Standard Industrial/Commercial Multi-Tenant Lease



 Exhibit 10.12 
 

 
 STANDARD INDUSTRIAL/COMMERCIAL MULTI-TENANT LEASE – NET 
 AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION 
 1. Basic Provisions (“Basic Provisions”). 
 1.1 Parties: This
Lease (“Lease”), dated for reference purposes only September 7 , 2004, is made by and between Nancy Ridge Technology Center, L.P., a California Limited Partnership (“Lessor”) and RexC
Pharmaceuticals, Inc., a California corporation (“Lessee”), (collectively the “Parties”, or individually a “Party”). 
 1.2(a) Premises: That certain portion of the Project (as defined below), including all improvements therein or to be provided by Lessor under the terms of this Lease, commonly known by
the street address of 6310 Nancy Ridge Drive, Suite #105, located in the City of San Diego, County of San Diego, State of California, with zip code 92121, as outlined on Exhibit B & C attached hereto
(“Premises”) and generally described as (describe briefly the nature of the Premises): Approximately 5,803 square feet of office and biotech lab space. In addition to Lessee’s rights to use and occupy the Premises as
hereinafter specified, Lessee shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as hereinafter specified, but shall not have any rights to the roof, exterior walls or utility raceways of the building containing
the Premises (“Building”) or to any other buildings in the Project. The Premises, the Building, the Common Areas, the land upon which they are located, along with all other buildings and improvements thereon, are herein collectively
referred to as the “Project.” (See also Paragraph 2) 
 1.2(b) Parking: Pro rata share of
unreserved vehicle parking spaces (“Unreserved Parking Spaces”); and No reserved vehicle parking spaces (“Reserved Parking Spaces”). (See also Paragraph 2.6) 
 1.3 Term: Two (2) years and No months (“Original Term”) commencing September 1,
2004 (“Commencement Date”) and ending August 31, 2006 (“Expiration Date”). (See also Paragraph 3) 
 1.4 Early Possession: Upon full execution of Lease (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3) 
 1.5 Base Rent: $4,874.52 per month (“Base Rent”), payable on the first (1st) day of each
month commencing August 15, 2004. (See also Paragraph 4) 
 þ If this box is checked, there are provisions in this Lease for the Base Rent to be adjusted. 
 1.6 Lessee’s Share of Common Area Operating Expenses: three point three percent
(3.3%) (“Lessee’s Share”). 
 1.7 Base Rent and Other Monies Paid Upon Execution:

 (a) Base Rent: $4,874.52 for the period September 2004. 
 (b) Common Area Operating Expenses: $1,450.00 for the period September 2004. 
 (c) Security Deposit: $9,749.04 (“Security Deposit”). (See also Paragraph 5) 
 (d) Other: $             for
                                        
. 
 (e) Total Due Upon Execution of this Lease: $16,073.56. 
 1.8 Agreed Use: General office, biotech research and development. Lessee shall not create any health or safety risks, odors,
or nuisance to any other tenants in the project; nor preclude, nor limit any other present or future tenant’s use of space. (See also Paragraph 6) 
 1.9 Insuring Party. Lessor is the “Insuring Party”. (See also Paragraph 8) 
 1.10 Real Estate Brokers: (See also Paragraph 15) 
 (a)
Representation: The following real estate brokers (the “Brokers”) and brokerage relationships exist in this transaction (check applicable boxes): 
 þ Phase 3 Properties represents Lessor exclusively
(“Lessor’s Broker”); 
 þ CB Richard Ellis represents Lessee exclusively (“Lessee’s Broker”); or 
  ̈

                                        
represents both Lessor and Lessee (“Dual Agency”). 
 (b) Payment to Brokers: Upon execution and
delivery of this Lease by both Parties, Lessor shall pay to the Brokers the brokerage fee agreed to in a separate written agreement (or if there is no such agreement, the sum of
             or      % of the total Base Rent for the brokerage services
rendered by the Brokers). Half of this fee will be paid upon execution of this lease by both parties, and the other half will be paid once Lessee has taken possession of the premises and begun paying full rent. Broker shall not be paid on
any lease extensions, options or expansions, or any space subleased to Perlan. 
 1.11 Guarantor. The
obligations of the Lessee under this Lease are to be guaranteed by
                                     
    (“Guarantor”). (See also Paragraph 37) 
 1.12 Addenda and Exhibits. Attached hereto is an Addendum or Addenda consisting of Paragraphs 50 through 63 and Exhibits A through C, all of which constitute a part of this
Lease. 
 2. Premises. 
 2.1 Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set forth in this Lease.
Unless otherwise provided herein, any statement of size set forth in this Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree is reasonable and any payments based thereon are not subject to revision
whether or not the actual size is more or less. 
 2.2 Condition. Lessor shall deliver that portion of the Premises
contained within the Building (“Unit”) to Lessee broom clean and free of debris on the Commencement Date or the Early Possession Date, whichever first occurs (“Start Date”), and, so long as the required service
contracts described in Paragraph 7.1(b) below are obtained by Lessee and in effect within thirty days following the Start Date, warrants that the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air conditioning
systems (“HVAC”), loading doors, if any, and all other such elements in the Unit, other than those constructed by Lessee, shall be in good operating condition on said date and that the structural elements of the roof, bearing walls
and foundation of the Unit shall be free of material defects. If a non-compliance with such warranty exists as of the Start Date, or if one of such systems or elements should malfunction or fail within the appropriate warranty period, Lessor shall,
as Lessor’s sole obligation with respect to such matter, except as otherwise provided in this Lease, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 1 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 
non-compliance, malfunction or failure, rectify same at Lessor’s expense. The warranty periods shall be as follows: (i) 6 months as to the HVAC systems, and (ii) 30 days as to the
remaining systems and other elements of the Unit. If Lessee does not give Lessor the required notice within the appropriate warranty period, correction of any such non-compliance, malfunction or failure shall be the obligation of Lessee at
Lessee’s sole cost and expense (except for the repairs to the fire sprinkler systems, roof, foundations, and/or bearing walls - see Paragraph 7). 
 2.3 Compliance. Lessor warrants that to the best of Lessor’s actual knowledge and without duty to investigate, the improvements on the Premises and the Common Areas comply with the building codes that
were in effect at the time that each such improvement, or portion thereof, was constructed, and also with all applicable laws, covenants or restrictions of record, regulations, and ordinances in effect on the Start Date (“Applicable
Requirements”). Said warranty does not apply to the use to which Lessee will put the Premises or to any Alterations or Utility Installations (as defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible
for determining whether or not the Applicable Requirements, and especially the zoning, are appropriate for Lessee’s intended use, and acknowledges that past uses of the Premises may no longer be allowed. If the Premises do not comply with said
warranty, Lessor shall, except as otherwise provided, promptly after receipt of written notice from Lessee setting forth with specificity the nature and extent of such non-compliance, rectify the same at Lessor’s expense. If Lessee does not
give Lessor written notice of a non-compliance with this warranty within 6 months following the Start Date, correction of that non-compliance shall be the obligation of Lessee at Lessee’s sole cost and expense. If the Applicable Requirements
are hereafter changed so as to require during the term of this Lease the construction of an addition to or an alteration of the Unit, Premises and/or Building, the remediation of any Hazardous Substance, or the reinforcement or other physical
modification of the Unit, Premises and/or Building (“Capital Expenditure”), Lessor and Lessee shall allocate the cost of such work as follows: 
 (a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result of the specific and unique use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof, provided, however that if such Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds 6 months’ Base Rent, Lessee may instead terminate
this Lease unless Lessor notifies Lessee, in writing, within 10 days after receipt of Lessee’s termination notice that Lessor has elected to pay the difference between the actual cost thereof and the amount equal to 6 months’ Base Rent. If
Lessee elects termination, Lessee shall immediately cease the use of the Premises which requires such Capital Expenditure and deliver to Lessor written notice specifying a termination date at least 90 days thereafter. Such termination date shall,
however, in no event be earlier than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure. 
 (b) If such Capital Expenditure is not the result of the specific and unique use of the Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor and Lessee shall allocate the
obligation to pay for the portion of such costs reasonably attributable to the Premises pursuant to the formula set out in Paragraph 7.1(d); provided, however, that if such Capital Expenditure is required during the last 2 years of this Lease or if
Lessor reasonably determines that it is not economically feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90 days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days
after receipt of Lessor’s termination notice that Lessee will pay for such Capital Expenditure. If Lessor does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee may advance such funds and deduct same,
with Interest, from Rent until Lessor’s share of such costs have been fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent due and payable for the remainder of this Lease is not sufficient to fully
reimburse Lessee on an offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to Lessor. 
 (c) Notwithstanding the above, the provisions concerning Capital Expenditures are intended to apply only to non-voluntary, unexpected, and new Applicable Requirements. If the Capital Expenditures are instead triggered by Lessee as a result
of an actual or proposed change in use, change in intensity of use, or modification to the Premises then, and in that event, Lessee shall be fully responsible for the cost thereof, and Lessee shall not have any right to terminate this Lease.

 2.4 Acknowledgements. Lessee acknowledges that: (a) it has been advised by Lessor and/or Brokers to satisfy
itself with respect to the condition of the Premises (including but not limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and compliance with Applicable Requirements and the Americans with Disabilities
Act), and their suitability for Lessee’s intended use, (b) Lessee has made such investigation as it deems necessary with reference to such matters and assumes all responsibility therefor as the same relate to its occupancy of the Premises,
and (c) neither Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or warranties with respect to said matters other than as set forth in this Lease. In addition, Lessor acknowledges that: (i) Brokers
have made no representations, promises or warranties concerning Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s sole responsibility to investigate the financial capability and/or
suitability of all proposed tenants. 
 2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor
in Paragraph 2 shall be of no force or effect if immediately prior to the Start Date Lessee was the owner or occupant of the Premises. In such event, Lessee shall be responsible for any necessary corrective work. 
 2.6 Vehicle Parking. Lessee shall be entitled to use the number of Unreserved Parking Spaces and Reserved Parking Spaces
specified in Paragraph 1.2(b) on those portions of the Common Areas designated from time to time by Lessor for parking. Lessee shall not use more parking spaces than said number. Said parking spaces shall be used for parking by vehicles no larger
than full-size passenger automobiles or pick-up trucks, herein called “Permitted Size Vehicles.” Lessor may regulate the loading and unloading of vehicles by adopting Rules and Regulations as provided in Paragraph 2.9. No vehicles
other than Permitted Size Vehicles may be parked in the Common Area without the prior written permission of Lessor. 
 (a)
Lessee shall not permit or allow any vehicles that belong to or are controlled by Lessee or Lessee’s employees, suppliers, shippers, customers, contractors or invitees to be loaded, unloaded, or parked in areas other than those designated by
Lessor for such activities. 
 (b) Lessee shall not service or store any vehicles in the Common Areas. 
 (c) If Lessee permits or allows any of the prohibited activities described in this Paragraph 2.6, then Lessor shall have the right,
without notice, in addition to such other rights and remedies that it may have, to remove or tow away the vehicle involved and charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor. 
 (d) Lessor reserves the right to designate, change, or eliminate employee parking areas in the Project. 
 2.7 Common Areas - Definition. The term “Common Areas” is defined as all areas and facilities outside the
Premises and within the exterior boundary line of the Project and interior utility raceways and installations within the Unit that are provided and designated by the Lessor from time to time for the general non-exclusive use of Lessor, Lessee and
other tenants of the Project and their respective employees, suppliers, shippers, customers, contractors and invitees, including parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways and landscaped areas. 

2.8 Common Areas - Lessee’s Rights. Lessor grants to Lessee, for the benefit of Lessee and its employees, suppliers,
shippers, contractors, customers and invitees, during the term of this Lease, the non-exclusive right to use, in common with others entitled to such use, the Common Areas as they exist from time to time, subject to any rights, powers, and privileges
reserved by Lessor under the terms hereof or under the terms of any rules and regulations or restrictions governing the use of the Project. Under no circumstances shall the right herein granted to use the Common Areas be deemed to include the right
to store any property, temporarily or permanently, in the Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or Lessor’s designated agent, which consent may be revoked at any time. In the event that
any unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to such other rights and remedies that it may have, to remove the property and charge the cost to Lessee, which cost shall be immediately payable upon
demand by Lessor. 
 2.9 Common Areas - Rules and Regulations. Lessor or such other person(s) as Lessor may appoint
shall have the exclusive control and management of the Common Areas and shall have the right, from time to time, to establish, modify, amend and enforce reasonable rules and regulations (“Rules and Regulations”) for the management,
safety, care, and cleanliness of the grounds, the parking and unloading of vehicles and the preservation of good order, as well as for the convenience of other occupants or tenants of the Building and the Project and their invitees. Lessee agrees to
abide by and conform to all such Rules and Regulations, and to cause its employees, suppliers, shippers, customers, contractors and invitees to so abide and conform. Lessor shall not be responsible to Lessee for the non-compliance with said Rules
and Regulations by other tenants of the Project. 
 2.10 Common Areas - Changes. Lessor shall have the right, in
Lessor’s sole discretion, from time to time: 
 (a) 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, walkways and utility raceways; 
 (b) To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains
available; 
 (c) To designate other land outside the boundaries of the Project to be a part of the Common
Areas; 
 (d) To add additional buildings and improvements to the Common Areas; 
 (e) To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any portion
thereof; and 
 (f) To do and perform such other acts and make such other changes in, to or with respect to the Common
Areas and Project as Lessor may, in the exercise of sound business judgment, deem to be appropriate. 
 3. Term. 
 3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as specified in Paragraph 1.3. 

3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the Commencement Date, the obligation to
pay Base Rent shall be abated for the period of such early possession. All other terms of this Lease (including but not limited to the obligations to pay Lessee’s Share of Common Area Operating Expenses, Real Property Taxes and insurance
premiums and to maintain the Premises) shall, however, be in effect during such period. Any such early possession shall not affect the Expiration Date. 
 3.3 Delay In Possession. Lessor agrees to use its best commercially reasonable efforts to deliver possession of the Premises to Lessee by

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 2 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 
the Commencement Date. If, despite said efforts, Lessor is unable to deliver possession as agreed, Lessor shall not be subject to any liability therefor, nor shall such failure affect the
validity of this Lease. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until it receives possession of the Premises. If possession is not delivered within 60 days after the Commencement Date, Lessee may, at its
option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease, in which event the Parties shall be discharged from all obligations hereunder. If such written notice is not received by Lessor within said 10 day
period, Lessee’s right to cancel shall terminate. Except as otherwise provided, if possession is not tendered to Lessee by the Start Date and Lessee does not terminate this Lease, as aforesaid, any period of rent abatement that Lessee would
otherwise have enjoyed shall run from the date of delivery of possession and continue for a period equal to what Lessee would otherwise have enjoyed under the terms hereof, but minus any days of delay caused by the acts or omissions of Lessee. If
possession of the Premises is not delivered within 4 months after the Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor and Lessee, in writing. 
 3.4 Lessee Compliance. Lessor shall not be required to tender possession of the Premises to Lessee until Lessee complies with
its obligation to provide evidence of insurance (Paragraph 8.5). Pending delivery of such evidence, Lessee shall be required to perform all of its obligations under this Lease from and after the Start Date, including the payment of Rent,
notwithstanding Lessor’s election to withhold possession pending receipt of such evidence of insurance. Further, if Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the Start Date shall occur but
Lessor may elect to withhold possession until such conditions are satisfied. 
 4. Rent. 
 4.1 Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease (except for the Security Deposit)
are deemed to be rent (“Rent”). 
 4.2 Common Area Operating Expenses. Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent, Lessee’s Share (as specified in Paragraph 1.6) of all Common Area Operating Expenses, as hereinafter defined, during each calendar year of the term of this Lease, in accordance with the
following provisions: 
 (a) “Common Area Operating Expenses” are defined, for purposes of this Lease, as
all costs incurred by Lessor relating to the ownership and operation of the Project, including, but not limited to, the following: 
  

	 	 (i)
	 The operation, repair and maintenance, in neat, clean, good order and condition of the following: 


 (aa) The Common Areas and Common Area improvements, including parking areas, loading and unloading areas, trash areas, roadways,
parkways, walkways, driveways, landscaped areas, bumpers, irrigation systems, Common Area lighting facilities, fences and gates, elevators, roofs, and roof drainage systems. 
 (bb) Exterior signs and any tenant directories. 
 (cc) Any fire
detection and/or sprinkler systems. 
  

	 	 (ii)
	 The cost of water, gas, electricity and telephone to service the Common Areas and any utilities not separately metered. 


  

	 	 (iii)
	 Trash disposal, pest control services, property management, security services, and the costs of any environmental inspections. 



 

	 	 (iv)
	 Reserves set aside for maintenance and repair of Common Areas. 


  

	 	 (v)
	 Real Property Taxes (as defined in Paragraph 10). 


  

	 	 (vi)
	 The cost of the premiums for the insurance maintained by Lessor pursuant to Paragraph 8. 


  

	 	 (vii)
	 Any deductible portion of an insured loss concerning the Building or the Common Areas. 


  

	 	 (viii)
	 The cost of any Capital Expenditure to the Building or the Project not covered under the provisions of Paragraph 2.3 provided; however, that Lessor shall
allocate the cost of any such Capital Expenditure over a 12 year period and Lessee shall not be required to pay more than Lessee’s Share of 1/144th of the cost of such Capital Expenditure in any given month. 


  

	 	 (ix)
	 Any other services to be provided by Lessor that are stated elsewhere in this Lease to be a Common Area Operating Expense. 


 (b) Any Common Area Operating Expenses and Real Property Taxes that are specifically attributable to the Unit (which shall
specifically include the tax assessment of the existing improvements, and any new improvements to the suite), the Building or to any other building in the Project or to the operation, repair and maintenance thereof, shall be allocated entirely to
such Unit, Building, or other building. However, any Common Area Operating Expenses and Real Property Taxes that are not specifically attributable to the Building or to any other building or to the operation, repair and maintenance thereof, shall be
equitably allocated by Lessor to all buildings in the Project. 
 (c) The inclusion of the improvements, facilities and
services set forth in Subparagraph 4.2(a) shall not be deemed to impose an obligation upon Lessor to either have said improvements or facilities or to provide those services unless the Project already has the same, Lessor already provides the
services, or Lessor has agreed elsewhere in this Lease to provide the same or some of them. 
 (d) Lessee’s
Share of Common Area Operating Expenses shall be payable by Lessee within 10 days after a reasonably detailed statement of actual expenses is presented to Lessee. At Lessor’s option, however, an An amount may be estimated by Lessor
from time to time of Lessee’s Share of annual Common Area Operating Expenses and the same shall be payable monthly or quarterly, as Lessor shall designate, during each 12 month period of the Lease term, on the same day as the
Base Rent is due hereunder. Lessor shall deliver to Lessee within 60 days after the expiration of each calendar year a reasonably detailed statement showing Lessee’s Share of the actual Common Area Operating Expenses incurred during the
preceding year. If Lessee’s payments under this Paragraph 4.2(d) during the preceding year exceed Lessee’s Share as indicated on such statement; Lessor shall credit the amount of such over-payment against Lessee’s Share of Common Area
Operating Expenses next becoming due. If Lessee’s payments under this Paragraph 4.2(d) during the preceding year were less than Lessee’s Share as indicated on such statement, Lessee shall pay to Lessor the amount of the deficiency within
10 days after delivery by Lessor to Lessee of the statement. 
 (e) Exclusions to Common Area Operating Expenses: The
“Common Area Operating Expenses” shall exclude the following: 
  

	 	 (i)
	 depreciation, interest and/or amortization on mortgages or ground lease payments; 


  

	 	 (ii)
	 legal fees incurred in negotiating and enforcing other tenant leases affecting the Project; 


  

	 	 (iii)
	 real estate broker commissions; 


  

	 	 (iv)
	 initial improvements or alterations to tenant spaces; 


  

	 	 (v)
	 the cost of providing any service directly to, and paid directly by, any other tenant; 


  

	 	 (vi)
	 Cost of any items for which Lessor receives reimbursement from insurance proceeds or from any third party (other than reimbursement from the other tenants of
the Building based upon such tenants’ pro rata share of Common Area Operating Expenses); 


  

	 	 (vii)
	 costs and expenses incurred with respect to the removal of Hazardous Substances not attributable to the acts of Lessee; 


  

	 	 (viii)
	 any management fee in excess of four percent (4%) of the Base Rent; and 


  

	 	 (ix)
	 any federal and state income taxes, and other taxes applied or measured by Lessor’s general or net income (as opposed to rents, receipts; or income
directly attributable to operation of the Project and excluding real property taxes and assessments which are Lessee’s responsibility under the lease). 


 4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor in lawful money of the United States, without offset or deduction (except as specifically permitted in this
Lease), on or before the day on which it is due. Rent for any period during the term hereof which is for less than one full calendar month shall be prorated based upon the actual number of days of said month. Payment of Rent shall be made to Lessor
at its address stated herein or to such other persons or place as Lessor may from time to time designate in writing. Acceptance of a payment which is less than the amount then due shall not be a waiver of Lessor’s rights to the balance of such
Rent, regardless of Lessor’s endorsement of any check so stating. In the event that any check, draft, or other instrument of payment given by Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in
addition to any late charges which may be due. 
 5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
Security Deposit as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails to pay Rent, or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of said Security Deposit
for the payment of any amount due Lessor or to reimburse or compensate Lessor for any liability, expense, loss or damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any portion of the Security Deposit, Lessee
shall within 10 days after written request therefor deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base Rent increases during the

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 3 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 
term of this Lease, Lessee shall, upon written request from Lessor, deposit additional monies with Lessor so that the total amount of the Security Deposit shall at all times bear the same
proportion to the increased Base Rent as the initial Security Deposit bore to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the business of Lessee or to accommodate a sublessee or assignee, Lessor shall
have the right to increase the Security Deposit to the extent necessary, in Lessor’s reasonable judgment, to account for any increased wear and tear that the Premises may suffer as a result thereof. If a change in control of Lessee occurs
during this Lease and following such change the financial condition of Lessee is, in Lessor’s reasonable judgment, significantly reduced, Lessee shall deposit such additional monies with Lessor as shall be sufficient to cause the Security
Deposit to be at a commercially reasonable level based on such change in financial condition. Lessor shall not be required to keep the Security Deposit separate from its general accounts. Within 14 days after the expiration or termination of this
Lease, if Lessor elects to apply the Security Deposit only to unpaid Rent, and otherwise within 30 days after the Premises have been vacated pursuant to Paragraph 7.4(c) below, Lessor shall return that portion of the Security Deposit not used or
applied by Lessor. No part of the Security Deposit shall be considered to be held in trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease. If Lessee Defaults under any of the terms of this lease; the
Security Deposit shall be increased to an amount equal to three month of the then current Base Rent and NNN charges. 
 6. Use.

 6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use which is
reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that disturbs occupants of or causes damage to neighboring premises
or properties. Lessor shall not unreasonably withhold or delay its consent to any written request for a modification of the Agreed Use, so long as the same will not impair the structural integrity of the improvements on the Premises or the
mechanical or electrical systems therein, and/or is not significantly more burdensome to the Premises. If Lessor elects to withhold consent, Lessor shall within 7 days after such request give written notification of same, which notice shall include
an explanation of Lessor’s objections to the change in the Agreed Use. 
 6.2 Hazardous Substances.

 (a) Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease shall
mean any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or release, either by itself or in combination with other materials expected to be on the Premises, is either: (i) potentially injurious to the
public health, safety or welfare, the environment or the Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability of Lessor to any governmental agency or third party under any applicable
statute or common law theory. Hazardous Substances shall include, but not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products or fractions thereof. Lessee shall not engage in any activity in or on the
Premises which constitutes a Reportable Use of Hazardous Substances without the express prior written consent of Lessor and timely compliance (at Lessee’s expense) with all Applicable Requirements. "Reportable Use" shall mean (i) the
installation or use of any above or below ground storage tank, (ii) the generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that requires a permit from, or with respect to which a report, notice,
registration or business plan is required to be filed with, any governmental authority, and/or (iii) the presence at the Premises of a Hazardous Substance with respect to which any Applicable Requirements requires that a notice be given to
persons entering or occupying the Premises or neighboring properties. Notwithstanding the foregoing, Lessee may use any ordinary and customary materials reasonably required to be used in the normal course of the Agreed Use, so long as such use is in
compliance with all Applicable Requirements, is not a Reportable Use, and does not expose the Premises or neighboring property to any meaningful risk of contamination or damage or expose Lessor to any liability therefor. In addition, Lessor may
condition its consent to any Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to protect itself, the public, the Premises and/or the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease expiration or termination) of protective modifications (such as concrete encasements) and/or increasing the Security Deposit. Lessee may use amounts and types of
Hazardous Substances which are reasonable and customary for purposes of conducting its business operations in accordance with its Permitted Use of the Premises in accordance with Applicable Requirements and/or Law. 
 (b) Duty to Inform Lessor. If Lessee knows, or has reasonable cause to believe, that a Hazardous Substance has come to be
located in, on, under or about the Premises, other than as previously consented to by Lessor, or in violation of Applicable Requirements, and/or Law, Lessee shall immediately give written notice of such fact to Lessor, and provide Lessor with a copy
of any report, notice, claim or other documentation which it has concerning the presence of such Hazardous Substance. 
                 (c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or released in, on, under, or about the
Premises (including through the plumbing or sanitary sewer system) and shall promptly, at Lessee’s expense, take all investigatory and/or remedial action reasonably recommended, whether or not formally ordered or required, for the cleanup of
any contamination of, and for the maintenance, security and/or monitoring of the Premises or neighboring properties, that was caused or materially contributed to by Lessee, or pertaining to or involving any Hazardous Substance brought onto the
Premises during the term of this Lease, by or for Lessee, or any third party. 
 (d) Lessee Indemnification. Lessee
shall indemnify, defend and hold Lessor, its agents, employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments, claims, expenses, penalties, and attorneys’ and
consultants’ fees arising out of or involving any Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided, however, that Lessee shall have no liability under this Lease with respect to underground migration
of any Hazardous Substance under the Premises from areas outside of the Project). Lessee’s obligations shall include, but not be limited to, the effects of any contamination or injury to person, property or the environment created or suffered
by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of this Lease. No termination, cancellation or release agreement entered into by Lessor and Lessee shall
release Lessee from its obligations under this Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at the time of such agreement. 
 (e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend, reimburse and hold Lessee, its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which existed as a result of Hazardous Substances on the Premises prior to the Start Date or which are caused by the gross negligence or willful misconduct of Lessor, its agents or employees.
Lessor’s obligations, as and when required by the Applicable Requirements, shall include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration or termination of
this Lease. 
 (f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any
investigations or remediation measures required by governmental entities having jurisdiction with respect to the existence of Hazardous Substances on the Premises prior to the Start Date, unless such remediation measure is required as a result of
Lessee’s use (including “Alterations”, as defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for such payment. Lessee shall cooperate fully in any such activities at the request of Lessor,
including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at reasonable times in order to carry out Lessor’s investigative and remedial responsibilities. 
 (g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs during the term of this Lease,
unless Lessee is legally responsible therefor (in which case Lessee shall make the investigation and remediation thereof required by the Applicable Requirements and this Lease shall continue in full force and effect, but subject to Lessor’s
rights under Paragraph 6.2(d) and Paragraph 13), Lessor may, at Lessor’s option, either (i) investigate and remediate such Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s expense, in which event
this Lease shall continue in full force and effect, or (ii) if the estimated cost to remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is greater, give written notice to Lessee, within 30 days after
receipt by Lessor of knowledge of the occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this Lease as of the date 60 days following the date of such notice. In the event Lessor elects to give a termination
notice, Lessee may, within 10 days thereafter, give written notice to Lessor of Lessee’s commitment to pay the amount by which the cost of the remediation of such Hazardous Substance Condition exceeds an amount equal to 12 times the then
monthly Base Rent or $100,000, whichever is greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days following such commitment. In such event, this Lease shall continue in full force and effect, and
Lessor shall proceed to make such remediation as soon as reasonably possible after the required funds are available. If Lessee does not give such notice and provide the required funds or assurance thereof within the time provided, this Lease shall
terminate as of the date specified in Lessor’s notice of termination. 
 6.3 Lessee’s Compliance with
Applicable Requirements. Except as otherwise provided in this Lease, Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially comply with all Applicable Requirements, the requirements of any applicable
fire insurance underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants which relate in any manner to the Premises, without regard to whether said requirements are now in effect or become effective after
the Start Date. Lessee shall, within 10 days after receipt of Lessor’s written request, provide Lessor with copies of all permits and other documents, and other information evidencing Lessee’s compliance with any Applicable Requirements
specified by Lessor, and shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or involving the failure of
Lessee or the Premises to comply with any Applicable Requirements. 
         6.4 Inspection;
Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and consultants shall have the right to enter into Premises at any time, in the case of an emergency, and otherwise at reasonable times, for the purpose
of inspecting the condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a contamination is found to exist or be
imminent, or the inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably related to the violation or
contamination. 
 7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations. 
  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 4 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 7.1 Lessee’s Obligations. 
 (a) In General. Subject to the provisions of Paragraph 2.2 (Condition), 2.3 (Compliance), 6.3 (Lessee’s Compliance with
Applicable Requirements), 7.2 (Lessor’s Obligations), 9 (Damage or Destruction), and 14 (Condemnation), Lessee shall, at Lessee’s sole expense, keep the Premises, Utility Installations (intended for Lessee’s exclusive use, no matter
where located), and Alterations in good order, condition and repair (whether or not the portion of the Premises requiring repairs, or the means of repairing the same, are reasonably or readily accessible to Lessee, and whether or not the need for
such repairs occurs as a result of Lessee’s use, any prior use, the elements or the age of such portion of the Premises), including, but not limited to, all equipment or facilities, such as plumbing, HVAC equipment, electrical, lighting
facilities, boilers, pressure vessels, fixtures, interior walls, interior surfaces of exterior walls, ceilings, floors, windows, doors, plate glass, and skylights but excluding any items which are the responsibility of Lessor pursuant to Paragraph
7.2. Lessee, in keeping the Premises in good order, condition and repair, shall exercise and perform good maintenance practices, specifically including the procurement and maintenance of the service contracts required by Paragraph 7.1(b) below.
Lessee’s obligations shall include restorations, replacements or renewals when necessary to keep the Premises and all improvements thereon or a part thereof in good order, condition and state of repair. 
 (b) Service Contracts. Lessee shall, at Lessee’s sole expense, procure and maintain contracts, with copies to Lessor, in
customary form and substance for, and with contractors specializing and experienced in the maintenance of the following equipment and improvements, if any, if and when installed on the Premises: (i) HVAC equipment, (ii) boiler and pressure
vessels, (iii) clarifiers, and (iv) any other equipment, if reasonably required by Lessor. However, Lessor reserves the right, upon notice to Lessee, to procure and maintain any or all of such service contracts, and if Lessor so elects,
Lessee shall reimburse Lessor, upon demand, for the cost thereof. 
 (c) Failure to Perform. If Lessee fails to
perform Lessee’s obligations under this Paragraph 7.1, Lessor may enter upon the Premises after 10 days’ prior written notice to Lessee (except in the case of an emergency, in which case no notice shall be required), perform such
obligations on Lessee’s behalf, and put the Premises in good order, condition and repair, and Lessee shall promptly reimburse Lessor for the cost thereof. 
 (d) Replacement. Subject to Lessee’s indemnification of Lessor as set forth in Paragraph 8.7 below, and without relieving Lessee of liability resulting from Lessee’s failure
to exercise and perform good maintenance practices, if an item described in Paragraph 7.1(b) cannot be repaired other than at a cost which is in excess of 50% of the cost of replacing such item, then such item shall be replaced by Lessor, and the
cost thereof shall be prorated between the Parties and Lessee shall only be obligated to pay, each month during the remainder of the term of this Lease, on the date on which Base Rent is due, an amount equal to the product of multiplying the cost of
such replacement by a fraction, the numerator of which is one, and the denominator of which is 144 (ie. 1/144th of the cost per month). Lessee shall pay Interest on the unamortized balance at a rate that is commercially reasonable in the judgment of
Lessor’s accountants. Lessee may, however, prepay its obligation at any time. 
 7.2 Lessor’s
Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3 (Compliance), 4.2 (Common Area Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or Destruction) and 14 (Condemnation), Lessor, subject to
reimbursement pursuant to Paragraph 4.2, shall keep in good order, condition and repair the foundations, exterior walls, structural condition of interior bearing walls, exterior roof, fire sprinkler system, Common Area fire alarm and/or smoke
detection systems, fire hydrants, parking lots, walkways, parkways, driveways, landscaping, fences, signs and utility systems serving the Common Areas and all parts thereof, as well as providing the services for which there is a Common Area
Operating Expense pursuant to Paragraph 4.2. Lessor shall not be obligated to paint the exterior or interior surfaces of exterior walls nor shall Lessor be obligated to maintain, repair or replace windows, doors or plate glass of the Premises.
Lessee expressly waives the benefit of any statute now or hereafter in effect to the extent it is inconsistent with the terms of this Lease. 
 7.3 Utility Installations; Trade Fixtures; Alterations. 
 (a)
Definitions. The term “Utility Installations” refers to all floor and window coverings, air lines, power panels, electrical distribution, security and fire protection systems, communication systems, lighting fixtures, HVAC
equipment, plumbing, and fencing in or on the Premises. The term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed without doing material damage to the Premises. The term
“Alterations” shall mean any modification of the improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion. “Lessee Owned Alterations and/or Utility Installations” are defined
as Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant to Paragraph 7.4(a). 
                 (b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without Lessor’s prior written consent.
Lessee may, however, make non-structural Utility Installations to the interior of the Premises (excluding the roof) without such consent but upon notice to Lessor, as long as they are not visible from the outside, do not involve puncturing,
relocating or removing the roof or any existing walls, and the cumulative cost thereof during this Lease as extended does not exceed a sum equal to 3 month’s Base Rent in the aggregate or a sum equal to one month’s Base Rent in any one
year. Notwithstanding the foregoing, Lessee shall not make or permit any roof penetrations and/or install anything on the roof without the prior written approval of Lessor. Lessor may, as a precondition to granting such approval, require Lessee to
utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility Installations that Lessee shall desire to make and which require the consent of the Lessor shall be presented to Lessor in written form with detailed plans. Consent
shall be deemed conditioned upon Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies of both the permits and the plans and specifications prior to commencement of the work, and
(iii) compliance with all conditions of said permits and other Applicable Requirements in a prompt and expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike manner with good and sufficient materials.
Lessee shall promptly upon completion furnish Lessor with as-built plans and specifications. For work which costs an amount in excess of one month’s Base Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in
an amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon Lessee’s posting an additional Security Deposit with Lessor. 
 (c) Indemnification. Lessee shall pay, when due, all claims for labor or materials furnished or alleged to have been furnished to or for Lessee at or for use on the Premises, which
claims are or may be secured by any mechanic’s or materialman’s lien against the Premises or any interest therein. Lessee shall give Lessor not less than 10 days notice prior to the commencement of any work in, on or about the Premises,
and Lessor shall have the right to post notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises against the same
and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an amount equal to 150% of the amount of such contested lien, claim or
demand, indemnifying Lessor against liability for the same. If Lessor elects to participate in any such action, Lessee shall pay Lessor’s attorneys’ fees and costs. 
 7.4 Ownership; Removal; Surrender; and Restoration. 
 (a)
Ownership. Subject to Lessor’s right to require removal or elect ownership as hereinafter provided, all Alterations and Utility Installations made by Lessee shall be the property of Lessee, but considered a part of the Premises. Lessor
may, at any time, elect in writing to be the owner of all or any specified part of the Lessee Owned Alterations and Utility Installations. Unless otherwise instructed per paragraph 7.4(b) hereof, all Lessee Owned Alterations and Utility
Installations shall, at the expiration or termination of this Lease, become the property of Lessor and be surrendered by Lessee with the Premises. 
 (b) Removal. By delivery to Lessee of written notice from Lessor not earlier than 90 and not later than 30 days prior to the end of the term of this Lease, Lessor may require that any or all Lessee Owned
Alterations or Utility Installations be removed by the expiration or termination of this Lease. Lessor may require the removal at any time of all or any part of any Lessee Owned Alterations or Utility Installations made without the required consent.

 (c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any earlier
termination date, with all of the improvements, parts and surfaces thereof broom clean and free of debris, and in good operating order, condition and state of repair, ordinary wear and tear excepted. “Ordinary wear and tear” shall not
include any damage or deterioration that would have been prevented by good maintenance practice. Notwithstanding the foregoing, if this Lease is for 12 months or less, then Lessee shall surrender the Premises in the same condition as delivered to
Lessee on the Start Date with NO allowance for ordinary wear and tear. Lessee shall repair any damage occasioned by the installation, maintenance or removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and
equipment as well as the removal of any storage tank installed by or for Lessee. Lessee shall also completely remove from the Premises any and all Hazardous Substances brought onto the Premises by or for Lessee, or any third party (except Hazardous
Substances which were deposited via underground migration from areas outside of the Project) even if such removal would require Lessee to perform or pay for work that exceeds statutory requirements. Trade Fixtures shall remain the property of Lessee
and shall be removed by Lessee. The failure by Lessee to timely vacate the Premises pursuant to this Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under the provisions of Paragraph 26 below. 

8. Insurance; Indemnity. 
 8.1 Payment of Premiums. The cost of the premiums for the insurance policies required to be carried by Lessor, pursuant to Paragraphs 8.2(b), 8.3(a) and 8.3(b), shall be a Common Area Operating Expense.
Premiums for policy periods commencing prior to, or extending beyond, the term of this Lease shall be prorated to coincide with the corresponding Start Date or Expiration Date. 
 8.2 Liability Insurance. 
 (a) Carried by Lessee.
Lessee shall obtain and keep in force a Commercial General Liability policy of insurance protecting Lessee and Lessor as an additional insured against claims for bodily injury, personal injury and property damage based upon or arising out of the
ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate
of not less than $2,000,000, an “Additional Insured-Managers or Lessor’s of Premises Endorsement” and contain the “Amendment of the Pollution Exclusion Endorsement” and coverage shall also be extended to include damage
caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “insured
contract” for the performance of Lessee’s indemnity obligations under this Lease. The limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee of any obligation hereunder. All insurance carried by
Lessee shall be primary to and not contributory with any similar insurance carried by Lessor, whose insurance shall be considered excess insurance only. 
  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 5 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 (b) Carried by Lessor. Lessor shall maintain liability insurance as described
in Paragraph 8.2(a), in addition to, and not in lieu of, the insurance required to be maintained by Lessee. Lessee shall not be named as an additional insured therein. 
 8.3 Property Insurance - Building, Improvements and Rental Value. 
 (a) Building and Improvements. Lessor shall obtain and keep in force a policy or policies of insurance in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender insuring loss
or damage to the Premises. The amount of such insurance shall be equal to the full replacement cost of the Premises, as the same shall exist from time to time, or the amount required by any Lender, but in no event more than the commercially
reasonable and available insurable value thereof. Lessee Owned Alterations and Utility Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee under Paragraph 8.4. If the coverage is available and commercially
appropriate, such policy or policies shall insure against all risks of direct physical loss or damage (except the perils of flood and/or earthquake unless required by a Lender), including coverage for debris removal and the enforcement of any
Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement of any portion of the Premises as the result of a covered loss. Said policy or policies shall also contain an agreed valuation provision in lieu of any
coinsurance clause, waiver of subrogation, and inflation guard protection causing an increase in the annual property insurance coverage amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for All Urban
Consumers for the city nearest to where the Premises are located. If such insurance coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence. 
 (b) Rental Value. Lessor shall also obtain and keep in force a policy or policies in the name of Lessor with loss payable to
Lessor and any Lender, insuring the loss of the full Rent for one year with an extended period of indemnity for an additional 180 days (“Rental Value Insurance”). Said insurance shall contain an agreed valuation provision in
lieu of any coinsurance clause, and the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable by Lessee, for the next 12 month period. 
 (c) Adjacent Premises. Lessee shall pay for any increase in the premiums for the property insurance of the Building and for the Common Areas or other buildings in the Project if said
increase is caused by Lessee’s acts, omissions, use or occupancy of the Premises. 
 (d) Lessee’s
Improvements. Since Lessor is the Insuring Party, Lessor shall not be required to insure Lessee Owned Alterations and Utility Installations unless the item in question has become the property of Lessor under the terms of this Lease. 

8.4 Lessee’s Property; Business Interruption Insurance. 
 (a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s personal property, Trade
Fixtures, and Lessee Owned Alterations and Utility Installations. Such insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by Lessee for the
replacement of personal property, Trade Fixtures and Lessee Owned Alterations and Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in force. 
 (b) Business Interruption. Lessee shall obtain and maintain loss of income and extra expense insurance in amounts as
will reimburse Lessee for direct or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees in the business of Lessee or attributable to prevention of access to the Premises as a result of such perils.
See paragraph 8.8 and 65. 
 (c) No Representation of Adequate Coverage. Lessor makes no representation
that the limits or forms of coverage of insurance specified herein are adequate to cover Lessee’s property, business operations or obligations under this Lease. 
         8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or admitted to transact business in the state where the Premises are
located, and maintaining during the policy term a “General Policyholders Rating” of at least B+, V, as set forth in the most current issue of “Best’s Insurance Guide”, or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which invalidates the required insurance policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of such insurance or certificates evidencing the existence and
amounts of the required insurance. No such policy shall be cancelable or subject to modification except after 30 days prior written notice to Lessor. Lessee shall, at least 30 days prior to the expiration of such policies, furnish Lessor with
evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may order such insurance and charge the cost thereof to Lessee, which amount shall be payable by Lessee to Lessor upon demand. Such policies shall be for a
term of at least one year, or the length of the remaining term of this Lease, whichever is less. If either Party shall fail to procure and maintain the insurance required to be carried by it, the other Party may, but shall not be required to,
procure and maintain the same. 
 8.6 Waiver of Subrogation. Without affecting any other rights or remedies, Lessee
and Lessor each hereby release and relieve the other, and waive their entire right to recover damages against the other, for loss of or damage to its property arising out of or incident to the perils required to be insured against herein. The effect
of such releases and waivers is not limited by the amount of insurance carried or required, or by any deductibles applicable hereto. The Parties agree to have their respective property damage insurance carriers waive any right to subrogation that
such companies may have against Lessor or Lessee, as the case may be, so long as the insurance is not invalidated thereby. 
 8.7 Indemnity. Except for Lessor’s gross negligence or willful misconduct, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its agents, Lessor’s master or ground lessor, partners and
Lenders, from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by reason of any of the foregoing matters, Lessee shall upon notice defend the same at Lessee’s expense by counsel reasonably satisfactory to Lessor and
Lessor shall cooperate with Lessee in such defense. Lessor need not have first paid any such claim in order to be defended or indemnified. 
 8.8 Exemption of Lessor from Liability. Lessor shall not be liable for injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees, contractors, invitees,
customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers,
wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the Building, or from other sources or places. Lessor
shall not be liable for any damages arising from any act or neglect of any other tenant of Lessor nor from the failure of Lessor to enforce the provisions of any other lease in the Project. Notwithstanding Lessor’s negligence or breach of this
Lease, Lessor shall under no circumstances be liable for injury to Lessee’s business or for any loss of income or profit therefrom. 
 8.9 Payment of Deductible Amounts. Lessee’s obligation with respect to payment of any “deductible amount” under Lessor’s liability, fire and/or casualty policies of insurance shall be as
follows: 
 (a) If the damage or destruction is caused by a negligent or intentional act or omission by Lessee or
Lessee’s agents, employees or contractors or otherwise arises out of the operation of the Lessee’s business and/or occupancy of the Premises; then Lessee shall pay the full ‘deductible amount’. 
 (b) If the damage or destruction is caused by a negligent or intentional act or omission by another tenant of the Building or such
other tenant’s agents, employees or contractors or otherwise arises out of the operation of such other tenant’s business and/or such other tenant’s occupancy of another portion of the Building; then such other tenant shall pay the
full “deductible amount” and Lessee shall have no responsibility or liability therefore and such amount shall not be included as an element of Common Area Operating Expenses. 
 (c) If the damage or destruction arises from any other cause other than a cause described in either of the preceding subparagraphs
(a) or (b); then the “deductible amount” shall be an item of Common Area Operating Expenses. 
 9. Damage or
Destruction. 
 9.1 Definitions. 
 (a) “Premises Partial Damage” shall mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations, which can
reasonably be repaired in 3 months or less from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or
destruction as to whether or not the damage is Partial or Total 
 (b) “Premises Total Destruction” shall
mean damage or destruction to the improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which cannot reasonably be repaired in 3 months or less from the date of the damage or destruction
and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage or destruction as to whether or not the damage is Partial or Total. 
                 (c) “Insured Loss” shall mean damage
or destruction to improvements on the Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which was caused by an event required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved. 
 (d) “Replacement Cost” shall mean the cost to repair
or rebuild the improvements owned by Lessor at the time of the occurrence to their condition existing immediately prior thereto, including demolition, debris removal and upgrading required by the operation of Applicable Requirements, and without
deduction for depreciation. 
 (e) “Hazardous Substance Condition” shall mean the occurrence or discovery
of a condition involving the presence of, or a contamination by, a Hazardous Substance as defined in Paragraph 6.2(a), in, on, or under the Premises. 
         9.2 Partial Damage - Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then Lessor shall, at Lessor’s expense, repair such damage
(but not Lessee’s Trade Fixtures or Lessee Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 6 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 shall continue in full force and effect; provided, however, that Lessee shall, at Lessor’s
election, make the repair of any damage or destruction the total cost to repair of which is $5,000 or less, and, in such event, Lessor shall make any applicable insurance proceeds available to Lessee on a reasonable basis for that purpose.
Notwithstanding the foregoing, if the required insurance was not in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party shall promptly contribute the shortage in proceeds as and when required to complete said
repairs. In the event, however, such shortage was due to the fact that, by reason of the unique nature of the improvements, full replacement cost insurance coverage was not commercially reasonable and available, Lessor shall have no obligation to
pay for the shortage in insurance proceeds or to fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to cover same, or adequate assurance thereof, within 10 days following receipt of written notice of such
shortage and request therefor. If Lessor receives said funds or adequate assurance thereof within said 10 day period, the party responsible for making the repairs shall complete them as soon as reasonably possible and this Lease shall remain in full
force and effect. If such funds or assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10 days thereafter to: (i) make such restoration and repair as is commercially reasonable with Lessor paying any
shortage in proceeds, in which case this Lease shall remain in full force and effect, or (ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of any funds contributed by Lessee to repair any such
damage or destruction. Premises Partial Damage due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be some insurance coverage, but the net proceeds of any such insurance shall be made available for the
repairs if made by either Party. 
 9.3 Partial Damage - Uninsured Loss. If a Premises Partial Damage that is not
an Insured Loss occurs, unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs at Lessee’s expense), Lessor may either: (i) repair such damage as soon as reasonably possible at Lessor’s
expense, in which event this Lease shall continue in full force and effect, or (ii) terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of knowledge of the occurrence of such damage. Such termination
shall be effective 60 days following the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the right within 10 days after receipt of the termination notice to give written notice to Lessor of Lessee’s
commitment to pay for the repair of such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30 days after making such commitment. In such event this Lease shall continue in
full force and effect, and Lessor shall proceed to make such repairs as soon as reasonably possible after the required funds are available. If Lessee does not make the required commitment, this Lease shall terminate as of the date specified in the
termination notice. 
 9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total
Destruction occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to recover Lessor’s damages from
Lessee, except as provided in Paragraph 8.6. 
 9.5 Damage Near End of Term. If at any time during the last 6
months of this Lease there is damage for which the cost to repair exceeds one month’s Base Rent, whether or not an Insured Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such damage by giving a
written termination notice to Lessee within 30 days after the date of occurrence of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to extend this Lease or to purchase the Premises, then Lessee may
preserve this Lease by, (a) exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date which is 10 days
after Lessee’s receipt of Lessor’s written notice purporting to terminate this Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises such option during such period and provides Lessor with
funds (or adequate assurance thereof) to cover any shortage in insurance proceeds, Lessor shall, at Lessor’s commercially reasonable expense, repair such damage as soon as reasonably possible and this Lease shall continue in full force and
effect. If Lessee fails to exercise such option and provide such funds or assurance during such period, then this Lease shall terminate on the date specified in the termination notice and Lessee’s option shall be extinguished. 
 9.6 Abatement of Rent; Lessee’s Remedies. 
 (a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous Substance Condition for which Lessee is not responsible under this Lease, the Rent
payable by Lessee for the period required for the repair, remediation or restoration of such damage shall be abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but not to exceed the proceeds received from the
Rental Value insurance. All other obligations of Lessee hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage, destruction, remediation, repair or restoration except as provided herein. 
                 (b) Remedies. If Lessor shall be obligated to
repair or restore the Premises and does not commence, in a substantial and meaningful way, such repair or restoration within 90 days after such obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or restoration,
give written notice to Lessor and to any Lenders of which Lessee has actual notice, of Lessee’s election to terminate this Lease on a date not less than 60 days following the giving of such notice. If Lessee gives such notice and such repair or
restoration is not commenced within 30 days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair or restoration is commenced within such 30 days, this Lease shall continue in full force and effect.
“Commence” shall mean either the unconditional authorization of the preparation of the required plans, or the beginning of the actual work on the Premises, whichever first occurs. 
 9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or Paragraph 9, an equitable
adjustment shall be made concerning advance Base Rent and any other advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of Lessee’s Security Deposit as has not been, or is not then required to be, used
by Lessor. 
 9.8 Waive Statutes. Lessor and Lessee agree that the terms of this Lease shall govern the effect of
any damage to or destruction of the Premises with respect to the termination of this Lease and hereby waive the provisions of any present or future statute to the extent inconsistent herewith. 
 10. Real Property Taxes. 
 10.1 Definition. As
used herein, the term “Real Property Taxes” shall include any form of assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other than inheritance, personal income or estate taxes); improvement
bond; and/or license fee imposed upon or levied against any legal or equitable interest of Lessor in the Project, Lessor’s right to other income therefrom, and/or Lessor’s business of leasing, by any authority having the direct or indirect
power to tax and where the funds are generated with reference to the Project address and where the proceeds so generated are to be applied by the city, county or other local taxing authority of a jurisdiction within which the Project is located. The
term “Real Property Taxes” shall also include any tax, fee, levy, assessment or charge, or any increase therein, imposed by reason of events occurring during the term of this Lease, including but not limited to, a change in the ownership
of the Project or any portion thereof or a change in the improvements thereon. In calculating Real Property Taxes for any calendar year, the Real Property Taxes for any real estate tax year shall be included in the calculation of Real Property Taxes
for such calendar year based upon the number of days which such calendar year and tax year have in common. 
 10.2
Payment of Taxes. Lessor shall pay the Real Property Taxes applicable to the Project, and except as otherwise provided in Paragraph 10.3, any such amounts shall be included in the calculation of Common Area Operating Expenses in accordance
with the provisions of Paragraph 4.2. 
 10.3 Additional Improvements. Common Area Operating Expenses shall not
include Real Property Taxes specified in the tax assessor’s records and work sheets as being caused by additional improvements placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other lessees.
Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time Common Area Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property Taxes if assessed solely by reason of Alterations,
Trade Fixtures or Utility Installations placed upon the Premises by Lessee or at Lessee’s request. 
 10.4 Joint
Assessment. If the Building is not separately assessed, Real Property Taxes allocated to the Building shall be an equitable proportion of the Real Property Taxes for all of the land and improvements included within the tax parcel assessed, such
proportion to be determined by Lessor from the respective valuations assigned in the assessor’s work sheets or such other information as may be reasonably available. Lessor’s reasonable determination thereof, in good faith, shall be
conclusive. 
 10.5 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against and
levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings, equipment and all personal property of Lessee contained in the Premises. When possible, Lessee shall cause its Lessee Owned Alterations and Utility
Installations, Trade Fixtures, furnishings, equipment and all other personal property to be assessed and billed separately from the real property of Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real property,
Lessee shall pay Lessor the taxes attributable to Lessee’s property within 10 days after receipt of a written statement setting forth the taxes applicable to Lessee’s property. 
 11. Utilities. Lessee shall pay for all water, gas, heat, light, power, telephone, trash disposal and other utilities and services supplied to the Premises, together with any taxes
thereon. Notwithstanding the provisions of Paragraph 4.2, if at any time in Lessor’s sole judgment, Lessor determines that Lessee is using a disproportionate amount of water, electricity or other commonly metered utilities, or that Lessee is
generating such a large volume of trash as to require an increase in the size of the dumpster and/or an increase in the number of times per month that the dumpster is emptied, then Lessor may increase Lessee’s Base Rent by an amount equal to
such increased costs. 
 12. Assignment and Subletting. 
 12.1 Lessor’s Consent Required. 
 (a) Lessee shall
not voluntarily or by operation of law assign, transfer, mortgage or encumber (collectively, “assign or assignment”) or sublet all or any part of Lessee’s interest in this Lease or in the Premises without Lessor’s prior
written consent. 
 (b) A change in the control of Lessee shall constitute an assignment requiring consent. The transfer,
on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a change in control for this purpose. 
 (c) The involvement of Lessee or its assets in any transaction, or series of transactions (by way of merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal assignment or hypothecation of
this Lease or Lessee’s assets occurs, which results or will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net Worth as it was represented at the time of the execution of this Lease or at the time of the
most recent assignment to which Lessor has consented, or as it exists immediately prior to said transaction or transactions constituting such reduction, whichever was or is greater, shall be considered an assignment of this Lease to which Lessor may
withhold its consent. “Net Worth of Lessee” shall mean the net worth of Lessee (excluding any guarantors) established under generally accepted accounting principles. 
  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 7 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 (d) An assignment or subletting without consent shall, at Lessor’s option, be a
Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either:
(i) terminate this Lease, or (ii) upon 30 days written notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the event of such Breach and rental adjustment, (i) the purchase price of any option to
purchase the Premises held by Lessee shall be subject to similar adjustment to 110% of the price previously in effect, and (ii) all fixed and non-fixed rental adjustments scheduled during the remainder of the Lease term shall be increased to
110% of the scheduled adjusted rent. 
 (e) Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be
limited to compensatory damages and/or injunctive relief. 
 12.2 Terms and Conditions Applicable to Assignment and
Subletting. 
 (a) Regardless of Lessor’s consent, no assignment or subletting shall: (i) be effective
without the express written assumption by such assignee or sublessee of the obligations of Lessee under this Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of Lessee for the payment of Rent or
for the performance of any other obligations to be performed by Lessee. 
 (b) Lessor may accept Rent or performance of
Lessee’s obligations from any person other than Lessee pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of such assignment nor the acceptance of Rent or performance shall constitute a waiver or
estoppel of Lessor’s right to exercise its remedies for Lessee’s Default or Breach. 
 (c) Lessor’s consent
to any assignment or subletting shall not constitute a consent to any subsequent assignment or subletting. 
 (d) In the
event of any Default or Breach by Lessee, Lessor may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance of Lessee’s obligations under this Lease, including any assignee or sublessee, without first
exhausting Lessor’s remedies against any other person or entity responsible therefore to Lessor, or any security held by Lessor. 
 (e) Each request for consent to an assignment or subletting shall be in writing, accompanied by information relevant to Lessor’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 fee of $1,000 or 10% of the current monthly Base Rent applicable to the
portion of the Premises which is the subject of the proposed assignment or sublease, whichever is greater, as consideration for Lessor’s considering and processing said request. Lessee agrees to provide Lessor with such other or additional
information and/or documentation as may be reasonably requested. 
 (f) Any assignee of, or sublessee under, this Lease
shall, by reason of accepting such assignment or entering into such sublease, be deemed to have assumed and agreed to conform and comply with each and every term, covenant, condition and obligation herein to be observed or performed by Lessee during
the term of said assignment or sublease, other than such obligations as are contrary to or inconsistent with provisions of an assignment or sublease to which Lessor has specifically consented to in writing. 
 (g) Lessor’s consent to any assignment or subletting shall not transfer to the assignee or sublessee any Option granted to the
original Lessee by this Lease unless such transfer is specifically consented to by Lessor in writing. (See Paragraph 39.2) 
 12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed included in all subleases under this
Lease whether or not expressly incorporated therein: 
 (a) Lessee hereby assigns and transfers to Lessor all of
Lessee’s interest in all Rent payable on any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s
obligations, Lessee may collect said Rent. Lessor shall not, by reason of the foregoing or any assignment of such sublease, nor by reason of the collection of Rent, be deemed liable to the sublessee for any failure of Lessee to perform and comply
with any of Lessee’s obligations to such sublessee. Lessee hereby irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor stating that a Breach exists in the performance of Lessee’s obligations
under this Lease, to pay to Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to whether such Breach
exists, notwithstanding any claim from Lessee to the contrary. 
 (b) In the event of a Breach by Lessee, Lessor may, at
its option, require sublessee to attorn to Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease from the time of the exercise of said option to the expiration of such sublease; provided, however, Lessor
shall not be liable for any prepaid rents or security deposit paid by such sublessee to such sublessor or for any prior Defaults or Breaches of such sublessor. 
 (c) Any matter requiring the consent of the sublessor under a sublease shall also require the consent of Lessor. 
 (d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor’s prior written consent. 
 (e) Lessor shall deliver a copy of any notice of Default or Breach by Lessee to the sublessee, who shall have the right to cure the
Default of Lessee within the grace period, if any, specified in such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee for any such Defaults cured by the sublessee. 
 13. Default; Breach; Remedies. 
 13.1 Default; Breach. A “Default” is defined as a failure by the Lessee to comply with or perform any of the terms, covenants, conditions or Rules and Regulations under this Lease. A
“Breach” is defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to cure such Default within any applicable grace period: 
 (a) The abandonment of the Premises; or the vacating of the Premises without providing a commercially reasonable level of security, or
where the coverage of the property insurance described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable assurances to minimize potential vandalism. 
 (b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made by Lessee hereunder, whether to
Lessor or to a third party, when due, to provide reasonable evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers or threatens life or property, where such failure continues for a period of 3 business
days following written notice to Lessee. 
 (c) The failure by Lessee to provide (i) reasonable written evidence of
compliance with Applicable Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or subletting, (iv) an Estoppel Certificate, (v) a requested subordination, (vi) evidence concerning any
guaranty and/or Guarantor, (vii) any document requested under Paragraph 41 (easements), or, (viii) or any other documentation or information which Lessor may reasonably require of Lessee under the terms of this Lease, where any such
failure continues for a period of 10 days following written notice to Lessee. 
 (d) A Default by Lessee as to the terms,
covenants, conditions or provisions of this Lease, or of the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs 13.1(a), (b) or (c), above, where such Default continues for a period of 30 days after written
notice; provided, however, that if the nature of Lessee’s Default is such that more than 30 days are reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences such cure within said 30 day period and
thereafter diligently prosecutes such cure to completion. 
 (e) The occurrence of any of the following events:
(i) the making of any general arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor” as defined in 11 U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed
against Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where
possession is not restored to Lessee within 30 days; or (iv) the attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at the Premises or of Lessee’s interest in this Lease, where such seizure
is not discharged within 30 days; provided, however, in the event that any provision of this subparagraph (e) is contrary to any applicable law, such provision shall be of no force or effect, and not affect the validity of the remaining
provisions. 
 (f) The discovery that any financial statement of Lessee or of any Guarantor given to Lessor was materially
false. 
 (g) If the performance of Lessee’s obligations under this Lease is guaranteed: (i) the death of a
Guarantor, (ii) the termination of a Guarantor’s liability with respect to this Lease other than in accordance with the terms of such guaranty, (iii) a Guarantor’s becoming insolvent or the subject of a bankruptcy filing,
(iv) a Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of its guaranty obligation on an anticipatory basis, and Lessee’s failure, within 60 days following written notice of any such event, to provide
written alternative assurance or security, which, when coupled with the then existing resources of Lessee, equals or exceeds the combined financial resources of Lessee and the Guarantors that existed at the time of execution of this Lease.

 13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within 10 days after
written notice (or in case of an emergency, without notice), Lessor may, at its option, perform such duty or obligation on Lessee’s behalf, including but not limited to the obtaining of reasonably required bonds, insurance policies, or
governmental licenses, permits or approvals. The costs and expenses of any such performance by Lessor shall be due and payable by Lessee upon receipt of invoice therefor. If any check given to Lessor by Lessee shall not be honored by the bank upon
which it is drawn, Lessor, at its option, may require all future payments to be made by Lessee to be by cashier’s check. In the event of a Breach, Lessor may, with or without further notice or demand, and without limiting Lessor in the exercise
of any right or remedy which Lessor may have by reason of such Breach: 
 (a) Terminate Lessee’s right to possession
of the Premises by any lawful means, in which case this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned
at the time of termination; (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 the Lessee proves could
have been reasonably avoided; (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 the Lessee proves could be reasonably
avoided; and (iv) any other amount necessary to compensate Lessor for all the detriment proximately caused by the Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to
result therefrom, including but not limited to the cost of recovering possession of the Premises, expenses of reletting, including necessary renovation and alteration of the Premises, reasonable attorneys’ fees, and that portion of any leasing
commission paid by Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at the time of award of the amount referred to in provision (iii) of the immediately preceding sentence shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of the District within which the Premises are located at the time of award plus one percent. Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease
shall not waive Lessor’s right to recover damages under Paragraph 12. If termination of this Lease is obtained

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 8 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 
through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the
right to recover all or any part thereof in a separate suit. If a notice and grace period required under Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given to Lessee under the unlawful detainer statute
shall also constitute the notice required by Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default within the
greater of the two such grace periods shall constitute both an unlawful detainer and a Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said statute. 
 (b) Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes due, in which event Lessee may sublet
or assign, subject only to reasonable limitations. Acts of maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s interests, shall not constitute a termination of the Lessee’s right to possession.

 (c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of the state wherein the
Premises are located. The expiration or termination of this Lease and/or the termination of Lessee’s right to possession shall not relieve Lessee from liability under any indemnity provisions of this Lease as to matters occurring or accruing
during the term hereof or by reason of Lessee’s occupancy of the Premises. 
 13.3 Inducement Recapture. Any
agreement for free or abated rent or other charges, or for the giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration for Lessee’s entering into this Lease, all of which concessions are hereinafter
referred to as “Inducement Provisions”, shall be deemed conditioned upon Lessee’s full and faithful performance of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any such
Inducement Provision shall automatically be deemed deleted from this Lease and of no further force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated, given or paid by Lessor under such an Inducement
Provision shall be immediately due and payable by Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not be
deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in writing by Lessor at the time of such acceptance. 
 13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to
ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any Rent shall not be received by Lessor within 5 days after such amount shall
be due, then, without any requirement for notice to Lessee, Lessee shall pay to Lessor a one-time late charge equal to 10% of each such overdue amount or $100, whichever is greater. The parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Lessor will incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event constitute a waiver of Lessee’s Default or Breach with respect to such overdue amount, nor prevent
the exercise of any of the other rights and remedies granted hereunder. In the event that a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of Base Rent, then notwithstanding any provision of this Lease to
the contrary, Base Rent shall, at Lessor’s option, become due and payable quarterly in advance. 
 13.5
Interest. Any monetary payment due Lessor hereunder, other than late charges, not received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days following the date on which it was due for non-scheduled payment,
shall bear interest from the date when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments. The interest (“Interest”) charged shall be equal to the prime rate reported in the Wall Street
Journal as published closest prior to the date when due plus 4%, but shall not exceed the maximum rate allowed by law. Interest is payable in addition to the potential late charge provided for in Paragraph 13.4. 
 13.6 Breach by Lessor. 
 (a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails within a reasonable time to perform an obligation required to be performed by Lessor. For purposes of this
Paragraph, a reasonable time shall in no event be less than 30 days after receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in writing for such purpose, of written notice specifying wherein such obligation of
Lessor has not been performed; provided, however, that if the nature of Lessor’s obligation is such that more than 30 days are reasonably required for its performance, then Lessor shall not be in breach if performance is commenced within such
30 day period and thereafter diligently pursued to completion. 
                 (b) Performance by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender cures said breach within 30 days after receipt
of said notice, or if having commenced said cure they do not diligently pursue it to completion, then Lessee may elect to cure said breach at Lessee’s expense and offset from Rent an amount equal to the greater of one month’s Base Rent or
the Security Deposit, and to pay an excess of such expense under protest, reserving Lessee’s right to reimbursement from Lessor. Lessee shall document the cost of said cure and supply said documentation to Lessor. 
 14. Condemnation. If the Premises or any portion thereof are taken under the power of eminent domain or sold under the threat of the exercise
of said power (collectively “Condemnation”), this Lease shall terminate as to the part taken as of the date the condemning authority takes title or possession, whichever first occurs. If more than 10% of the floor area of the Unit,
or more than 25% of Lessee’s Reserved Parking Spaces, is taken by Condemnation, Lessee may, at Lessee’s option, to be exercised in writing within 10 days after Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within 10 days after the condemning authority shall have taken possession) terminate this Lease as of the date the condemning authority takes such possession. If Lessee does not terminate this Lease in accordance with the foregoing,
this Lease shall remain in full force and effect as to the portion of the Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in utility of the Premises caused by such Condemnation. Condemnation awards
and/or payments shall be the property of Lessor, whether such award shall be made as compensation for diminution in value of the leasehold, the value of the part taken, or for severance damages; provided, however, that Lessee shall be entitled to
any compensation for Lessee’s relocation expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility
Installations made to the Premises by Lessee, for purposes of Condemnation only, shall be considered the property of the Lessee and Lessee shall be entitled to any and all compensation which is payable therefor. In the event that this Lease is not
terminated by reason of the Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation. 
 15. Brokerage
Fees. 
 15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.10 above,
and unless Lessor and the Brokers otherwise agree in writing, Lessor agrees that: (a) if Lessee exercises any Option, (b) if Lessee acquires from Lessor any rights to the Premises or other premises owned by Lessor and located within the
Project, (c) if Lessee remains in possession of the Premises, with the consent of Lessor, after the expiration of this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation clause
herein, then, Lessor shall pay Brokers a fee in accordance with the schedule of the Brokers in effect at the time of the execution of this Lease. 
 15.2 Assumption of Obligations. Any buyer or transferee of Lessor’s interest in this Lease shall be deemed to have assumed Lessor’s obligation hereunder. Brokers shall be third party
beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such amounts shall accrue Interest. In addition, if Lessor fails
to pay any amounts to Lessee’s Broker when due, Lessee’s Broker may send written notice to Lessor and Lessee of such failure and if Lessor fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to its
Broker and offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to be a third party beneficiary of any commission agreement entered into by and/or between Lessor and Lessor’s Broker for the limited purpose of
collecting any brokerage fee owed. 
 15.3 Representations and Indemnities of Broker Relationships. Lessee
and Lessor each represent and warrant to the other that it has had no dealings with any person, firm, broker or finder (other than the Brokers, if any) in connection with this Lease, and that no one other than said named Brokers is entitled to any
commission or finder’s fee in connection herewith. Lessee and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and against liability for compensation or charges which may be claimed by any such unnamed
broker, finder or other similar party by reason of any dealings or actions of the indemnifying Party, including any costs, expenses, attorneys’ fees reasonably incurred with respect thereto. 
 16. Estoppel Certificates. 
 (a) Each Party (as “Responding Party”) shall within 10 days after written notice from the other Party (the “Requesting Party”) execute, acknowledge and deliver to the Requesting
Party a statement in writing in form similar to the then most current “Estoppel Certificate” form published by the American Industrial Real Estate Association, or as may be reasonably required by a purchaser, lender, or the Lessor,
plus such additional information, confirmation and/or statements as may be reasonably requested by the Requesting Party. 
                 (b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within such 10 day period, the Requesting Party may
execute an Estoppel Certificate stating that: (i) the Lease is in full force and effect without modification except as may be represented by the Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s
performance, and (iii) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance. Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate, and the Responding
Party shall be estopped from denying the truth of the facts contained in said Certificate. 
 (c) If Lessor desires to
finance, refinance, or sell the Premises, or any part thereof, Lessee and all Guarantors shall deliver to any potential lender or purchaser designated by Lessor such financial statements as may be reasonably required by such lender or purchaser,
including but not limited to Lessee’s financial statements for the past 3 years. All such financial statements shall be received by Lessor and such lender or purchaser in confidence and shall be used only for the purposes herein set forth.

 17. Definition of Lessor. The term “Lessor” as used herein shall mean the owner or owners at the time in
question of the fee title to the Premises, or, if this is a sublease, of the Lessee’s interest in the prior lease. In the event of a transfer of Lessor’s title or interest in the Premises or this Lease, Lessor shall deliver to the
transferee or assignee (in cash or by credit) any unused Security Deposit held by Lessor. Except as provided in Paragraph 15, upon such transfer or assignment and delivery of the Security Deposit, as aforesaid, the prior Lessor shall be relieved of
all liability with respect to the obligations and/or covenants under this Lease thereafter to be performed by the Lessor. Subject to the foregoing, the obligations and/or covenants in this Lease to be performed by the Lessor shall be binding only
upon the Lessor as hereinabove defined. Notwithstanding the above, and subject to the provisions of

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 9 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 
Paragraph 20 below, the original Lessor under this Lease, and all subsequent holders of the Lessor’s interest in this Lease shall remain liable and responsible with regard to the potential
duties and liabilities of Lessor pertaining to Hazardous Substances as outlined in Paragraph 6.2 above. 
 18. Severability. The
invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof. 
 19. Days. Unless otherwise specifically indicated to the contrary, the word “days” as used in this Lease shall mean and refer to calendar days. 
 20. Limitation on Liability. Subject to the provisions of Paragraph 17 above, the obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor, the individual partners of Lessor or its or their individual partners, directors, officers or shareholders, and Lessee shall look to the Premises, and to no other assets of Lessor, for the satisfaction of any
liability of Lessor with respect to this Lease, and shall not seek recourse against the individual partners of Lessor or its or their individual partners, directors, officers or shareholders, or any of their personal assets for such satisfaction.

 21. Time of Essence. Time is of the essence with respect to the performance of all obligations to be performed or observed by
the Parties under this Lease. 
 22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between
the Parties with respect to any matter mentioned herein, and no other prior or contemporaneous agreement or understanding shall be effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and is relying solely upon,
its own investigation as to the nature, quality, character and financial responsibility of the other Party to this Lease and as to the use, nature, quality and character of the Premises. Brokers have no responsibility with respect thereto or with
respect to any default or breach hereof by either Party. The liability (including court costs and attorneys’ fees), of any Broker with respect to negotiation, execution, delivery or performance by either Lessor or Lessee under this Lease or any
amendment or modification hereto shall be limited to an amount up to the fee received by such Broker pursuant to this Lease, provided, however, that the foregoing limitation on each Broker’s liability shall not be applicable to any gross
negligence or willful misconduct of such Broker. 
 23. Notices. 
 23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law shall be in writing and may be
delivered in person (by hand or by courier) or may be sent by regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or by facsimile transmission, and shall be deemed sufficiently given if served in a manner
specified in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be that Party’s address for delivery or mailing of notices except in the case of Lessor in which case Notice must be concurrently
delivered to (a) the Property Manager and (b) Sig Luther at 401 West “A” Street #1625, San Diego, CA 92101, Tel. 619-239-0755, Fax 619-239-0541. Either Party may by written notice to the other specify a different address for
notice, except that upon Lessee’s taking possession of the Premises, the Premises shall constitute Lessee’s address for notice. A copy of all notices to Lessor shall be concurrently transmitted to such party or parties at such addresses as
Lessor may from time to time hereafter designate in writing. 
 23.2 Date of Notice. Any notice sent by registered
or certified mail, return receipt requested, shall be deemed given on the date of delivery shown on the receipt card, or if no delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed given 48 hours after the
same is addressed as required herein and mailed with postage prepaid. Notices delivered by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed delivered upon telephone confirmation of receipt (confirmation report from fax machine is sufficient), provided a copy is also delivered via delivery
or mail. If notice is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day. 
 24.
Waivers. No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any subsequent Default or Breach by Lessee of the same
or of any other term, covenant or condition hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary the obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or be
construed as the basis of an estoppel to enforce the provision or provisions of this Lease requiring such consent. The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee. Any payment by Lessee may be accepted by
Lessor on account of moneys or damages due Lessor, notwithstanding any qualifying statements or conditions made by Lessee in connection therewith, which such statements and/or conditions shall be of no force or effect whatsoever unless specifically
agreed to in writing by Lessor at or before the time of deposit of such payment. 
 25. Disclosures Regarding The Nature of a
Real Estate Agency Relationship. 
 (a) When entering into a discussion with a real estate agent
regarding a real estate transaction, a Lessor or Lessee should from the outset understand what type of agency relationship or representation it has with the agent or agents in the transaction. Lessor and Lessee acknowledge being advised by the
Brokers in this transaction, as follows: 
 (i) Lessor’s
Agent. A Lessor’s agent under a listing agreement with the Lessor acts as the agent for the Lessor only. A Lessor’s agent or subagent has the following affirmative obligations: To the
Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessor. To the Lessee and the Lessor: (a) Diligent exercise of reasonable skills and care in performance of the
agent’s duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of the property that are not known to, or within the diligent
attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the affirmative duties set forth above. 
 (ii) Lessee’s Agent. An agent can agree to act as
agent for the Lessee only. In these situations, the agent is not the Lessor’s agent, even if by agreement the agent may receive compensation for services rendered, either in full or in part from the Lessor. An agent acting only for a Lessee has
the following affirmative obligations. To the Lessee: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: (a) Diligent
exercise of reasonable skills and care in performance of the agent’s duties. (b) A duty of honest and fair dealing and good faith. (c) A duty to disclose all facts known to the agent materially affecting the value or desirability of
the property that are not known to, or within the diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential information obtained from the other Party which does not involve the
affirmative duties set forth above. 
 (iii) Agent Representing Both
Lessor and Lessee. A real estate agent, either acting directly or through one or more associate licenses, can legally be the agent of both the Lessor and the Lessee in a transaction, but only with the
knowledge and consent of both the Lessor and the Lessee. In a dual agency situation, the agent has the following affirmative obligations to both the Lessor and the Lessee: (a) A fiduciary duty of utmost care, integrity, honesty and loyalty in
the dealings with either Lessor or the Lessee. (b) Other duties to the Lessor and the Lessee as stated above in subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the express permission of the
respective Party, disclose to the other Party that the Lessor will accept rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a higher rent than that offered. The above duties of the agent in a real estate
transaction do not relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and Lessee should carefully read all agreements to assure that they adequately express their understanding of the transaction. A real estate
agent is a person qualified to advise about real estate. If legal or tax advice is desired, consult a competent professional. 
 (b) Brokers have no responsibility with respect to any default or breach hereof by either Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty, error or omission
relating to this Lease may be brought against Broker more than one year after the Start Date and that the liability (including court costs and attorneys’ fees), of any Broker with respect to any such lawsuit and/or legal proceeding shall not
exceed the fee received by such Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker’s liability shall not be applicable to any gross negligence or willful misconduct of such Broker.

 (c) Buyer and Seller agree to identify to Brokers as “Confidential” any communication or information
given Brokers that is considered by such Party to be confidential. 
 26. No Right To Holdover. Lessee has no right to
retain possession of the Premises or any part thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over, then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the
expiration or termination and Lessee shall pay Lessor for any and all costs and/or damages incurred by Lessor as a result of any holdover by Lessee. Nothing contained herein shall be construed as consent by Lessor to any holding over by Lessee.

 27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall, wherever possible, be cumulative
with all other remedies at law or in equity. 
 28. Covenants and Conditions; Construction of Agreement. All provisions of this
Lease to be observed or performed by Lessee are both covenants and conditions. In construing this Lease, all headings and titles are for the convenience of the Parties only and shall not be considered a part of this Lease. Whenever required by the
context, the singular shall include the plural and vice versa. This Lease shall not be construed as if prepared by one of the Parties, but rather according to its fair meaning as a whole, as if both Parties had prepared it. 
 29. Binding Effect; Choice of Law. This Lease shall be binding upon the parties, their personal representatives, successors and assigns and be
governed by the laws of the State in which the Premises are located. Any litigation between the Parties hereto concerning this Lease shall be initiated in the county in which the Premises are located. 
 30. Subordination; Attornment; Non-Disturbance. 
 30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate to any ground lease, mortgage, deed of trust, or other hypothecation or security device (collectively,
“Security Device”), now or hereafter placed upon the Premises, to any and all advances made on the security thereof, and to all renewals, modifications, and extensions thereof. Lessee agrees that the holders of any such Security
Devices (in this Lease together referred to as “Lender”) shall have no liability or obligation to perform any of the obligations of Lessor under this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby
superior to the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates of the documentation or recordation
thereof. 
 30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are acquired
by another upon the foreclosure or termination of a Security Device to which this Lease is subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn to

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 10 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 
such new owner, and upon request, enter into a new lease, containing all of the terms and provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the election
of such new owner, this Lease shall automatically become a new lease between Lessee and such new owner, upon all of the terms and conditions hereof, for the remainder of the term hereof, and (ii) Lessor shall thereafter be relieved of any
further obligations hereunder and such new owner shall assume all of Lessor’s obligations hereunder, except that such new owner shall not: (a) be liable for any act or omission of any prior lessor or with respect to events occurring prior
to acquisition of ownership, (b) be subject to any offsets or defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than one month’s rent, or (d) be liable for the return of any security
deposit paid to any prior lessor. Upon any Default by Lessor in the performance of Lessor’s obligations under any mortgage, deed of trust, ground lease, lease-back lease, or assignment, Lessee (and any Sublessee) shall attorn to the mortgagee,
ground lessor, lease-back lessor or assignee thereunder upon demand and shall execute and deliver any instrument or instruments confirming the attornment herein provided. Lessee shall, upon Lessor’s request, subordinate the Lease in the future
to any first, second, or third lien placed upon the Premises by Lessor provided such lender executes a commercially reasonable non-disturbance agreement. 
 30.3 Non-Disturbance. With respect to Security Devices entered into by Lessor after the execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a commercially
reasonable non-disturbance agreement (a “Non-Disturbance Agreement”) from the Lender which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease, including any options to extend the term
hereof, will not be disturbed so long as Lessee is not in Breach hereof and attorns to the record owner of the Premises. Further, within 60 days after the execution of this Lease, Lessor shall use its commercially reasonable efforts to obtain a
Non-Disturbance Agreement from the holder of any pre-existing Security Device which is secured by the Premises. In the event that Lessor is unable to provide the Non-Disturbance Agreement within said 60 days, then Lessee may, at Lessee’s
option, directly contact Lender and attempt to negotiate for the execution and delivery of a Non-Disturbance Agreement. 
 30.4 Self-Executing. The agreements contained in this Paragraph 30 shall be effective without the execution of any further documents; provided, however, that, upon written request from Lessor or a Lender in connection with a sale,
financing or refinancing of the Premises, Lessee and Lessor shall execute such further writings as may be reasonably required to separately document any subordination, attornment and/or Non-Disturbance Agreement provided for herein. 
 31. Attorneys’ Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort,
contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or
recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, “Prevailing Party” shall include, without limitation, a Party or Broker who substantially obtains or defeats the
relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys’ fees award shall not be computed in accordance with any court fee schedule,
but shall be such as to fully reimburse all attorneys’ fees reasonably incurred. In addition, Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in the preparation and service of notices of Default and consultations
in connection therewith, whether or not a legal action is subsequently commenced in connection with such Default or resulting Breach ($200 is a reasonable minimum per occurrence for such services and consultation). Lessor shall be further entitled
to recover reasonable attorney’s fees incurred in connection with any hearing or motion for assumption or rejection of the Lease under Title 11 of the United States Code. 
 32. Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to enter the Premises at any time, in the case of an emergency, and otherwise
at reasonable times for the purpose of showing the same to prospective purchasers, lenders, or tenants, and making such alterations, repairs, improvements or additions to the Premises as Lessor may deem necessary. All such activities shall be
without abatement of rent or liability to Lessee. Lessor may at any time place on the Premises any ordinary “For Sale” signs and Lessor may during the last 6 months of the term hereof place on the Premises any ordinary “For
Lease” signs. Lessee may at any time place on the Premises any ordinary “For Sublease” sign. 
 33. Auctions. Lessee
shall not conduct, nor permit to be conducted, any auction upon the Premises without Lessor’s prior written consent. Lessor shall not be obligated to exercise any standard of reasonableness in determining whether to permit an auction.

 34. Signs. Except for ordinary “For Sublease” signs which may be placed only on the Premises, Lessee shall not place
any sign upon the Project without Lessor’s prior written consent. All signs must comply with all Applicable Requirements. 
 35.
Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a termination hereof by Lessor for Breach by Lessee,
shall automatically terminate any sublease or lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all existing subtenancies. Lessor’s failure within 10 days following any such event to elect to the
contrary by written notice to the holder of any such lesser interest, shall constitute Lessor’s election to have such event constitute the termination of such interest. 
 36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is required to an act by or for the other Party, such consent shall not be unreasonably
withheld or delayed. Lessor’s actual reasonable costs and expenses (including but not limited to architects’, attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response to, a request by
Lessee for any Lessor consent, including but not limited to consents to an assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee upon receipt of an invoice and supporting documentation therefor.
Lessor’s consent to any act, assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or Breach, except as
may be otherwise specifically stated in writing by Lessor at the time of such consent. The failure to specify herein any particular condition to Lessor’s consent shall not preclude the imposition by Lessor at the time of consent of such further
or other conditions as are then reasonable with reference to the particular matter for which consent is being given. In the event that either Party disagrees with any determination made by the other hereunder and reasonably requests the reasons for
such determination, the determining party shall furnish its reasons in writing and in reasonable detail within 10 business days following such request. 
 37. Guarantor. 
 37.1 Execution. The Guarantors, if any, shall each
execute a guaranty in the form most recently published by the American Industrial Real Estate Association, and each such Guarantor shall have the same obligations as Lessee under this Lease. 
 37.2 Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon request to provide:
(a) evidence of the execution of the guaranty, including the authority of the party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a corporate Guarantor, a certified copy of a resolution of its board of directors
authorizing the making of such guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written confirmation that the guaranty is still in effect. 
 38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the covenants, conditions and provisions on Lessee’s part to be observed and performed
under this Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term hereof. 
 39. Options. If
Lessee is granted an option, as defined below, then the following provisions shall apply. 
 39.1 Definition.
“Option” shall mean: (a) the right to extend the term of or renew this Lease or to extend or renew any lease that Lessee has on other property of Lessor; (b) the right of first refusal or first offer to lease either the
Premises or other property of Lessor; (c) the right to purchase or the right of first refusal to purchase the Premises or other property of Lessor. 
 39.2 Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee and only
while the original Lessee is in full possession of the Premises and, if requested by Lessor, with Lessee certifying that Lessee has no intention of thereafter assigning or subletting. 
 39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew this Lease, a later Option cannot
be exercised unless the prior Options have been validly exercised. 
 39.4 Effect of Default on
Options. 
 (a) Lessee shall have no right to exercise an Option: (i) during the period
commencing with the giving of any notice of Default and continuing until said Default is cured, (ii) during the period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii) during the time Lessee is
in Breach of this Lease, or (iv) in the event that Lessee has been given 3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month period immediately preceding the exercise of the Option.

 (b) The period of time within which an Option may be exercised shall not be extended or enlarged by reason of
Lessee’s inability to exercise an Option because of the provisions of Paragraph 39.4(a). 
                 (c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee’s due and timely exercise of the Option,
if, after such exercise and prior to the commencement of the extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days after such Rent becomes due (without any necessity of Lessor to give notice thereof),
(ii) Lessor gives to Lessee 3 or more notices of separate Default during any 12 month period, whether or not the Defaults are cured, or (iii) if Lessee commits a Breach of this Lease. 
 40. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does not include the cost of guard service or other
security measures, and that Lessor shall have no obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the Premises, Lessee, its agents and invitees and their property from the acts of third parties.

 41. Reservations. Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such easements, rights
and dedications that Lessor deems necessary, (ii) to cause the recordation of parcel maps and restrictions, and (iii) to create and/or install new utility raceways, so long as such easements, rights, dedications, maps, restrictions, and
utility raceways do not unreasonably interfere with the use of the Premises by Lessee. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate such rights. 
  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 11 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 42. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of
money to be paid by one Party to the other under the provisions hereof, the Party against whom the obligation to pay the money is asserted shall have the right to make payment “under protest” and such payment shall not be regarded as a
voluntary payment and there shall survive the right on the part of said Party to institute suit for recovery of such sum. If it shall be adjudged that there was no legal obligation on the part of said Party to pay such sum or any part thereof, said
Party shall be entitled to recover such sum or so much thereof as it was not legally required to pay. 
 43. Authority. If either
Party hereto is a corporation, trust, limited liability company, partnership, or similar entity, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this
Lease on its behalf. Each party shall, within 30 days after request, deliver to the other Party satisfactory evidence of such authority. 
 44. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or handwritten provisions shall be controlled by the typewritten or handwritten provisions. 
 45. Offer. Preparation of this Lease by either party or their agent and submission of same to the other Party shall not be deemed an offer to
lease to the other Party. This Lease is not intended to be binding until executed and delivered by all Parties hereto. 
 46.
Amendments. This Lease may be modified only in writing, signed by the Parties in interest at the time of the modification. As long as they do not materially change Lessee’s obligations hereunder, Lessee agrees to make such reasonable
non-monetary modifications to this Lease as may be reasonably required by a Lender in connection with the obtaining of normal financing or refinancing of the Premises. 
 47. Multiple Parties. If more than one person or entity is named herein as either Lessor or Lessee, such multiple Parties shall have joint and several responsibility to comply with the terms of this Lease.

 48. Waiver of Jury Trial. The Parties hereby waive their respective rights to trial by jury in any action or proceeding
involving the Property or arising out of this Agreement. 
 49. Mediation and Arbitration of Disputes. An Addendum requiring the
Mediation and/or the Arbitration of all disputes between the Parties and/or Brokers arising out of this Lease  ̈ is þ is not attached to this Lease. 
 50. Rental Escalations: The Base Rent shall: 
  

	 	 (a)
	 be waived during the Early Possession, 


  

	 	 (b)
	 be discounted to $4,874.52 from $9,749.04 from the Commencement Date through 2/28/05, 


  

	 	 (c)
	 go to $9,749.04 on March 1, 2005, and 


  

	 	 (d)
	 increase to $10,139.00 on September 1, 2005. 


 51. California Broker Disclosure: Chris Loughridge is a licensed California Real Estate Broker. 
 52.
Monthly Common Area Operating Expense Estimate: In addition to the Base Rent; Lessee shall initially pay a monthly charge of $1,450.00 which is an estimate of the monthly Common Area Operating Expenses due under Paragraph #4. 
 53. Right to Recapture: Lessor shall have the option, at Lessor’s sole discretion, to terminate the lease and recapture the space in lieu of
approving any proposed sublease other than the sublease to Perlan. 
 54. Assignment/Subleasing Overage: In the event Lessee assigns this
lease, or subleases any portion of the premises for more consideration than that paid by Lessee, seventy-five percent (75%) of any such overage shall be paid to Lessor as additional rent (except in the instance of a sublease to Perlan in which
case 100% of the consideration paid by Perlan will be paid to Lessor). If excess rent is being determined for a subtenant(s) which occupy(ies) less than all of the premises, then excess rent shall be the difference between; (1) the amount of
the rent and other amounts paid by the subtenant, and (2) the amount of base rent and other charges due under the lease multiplied by a fraction, the numerator of which is the usable floor area of the premises occupied by the subtenant(s) and
the denominator of which is the total usable floor area of the premises. 
 55. Substances For Biomedical Research: Lessor acknowledges
that Lessee is in the business of biomedical research. In the course of conducting such business, Lessee will have on the Premises and will be handling substances that will include, but not be limited to, certain chemicals, gases, solvents, and
other materials typically used in biomedical research. Lessee shall abide by, and be in compliance with all City, State, and Federal Agency rules and regulations governing the usage of said substances. 
 56. Phase I Environmental Report: At the end of the Lease, Lessee shall provide Lessor with a Phase I Report (or a more detailed report if recommended
by the preparer), prepared by a reputable environmental company approved in advance in writing by Lessor, indicating the Premises is free of any and all Hazardous Materials. 
 57. Lessee’s Financials: Lessee shall deliver a copy of Lessee’s financial statements to Lessor on a quarterly basis, and a copy of Lessee’s tax return when requested by Lessor.

 58. Animals: Provided it does not create any health risks, odors, or nuisance to any other tenants in the project; and provided
Lessee’s use and housing of all such animals is in compliance with all applicable City, State, and Federal Agency rules and regulations; Lessee may house mice, rats, guinea pigs, and rabbits in hepa filtered cages. 
 59. Concession Recapture: If the Lease is terminated prior to the expiration of the Original Term as a consequence of Lessee’s Breach, then, in
addition to all other remedies available to Lessor as a consequence of such Breach, Lessor shall be entitled to recover from Lessee the full amount of any Leasing Commissions paid, or financial concessions made as a part of this Lease including, but
not limited to any Early Possession, Abated Rent, Free Rent, Tenant Improvement Costs, and any Tenant Improvement Allowance. 
 60.
Approval by Lender: The obligations of Lessor under the Lease are conditioned upon written approval of the Lease by Lessor’s Lender(s). 
 61. Tenant Improvements: Lessor will install one additional 220 plug if required, but otherwise the Premises is being delivered “AS-IS”. 
 62. Option to Expand or Terminate: Lessee shall have a one time option to terminate this Lease if Lessee gives Lessor Notice that Lessee needs more space, and Lessor is unable to provide suite #101 at 6310 Nancy
Ridge Drive (or space of equal or greater size and substantially similar in lab offerings) to Lessee at the same per square foot price within ninety days of said Notice from Lessee to Lessor. If Lessor is unable to meet Lessee’s space
requirement within the ninety day period, Lessee may terminate the lease effective the earlier of (a) 120 days from Lessee’s initial Notice for more space, or (b) August 31, 2005, by reimbursing Lessor for all unamortized leasing
commission, tenant improvements and rent concessions (including Early Possession, Discounted Rent and Free rent). This Option to Expand or Terminate shall expire on the earlier of (a) August 31, 2005 or (b) any Lessee Default (whether
since cured or not). 
 63. Options to Extend: Provided, and only if, (a) Lessee has not at any time Defaulted (whether since cured
or not) under any of the terms of this Lease, and (b) Lessee has delivered written Notice of Lessee’s intent to exercise said option not less than 120 days, prior to the Expiration Date, Lessee shall have two (2) one (1) year
options to extend the Lease at a four

  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 12 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 
percent (4%) increase in the Base Rent. 
 64. Existing Equipment: The existing
hoods, ice maker and DI water system are Lessor’s property but may be used by Lessee and shall be maintained in good working order by Lessee at Lessee’s sole cost, during the term of the Lease. 
 65. Business Interruption: Lessee acknowledges that, notwithstanding Lessor’s agreement not to require Lessee to maintain business interruption
insurance, the provisions of Paragraph 8.8 of this Lease remain in full force and effect. 
 66. Permitted Transactions: Lessor’s
consent shall not be required for an assignment of this Lease (i) to any person(s) or entity that controls, is controlled by, or is under common control with Lessee, (ii) to any entity resulting from the merger, acquisition, consolidation,
or other reorganization with Lessee, whether or not Lessee is the surviving entity, (iii) to any person or legal entity that acquires all or substantially all of the assets or stock of Lessee (each of the foregoing is hereinafter referred to as
a “Tenant Affiliate”), provided that before such assignment shall be effective, (x) the Tenant Affiliate shall deliver to Lessor a written document by which the Tenant Affiliate assumes in full the obligations of Lessee under this
Lease, (y) Lessor shall be given written notice of such assignment and assumption, including a copy of the document(s) that evidence the assignment, and (z) the use of the Premises by the Tenant Affiliate shall be as set forth in Paragraph
1.8 above. Lessor’s consent shall also not be required for an assignment described in Paragraph 12(b) above (i.e, sale of 25 percent or more of voting control of Lessee), provided that before such assignment shall be effective, the person or
entity acquiring the voting control executes and delivers to Lessor a written guaranty of Lessee’s obligations under this Lease, and such written guaranty shall be on the current form published by American Industrial Real Estate Association.
Lessor agrees that Paragraph 12.1(b) above shall not apply to sales of shares or other ownership interests of Lessee if such sales are conducted through a nationally recognized securities exchange pursuant to a duly registered public offering,
provided that if more than 25 percent of the voting control of Lessee is sold to a single person or entity, the provisions of the preceding sentence shall apply of Lessor’s consent shall be required. The term “control” means
possession, directly or indirectly, of the power to direct or cause the direction of the management, affairs, and policies of anyone, whether through ownership of voting securities, by contract, or otherwise. The bonus rental provisions of
Section 54 or such other sections shall not apply to an assignment or sublease by Lessee to a Tenant Affiliate. 
 %

 LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN, AND BY THE EXECUTION
OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES. 
 ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO: 
 1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS LEASE. 
 2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PREMISES, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, COMPLIANCE WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED USE. 
 WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES ARE
LOCATED. 
 The parties hereto have executed this Lease at the place and on the dates specified above their respective signatures.

  

			
	 Executed at:
	 	 San Diego



			
	 On:
	 	 9/8/04



			
	
	 By LESSOR

	
	 Nancy Ridge Technology Center, L.P., a

	 a California Limited Partnership



			
		
	 By:
	 	 Nancy Ridge Technology Center, LLC,

	 a California Limited Liability Co.



			
	 Title:
	 	 General Partner of the L.P.



			
		
	 By:
	 	 /s/ Chris Loughridge



			
	 Name Printed:
	 	 Chris Loughridge



			
	 Title:
	 	 Manager of the LLC



			
	 Address:
	 	 1145 Pacific Beach Drive #309

	 San Diego, CA 92109-5158

	  



			
	 Telephone:
	 	 (858) 272-4400



			
	 Facsimile:
	 	 (858)272-4600



			
	 Federal ID No.
	 	 33-0990420


  


			
	 Executed at:
	 	 San Diego



			
	 On:
	 	  



			
	
	 By LESSEE

	
	 RexC Pharmaceuticals, Inc., a California

	 corporation



			
		
	 By:
	 	 /s/ John Finn



			
	 Name Printed:
	 	 John Finn



			
	 Title:
	 	 President



			
		
	 By:
	 	  



			
	 Name Printed:
	 	  



			
	 Title:
	 	  



			
	 Address:
	 	  

	  

	  



			
	 Telephone:
	 	 (858)



			
	 Facsimile:
	 	 (858)



			
	 Federal ID No.
	 	  




  
 These forms are often modified to meet changing requirements of law and needs of the industry. Always write or call to make sure you are utilizing the most current form: American Industrial Real Estate Corporation, 700 South Flower
Street, Suite 600, Los Angeles, CA 90017. 
 (213) 687-8777. 
 ©Copyright 1999 By American Industrial Real Estate Association. 
 All rights reserved. 
  


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 13 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 No part of these works may be reproduced in any form without permission in writing. 

 


									
		 		  		  		  	
	 	 		  		  		  	 
	 Initials    
	 		  		  		  	    Initials
			
	 ©1999 – American Industrial Real Estate Association
	  	 PAGE 14 OF 14
 REVISED
	  	FORM MTN-2-2/99E









 RULES AND REGULATIONS 
 Exhibit “A” 
 Attached to and Forming a Part of the Lease
Agreement 
  

	 1.
	 Lessor agrees to furnish two keys without charge. Additional keys will be furnished at an optional charge. Lessee shall not change locks or install additional
locks on doors without prior written consent of Lessor. Lessee shall not make or cause to be made duplicates of keys procured from Lessor without prior approval of Lessor. All keys to Leased Premises shall be surrendered to Lessor upon termination
of this Lease. 


  

	 2.
	 Lessee will refer all contractors, contractor’s representatives, and installation technicians rendering any service on or to the Lease Premises for
Lessee to Lessor for Lessor’s approval before performance of any contractual service. Lessee’s contractors and installation technicians shall comply with Lessor’s rules, regulations and specifications pertaining to construction and
installation. This provision shall apply to all work performed on or about the Leased Premises or Property, including installation of telephones, telegraph equipment, electrical devices and attachments and installations of any nature affecting
floors, walls woodwork, trim, windows, ceilings and equipment or any other physical portion of the Lease Premises or Property. 


  

	 3.
	 Lessee shall not at any time occupy any part of the Leased Premises or Property as sleeping or lodging quarters. 


  

	 4.
	 No storage shall be permitted outside the Leased Premises, including, without limitation, the storage of motor vehicles, trucks, boats, trailers. pallets,
drums, or equipment of any kind or nature, without the permission in writing from Lessor. Lessee shall not be permitted to conduct any work activity outside the Leased Premises. Lessee shall not work on motor vehicles on or in the Premises.



  

	 5.
	 Lessee shall not place, install or operate on the Leased Premises or in any part of the Building any engine, stove or machinery, or conduct mechanical
operations or cook thereon or therein, or place or use in or about the Leased Premises or Property any explosives, gasoline, kerosene, oil, acids, caustics, or any flammable, explosive or hazardous material without written consent of Lessor. Lessee
shall not use, keep or permit to be used or kept any foul or obnoxious gas or substance on or around the Premises, which would unreasonably disturb other tenants on the Project or is prohibited by a standard form insurance policy. Notwithstanding
the foregoing, this rule shall not be construed to preclude Lessee’s use of a microwave oven or similar appliances in an employee break room. 


  

	 6.
	 Lessor will not be responsible for lost or stolen personal property, equipment, money or jewelry from the Leased Premises or the Property regardless or
whether such loss occurs when the area is locked against entry. 


  

	 7.
	 No dogs, cats, fowl or other animals shall be brought into or kept in or about the Leased Premises or Property. 


  

	 8.
	 None of the parking, lawn areas, entries, doors or stairways shall be blocked or obstructed or any rubbish, litter, trash, or material or any nature placed,
emptied or thrown into these areas or such area used by Lessee’s agents, employees or invitees at any time for purposes inconsistent with their designation by Lessor. No Lessee shall permit any trash, oil, chemicals or any foreign materials to
be deposited or disposed of in the landscaped, parking or common areas of the project. Trash (not including oil, hazardous materials, chemicals, which shall not be disposed of on the project) shall be placed inside the bins. at a level not higher
than the top of the bin and shall not be placed outside the bin or in the enclosure area. Lessee shall cooperate with Lessor and all other tenants of the development so that the common areas may be kept in a clean and orderly condition and free of
obstruction. Lessor provides free, NORMAL use of waste containers and disposal service; however, Lessee shall provide, at Lessee’s expense, waste containers and regular disposal service as may be, required by Lessee in excess of the service
made available by Lessor as provided above. This shall preclude abnormal trash pick-ups as determined by Lessor where trash generated by Lessee is considered excessive above average usage. 


  

	 9.
	 The water closets and other water fixtures shall not be used for any purpose other than those for which they were constructed, and any damage resulting to
them from misuse or by the defacing or injury of any part of the building shall be borne by the person who shall occasion it. No person shall waste water by interfering with the faucets or otherwise. 


  

	 10.
	 No person shall disturb occupants of the Building by the use of any radios, record players, tape recorders, musical instruments, the making of unseemly noises
or any unreasonable use. 










	 11.
	 Subject to the term of the Lease, no advertisement, picture or sign of any sort shall be displayed on or outside the Premises without the prior written
consent of the Lessor. Lessor shall have the right to remove any such unapproved item without notice and at Lessee’s expense. 


  

	 12.
	 Lessee shall not use any method of heating or air conditioning other than that supplied by Landlord without the consent of Lessor.



  

	 13.
	 Lessee shall not disturb, solicit or canvas any occupant of the Building or Project and shall cooperate to prevent the same. 


  

	 14.
	 No persons shall go on the roof or in the meter rooms(s) without the Landlord’s permission. 


  

	 15.
	 Business machines and mechanical equipment belonging to the Lessee which cause noise or vibration that may be transmitted to the structure of the Building, to
such a degree as to cause structural damages or unreasonably disturb other tenants shall be placed and maintained by Lessee, at Lessee’s expense, on vibration eliminators or other devices sufficient to effectively control noise vibration.



  

	 16.
	 Except in the normal conduct of its business, Lessee shall not regularly park motor vehicles in the parking areas after the conclusion of normal daily
business activities. 


 Lessee and its employees, agents and invitees shall park their vehicles only in
those parking areas designated by Lessor. Lessee shall not leave any vehicle in a state of disrepair (including without limitation, flat tires, out of date inspection stickers, or license plates) on the Property. If Lessee or its employees, agents,
invitees park their vehicles in areas other than the designated parking areas or leave any vehicle in a state of disrepair, Lessor shall have the right to remove such vehicles at Lessee’s expense. Parking is shared in common with all other
tenants. 
 Parking shall be in compliance with all parking rules and regulations including any sticker or other
identification system established by Lessor. Failure to observe the rules and regulations shall terminate Lessee’s right to use the parking area and subject the vehicle in violation of the parking rules and regulations to removal and
impoundment. No such termination of parking privileges or removal of impoundment of a vehicle shall create any liability on Lessor or to be deemed to interfere with Lessee’s right to possession of the Leased Premises. Vehicles must be parked
entirely within the stall lines and all directional signs, arrows and posted speed limits must be observed. Parking is prohibited in areas not striped for parking, in aisles, where “No Parking” signs are posted, on ramps, in crosshatched
areas, and in other areas as may be designated by Lessor. Parking stickers or other forms or identification supplied by Lessor shall remain the property of Lessor and not the property of Lessee and are not transferable. Every person is required to
park and lock his vehicle. All responsibility for damage to vehicles or persons is assumed by the owner of the vehicle or its driver. 
 Lessee shall unload vehicles only in those areas designated by Lessor for such purpose. During periods of loading and unloading, Lessee shall not unreasonably interfere with traffic flow within the project and
loading and unloading areas of other tenants. All goods, including materials used to store goods, delivered to the premises of the Lessee shall be immediately moved into premises and shall not be left in parking or receiving areas overnight.
Tractor-trailers, which must be unhooked or parked with dolly wheels beyond the concrete loading areas, must use steel plates or wood blocks under the dolly wheels to prevent damage to the asphalt paving surfaces. No parking or storing of such
trailers will be permitted in the auto parking areas of the Project or on streets adjacent thereto. 
  

	 17.
	 Lessee is responsible for the cleaning of his own entry, restrooms and interior of windows. In the case of shared entries, hallways and restrooms, each Lessee
shall cooperate with the other Tenants sharing the facilities to maintain good order and shall share the expense equally. 


  

	 18.
	 Lessee will provide and keep in working order all necessary fire extinguishers to provide adequate protection and meet all city, state and federal
requirements. 


  

	 19.
	 Lessee shall not lay floor covering within the Lease Premises without written approval of the Lessor. The use of cement or other similar adhesive materials
not easily removed with water is expressly prohibited. 


  

	 20.
	 No stored goods (e.g. boxes, racking, raw or finish product, etc.) shall be visible through Lessee’s windows. Lessee shall use window coverings that are
acceptable to Lessor to prevent any such items from being visible through the windows to the outside. It shall be Lessee’s responsibility to maintain the window coverings in good working order and condition so as to maintain the aesthetic
appeal of the property. 










	 21.
	 It is Lessor’s desire to maintain the Property in the highest standard of dignity and good taste consistent with comfort and convenience for Lessees. Any
action or condition not meeting this high standard should be reported directly to Lessor. Your cooperation will be mutually beneficial and sincerely appreciated. Lessor reserves the right to make such other and further reasonable rules and
regulations that in its judgement may from time to time be necessary, for the safety, care and cleanliness of the Leased Premises and for the preservation of good order therein. 


  

	 22.
	 Smoking of cigarettes, pipes or cigars is not permitted in the Premises. 


  

													
	 “LESSEE”
	  		  		  		  	
							
		  	 By:
	  	 /s/ John Finn
	  		  	 Date:
	  	 Sept 8, 2004
	  	








 

 







 

 







 

 







 

 







 FIRST AMENDMENT DATED AUGUST 2, 2006 
 Nancy Ridge Technology Center, L.P., a California limited partnership (“Lessor”), and Rx3 Pharmaceuticals, Inc. (formerly
known as RexC Pharmaceuticals, Inc.), a California Corporation (“Lessee”) hereby amend the Lease dated September 7, 2004 for suite #105 at 6310 Nancy Ridge Drive, San Diego, CA 92121 (“Premises”) as follows effective
August 1, 2006: 
  

	 1.
	 Premises: Lessee shall expand into the portion of suite #102 at 6310 Nancy Ridge Drive formerly occupied by Perlan, which:



 (1) excludes rooms #107 and #200 thru #204, all of which are exclusively used by Genpathway,

 (2) includes rooms #101 thru #104, and room #108, all of which shall be exclusively used by Lessee, and 
 (3) includes the rooms and areas in suite #102 not listed above which shall be considered Suite #102 common areas that may be used on a
non-exclusive basis, and in which Genpathway and Lessee may not place or store any Personal Property. 
 (4) represents
approximately 2,678 square feet of additional space. 
 The Premises shall increase to approximately 8,481 square feet, and
Lesee’s Share shall increase to approximately four point eight three percent (4.83%). 
  

	 2.
	 Base Rent: The Base Rent shall increase to $15,410.72 per month on September 1, 2006. 


  

	 3.
	 Suite #102 Utilities: The Suite #102 utilities shall be pro-rated by footage occupied by Lessee and Genpathway in Suite #102. If the lease with
Genpathway terminates or expires, Lessee shall pay the entire utility cost for all of suite #102 until new tenant(s) occupy the space. Once the remainder of suite #102 is occupied by new tenant(s), the utilities shall again be pro-rated by footage
occupied by Lesse and new tenant(s). In light of the new hoods Lessee will be installing in the space, Lessor shall have the right, at Lessor’s sole discretion, to change the manner in which the utilities are pro-rated once Lessor has more
information on Genpathway’s historical usage. 


  

	 4.
	 Exercise of First Option to Extend: Lessee has exercised the first of its two Options to Extend under paragraph #63. The Expiration Date shall be
August 31, 2007 instead of August 31, 2006. 


  

	 5.
	 Tenant Improvements: Lessee shall, at Lessee’s sole cost, install stainless ducts and fans, and upgrade the airconditioning capacity, to support
three eight foot chemistry hoods in the Premises. Lessor shall contribute the lesser of (a) $5,000 or (b) one half of the cost of such work. Lessor shall have the first right of refusal to purchase the fume hoods if Lessee vacates the
Premises and elects to sell or donate the fume hoods. Lessor shall have three (3) business days from receipt of Notice and a bona fide offer from Lessee to decide whether to purchase the hoods. 


  

	 6.
	 Confidentiality: The terms of the Lease are confidential. No party to the Lease, nor any broker, shall disclose any of the terms of the Lease to any
other party. 


  

	 7.
	 No Lessor Default: Lessor is not currently in Default of any of the terms or conditions of the Lease 


  

	 8.
	 Brokers: Lessor and Lessee each represent to the other that they have dealt with no real estate agents, brokers, finders, or salesmen in connection
with this transaction. Each party agrees to hold the other party harmless from and against all claims for brokerage commissions, finder’s fees or other compensation made by any agent, broker, finder or salesman as a consequence of said
party’s actions or dealings with such agent, broker, finder or salesman. 


  

	 9.
	 Authority to Execute: Each person executing this Amendment represents and warrants to all parties that he or she is duly authorized to execute and
deliver this Amendment on behalf of that party. 


 All other terms and conditions of the original Lease shall remain in
full force and effect. 
 In witness hereof, the parties have caused these present to be executed as of the day and the year first above
written. 








							
	 Lessor:
	  	 Nancy Ridge Technology Center, L.P., a California Limited Partnership

	 By:
	  	 Nancy Ridge Technology Center, L.L.C., a California Limited Liability Company, General Partner



			
		
	 By:
	 	 /s/ Chris Loughridge

		 	 Chris Loughridge, its Manager



					
			
	 Date:
	 	 8/7/06
	 	


			
		
	 Lessee:
	  	 Rx3 Pharmaceuticals, Inc., a California Corporation



			
		
	 By:
	 	 /s/ John Schmid



			
		
	 Title:
	 	 CFO



					
			
	 Date:
	 	 8/3/06
	 	








 SECOND AMENDMENT DATED MARCH 14, 2007 
 Nancy Ridge Technology Center, L.P., a California limited partnership (“Lessor”), and Trius Therapeutics, Inc., a California corporation, (“Lessee”) as successor in
interest to (a) RexC Pharmaceuticals, and (b) RX3, hereby amend the Lease dated September 7, 2004 for suite #105 at 6310 Nancy Ridge Drive, San Diego, CA 92121 (“Premises”) as follows: 
 1) Premises: Lessee shall vacate suite #102 at 6310 Nancy Ridge Drive on or before April 30, 2007 and may immediately take Early
Possession of suite #101 at 6310 Nancy Ridge Drive. Effective May 1, 2007, the Premises shall be suites #101 & #105 at 6310 Nancy Ridge Drive, which combined are approximately 13,121 square feet, and Lesee’s Share shall be
approximately seven point five percent (7.5%). 
 2) Base Rent: The Base Rent shall increase to $22,912 per month on May 1,
2007, and then increase four percent (4%) on every twelve (12) month anniversary of the Commencement Date of the Original Term. 
 3) Lease Term: The Lease Term is hereby extended. The Expiration Date shall be January 31, 2008 instead of August 31, 2007. 
 4) Option to Extend: Lessee has exercised the first of its two Options to Extend under paragraph #63. Lessee has one (1) remaining one (1) year Option to Extend. 
 5) Confidentiality: The terms of the Lease are confidential. No party to the Lease, nor any broker, shall disclose any of the terms of the
Lease to any other party. 
 6) No Lessor Default: Lessor is not currently in Default of any of the terms or conditions of the
Lease 
 7) Authority to Execute: Each person executing this Amendment represents and warrants to all parties that he or she is
duly authorized to execute and deliver this Amendment on behalf of that party. 
 All other terms and conditions of the original Lease
shall remain in full force and effect. 
 In witness hereof, the parties have caused these present to be executed as of the day and the
year first above written. 
  

			
	 Lessor:
	  	 Nancy Ridge Technology Center, L.P., a California Limited Partnership

	 By:
	  	 Nancy Ridge Technology Center, L.L.C., a California Limited Liability Company, General Partner



			
		
	 By:
	 	 /s/ Chris Loughridge

		 	 Chris Loughridge, its Manager



			
		
	 Date:
	 	 3/31/07



			
		
	 Lessee:
	  	 Trius Therapeutics, Inc., a California Corporation



			
		
	 By:
	 	 /s/ John Schmid



			
		
	 Title:
	 	 CFO



			
		
	 Date:
	 	 3-29-07


  

 1. 








 THIRD AMENDMENT DATED SEPTEMBER 24, 2007 
 Nancy Ridge Technology Center, L.P., a California limited partnership (“Lessor”), and Trius Therapeutics, Inc., a California corporation,
(“Lessee”), hereby amend the Lease dated September 7, 2004 for suites #101 & #105 at 6310 Nancy Ridge Drive, San Diego, CA 92121 (“Premises”) as follows: 
 1) Lease Term: The Lease Term is hereby extended. The Expiration Date shall be January 31, 2009 instead of January 31, 2008. 
 2) Option to Extend: Lessee has exercised the first of its two Options to Extend under paragraph #63. Lessee has one (1) remaining one
(1) year Option to Extend. 
 3) Confidentiality: The terms of the Lease are confidential. No party to the Lease, nor any
broker, shall disclose any of the terms of the Lease to any other party. 
 4) No Lessor Default: Lessor is not currently in
Default of any of the terms or conditions of the Lease. 
 5) Authority to Execute: Each person executing this Amendment represents
and warrants to all parties that he or she is duly authorized to execute and deliver this Amendment on behalf of that party. 
 All other
terms and conditions of the original Lease shall remain in full force and effect. 
 In witness hereof, the parties have caused these
present to be executed as of the day and the year first above written. 
  

			
	 Lessor:
	  	 Nancy Ridge Technology Center, L.P., a California Limited Partnership

	 By:
	  	 Nancy Ridge Technology Center, L.L.C., a California Limited Liability Company, General Partner



			
		
	 By:
	 	 /s/ Chris Loughridge

		 	 Chris Loughridge, its Manager



			
		
	 Date:
	 	 10/12/07


  

			
	 Lessee:
	  	 Trius Therapeutics, Inc., a Delaware Corporation



			
		
	 By:
	 	 /s/ John Schmid



			
		
	 Title:
	 	 CFO



			
		
	 Date:
	 	 9/27/07


  







 FOURTH AMENDMENT DATED MAY 12, 2008 
 Nancy Ridge Technology Center, L.P., a California limited partnership (“Lessor”), and Trius Therapeutics, Inc., a Delaware corporation, (“Lessee”), hereby amend the Lease
dated September 7, 2004 for Suites #101 & #105 at 6310 Nancy Ridge Drive, San Diego, CA 92121 (“Premises”) as follows effective July 15, 2008: 
 1) Premises: The Premises shall be expanded to include Suite #106 at 6310 Nancy Ridge Drive, for a total of approximately 18,924 square feet. Lessee’s Share shall be ten point
eight one percent (10.81%). 
 2) Lease Term: The Lease Term is hereby extended. The Expiration Date shall be January 31, 2010
instead of January 31, 2009. 
 3) Tenant Improvements: Lessor shall, at Lessor’s sole cost, do the following in suite
#102 
  

	 	 (a)
	 clean the carpet & tile flooring 


  

	 	 (b)
	 touch up paint as needed 


  

	 	 (c)
	 repair any damaged bench edges 


  

	 	 (d)
	 rebuild room #619, and restore the openings between rooms #515 & #618, #513 & #613, and in #502 per the attached



 Other than the above, the Premises is being delivered in “as-is” condition. 
 4) Base Rent: The Base Rent shall increase to $34,367.06 per month, and then four percent (4%) on every twelve (12) month anniversary
of the Commencement Date of the Original Term. 
 5) Exercise of 2nd Option to Extend: Lessee has exercised the second of its two Options to
Extend under paragraph #63. There are no remaining Options to Extend. 
 6) Confidentiality: The terms of the Lease are
confidential. No party to the Lease, nor any broker, shall disclose any of the terms of the Lease to any other party. 
 7) No Lessor
Default: Lessor is not currently in Default of any of the terms or conditions of the Lease 
 8) Authority to Execute: Each
person executing this Amendment represents and warrants to all parties that he or she is duly authorized to execute and deliver this Amendment on behalf of that party. 
 All other terms and conditions of the original Lease shall remain in full force and effect. 
 In
witness hereof, the parties have caused these present to be executed as of the day and the year first above written. 
  

			
	 Lessor:
	  	 Nancy Ridge Technology Center, L.P., a California Limited Partnership

	 By:
	  	 Nancy Ridge Technology Center, L.L.C., a California Limited Liability Company, General Partner



			
		
	 By:
	 	 /s/ Chris Loughridge



			
		 	 Chris Loughridge, its Manager

		
	 Date:
	 	 6/18/08


  

			
	 Lessee:
	  	 Trius Therapeutics, Inc., a Delaware Corporation



			
		
	 By:
	 	 /s/ John Schmid



			
		
	 Title:
	 	 CFO



			
		
	 Date:
	 	 5-27-08