease dated ___________, 20__, between Landlord and Tenant (the "Lease"), which
demises premises located at Suite ___, __________________________________,
California (the "Premises"). The Lease is now in full force and has not been
amended, modified or supplemented, except as set forth in Paragraph 4 below.

 

2.          The term of the Lease commenced on __________________, 20__.

 

3.          The term of the Lease shall expire on ____________________, 20__.
There are ________ options to extend the Lease term for a total period of ____
years, none of which has been exercised. There are no options to expand the
Premises.

 

4.          The Lease has: (Initial one)

 

(_____) not been amended, modified, supplemented, extended, renewed or assigned.

 

(_____) been amended, modified, supplemented, extended, renewed or assigned by
the following described agreements, copies of which are attached hereto:

 

                 

 

5.          Tenant has accepted and is now in possession of the Premises.

 

6.          Tenant acknowledges that Landlord's interest in the Lease will be
assigned to ________________ and that no modification, adjustment, revision or
cancellation of the Lease or amendments thereto shall be effective unless the
prior written consent of __________________ is obtained.

 

7.          The amount of fixed monthly rent is $ __________________.

 

8.          The amount of security deposits (if any) is $ __________________. No
other security deposits have been made.

 

9.          Tenant is paying the full lease rental, which has been paid in full
as of the date of this Certificate. No rent or other amount under the Lease has
been paid for more than thirty (30) days in advance of its due date.

 

10.         All work required to be performed by Landlord under the Lease and
the Premises Preparation Agreement (as defined in the Lease) has been completed.

 

11.         There are no defaults on the part of the Landlord or Tenant under
the Lease.

 

12.         Tenant has no defense as to its obligations under the Lease and
claims no set-off or counterclaim against Landlord.

  

Exhibit E
-1-

 

 

13.         Tenant has no right to any concession (rental or otherwise) or
similar compensation in connection with renting the space it occupies except as
provided in the Lease.

 

All provisions of the Lease and the amendments thereto (if any) referred to
above are hereby ratified.

 

The foregoing certification is made with the knowledge that Landlord is about to
sell the Property to ___________ or that _________________________ is about to
fund a loan to Landlord, which sale/loan Tenant understands is scheduled to
close on ___________________, and that in either case the named party is relying
upon the representations herein made in proceeding with that execution. Tenant
shall take all steps reasonably necessary to keep the transaction and party
described in this Certificate confidential. If there is any change in the
information provided in this Certificate between now and the closing described
above, Tenant shall immediately inform you of that change.

 

This Certificate has been duly executed and delivered by the authorized officers
of the undersigned as of _____________________, 20__.

 

  "TENANT"                       By:       Its:  

  

Exhibit E
-2-

 

 

RULES AND REGULATIONS

 

1.          Except as specifically provided in the Lease to which these Rules
and Regulations are attached, no sign, placard, picture, advertisement, name or
notice shall be installed or displayed on any part of the outside or inside of
the Building or the Project without the prior written consent of Landlord.
Landlord shall have the right to remove, at Tenant's expense and without notice,
any sign installed or displayed in violation of this rule. All approved signs or
lettering on doors and walls shall comply with all then-applicable governmental
requirements and shall be printed, painted, affixed or inscribed at the expense
of Tenant by a person or company designated by Landlord.

 

2.          Tenant shall not place anything against or near glass partitions or
doors or windows, other than the Building Standard window covering, which is
visible from outside the Premises.

 

3.          Tenant shall not obstruct any sidewalks, halls, passages, exits,
entrances, escalators, or stairways of the Building or the Project. The halls,
passages, exits, entrances, escalators and stairways are not open to the general
public, but are open, subject to reasonable regulations, to Tenant's business
invitees. Landlord shall in all cases retain the right to control and prevent
access thereto of all persons whose presence in the judgment of Landlord would
be prejudicial to the safety, character, reputation and interest of the Project
and its tenants; provided that nothing contained in these Rules and Regulations
shall be construed to prevent such access to persons with whom any tenant
normally deals in the ordinary course of its business, unless such persons are
engaged in illegal or unlawful activities. No tenant and no employee or invitee
of any tenant shall go upon the roof(s) of the Project.

 

4.          The directory of the Building, if any, will be provided exclusively
for the display of the name and location of tenants only and Landlord reserves
the right to exclude any other names therefrom.

 

5.          Landlord will at Landlord’s expense, re-key the exterior doors to
the Premises and furnish Tenant, free of charge, with ten (10) keys. Landlord
may make a reasonable charge for any additional keys requested by Tenant. Tenant
shall not alter any lock or install any new additional lock or bolt on any door
of the Premises, without Landlord’s prior approval. If Tenant alters or installs
any new or additional locks with Landlord’s approval, then Tenant shall provide
Landlord with two (2) copies of each key for each altered or new lock. Tenant,
upon the termination of its tenancy, shall deliver to Landlord the keys to all
doors which have been furnished to Tenant or subsequently altered or installed
by Tenant, and in the event of loss of any keys, Tenant shall pay Landlord the
cost of re-keying the locks and replacing the lost key(s).

 

6.          If Tenant requires telegraphic, telephonic, burglar alarm, satellite
dishes, antennae or similar services, it shall first obtain Landlord's written
approval (which Landlord may give or withhold in its sole discretion), and shall
comply with Landlord's instructions in their installation.

 

7.          Tenant's initial move in and subsequent deliveries of bulky items,
such as furniture, safes and similar items, shall, unless otherwise agreed in
writing by Landlord, be made during the hours of 6:00 p.m. to 6:00 a.m. or on
Saturday or Sunday. Deliveries during normal office hours shall be limited to
normal office supplies and other small items. No deliveries shall be made which
impede or interfere with other tenants or the operation of the Building.

 

8.          Tenant shall not place a load upon any floor of the Premises which
exceeds the load per square foot which such floor was designed to carry and
which is allowed by law. Landlord shall have the right to prescribe the weight,
size and position of all equipment, materials, furniture or other property
brought into the Building. Heavy objects shall, if considered necessary by
Landlord, stand on such platforms as determined by Landlord to be necessary to
properly distribute the weight, which platforms shall be provided at Tenant's
expense. Business machines and mechanical equipment belonging to Tenant, which
cause noise or vibration that may be transmitted to the structure of the
building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenants in the Building, shall be placed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devises
sufficient to eliminate noise or vibration. The persons employed to move such
equipment in or out of the Building must be acceptable to Landlord. Landlord
will not be responsible for loss of, or damage to, any such equipment or other
property from any cause, and all damage done to the Building or Project by
maintaining or moving such equipment or other property shall be repaired at the
expense of Tenant.

  

Exhibit F
-1-

 

 

9.          Tenant shall not use or keep in the Premises any firearms,
explosives, kerosene, gasoline or inflammable or combustible fluid or material
other than those limited quantities necessary for the operation or maintenance
of office equipment. Tenant shall not use or permit to be used in the Premises
any foul or noxious gas or substance, or permit or allow the Premises to be
occupied or used in a manner offensive or objectionable to Landlord or other
occupants of the Building by reason of noise, odors or vibrations, nor shall
Tenant bring into or keep in or about the Premises any birds or animals.

 

10.         Tenant shall not use any method of heating or air conditioning other
than that supplied by Landlord.

 

11.         Tenant shall not waste electricity, water or air conditioning and
agrees to cooperate fully with Landlord to assure the most effective operation
of the Building's heating and air conditioning and to comply with any
governmental energy saving rules, laws or regulations of which Tenant has actual
notice, and shall refrain from attempting to adjust controls. Tenant shall keep
corridor doors closed, and shall keep all window coverings pulled down.

 

12.         Landlord reserves the right, exercisable after thirty (30) days
written notice to Tenant and without liability to Tenant, to change the name and
street address of the Building.

 

13.         Landlord shall not be liable for damages for any error with regard
to the admission to or exclusion from the Building of any person. Landlord
reserves the right to prevent access to the Building in case of invasion, mob,
riot, public excitement or other commotion by closing and locking the doors or
by other appropriate action.

 

14.         Tenant shall close and lock the doors of its Premises and entirely
shut off all water faucets or other water apparatus, and all lights,
electricity, gas or air outlets before Tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for noncompliance with
this rule.

 

15.         Tenant shall not obtain for use on the Premises ice, drinking water,
food, beverage, towel or other similar services or accept upon the Premises
sandwich or other food services, barbering or shoeshine service, or similar
non-office related or business vendors without Landlord's prior written approval
(which may be withheld in Landlord's subjective good faith discretion), and then
only at such hours and under such regulations as may be fixed by Landlord.

 

16.         The lavatories, toilets, urinals, wash bowls and other apparatus
shall not be used for any purpose other than that for which they were
constructed and no inappropriate substance of any kind whatsoever shall be
thrown therein. The expense of any breakage, stoppage or damage resulting from
the violation of this rule shall be borne by the tenant who, or whose employees
or invitees, shall have caused it.

 

17.         Tenant shall not sell, or permit the sale at retail of newspapers,
magazines, periodicals, theater tickets or any other goods or merchandise to the
general public in or on the Premises. Tenant shall not make any room-to-room
solicitation of business from other tenants in the Project. Tenant shall not use
the Premises for any business or activity other than that specifically provided
for in this Lease.

 

18.         Tenant shall not install any radio or television antenna,
loudspeaker, satellite dishes or other devices on the roof(s) or exterior walls
of the Building or the Project. Tenant shall not interfere with radio or
television broadcasting or reception from or in the Project or elsewhere.

 

19.         Tenant shall not mark, drive nails, screw or drill into the
partitions, woodwork or plaster or in any way deface the Premises or any part of
the Premises, except in accordance with the provisions of the Lease pertaining
to alterations. Landlord reserves the right to direct electricians as to where
and how telephone and telegraph wires are to be introduced to the Premises.
Tenant shall not cut or bore holes in partitions, floors or ceilings for wires
or any other purpose. Tenant shall not affix any floor covering to the floor of
the Premises in any manner except as approved by Landlord. Tenant shall, at its
sole cost, repair any damage resulting from noncompliance with this rule.

 

Exhibit F
-2-

 

 

20.         Tenant shall not install, maintain or operate upon the Premises any
vending machines without the prior written consent of Landlord.

 

21.         Canvassing, soliciting and distribution of handbills or any other
written material, and peddling in the Project are prohibited, and Tenant shall
cooperate with Landlord to prevent such activities.

 

22.         Landlord reserves the right to exclude or expel from the Project any
person who, in Landlord's judgment, is intoxicated or under the influence of
liquor or drugs or who is in violation of any of these Rules and Regulations or
any other rules and regulations of the Building.

 

23.         Tenant shall store all its trash and garbage within its Premises or
in other facilities provided by Landlord. Tenant shall not place in any trash
box or receptacle any material which cannot be disposed of in the ordinary and
customary manner of trash and garbage disposal. All garbage and refuse disposal
shall be made in accordance with directions issued from time to time by
Landlord.

 

24.         The Premises shall not be used for the storage of merchandise held
for sale to the general public, or for lodging or for manufacturing of any kind,
nor shall the Premises be used for any improper, immoral or objectionable
purpose. No cooking shall be done or permitted on the Premises without
Landlord's consent, except the use by Tenant of Underwriters' Laboratory
approved equipment for brewing coffee, tea, hot chocolate and similar beverages
shall be permitted, and the use of a microwave oven for employees use shall be
permitted, provided that such equipment and use is in accordance with all
applicable federal, state, county and city laws, codes, ordinances, rules and
regulations.

 

25.         Tenant shall not use in any space of the Project any hand truck
except those equipped with rubber tires and side guards or such other
material-handling equipment as Landlord may approve. Tenant shall not bring any
other vehicles of any kind into the Building.

 

26.         Without the written consent of Landlord, Tenant shall not use the
name of the Building or the Project in connection with or in promoting or
advertising the business of Tenant except as Tenant's address.

 

27.         Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

 

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

 

29.         To the extent Landlord reasonably deems it necessary (i) to provide
to third parties access to portions of the Common Areas in order to comply with
any applicable law, Landlord may do so without breaching this Lease, and (ii) to
exercise exclusive control over any portions of the Common Areas for the mutual
benefit of the tenants in the Project, Landlord may do so subject to
nondiscriminatory additional Rules and Regulations.

 

30.         Tenant's requirements will be attended to only upon appropriate
application to Landlord's asset management office for the Project by an
authorized individual. Employees of Landlord shall not perform any work or do
anything outside of their regular duties unless under special instructions from
Landlord, and no employee of Landlord will admit any person (Tenant or
otherwise) to any office without specific instructions from Landlord.

 

31.         Tenant shall abide by all restrictions Landlord places on smoking
within the Building. Notwithstanding the foregoing, Landlord shall not be
required to impose any restrictions on smoking within the Building for the
benefit of Tenant. No decision of Landlord to permit or prohibit smoking shall
be construed as a breach of this Lease by Landlord.

 

32.         Tenant shall comply with all (a) crime prevention programs, (b)
hazardous materials disclosure and control programs, and (c) water conservation
programs which Landlord is required to participate in under (i) any restrictive
covenants which may now or hereafter exist or (ii) any other agreements which
may now exist or hereafter be executed which affect the use and operation of the
Premises or Project.

  

Exhibit F
-3-

 

 

33.         Tenant shall promptly provide Landlord with any information
Landlord, any mortgagee or beneficiary with a lien on the Building, any ground
lessor with respect to the Building, or any governmental agency may reasonably
request.

 

34.         Landlord may waive any one or more of these Rules and Regulations
for the benefit of Tenant or any other tenant, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of Tenant
or any other tenant, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against Tenant or any other tenant of the Project.

 

35.         These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease.

 

36.         Landlord reserves the right to modify these Rules and Regulations
and adopt such other reasonable and non-discriminatory rules and regulations as,
in its judgment, may from time to time be needed for safety and security, for
care and cleanliness of the Project and for the preservation of good order in
the Project. Tenant agrees to abide by all the Rules and Regulations stated
herein and any additional rules and regulations which are adopted.

 

37.         Tenant shall be responsible for the observance of all of the
foregoing rules by Tenant's employees, agents, contractors, clients, customers,
invitees, guests and other users of the Premises.

  

Exhibit F
-4-

 

 

TRAFFIC AND PARKING RULES AND REGULATIONS

 

The following rules and regulations shall govern the use of the parking
facilities designated on Exhibit A-2 of the Lease in connection with the use of
the Premises.

 

1.          Landlord assumes no responsibility for any damage to any vehicle
parked in the parking areas or for any goods left in any such vehicle. All such
liability is specifically assumed by the operator of any such vehicle as a
condition of parking.

 

2.          Tenant shall not (a) park or permit its employees to park in any
parking areas designated by Landlord as areas for parking by visitors to the
Project, (b) park or permit its employees, guests, invitees or visitors to park
in the residential or commercial neighborhoods contiguous to the Project, (c)
leave vehicles in the parking areas overnight, or (d) park any vehicles in the
parking areas other than automobiles, motorcycles, motor driven or non-motor
driven bicycles or four wheeled trucks. No propane or natural gas powered
vehicles shall be allowed to park in the parking areas.

 

3.          Parking cards, stickers, or any other devices or forms of
identification supplied by Landlord as a condition of use of the parking
facilities shall remain the property of Landlord. Such parking identification
device must be displayed as requested and may not be mutilated in any manner.
The serial number of the parking identification device may not be obliterated.
Devices are not transferable and any device in the possession of an unauthorized
holder will be void. Landlord reserves the right to (a) require that a
reasonable security deposit be paid to Landlord for each parking area or
Building access card issued to Tenant, and (b) change the location of Tenant's
reserved parking spaces, if any, from time to time.

 

4.          No overnight or extended term storage of vehicles shall be
permitted.

 

5.          Vehicles must be parked entirely within painted stall lines of a
single parking stall.

 

6.          All directional signs and arrows must be observed.

 

7.          The speed limit within all parking areas shall be five (5) miles per
hour.

 

8.          Parking is prohibited in any area other than those specifically
designated for parking.

 

9.          All parkers are required to park and lock their own vehicles. All
responsibility for damage to vehicles is assumed by the parker.

 

10.         Loss or theft of parking identification devices must be reported to
Landlord's asset management office for the Project immediately, and a lost or
stolen report must be filed by the Tenant or user of such parking identification
device at the time. Landlord has the right to exclude any vehicle from the
parking facilities that does not have an identification device.

 

11.         Any parking identification devices reported lost or stolen found on
any unauthorized vehicle will be confiscated and the illegal holder will be
subject to prosecution.

 

12.         Washing, waxing, cleaning or servicing of any vehicle in any area
not specifically reserved for such purpose is prohibited.

 

13.         The parking operators, managers or attendants are not authorized to
make or allow any exceptions to these rules and regulations.

 

14.         Tenant's continued right to use any parking spaces in the parking
facilities is conditioned upon Tenant abiding by these rules and regulations and
those contained in this Lease. Further, if this Lease terminates for any reason
whatsoever, Tenant's right to use the parking spaces in the parking facilities
shall terminate concurrently with the Lease.

  

Exhibit G
-1-

 

 

15.         Tenant agrees to sign a parking agreement with Landlord or
Landlord's parking operator within five (5) days of request, which agreement
shall be consistent with this Lease and these rules and regulations.

 

16.         Landlord reserves the right to refuse the sale of parking cards,
stickers or other parking identification devices to any tenant or person or
their respective agents or representatives who willfully refuse to comply with
these rules and regulations and all posted or unposted city, state or federal
ordinances, laws or agreements.

 

17.         Tenant and its employees shall comply with any traffic management
and/or environmental regulation program now or hereafter in effect, whether
imposed by local, regional, state or federal governmental or quasi-governmental
agencies (collectively, "TDM Program") which has been or may hereafter be
applicable to Tenant, the Building or the Project. Tenant acknowledges that such
a TDM Program may cause Tenant inconvenience, but nonetheless agrees to
cooperate in the formation of, and comply with the provisions of, any such TDM
Program. Additionally, Tenant shall (a) participate in any employee commute
transportation surveys reasonably required by Landlord, and (b) adhere to
measures that Landlord may enact in order to comply with existing and future
laws relating to traffic control or flow applicable to the Project. Any breach
by Tenant of any of its covenants in this Paragraph 17 may result in penalty
fees being assessed against Landlord; therefore, Tenant shall be liable to
Landlord for all such fees, plus interest thereon, assessed on account of any
such breach, and that breach shall also constitute a material default under this
Lease.

 

18.         Landlord reserves the right to establish and to modify these rules
and regulations or adopt such other reasonable and nondiscriminatory rules and
regulations for the parking facilities as it deems necessary for the operation
of the parking facilities. Landlord may refuse to permit any person who violates
these rules to park in the parking facilities, and any violation of the rules
shall subject the vehicle to removal at such vehicle owner's expense.

 

Exhibit G
-2-

 

 

Index of Lease Riders

 

1.          Option(s) to Extend Term

 

 

 

 

LEASE RIDER NO. 1

 

OPTION TO EXTEND TERM

 

This Rider is attached to and made a part of that certain Lease (the "Lease"),
dated Apr 1, 2015, between Pointe Camino Windell, LLC, a California limited
liability company ("Landlord"), and CDX, Inc., a Delaware corporation ("Tenant")
for the premises known as Suite B, 6335 Ferris Square, San Diego, California
(the "Premises"). Defined or initially capitalized terms in this Rider have the
same meanings as in the Lease. The provisions of this Rider shall supersede any
inconsistent provisions of the Lease to the extent of the inconsistency.

 

Landlord grants to Tenant an option (the "Option") to extend the Term for two
(2) options of eighteen (18) additional months(s) (the "Extension") on the same
terms and conditions as set forth in the Lease, except that the Monthly Basic
Rent shall increase annually by 3% from the last month of the previous term on
the first day of the Extension (the "Adjustment Date").

 

The Option shall be exercised only by written unconditional notice received by
Landlord at least one hundred eighty (180) days before expiration of the Term.
If Landlord does not timely receive Tenant's written unconditional notice of the
exercise of the Option, the Option under this Rider shall immediately lapse, and
there shall be no further right to extend the Term or to the Extension. The
Option shall be exercisable by Tenant on the express condition for Landlord's
benefit that Tenant shall not be in default either at the time of the exercise
of the Option or at the commencement of the Extension. If Tenant timely
exercises the Option under this Rider, "Term" shall mean, for all purposes under
the Lease, the sum of (a) the Term, as defined under Subparagraph 1(m) of the
Lease, plus (b) the term of the Extension for which the Option has been
exercised.

 

The Option is personal to Tenant. In the event of any sublease or Transfer of
Tenant's interest in the Lease before the permitted exercise of the Option, the
Option shall not be transferred to any transferee but shall instead
automatically lapse, and the Term shall be as provided for in Paragraph 3 of the
Lease.

 

Signature:    /s/ Sofia Stieve       Sofia Stieve (Apr 1, 2015)           Email:
  sofia.stieve@windell-investments.com           Title:   Chief Financial
Officer