exv10w24



 





Exhibit 10.24




LEASE AGREEMENT




     THIS LEASE AGREEMENT is made as of this 6th day of April, 2000, between ALEXANDRIA
REAL ESTATE EQUITIES, INC., a Maryland corporation (“Landlord”), and PRIMAL, INC., a Washington
corporation (“Tenant”).



	 	 	 
	Address:

	 	1124 Columbia Street, Seattle, Washington
	 
	 	 
	Premises:

	 	That portion of the Project, commonly known as Suite 650,
containing approximately 11,577 rentable square feet, as
determined by Landlord, as shown on Exhibit A.
	 
	 	 
	Project:

	 	The real property on which the building in which the Premises
are located (the “Building”), together with all improvements
thereon and appurtenances thereto as described on Exhibit B,
excluding any buildings constructed on such real property after
the date hereof.






	 	 	 	 	 	 	 
	Base Rent:
	 	$27,977.75 per month	 	Rentable Area of Premises:	 	11,577 sq. ft.
	 
	 	 	 	 	 	 
	Rentable Area of Project:
	 	163,525 sq. ft.	 	Tenant’s Share of Net	 	7.87%
	 
	 	 	 	Building Expenses:	 	 
	 
	 	 	 	 	 	 
	Security Deposit:
	 	$111,911	 	Target Commencement	 	May 1, 2000
	 
	 	 	 	Date:	 	 






	 	 	 
	Rent Adjustment
	 	3.5%
	Percentage:
	 	 
	 
	 	 
	Base Term:
	 	60 months from the first day of the first full month of the Term (as defined in Section 2) hereof
	 
	 	 
	Permitted Use:
	 	Research and development laboratory, related office and other related uses consistent with the character
	 
	 	of the Project






	 	 	 
	Address for Rent Payment:

135 N. Los Robles Avenue, Suite 250

Pasadena, CA 91101

Attention: Accounts Receivable

	 	Landlord’s Notice Address:

135 N. Los Robles Avenue, Suite 250

Pasadena, CA 91101

Attention: General Counsel
	 
	 	 
	Tenant’s Notice Address:

Primal, Inc.

1124 Columbia Street, Suite 650

Seattle, WA 98122

Attention: Bill Daley
	 	 






 









 






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



	 	 	 	 	 	 	 	 	 	 	 
	ý     EXHIBIT A

	 	—
	 	PREMISES DESCRIPTION
	 	ý     EXHIBIT B
	 	—
	 	DESCRIPTION OF PROJECT
	ý     EXHIBIT C

	 	—
	 	WORK LETTER
	 	ý     EXHIBIT D
	 	—
	 	COMMENCEMENT DATE
	ý     EXHIBIT E

	 	—
	 	RULES AND REGULATIONS
	 	ý     EXHIBIT F
	 	—
	 	TENANT’S PERSONAL PROPERTY
	ý     EXHIBIT G

	 	—
	 	ESTOPPEL CERTIFICATE
	 	ý     EXHIBIT H
	 	—
	 	NONDISTURBANCE AGREEMENT
	ý     EXHIBIT I

	 	—
	 	LOCATION OF PARKING	 	 	 	 	 	 






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     1. Lease of Premises. Upon and subject to all of the terms and conditions hereof, Landlord
hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord. The
portions of the Project which are for the non-exclusive use of tenants of the Project are
collectively referred to herein as the “Common Areas.” Landlord reserves the right to modify
Common Areas, provided that such modifications do not materially adversely affect Tenant’s use of
the Premises for the Permitted Use. Tenant shall have the right to use the loading area in the
annex level of the Project leased by Corixa Corporation, a Delaware corporation (“Corixa”) under
that certain Columbia Building Lease dated October 28, 1994, and as amended (the “Corixa Lease”)
and the portion of the bio-hazards waste cage facility assigned to Tenant and located on the
basement level of the Building.



     2. Delivery; Acceptance of Premises; Commencement Date. Landlord shall use reasonable efforts
to make the Premises available to Tenant for Tenant’s Work under the Work Letter within 5 days of
full execution of this Lease and Tenant’s delivery of evidence of the insurance required hereby and
by the Work Letter (“Delivery” or “Deliver”). If Landlord is reasonably unable to timely Deliver
the Premises, Landlord shall not be liable to Tenant for any loss or damage resulting therefrom,
and this Lease shall not be void or voidable except as provided herein. If Landlord is not
reasonably able to Deliver the Premises within 60 days of the Target Commencement Date for any
reason other than Force Majeure delays, this Lease shall be voidable by Landlord or Tenant by
written notice to the other, and if so voided by either: (a) so long as Tenant is not in default
hereunder, the Security Deposit shall be returned to Tenant, and (b) neither Landlord nor Tenant
shall have any further rights, duties or obligations under this Lease, except with respect to
provisions which expressly survive termination of this Lease. As used herein, the terms “Force
Majeure” shall have the meaning set forth for such terms in Section 24. If neither Landlord nor
Tenant elects to void this Lease within 5 business days of the lapse of such 60 day period, such
right to void this Lease shall be waived and this Lease shall remain in full force and effect.



     The “Commencement Date” shall be the earlier of: (i) May 1, 2000; and (ii) the date Tenant
conducts any business in the Premises or any part thereof. Upon request of Landlord, Tenant shall
execute and deliver a written acknowledgment of the Commencement Date and the expiration date of
the Term when such are established in the form attached to this Lease as Exhibit D;
provided, however, Tenant’s failure to execute and deliver such acknowledgment
shall not affect Landlord’s rights hereunder. The “Term” of this Lease shall be the Base Term and
any Extension Terms which Tenant may elect pursuant to Section 40 hereof.



     Except as set forth in the Work Letter, if applicable: (i) Tenant shall accept the Premises in
their condition as of the Commencement Date, subject to all applicable laws, ordinances,
regulations, covenants and restrictions; (ii) Landlord shall have no obligation for any defects in
the Premises; and (iii) Tenant’s taking possession of the Premises shall be conclusive evidence
that Tenant accepts the Premises and that the Premises were in good condition at the time
possession was taken. Any occupancy of the Premises by Tenant before the Commencement Date shall
be subject to all of the terms and conditions of this Lease, excluding the obligation to pay Rent.



 









 





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



     3. Rent.



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




          (b) Additional Rent. In addition to Base Rent, Tenant agrees to pay to Landlord as additional
rent (“Additional Rent”): (i) Tenant’s Share of Net Building Expenses (as defined in Section 5),
(ii) the rent and expenses for the parking described in Section 10 hereof, and (iii) any and all
other amounts Tenant assumes or agrees to pay under the provisions of this Lease, including,
without limitation, any and all other sums that may become due by reason of any default of Tenant
or failure to comply with the agreements, terms, covenants and conditions of this Lease to be
performed by Tenant, after any applicable notice and cure period.




     4. Base Rent Adjustments. Base Rent shall be increased on each annual anniversary of the
first day of the first full month of the Term of this Lease by multiplying the Base Rent payable
immediately before such adjustment by the Rent Adjustment Percentage and adding the resulting
amount to the Base Rent payable immediately before such adjustment. Base Rent, as so adjusted,
shall thereafter be due as provided herein. Base Rent adjustments for any fractional calendar
month shall be prorated.



     5. Operating Expense Payments. Landlord shall deliver to Tenant a written estimate of Net
Building Expenses for each calendar year during the Term (the “Annual Estimate”), which may be
revised by Landlord from time to time during such calendar year. During each month of the Term, on
the same date that Base Rent is due, Tenant shall pay Landlord an amount equal to 1/12 of Tenant’s
Share of the Annual Estimate. Payments for any fractional calendar month shall be prorated.



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     “Net Building Expenses” for any period shall mean the Operating Expenses for the Project for
such period less the First Floor Operating Expenses for such period. “First Floor Operating
Expenses” means an amount equal to the First Floor Operating Expense Rate, as defined below,
multiplied by 16,894, the total rentable square feet on the first floor of the Project. “First
Floor Operating Expense Rate” shall mean an initial rate of $8.24 per rentable square foot per
year, which shall be increased by 3% each calendar year commencing on January 1, 2001, including,
without limitation, throughout the Extension Term.



     The term “Operating Expenses” means all costs and expenses of any kind or description
whatsoever incurred or accrued each calendar year by Landlord with respect to the Project
(including, without duplication, Taxes (as defined in Section 9), reasonable reserves consistent
with good business practice for future repairs and replacements, capital repairs and improvements
amortized over the lesser of 7 years and the useful life of such capital items, and the costs of
Landlord’s third party property manager or, if there is no third party property manager,
administration rent in the amount of 3.0% of Base Rent), excluding only:



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




          (b) capital expenditures for expansion of the Project;




          (c) interest, principal payments of Mortgage (as defined in Section 27) debts of Landlord,
financing costs and amortization of funds borrowed by Landlord, whether secured or unsecured and
all payments of base rent (but not taxes or operating expenses) under any ground lease or other
underlying lease of all or any portion of the Project;




          (d) depreciation of the Project;




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




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




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




          (h) costs of utilities outside normal business hours sold to tenants of the Project;




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




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          (j) salaries, wages, benefits and other compensation paid to officers and employees of
Landlord who are not assigned in whole or in part to the operation, management, maintenance or
repair of the Project;




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




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




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




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




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




          (p) costs arising from Landlord’s charitable or political contributions or fine art maintained
at the Project;




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




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




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




          (t) costs incurred by reason of the remediation or other environmental response regarding any
contamination of the Premises or the Project or soils or groundwater thereunder, by Hazardous
Materials other than as described in Section 30 hereof;




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          (u) costs of repairs or other work occasioned by fire, windstorm, earthquake or other casualty
or loss in excess of the deductible under the casualty insurance maintained by Landlord pursuant to
Section 17 hereof; and




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




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



     The Annual Statement shall be final and binding upon Tenant unless Tenant, within 30 days
after Tenant’s receipt thereof, shall contest any item therein by giving written notice to
Landlord, specifying each item contested and the reason therefor. If, during such 30 day period,
Tenant reasonably and in good faith questions or contests the correctness of Landlord’s statement
of Tenant’s Share of Net Building Expenses, Landlord will provide Tenant with access to Landlord’s
books and records relating to the operation of the Project and such information as Landlord
reasonably determines to be responsive to Tenant’s questions. If after Tenant’s review of such
information, Landlord and Tenant cannot agree upon the amount of Tenant’s Share of Net Building
Expenses, then Tenant shall have the right to have an independent public accounting firm selected
by Tenant from among the 5 largest in the United States, working pursuant to a fee arrangement
other than a contingent fee (at Tenant’s sole cost and expense) and approved by Landlord (which
approval shall not be unreasonably withheld or delayed), audit and/or review Landlord’s books and
records relating to the operation of the Project and such other information relating to the
operation of the Project for the year in question (the “Independent Review”). The results of any
such Independent Review shall be binding on Landlord and Tenant. If the Independent Review shows
that Tenant’s pro rata share of the Net Building Expenses actually paid by Tenant for the calendar
year in question exceeded Tenant’s obligations for such calendar year, Landlord shall pay the
excess to Tenant within 30 days after delivery of such statement, except that after expiration or
earlier termination of the Term, Landlord shall pay the excess to Tenant after deducting all other
amounts due Landlord. If the Independent Review shows that Tenant’s payments of Tenant’s Share of
Net Building Expenses for such calendar year were less than Tenant’s obligation for the calendar
year, Tenant shall pay the deficiency to the Landlord within 30 days after delivery of such
statement. If the Independent Review shows that Tenant has overpaid Tenant’s pro rata share of Net
Building Expenses by more than 5% then Landlord shall reimburse Tenant for all costs incurred by
Tenant for the Independent Review. Net Building Expenses for the calendar years in which Tenant’s
obligation to share therein



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begins and ends shall be prorated. Notwithstanding anything set forth herein to the contrary,
if the Project is not at least 95% occupied on average during any year of the Term, Tenant’s Share
of Net Building Expenses for such year shall be computed as though the Project had been 95%
occupied on average during such year.




     “Tenant’s Share” shall be the percentage set forth on the first page of this Lease as Tenant’s
Share of Net Building Expenses as reasonably adjusted by Landlord for changes in the physical size
of the Premises or the Project occurring after commencement of the Term. Any such measurement
shall be performed in accordance with the 1996 Standard Method of Measuring Floor Area in Office
Buildings as adopted by the Building Owners and Managers Association (ANSI/BOMA Z65.1-1996).
Landlord may equitably increase Tenant’s Share for any item of expense or cost reimbursable by
Tenant that relates to a repair, replacement, or service that benefits only the Premises or only a
portion of the Project that includes the Premises or that varies with occupancy or use. Base Rent,
Tenant’s Share of Net Building Expenses and all other amounts payable by Tenant to Landlord
hereunder are collectively referred to herein as “Rent.”



     6. Security Deposit. The Security Deposit shall be held by Landlord as security for the
performance of Tenant’s obligations under this Lease. The Security Deposit is not an advance
rental deposit or a measure of Landlord’s damages in case of Tenant’s Default. Upon each
occurrence of a Default (as defined in Section 20), Landlord may use all or part of the Security
Deposit to pay delinquent payments due under this Lease, and the cost of any damage, injury,
expense or liability caused by such Default, without prejudice to any other remedy provided herein
or provided by law. Upon any such use of all or any portion of the Security Deposit, Tenant shall
pay Landlord on demand the amount that will restore the Security Deposit to its original amount.
Upon bankruptcy or other debtor-creditor proceedings against Tenant, the Security Deposit shall be
deemed to be applied first to the payment of Rent and other charges due Landlord for periods prior
to the filing of such proceedings. Landlord’s obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security Deposit shall be the
property of Landlord, but shall be paid to Tenant when Tenant’s obligations under this Lease have
been completely fulfilled. Landlord shall be released from any obligation with respect to the
Security Deposit upon transfer of this Lease and the Premises to a person or entity assuming
Landlord’s obligations under this Section 6. Tenant hereby waives the provisions of any law, now
or hereafter in force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of Rent, to repair damage caused by
Tenant or to clean the Premises, it being agreed that Landlord may, in addition, claim those sums
reasonably necessary to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the act or omission of Tenant or any officer, employee, agent or invitee
of Tenant. If Tenant shall fully perform every provision of this Lease to be performed by Tenant,
the Security Deposit, or any balance thereof, shall be returned to Tenant (or, at Landlord’s
option, to the last assignee of Tenant’s interest hereunder) within 90 days after the expiration or
earlier termination of this Lease.



     7. Use. The Premises shall be used solely for the Permitted Use set forth in the Basic Lease
Provisions, in compliance with all laws, orders, judgments, ordinances, regulations, codes,
directives, permits, licenses, covenants and restrictions now or hereafter applicable to the
Premises,



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and the use and occupancy thereof (collectively, “Legal Requirements”). Tenant shall, upon 5
days’ written notice from Landlord, discontinue any use of the Premises which is declared by any
Governmental Authority (as defined in Section 9) having jurisdiction to be a violation of any Legal
Requirement. Tenant will not use or permit the Premises to be used for any purpose or in any
manner that would void Tenant’s or Landlord’s insurance, increase the insurance risk, or cause the
disallowance of any sprinkler or other credits. Tenant shall reimburse Landlord promptly upon
demand for any additional premium charged for any such insurance policy by reason of Tenant’s
failure to comply with the provisions of this Section or otherwise caused by Tenant’s use and/or
occupancy of the Premises. Tenant will use the Premises in a careful, safe and proper manner and
will not commit waste, overload the floor or structure of the Premises, subject the Premises to use
that would damage the Premises or obstruct or interfere with the rights of Landlord or other
tenants or occupants of the Project, including conducting or giving notice of any auction,
liquidation, or going out of business sale on the Premises, or using or allowing the Premises to be
used for any unlawful purpose. Tenant shall cause any equipment or machinery to be installed in
the Premises so as to reasonably prevent sounds or vibrations from the Premises from extending into
Common Areas, or other space in the Project. Tenant shall not place any machinery or equipment
weighing 500 pounds or more in or upon the Premises or transport or move such items through the
Common Areas of the Project or in the Project elevators without the prior written consent of
Landlord. Except as may be provided under the Work Letter, Tenant shall not, without the prior
written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed, use the Premises in any manner which will require ventilation, air exchange, heating, gas,
steam, electricity or water beyond the existing capacity of the Project as proportionately
allocated to the Premises based upon Tenant’s Share as usually furnished for the Permitted Use.




     Tenant, at its sole expense, shall make any alterations or modifications to the interior or
the exterior of the Premises or the Project that are required by Legal Requirements (including,
without limitation, compliance of the Premises with the Americans With Disabilities Act, 42 U.S.C.
§ 12101, et seq. together with regulations promulgated pursuant thereto) related to Tenant’s use or
occupancy of the Premises as distinguished from the general use or occupancy of the Project.
Notwithstanding any other provision herein to the contrary, Tenant shall be responsible for any and
all demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages or
judgments, and all reasonable expenses incurred in investigating or resisting the same (including,
without limitation, reasonable attorneys’ fees, charges and disbursements and costs of suit)
(collectively, “Claims”) arising out of or in connection with Tenant’s obligation to comply with
Legal Requirements, and Tenant shall indemnify, defend, hold and save Landlord harmless from and
against any and all Claims arising out of or in connection with any failure of the Premises to
comply with any Legal Requirement.



     8. Holding Over. If, with Landlord’s express written consent, Tenant retains possession of
the Premises after the termination of the Term, (i) unless otherwise agreed in such written
consent, such possession shall be subject to immediate termination by Landlord at any time, (ii)
all of the other terms and provisions of this Lease (including, without limitation, the adjustment
of Base Rent pursuant to Section 4 hereof) shall remain in full force and effect (excluding any
expansion or renewal option or other similar right or option) during such holdover period, (iii)
Tenant shall



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continue to pay Base Rent in the amount payable upon the date of the expiration or earlier
termination of this Lease or such other amount as Landlord may indicate, in Landlord’s sole and
absolute discretion, in such written consent, and (iv) all other payments shall continue under the
terms of this Lease. If Tenant remains in possession of the Premises after the expiration or
earlier termination of the Term without the express written consent of Landlord, (A) Tenant shall
become a tenant at sufferance upon the terms of this Lease except that the monthly rental shall be
equal to 200% of the Rent in effect during the last 30 days of the Term, and (B) Tenant shall be
responsible for all damages suffered by Landlord resulting from or occasioned by Tenant’s holding
over, including consequential damages. No holding over by Tenant, whether with or without consent
of Landlord, shall operate to extend this Lease except as otherwise expressly provided, and this
Section 8 shall not be construed as consent for Tenant to retain possession of the Premises.
Acceptance by Landlord of Rent after the expiration of the Term or earlier termination of this
Lease shall not result in a renewal or reinstatement of this Lease.




     9. Taxes. Landlord shall pay, as part of Operating Expenses, all taxes, levies, assessments
and governmental charges of any kind (collectively referred to as “Taxes”) imposed by any federal,
state, regional, municipal, local or other governmental authority or agency, including, without
limitation, quasi-public agencies (collectively, “Governmental Authority”) during the Term,
including, without limitation, all Taxes: (i) imposed on or measured by or based, in whole or in
part, on rent payable to Landlord under this Lease and/or from the rental by Landlord of the
Project or any portion thereof, or (ii) based on the square footage, assessed value or other
measure or evaluation of any kind of the Premises or the Project, or (iii) assessed or imposed by
or on the operation or maintenance of any portion of the Premises or the Project, including
parking, or (iv) assessed or imposed by, or at the direction of, or resulting from statutes or
regulations, or interpretations thereof, promulgated by, any Governmental Authority, or (v) imposed
as a license or other fee on Landlord’s business of leasing space in the Project. Landlord may
contest by appropriate legal proceedings the amount, validity, or application of any Taxes or liens
securing Taxes. Taxes shall not include any net income taxes imposed on Landlord unless such net
income taxes are in substitution for any Taxes payable hereunder. If any such Tax is levied or
assessed directly against Tenant, then Tenant shall be responsible for and shall pay the same at
such times and in such manner as the taxing authority shall require. Tenant shall pay, prior to
delinquency, any and all Taxes levied or assessed against any personal property or trade fixtures
placed by Tenant in the Premises, whether levied or assessed against Landlord or Tenant. If any
Taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s
property, or if the assessed valuation of the Project is increased by a value attributable to
improvements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or
not affixed to the real property so as to become a part thereof, higher than the base valuation on
which Landlord from time-to-time allocates Taxes to all tenants in the Project, Landlord shall have
the right, but not the obligation, to pay such Taxes. Landlord’s determination of any excess
assessed valuation shall be binding and conclusive, absent manifest error. The amount of any such
payment by Landlord shall constitute Additional Rent due from Tenant to Landlord immediately upon
demand.



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     10. Parking.



          (a) Tenant shall have the non-exclusive right, in common with others, to use the Building
Common Areas, subject to the rules and regulations attached hereto as Exhibit E together with such
other reasonable and nondiscriminatory rules and regulations as are hereafter promulgated by
Landlord in its discretion.




          (b) Tenant shall be assigned 12 parking stalls to be designated by Landlord and reserved for
Tenant’s use, which parking stalls shall be located as set forth on Exhibit I. Landlord reserves
the right from time-to-time to provide other parking for Tenant, which shall be no farther from the
Building than the farther of Landlord’s two present lots, except for an interim period not
exceeding 18 months in connection with a redevelopment of either such lot, in which case such
replacement parking shall be no more than 5 blocks from the Building. Tenant shall pay as triple
net Additional Rent the sum of 575.00 per month, per stall, which sum shall be increased by 3.5%
per annum. In addition, Tenant shall pay its Allocated Parking Expenses on a monthly basis with
Base Rent. Allocated Parking Expenses shall be subject to the operating expense exclusions set
forth in Article 5.




          (c) Tenant agrees not to overburden the guest parking facilities and agrees to cooperate with
Landlord and other tenants in the use of such guest parking. Landlord reserves the right to
determine that guest parking is becoming overcrowded and to limit Tenant’s use thereof. Upon such
determination, Landlord may reasonably allocate guest parking spaces among Tenant and other
tenants. If, after such allocation, Landlord determines that Tenant’s customers, clients, or
invitees are using more than the number of guest parking spaces that would otherwise be
attributable to a reasonable number of guest parking spaces for Tenant’s use, Landlord may require
Tenant to obtain guest parking outside of the Building and the parking lot to the extent of such
unreasonable excess uses. However, nothing in this Section 10(c) is intended to create an
affirmative duty on Landlord to monitor parking.




     11. Utilities, Services.



     Landlord shall provide, subject to the terms of this Section 11, potable water, electricity,
heat, ventilation, air conditioning, light, power, telephone, sewer, deionized water, steam, carbon
dioxide gas, compressed air, vacuum and other utilities (including gas and fire sprinklers to the
extent the Project is plumbed for such services), refuse and trash collection and janitorial
services (collectively, “Utilities”). Any use by Tenant of Utilities shall be allocated to and
paid by Tenant on such basis as Landlord shall determine for the Project. Tenant shall be entitled
to use its pro rata share of Utilities. Landlord shall pay, as Operating Expenses or subject to
Tenant’s reimbursement obligation, for all Utilities used on the Premises, all maintenance charges
for Utilities, and any storm sewer charges or other similar charges for Utilities imposed by any
governmental entity or Utility provider, and any taxes, penalties, surcharges or similar charges
thereon. Landlord may cause, at Tenant’s expense, any Utilities to be separately metered or
charged directly to Tenant by the provider. Tenant shall pay directly to the Utility provider,
prior to delinquency, any separately metered Utilities and services which may be furnished to
Tenant or the Premises during the Term. Tenant shall pay, as part of Operating Expenses, its share
of all charges for jointly metered Utilities



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based upon consumption, as reasonably determined by Landlord and shall pay the cost of any
after hours Utilities reasonably allocated to it by Landlord. No interruption or failure of
Utilities, from any cause whatsoever other than Landlord’s willful misconduct, shall result in
eviction or constructive eviction of Tenant, termination of this Lease or the abatement of Rent.
Tenant agrees to limit use of water and sewer with respect to Common Areas to normal restroom use.
Landlord’s sole obligation for either providing emergency generators or providing emergency back-up
power to Tenant shall be: (i) to provide emergency generators with not less than the capacity of
the emergency generators located in the Building as of the Commencement Date, and (ii) to contract
with a third party to maintain the emergency generators as per the manufacturer’s standard
maintenance guidelines. Landlord shall have no obligation to provide Tenant with operational
emergency generators or back-up power or to supervise, oversee or confirm that the third party
maintaining the emergency generators is maintaining the generators as per the manufacturer’s
standard guidelines or otherwise. During any period of replacement, repair or maintenance of the
emergency generators when the emergency generators are not operational, including any delays
thereto due to the inability to obtain parts or replacement equipment, Landlord shall have no
obligation to provide Tenant with an alternative back-up generator or generators or alternative
sources of back-up power.




     12. Alterations and Tenant’s Property. Any alterations, additions, or improvements made to
the Premises by or on behalf of Tenant, including additional locks or bolts of any kind or nature
upon any doors or windows in the Premises, but excluding installation, removal or realignment of
furniture systems (other than removal of furniture systems owned or paid for by Landlord) not
involving any modifications to the structure or connections (other then by ordinary plugs or jacks)
to Building Systems (as defined in Section 13) (“Alterations”) shall be subject to Landlord’s prior
written consent, which may be given or withheld in Landlord’s sole discretion if any such
Alteration affects the structure or Building Systems. Tenant may construct nonstructural
Alterations in the Premises without Landlord’s prior approval if the aggregate cost of all such
work in any 12 month period does not exceed $25,000 (a “Notice-Only Alteration”), provided Tenant
notifies Landlord in writing of such intended Notice-Only Alteration, and such notice shall be
accompanied by plans, specifications, work contracts and such other information concerning the
nature and cost of the Notice-Only Alteration as may be reasonably requested by Landlord, which
notice and accompanying materials shall be delivered to Landlord not less than 15 business days in
advance of any proposed construction. If Landlord approves any Alterations, Landlord may impose
such conditions on Tenant in connection with the commencement, performance and completion of such
Alterations as Landlord may deem appropriate in Landlord’s sole and absolute discretion. Any
request for approval shall be in writing, delivered not less than 15 business days in advance of
any proposed construction, and accompanied by plans, specifications, bid proposals, work contracts
and such other information concerning the nature and cost of the alterations as may be reasonably
requested by Landlord, including the identities and mailing addresses of all persons performing
work or supplying materials. Landlord’s right to review plans and specifications and to monitor
construction shall be solely for its own benefit, and Landlord shall have no duty to ensure that
such plans and specifications or construction comply with applicable Legal Requirements. Tenant
shall cause, at its sole cost and expense, all Alterations to comply with insurance requirements
and with Legal Requirements and shall implement at its sole cost and expense any alteration or
modification required by Legal Requirements as a result of any Alterations. Tenant shall pay to
Landlord, as



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Additional Rent, on demand an amount equal to 5% of all charges incurred by Tenant or its
contractors or agents in connection with any Alteration to cover Landlord’s overhead and expenses
for plan review, coordination, scheduling and supervision. Before Tenant begins any Alteration,
Landlord may post on and about the Premises notices of non-responsibility pursuant to applicable
law. Tenant shall reimburse Landlord for, and indemnify and hold Landlord harmless from, any
expense incurred by Landlord by reason of faulty work done by Tenant or its contractors, delays
caused by such work, or inadequate cleanup.




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



     Other than (i) the items, if any, listed on Exhibit F attached hereto, (ii) any items agreed
by Landlord in writing to be included on Exhibit F in the future, and (iii) any trade fixtures,
machinery, equipment and other personal property not paid for with the TI Allowance (as defined in
the Work Letter) which may be removed without material damage to the Premises, which damage shall
be repaired (including capping or terminating utility hook-ups behind walls) by Tenant during the
Term (collectively, “Tenant’s Property”), all property of any kind paid for with the TI Allowance,
all Alterations, real property fixtures, built-in machinery and equipment, built-in casework and
cabinets and other similar additions and improvements built into the Premises so as to become an
integral part of the Premises such as fume hoods which penetrate the roof or plenum area, built-in
cold rooms, built-in warm rooms, walk-in cold rooms, walk-in warm rooms, deionized water systems,
glass washing equipment, autoclaves, chillers, built-in plumbing, electrical and mechanical
equipment and systems, and any power generator and transfer switch (collectively, “Installations”)
shall be and shall remain the property of Landlord during the Term and following the expiration or
earlier termination of the Term, shall not be removed by Tenant at any time during the Term and
shall remain upon and be surrendered with the Premises as a part thereof following the expiration
or earlier termination of this Lease; provided, however, that Landlord shall, at the time its
approval of such Installation is requested or at the time it receives notice of a Notice-Only
Alteration notify Tenant if it has elected to cause Tenant to remove such Installation upon the
expiration or earlier termination of this Lease. If Landlord so elects, Tenant shall remove such
Installation upon the expiration or earlier termination of this Lease and restore any damage caused
by or occasioned as a result of such removal, including, when removing any of Tenant’s Property
which was plumbed, wired or otherwise connected to any of the Building Systems, capping off all
such connections behind the walls of the Premises and repairing any holes. During any such
restoration period, Tenant shall pay Rent to Landlord as provided herein as if said space were
otherwise occupied by Tenant.



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     13. Landlord’s Repairs. Landlord, as an Operating Expense, shall maintain all of the
structural, exterior, parking and other Common Areas of the Project, including HVAC, plumbing,
electrical, fire sprinklers, elevators, deionized water, steam, carbon dioxide gas, compressed air,
vacuum and all other building systems serving the Premises and other portions of the Project
(“Building Systems”), in good repair, reasonable wear and tear and uninsured losses and damages
caused by Tenant, its agents, servants, employees, invitees and contractors excluded. Losses and
damages caused by Tenant, its agents, servants, employees, invitees and contractors shall be
repaired by Landlord, to the extent not covered by insurance, at Tenant’s sole cost and expense.
Landlord reserves the right to stop Building System services when necessary (i) by reason of
accident or emergency, or (ii) for planned repairs, alterations or improvements, which are, in the
judgment of Landlord, desirable or necessary to be made, until said repairs, alterations or
improvements shall have been completed. Landlord shall have no responsibility or liability for
failure to supply Building System services during any such period of interruption;
provided, however, that Landlord shall give Tenant 48 hours advance notice of any
planned stoppage of Building System services for routine maintenance, repairs, alterations or
improvements. Tenant shall promptly give Landlord written notice of any repair required by
Landlord pursuant to this Section, after which Landlord shall have a reasonable opportunity to
effect such repair. Landlord shall not be liable for any failure to make any repairs or to perform
any maintenance unless such failure shall persist for an unreasonable time after Tenant’s written
notice of the need for such repairs or maintenance. Tenant waives its rights under any state or
local law to terminate this Lease or to make such repairs at Landlord’s expense and agrees that the
parties’ respective rights with respect to such matters shall be solely as set forth herein.
Repairs required as the result of fire, earthquake, flood, vandalism, war, or similar cause of
damage or destruction shall be controlled by Section 18.



     14. Tenant’s Repairs. Subject to Section 13 hereof, Tenant, at its expense, shall repair,
replace and maintain in good condition all portions of the Premises, including, without limitation,
entries, doors, ceilings, interior windows, interior walls, and the interior side of demising
walls. Such repair and replacements may include capital expenditures and repairs whose benefit may
extend beyond the Term. Should Tenant fail to make any such repair or replacement or fail to
maintain the Premises, Landlord shall give Tenant notice of such failure. If Tenant fails to
commence cure of such default within 10 days of Landlord’s notice, and thereafter diligently
prosecute such cure to completion, Landlord may perform such work and shall be reimbursed by Tenant
within 10 days after demand therefor; provided, however, that if such default by Tenant creates or
could create an emergency, Landlord may immediately commence cure of such default and shall
thereafter be entitled to recover the costs of such cure from Tenant. Subject to Sections 17 and
18, Tenant shall bear the full uninsured cost of any repair or replacement to any part of the
Project that results from damage caused by Tenant, its agents, contractors, or invitees and any
repair that benefits only the Premises.



     15. Mechanic’s Liens. Tenant shall discharge, by bond or otherwise, any mechanic’s lien filed
against the Premises or against the Project for work claimed to have been done for, or materials
claimed to have been furnished to, Tenant within 10 days after the filing thereof, at Tenant’s sole
cost and shall otherwise keep the Premises and the Project free from any liens arising out of work
performed, materials furnished or obligations incurred by Tenant. Should Tenant fail to discharge



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any lien described herein, Landlord shall have the right, but not the obligation, to pay such
claim or post a bond or otherwise provide security to eliminate the lien as a claim against title
to the Project and the cost thereof shall be immediately due from Tenant as Additional Rent. If
Tenant shall lease or finance the acquisition of office equipment, furnishings, or other personal
property of a removable nature utilized by Tenant in the operation of Tenant’s business, Tenant
warrants that any Uniform Commercial Code Financing Statement executed by Tenant will upon its face
or by exhibit thereto indicate that such Financing Statement is applicable only to removable
personal property of Tenant located within the Premises. In no event shall the address of the
Project be furnished on the statement without qualifying language as to applicability of the lien
only to removable personal property, located in an identified suite held by Tenant.




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



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



     Tenant, at its sole cost and expense, shall maintain during the Term: all risk property
insurance covering the full replacement cost of all property and improvements installed or placed
in the Premises by Tenant at Tenant’s expense; workers’ compensation insurance with no less than
the minimum limits required by law; employer’s liability insurance with such limits as required by
law;



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and commercial general liability insurance, with a minimum limit of not less than $2,000,000
per occurrence for death or bodily injury and not less than $1,000,000 for property damage with
respect to the Premises. The commercial general liability insurance policies shall name Landlord,
its officers, directors, employees, managers, agents, invitees and contractors (collectively,
“Related Parties”), as additional insureds; insure on an occurrence and not a claims-made basis; be
issued by insurance companies which have a rating of not less than policyholder rating of A and
financial category rating of at least Class XII in “Best’s Insurance Guide”; shall not be
cancelable unless 30 days prior written notice shall have been given to Landlord from the insurer;
contain a hostile fire endorsement and a contractual liability endorsement; and provide primary
coverage to Landlord (any policy issued to Landlord providing duplicate or similar coverage shall
be deemed excess over Tenant’s policies). Such policies or certificates thereof shall be delivered
to Landlord by Tenant upon commencement of the Term and upon each renewal of said insurance.
Tenant’s policy may be a “blanket policy” which specifically provides that the amount of insurance
shall not be prejudiced by other losses covered by the policy. Tenant shall, at least 20 days
prior to the expiration of such policies, furnish Landlord with renewals or binders. Tenant agrees
that if Tenant does not take out and maintain such insurance, Landlord may (but shall not be
required to) procure said insurance on Tenant’s behalf and at its cost to be paid as Additional
Rent.




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



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



     Landlord may require insurance policy limits to be raised to conform with requirements of
Landlord’s lender and/or to bring coverage limits to levels then being generally required of new
tenants within the Project.



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     18. Restoration. If at any time during the Term the Project or the Premises are damaged by a
fire or other insured casualty, Landlord shall notify Tenant within 60 days after discovery of such
damage as to the amount of time Landlord reasonably estimates it will take to restore the Project
or the Premises, as applicable. If the restoration time is estimated to exceed 11 months, Landlord
may, in such notice, elect to terminate this Lease as of the date that is 75 days after the date of
discovery of such damage or destruction; provided, however, that notwithstanding
Landlord’s election to restore the Premises, Tenant may elect to terminate this Lease by written
notice to Landlord delivered within 5 business days of receipt of Landlord’s notice electing to
restore the Premises over an 11 month or longer period. Unless either Landlord or Tenant elects to
terminate this Lease, Landlord shall, subject to receipt of sufficient insurance proceeds (with any
deductible to be treated as a current Operating Expense), promptly restore the Premises (excluding
the improvements installed by Tenant or by Landlord and paid for by Tenant), subject to delays
arising from the collection of insurance proceeds, from Force Majeure events or as needed for
Tenant to obtain any license, clearance or other authorization of any kind required to enter into
and restore the Premises issued by any governmental or quasi-governmental agency having
jurisdiction over the use, storage, release or removal of Hazardous Materials (as defined in
Section 30) in, on or about the Premises (collectively referred to herein as “Hazardous Materials
Clearances”); provided, however, that if repair or restoration of the Premises is
not substantially complete as of the end of 11 months from the date of damage or destruction,
Landlord may, in its sole and absolute discretion, elect not to proceed with such repair and
restoration, or Tenant may by written notice to Landlord delivered within 5 business days of the
expiration of such 11 month period, elect to terminate this Lease, in which event Landlord shall be
relieved of its obligation to make such repairs or restoration and this Lease shall terminate as of
the date that is 75 days after the later of: (i) discovery of such damage or destruction, or (ii)
the date all required Hazardous Materials Clearances are obtained.



     Tenant, at its expense, shall promptly perform, subject to delays arising from the collection
of insurance proceeds, from Force Majeure (as defined in Section 34) events or to obtain Hazardous
Material Clearances, all repairs or restoration not required to be done by Landlord and shall
promptly re-enter the Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, Landlord may terminate this Lease if the Premises are damaged during
the last 1 year of the Term and Landlord reasonably estimates that it will take more than 2 months
to repair such damage, or if insurance proceeds are not available for such restoration. Rent shall
be abated from the date all required Hazardous Material Clearances are obtained until the Premises
are repaired and restored, in the proportion which the area of the Premises, if any, which is not
usable by Tenant bears to the total area of the Premises, unless Landlord provides Tenant with
other space during the period of repair that is suitable for the temporary conduct of Tenant’s
business. Such abatement shall be the sole remedy of Tenant, and except as provided herein, Tenant
waives any right to terminate the Lease by reason of damage or casualty loss.



     The provisions of this Lease, including this Section 18, constitute an express agreement
between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any
part of the Premises, or any other portion of the Project, and any statute or regulation which is
now or may hereafter be in effect shall have no application to this Lease or any damage or
destruction to all



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or any part of the Premises or any other portion of the Project, the parties hereto expressly
agreeing that this Section 18 sets forth their entire understanding and agreement with respect to
such matters.




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



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



          (a) Payment Defaults. Tenant shall fail to pay any installment of Rent or any other payment
hereunder when due.




          (b) Insurance. Any insurance required to be maintained by Tenant pursuant to this Lease shall
be canceled or terminated or shall expire or shall be reduced or materially changed, or Landlord
shall receive a notice of nonrenewal of any such insurance and Tenant shall fail to obtain
replacement insurance at least 20 days before the expiration of the current coverage.




          (c) Abandonment. Tenant shall abandon the Premises.




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




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




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




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




          (h) Other Defaults. Tenant shall fail to comply with any provision of this Lease other than
those specifically referred to in this Section 20, and, except as otherwise expressly provided
herein, such failure shall continue for a period of 10 days after written notice thereof from
Landlord to Tenant.




     Any notice given under Section 20(h) hereof shall: (i) specify the alleged default, (ii)
demand that Tenant cure such default, (iii) be in lieu of, and not in addition to, or shall be
deemed to be, any notice required under any provision of applicable law, and (iv) not be deemed a
forfeiture or a termination of this Lease unless Landlord elects otherwise in such notice; provided
that if the nature of Tenant’s default pursuant to Section 20(h) is such that it cannot be cured by
the payment of money and reasonably requires more than 30 days to cure, then Tenant shall not be
deemed to be in default if Tenant commences such cure within said 30 day period and thereafter
diligently prosecutes the same to completion; provided, however, that such cure shall be completed
no later than 150 days from the date of Landlord’s notice.



     21. Landlord’s Remedies.



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




          (b) Late Payment Rent. Late payment by Tenant to Landlord of Rent and other sums due will
cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be
extremely difficult and impracticable to ascertain. Such costs include, but are not limited to,
processing and accounting charges and late charges which may be imposed on Landlord under any
Mortgage covering the Premises. Therefore, if any installment of Rent due from Tenant is




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not received by Landlord within 5 days after the date such payment is due, Tenant shall pay to
Landlord an additional sum equal to 6% of the overdue Rent as a late charge. The parties agree
that this late charge represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. In addition to the late charge, Rent not paid when due shall
bear interest at the Default Rate from the 5th day after the date due until paid.




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




               (i) Terminate this Lease, or at Landlord’s option, Tenant’s right to possession only, in which
event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for possession or arrearages
in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other
person who may be occupying the Premises or any part thereof, without being liable for prosecution
or any claim or damages therefor;



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



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



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



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



                    (D) Any other amount necessary to compensate Landlord for all the detriment proximately caused
by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, specifically including, but not limited to, brokerage
commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion
thereof for a new tenant, whether for the same or a different use, and any special concessions made
to obtain a new tenant; and



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



     The term “rent” as used in this Section 21 shall be deemed to be and to mean all sums of every
nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord



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or to others. As used in Sections 21(c)(ii) (A) and (B), above, the “worth at the time of
award” shall be computed by allowing interest at the Default Rate. As used in Section 21(c)(ii)(C)
above, the “worth at the time of award” shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award plus 1%.




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



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



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



          (d) Effect of Exercise. Exercise by Landlord of any remedies hereunder or otherwise available
shall not be deemed to be an acceptance of surrender of the Premises and/or a termination of this
Lease by Landlord, it being understood that such surrender and/or termination can be effected only
by the express written agreement of Landlord and Tenant. Any law, usage, or custom to the contrary
notwithstanding, Landlord shall have the right at all times to enforce the provisions of this Lease
in strict accordance with the terms hereof; and the failure of Landlord at any time to enforce its
rights under this Lease strictly in accordance with same shall not be construed as having created a
custom in any way or manner contrary to the specific terms, provisions, and covenants of this Lease
or as having modified the same and shall not be deemed a waiver of Landlord’s right to enforce one
or more of its rights in connection with any subsequent default. A receipt by Landlord of Rent or
other payment with knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be deemed to have been
made unless expressed in writing and signed by Landlord. To the greatest extent permitted by law,
Tenant waives the service of notice of Landlord’s intention to re-enter, re-take or otherwise
obtain possession of the Premises as provided in any statute, or to institute legal proceedings to
that end, and also waives all right of redemption in case Tenant shall be dispossessed by a
judgment or by warrant of any court or judge. Any reletting of the Premises or any portion thereof
shall be on such terms and conditions as Landlord in its sole discretion may determine. Landlord
shall not liable for, nor shall Tenant’s obligations hereunder be diminished




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because of, Landlord’s failure to relet the Premises or collect rent due in respect of such
reletting or otherwise to mitigate any damages arising by reason of Tenant’s Default.




     22. Assignment and Subletting.



          (a) General Prohibition. Without Landlord’s prior written consent subject to and on the
conditions described in this Section 22, Tenant shall not, directly or indirectly, voluntarily or
by operation of law, assign this Lease or sublease the Premises or any part thereof or mortgage,
pledge, or hypothecate its leasehold interest or grant any concession or license within the
Premises, and any attempt to do any of the foregoing shall be void and of no effect. If Tenant is
a corporation, partnership or limited liability company, the shares or other ownership interests
thereof which are not actively traded upon a stock exchange or in the over-the-counter market, a
transfer or series of transfers whereby 25% or more of the issued and outstanding shares or other
ownership interests of such corporation are, or voting control is, transferred (but excepting
transfers upon deaths of individual owners) from a person or persons or entity or entities which
were owners thereof at time of execution of this Lease to persons or entities who were not owners
of shares or other ownership interests of the corporation, partnership or limited liability company
at time of execution of this Lease, shall be deemed an assignment of this Lease requiring the
consent of Landlord as provided in this Section 22. For purposes of this Section, a transfer of
ownership interests controlling Tenant shall be deemed an assignment of this Lease unless such
ownership interests are publicly traded or unless such ownership interest are issued by Tenant in
an equity financing or result from the conversion of not more than $7,000,000 of debt which by its
original terms was convertible into equity interests.




          (b) Permitted Transfers. If Tenant desires to assign, sublease, hypothecate or otherwise
transfer this Lease or sublet the Premises other than pursuant to a Permitted Assignment, as
defined below, then at least 15 business days, but not more than 45 business days, before the date
Tenant desires the assignment or sublease to be effective (the “Assignment Date”), Tenant shall
give Landlord a notice (the “Assignment Notice”) containing such information about the proposed
assignee or sublessee, including the proposed use of the Premises and any Hazardous Materials
proposed to be used or stored in the Premises, the Assignment Date, any relationship between Tenant
and the proposed assignee or sublessee, and all material terms and conditions of the proposed
assignment or sublease, including a copy of any proposed assignment or sublease in its final form,
and such other information as Landlord may deem reasonably necessary or appropriate to its
consideration whether to grant its consent. Landlord may, by giving written notice to Tenant
within 15 business days after receipt of the Assignment Notice: (i) grant or refuse such consent,
in its sole discretion with respect to a proposed assignment, hypothecation or other transfer or
subletting of more than (together with all other then effective subleases) 50% of the Premises, or
grant or refuse such consent, in its reasonable discretion with respect to a proposed subletting of
up to (together with all other then effective subleases) 50% of the Premises (provided that
Landlord shall further have the right to review and approve or disapprove the proposed form of
sublease prior to the effective date of any such subletting), or (ii) terminate this Lease with
respect to the space described in the Assignment Notice as of the Assignment Date (an “Assignment
Termination”). If Landlord elects an Assignment Termination, Tenant shall have the right to
withdraw such Assignment Notice




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by written notice to Landlord of such election within 5 days after Landlord’s notice electing
to exercise the Assignment Termination. If Tenant withdraws such Assignment Notice, this Lease
shall continue in full force and effect. If Tenant does not withdraw such Assignment Notice, this
Lease, and the term and estate herein granted, shall terminate as of the Assignment Date with
respect to the space described in such Assignment Notice. No failure of Landlord to exercise any
such option to terminate this Lease shall be deemed to be Landlord’s consent to the proposed
assignment, sublease or other transfer. Tenant shall reimburse Landlord for all of Landlord’s
reasonable out-of-pocket expenses in connection with its consideration of any Assignment Notice,
not to exceed $5,000 in connection with any single Assignment Notice.




     Notwithstanding the foregoing, Landlord’s consent to an assignment of this Lease or a
subletting of any portion of the Premises to any entity controlling, controlled by or under common
control with Tenant shall not be required, provided that Landlord shall have the right to approve
the form of any such sublease or assignment. In addition, Tenant shall have the right to assign
this Lease, upon 30 days prior written notice to Landlord but without obtaining Landlord’s prior
written consent, to a corporation or other entity which is a successor-in-interest to Tenant, by
way of merger, consolidation or corporate reorganization, or by the purchase of all or
substantially all of the assets or the ownership interests of the Tenant provided that (i) such
merger or consolidation, or such acquisition or assumption, as the case may be, is for a good
business purpose and not principally for the purpose of transferring the Lease, and (ii) the net
worth (as determined in accordance with generally accepted accounting principles (“GAAP”)) of the
assignee is not less than the net worth (as determined in accordance with GAAP) of Tenant as of the
date of Tenant’s most current quarterly or annual financial statements, and (iii) such assignee
shall agree in writing to assume all of the terms, covenants and conditions of this Lease arising
after the effective date of the assignment. Any such assignment described in this paragraph is
referred to herein as a “Permitted Assignment” and any person succeeding to Tenant’s rights
hereunder pursuant to a Permitted Assignment is to herein as a “Permitted Assignee.”



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




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



               (ii) A list of Hazardous Materials, certified by the proposed assignee or sublessee to be true
and correct, which the proposed assignee or sublessee intends to use or store in the Premises
together with copies of all documents relating to the handling, storage, disposal and emission of
Hazardous Materials by the proposed assignee or subtenant in the Premises or on the Project, prior
to the proposed assignment or subletting, including, without limitation: permits;



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approvals; reports and correspondence; storage and management plans; plans relating to the
installation of any storage tanks to be installed in or under the Project (provided, said
installation of tanks shall only be permitted after Landlord has given its written consent to do
so, which consent may be withheld in Landlord’s sole and absolute discretion); and all closure
plans or any other documents required by any and all federal, state and local governmental agencies
and authorities for any storage tanks installed in, on or under the Project for the closure of any
such tanks. Neither Tenant nor any such proposed assignee or subtenant is required, however, to
provide Landlord with any portion(s) of the such documents containing information of a proprietary
nature which, in and of themselves, do not contain a reference to any Hazardous Materials or
hazardous activities.




          (d) No Release of Tenant, Sharing of Excess Rents. Notwithstanding any assignment or
subletting, Tenant and any guarantor or surety of Tenant’s obligations under this Lease shall at
all times remain fully and primarily responsible and liable for the payment of Rent and for
compliance with all of Tenant’s other obligations under this Lease. If the Rent due and payable by
a sublessee or assignee (or a combination of the rental payable under such sublease or assignment
plus any bonus or other consideration therefor or incident thereto) exceeds the rental payable
under this Lease, after reasonable and customary expenses related thereto, including without
limitation reasonable commissions, attorneys’ fees and tenant improvements (excluding however, any
Rent payable under this Section), then Tenant shall be bound and obligated to pay Landlord as
Additional Rent hereunder 50% of such excess rental and other excess consideration within 10 days
following receipt thereof by Tenant. If Tenant shall sublet the Premises or any part thereof,
Tenant hereby immediately and irrevocably assigns to Landlord, as security for Tenant’s obligations
under this Lease, all rent from any such subletting, and Landlord as assignee and as
attorney-in-fact for Tenant, or a receiver for Tenant appointed on Landlord’s application, may
collect such rent and apply it toward Tenant’s obligations under this Lease; except that, until the
occurrence of a Default, Tenant shall have the right to collect such rent.




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




          (f) Prior Conduct of Proposed Transferee. Notwithstanding any other provision of this Section
22, if (i) the proposed assignee or sublessee of Tenant has been required by any prior landlord,
lender or Governmental Authority to take remedial action in connection with Hazardous Materials
contaminating a property, where the contamination resulted from such party’s action or use of the
property in question, or (ii) the proposed assignee or sublessee is subject to an enforcement order
issued by any governmental authority in connection with the use, disposal or storage of Hazardous
Materials, Landlord shall have the absolute right to refuse to consent to any assignment or
subletting to any such party.




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     23. Estoppel Certificate. Tenant shall, within 10 business days of written notice from
Landlord, execute, acknowledge and deliver a statement in writing substantially in the form
attached to this Lease as Exhibit G with the blanks filled in, or on any other form reasonably
requested by a proposed lender or purchaser, (i) certifying that this Lease is unmodified and in
full force and effect (or, if modified, stating the nature of such modification and certifying that
this Lease as so modified is in full force and effect) and the dates to which the rental and other
charges are paid in advance, if any, (ii) acknowledging that there are not any uncured defaults on
the part of Landlord hereunder, or specifying such defaults if any are claimed, and (iii) setting
forth such further information with respect to the status of this Lease or the Premises as maybe
requested thereon. Any such statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the real property of which the Premises are a part. Tenant’s
failure to deliver such statement within such time shall, at the option of Landlord, constitute a
Default under this Lease, and, in any event, shall be conclusive upon Tenant that the Lease is in
full force and effect and without modification except as may be represented by Landlord in any
certificate prepared by Landlord and delivered to Tenant for execution.



     24. Quiet Enjoyment. So long as Tenant shall perform all of the covenants and agreements
herein required to be performed by Tenant, Tenant shall, subject to the terms of this Lease, at all
times during the Term, have peaceful and quiet enjoyment of the Premises against any person
claiming by, through or under Landlord.



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



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



     27. Subordination. This Lease and Tenant’s interest and rights hereunder are and shall be
subject and subordinate at all times to the lien of any Mortgage now existing or hereafter created
on or against the Project or the Premises, and all amendments, restatements, renewals,
modifications, consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant; provided, however that so long as
there is no Default hereunder, Tenant’s right to possession of the Premises shall not be disturbed
by the Holder of any such Mortgage. Tenant agrees, at the election of the Holder of any such
Mortgage, to attorn to any such Holder. Tenant agrees upon demand to execute, acknowledge and
deliver a Subordination, Non-disturbance and Attornment Agreement in substantially the form
attached hereto as Exhibit H, or such other instruments, confirming such subordination and
nondisturbance, and such instruments of attornment as shall be requested by any such Holder,
provided any such instruments contain appropriate non-disturbance provisions assuring Tenant’s
quiet enjoyment of the Premises as set



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forth in Section 24 hereof. Notwithstanding the foregoing, any such Holder may at any time
subordinate its Mortgage to this Lease, without Tenant’s consent, by notice in writing to Tenant,
and thereupon this Lease shall be deemed prior to such Mortgage without regard to their respective
dates of execution, delivery or recording and in that event such Holder shall have the same rights
with respect to this Lease as though this Lease had been executed prior to the execution, delivery
and recording of such Mortgage and had been assigned to such Holder. The term “Mortgage” whenever
used in this Lease shall be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the “Holder” of a Mortgage shall be deemed to include the
beneficiary under a deed of trust.




     28. Surrender. Upon expiration of the Term or earlier termination of Tenant’s right of
possession, Tenant shall surrender the Premises to Landlord in the same condition as received,
subject to any Alterations permitted by Landlord to remain in the Premises, free of Hazardous
Materials brought upon, kept or used in or about the Premises by any person other than Landlord,
its agents, employees, contractors or invitees (or Hazardous Materials brought upon, kept or used
in or about the Project by Tenant or any of its agents, employees, contractors or invitees) and
released of all Hazardous Materials Clearances, broom clean, ordinary wear and tear and casualty
loss and condemnation covered by Sections 18 and 19 excepted. Tenant shall immediately return to
Landlord all keys and/or access cards to parking, the Project, restrooms or all or any portion of
the Premises furnished to or otherwise procured by Tenant. If any such access card or key is lost,
Tenant shall pay to Landlord, at Landlord’s election, either the cost of replacing such lost access
card or key or the cost of reprogramming the access security system in which such access card was
used or changing the lock or locks opened by such lost key. Any Tenant’s Property, Alterations and
property not so removed by Tenant as permitted or required herein shall be deemed abandoned and may
be stored, removed, and disposed of by Landlord at Tenant’s expense, and Tenant waives all claims
against Landlord for any damages resulting from Landlord’s retention and/or disposition of such
property. All obligations of Tenant hereunder not fully performed as of the termination of the
Term, including the obligations of Tenant under Section 30 hereof, shall survive the expiration or
earlier termination of the Term, including, without limitation, indemnity obligations, payment
obligations with respect to Rent and obligations concerning the condition and repair of the
Premises.



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



     30. Environmental Requirements.



          (a) Prohibition/Compliance/Indemnity. Tenant shall not cause or permit any Hazardous
Materials (as hereinafter defined) to be brought upon, kept or used in or about the Premises or the
Project in violation of applicable law by Tenant, its agents, employees, contractors or invitees.
If Tenant breaches the obligation stated in the preceding sentence, or if the presence of




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Hazardous Materials in the Premises during the Term or any holding over results in
contamination of the Premises, the Project or any adjacent property or if contamination of the
Premises, the Project or any adjacent property by Hazardous Materials brought into the Premises by
anyone other than Landlord and Landlord’s employees, agents and contractors otherwise occurs during
the Term or any holding over, Tenant hereby indemnifies and shall defend and hold Landlord, its
officers, directors, employees, agents and contractors harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities, or losses (including, without limitation, diminution
in value of the Premises or any portion of the Project, damages for the loss or restriction on use
of rentable or usable space or of any amenity of the Premises or the Project, damages arising from
any adverse impact on marketing of space in the Premises or the Project, and sums paid in
settlement of claims, attorneys’ fees, consultant fees and expert fees) which arise during or after
the Term as a result of such contamination. This indemnification of Landlord by Tenant includes,
without limitation, costs incurred in connection with any investigation of site conditions or any
cleanup, remedial, removal, or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Materials present in the air,
soil or ground water above, on, or under the Premises. Without limiting the foregoing, if the
presence of any Hazardous Materials on the Premises, the Project or any adjacent property caused or
permitted by Tenant results in any contamination of the Premises, the Project or any adjacent
properly, Tenant shall promptly take all actions at its sole expense and in accordance with
applicable law as are necessary to return the Premises, the Project or any adjacent property to the
condition existing prior to the time of such contamination, provided that Landlord’s approval of
such action shall first be obtained, which approval shall not unreasonably be withheld, conditioned
or delayed so long as such actions would not potentially have any material adverse long-term or
short-term effect on the Premises or the Project.




          (b) Business. Landlord acknowledges that it is not the intent of this Section 30 to prohibit
Tenant from using the Premises for the Permitted Use. Tenant may operate its business according to
the custom of the industry so long as the use or presence of Hazardous Materials is strictly and
properly monitored according to all then applicable governmental requirements. As a material
inducement to Landlord to allow Tenant to use Hazardous Materials in connection with its business,
Tenant agrees to deliver to Landlord prior to the Commencement Date a list identifying each type of
Hazardous Materials to be present on the Premises and setting forth any and all governmental
approvals or permits required in connection with the presence of such Hazardous Materials on the
Premises (“Hazardous Materials List”). Tenant shall deliver to Landlord an updated Hazardous
Materials List at least once a year and shall also deliver an updated list before any new Hazardous
Material is brought onto the Premises. Tenant shall deliver to Landlord true and correct copies of
the following documents (the “Haz Mat Documents”) relating to the handling, use, storage, disposal
and emission of Hazardous Materials prior to the Commencement Date, or if unavailable at that
time, concurrent with the receipt from or submission to a governmental agency: permits; approvals;
reports and correspondence; storage and management plans, notice of violations of any laws; plans
relating to the installation of any storage tanks to be installed in or under the Project
(provided, said installation of tanks shall only be permitted after Landlord has given Tenant its
written consent to do so, which consent may be withheld in Landlord’s sole and absolute
discretion); and all closure plans or any other documents required by any and all federal, state
and




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local governmental agencies and authorities for any storage tanks installed in, on or under
the Project for the closure of any such tanks. Tenant is not required, however, to provide
Landlord with, any portion(s) of the Haz Mat Documents containing information of a proprietary
nature which, in and of themselves, do not contain a reference to any Hazardous Materials or
hazardous activities. It is not the intent of this Section to provide Landlord with information
which could be detrimental to Tenant’s business should such information become possessed by
Tenant’s competitors.




          (c) Tenant Representation and Warranty. Tenant hereby represents and warrants to Landlord
that (i) neither Tenant nor any of its legal predecessors has been required by any prior landlord,
lender or governmental authority at any time to take remedial action in connection with Hazardous
Materials contaminating a property which contamination was permitted by Tenant of such predecessor
or resulted from Tenant’s or such predecessor’s action or use of the property in question, and (ii)
Tenant is not subject to any enforcement order issued by any governmental authority in connection
with the use, disposal or storage of a Hazardous Materials. If Landlord determines that this
representation and warranty was not true as of the date of this lease, Landlord shall have the
right to terminate this Lease in Landlord’s sole and absolute discretion.




          (d) Testing. Landlord shall have the right to conduct annual tests of the Premises to
determine whether any contamination has occurred as a result of Tenant’s use. Tenant shall be
required to pay the cost of such annual test of the Premises; provided, however, that if Tenant
conducts its own tests of the Premises using third party contractors and test procedures acceptable
to Landlord which tests are certified to Landlord, Landlord shall accept such tests in lieu of the
annual tests to be paid for by Tenant. In addition, at any time, and from time to time, prior to
the expiration or earlier termination of the Term, Landlord shall have the right to conduct
appropriate tests of the Premises and the Project to determine if contamination has occurred as a
result of Tenant’s use of the Premises. lf contamination has occurred for which Tenant is liable
under this Section 30, Tenant shall pay all costs to conduct such tests. If no such contamination
is found, Landlord shall pay the costs of such tests (which shall not constitute an Operating
Expense). Landlord shall provide Tenant with a copy of all third party, non-confidential reports
and tests of the Premises made by or on behalf of Landlord during the Term without representation
or warranty and subject to a confidentiality agreement. Landlord’s receipt of or satisfaction with
any environmental assessment in no way waives any rights which Landlord may have against Tenant.




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




          (f) Tenant’s Obligations. Tenant’s obligations under this Section 30 shall survive the
expiration or earlier termination of the Lease. During any period of time after the expiration or
earlier termination of this Lease required by Tenant or Landlord to complete the




-26-









 







removal from the Premises of any Hazardous Materials and the release and termination of any
licenses or permits restricting the use of the Premises, Tenant shall continue to pay the full Rent
in accordance with this Lease for any portion of the Premises not relet by Landlord in Landlord’s
sole discretion, which Rent shall be prorated daily.




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




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



     32. Inspection and Access. Landlord and its agents, representatives, and contractors may
enter the Premises at any reasonable time to inspect the Premises and to make such repairs as



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may be required or permitted pursuant to this Lease and for any other business purpose.
Landlord and Landlord’s representatives may enter the Premises during business hours on not less
than 48 hours advance written notice (except in the case of emergencies in which case no such
notice shall be required and such entry may be at any time) for the purpose of effecting any such
repairs, inspecting the Premises, showing the Premises to prospective purchasers and, during the
last year of the Term, to prospective tenants or for any other business purpose. Landlord may
erect a suitable sign on the Premises stating the Premises are available to let or that the Project
is available for sale. Landlord may grant easements, make public dedications, designate Common
Areas and create restrictions on or about the Premises, provided that no such easement, dedication,
designation or restriction materially, adversely affects Tenant’s use or occupancy of the Premises
for the Permitted use. At Landlord’s request, Tenant shall execute such instruments as may be
necessary for such easements, dedications or restrictions. Tenant shall at all times, except in
the case of emergencies, have the right to escort Landlord or its agents, representatives,
contractors or guests while the same are in the Premises, provided such escort does not materially
and adversely affect Landlord’s access rights hereunder.




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



     34. Force Majeure. Landlord shall not be held responsible for delays in the performance of
its obligations hereunder when caused by strikes, lockouts, labor disputes, weather, natural
disasters, inability to obtain labor or materials or reasonable substitutes therefor, governmental
restrictions, governmental regulations, governmental controls, delay in issuance of permits, enemy
or hostile governmental action, civil commotion, fire or other casualty, and other causes beyond
the reasonable control of Landlord (“Force Majeure”).



     35. Brokers, Entire Agreement, Amendment. Landlord and Tenant each represents and warrants
that it has not dealt with any broker, agent or other person (collectively, “Broker) in connection
with this transaction and that no Broker brought about this transaction, other than CB Richard
Ellis, Inc. and Kidder, Matthews & Segner. Landlord and Tenant each hereby agree to indemnify and
hold the other harmless from and against any claims by any Broker, other than the Brokers, if any
named in this Section 35, claiming a commission or other form of compensation by virtue of having
dealt with Tenant or Landlord, as applicable, with regard to this leasing transaction. This Lease
may not be amended except by an instrument in writing signed by both parties hereto.



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



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



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



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     39. Right to Expand.



          (a) Expansion in the Project. Tenant shall have the right, but not the obligation, to expand
the Premises (the “Expansion Right”) to include any space in the Project (the “Expansion Space”)
upon the terms and conditions in this Section. If a vacancy occurs, Landlord shall deliver to
Tenant written notice (the “Expansion Notice”) of the availability of such portion of the Expansion
Space, together with the terms and conditions on which Landlord is prepared to lease to Tenant such
portion of the Expansion Space. Provided that no prior right to expand is exercised by any of Fred
Hutchinson Cancer Research Center, Corixa or The Hope Heart Institute, or Xcyte Therapies, Inc.,
Tenant shall have 10 business days following delivery of the Expansion Notice to deliver to
Landlord written notification of Tenant’s exercise of the Expansion Right. Provided that no right
to expand is exercised by any tenant with superior rights, Tenant shall be entitled to lease such
Expansion Space upon the terms and conditions set forth in the Expansion Notice.




          (b) Amended Lease. If: (i) Tenant fails to timely deliver notice accepting the terms of an
Expansion Notice, or (ii) after the expiration of a period of 30 days from the date Tenant gives
notice accepting Landlord’s offer to lease such Expansion Space, no lease amendment or lease
agreement for the Expansion Space has been executed, and Landlord tenders to Tenant an amendment to
this Lease setting forth the terms for the rental of the Expansion Space consistent with those set
forth in the Expansion Notice and otherwise consistent with the terms of this Lease and Tenant
fails to execute such Lease amendment within 10 business days following such tender, Tenant shall
be deemed to have waived its right to lease such Expansion Space.




          (c) Exceptions. Notwithstanding the above, the Expansion Right shall not be in effect and may
not be exercised by Tenant:




               (i) during any period of time that Tenant is in Default under any provision of the Lease; or



               (ii) if Tenant has been in Default under any provision of the Lease 3 or more times, whether
or not the Defaults are cured, during the 12 month period prior to the date on which Tenant seeks
to exercise the Expansion Right.



          (d) Termination. The Expansion Right shall terminate and be of no further force or effect
even after Tenant’s due and timely exercise of the Expansion Right, if, after such exercise, but
prior to the commencement date of the Expansion Space, (i) Tenant fails to timely cure any default
by Tenant under the Lease; or (ii) Tenant has Defaulted 3 or more times during the period from the
date of the exercise of the Expansion Right to the date of the commencement of the lease of the
Expansion Space, whether or not such Defaults are cured.




          (e) Subordinate. Tenant’s rights in connection with the Expansion Right are and shall be
subject to and subordinate to any expansion or extension rights granted in the Project prior to the
date hereof to Fred Hutchinson Cancer Research Center, Corixa or The Hope Heart Institute and Xcyte
Therapies, Inc.




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          (f) Rights Personal. Expansion Rights are personal to Tenant and are not assignable without
Landlord’s consent, which may be granted or withheld in Landlord’s sole discretion separate and
apart from any consent by Landlord to an assignment of Tenant’s interest in the Lease; provided,
however, a Permitted Assignee shall succeed to such Expansion Rights.




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




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



          (a) Extension Rights. Tenant shall have the right (the “Extension Right”) to extend the term
of this Lease for 5 years (the “Extension Term”) on the same terms and conditions as this Lease
(other than Base Rent) by giving Landlord written notice of its election to exercise each
Extension Right at least 12 months prior to the expiration of the Base Term of the Lease or the
expiration of any prior Extension Term. Upon the commencement of any Extension Term, Base Rent
shall be payable at the Market Rate (as defined below). Base Rent shall thereafter be adjusted on
each annual anniversary of the commencement of such Extension Term by a percentage as determined by
Landlord and agreed to by Tenant at the time the Market Rate is determined. As used herein,
“Market Rate” shall mean the then market rental rate as determined by Landlord and agreed to by
Tenant, which shall in no event be less than the Base Rent payable as of the date immediately
preceding the commencement of such Extension Term increased by the Rent Adjustment Percentage
multiplied by such Base Rent. In addition, Landlord may impose a market rent for the parking
rights provided hereunder.




     If, on or before the date which is 120 days prior to the expiration of the Base Term of this
Lease, or the expiration of any prior Extension Term, Tenant has not agreed with Landlord’s
determination of the Market Rate and the rent escalations during such subsequent Extension Term
after negotiating in good faith, Tenant may by written notice to Landlord not later than 120 days
prior to the expiration of the Base Term of this Lease, or the expiration of any then effective
Extension Term, elect arbitration as described in Section 40(b) below. If Tenant does not elect
such arbitration, Tenant shall be deemed to have waived any right to extend, or further extend, the
Term of the Lease and all of the remaining Extension Rights shall terminate.



          (b) Arbitration.




               (i) Within 10 business days of Tenant’s notice to Landlord of its election to arbitrate Market
Rate and escalations, each party shall deliver to the other a proposal containing the Market Rate
and escalations that the submitting party believes to be correct (“Extension Proposal”). If either
party fails to timely submit an Extension Proposal, the other party’s submitted proposal shall
determine the Base Rent and escalations for the Extension Term. If both parties submit Extension
Proposals, then Landlord and Tenant shall meet within 7 days after delivery of the last Extension
Proposal and make a good faith attempt to mutually appoint a single Arbitrator (and defined below)
to determine the Market Rate and escalations. If Landlord and Tenant are unable to



-31-









 




agree upon a single Arbitrator, then each shall, by written notice delivered to the other
within 10 business days after the meeting, select an Arbitrator. If either party fails to timely
give notice of its selection for an Arbitrator, the other party’s submitted proposal shall
determine the Base Rent for the Extension Term. The 2 Arbitrators so appointed shall, within 5
business days after their appointment, appoint a third Arbitrator. If the 2 Arbitrators so
selected cannot agree on the selection of the third Arbitrator within the time above specified,
then either party, on behalf of both parties, may request such appointment of such third Arbitrator
by application to any state court of general jurisdiction in the jurisdiction in which the Premises
are located, upon 10 days prior written notice to the other party of such intent.




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



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



          (c) Rights Personal. Extension Rights are personal to Tenant and are not assignable without
Landlord’s consent, which may be granted or withheld in Landlord’s sole discretion separate and
apart from any consent by Landlord to an assignment of Tenant’s interest in the Lease; provided,
however, a Permitted Assignee shall succeed to such Extension Rights.




          (d) Exceptions. Notwithstanding anything set forth above to the contrary, Extension Rights
shall not be in effect and Tenant may not exercise any of the Extension Rights:




               (i) during any period of time that Tenant is in Default under any provision of this Lease; or



-32-









 





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



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




          (f) Termination. The Extension Rights shall terminate and be of no further force or effect
even after Tenant’s due and timely exercise of an Extension Right, if, after such exercise, but
prior to the commencement date of an Extension Term, (i) Tenant fails to timely cure any default by
Tenant under this Lease; or (ii) Tenant has Defaulted 3 or more times during the period from the
date of the exercise of an Extension Right to the date of the commencement of the Extension Term,
whether or not such Defaults are cured.




     41. Miscellaneous.



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




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




          (c) Financial Information. Tenant shall furnish Landlord with true and complete copies of (i)
Tenant’s most recent audited annual financial statements within 90 days of the end of each of
Tenant’s fiscal years during the Term, (ii) Tenant’s most recent unaudited quarterly financial
statements within 45 days of the end of each of Tenant’s first three fiscal quarters of each of
Tenant’s fiscal years during the Term, (iii) at Landlord’s request from time to time, updated
business plans, including cash flow projections and/or pro forma balance sheets and income
statements, all of which shall be treated by Landlord as confidential information belonging to
Tenant, (iv) corporate brochures and/or profiles prepared by Tenant for prospective investors, and
(v) any other financial information or summaries that Tenant typically provides to its lenders or
shareholders.




          (d) Recordation. Neither this Lease nor a memorandum of lease shall be filed by or on behalf
of Tenant in any public record. Landlord may prepare and file, and upon request by Landlord Tenant
will execute, a memorandum of lease.




          (e) Interpretation. The normal rule of construction to the effect that any ambiguities are to
be resolved against the drafting party shall not be employed in the interpretation of this Lease or
any exhibits or amendments hereto. Words of any gender used in this Lease shall be




-33-









 







held and construed to include any other gender, and words in the singular number shall be held
to include the plural, unless the context otherwise requires. The captions inserted in this Lease
are for convenience only and in no way define, limit or otherwise describe the scope or intent of
this Lease, or any provision hereof, or in any way affect the interpretation of this Lease.




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




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




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




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




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




-34-









 








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



	 	 	 	 	 
	 	TENANT:



PRIMAL, INC.,

a Washington corporation

 	 
	 	By:  	/s/ William F. Daly
 	 
	 	Its: 	Chief Executive Officer 	 
	 
	 	LANDLORD:



ALEXANDRIA REAL ESTATE EQUITIES, INC.

a Maryland corporation

 	 
	 	By:  	/s/ Joel S. Marcus
 	 
	 	Its: 	Chief Executive Officer 	 



-35-









 





	 	 	 
	STATE OF WASHINGTON

	 	 )
	 

	 	 ) ss.
	COUNTY OF KING

	 	 )






     On this 07 day of April, 2000, before me personally appeared William F. Daly,
Jr. , to me known to be the Chief Executive Officer of the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the free and voluntary
act and deed of said corporation, for the uses and purposes therein mentioned, and on oath
stated that he was authorized to execute said instrument and that the seal affixed is the
corporate seal of said corporation.



     IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the day and year
first above written.



	 	 	 	 
	

(Seal or stamp)

	 	/s/Joseph Robinson
	 	 	 
	 	(Signature)	 
	 	 
	 	Joseph Robinson	 
	 	 	 
	 	(Name legibly printed or stamped)	 
	 	Notary Public in and for the State of Washington,
residing at Seattle.	 
	 	My appointment expires 02.09.04	 






	 	 	 
	STATE OF CALIFORNIA

	 	 )
	 

	 	 ) ss.
	COUNTY OF Los Angeles

	 	 )






     On this 10th day of April, 2000, before me personally appeared
Joel S. Marcus to me known to be the Chief Executive Officer of the
corporation that executed the within and foregoing instrument, and acknowledged said instrument
to be the free and voluntary act and deed of said corporation, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument and that the seal
affixed is the corporate seal of said corporation.



     IN WITNESS WHEREOF I have hereunto set my hand and affixed my official seal the day and year
first above written.



	 	 	 	 
	

(Seal or stamp)

	 	/s/ Shelly A. Kroll	 
	 	 	 
	 	(Signature)	 
	 	 
	 	Shelly A. Kroll	 
	 	 	 
	 	(Name legibly printed or stamped)	 
	 	Notary Public in and for the State of California, residing at Los Angeles.	 
	 	My Appointment expires 8/10/02	 






 









 





EXHIBIT A TO LEASE




DESCRIPTION OF PREMISES









 









 





EXHIBIT B TO LEASE




DESCRIPTION OF PROJECT









-2-









 





EXHIBIT C TO LEASE




WORK LETTER





     THIS WORK LETTER dated April 6, 2000 (this “Work Letter”) is made and entered into by and
between ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland corporation (“Landlord”), and PRIMAL,
INC., a Washington corporation (“Tenant”), and is attached to and made a part of the Lease dated
April 6, 2000 (the “Lease”), by and between Landlord and Tenant. Any initially capitalized terms
used but not defined herein shall have the meanings given them in the Lease.


1. General Requirements




     (a) Tenant’s Authorized Representative. Tenant designates William F. Daly, Jr. and
                     (either such individual acting alone, “Tenant’s Representative”) as the only persons
authorized to act for Tenant pursuant to this Work Letter. Landlord shall not be obligated to
respond to or act upon any request, approval, inquiry or other communication (“Communication”) from
or on behalf of Tenant in connection with this Work Letter unless such Communication is in writing
from Tenant’s Representative. Tenant may change either Tenant’s Representative at any time upon
not less than 5 business days advance written notice to Landlord. No period set forth herein for
any approval of any matter by Tenant’s Representative shall be extended by reason of any change in
Tenant’s Representative.



     (b) Landlord’s Authorized Representative. Landlord designates Vin Ciruzzi and Jeff Ryan
(either such individual acting alone, “Landlord’s Representative”) as the only persons authorized
to act for Landlord pursuant to this Work Letter. Tenant shall not be obligated to respond to or
act upon any request, approval, inquiry or other Communication from or on behalf of Landlord in
connection with this Work Letter unless such Communication is in writing from Landlord’s
Representative. Landlord may change either Landlord’s Representative at any time upon not less
than 5 business days advance written notice to Tenant. No period set forth herein for any approval
of any matter by Landlord’s Representative shall be extended by reason of any change in Landlord’s
Representative.



     (c) Architects, Consultants and Contractors. Landlord and Tenant hereby acknowledge and agree
that the architect (the “TI Architect”) for the Tenant Improvements, the general contractor and any
subcontractors for the Tenant Improvements shall be selected by Tenant, subject to Landlord’s
approval, which approval shall not be unreasonably withheld, conditioned or delayed.


2. Tenant Improvements.




     (a) Tenant Improvements Defined. As used herein, “Tenant Improvements” shall mean all
improvements to the Premises desired by Tenant of a fixed and permanent nature. Other
than funding the TI Allowance (as defined below) as provided herein, Landlord shall not have
any obligation whatsoever with respect to the finishing of the Premises for Tenant’s use and
occupancy.



-3-









 





     (b) Tenant’s Space Plans. Tenant shall deliver to Landlord schematic drawings and outline
specifications (the “TI Design Drawings”) detailing Tenant’s requirements for the Tenant
Improvements on or before 60 days’ following the date hereof. Not more than ten 10 business days
thereafter, Landlord shall deliver to Tenant the written objections, questions or comments of
Landlord and the TI Architect with regard to the TI Design Drawings. Tenant shall cause the TI
Design Drawings to be revised to address such written comments and shall resubmit said drawings to
Landlord for approval within 10 business days thereafter. Such process shall continue until
Landlord has approved the TI Design Drawings.



     (c) Working Drawings. Not later than 15 business days following the approval of the TI Design
Drawings by Landlord, Tenant shall cause the TI Architect to prepare and deliver to Landlord for
review and comment construction plans, specifications and drawings for the Tenant Improvements (“TI
Construction Drawings”), which TI Construction Drawings shall be prepared substantially in
accordance with the TI Design Drawings. Tenant shall be solely responsible for ensuring that the
TI Construction Drawings reflect Tenant’s requirements for the Tenant Improvements. Landlord shall
deliver its written comments on the TI Construction Drawings to Tenant not later than 10 business
days after Landlord’s receipt of the same; provided, however, that Landlord may not disapprove any
matter that is consistent with the TI Design Drawings. Tenant and the TI Architect shall consider
all such comments in good faith and shall, within 10 business days after receipt, notify Landlord
how Tenant proposes to respond to such comments. Any disputes in connection with such comments
shall be resolved in accordance with Section 2(d) hereof. Provided that the design reflected in
the TI Construction Drawings is consistent with the TI Design Drawings, Landlord shall approve the
TI Construction Drawings submitted by Tenant. Once approved by Landlord, subject to the provisions
of Section 2(d) below, Tenant shall not materially modify the TI Construction Drawings except as
may be reasonably required in connection with the issuance of the TI Permit (as defined in Section
3(b) below).



     (d) Approval and Completion. Upon any dispute regarding the design of the Tenant
Improvements, which is not settled within 10 business days after notice of such dispute is
delivered by one party to the other, Tenant shall make the final decision regarding the design of
the Tenant Improvements, provided Tenant acts reasonably and such final decision is either
consistent with or a compromise between Landlord’s and Tenant’s positions with respect to such
dispute, provided further that all costs and expenses resulting from any such decision by Tenant
shall be payable by Tenant, as defined in Section 5(d) below. Any changes to the TI Construction
Drawings following Landlord’s and Tenant’s approval of same requested by Tenant shall be processed
as provided in Section 4 hereof.


3. Performance of Tenant’s Work




     (a) Definition of Tenant’s Work. As used herein, “Tenant’s Work” shall mean the work of
constructing the Tenant improvements.



     (b) Commencement and Permitting of Tenant’s Work. Tenant shall commence construction of the
Tenant Improvements upon obtaining a building permit (the “TI Permit”) authorizing the construction
of the Tenant Improvements consistent with the TI Construction



-4-









 




Drawings approved by Landlord. The
cost of obtaining the TI Permit shall be payable by Tenant. Landlord shall assist Tenant in
obtaining the TI Permit. Tenant shall complete Tenant’s work on or before 180 days following the
date hereof.




     (c) Selection of Materials, Etc. Where more than one type of material or structure is
indicated on the TI Construction Drawings approved by Tenant and Landlord, the option will be
within Tenant’s reasonable discretion.


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




     (a) Tenant’s Right to Request Changes. If Tenant shall request changes (“Changes”), Tenant
shall request such Changes by notifying Landlord in writing in substantially the same form as the
AIA standard change order form (a “Change Request”), which Change Request shall detail the nature
and extent of any such Change. Such Change Request must be signed by Tenant’s Representative.
Landlord shall review and approve or disapprove such Change Request within 10 business days
thereafter, provided that Landlord’s approval shall not be unreasonably withheld, conditioned or
delayed.



     (b) Implementation of Changes. If Landlord approves such Change, Tenant may cause the
approved Change to be instituted.


5. Costs




     (a) Budget For Tenant Improvements. Before the commencement of construction of the Tenant
Improvements, Tenant shall obtain a detailed breakdown, by trade, of the costs incurred or which
will be incurred, in connection with the design and construction of Tenant’s Work (the “Budget”).
The Budget shall be based upon the TI Construction Drawings approved by Landlord and shall include
a payment to Landlord of administrative rent (“Administrative Rent”) equal to 5.0% of the TI Costs
(as hereinafter defined) for monitoring and inspecting the construction of Tenant’s Work, which sum
shall be payable by Tenant. Such Administrative Rent shall include, without limitation, all
out-of-pocket costs, expenses and fees incurred by or on behalf of Landlord arising from, out of,
or in connection with, such monitoring of the construction of the Tenant’s Improvements.



     (b) TI Allowance. Landlord shall provide to Tenant a tenant improvement allowance (“TI
Allowance”) of $191,020.50 ($16.50 per rentable square foot of the Premises). The TI Allowance (or
so much thereof as shall have been expended in connection with Tenant’s Work) shall be disbursed
upon substantial completion of Tenant’s Work in a good and workmanlike manner, in accordance with
the TI Construction Drawings and the TI Permit (“Substantial Completion”) and
receipt by Landlord of a Certificate of Substantial Completion in the form of the American
Institute of Architects document G704 executed by the TI Architect and the general contractor, for
the benefit



-5-









 




of Landlord together with a draw request in Landlord’s standard form, containing such
certifications, lien waivers, inspection reports and other matters as Landlord customarily obtains.




     (c) Costs Includable in TI Allowance. The TI Allowance shall be used solely for the payment
of design and construction costs in connection with the construction of the Tenant Improvements,
including, without limitation, the cost of preparing the TI Design Drawings and the TI Construction
Drawings, all costs set forth in the Budget, including Landlord’s Administrative Rent, and the cost
of Changes (collectively, “TI Costs”). Notwithstanding anything to the contrary contained herein,
the TI Allowance shall not be used to purchase any furniture, personal property or other
non-Building System materials or equipment, including, but not be limited to, biological safety
cabinets and other scientific equipment not incorporated into the Improvements.


6. Miscellaneous




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



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



     (c) Counterparts. This Work Letter may be executed in any number of counterparts but all
counterparts taken together shall constitute a single document.



     (d) Governing Law. This Work Letter shall be governed by, construed and enforced in
accordance with the internal laws of the state in which the Premises are located, without regard to
choice of law principles of such State.



     (e) Time of the Essence. Time is of the essence of this Work Letter and of each and all
provisions thereof.



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



     (g) Severability. If any term or provision of this Work Letter is declared invalid or
unenforceable, the remainder of this Work Letter shall not be affected by such determination and
shall continue to be valid and enforceable.



     (h) Merger. All understandings and agreements, oral or written, heretofore made between the
parties hereto and relating to Tenant’s Work are merged in this Work Letter, which alone (but
inclusive of provisions of the Lease incorporated herein and the final approved
constructions drawings and specifications prepared pursuant hereto) fully and completely
expresses the agreement between Landlord and Tenant with regard to the matters set forth in this
Work Letter.



-6-









 





     (i) Entire Agreement. This Work Letter is made as a part of and pursuant to the Lease and,
together with the Lease, constitutes the entire agreement of the parties with respect to the
subject matter hereof. This Work Letter is subject to all of the terms and limitation set forth in
the Lease, and neither party shall have any rights or remedies under this Work Letter separate and
apart from their respective remedies pursuant to the Lease.



     IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to be effective on the
date first above written.



	 	 	 	 	 
	 	TENANT:



PRIMAL, INC.,

a Washington corporation

 	 
	 	By:  	/s/ William F. Daly, Jr.
 	 
	 	Its: 	Chief Executive Officer 	 
	 
	 	LANDLORD:



ALEXANDRIA REAL ESTATE EQUITIES, INC.

a Maryland corporation

 	 
	 	By:  	/s/ Joel S. Marcus
 	 
	 	Its: 	Chief Executive Officer 	 



-7-









 






	 	 	 	 	 



EXHIBIT D TO LEASE




ACKNOWLEDGMENT OF COMMENCEMENT DATE



This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this 6th day of April, 2000, between Alexandria
Real Estate Equities, Inc., a Maryland corporation (“Landlord”), and Primal, Inc., a Washington
corporation (“Tenant”), and is attached to and made a part of the Lease dated April 6, 2000 (the
“Lease”), by and between Landlord and Tenant. Any initially capitalized terms used but not defined
herein shall have the meanings given them in the Lease.



Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease, that the
Commencement Date of the Base Term of the Lease is       
              ,
___ and the termination date of the
Base Term of the Lease shall be midnight on                     ,___.



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




	 	 	 	 	 
	TENANT:



PRIMAL, INC., a Washington corporation

 	 	 
	By:  	 	 	 
	 	 	 	 
	 	Its:
	 	 	 
	 
	LANDLORD:



ALEXANDRIA REAL ESTATE EQUITIES, INC.

a Maryland corporation

 	 	 
	By:  	 	 	 
	 	 	 	 
	 	Its:
	 	 	 



-8-









 






	 	 	 	 	 



EXHIBIT E TO LEASE




Rules and Regulations





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



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



     3. Except for seeing-eye dogs, no animals shall be allowed in the offices, halls, or corridors
in the Project.



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



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



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



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



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



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



     10. Tenant shall not cause any unnecessary labor by reason of Tenant’s carelessness or
indifference in the preservation of good order and cleanliness. Landlord shall not be responsible
to



-9-









 




Tenant for any loss of property on the Premises, however occurring, or for any damage done to
the effects of Tenant by the janitors or any other employee or person.




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



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



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



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



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



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



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



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



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



-10-









 





EXHIBIT F TO LEASE




TENANT’S PERSONAL PROPERTY



None, except as set forth below:




-11-









 








EXHIBIT G TO LEASE




ESTOPPEL CERTIFICATE




     THIS TENANT ESTOPPEL CERTIFICATE (“Certificate”), dated as of                     ,___, is executed by
                                         (“Tenant”) in favor of [Buyer], a                                
                             , together with its
nominees, designees and assigns (collectively, “Buyer”), and in favor of                                         , together
with its nominees, designees and assigns (collectively, “Lender”).



RECITALS




     A. Buyer and                      (“Landlord”) have entered into that certain Purchase and Sale
Agreement and Joint Escrow Instructions, dated as of     
             
   , 20___ (the “Purchase Agreement”),
whereby Buyer has agreed to purchase, among other things, the improved real property located in the
City of              
       , County of     
              
  , State of          
           ,
more particularly described on
Exhibit A attached to the Purchase Agreement (the “Property”).



     B. Tenant and Landlord have entered into that certain Lease Agreement, dated as of
                     (together with all amendments, modifications, supplements, guarantees and
restatements thereof, the “Lease”), for a portion of the Property.



     C. Pursuant to the Lease, Tenant has agreed that upon the request of Landlord, Tenant would
execute and deliver an estoppel certificate certifying the status of the Lease.



     D. In connection with the Purchase Agreement, Landlord has requested that Tenant execute this
Certificate with an understanding that Lender will rely on the representations and agreements below
in granting to Buyer a loan.



     NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer and Lender as follows:



     1. Lease. Attached hereto as Exhibit B is a true, correct and complete copy of the
Lease, including the following amendments, modifications, supplements, guarantees and restatements
thereof, which together represent all of the amendments, modifications, supplements, guarantees and
restatements thereof: ______________________________
____________________________________________________________________________________________

(If none, please state “None.”)



     2. Premises. Pursuant to the Lease, Tenant leases those certain premises (the “Premises”)
consisting of approximately                      rentable square feet within the Property, as more
particularly described in the Lease. In addition, pursuant to the terms of the Lease, Tenant has
the [non-exclusive] right to use                      parking spaces/the parking area] located on the Property
during the term of the Lease.



-12-









 






     3. Full Force of Lease. The Lease has been duly authorized, executed and delivered by Tenant,
is in full force and effect, has not been terminated, and constitutes a legally valid instrument,
binding and enforceable against Tenant in accordance with its terms, subject only to applicable
limitations imposed by laws relating to bankruptcy and creditor’s rights.



     4. Complete Agreement. The Lease constitutes the complete agreement between Landlord and
Tenant for the Premises and the Property, and except as modified by the Lease amendments noted
above (if any), has not been modified, altered or amended.



     5. Acceptance of Premises. Tenant has accepted possession of and is currently occupying the
Premises.



     6. Lease Term. The term of the Lease commenced on                      and ends on                     ,
subject to the following options to extend:                                                                 . (If none, please state “None.”)





     7. Purchase Rights. Tenant has no option, right of first refusal, right of first offer, or
other right to acquire or purchase all or any portion of the Premises or all or any portion of, or interest in, the Property, except as follows:                                                                       

______________________________________________________________________________________________________________.

(If none, please state “None.”)



     8. Rights of Tenant. Except as expressly stated in this Certificate, Tenant:



          (a) has no right to renew or extend the term of the Lease;




          (b) has no option or other right to purchase all or any part of the Premises or all or any
part of the Property; and




          (c) has no right, title, or interest in the Premises, other than as Tenant under the Lease.




     9. Rent.



          (a) The obligation to pay rent under the Lease commenced on                     . The rent under
the Lease is current, and Tenant is not in default in the performance of any of its obligations
under the Lease.




          (b) Tenant is currently paying base rent under the Lease in the amount of $                     per month.
Tenant has not received and is not presently entitled to any abatement, refunds, rebates,
concessions or forgiveness of rent or other charges, free rent, partial rent, or credits, offsets
or reductions in rent, except as follows:
___________

________________________________________________________________________________________________________________

________________________________________________________________________________________________________________.

(If none, please state “None.”)




-13-









 





        
  (c) Tenant’s estimated share of Net Building Expenses, as defined in the Lease, is _____% and
is currently being paid at the rate of $          
           per month, payable to:
                
              
                  
                 
               
                 
                 
            
                  .





          (d) There are no existing defenses or offsets against rent due or to become due under the
terms of the Lease, and there presently is no default or other wrongful act or omission by Landlord
under the Lease or otherwise in connection with Tenant’s occupancy of the Premises, nor is there a
state of facts which with the passage of time or the giving of notice or both could ripen into a
default on the part of Tenant, or, to the best knowledge of Tenant, could ripen into a default on
the part of Landlord under the Lease, except as follows:      
            
               
       
               
              
           
               
            
            
            
            
            
            
            
               
               
   
                 
              .
(If
none, please state “None.”)




     10. Security Deposit. The amount of Tenant’s security deposit held by Landlord under the
Lease is $                    



     11. Prepaid Rent. The amount of prepaid rent, separate from the security deposit, is
$                    , covering the period from                      to                     .



     12. Insurance. All insurance, if any, required to be maintained by Tenant under the Lease is
presently in effect.



     13. Pending Actions. There is not pending or, to the knowledge of Tenant, threatened against
or contemplated by the Tenant, any petition in bankruptcy, whether voluntary or otherwise, any
assignment for the benefit of creditors, or any petition seeking reorganization or arrangement
under the federal bankruptcy laws or those of any state.



     14. Tenant Improvements. As of the date of this Certificate, to the best of Tenant’s
knowledge, Landlord has performed all obligations required of Landlord pursuant to the Lease; no
offsets, counterclaims, or defenses of Tenant under the Lease exist against Landlord; and no events
have occurred that, with the passage of time or the giving of notice or both, would constitute a
basis for offsets, counterclaims, or defenses against Landlord, except as
follows:               
                
                 
                 
                  
                  
      
                 
                 
                  
                  
        
                  
                  
                  
                  
      
                  
                 
                
                 
       . 
(If none, please state “None.”)



     15. Assignments by Landlord. Tenant has received no notice of any assignment, hypothecation
or pledge of the Lease or rentals under the Lease by Landlord. Tenant hereby consents to an
assignment of the Lease and rents to be executed by Landlord to Buyer or Lender in connection with
the Loan and acknowledges that said assignment does not violate the provisions of the Lease.
Tenant acknowledges that the interest of the Landlord under the Lease is to be assigned to Lender
solely as security for the purposes specified in said assignment and Lender shall have no duty,
liability or obligation whatsoever under the Lease or any extension or renewal thereof, either by
virtue of said assignment or by any subsequent receipt or collection of rents thereunder, unless
Lender shall specifically undertake such liability in writing. Tenant agrees that upon receipt of
a



-14-









 




written notice from Buyer or Lender of a default by Landlord under the Loan, Tenant will
thereafter pay rent to Buyer or Lender in accordance with the terms of the Lease.




     16. Assignments by Tenant. Tenant has not sublet or assigned the Premises or the Lease or any
portion thereof to any sublessee or assignee. No one except Tenant and its employees will occupy
the Premises. The address for notices to be sent to Tenant is as set forth in the Lease.



     17. Environmental Matters. The operation and use of the Premises does not involve the
generation, treatment, storage, disposal or release into the environment of any hazardous
materials, regulated materials and/or solid waste, except those used in the ordinary course of
operating for the Permitted Use, as defined in the Lease, or otherwise used in accordance with all
applicable laws.



     18. Succession of Interest. Tenant agrees that, in the event Buyer or Lender succeeds to the
interest of Landlord under the Lease:



          (a) Buyer or Lender shall not be liable for any act or omission, of any prior landlord
(including Landlord);




          (b) Buyer or Lender shall not be liable for the return of any security deposit unless such
Buyer or Lender has assumed such obligation pursuant to Section 6 of the Lease;




          (c) Buyer or Lender shall not be bound by any rent or additional rent which Tenant might have
prepaid under the Lease for more than the current month;




          (d) Buyer or Lender shall not be bound by any amendments or modifications of the Lease made
without the prior consent of Buyer or Lender;




          (e) Buyer or Lender shall not be subject to any offsets or defenses which Tenant might have
against any prior landlord (including Landlord); and




          (f) Buyer or Lender shall not be liable under the Lease to Tenant for the performance of
Landlord’s obligations under the Lease beyond Buyer or Lender’s interest in the Property.




     19. Notice of Default. Tenant agrees to give Buyer and Lender a copy of any notice of default
under the Lease served upon Landlord at the same time as such notice is given to Landlord. Tenant
further agrees that if Landlord shall fail to cure such default within the applicable grace period,
if any, provided in the Lease, then Buyer or Lender shall have an additional 60 days within which
to cure such default, or if such default cannot be cured within such 60-day period, such 60-day
period shall be extended so long as Buyer or Lender has commenced and is diligently pursuing the
remedies necessary to cure such default, including, but not limited to, commencement of foreclosure
proceedings, if necessary to effect such cure, in which event the Lease shall not be terminated
while such remedies are being pursued.



-15-









 





     20. Notification by Tenant. From the date of this Certificate and continuing until
                    , Tenant agrees to immediately notify Buyer and Lender, in writing by registered or
certified mail, return receipt requested, at the following addresses, on the occurrence of any
event or the discovery of any fact that would make any representation contained in this Certificate
inaccurate:



	 	 	 	 	 
	If To Buyer:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	With A Copy To:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	If To Lender:
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 






     Tenant makes this Certificate with the knowledge that it will be relied upon by Buyer and
Lender in agreeing to purchase the Property.



[Signature appears on next page]




-16-









 








     Tenant has executed this Certificate as of the date first written above by the person named
below, who is duly authorized to do so.



	 	 	 	 	 	 	 
	TENANT:
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	a	 	 	 	 
	 

	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 
	 

	 	 	 

	 	 
	 

	 	 	Name: 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	Its:	 	 	 
	 

	 	 	 	 

	 	 






-17-









 






EXHIBIT A TO ESTOPPEL CERTIFICATE




Legal Description




-18-









 





EXHIBIT B TO ESTOPPEL CERTIFICATE




Copy of Lease




-19-









 





EXHIBIT H TO LEASE




SUBORDINATION, NON-DISTURBANCE AND

ATTORNMENT AGREEMENT




     THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT is made and entered into as of
                     (“Agreement”), by and between                                                     
     , a
                     together with its nominees, designees and assigns (collectively,
“Landlord”),                    , a                      (“Tenant”), and                      a
                     (“Mortgagee”).



     WHEREAS, Mortgagee is making a loan to Landlord and others evidenced by a certain promissory
note (“Note”), and secured by, among other things, a deed of trust/mortgage to be recorded prior
hereto in the public records of the City of                     , County of                     , State of                     
(“Mortgage”) constituting a lien upon the real property described in Exhibit A hereto (the
“Real Property”); and



     WHEREAS,                                                             
and Tenant have entered into a Lease Agreement dated as of
                                ,___ (“Lease”), for certain leased premises encompassing
                                        located in                     , containing approximately
                                         net square feet (hereinafter collectively referred to as “Premises”); and



     WHEREAS, the Lease is subordinate to the Mortgage and to the right, title, and interests of
Mortgagee thereto and thereunder; and



     WHEREAS, Mortgagee wishes to obtain from Tenant certain assurances that Tenant will attorn to
Mortgagee in the event of a foreclosure by Mortgagee or the exercise of other rights under the
Mortgage; and



     WHEREAS, Tenant wishes to obtain from Mortgagee certain assurances that Tenant’s possession of
the Premises will not, subject to the terms and conditions of this Agreement, be disturbed by
reason of a foreclosure of the lien of the Mortgage on the Real Property; and



     WHEREAS, Tenant and Mortgagee are both willing to provide such assurances to each other upon
and subject to the terms and conditions of this Agreement.



     NOW, THEREFORE, in consideration of the above, the mutual promises hereinafter set forth, and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto mutually agree as follows:



     1. Affirmation. Tenant hereby agrees that the Lease now is and shall be subject and
subordinate in all respects to the Mortgage and to all renewals, modifications and extensions
thereof until such time that the Mortgage is released, satisfied or otherwise discharged, subject
to the terms



-20-









 




and conditions of this Agreement. Landlord and Tenant hereby affirm that the Lease is in full
force and effect and that the Lease has not been modified or amended. Mortgagee hereby confirms
that it is the holder of the Note and the beneficiary of the Mortgage and has full power and
authority to enter into this Agreement.




     2. Attornment and Non-Disturbance.



          (a) So long as Tenant is not in default under the Lease (beyond Tenant’s receipt of notice
from Landlord and any grace period granted Tenant under the Lease to cure such default) as would
entitle the Landlord to terminate the Lease or would cause, without any further action of the
Landlord, the termination of the Lease or would entitle the Landlord to dispossess Tenant
thereunder then Mortgagee agrees with Tenant that in the event the interest of Landlord shall be
acquired by Mortgagee or in the event Mortgagee comes into possession of or acquires title to the
Real Property by reason of foreclosure or foreclosure sale or the enforcement of the Mortgage or
the Note or other obligation secured thereby or by a conveyance in lieu thereof, or as a result of
any other means then:




               (i) Subject to the provisions of this Agreement, Tenant’s occupancy and possession of the
Premises and Tenant’s rights and privileges under the Lease or any extensions, modifications or
renewals thereof or substitutions therefor (in accordance with the Lease and the Mortgage) shall
not be disturbed, diminished or interfered with by Mortgagee during the term of the Lease (or any
extensions or renewals thereof provided for in the Lease);



               (ii) Mortgagee will not join Tenant as a party defendant in any action or proceeding for the
purpose of terminating Tenant’s interest and estate under the Lease because of any default under
the Mortgage; and



               (iii) The Lease shall continue in full force and effect and shall not be terminated except in
accordance with the terms of the Lease.



          (b) Tenant shall be bound to Mortgagee under all of the terms, covenants and conditions of the
Lease for the balance of the term thereof remaining (and any extensions or renewals thereof which
may be effected in accordance with any option contained in the Lease) with the same force and
effect as if Mortgagee were the landlord under the Lease, and Tenant does hereby agree to attorn to
Mortgagee as its landlord, said attornment to be effective and self-operative without the execution
of any other instruments on the part of either party hereto immediately upon Mortgagee’s succeeding
to the interest of Landlord under the Lease. Upon request of Lender, Tenant shall execute and
deliver to Lender an agreement reaffirming such attornment.




          (c) If the Mortgage is foreclosed and any party (“Purchaser”) other than Mortgagee purchases
the Premises and succeeds to the interest of Landlord under the Lease, Tenant shall likewise be
bound to Purchaser and Tenant hereby covenants and agrees to attorn to Purchaser in accordance with
all of the provisions of this Agreement; provided, however, that Purchaser shall
have transmitted to Tenant a written document in recordable form, whereby Purchaser agrees to
recognize Tenant as its lessee under the Lease and agrees to be directly bound to Tenant for the




-21-









 







performance and observance of all the terms and conditions of the Lease required to be
performed or observed by Landlord thereunder, subject to and in accordance with the terms of this
Agreement.




          (d) Mortgagee agrees that if Mortgagee shall succeed to the interest of Landlord under the
Lease as above provided, Mortgagee shall be bound to Tenant under all of the terms, covenants, and
conditions of the Lease, and Tenant shall, from and after Mortgagee’s succession to the interest of
Landlord under the Lease, have the same remedies against Mortgagee that Tenant might have had under
the Lease against Landlord if Mortgagee had not succeeded to the interest of Landlord;
provided, however, that Mortgagee (and Purchaser, as the case may be) shall not be:




               (i) liable for any act or omission of any prior lessor (including Landlord) occurring prior to
the date that Mortgagee or Purchaser acquired title to the Premises;



               (ii) subject to any offsets, counterclaims or defenses which Tenant might have against any
prior lessor (including Landlord);



               (iii) bound by any previous payment of rent or additional rent for a period greater than 1
month unless such prepayment shall have been consented to in writing by Mortgagee;



               (iv) bound by any amendment or modification of the Lease made after the date of this Agreement
and prior to the date Mortgagee or Purchaser succeeds to the interest of Landlord without
Mortgagee’s written consent;



               (v) liable to Tenant for any loss of business or any other indirect or consequential damages
from whatever cause; provided, however, no inference shall be drawn from this
clause (v) that Tenant would otherwise be entitled (or not entitled) to recover for loss of
business or any other indirect or consequential damages; or



               (vi) liable for the return of any security deposit unless such deposit has been paid over to
the Mortgagee.


The foregoing shall not be construed to modify or limit any right Tenant may have at law or in
equity against Landlord or any other prior owner of the Real Property.




     3. Notices. All notices required or permitted to be given pursuant to this Agreement shall be
in writing and shall be sent postage prepaid, by certified mail, return receipt requested, or other
nationally utilized overnight delivery service. All notices shall be deemed delivered when
received or refused. Rejection or other refusal to accept or inability to deliver because of
changed address of which no notice has been given shall constitute receipt of the notice, demand or
request sent. Any such notice if given to Tenant shall be addressed as follows:


                                                            

                                                            

                                                            

                                                            





-22-









 








     if given to Landlord shall be addressed as follows:


c/o Alexandria Real Estate Equities, Inc.

135 N. Los Robles Avenue

Suite 250

Pasadena, California 91101

Attention: General Counsel




     if given to Mortgagee shall be addressed as follows:


                                                            

                                                            

                                                            

                                                            




     4. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The words “foreclosure” and
“foreclosure sale” as used herein shall be deemed to also include the acquisition of Landlord’s
estate in the Real Property by voluntary deed, assignment or other conveyance or transfer in lieu
of foreclosure.



     5. Modifications to Lease. Tenant shall not modify or amend the Lease or terminate the same
without Mortgagee’s prior written consent. If Mortgagee fails to provide Tenant with a written
approval of the proposed modification, amendment or termination within 10 business days after
notice to Mortgagee of such proposal, then Mortgagee shall be deemed to have rejected such
proposal.



     6. Additional Agreements. Tenant agrees that:



          (a) it shall give Mortgagee copies of all notices of default and requests for approval or
consent by Landlord that Tenant gives to Landlord pursuant to the Lease in the same manner as they
are given to Landlord and no such notice or other communication shall be deemed to be effective
until a copy is given to Mortgagee;




          (b) in all provisions of the Lease where Landlord is indemnified, the reference to Landlord as
an indemnitee shall be deemed to include Mortgagee and any Purchaser and such agreement of
indemnification shall survive the repayment of the loan secured by the Mortgage and, to the extent
provided in the Lease, the expiration or termination of the Lease;




          (c) Tenant shall name Mortgagee and any Purchaser as additional insureds and loss payees, as
applicable and appropriate, on all insurance policies required by the Lease;




          (d) this Agreement satisfies any condition or requirement in the Lease relating to the
granting of a non-disturbance agreement by Mortgagee, and if there are inconsistencies between




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the terms and provisions of this Agreement and the terms and provisions of the Lease dealing
with non-disturbance by Mortgagee, the terms and provisions hereof shall be controlling; and




          (e) Mortgagee shall have no liability under the Lease until Mortgagee succeeds to the rights
of the Landlord under the Lease, and then only during such period as Mortgagee is the landlord At
all times during which Mortgagee is liable under the Lease, Mortgagee’s liability shall be limited
to Mortgagee’s interest in the Real Property.




     7. Mortgagee Cure Rights. If Landlord shall have failed to cure any default within the time
period provided for in the Lease (including any applicable notice and grace periods) and Tennant
exercises any right to terminate the Lease, Mortgagee shall have an additional 30 days within which
to cure such default, or if such default cannot by the exercise of reasonable efforts by Mortgagee
be cured within such period, then such additional time as may be reasonable necessary to effect
such a Cure (including, if necessary, sufficient time to complete foreclosure proceedings) provided
that Mortgagee shall commence and thereafter diligently pursue remedies to cure such default. The
Lease shall not be terminated (i) while such remedies are being diligently pursued or (ii) based
upon a default which is personal to Landlord and therefore not susceptible to cure by Mortgagee or
which requires possession of the Premises to cure. Mortgagee shall in no event be obligated to
cure any such default by Landlord unless it forecloses. Nothing in this Section 7 shall affect any
of Tenant’s termination rights under the Lease due to casualty or condemnation.



     8. Direction to Pay. Landlord hereby directs Tenant and Tenant agrees to make all payments of
amounts owed by Tenant under the Lease directly to Mortgagee from and after receipt by Tenant of
notice from Mortgagee directing Tenant to make such payments to Mortgagee. (As between Landlord
and Mortgagee, the foregoing provision shall not be construed to modify any rights of Landlord
under any provisions of the Mortgage or any other instrument securing the Note).



     9. Conditional Assignment. With reference to any assignment by Landlord of Landlord’s
interest in the Lease, or the rents payable thereunder, conditional in nature or otherwise, which
assignment is made to Mortgagee, Tenant agrees that the execution thereof by Landlord, and the
acceptance thereof by Mortgagee, shall never be treated as an assumption by Mortgagee of any of the
obligations of Landlord under the Lease unless and until Mortgagee shall have succeeded to the
interest of Landlord. The foregoing sentence shall not affect any of Tenant’s rights against
Landlord under the Lease.



[Signatures on next page]




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     IN WITNESS WHEREOF, the parties have caused this Agreement to be properly executed by their
duly authorized representatives as of the date first above written.



	 	 	 	 	 	 	 
	 
	 	
	 	 

	 	 
	TENANT:
	 	 	 	 	 	 
	 

	 	a	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 
	 

	 	 	 
	 	 
	 
	 	 	Its:	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	LANDLORD:	 	[INSERT APPROPRIATE SIGNATURE BLOCK]	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	MORTGAGEE:
	 	 	 	 	 	 
	 

	 	a 	 

	 	 
	 

	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	By: 	 	 	 	 
	 

	 	 	 

	 	 
	 

	 	 	Name: 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	Its: 	 	 	 	 
	 

	 	 	 	 

	 	 






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EXHIBIT A TO SUBORDINATION AGREEMENT




Legal Description





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