Filed by Bowne Pure Compliance






Exhibit 10.1




					
	
	 	AIR COMMERCIAL REAL ESTATE ASSOCIATION
	 	 
	 
	 	STANDARD MULTI-TENANT OFFICE LEASE — NET	 	 






1. Basic Provisions (“Basic Provisions”).




1.1
Parties: This Lease (“Lease”),
dated for reference purposes only September 11, 2008, is made by and between AG/Touchstone TP, LLC, a Delaware
limited liability company (“Lessor”) and Amicus Therapeutics, Inc., a Delaware corporation
(“Lessee“), (collectively the “Parties”,
or individually a “Party”).



1.2(a) Premises: That certain portion of the Project (as defined below), known as Suite
Number(s) 200,  * floor(s), consisting of approximately 7,668 rentable square feet and approximately
6,498 useable square feet(“Premises”). The Premises are located at: 11099 North Torrey Pines Road,
in the City of San Diego (La Jolla), County of San Diego, State of
California, with zip code 92037.
In addition to Lessee’s rights to use and occupy the Premises as hereinafter specified. Lessee
shall have non-exclusive rights to the Common Areas (as defined in Paragraph 2.7 below) as
hereinafter specified, but shall not have any rights to the roof, the exterior walls or, except as
reasonably needed for Lessee’s cables, wires, and conduits, the area above the dropped ceilings,
or the utility raceways of the building containing the Premises (“Building”) or to any other
buildings in the Project. The Premises, the Building, the Common Areas, the land upon which they
are located, along with all other buildings and improvements thereon, are herein collectively
referred to as the “Project”. The Project consists of approximately 91,866 rentable square feet.
(See also Paragraph 2) “*” means “see
addendum”



1.2(b) Parking: * unreserved and * reserved vehicle parking spaces at a monthly cost of
$ * per unreserved space and $ * per reserved space. (See
Paragraph 2.6)



1.3
Term: See addendum years and see addendum months
(“Original Term”) commencing see addendum
(“Commencement Date”) and ending see addendum (“Expiration Date”). (See also Paragraph 3)



1.4 Early Possession: N/A (“Early Possession Date”). (See also Paragraphs 3.2 and 3.3)



1.5 Base Rent: $ * per month (“Base Rent)”, payable on the first day of each month commencing
*. (See also Paragraph 4)



þ If this box is checked, there are provisions in this Lease for the Base Rent to be
adjusted. See Paragraph Addendum.



1.6 Lessee’s Share of Operating Expenses: eight and 35/100 percent (8.35%) (“Lessee’s Share”).
Lessee’s Share has been calculated by dividing the approximate rentable square footage of the
Premises by the total approximate square footage of the rentable space contained in the Project and
shall not be subject to revision except in connection with an actual change in the size of the
Premises or a change in the space available for lease in the Project.




1.7 Base Rent and Other Monies Paid Upon Execution:




	 	(a)	 	Base Rent: $22,
620.60 for the period first full calendar month.

	 
	 	(b)	 	Operating Expenses:
$9,000.00 for the period first full calendar month.

	 
	 	(c)	 	Security Deposit:
$                     (“Security Deposit”). (See also Paragraph 5)

	 
	 	(d)	 	Parking: $0.00 for the period                     .

	 
	 	(e)	 	Other: $0.00 for                     .

	 
	 	(f)	 	Total Due Upon Execution of this Lease: $31, 620.60.







1.8 Agreed Use: * (See also Paragraph 6)



			
	                    
	 	                    
	 
	                    
	 	                    
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	 	INITIALS
	 	 	 
	©2002 — AIR COMMERCIAL REAL ESTATE ASSOCIATION
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1.9
Insuring Party. Lessor is the “Insuring Party”. (See also Paragraph 8)



1.10 Real Estate Brokers: (See also Paragraph 15)



(a) Representation: The following real estate brokers (the “Brokers”) and brokerage
relationships exist in this transaction (check
applicable boxes):



þ CB/Richard Ellis represents Lessor exclusively (“Lessor’s Broker”);

þ Irving Hughes represents Lessee exclusively (“Lessee’s Broker”); or

o
                     represents both Lessor and Lessee (“Dual Agency”).




(b) Payment to Brokers: Upon execution and delivery of this Lease by both Parties,
Lessor shall pay to the Brokers the brokerage fee agreed to in a separate written agreement (or if there is no such agreement, the
sum of
                     or                     % of the total Base Rent for the brokerage services rendered by the Brokers).



1.11 Guarantor. The obligations of the Lessee under this Lease shall be guaranteed by N/A (“Guarantor”). (See also Paragraph 37)



1.12 Business Hours for the Building: * a.m. to * p.m., Mondays through Fridays (except Building
Holidays) and * a.m. to * p.m. on Saturdays (except Building Holidays). “Building Holidays” shall mean the dates of
observation of New Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day, Christmas Day, and
                                        .



1.13 Lessor Supplied Services. Notwithstanding the provisions of Paragraph 11.1, Lessor is NOT obligated to provide the following:



þ
Janitorial services inside Premises.

o Electricity

o Other (specify):                                         




1.14 Attachments. Attached hereto are the following, all of which constitute a part of this Lease:



þ
an Addendum consisting of Paragraphs
                     through                     ;

þ a plot plan depicting the Premises;

þ a current set of the Rules and Regulations;

o a Work Letter;

o a janitorial schedule;

o other (specify):                                         




2. Premises.




2.1
Letting. Lessor hereby leases to Lessee, and Lessee hereby leases from Lessor, the
Premises, for the term, at the rental, and upon all of the terms, covenants and conditions set
forth in this Lease. Unless otherwise provided herein, any statement of size set forth in this
Lease, or that may have been used in calculating Rent, is an approximation which the Parties agree
is reasonable and any payments based thereon are not subject to revision whether or not the actual
size is more or less. Note: Lessee is advised to verify the actual size prior to executing this
Lease.



2.2 Condition. Lessor shall deliver the Premises to Lessee in a clean condition on the
Commencement Date or the Early Possession Date, whichever first
occurs (“Start Date”), and warrants
that (1) the existing electrical, plumbing, fire sprinkler, lighting, heating, ventilating and air
conditioning systems (including single-pass air)
(“HVAC”), and all other items which the Lessor is
obligated to construct pursuant to the Work Letter attached hereto, if any, other than those
constructed by Lessee, shall be in good operating condition on said date and for a period of one
year thereafter, that (2) the structural elements of the roof, bearing walls and foundation of the
Unit shall be free of material defects, and that (3) to
Lessor’s actual knowledge, the Premises
do not contain hazardous levels of any mold or fungi defined as toxic under applicable state or
federal law.



2.3 Compliance. Lessor warrants that to the best of its knowledge the improvements
comprising the Premises and the Common Areas comply with the building
codes that were in effect at
the time that each such improvement, or portion thereof, was
constructed, and also with all
applicable laws, covenants or restrictions of record, regulations, and ordinances (“Applicable
Requirements”) in effect on the Start Date. As used
herein, “Applicable Requirements” means all laws,
covenants, or restrictions of record, regulations, and ordinances applicable to the Premises.
Said warranty does not apply to the use to which Lessee will put the Premises, modifications
which may be required by the Americans with Disabilities Act or any similar laws as a result of
Lessee’s particular use (see Paragraph 49), or to any Alterations or Utility Installations (as
defined in Paragraph 7.3(a)) made or to be made by Lessee. NOTE: Lessee is responsible for
determining whether or not the zoning and other Applicable Requirements are appropriate for
Lessee’s intended use, and acknowledges that past uses of the Premises may no longer be allowed.
If the Premises do not comply with said warranty or do not comply with Applicable Requirements on
the Commencement Date, Lessor shall, except as otherwise provided, promptly after receipt of
written notice from Lessee setting forth with specificity the nature and extent of such
non-compliance, rectify the same. If the Applicable Requirements are hereafter changed so as to
require during the term of this Lease the construction of an addition to or an alteration of the
Premises, the remediation of any Hazardous Substance, or the reinforcement or other physical
modification of the Premises (“Capital Expenditure”), Lessor and Lessee shall allocate the cost of
such work as follows:



(a) Subject to Paragraph 2.3(c) below, if such Capital Expenditures are required as a result
of the specific and unique use of the Premises by Lessee as compared with uses by tenants in
general, Lessee shall be fully responsible for the cost thereof, provided, however that if such
Capital Expenditure is required during the last 2 years of this Lease and the cost thereof exceeds
6 months’ Base Rent, Lessee may instead terminate this Lease unless Lessor notifies Lessee, in
writing, within 10 days after receipt of Lessee’s termination notice that Lessor has elected to pay
the difference between the actual cost thereof and the amount equal to 6 months’ Base Rent. If
Lessee elects termination, Lessee shall immediately cease


				
	                    	 	 	                    
	 
	                    	 	 	                    
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the use of
the Premises which requires such Capital Expenditure and deliver to
Lessor written notice specifying a termination date at least
90 days thereafter. Such termination date shall, however, in no event be earlier
than the last day that Lessee could legally utilize the Premises without commencing such Capital Expenditure.


(b) If such Capital Expenditure is not the result of the specific and unique use of the
Premises by Lessee (such as, governmentally mandated seismic modifications), then Lessor shall pay
for such Capital Expenditure and Lessee shall only be obligated to pay, each month during the
remainder of the term of this Lease, on the date that on which the Base Rent is due, an amount
equal to the amount 44th of the portion of such costs reasonably attributable to the Premises
multiplied by a fraction, the numerator of which is 1 and the denominator of which is the number of
months in the useful life of such Capital Expenditure. Lessee shall pay Interest on the balance but
may prepay its obligation at any time. If, however, such Capital Expenditure is required during
the last 2 years of this Lease or if Lessor reasonably determines that it is not economically
feasible to pay its share thereof, Lessor shall have the option to terminate this Lease upon 90
days prior written notice to Lessee unless Lessee notifies Lessor, in writing, within 10 days after
receipt of Lessor’s termination notice that Lessee will pay for
such Capital Expenditure. If Lessor
does not elect to terminate, and fails to tender its share of any such Capital Expenditure, Lessee
may advance such funds and deduct same, with interest, from Rent until Lessor’s share of such costs
have been fully paid. If Lessee is unable to finance Lessor’s share, or if the balance of the Rent
due and payable for the remainder of this Lease is not sufficient to fully roimburse Lessee on an
offset basis, Lessee shall have the right to terminate this Lease upon 30 days written notice to
Lessor.



(c) Notwithstanding
the above, the provisions concerning Capital Expenditures are intended to
apply only to non-voluntary, unexpected, and new Applicable Requirements. If the Capital
Expenditures are instead triggered by Lessee as a result of an actual or proposed change in use,
change in intensity of use other than the Agreed Use, or modification
to the Premises then, and in
that event, Lessee shall either: (i) immediately cease such changed use or intensity of use and/or
take such other steps as may be necessary to eliminate the requirement for such Capital
Expenditure, or (ii) complete such Capital Expenditure at its own expense. Lessee shall not have
any right to terminate this Lease.



2.4 Acknowledgements. Lessee acknowledges that: (a) Lessee has been advised by Lessor
and/or Brokers to satisfy itself with respect to the condition of the Premises (including but not
limited to the electrical, HVAC and fire sprinkler systems, security, environmental aspects, and
compliance with Applicable Requirements), and their suitability for Lessee’s intended use, (b)
Lessee has made such investigation as it deems necessary with reference to such matters and assumes
all responsibility therefor as the same relate to its occupancy of the Premises, and (c) neither
Lessor, Lessor’s agents, nor Brokers have made any oral or written representations or warranties
with respect to said matters other than as set forth in this Lease. In addition, Lessor
acknowledges that: (i) Brokers have made no representations, promises or warranties concerning
Lessee’s ability to honor the Lease or suitability to occupy the Premises, and (ii) it is Lessor’s
sole responsibility to investigate the financial capability and/or suitability of all proposed
tenants.



2.5 Lessee as Prior Owner/Occupant. The warranties made by Lessor in Paragraph 2 shall be of
no force or effect if immediately prior to the Start Date Lessee was the owner or occupant of the
Premises. In such event, Lessee shall be responsible for any necessary corrective work.



2.6 Vehicle Parking. So long as Lessee is not in Breach default, and subject to the Rules
and Regulations attached hereto, and as established by Lessor from time to time, Lessee shall be
entitled to rent and use the number of parking spaces specified in
Paragraph 1.2(b) at no
additional charge, the rental rate applicable from time to time for monthly parking as set by
Lessor and/or its licensee.



(a) If Lessee commits, permits or allows any of the prohibited activities described in the
Lease or the rules then in effect, then Lessor shall have the right, without notice, in addition
to such other rights and remedies that it may have, to remove or tow away the vehicle involved and
charge the cost to Lessee, which cost shall be immediately payable upon demand by Lessor.



(b) The monthly rent per parking space specified in Paragraph 1.2(b) is subject to
change upon 30 days prior written notice to Lessee. The rent for the parking is
payable one month in advance prior to the first day of each calendar month.



2.7
Common Areas — Definition. The term “Common Areas” is defined as all areas and facilities
outside the Premises and within the exterior boundary line of the
Project and interior utility
raceways and installations within the Premises that are provided and designated by the Lessor from
time to time for the genera! non-exclusive use of Lessor, Lessee and other tenants of the Project
and their respective employees, suppliers, shippers, customers, contractors and invitees,
including, but not limited to, common entrances, lobbies, corridors, stairwells, public restrooms,
elevators, parking areas, loading and unloading areas, trash areas, roadways, walkways, driveways
and landscaped areas.



2.8 Common Areas — Lessee’s Rights. Lessor grants to Lessee, for the benefit of Lessee and
its employees, suppliers, shippers, contractors, customers and invitees, during the term of this
Lease, the non-exclusive right to use, in common with others entitled to such use, the Common Areas
as they exist from time to time, subject to any rights, powers, and privileges reserved by Lessor
under the terms hereof or under the terms of any rules and regulations or restrictions governing
the use of the Project. Under no circumstances shall the right herein granted to use the Common
Areas be deemed to include the right to store any property, temporarily or permanently, in the
Common Areas. Any such storage shall be permitted only by the prior written consent of Lessor or
Lessor’s designated agent, which consent may be revoked at any time. In the event that any
unauthorized storage shall occur then Lessor shall have the right, without notice, in addition to
such other rights and remedies that it may have, to remove the property and charge the cost to
Lessee, which cost shall be immediately payable upon demand by Lessor.



2.9 Common Areas — Rules and Regulations. Lessor or such other person(s) as Lessor may appoint
shall have the exclusive control and management of the Common Areas and shall have the right, from
time to time, to adopt, modify, amend and enforce reasonable, nondiscriminatory rules and
regulations (“Rules and Regulations”) for the management, safety, care, and cleanliness of the
grounds, the parking and unloading of vehicles and the preservation of good order, as well as for
the convenience of other occupants or tenants of the Building and the Project and their invitees.
The Lessee agrees to abide by and conform to all such Rules and Regulations, and shall use its best
efforts to cause its employees, suppliers, shippers, customers, contractors and invitees to so
abide and conform. Lessor shall not be responsible to Lessee for the non-compliance with said
Rules and Regulations by other tenants of the Project.



2.10 Common Areas — Changes. Lessor shall have the right, in Lessor’s sole discretion, from
time to time:



(a) To make changes to the Common Areas, including, without limitation, changes in the
location, size, shape and number of the lobbies, windows, stairways,
air shafts, elevators,
escalators, restrooms, driveways, entrances, parking spaces, parking areas, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways;



(b) To close temporarily any of the Common Areas for maintenance purposes so long as
reasonable access to the Premises remains available;



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



(d) To add additional buildings and improvements to the Common Areas;



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



(f) To do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and Project
as Lessor may, in the exercise of sound business judgment, deem to be appropriate.





				
	                    	 	 	                    
	 
	                    	 	 	                    
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3. Term.




3.1 Term. The Commencement Date, Expiration Date and Original Term of this Lease are as
specified in Paragraph 1.3.



3.2 Early Possession. If Lessee totally or partially occupies the Premises prior to the
Commencement Date, the obligation to pay Base Rent shall be abated for the period of such early
possession. All other terms of this Lease (including but not limited to the obligations to pay
Lessee’s Share of the Operating Expenses) shall be in effect during such period. Any such early
possession shall not affect the Expiration Date.



3.3
Delay in Possession. Lessor agrees to use its best commercially reasonable efforts to
deliver possession of the Premises to Lessee by the Target Commencement Date (defined in the
Addendum). If, despite said efforts, Lessor is unable to deliver possession by such date, Lessor
shall not be subject to any liability therefor, nor shall such failure affect the validity of this
Lease. Lessee shall not, however, be obligated to pay Rent or perform its other obligations until
the Commencement Date Lessor delivers possession of the Premises and any period of rent abatement
that Lessee would otherwise have enjoyed shall run from the Commencement Date date of delivery of
possession and continue for a period equal to what Lessee
would otherwise have enjoyed under the
terms hereof, but minus any days of delay caused by the acts or omissions of Lessee as to which
Lessee was given notice and one day to cure. If the Commencement Date has not occurred prior to the
date that is,  If possession is not delivered within 60 days after the Target Commencement Date, as
the same may be extended under the terms of any Work Letter executed
be Parties, Lessee may, at its
option, by notice in writing within 10 days after the end of such 60 day period, cancel this Lease,
in which event the Parties shall be discharged from all obligations hereunder. If such written
notice is not received by Lessor within said 10 day period, Lessee’s right to cancel shall
terminate. If possession of the Premises is not delivered within 120 days after the
Commencement Date, this Lease shall terminate unless other agreements are reached between Lessor
and Lessee, in writing.



3.4 Lessee Compliance. Lessor shall not be required to deliver possession of the Premises to
Lessee until Lessee complies wish its obligation to provide evidence of insurance (Paragraph 8.5).
Pending delivery of such evidence, Lessee shall be required to perform all of its obligations
under this Lease from and after the Start Date, including the payment
of Rent, notwithstanding
Lessor’s election to withhold possession pending receipt of such evidence of insurance. Further, if
Lessee is required to perform any other conditions prior to or concurrent with the Start Date, the
Start Date shall occur but Lessor may elect So withhold possession until such conditions are
satisfied.



4. Rent.




4.1 Rent Defined. All monetary obligations of Lessee to Lessor under the terms of this Lease
(except for the Security Deposit) are deemed to be rent
(“Rent”).



4.2 Operating Expenses. Commencing on the Commencement Date, Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent, Lessee’s Share of all Operating Expenses, as
hereinafter defined, during each calendar year of the term of this Lease, in accordance with the
following provisions:



(a) “Operating Expenses” include all commercially reasonable costs incurred by Lessor relating
to the ownership and operation of the Project, calculated as if the Project was at least 95%
occupied, including, but not limited to, the following:



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



(aa) The Common Areas, including their surfaces, coverings, decorative items, carpets,
drapes and window coverings, and including parking areas, loading and unloading areas, trash areas,
roadways, sidewalks, walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building exteriors and roofs, fences and
gales;



(bb) All heating, air conditioning, plumbing, electrical systems, life safety
equipment, communication systems and other equipment used in common by, or for the benefit of,
lessees or occupants of the Project, including elevators and escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair.



(ii) The cost of trash disposal, janitorial and security services, pest control services, and
the costs of any environmental inspections;



(iii) The cost of any other service to be provided by Lessor that is elsewhere in this Lease
staled to be an “Operating Expense”;



(iv) The cost of the premiums for the insurance policies maintained by Lessor pursuant to
paragraph 8 and any deductible portion of an insured loss concerning the Building or the Common
Areas;



(v) The amount of the Real Property Taxes payable by Lessor pursuant to paragraph 10;



(vi) The cost of water, sewer, gas, electricity, and other publicly mandated services not
separately metered;



(vii) Labor, salaries, and applicable fringe benefits and costs, materials, supplies and
tools, used in maintaining and/or cleaning the Project and accounting and management fees
attributable to the operation of the Project;



(viii) The cost to replace equipment or capital components such as the roof
foundations, or exterior walls, the cost to replace a Common Area capital improvement, such as the
parking lot paving, elevators or fences, and/or the cost of any capital improvement to the Building
or the Project not covered under the provisions of Paragraph 2.3, Provided however, that if such
equipment or capital component has a useful life for accounting purposes of 5 years or more that
Lessor shall allocate the cost of any such capital improvement over the useful life of such
capital improvement a 12 year period and Lessee
shall not be required to pay more than Lessee’s
Share of 1/144th of the cost of such capital improvement in any given month more than an amount equal to
the amount of the cost, of such capital improvement attributable to
the Premises multiplied by a
fraction, the numerator of which is 1 and the denominator of which is the number of months in the
useful life of such capital improvement;



(ix) The cost to replace equipment or improvements that have a useful life for accounting
purposes of 5 years or less.



(x) Reserves
set aside for maintenance, repair, and/or replacement of Common Area improvements
and equipment.



(b) Any
item of Operating Expense that is specifically attributable to the
Premises, the
Building or to any other building in the Project or to the operation, repair and maintenance
thereof, shall be allocated entirely to such Premises, Building, or other building. However, any
such item that is not specifically attributable to the Building or to any other building or to the
operation, repair and maintenance thereof, shall be equitably allocated by Lessor to all buildings
in the Project.



(c) The
inclusion of the improvements, facilities and services set forth in Subparagraph 4.2(a)
shall not be deemed to impose an obligation upon Lessor to either have said improvements or
facilities or to provide those services unless the Project already has the same, Lessor already
provides the services, or Lessor has agreed elsewhere in this Lease to provide the same or some of
them.



(d) Lessee’s Share of Operating Expenses is payable monthly on the same day as the Base Rent
is due hereunder. The amount of such payments shall be based on Lessor’s estimate of the Operating
Expenses. Within 90 days following the end of each calendar year. 60-days after written request
(but not more than once each year) Lessor shall deliver to Lessee a reasonably detailed statement
showing Lessee’s Share of the actual Common Area Operating Expenses incurred during the preceding
year. If Lessee’s payments during such year exceed Lessee’s Share, Lessor





				
	                    	 	 	                    
	                    	 	 	                    
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shall credit the amount of such over-payment against Lessee’s future payments. If Lessee’s payments
during such year were less than Lessee’s Share, Lessee shall pay to Lessor the amount of the
deficiency within 10 30 days after delivery by Lessor to Lessee of the statement.


(e) Operating Expenses shall not include any expenses paid by any tenant directly to third parties,
or as to which Lessor is otherwise reimbursed by any third party, other tenant, or by insurance
proceeds.


4.3 Payment. Lessee shall cause payment of Rent to be received by Lessor
in lawful money of the
United States, without offset or deduction (except as specifically permitted in this Lease), on or
before the day on which it is due. All monetary amounts shall be rounded to the nearest
whole-dollar. In the event that any invoice prepared by Lessor is inaccurate such inaccuracy shall
not constitute a waiver and Lessee shall be obligated to pay the amount set forth in this Lease.
Rent for any period during the term hereof which is for less than one full calendar month shall be
prorated based upon the actual number of days of said month. Payment of Rent shall be made to
Lessor at its address stated herein or to such other persons or place as Lessor may from time to
time designate in writing. Acceptance of a payment which is less than the amount then due shall not
be a waiver of Lessor’s rights to the balance of such Rent, regardless of Lessor’s endorsement of
any check so stating. In the event that any check, draft, or other instrument of payment given by
Lessee to Lessor is dishonored for any reason, Lessee agrees to pay to Lessor the sum of $25 in
addition to any Late Charge and Lessor, at its option, may require all future Rent be paid by
cashier’s check. Payments will be applied first to accrued late charges and attorney’s fees, second
to accrued interest, then to Base Rent and Common Area Operating Expenses, and any remaining amount
to any other outstanding charges or costs.



5. Security Deposit. Lessee shall deposit with Lessor upon execution
hereof the Security Deposit
as security for Lessee’s faithful performance of its obligations under this Lease. If Lessee fails
to pay Rent or otherwise Defaults under this Lease, Lessor may use, apply or retain all or any portion of
said Security Deposit for the payment of any amount due already due Lessor, for Rents which will be
due in the future and/or to reimburse or compensate Lessor for any liability, expense, loss or
damage which Lessor may suffer or incur by reason thereof. If Lessor uses or applies all or any
portion of the Security Deposit, Lessee shall within 10 days after written request therefor
deposit monies with Lessor sufficient to restore said Security Deposit to the full amount required by this Lease. If the Base
Rent increases during the term of this Lease, Lessee shall, upon written request from Lessor,
deposit additional monies with Lessor so that the total amount of the Security Deposit shall at
all times bear the same proportion to the increased Base Rent as the initial Security Deposit bore
to the initial Base Rent. Should the Agreed Use be amended to accommodate a material change in the
business of Lessee or to accommodate a sublessee or assignee, Lessor shall have the right to
increase the Security Deposit to the extent necessary, in Lessor’s reasonable judgment to account
for any increased wear and tear that the Premises may suffer as a result thereof if a change in
control of Lessee occurs during this Lease and following such change the financial condition of
Lessee is in Lessor’s reasonable judgment, significantly reduced, Lessee shall deposit such
additional monies with Lessor as shall be sufficient to cause the Security Deposit to be at a
commercially reasonable level based on such change in financial condition. Lessor shall not be
required to keep the Security Deposit separate from its general accounts. Within 90 days after the
expiration or termination of this Lease, Lessor shall return that portion of the Security Deposit
not used or applied by Lessor. No part of the Security Deposit shall be considered to be held in
trust, to bear interest or to be prepayment for any monies to be paid by Lessee under this Lease.




6. Use.




6.1 Use. Lessee shall use and occupy the Premises only for the Agreed Use, or any other legal use
which is reasonably comparable thereto, and for no other purpose. Lessee shall not use or permit
the use of the Premises in a manner that is unlawful, creates damage, waste or a nuisance, or that
disturbs occupants of or causes damage to neighboring premises or properties. Other than guide,
signal and seeing eye dogs, Lessee shall not keep or allow in the Premises any pets, animals,
birds, fish, or reptiles. Lessor shall not unreasonably withhold or delay its consent to any
written request for a modification of the Agreed Use, so long as the same will not impair the
structural integrity of the improvements of the Building, will not adversely affect the mechanical,
electrical, HVAC, and other systems of the Building, and/or will not affect the exterior appearance
of the Building. If Lessor elects to withhold consent, Lessor shall within 7 days after such
request give written notification of same, which notice shall include an explanation of Lessor’s
objections to the change in the Agreed Use.



6.2 Hazardous Substances.



(a) Reportable Uses Require
Contest. The term “Hazardous Substance” as used in this Lease shall mean
any product substance, or waste whose presence, use, manufacture, disposal, transportation, or release,
either by itself or in combination with other materials expected to be on the Premises, is either:
(i) potentially injurious to the public health safety or welfare the environment or the Premises,
(ii) regulated or monitored by any governmental authority, or (iii) a basis for potential liability
of Lessor to any governmental agency or third party under any
applicable statute or common law
theory.  Hazardous Substances shall include, but not be limited to hydrocarbons, petroleum, gassoline,
and/or crude oil or any products, by products or fractions thereof Lessee shall not engage in any
activity in or on the Premises which-constitutes a Reportable Use of Hazardous Substances without
the express prior written consent of Lessor and timely compliance (at Lessee’s expense) with all
Applicable Requirements, “Reportable Use” shall mean (i) the installation or use of any above or
below ground storage tank, (ii) the generation possession, storage, use, transportation, or disposal
of a Hazardous Substance that requires a permit from, or with respect to which a report notice
registration or business plan is required to be filed with any governmental authority and/or (iii)
the presence at the Premises of a Hazardous Substance with respect to which any Applicable
Requirements requires that a notice be given to persons entering or occupying the Premises or
neighboring properties Notwithstanding the foregoing Lessee may use any ordinary and customary
materials reasonably required to be used in the normal course of the Agreed Use such as ordinary
office supplies (copier toner, liquid, paper, glue, etc.) and common household cleaning materials so
long as such use is in compliance with all Applicable Requirements is not a Reportable Use and does
not expose the Premises or neighboring property to any meaningful risk of contamination or damage
or expose Lessor to any liability therefor. In addition Lessor may condition its consent to any
Reportable Use upon receiving such additional assurances as Lessor reasonably deems necessary to
protect itself, the public the Premises and/or the environment against damage contamination injury
and/or liability including but not limited to the installation (and removal on or before Lease
expiration or termination) of protective modifications (such as concrete encasements) and/or
increasing the Security Deposit.



(b) Duty
to Inform Lessor. If Lessee knows or has reasonable cause to believe that a Hazardous
Substance has come to be located in on under or about the Premises, other than as previously
consented to by Lessor, Lessee shall-immediately give written notice of such fact to Lessor and
provide Lessor with a copy of any report notice claim or other documentation which it has
concerning the presence of such Hazardous Substance.



(c) Lessee Remediation. Lessee shall not cause or permit any Hazardous Substance to be spilled or
released in, on, under, or about the Premises (including through the plumbing or sanitary sewer
system) and shall promptly, at Lessee’s expense, comply with all Applicable Requirements and take all
investigatory and/or remedial action reasonably recommended, whether or not formally ordered or
required, for the cleanup of any contamination of, and for the
maintenance, security and/or monitoring
of the Premises or neighboring properties, that was caused or materially contributed
to by Lessee, or planing to or involving any Hazardous Substance
brought onto the Premises during the term of this Lease, by or for  Lessee,
or any third party.


(d) Lessee
Indemnification. Lessee shall indemnify defend and hold Lessor its agents employees
lenders and ground lessor.



			
	                    	 	                    
	                    
	 	                    
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if any, harmless from and against any and all loss of rents and/or damages, liabilities, judgments,
claims, expenses, penalties, and attorneys’ and consultants’ fees arising out of or involving any
Hazardous Substance brought onto the Premises by or for Lessee, or any third party (provided,
however, that Lessee shall have no liability under this Lease with respect to underground migration
of any Hazardous Substance under the Premises from areas outside of the Project not caused or
contributed to by Lessee). Lessee’s obligations shall include, but not to be limited to, the
effects of any contamination or injury to person, property or the environment created or suffered
by Lessee, and the cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease. No termination, cancellation or release
agreement entered into by Lessor and Lessee shall release Lessee from its obligations under this
Lease with respect to Hazardous Substances, unless specifically so agreed by Lessor in writing at
the time of such agreement.



(e) Lessor Indemnification. Lessor and its successors and assigns shall indemnify, defend,
reimburse and hold Lessee, its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which result from Hazardous Substances
which existed on the Premises prior to Lessee’s occupancy or which are caused by the gross
negligence or willful misconduct of Lessor, its agents or-employees. Lessor’s obligations, as and
when required by the Applicable Requirements, shall include, but not be limited to, the cost of
investigation, removal, remediation, restoration and/or abatement, and shall survive the expiration
or termination of this Lease.



(f) Investigations and Remediations. Lessor shall retain the responsibility and pay for any
investigations or remediation measures required by governmental entities having jurisdiction with
respect to the existence of Hazardous Substances on the Premises prior to Lessee’s occupancy,
unless such remediation measure is required as a result of Lessee’s use (including “Alterations”, as
defined in paragraph 7.3(a) below) of the Premises, in which event Lessee shall be responsible for
such payment. Lessee shall cooperate fully in any such activities at the request of Lessor,
including allowing Lessor and Lessor’s agents to have reasonable access to the Premises at
reasonable times in order to carry out Lessor’s investigative and remedial responsibilities.



(g) Lessor Termination Option. If a Hazardous Substance Condition (see Paragraph 9.1(e)) occurs
during the term of this Lease, unless Lessee is legally responsible therefor (in which case Lessee
shall make the investigation and remediation thereof required by the Applicable Requirements and
this Lease shall continue in full force and effect, but subject to Lessor’s rights under Paragraph
6.2(d) and Paragraph 1.3), Lessor may, at Lessor’s option, either (i) investigate and remediate such
Hazardous Substance Condition, if required, as soon as reasonably possible at Lessor’s expense, in
which event this Lease shall continue in full force and effect, or (ii) if the estimated cost to
remediate such condition exceeds 12 times the then monthly Base Rent or $100,000, whichever is
greater, give written notice to Lessee, within 30 days after receipt by Lessor of knowledge of the
occurrence of such Hazardous Substance Condition, of Lessor’s desire to terminate this Lease as of
the date 60 days following the date of such notice. In the event Lessor elects to give a
termination notice, Lessee may, with 10 days thereafter, give written notice to Lessor of Lessee’s
commitment to pay the amount by which the cost of the remediation of such Hazardous Substance
Condition exceeds an amount equal to 12 times the then monthly Base Rent or $100,000, whichever is
greater. Lessee shall provide Lessor with said funds or satisfactory assurance thereof within 30
days following such commitment. In such event, this Lease shall continue in full force and effect,
and Lessor shall proceed to make such remediation as soon as reasonably possible after the required
funds are available. If Lessee does not give such notice and provide the required funds or
assurance thereof within the time provided, this Lease shall terminate as of the date specified in
Lessor’s notice of termination.



6.3. Lessee’s Compliance with Applicable Requirements. Except as otherwise provided in this Lease,
Lessee shall, at Lessee’s sole expense, fully, diligently and in a timely manner, materially
comply with all Applicable Requirements, the requirements of any applicable fire insurance
underwriter or rating bureau, and the recommendations of Lessor’s engineers and/or consultants
which relate in any manner to the Premises, without regard to whether said requirements are now in
effect or became effective after the Start Date. Lessee shall, within 10 days after receipt of
Lessor’s written request, provide Lessor with copies of all permits and other documents, and other
information evidencing Lessee’s compliance with any Applicable Requirements specified by Lessor, and
shall immediately upon receipt, notify Lessor in writing (with copies of any documents involved) of
any threatened or actual claim, notice, citation, warning, complaint or report pertaining to or
involving the failure of Lessee or the Premises to comply with any Applicable Requirements.
Likewise, Lessee shall immediately give written notice to Lessor of: (i) any water damage to the
Premises and any suspected seepage, pooling, dampness or other condition conducive to the
production of mold: or (ii) any mustiness or other oders that might indicate the presence of mold in
the Premises.



6.4 Inspection; Compliance. Lessor and Lessor’s “Lender” (as defined in Paragraph 30) and
consultants shall have the right to enter into Premises at any time, in the case of an emergency,
and otherwise at reasonable times after reasonable notice, for the purpose of inspecting the
condition of the Premises and for verifying compliance by Lessee with this Lease. The cost of any
such inspections shall be paid by Lessor, unless a violation of Applicable Requirements, or a
Hazardous Substance Condition (see paragraph 9.1) is found to exist or be imminent, or the
inspection is requested or ordered by a governmental authority. In such case, Lessee shall upon
request reimburse Lessor for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination. In addition, Lessee shall provide copies of all relevant
material safety data sheets (MSDS) to Lessor within 10 days of the receipt of written request
therefor.



7. Maintenance; Repairs, Utility Installations; Trade Fixtures and Alterations.



7.1 Lessee’s Obligations. Notwithstanding Lessor’s obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of the cost thereof to Lessor as
additional rent for that portion of the cost of any maintenance and repair of the Premises, or any
equipment (wherever located) that serves only Lessee or the Premises, to the extent such cost is
attributable to causes beyond normal wear and tear. Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any improvements with the
Premises. Lessor may, at its option, upon reasonable notice, elect to have Lessee perform any
particular such maintenance or repairs the cost of which is otherwise Lessee’s responsibility
hereunder.



7.2 Lessor’s Obligations. Subject to the provisions of Paragraphs 2.2 (Condition), 2.3
(Compliance), 4.2 (Operating Expenses), 6 (Use), 7.1 (Lessee’s Obligations), 9 (Damage or
Destruction) and 14 (Condemnation), Lessor, subject lo reimbursement pursuant to Paragraph 4.2,
shall keep in good order, condition and repair the foundations, exterior walls, structural
condition of interior bearing walls, exterior roof, fire sprinkler system, fire alarm and/or smoke
detection systems, fire hydrants, common Building plumbing, electrical, HVAC, and similar systems
and the Common Areas. Lessee expressly waives the benefit of any statute now or hereafter in effect
to the extent it is inconsistent with the terms of this Lease.



7.3 Utility Installations; Trade Fixtures; Alterations.



(a) Definitions.
The term “Utility Installations” refers to all floor and window coverings, air
lines, vacuum lines, power panels, electrical distribution, security and fire protection systems,
communication cabling, lighting fixtures, HVAC equipment, and plumbing in or on the Premises. The
term “Trade Fixtures” shall mean Lessee’s machinery and equipment that can be removed without doing
material damage to the Premises. The term “Alterations” shall mean any modification of the
improvements, other than Utility Installations or Trade Fixtures, whether by addition or deletion.
“Lessee Owned Alterations and/or Utility Installations” are defined as
Alterations and/or Utility Installations made by Lessee that are not yet owned by Lessor pursuant
to Paragraph 7.4(a).




(b) Consent. Lessee shall not make any Alterations or Utility Installations to the Premises without
Lessor’s prior written consent. Lessee may, however, make non-structural Utility Installations to
the interior of the Premises (excluding the roof) without such
consent but upon notice




				
	                    	 	 	                    
	 
	                    	 	 	                    
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to Lessor, as long as they are not visible from the outside, do not involve puncturing, relocating
or removing the roof, ceilings, floors of any existing walls, will not affect the electrical,
plumbing, HVAC, and/or life safety systems, and the
cumulative cost thereof during this Lease as
extended does not exceed $25,000.00 for each project 2000. Notwithstanding the foregoing, Lessee
shall not make or permit any roof penetrations and/or install anything on the roof without the
prior written approval of Lessor. Lesser may, as a precondition to granting such approval, require
Lessee to utilize a contractor chosen and/or approved by Lessor. Any Alterations or Utility
Installations that Lessee shall desire to make and which require the consent of the Lessor shall be
presented to Lessor in written form with detailed plans. Consent shall be deemed conditioned upon
Lessee’s: (i) acquiring all applicable governmental permits, (ii) furnishing Lessor with copies
of both the permits and the plans and specifications prior to commencement of the work, and (iii)
compliance with all conditions of said permits and other Applicable Requirements in a prompt and
expeditious manner. Any Alterations or Utility Installations shall be performed in a workmanlike
manner with good and sufficient materials. Lessee shall promptly upon completion furnish Lessor
with asbuilt plans and specifications. For work which costs
an amount in excess of one month’s Base
Rent, Lessor may condition its consent upon Lessee providing a lien and completion bond in an
amount equal to 150% of the estimated cost of such Alteration or Utility Installation and/or upon
Lessee’s posting an additional Security Deposit with Lessor.



(c) Liens;
Bonds. Lessee shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Lessee at or for use on the Premises, which claims are or
may be secured by any mechanic’s or materialmen’s lien against the Premises or any interest
therein. Lessee shall give Lessor not less than 10 three business days’ notice prior to the
commencement of any work in, on or about the Premises, and Lessor shall have the right to post
notices of non-responsibility. If Lessee shall contest the validity of any such lien, claim or
demand, then Lessee shall, at its sole expense defend and protect itself, Lessor and the Premises
against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon
before the enforcement thereof. If Lessor shall require, Lessee shall furnish a surety bond in an
amount equal to 150% of the amount of such contested lien, claim or demand, indemnifying Lessor
against liability for the same. If Lessor elects to participate in any such action. Lessee shall
pay Lessor’s attorneys’ fees and costs.




7.4 Ownership; Removal; Surrender; and Restoration.



(a) Ownership.
Subject to Lessor’s right to require removal or elect ownership as hereinafter
provided, all Alterations and Utility
Installations made by Lessee shall be the property of Lessee, but considered a part of the
Premises. Lessor may, at any time, elect in writing to be the
owner of all or any specified part of the Lessee Owned Alterations and Utility Installations.
Unless otherwise instructed per paragraph 7.4(b) hereof, all
Lessee Owned Alterations and Utility Installations shall, at the expiration or termination of
this Lease, become the property of Lessor and be
surrendered by Lessee with the Premises.



(b) Removal.
By delivery to Lessee of written notice from Lessor at the time Lessor gives
Lessor’s consent thereto not earlier than 90
and not later than 30 days prior to the end of the term of this
Lease, Lessor may require that
any or all Lessee Owned Alterations or Utility Installations
be removed by the expiration or termination of this Lease. Lessor may require the removal at
any time of all or any part of any Lessee Owned
Alterations or Utility Installations made without the required consent.



(c) Surrender; Restoration. Lessee shall surrender the Premises by the Expiration Date or any
earlier termination date, with all of
the improvements, parts and surfaces thereof clean and free of debris, and in good operating
order, condition and state of repair, ordinary wear and tear
excepted, “Ordinary wear and tear” shall not include any damage or deterioration that would
have been prevented by good maintenance practice.
Notwithstanding the foregoing, if this Lease is for 12 months or less, then
Lessee shall surrender the Premises in the same condition as
delivered  to Lessee on the Start Date with NO allowance for ordinary
wear and tear. Lessee shall repair any
damage occasioned by the installation, maintenance or
removal of Trade Fixtures, Lessee owned Alterations and/or Utility Installations, furnishings, and
equipment as well as the removal of any storage tank
installed by or for Lessee. Lessee shall also completely remove from the Premises any and all
Hazardous Substances brought onto the Premises by or
for Lessee, or any third party (except Hazardous Substances which were deposited via underground
migration from areas outside of the Project) as
required by even if such removal would require Lessee to
perform or pay for work that exceeds
statutory requirements. Trade Fixtures shall remain the
property of Lessee and shall be removed by Lessee. Any personal property of Lessee not removed on
or before the Expiration Date or any earlier
termination date shall be deemed to have been abandoned by Lessee
 and may be disposed of or
retained by Lessor in accordance with Applicable
Requirements, including Civil Code sections 1980, et seq. as
Lessor may desire. The failure by
Lessee to timely vacate the Premises pursuant to this
Paragraph 7.4(c) without the express written consent of Lessor shall constitute a holdover under
the provisions of Paragraph 26 below.



8. Insurance;
Indemnity.



8.1 Insurance Premiums. The cost of the premiums for the insurance policies maintained by
Lessor pursuant to paragraph 8 are
included as Operating Expenses (see paragraph 4.2 (a) (iv)). Said costs shall include
increases in the premiums resulting from additional coverage
related to requirements of the holder of a mortgage or deed of trust covering the Premises,
Building and/or Project, increased valuation of the Premises,
Building and/or Project, and/or a general premium rate increase. Said costs shall not,
however, include any premium increases resulting from the
nature of the occupancy of any other tenant of the Building.
In no event, however, shall
Lessee be responsible for any portion of the premium cost attributable to liability insurance coverage in excess of $2,000,000
procured under Paragraph 8.2(b).



8.2
Liability Insurance.



(a) Carried by Lessee. Lessee shall obtain and keep in force a Commercial General Liability
policy of insurance protecting Lessee
and Lessor as an additional insured against claims for bodily injury, personal injury and
property damage based upon or arising out of the ownership,
use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such
insurance shall be on an occurrence basis providing single
limit coverage in an amount not less than $1,000,000 per occurrence with an annual aggregate
of not less than $2,000,000. Lessee shall add Lessor as
an additional insured by means of an endorsement at least as broad as the Insurance Service
Organization’s “Additional Insured-Managers or Lessors
of Premises” Endorsement. The policy shall not contain any infra-insured exclusions as between
insured persons or organizations, but shall include
coverage for liability assumed under this Lease as an
“insured contract” for the performance
of Lessee’s indemnity obligations under this Lease. The
limits of said insurance shall not, however, limit the liability of Lessee nor relieve Lessee
of any obligation hereunder. Lessee shall provide an
endorsement on its liability policy(ies) which provides that its insurance shall be primary to
and not contributory with any similar insurance carried by
Lessor, whose insurance shall be considered excess insurance only.



(b) Carried by Lessor. Lessor shall maintain liability insurance as described in Paragraph
8.2(a), in addition to, and not in lieu of,
the insurance required to be maintained by Lessee. Lessee shall not be named as an additional
insured therein.




8.3
Property insurance - Building, Improvements and Rental Value.



(a) Building and Improvements. Lessor shall obtain and keep in force a policy or policies of
insurance in the name of Lessor, with loss payable to Lessor, any ground-lessor, and to any Lender
insuring loss or damage to the Building and/or Project. The amount of such insurance shall be
equal to the full insurable replacement cost of the Building and/or Project, as the same shall
exist from time to time, or the amount required by any Lender, but in no event more than the
commercially reasonable and available insurable value thereof. Lessee Owned Alterations and Utility
Installations, Trade Fixtures, and Lessee’s personal property shall be insured by Lessee not by
Lessor. If the coverage is available and commercially
appropriate, such policy or policies shall
insure against all risks of direct physical loss or damage (except the perils of flood and/or



			
	                    
	 	                    
	                    
	 	                    
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earthquake unless required by a Lender), including coverage for debris removal and the enforcement
of any Applicable Requirements requiring the upgrading, demolition, reconstruction or replacement
of any portion of the Premises as the result of a covered loss. Said policy or policies shall also
contain an agreed valuation provision in lieu of any coinsurance clause, waiver of subrogation,
and inflation guard protection causing an increase in the annual property insurance coverage
amount by a factor of not less than the adjusted U.S. Department of Labor Consumer Price Index for
All Urban Consumers for the city nearest to where the Premises are located. If such insurance
coverage has a deductible clause, the deductible amount shall not exceed $1,000 per occurrence.



(b) Rental
Value. Lessor shall also obtain and keep in force a policy or policies in the name
of Lessor with loss payable to Lessor and any Lender, insuring the loss of the full Rent for one
year with an extended period of indemnity for an additional
180 days (“Rental Value Insurance”).
Said insurance shall contain an agreed valuation provision in lieu of any coinsurance clause, and
the amount of coverage shall be adjusted annually to reflect the projected Rent otherwise payable
by Lessee, for the next 12 month period.



(c) Adjacent
Premises. Lessee shall pay for any increase in the premiums for the property
insurance of the Building and for the Common Areas or other buildings in the Project if said
increase is caused by Lessee’s acts, omissions, use or occupancy for other than the Agreed Use of
the Premises.



(d) Lessee’s
Improvements. Since Lessor is the Insuring Party, Lessor shall not be required
to insure Lessee Owned Alterations and Utility Installations unless the item in question has
become the property of Lessor under the terms of this Lease.



8.4 Lessee’s Property; Business Interruption Insurance.



(a) Property Damage. Lessee shall obtain and maintain insurance coverage on all of Lessee’s
personal property, and Trade Fixtures, and Lessee Owned
Alterations and Utility Installations. Such
insurance shall be full replacement cost coverage with a deductible of not to exceed $1,000 per occurrence. The proceeds from any such insurance shall be used by
Lessee for the replacement of personal property. Trade Fixtures and Lessee Owned Alterations and
Utility Installations. Lessee shall provide Lessor with written evidence that such insurance is in
force.



(b) Business
Interruption. Lessee shall obtain and maintain loss of income and extra expense
insurance in amounts as will reimburse Lessee for direct or indirect loss of earnings attributable
to all perils commonly insured against by prudent lessees in the business of Lessee or
attributable to prevention of access to the Premises as a result of such perils.



(c) No
Representation of Adequate Coverage. Lessor makes no representation that the limits
or forms of coverage of insurance specified herein are adequate to cover Lessee’s property,
business operations or obligations under this Lease.



8.5 Insurance Policies. Insurance required herein shall be by companies duly licensed or
admitted to transact business in the state where the Premises are located, and maintaining during
the policy term a “General Policyholders Rating” of at least A-, VI, as set forth in the most
current issue of “Best’s Insurance Guide”, or such other rating as may be required by a Lender.
Lessee shall not do or permit to be done anything which invalidates the required insurance
policies. Lessee shall, prior to the Start Date, deliver to Lessor certified copies of policies of
such insurance or certificates evidencing the existence and amounts of the required insurance. No
such policy shall be cancelable or subject to modification except after 30 days prior written
notice to Lessor. Lessee shall, at least 10 days prior to the expiration of such policies, furnish
Lessor with evidence of renewals or “insurance binders” evidencing renewal thereof, or Lessor may
order such insurance and charge the cost thereof to Lessee, which amount shall be payable by
Lessee to Lessor upon demand. Such policies shall be for a term of at least one year, or the
length of the remaining term of this Lease, whichever is less. If either Party shall fail to
procure and maintain the insurance required to be carried by it, the other Party may, but shall
not be required to, procure and maintain the same.



8.6 Waiver of Subrogation. Without affecting any other rights or remedies. Notwithstanding
anything to the contrary herein, Lessee and Lessor each hereby release and relieve the other, and
waive their entire right to recover damages against the other, for loss of or damage to its
properly arising out of or incident to the perils required to be insured against herein. The
effect of such releases and waivers is not limited by the amount of
insurance carried or required,
or by any deductibles applicable hereto. The Parties agree to have their respective property
damage insurance carriers waive any right to subrogation that such companies may have against
Lessor or Lessee, as the case may be, so long as the insurance is not
invalidated thereby.



8.7
Indemnity. Except for Lessor’s gross negligence or willful misconduct or Breach of this
Lease, and subject to the waiver of subrogation
above, Lessee shall indemnify, protect, defend and hold harmless the Premises, Lessor and its
agents, Lessor’s master or ground lessor, partners and Lenders, from and against any and all
claims, loss of rents and/or damages, liens, judgments, penalties, attorneys’ and consultants’
fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or
occupancy of the Premises by Lessee to the extent due to the negligence, willful misconduct, or
Breach of this Lease by Lessee. If any action or proceeding is brought against Lessor by reason
of any of the foregoing matters. Lessee shall upon notice defend the same at Lessee’s expense by
counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee in such defense.
Lessor need not have first paid any such claim in order to be defended or indemnified.



8.8 Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or
breach of this Lease by Lessor or its
agents, neither Lessor nor its agents shall be liable under any
circumstances for: (i) injury or
damage to the person or goods, wares, merchandise or other property of Lessee, Lessee’s employees,
contractors, invitees, customers, or any other person in or about the Premises, whether such
damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor
air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of
pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other
cause, whether the said injury or damage results from conditions arising upon the Premises or upon
other portions of the Building, or from other sources or places, (ii) any damages arising from any
act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to
enforce the provisions of any other lease in the Project, or (iii) injury to Lessee’s business or
for any loss of income or profit therefrom. Instead, it is intended that Lessee’s sole recourse in
the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is
required to maintain pursuant to the provisions of paragraph 8.



8.9
Failure to Provide Insurance. Lessee acknowledges that any failure on its part to
obtain or maintain the insurance required herein will expose Lessor to risks and potentially cause Lessor to incur costs not contemplated by
this Lease, the extent of which will be extremely difficult to ascertain. Accordingly, for any
month or portion thereof that Lessee does not maintain the required insurance and/or does not
provide Lessor with the required binders or certificates evidencing the existence of the required
insurance, the Base Rent shall be automatically increased, without any requirement for notice  to Lessee, by an amount equal to 10% of the then existing Base Rent or $100, whichever is
greater. The parties agree that such increase in Base Rent represents
fair and reasonable compensation for the additional risk/costs that Lessor will incur by reason of Lessee’s failure to
maintain the required insurance. Such increase in Base Rent shall in no event constitute a waiver
of Lessee’s Default or Breach with respect to the failure to
maintain such insurance, prevent the exercise of any of the other
rights and remedies granted hereunder, nor relieve Lessee of its
obligation to maintain the insurance specified in
this Lease.



9. Damage or Destruction




9.1 Definitions.



(a) “Premises Partial Damage” shall mean damage or destruction to the improvements on
the Premises, other than Lessee




			
	                    
	 	                    
	 
	                    
	 	                    
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Owned
Alterations and Utility Installations. which can reasonably
be repaired in 3 6 months or less
from the date of the damage or destruction, and the cost thereof does not exceed a sum equal to 6
month’s Base Rent. Lessor shall notify Lessee in writing within 30 days from the date of the damage
or destruction as to whether or not the damage is Partial or Total.



(b) “Premises Total Destruction” shall mean damage or destruction to the improvements on the
Premises, other than Lessee Owned Alterations and Utility Installations and Trade Fixtures, which
cannot reasonably be repaired in 3 6 months or less from the date of the damage or destruction
and/or the cost thereof exceeds a sum equal to 6 month’s Base Rent. Lessor shall notify Lessee in
writing within 30 days from the date of the damage or destruction as to whether or not the damage
is Partial or Total.



(c) “Insured Loss” shall mean damage or destruction to improvements on the Premises, other than
Lessee Owned Alterations and Utility lnstallations and Trade Fixtures, which was caused by an event
required to be covered by the insurance described in Paragraph 8.3(a), irrespective of any
deductible amounts or coverage limits involved.



(d) “Replacement Cost” shall mean the cost to repair or rebuild the improvements owned by Lessor at
the time of the occurrence to their condition existing immediately prior thereto, including
demolition, debris removal and upgrading required by the operation of Applicable Requirements, and
without deduction for depreciation.



(e) “Hazardous Substance Condition” shall mean the occurrence or discovery of a condition involving
the presence of or a contamination by a Hazardous Substance, in, on, or under the Premises which
requiree restoration.



9.2
Partial Damage Insured Loss. If a Premises Partial Damage that is an Insured Loss occurs, then
Lessor shall, at Lessor’s expense, repair such damage (but not Lessee’s Trade Fixtures or Lessee
Owned Alterations and Utility Installations) as soon as reasonably possible and this Lease shall
continue in full force and effect; provided, however, that Lessee shall, at Lessor’s election, make
the repair of any damage or destruction the total cost to repair of which is $5,000 or less, and,
in such event, Lessor shall make any applicable insurance proceeds available to Lessee on
reasonable basis for that purpose. Notwithstanding the foregoing, if the required insurance was not
in force or the insurance proceeds are not sufficient to effect such repair, the Insuring Party
shall promptly contribute the shortage in proceeds as and when required to complete said repairs.
In the event, however, such shortage was due to the fact that, by reason of the unique nature of
the improvements, full replacement cost insurance coverage was not commercially reasonable and
available, Lessor shall have no obligation to pay for the shortage in insurance proceeds or to
fully restore the unique aspects of the Premises unless Lessee provides Lessor with the funds to
cover same, or adequate assurance thereof, within 10 days following receipt of written notice of
such shortage and request therefor. If Lessor receives said funds or adequate assurance thereof,
within said 10 days period, the party responsible for making the repairs shall complete them as soon as
reasonably possible and this Lease shall remain in full force and effect. If such funds or
assurance are not received, Lessor may nevertheless elect by written notice to Lessee within 10
days thereafter to (i) make such restoration and repair as is commercially reasonable with Lessor
paying any shortage in proceeds, in which case this Lease shall remain in full force and effect, or
(ii) have this Lease terminate 30 days thereafter. Lessee shall not be entitled to reimbursement of
any funds contributed by Lessee to repair any such damage or destruction. Premises Partial Damage
due to flood or earthquake shall be subject to Paragraph 9.3, notwithstanding that there may be
some insurance coverage, but the net proceeds of any such insurance shall be made available for the
repairs if made by either Party.



9.3 Partial Damage Uninsured Loss. If a Premises Partial Damage that is not an Insured Loss occurs,
unless caused by a negligent or willful act of Lessee (in which event Lessee shall make the repairs
at Lessee’s expense), Lessor may either: (i) repair such damage as soon as reasonably possible at
Lessor’s expense, in which event this Lease shall continue in full force and effect, or (ii)
terminate this Lease by giving written notice to Lessee within 30 days after receipt by Lessor of
knowledge of the occurrence of such damage. Such termination shall be effective 60 days following
the date of such notice. In the event Lessor elects to terminate this Lease, Lessee shall have the
right within 10 days after receipt of the
termination notice to give written notice to Lessor of Lessee’s commitment to pay for the repair of
such damage without reimbursement from Lessor. Lessee shall provide Lessor with said funds or
satisfactory assurance thereof within 30 days after making such commitment. In such event this
Lease shall continue in full force and effect, and Lessor shall proceed to make such repairs as
soon as reasonably possible after the required funds are available. If Lessee does not make the
required commitment, this Lease shall terminate as of the date specified in the termination notice.



9.4 Total Destruction. Notwithstanding any other provision hereof, if a Premises Total Destruction
occurs, this Lease shall terminate 60 days following such Destruction. If the damage or destruction
was caused by the gross negligence or willful misconduct of Lessee, Lessor shall have the right to
recover Lessor’s damages from Lessee, except as provided in Paragraph 8.6.



9.5 Damage Near End of Term. If at any time during the last 6 8 months of this Lease there is
damage for which the cost to repair exceeds one three month’s Base Rent, whether or not an Insured
Loss, Lessor may terminate this Lease effective 60 days following the date of occurrence of such
damage by giving a written termination notice to Lessee within 30 days after the date of occurrence
of such damage. Notwithstanding the foregoing, if Lessee at that time has an exercisable option to
extend this Lease or to purchase the Premises, then Lessee may preserve this Lease by, (a)
exercising such option and (b) providing Lessor with any shortage in insurance proceeds (or
adequate assurance thereof) needed to make the repairs on or before the earlier of (i) the date
which is 10 days after Lessee’s receipt of Lessor’s written notice purporting to terminate this
Lease, or (ii) the day prior to the date upon which such option expires. If Lessee duly exercises
such option during such period and provides Lessor with funds (or adequate assurance thereof) to
cover any shortage in insurance proceeds. Lessor shall, at Lessor’s commercially reasonable
expense, repair such damage as soon as reasonably possible and this Lease shall continue in full
force and effect. If Lessee fails to exercise such option and provide such funds or assurance
during such period, then this Lease shall terminate on the date specified in the termination notice
and Lessee’s option shall be extinguished.



9.6 Abatement of Rent; Lessee’s Remedies.



(a) Abatement. In the event of Premises Partial Damage or Premises Total Destruction or a Hazardous
Substance Condition for which Lessee is not responsible under this Lease, the Rent payable by
Lessee for the period required for the repair, remediation or restoration of such damage shall be
abated in proportion to the degree to which Lessee’s use of the Premises is impaired, but not to
exceed the proceeds received from the Rental Value insurance. All other obligations of Lessee
hereunder shall be performed by Lessee, and Lessor shall have no liability for any such damage,
destruction, remediation, repair or restoration except as provided herein.



(b) Remedies. If Lessor shall be obligated to repair or restore the Premises and does not commence,
in a substantial and meaningful way, such repair or restoration within 90 days after such
obligation shall accrue, Lessee may, at any time prior to the commencement of such repair or
restoration, give written notice to Lessor and to any Lenders of which Lessee has actual notice, of
Lessee’s election to terminate this Lease on a date not less than 60 days following the giving of
such notice. If Lessee gives such notice and such repair or restoration is not commenced within 30
days thereafter, this Lease shall terminate as of the date specified in said notice. If the repair
or restoration is commenced within such 30 days, this Lease shall continue in full force and
effect. “Commence” shall mean either the unconditional authorization of the preparation of the
required plans, or the beginning of the actual work on the Premises, whichever first occurs.



9.7 Termination; Advance Payments. Upon termination of this Lease pursuant to Paragraph 6.2(g) or
Paragraph 9, an equitable adjustment shall be made concerning advance Base Rent and any other
advance payments made by Lessee to Lessor. Lessor shall, in addition, return to Lessee so much of
Lessee’s Security Deposit as has not been, or is not then required to be, used by Lessor.


 
				
	                    	 	 	                    
	                    	 	 	                    
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10. Real Property Taxes.



10.1 Definitions. As used herein, the term “Real Property Taxes” shall include any form of
assessment; real estate, general, special, ordinary or extraordinary, or rental levy or tax (other
than documentary transfer, inheritance, personal income or estate taxes); improvement bond; and/or
license fee imposed upon or levied against any legal or equitable interest of Lessor in the
Project, Lessor’s right to other income therefrom, and/or Lessor’s business of leasing, by any
authority having the direct or indirect power to tax and where the funds are generated with
reference to the Project address and where the proceeds so generated are to be applied by the city,
county or other local taxing authority of a jurisdiction within which the Project is located. Real
Property Taxes shall also include any tax, fee, levy, assessment or charge, or any increase
therein: (i) imposed by reason of events occurring during the term of this Lease, including but not
limited to, a change in the ownership of the Project (excluding documentary transfer tax), (ii) a
change in the improvements thereon, and/or (iii) levied or assessed on machinery or equipment
provided by Lessor to Lessee pursuant to this Lease.



10.2 Payment of Taxes. Except as otherwise provided in Paragraph 10.3, Lessor shall pay the
Real Property Taxes applicable to the Project, and said payments shall be included in the
calculation of Operating Expenses in accordance with the provisions of Paragraph 4.2.



10.3 Additional Improvements. Operating Expenses shall not include Real Property Taxes
specified in the tax assessor’s records and work sheets as being caused by additional improvements
placed upon the Project by other lessees or by Lessor for the exclusive enjoyment of such other
lessees. Notwithstanding Paragraph 10.2 hereof, Lessee shall, however, pay to Lessor at the time
Operating Expenses are payable under Paragraph 4.2, the entirety of any increase in Real Property
Taxes if assessed solely by reason of Alterations, Trade Fixtures or Utility Installations placed
upon the Premises by Lessee or at Lessee’s request or by reason of any alterations or improvements
to the Premises made by Lessor subsequent to the execution of this Lease by the Parties.



10.4 Joint Assessment. If the Building is not separately assessed, Real Property Taxes
allocated to the Building shall be an equitable proportion of the
Real Property Taxes for all of
the land and improvements included within the tax parcel assessed, such proportion to be determined
by Lessor from the respective valuations assigned in the assessor’s work sheets or such other
information as may be reasonably available. Lessor’s reasonable determination thereof, in good
faith, shall be conclusive.



10.5 Personal Property Taxes. Lessee shall pay prior to delinquency all taxes assessed against
and levied upon Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all personal property of Lessee contained in the Premises. When possible, Lessee
shall cause its Lessee Owned Alterations and Utility Installations, Trade Fixtures, furnishings,
equipment and all other personal property to be assessed and billed separately from the real
property of Lessor. If any of Lessee’s said property shall be assessed with Lessor’s real property,
Lessee shall pay Lessor the taxes attributable to Lessee’s
property within 10 30 days after receipt
of a written statement setting forth the taxes applicable to Lessee’s property.



11. Utilities and Services.



11.1 Services Provided by Lessor. Lessor shall provide heating, ventilation, air conditioning
(including single-pass air), reasonable amounts of electricity for
normal lighting and office
machines, water for reasonable and normal drinking and lavatory use in connection with an office
and jaintorial services for the Common Area. and replacement light
bulbs and/or fluorescent tubes
and ballasts for standard overhead fixtures. Lessor shall also provide janitorial services to the
Premises and Common Areas 5 times per week excluding Building Holidays, or pursuant to the attached
janitorial schedule if any Lessor shall not, however, be required to provide janitorial services to
kitchens or storage areas included within the Premises.



11.2 Services Exclusive to Lessee. Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities and services specially or exclusively supplied and/or metered
exclusively to the Premises or to Lessee, together with any taxes thereon. If a service is deleted
by Paragraph 1.13 and
such service is not separately metered to the Premises, Lessee shall
pay at Lessor’s option,
either Lessee’s Share or a reasonable proportion to be determined by Lessor of all charges for such
jointly metered service.



11.3 Hours of Service. Said services and utilities shall be provided during times set forth in
Paragraph 1.12. Utilities and services required at other times
shall be subject to advance request
and reimbursement by Lessee to Lessor of the cost thereof.



11.4 Excess Usage by Lessee. Lessee shall not make connection to the utilities except by or
through existing outlets and shall not install or use machinery or
equipment in or about the
Premises that uses excess water, lighting or power, or suffer or permit any act that causes extra
burden upon the utilities or services, including but not limited to security and trash services,
over standard office usage for the Project, Lessor shall require Lessee to reimburse Lessor for any
excess expenses or costs that may arise out of a breach of this subparagraph by Lessee. Lessor may,
in its sole discretion, install at Lessee’s Lessor’s expense supplemental equipment and/or separate
metering applicable to Lessee’s excess usage or loading.



11.5 Interruptions. There shall be no abatement of rent and Lessor shall not be liable in any
respect whatsoever for the inadequacy, stoppage, interruption or discontinuance of any utility or
service due to not, strike, labor dispute, breakdown, accident, repair or other cause beyond
Lessor’s reasonable control or in cooperation with governmental request or directions.



12. Assignment and Subletting.




12.1 Lessor’s Consent Required.



(a) Lessee shall not voluntarily or by operation of law assign, transfer, mortgage or encumber
(collectively, “assign or assignment”) or sublet all or any part of Lessee’s interest in this Lease
or in the Premises without Lessor’s prior written consent.



(b) Unless Lessee is a corporation and its stock is publicly traded on a national stock
exchange, a change in the control of Lessee shall constitute an
assignment requiring consent. The
transfer, on a cumulative basis, of 25% or more of the voting control of Lessee shall constitute a
change in control for this purpose.



(c) The
involvement of Lessee or its assets in any transaction, or series of transactions (by
way of merger, sale, acquisition, financing, transfer, leveraged
buyout of otherwise), whether or not
a formal assignment or  hypothecation of this Lease of Lessee’s
assets occurs, which results or
will result in a reduction of the Net Worth of Lessee by an amount greater than 25% of such Net
Worth as it was represented at the time of the execution of this Lease or at the time of the most
recent assignment to which Lessor has consented, or as it exists immediately prior to said
transaction or transactions constituting such reduction, whichever was or is greater, shall be
considered an assignment of this Lease to which Lesser may withhold its consent. “Not Worth of
Lessee” shall mean the net worth of Lessee (excluding any guarantors) established under generally
accepted accounting principles.



(d) An assignment or subletting without consent shall, at Lessor’s option, be a Default
curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any
notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a
noncurable Breach, Lessor may either; (i) terminate this Lease, or (ii) upon 30 days written
notice, increase the monthly Base Rent to 110% of the Base Rent then in effect. Further, in the
event of such Breach and rental adjustment. (i) the purchase price of any option to purchase the
Premises held by Lessee shall be subject to similar adjustment of 110% of the price previously in
effect, and (ii) all fixed and nonfixed rental adjustments scheduled during the remainder of the
Lease term shall be increased to 110% of the scheduled adjusted
rent.




				
	                    	 	 	                    
	                    	 	 	                    
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(e) Lessee’s remedy for any breach of Paragraph 12.1 by Lessor shall be limited to compensatory
damages and/or injunctive relief.



(f) Lessor may reasonably withhold consent to a proposed assignment or subletting if Lessee is in
Default Breach at the time consent is requested.



(g) Notwithstanding the foregoing, allowing a de minimis portion of the Premises, ie.20 square feel
or less, lobe used by a third party vendor in connection with the installation of a vending machine
or payphone shall not constitute a subletting.



12.2 Terms and Conditions Applicable to Assignment and Subletting.



(a) Regardless of Lessor’s consent, no assignment or subletting shall: (i) be effective without the
express written assumption by such assignee or sublessee of the obligations of Lessee under this
Lease, (ii) release Lessee of any obligations hereunder, or (iii) alter the primary liability of
Lessee for the payment of Rent or for the performance of any other obligations to be performed by
Lessee.



(b) Lessor may accept Rent or performance of Lessee’s obligations from any person other than Lessee
pending approval or disapproval of an assignment. Neither a delay in the approval or disapproval of
such assignment nor the acceptance of Rent or performance shall constitute a waiver or estoppel of
Lessor’s right to exercise its remedies for Lessee’s Default or Breach.



(c) Lessor’s consent to any assignment or subletting shall not constitute a consent to any
subsequent assignment or subletting. 


(d) In
the event of any Default or Breach by Lessee, Lessor
may proceed directly against Lessee, any Guarantors or anyone else responsible for the performance
of Lessee’s obligations under this Lease, including any assignee or sublessee, without first
exhausting Lessor’s remedies against any other person or entity responsible therefor to Lessor, or
any security held by Lessor.



(e) Each request for consent to an assignment or subletting shall be in writing, accompanied by
information relevant to Lessor’s determination as to the financial and operational responsibility
and appropriateness of the proposed assignee or sublessee, including but not limited to the
intended use and/or required modification of the Premises, if any, together with a fee of $500 as
consideration for Lessor’s considering and processing said request. Lessee agrees to provide Lessor
with such other or additional information and/or documentation as may be reasonably requested. (See
also Paragraph 36)



(f) Any
assignee of or sublessee under, this Lease shall, by reason of accepting such assignment,
entering in to such sublease, or entering in to possession of
the Premises or any portion there of,
be deemed to have assumed and agreed to conform and comply with each and every term, covenant,
condition and obligation herein to be observed or performed by Lessee during the term of said
assignment or sublease, other than such obligations as are contrary to or inconsistent with
provisions of an assignment or sublease to which Lessor has specifically consented to in writing.



(g) Lesser’s consent to any assignment or subletting shall not transfer to the assignee or
sublessee any Option granted to the original Lessee by this Lease unless such transfer is
specifically consented to by Lessor in writing (See Paragraph 39.2)



12.3 Additional Terms and Conditions Applicable to Subletting. The following terms and conditions
shall apply to any subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly incorporated therein:



(a) Lessee hereby assigns and transfers to Lessor all of Lessee’s interest in all Rent payable on
any sublease, and Lessor may collect such Rent and apply same toward Lessee’s obligations under
this Lease; provided, however, that until a Breach shall occur in the performance of Lessee’s
obligations, Lessee may collect said Rent. In the event that the amount collected by Lessor exceeds
Lessee’s then outstanding obligations any such excess shall be refunded to Lessee. Lessor shall
not, by reason of the foregoing or any assignment of such sublease, not by reason of the collection
of Rent, be deemed liable to the sublessee for any failure of
Lessee to perform and comply with any of Lessee’s obligations to such sublessee. Lessee hereby
irrevocably authorizes and directs any such sublessee, upon receipt of a written notice from Lessor
stating that a Breach exists in the performance of Lessee’s obligations under this Lease, to pay to
Lessor all Rent due and to become due under the sublease. Sublessee shall rely upon any such notice
from Lessor and shall pay all Rents to Lessor without any obligation or right to inquire as to
whether such Breach exists, notwithstanding any claim from Lessee to the contrary.



(b) In the event of a Breach by Lessee, Lessor may, at its option, require sublessee toattorn to
Lessor, in which event Lessor shall undertake the obligations of the sublessor under such sublease
from the time of the exercise of said option to the expiration of such sublease; provided, however,
Lessor shall not be liable for any prepaid rents or security deposit paid by such Sublessee to such
sublessor or for any prior Defaults or Breaches of such sublessor.



(c) Any matter requiring the consent of the sublessor under a sublease shall also require the
consent of Lessor.



(d) No sublessee shall further assign or sublet all or any part of the Premises without Lessor’s
prior written consent.



(e) Lessor shall deliver a copy of anynotice of Default or Breach by Lessee to the sublessee, who
shall have the right to cure the Default of Lessee with in the grace period, if any, specified in
such notice. The sublessee shall have a right of reimbursement and offset from and against Lessee
for any such Defaults cured by the sublessee.



13. Default; Breach; Remedies.




13.1 Default; Breach. A “Default” is defined as a failure by the Lessee to comply with or perform
any of the terms, covenants, conditions or Rules and Regulations under this Lease. A “ Breach” is
defined as the occurrence of one or more of the following Defaults, and the failure of Lessee to
cure such Default within any applicable grace period:



(a) The abandonment of the Premises; or the vacating of the Premises without providing a
commercially reasonable level of security, or where the coverage of the property insurance
described in Paragraph 8.3 is jeopardized as a result thereof, or without providing reasonable
assurances to minimize potential vandalism.



(b) The failure of Lessee to make any payment of Rent or any Security Deposit required to be made
by Lessee hereunder, whether to Lessor or to a third party, when due, to provide reasonable
evidence of insurance or surety bond, or to fulfill any obligation under this Lease which endangers
or threatens life or property, where such failure continues for a period of 3 business days
following written notice to Lessee. THE ACCEPTANCE BY LESSOR OF A PARTIAL PAYMENT OF RENT OR
SECURITY DEPOSIT SHALL NOT CONSTITUTE A WAIVER OF ANY OF LESSOR’S RIGHTS, INCLUDING LESSOR’S RIGHT
TO RECOVER POSSESSION OF THE PREMISES.



(c) The failure of Lessee to allow Lessor and/or its agents access to the Premises or the
commission of waste, act or acts constituting public or private nuisance, and/or an illegal
activity on the Premises by Lessee, where such actions continue for a
period of 3 business 10 days
following written notice to Lessee.



(d) The failure by Lessee to provide (i) reasonable written evidence of compliance with Applicable
Requirements, (ii) the service contracts, (iii) the rescission of an unauthorized assignment or
subletting, (iv) an Estoppel Certificate or financial statements, (v) a requested subordination,
(vi) evidence concerning any guarantee and/or Guarantor, (vii) any document requested under
Paragraph 41, (viii) material data safety sheets (MSDS), or (ix) any other documentation or
information which Lessor may reasonably require of Lessee under the terms of this Lease, where any
such failure continues for a period of 10 days following written notice to Lessee.



(e) A Default by Lessee as to the terms, covenants, conditions or provisions of this Lease, or of
the rules adopted under Paragraph 2.9 hereof, other than those described in subparagraphs 13.1 (a),
(b), (c) or (d), above, where such Default continues for a period of 30 days after written notice;
provided, however, that if the nature of Lessee’s Default is such that more than 30 days are
reasonably required for its cure, then it shall not be deemed to be a Breach if Lessee commences
such cure within said 30 day period and thereafter diligently prosecutes such cure to completion.





				
	                    	 	 	                    
	                    	 	 	                    
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(f) The occurrence of any of the following events: (i) the making of any general
arrangement or assignment for the benefit of creditors; (ii) becoming a “debtor” as defined in 11
U.S.C. § 101 or any successor statute thereto (unless, in the case of a petition filed against
Lessee, the same is dismissed within 60 days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Lessee’s assets located at the Premises or of Lessee’s
interest in this Lease, where possession is not restored to Lessee within 30 days; or (iv) the
attachment, execution or other judicial seizure of substantially all of Lessee’s assets located at
the Premises or of Lessee’s interest in this Lease, where such seizure is not discharged within 30
days; provided, however, in the event that any provision of this subparagraph (e) is contrary to
any applicable law, such provision shall be of no force or effect, and not affect the validity of
the remaining provisions.



(g) The discovery that any financial statement of Lessee or of any Guarantor given to
Lessor was intentionally and materially false.



(h) If the performance of Lessee’s obligations under this Lease is guaranteed: (i) the
death of a Guarantor, (ii) the termination of a Guarantor’s liability with respect to
this Lease other than in accordance with the terms of such guaranty, (iii) a
Guarantor’s becoming insolvent or the subject of a bankruptcy filing, (iv) a
Guarantor’s refusal to honor the guaranty, or (v) a Guarantor’s breach of its guaranty
obligation on an anticipatory basis, and Lessee’s failure, within 60 days following
written notice of any such event, to provide written alternative assurance or
security, which when coupled with the then existing resources of Lessee, equals or
exceeds the combined financial resources of Lessee and the Guarantors that existed at
the time of execution of this Lease.



13.2 Remedies. If Lessee fails to perform any of its affirmative duties or obligations, within
10 days after written notice (or in case of an emergency, without notice), Lessor may, at its
option, perform such duty or obligation on Lessee’s behalf, including but not limited to the
obtaining of reasonably required bonds, insurance policies, or governmental licenses, permits or
approvals. Lessee shall pay to Lessor an amount equal to 115% of the costs and expenses incurred by
Lessor in such performance upon receipt of an invoice therefor. In the event of a Breach, Lessor
may, with or without further notice or demand, and without limiting Lessor in the exercise of any
right or remedy which Lessor may have by reason of such Breach:



(a) Terminate Lessee’s right to possession of the Premises by any lawful means, in which case
this Lease shall terminate and Lessee shall immediately surrender possession to Lessor. In such
event Lessor shall be entitled to recover from Lessee: (i) the unpaid Rent which had been earned at
the time of termination; (ii) the worth at the time of award of the amount by which the unpaid rent
which would have been earned after termination until the time of award exceeds the amount of such
rental loss that the Lessee proves could have been reasonably avoided; (iii) the worth at the time
of award of the amount by which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss that the Lessee proves could be reasonably avoided; and (iv)
any other amount necessary to compensate Lessor for all the detriment proximately caused by the
Lessee’s failure to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including but not limited to the cost of recovering
possession of the Premises, expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorneys’ fees, and that portion of any leasing commission paid by
Lessor in connection with this Lease applicable to the unexpired term of this Lease. The worth at
the time of award of the amount referred to in provision (iii) of the immediately preceding
sentence shall be computed by discounting such amount at the discount rate of the Federal Reserve
Bank of the District within which the Premises are located at the time of award plus one percent.
Efforts by Lessor to mitigate damages caused by Lessee’s Breach of this Lease shall not waive
Lessor’s right to recover damages under Paragraph 12. If termination of this Lease is obtained
through the provisional remedy of unlawful detainer, Lessor shall have the right to recover in such
proceeding any unpaid Rent and damages as are recoverable therein, or Lessor may reserve the right
to recover all or any part thereof in a separate suit. If a notice and grace period required under
Paragraph 13.1 was not previously given, a notice to pay rent or quit, or to perform or quit given
to Lessee under the unlawful detainer statute shall also constitute the notice required by
Paragraph 13.1. In such case, the applicable grace period required by Paragraph 13.1 and the
unlawful detainer statute shall run concurrently, and the failure of Lessee to cure the Default
within the greater of the two such grace periods shall constitute both an unlawful detainer and a
Breach of this Lease entitling Lessor to the remedies provided for in this Lease and/or by said
statute.



(b) Continue the Lease and Lessee’s right to possession and recover the Rent as it becomes
due, in which event Lessee may sublet or assign, subject only to reasonable limitations. Acts of
maintenance, efforts to relet, and/or the appointment of a receiver to protect the Lessor’s
interests, shall not constitute a termination of the Lessee’s right to possession.



(c) Pursue any other remedy now or hereafter available under the laws or judicial decisions of
the state wherein the Premises are located. The expiration or termination of this Lease and/or the
termination of Lessee’s right to possession shall not relieve Lessee from liability under any
indemnity provisions of this Lease as to matters occurring or accruing during the term hereof or by
reason of Lessee’s occupancy of the Premises.



13.3 Inducement Recapture. Any agreement for free or abated rent or other charges, or for the
giving or paying by Lessor to or for Lessee of any cash or other bonus, inducement or consideration
for Lessee’s entering into this Lease, all of which concessions are hereinafter referred to as
“Inducement Provisions”, shall be deemed conditioned upon Lessee’s full and faithful performance of
all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Lessee, any
such Inducement Provision shall automatically be deemed deleted from this Lease and of no further
force or effect, and any rent, other charge, bonus, inducement or consideration theretofore abated,
given or paid by Lessor under such an Inducement Provision shall be immediately due and payable by
Lessee to Lessor, notwithstanding any subsequent cure of said Breach by Lessee. The acceptance by
Lessor of rent or the cure of the Breach which initiated the operation of this paragraph shall not
be deemed a waiver by Lessor of the provisions of this paragraph unless specifically so stated in
writing by Lessor at the time of such acceptance.



13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee of Rent will cause
Lessor to incur costs not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to, processing and accounting
charges, and late charges which may be imposed upon Lessor by any Lender. Accordingly, if any
Rent shall not be received by Lessor within 5 days after such amount shall be due, then, without
any requirement for notice to Lessee, Lessee shall immediately pay to Lessor a one-time late
charge equal to 10% of each such overdue amount or $100, whichever is greater. The parties hereby
agree that such late charge represents a fair and reasonable estimate of the costs Lessor will
incur by reason of such late payment. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee’s Default or Breach will respect to such overdue amount, nor
prevent the exercise of any of the other rights and remedies granted hereunder. In the event that
a late charge is payable hereunder, whether or not collected, for 3 consecutive installments of
Base Rent, then notwithstanding any provision of this Lease to the
contrary, Base Rent shall, at
Lessor’s option, become due and payable quarterly in advance.



13.5 Interest. Any monetary payment due Lessor hereunder, other than late charges, not
received by Lessor, when due as to scheduled payments (such as Base Rent) or within 30 days
following the date on which it was due for non-scheduled payment, shall bear interest from the date
when due, as to scheduled payments, or the 31st day after it was due as to non-scheduled payments.
The interest (“Interest”) charged shall be computed at the rate of 10% per annum but shall not
exceed the maximum rate allowed by law. Interest is payable in addition to the potential late
charge provided for in Paragraph 13.4.



13.6 Breach by Lessor.



(a) Notice of Breach. Lessor shall not be deemed in breach of this Lease unless Lessor fails
within a reasonable time to perform an obligation required to be performed by Lessor. For
purposes of this Paragraph, a reasonable time shall in no event be less than 30 days after
receipt by Lessor, and any Lender whose name and address shall have been furnished Lessee in
writing for such purpose, of written notice specifying wherein such obligation of Lessor has not
been performed; provided, however, that if the nature of Lessor’s obligation is such that more
than 30 days



			
	                    
	 	                    
	 
	                    
	 	                    
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are reasonably required for its performance, then Lessor shall not be in breach if performance is
commenced within such 30 day period and thereafter diligently pursued to completion.



(b) Performance
by Lessee on Behalf of Lessor. In the event that neither Lessor nor Lender
cures said breach within 30 days after receipt of said notice, or if having commenced said cure
they do not diligently pursue it to completion, then Lessee may elect to cure said breach at
Lessee’s expense and offset from Rent the actual and reasonable cost to perform such cure,
provided, however, that such offset shall not exceed an amount equal to the greater of one month’s
Base Rent or the Security Deposit, reserving Lessee’s right to seek reimbursement from Lessor for
any such expense in excess of such offset. Lessee shall document the cost of said cure and supply
said documentation to Lessor.



14. Condemnation.
If the Premises or any portion thereof are taken under the power of eminent
domain or sold under the threat of the exercise of said power (collectively “Condemnation”), this
Lease shall terminate as to the part taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the rentable floor area of the Premises,
or more than 25% of Lessee’s Reserved Parking Spaces, if any, are taken by Condemnation, Lessee
may, at Lessee’s option, to be exercised in writing within 10 days after Lessor shall have given
Lessee written notice of such taking (or in the absence of such notice, within 10 days after the
condemning authority shall have taken possession) terminate this Lease as of the date the
condemning authority takes such possession. If Lessee does not terminate this Lease in accordance
with the foregoing, this Lease shall remain in full force and effect as to the portion of the
Premises remaining, except that the Base Rent shall be reduced in proportion to the reduction in
utility of the Premises caused by such Condemnation. Condemnation awards and/or payments shall be
the property of Lessor, whether such award shall be made as compensation for diminution in value of
the leasehold, the value of the part taken, or for severance damages; provided, however, that
Lessee shall be entitled to any compensation paid by the condemnor for Lessee’s relocation
expenses, loss of business goodwill and/or Trade Fixtures, without regard to whether or not this
Lease is terminated pursuant to the provisions of this Paragraph. All Alterations and Utility
installations made to the Premises by Lessee, for purposes of Condemnation only, shall be
considered the property of the Lessee and Lessee shall be entitled to any and all compensation
which is payable therefor. In the event that this Lease is not terminated by reason of the
Condemnation, Lessor shall repair any damage to the Premises caused by such Condemnation.



15. Brokerage Fees.



15.1 Additional Commission. In addition to the payments owed pursuant to Paragraph 1.10 above,
and unless Lessor and the Brokers otherwise agree in writing, Lessor agrees that; (a) if Lessee
exercises any Option, (b) if Lessee or anyone affiliated with Lessee acquires from Lessor any
rights to the Premises or other premises owned by Lessor and located within the Project, (c) if
Lessee remains in possession of the Premises, with the consent of
Lessor, after the expiration of
this Lease, or (d) if Base Rent is increased, whether by agreement or operation of an escalation
clause herein, then, Lessor shall pay Brokers a fee in accordance with the schedule of the
Brokers in effect at the time of the execution of this Lease.



15.2 Assumption of Obligations. Any buyer or transferee of Lessor’s interest in this Lease
shall be deemed to have assumed Lessor’s obligation hereunder. Brokers shall be third party
beneficiaries of the provisions of Paragraphs 1.10, 15, 22 and 31. If Lessor fails to pay to
Brokers any amounts due as and for brokerage fees pertaining to this Lease when due, then such
amounts shall accrue Interest. In addition, if Lessor fails to pay any amounts to Lessee’s Broker
when due, Lessee’s Broker may send written notice to Lessor and Lessee of such failure and if
Lesser fails to pay such amounts within 10 days after said notice, Lessee shall pay said monies to
its Broker and offset such amounts against Rent. In addition, Lessee’s Broker shall be deemed to
be a third party beneficiary of any commission agreement entered into by and/or between Lessor and
Lessor’s Broker for the limited purpose of collecting any brokerage fee owed.



15.3 Representations and Indemnities of Broker Relationships. Lessee and Lessor each
represent and warrant to the other that it has had no dealings with any person, firm, broker or
finder (other than the Brokers, if any) in connection with this Lease, and that no one other than
said named Brokers is entitled to any commission or finder’s fee in connection herewith. Lessee
and Lessor do each hereby agree to indemnify, protect, defend and hold the other harmless from and
against liability for compensation or charges which may be claimed by any such unnamed broker,
finder or other similar party by reason of any dealings or actions of the indemnifying Party,
including any costs, expenses, attorneys’ fees reasonably incurred with respect thereto.



16. Estoppel Certificates.



(a) Each Party (as “Responding Party”) shall within 10 days after written notice from the
other Party (the “Requesting Party”) execute, acknowledge and deliver to the Requesting Party a
statement in writing in form similar to the then most current “Estoppel Certificate” form published
by the AIR Commercial Real Estate Association, plus such additional information, confirmation
and/or statements as may be reasonably requested by the Requesting Party.



(b) If the Responding Party shall fail to execute or deliver the Estoppel Certificate within
such 10 day period, the Requesting Party may execute an Estoppel Certificate stating that: (i) the
Lease is in full force and effect without modification except as may be represented by the
Requesting Party, (ii) there are no uncured defaults in the Requesting Party’s performance, and
(iii) if Lessor is the Requesting Party, not more than one month’s rent has been paid in advance.
Prospective purchasers and encumbrancers may rely upon the Requesting Party’s Estoppel Certificate,
and the Responding Party shall be estopped from denying the truth of the facts contained in said
Certificate.



(c) If Lessor desires to finance, refinance, or self the Premises, or any part thereof, Lessee
and all Guarantors shall within 10 days after written notice from Lessor deliver to any potential
lender or purchaser designated by Lessor such financial statements as may be reasonably required by
such lender or purchaser, including but not limited to Lessee’s financial statements for the past 3
years. All such financial statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.



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



18. Severability. The invalidity of any provision of this Lease, as determined by a court of
competent jurisdiction, shall in no way affect the validity of any other provision hereof.



19. Days. Unless otherwise specifically indicated to the contrary, the word “days” as used in this
Lease shall mean and refer to calendar days.



20. Limitation on Liability. The obligations of Lessor under this Lease shall not constitute
personal obligations of Lessor or its Lessor’s partners, members, directors, officers or
shareholders, and Lessee shall look to the amount of Lessor’s interest in the Project, and to no
other assets of Lessor, for the satisfaction of any liability of Lessor with respect to this Lease,
and shall not seek recourse against Lessor’s partners, members, directors, officers or
shareholders, or any of their personal assets for such satisfaction.



21. Time of Essence. Time is of the essence with respect to the performance of all obligations to
be performed or observed by the Parties under this Lease.



22. No Prior or Other Agreements; Broker Disclaimer. This Lease contains all agreements between
the Parties with respect to any matter.





				
	                    	 	 	                    
	                    	 	 	                    
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mentioned herein, and no other prior or contemporaneous agreement or understanding shall be
effective. Lessor and Lessee each represents and warrants to the Brokers that it has made, and is
relying solely upon, its own investigation as to the nature, quality, character and financial
responsibility of the other Party to this Lease and as to the use, nature, quality and character
of the Premises. Brokers have no responsibility with respect thereto or with respect to any
default or breach hereof by either Party.



23. Notices.



23.1 Notice Requirements. All notices required or permitted by this Lease or applicable law
shall be in writing and may be delivered in person (by hand or by courier) or may be sent by
regular, certified or registered mail or U.S. Postal Service Express Mail, with postage prepaid, or
by facsimile transmission, and shall be deemed sufficiently given if served in a manner specified
in this Paragraph 23. The addresses noted adjacent to a Party’s signature on this Lease shall be
that Party’s address for delivery or mailing of notices. Either Party may by written notice to the
other specify a different address for notice, except that upon Lessee’s taking possession of the
Premises, the Premises shall constitute Lesse’s address for
notice. A copy of all notices to Lessor
shall be concurrently transmitted to such party or parties at such addresses as Lessor may from
time to time hereafter designate in writing.



23.2 Date of Notice. Any notice sent by registered or certified mail, return receipt
requested, shall be deemed given on the date of delivery shown on the receipt card, or if no
delivery date is shown, the postmark thereon. If sent by regular mail the notice shall be deemed
given three business days 72 hours after the same is addressed as required herein and mailed with
postage prepaid. Notices delivered by United States Express Mail or overnight courier that
guarantee next day delivery shall be deemed given 24 hours after delivery of the same to the Postal
Service or courier. Notices transmitted by facsimile transmission or similar means shall be deemed
delivered upon telephone confirmation of receipt (confirmation report from fax machine is
sufficient), provided a copy is also delivered via delivery or mail. If notice is received on a
Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.



24. Waivers.



(a) No waiver by Lessor of the Default or Breach of any term, covenant or condition hereof by
Lessee, shall be deemed a waiver of any other term, covenant or condition hereof, or of any
subsequent Default or Breach by Lessee of the same or of any other term, covenant or condition
hereof. Lessor’s consent to, or approval of, any act shall not be deemed to render unnecessary
the obtaining of Lessor’s consent to, or approval of, any subsequent or similar act by Lessee, or
be construed as the basis of an estoppel to enforce the provision or provisions of this Lease
requiring such consent.



(b) The acceptance of Rent by Lessor shall not be a waiver of any Default or Breach by Lessee,
Any payment by Lessee may be accepted by Lessor on account of moneys or damages due Lessor,
notwithstanding any qualifying statements or conditions made by Lassee in connection therewith,
which such statements and/or conditions shall be of no force or effect whatsoever unless
specifically agreed to in writing by Lessor at or before the time of deposit of such payment.



(c) THE PARTIES AGREE THAT THE TERMS OF THIS LEASE SHALL GOVERN WITH REGARD TO ALL MATTERS
RELATED THERETO AND HEREBY WAIVE THE PROVISIONS OF ANY PRESENT OR FUTURE STATUTE TO THE EXTENT THAT
SUCH STATUTE IS INCONSISTENT WITH THIS LEASE.



25. Disclosures Regarding The Nature of a Real Estate Agency Relationship.



(a) When entering into a discussion with a real estate agent regarding a real estate
transaction, a Lessor or Lessee should from the outset understand what type of agency relationship
or representation it has with the agent or agents in the transaction. Lessor and Lessee
acknowledge being advised by the Brokers in this transaction, as follows:



(i) Lessor’s Agent. A Lessor’s agent under a listing agreement with the Lessor acts as the
agent for the Lessor only. A Lessor’s agent or subagent has the following affirmative obligations:
To the Lessor: A fiduciary duty of utmost care, integrity, honesty, and loyalty in dealings with
the Lessor. To the Lessee and the Lessor: a. Diligent exercise of reasonable skills and care in
performance of the agent’s duties. b. A duty of honest and fair dealing and good faith. c. A duty
to disclose all facts known to the agent materially affecting the value or desirability of the
property that are not known to, or within the diligent attention and observation of, the Parties.
An agent is not obligated to reveal to either Party any confidential information obtained from the
other Party which does not involve the affirmative duties set forth above.



(ii) Lessee’s Agent. An agent can agree to act as agent for the Lessee only. In these
situations, the agent is not the Lessor’s agent, even if by agreement the agent may receive
compensation for services rendered, either in full or in part from the Lessor. An agent acting only
for a Lessee has the fallowing affirmative obligations. To the Lessee: A fiduciary duty of utmost
care, integrity, honesty, and loyalty in dealings with the Lessee. To the Lessee and the Lessor: a.
Diligent exercise of reasonable skills and care in performance of the agent’s duties. b. A duty of
honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent
materially affecting the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated to reveal to either
Party any confidential information obtained from the other Party which does not involve the
affirmative duties set forth above.



(iii) Agent Representing Both Lessor and Lessee. A real estate agent, either acting directly
or through one or more associate licenses, can legally be the agent of both the Lessor and the
Lessee in a transaction, but only with the knowledge and consent of both the Lessor and the Lessee.
In a dual agency situation, the agent has the following affirmative obligations to both the Lessor
and the Lessee: a. A fiduciary duty of utmost care, integrity, honesty and loyalty in the dealings
with either Lessor or the Lessee. b. Other duties to the Lessor and the Lessee as stated above in
subparagraphs (i) or (ii). In representing both Lessor and Lessee, the agent may not without the
express permission of the respective Party, disclose to the other Party that the Lessor will accept
rent in an amount less than that indicated in the listing or that the Lessee is willing to pay a
higher rent than that offered. The above duties of the agent in a real estate transaction do not
relieve a Lessor or Lessee from the responsibility to protect their own interests. Lessor and
Lessee should carefully read all agreements to assure that they adequately express their
understanding of the transaction. A real estate agent is a person qualified to advise about real
estate. If legal or tax advice is desired, consult a competent professional.



(b) Brokers have no responsibility with respect to any default or breach hereof by either
Party. The Parties agree that no lawsuit or other legal proceeding involving any breach of duty,
error or omission relating to this Lease may be brought against Broker more than one year after the
Start Date and that the liability (including court costs and attorneys’ fees), of any Broker with
respect to any such lawsuit and/or legal proceeding shall not exceed the fee received by such
Broker pursuant to this Lease; provided, however, that the foregoing limitation on each Broker’s
liability shall not be applicable to any gross negligence or willful misconduct of such Broker.



(c) Buyer and Seller agree to identify to Brokers as “Confidential” any communication or
information given Brokers that is considered by such Party to be confidential.



26. No Right To Holdover. Lessee has no right to retain possession of the Premises or any part
thereof beyond the expiration or termination of this Lease. In the event that Lessee holds over,
then the Base Rent shall be increased to 150% of the Base Rent applicable immediately preceding the
expiration or termination. Nothing contained herein shall be construed as consent by Lessor to any
holding over by Lessee.



27. Cumulative Remedies. No remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies at law or in equity.





				
	                    	 	 	                    
	                    	 	 	                    
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28. Covenants
and Conditions; Construction of Agreement. All provisions of this Lease to be
observed or performed by Lessee are both covenants and conditions. In construing this Lease, all
headings and titles are for the convenience of the Parties only and shall not be considered a part
of this Lease. Whenever required by the context, the singular shall include the plural and vice
versa. This Lease shall not be construed as if prepared by one of the Parties, but rather
according to its fair meaning as a whole, as if both Parties had prepared it.



29. Binding Effect; Choice of Law. This Lease shall be binding upon the Parties, their personal
representatives, successors and assigns and be governed by the laws of the State in which the
Premises are located. Any litigation between the Parties hereto concerning this Lease shall be
initiated in the county in which the Premises are located.



30. Subordination; Attornment; NonDisturbance.




30.1 Subordination. This Lease and any Option granted hereby shall be subject and subordinate
to any ground lease, mortgage, deed of trust, or other hypothecation or security device
(collectively, “Security Device”), now or hereafter placed upon the Premises, to any and all
advances made on the security thereof, and to all renewals, modifications, and extensions thereof.
Lessee agrees that the holders of any such Security Devices (in this Lease together referred to as
“Lender”) shall have no liability or obligation to perform any of the obligations of Lessor under
this Lease. Any Lender may elect to have this Lease and/or any Option granted hereby superior to
the lien of its Security Device by giving written notice thereof to Lessee, whereupon this Lease
and such Options shall be deemed prior to such Security Device, notwithstanding the relative dates
of the documentation or recordation thereof.



30.2 Attornment. In the event that Lessor transfers title to the Premises, or the Premises are
acquired by another upon the foreclosure or termination of a Security Device to which this Lease is
subordinated (i) Lessee shall, subject to the non-disturbance provisions of Paragraph 30.3, attorn
to such new owner, and upon request, enter into a new lease, containing all of the terms and
provisions of this Lease, with such new owner for the remainder of the term hereof, or, at the
election of the new owner, this Lease will automatically become a new lease between Lessee and such
new owner, and (ii) Lessor shall thereafter be relieved of any further obligations hereunder and
such new owner shall assume all of Lessor’s obligations, except that such new owner shall not: (a)
except for continuing defaults, be liable for any act or omission of any prior lessor or with
respect to events occurring prior to acquisition of ownership; (b) be subject to any offsets or
defenses which Lessee might have against any prior lessor, (c) be bound by prepayment of more than
one month’s rent, or (d) be liable for the return of any security deposit paid to any prior lessor.



30.3 NonDisturbance. With respect to Security Devices entered into by Lessor after the
execution of this Lease, Lessee’s subordination of this Lease shall be subject to receiving a
commercially reasonable non-disturbance agreement (a
“NonDisturbance Agreement”) from the Lender
which Non-Disturbance Agreement provides that Lessee’s possession of the Premises, and this Lease,
including any options to extend the term hereof, will not be disturbed so long as Lessee is not in
Breach hereof and attorns to the record owner of the Premises.
Further, within 60 days after the
execution of this Lease, Lessor shall, if requested by Lessee, use its commercially reasonable
efforts to obtain a Non-Disturbance Agreement from the holder of any
pre-existing Security Device
which is secured by the Premises. In the event that Lessor is unable
to provide the Non-Disturbance
Agreement within said 60 days, then Lessee may, at Lessee’s option, directly contact Lender and
attempt to negotiate for the execution and delivery of a
Non-Disturbance Agreement.



30.4
SelfExecuting. The agreements contained in this Paragraph 30 shall be effective without
the execution of any further documents; provided, however, that, upon written request from Lessor
or a Lender in connection with a sale, financing or refinancing of
the Premises. Lessee and Lessor
shall execute such further writings as may be reasonably required to separately document any
subordination, attornment and/or Non-Disturbance Agreement provided for herein.



31. Attorneys’
Fees. If any Party or Broker brings an action or proceeding involving this
Lease the Premises whether founded in
tort, contract or equity, or to declare rights hereunder, the
Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall
be entitled to reasonable attorneys’ fees. Such fees may be awarded in the same suit or recovered
in a separate suit, whether or not such action or proceeding is pursued to decision or judgment.
The term, “Prevailing Party” shall include, without
limitation, a Party  or Broker who
substantially obtains or defeats the relief sought, as the case may be, whether by compromise,
settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The
attorneys’ fees award shall not be computed in accordance with any court fee schedule, but shall
be such as to fully reimburse all attorneys’ fees reasonably incurred. In addition and subject to
the foregoing, Lessor shall be entitled to attorneys’ fees, costs and expenses incurred in the
preparation and service of notices of Default and consultations in connection therewith, whether
or not a legal action is subsequently commenced in connection with such Default or resulting
Breach ($200 is a reasonable minimum per occurrence for such services and consultation).



32. Lessor’s Access; Showing Premises; Repairs. Lessor and Lessor’s agents shall have the right to
enter the Premises at any time, in the case of an emergency, and
otherwise at reasonable times
after reasonable prior notice for the purpose of showing the same to prospective purchasers,
lenders, or, during the last nine months of the term, tenants, and making such alterations,
repairs, improvements or additions to the Premises as Lessor may deem necessary or desirable and
the erecting, using and maintaining of utilities, services, pipes and conduits through the Premises
and/or other premises as long as there is no material adverse effect to Lessee’s use of the
Premises. All such activities shall be without abatement of rent or
liability to Lessee. In
addition, Lessor shall have the right to retain keys to the Premises and to unlock all doors in or
upon the Premises other than to files, vaults and safes, and in the case of emergency to enter the
Premises by any reasonably appropriate means, and any such entry shall not be deemed a forcible or
unlawful entry or detainer of the Premises or an eviction. Lessee waives any charges for damages
or injuries or interference with Lessee’s property or business in connection therewith.



33. Auctions. Lessee shall not conduct, nor permit to be conducted, any auction upon the Premises
without Lessor’s prior written consent. Lessor shall not be obligated to exercise any standard of
reasonableness
in determining whether to permit an auction.



34. Signs.
Lessor may place on the Premises ordinary “For Sale” signs
at any time and ordinary
“For Lease” signs during the last 6 months of the term
hereof. Except for ordinary “For Sublease”
signs which may be placed only on the Premises. Lessee shall not place any sign upon the Project
without Lessor’s prior written consent. All signs must comply with all Applicable Requirements.



35. Termination; Merger. Unless specifically stated otherwise in writing by Lessor, the voluntary
or other surrender of this Lease by Lessee, the mutual termination or cancellation hereof, or a
termination hereof by Lessor for Breach by Lessee, shall automatically terminate any sublease or
lesser estate in the Premises; provided, however, that Lessor may elect to continue any one or all
existing subtenancies. Lessor’s failure within 10 days
following any such event to elect to the
contrary by written notice to the holder of any such lesser interest, shall constitute Lessor’s
election to have such event constitute the termination of such interest.



36. Consents. Except as otherwise provided herein, wherever in this Lease the consent of a Party is
required to an act by or for the other Party, such consent shall not be unreasonably withheld or
delayed. Lessor’s actual reasonable costs and expenses (including but not limited to architects’,
attorneys’, engineers’ and other consultants’ fees) incurred in the consideration of, or response
to, a request by Lessee for any Lessor consent, including but not limited to consents to an
assignment, a subletting or the presence or use of a Hazardous Substance, shall be paid by Lessee
upon receipt of an invoice and supporting documentation therefor. Lessor’s consent to any act,
assignment or subletting shall not constitute an acknowledgment that no Default or Breach by Lessee
of this Lease exists, nor shall such consent be deemed a waiver of any then existing Default or
Breach, except as may be otherwise specifically stated in writing by Lessor at the time of such
consent.





				
	                    	 	 	                    
	                    	 	 	                    
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The failure to specify herein any particular
condition to Lessor’s consent shall not preclude the imposition by Lessor at the time of consent of
such further or other conditions as are then reasonable with reference to the particular matter for
which consent is being given. In the event that either Party disagrees with any determination
made by the other hereunder and reasonably requests the reasons for such determination, the
determining party shall furnish its reasons in writing and in reasonable detail within 10 business
days following such request.



37. Guarantor.




37.1 Execution. The Guarantors, if any, shall each execute a guaranty in the form most recently
published by the AIR Commercial Real Estate Association.



37.2 Default. It shall constitute a Default of the Lessee if any Guarantor fails or refuses, upon
request to provide: (a) evidence of the execution of the guaranty, including the authority of the
party signing on Guarantor’s behalf to obligate Guarantor, and in the case of a corporate
Guarantor, a certified copy of a resolution of its board of directors authorizing the making of such
guaranty, (b) current financial statements, (c) an Estoppel Certificate, or (d) written
confirmation that the guaranty is still in effect.



38. Quiet Possession. Subject to payment by Lessee of the Rent and performance of all of the
covenants, conditions and provisions on Lessee’s part to be observed and performed under this
Lease, Lessee shall have quiet possession and quiet enjoyment of the Premises during the term
hereof.



39. Options. If Lessee is granted an Option, as defined below, then the following provisions shall
apply.



39.1 Definition. “Option” shall mean; (a) the right to extend or reduce the term of or renew
this Lease or to extend or reduce the term of or renew any lease that Lessee has on other
property of Lessor, (b) the right of first refusal or first offer to lease either the Premises or
other property of Lessor: (c) the right to purchase, the right of first offer to purchase or the
right of first refusal to purchase the Premises or other property of Lessor.



39.2
Options Personal To Original Lessee. Any Option granted to Lessee in this Lease is personal to
the original Lessee, and cannot be assigned or exercised by anyone other than said original Lessee
and only while the original Lessee is  in full possession of the Premises and, if requested by Lessor,
with Lessee certifying that Lessee has no intention of thereafter
assigning or subletting.



39.3 Multiple Options. In the event that Lessee has any multiple Options to extend or renew
this Lease, a later Option cannot be exercised unless the prior Options have been validly
exercised.



39.4 Effect of Default on Options.



(a) Lessee shall have no right to exercise an Option; (i) during the period commencing with
the giving of any notice of Default and continuing until said Default is cured, (ii) during the
period of time any Rent is unpaid (without regard to whether notice thereof is given Lessee), (iii)
during the time Lessee is in Breach of this Lease, or (iv) in the event that Lessee has been given
3 or more notices of separate Default, whether or not the Defaults are cured, during the 12 month
period immediately preceding the exercise of the Option.



(b) The period of time within which an Option may be exercised shall not be extended or
enlarged by reason of Lessee’s inability to exercise an Option because of the provisions of
Paragraph 39.4(a).



(c) An Option shall terminate and be of no further force or effect, notwithstanding Lessee’s
due and timely exercise of the Option, if, after such exercise and prior to the commencement of the
extended term or completion of the purchase, (i) Lessee fails to pay Rent for a period of 30 days
after such Rent becomes due (without any necessity of Lessor to give notice thereof), or (ii) if
Lessee commits a Breach of this Lease.



40. Security Measures. Lessee hereby acknowledges that the Rent payable to Lessor hereunder does
not include the cost of guard service or other security measures, and that Lessor shall have no
obligation whatsoever to provide same. Lessee assumes all responsibility for the protection of the
Premises, Lessee, its agents and invitees and their property from the acts of third parties. In the
event, however, that Lessor should elect to provide security services, then the cost thereof shall
be an Operating Expense.



41. Reservations.



(a) Lessor reserves the right: (i) to grant, without the consent or joinder of Lessee, such
easements, rights and dedications that Lessor deems necessary, (ii) to cause the recordation of
parcel maps and restrictions, (iii) to create and/or install new utility raceways, so long as such
easements, rights, dedications, maps, restrictions, and utility raceways do not unreasonably
interfere with the use of the Premises by Lessee. Lessor may also: change the name, address or
title of the Building or Project upon at least 90 days prior
written notice; provide and install,
at Lessee’s expense, Building standard graphics on the door of the Premises and such portions of
the Common Areas as Lessor shall reasonably deem appropriate; grant to any lessee the exclusive
right to conduct any business as long as such exclusive right does not conflict with any rights
expressly given herein; and to place such signs, notices or displays as Lessor reasonably deems
necessary or advisable upon the roof, exterior of the Building or the Project or on pole signs in
the Common Areas. Lessee agrees to sign any documents reasonably requested by Lessor to effectuate
such rights. The obstruction of Lessee’s view, air, or light by any structure erected in the
vicinity of the Building, whether by Lessor or third parties, shall in no way affect this Lease or
impose any liability upon Lessor.



(b) Lesser also reserves the right to move Lessee to other space of comparable size in the Building
or Project.
Lesser must provide at least 45 days prior written notice of such move, and the new space must
contain improvements of comparable quality to those contained within the Premises. Lessor shall pay
the reasonable out of pocket costs that Lessee incurs with regard to such relocation, including
the expenses of moving and necessary stationary revision costs. In no event, however, shall Lessor
be required to pay an amount in excess of two months Base Rent Lessee may not be relocated more
than once during the term of this Lease.



(c) Lessee shall not: (i) use a representation (photographic or otherwise) of the Building or
Project or their name(s) in connection with Lessee’s business; or (ii) suffer or permit anyone,
except in emergency, to go upon the roof of the Building.



42. Performance Under Protest. If at any time a dispute shall arise as to any amount or sum of
money to be paid by one Party to the other under the provisions hereof, the Party against whom the
obligation to pay the money is asserted shall have the right to make payment “under protest” and
such payment shall not be regarded as a voluntary payment and there shall survive the right on the
part of said Party to institute suit for recovery of such sum. if it shall be adjudged that there
was no legal obligation on the part of said Party to pay such sum or any part thereof, said Party
shall be entitled to recover such sum or so much thereof as it was not legally required to pay. A
Party who does not initiate suit for the recovery of sums paid “under protest” with 6 months shall
be deemed to have waived its right to protest such payment.



43. Authority; Multiple Parties; Execution.



(a) If either Party hereto is a corporation, trust, limited liability company, partnership, or
similar entity, each such party represents that the individual executing this Lease on behalf of
such entity represents and warrants that he or she is duly authorized to execute and deliver this
Lease on its behalf. Each Party shall, within 30 days after request, deliver to the other Party
satisfactory evidence of such authority.



(b) If this Lease is executed by more than one person or entity as “Lessee”, each such
person or entity shall be jointly and severally liable hereunder. It is agreed that any one of the
named Lessees shall be empowered to execute any amendment to this Lease, or other document
ancillary thereto and bind all of the named Lessees, and Lessor may rely on the same as if all of
the named Lessees had executed such document.



(c) This Lease may be executed by the Parties in counterparts, each of which shall be deemed
an original and all of which together shall constitute one and the same instrument.





				
	                    	 	 	                    
	 
	                    	 	 	                    
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44. Conflict. Any conflict between the printed provisions of this Lease and the typewritten or
handwritten provisions shall be controlled by the typewritten or handwritten provisions.



45. Offer. Preparation of this Lease by either party or their agent and submission of same to the
other Party shall not be deemed an offer to lease to the other Party. This Lease is not intended to
be binding until executed and delivered by all Parties hereto.



46. Amendments. This Lease may be modified only in writing, signed by the Parties in interest at
the time of the modification. As long as they do not materially change Lessee’s obligations or
rights hereunder. Lessee agrees to make such reasonable non-monetary modifications to this Lease as
may be reasonably required by a Lender in connection with the obtaining of normal financing or
refinancing of the Premises.



47. Waiver
of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO TRIAL BY—JURY IN
ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF
THIS AGREEMENT.



48. Mediation
and Arbitration of Disputes. An Addendum requiring the Mediation and/or the
Arbitration of all disputes between the Parties and/or Brokers
arising out of this Lease
o is o is not attached to this Lease.



49. Americans
with Disabilities Act. Since compliance with the Americans with Disabilities Act
(ADA) is dependent upon Lessee’s specific use of the Premises, except as expressly set forth in
this Lease. Lessor makes no warranty or representation as to whether or not the Premises comply
with ADA or any similar legislation. In the event that Lessee’s particular use of the Premises
requires modifications or additions to the Premises in order to be in
ADA compliance, Lessee agrees
to make any such necessary modifications and/or additions at Lessee’s expense.



LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION
CONTAINED HEREIN, AND BY THE EXECUTION OF THIS LEASE SHOW THEIR INFORMED AND VOLUNTARY CONSENT
THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS
LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH
RESPECT TO THE PREMISES.



ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AIR COMMERCIAL REAL ESTATE
ASSOCIATION OR BY ANY BROKER AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF
THIS LEASE OR THE TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE
URGED TO:



1. SEEK
ADVICE OF COUNSEL AS TO THE LEGAL AND TAXCONSEQUENCES OF THIS
LEASE.



2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE PREMISES.
SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE PRESENCE OF HAZARDOUS
SUBSTANCES, THE ZONING AND SIZE OF THE PREMISES, THE STRUCTURAL INTEGRITY, THE CONDITION OF THE
ROOF AND OPERATING SYSTEMS, COMPLIANCE
WITH THE AMERICANS WITH DISABILITIES ACT AND THE SUITABILITY OF THE PREMISES FOR LESSEE’S INTENDED
USE.



WARNING: IF THE PREMISES ARE LOCATED IN A STATE OTHER THAN CALIFORNIA, CERTAIN PROVISIONS
OF THE LEASE MAY NEED TO BE REVISED TO COMPLY WITH THE LAWS OF THE STATE IN WHICH THE PREMISES
ARE LOCATED.



The parties hereto have executed this Lease at the place and on the dates specified above their
respective signatures.



	 	 	 	 	 	 	 	 	 	 	 
	Executed at:

	 	Carlsbad, CA
	 	Executed at:	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	On:

	 	9/11/08
	 	On:	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By LESSOR:

	 	/s/ G. Erickson	 	By LEASE :	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Amicus Therapeutics,
Inc.,
	 	 	 	 	a Delaware corporation
	 
	 	 	 	 	 	 	 	 	 	 
	AG/Touchstone TP, LLC, a Delaware limited liability company	 	By:	 	/s/ John F. Crowley
	By AG/Touchstone TP
Parent, LP., a Delaware limited partnership, its sole member	 	Name Printed:
Title:	 	JOHN F. CROWLEY
PRESIDENT & CEO
	By AG TP Parent GP, LLC, a Delaware limited liability company, its general partner	 	 	 	 
	By AG Real Estate Manager, Inc., a Delaware corporation, its manager	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	TOUCHSTONE INVESTMENT
	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Name Printed:

	 	G. ERICKSON
	 	Name Printed:	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	Title:

	 	President
	 	Title:	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Address:	 	* 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	Telephone:
(          )	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	Name Printed:

	 	 	 	Facsimile:
(          )	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	Title:

	 	 	 	Federal ID No.	 	 	 	 	 	 
	 

	 	 
	 	 	 	 
	Address:
	 	* 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Telephone:
(          )

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Facsimile: (          )
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	Federal ID No.
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 






				
	                    	 	 	                    
	                    	 	 	                    
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	LESSOR’S
BROKER:	 	LESSEE’S
BROKER:
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Attn:

	 	 	 	 	 	 	 	Attn:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Title:

	 	 	 	 	 	 	 	Title:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	Address:

	 	 	 	 	 	 	Address:	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Telephone: (          )	 	 	 	 	 	Telephone: (          )	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Facsimile: (          )	 	 	 	 	 	Facsimile: (          )	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	Federal ID No.	 	 	 	 	 	Federal ID No.	 	 	 	 
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 






NOTICE: These forms are often modified to meet changing requirements of law and industry needs.
Always write or call to make sure you are utilizing the most current
form: AIR Commercial Real
Estate Association, 800 W 6th Street, Suite 800, Los Angeles, CA 90017. Telephone No.
(213) 687-8777. Fax No.: (213) 687-8616.



©
Copyright 2002 — By AIR Commercial Real Estate Association.

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





				
	                    	 	 	                    
	                    	 	 	                    
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Addendum to Lease




This Addendum, dated September 11, 2008, constitutes an addendum to that certain Standard
Multi-Tenant Office Lease—Net (“the Lease”) dated September 11, 2008, by and between (1)
AG/Touchstone TP, LLC, a Delaware limited liability company
(“Lessor”), and (2) Amicus
Therapeutics, Inc., a Delaware corporation
(“Lessee”). Defined (capitalized) terms used in this
Addendum shall have the same meanings as in the Lease. Lessor and Lessee hereby supplement and
amend the Lease as follows, and in the event of a conflict between the terms of the Lease and the
terms of this Addendum, the terms of this Addendum shall prevail.



1.2
Premises. As used herein, “the Building” means the building commonly known as
11099 North Torrey Pines Road, San Diego, California 92037. The “Premises” consists of
approximately 7,668 rentable square feet on the second floor of the Building and is commonly known
as Suite 200. The location of the Premises is generally depicted on Exhibit 1 attached hereto. In
connection with this Lease, Lessee shall have the right to use, at no
additional cost, (1) 16
unreserved, covered parking spaces in the Common Area and (2) 7 reserved spaces. The location of
the reserved spaces shall be reasonably determined by Lessor. If Lessor is unable to provide the
necessary back-up power for Lessee’s critical equipment, Lessee may also install, at Lessee’s sole
cost, a back-up generator adjacent to the Premises at a location reasonably acceptable to Lessor.
The Building, the land owned by Lessor on which the Building is situated, and all other
improvements on such land are herein referred to as “the Project.” The Project is part of a
multi-parcel subdivision (“the Office Center”) on which other office buildings are situated. The
other buildings in the Office Center are not owned by Lessor. The Office Center is subject to that
certain Reciprocal Easement Agreement recorded June 30, 1988, as Document No. 88-223085, as
amended by the First Amendment to Reciprocal Easement Agreement
recorded December 30, 1988. Such
agreements are herein collectively referred to as “the REA.”




1.3
Term.



1.3.1 Original Term. The Original Term of this Lease shall commence on the
Commencement Date (defined below) and expire on the date (“the Expiration Date”) that is (1) 36
months after the Commencement Date if the Commencement Date is the first day of a calendar month or
(2) 36 months after the first day of the calendar month after the Commencement Date if the
Commencement Date is other than the first day of a calendar month (e.g., if the Commencement Date
were September 15, 2008, then the Expiration Date would be September 30, 2011). As used herein,
“Commencement Date” shall mean the date on which Lessor achieves Substantial Completion (defined
below) of Lessor’s Work (defined below) and delivers the Premises in the required condition. As
used herein, “the Target Commencement Date” shall mean September 15, 2008.


 


1









 





1.3.2 Option to Renew. Lessee shall have the right and option to renew the term of
this Lease for a further term of three years commencing on the expiration of the Original Term. The
term of this Lease, including the Original Term and any extensions pursuant to Lessee’s exercise of
options to extend, is herein referred to as “the Term.” The option to extend the Term of this
Lease may be exercised only by the delivery by Lessee to Lessor, no
earlier than 12 months or later than six months prior to the expiration of the Term, of written
notice of such exercise. Except as provided below, Lessee’s exercise of the options shall be
irrevocable. Lessee’s occupancy during the option period shall be subject to all terms and
conditions of this Lease; however, the Rent payable during the option period shall be subject to
adjustment, as provided below.




1.5 Base Rent.



1.5.1 Base Rent During Original Term. Commencing on the Commencement Date, Lessee
shall pay Base Rent to Lessor in advance, without deduction, offset, or notice of demand, on the
first day of each calendar month. A schedule of Base Rent to be paid during the Original Term is
as follows:



Base Rent Original Term 




	 	 	 	 	 
	Applicable Period	 	Monthly Base Rent Amount	 
	 
	 	 	 	 
	Lease Year 1
	 	$	22,620.60	 
	Lease Year 2
	 	$	23,299.22	 
	Lease Year 3
	 	$	23,998.20	 






As used herein, the term “Lease Year” shall mean each 12-month period commencing on the
Commencement Date if the Commencement Date is the first day of a calendar month, but otherwise on
the first day of the calendar month immediately next following the calendar month in which the
Commencement Date occurs and ending on the last day of the twelfth month thereafter; however, the
first Lease Year shall include any partial month in which the Commencement Date occurs if the
Commencement Date occurs on a day other than the first day of the month (e.g., if the Commencement
Date were September 15, 2008, then the first Lease Year would be September 15, 2008, through
September 30, 2009, and each subsequent Lease Year would start on October 1 and end on September
30).



1.5.2 Proration. If this Lease starts on other than the first day of a calendar month
or terminates on other than the last day of a calendar month, then the Rent for such partial month
shall be prorated in the proportion that the number of days of this Lease is in effect during such
period bears to the actual number of days in such month.


 


2









 





1.5.3
Determination of Rent for Option Period. The Base Rent to be paid by Lessee to
Lessor during the option period shall be the Market Rental Rate (defined below. As used herein,
the term “Market Rental Rate” shall mean the rate that is prevailing as of the commencement of the
first year of the option period for comparable space in a comparable building in the Torrey Pines
area, taking into consideration the size and age of and improvements in the Premises, the
three-year term of the option period, and other relevant factors; however, determination of Market
Rental Rate shall not consider improvements installed in the Premises at Lessee’s expense and
shall also take into consideration that there will be no free rent, allowance, or other concession
during the extension period. If appropriate under then current market conditions, determination of
Market Rental Rate shall also include determination of a reasonable
annual increase to the Base Rent for the second and third Lease Years of the option period. Market
Rental Rate shall be determined as follows:



1.5.3.1 By mutual agreement between Lessor and Lessee
evidenced in a writing signed by each and mutually delivered or



1.5.3.2 If Lessor and Lessee have not agreed upon the Market
Rental Rate four months prior to the commencement of the first Lease Year of the option period,
then either Lessor or Lessee may submit the issue of Market Rental Rate to determination by
arbitration; however, if Lessor is the Party that elects to initiate the arbitration process, then,
within 10 days after Lessee’s receipt of Lessor’s notice that Lessor elects to initiate the
arbitration process, Lessee may rescind Lessee’s exercise of the option by delivering to Lessor
written notice of Lessee’s election to rescind exercise of the option. If the arbitration process
is initiated and Lessee does not timely rescind exercise of the option, then the venue for the
arbitration shall be San Diego County and, with respect to the conduct of the arbitration, the
following shall apply:



1.5.3.2.1 At least three weeks in advance of the date for
the commencement of the arbitration hearing, Lessor and Lessee shall
exchange with each other (1)
the name, address, and qualifications of any appraiser, broker, or other expert intended to be
called at the time of the arbitration (each, an
“Expert”), (2) any reports and/or data relied upon
by the Expert in connection with forming an opinion as to Market Rental Rate, and (3) a statement
as to each party’s determination of the Market Rental Rate
(“MRR Statement”) (i.e., Lessor shall
give to Lessee Lessor’s determination of the Market Rental Rate and vice-versa).



1.5.3.2.2 For a period of 10 days following the exchange
of the MRR Statements, either party may accept the Market Rental Rate stated in the other party’s
MRR Statement, and, in such event, the accepted amount will become the Rent for the option period
(e.g., if Lessor delivered to Lessee timely written notice of acceptance of Lessee’s determination
of Market Rental Rate as provided in Lessee’s MRR Statement, then the amount shown on Lessee’s MRR
Statement would become the Rent for the option period).



1.5.3.2.3 If neither party accepts the other
party’s
determination of Market Rental Rate, then the arbitration shall be conducted before a single
arbitrator. The arbitrator shall be selected by the Parties; however, if after 10 days the
Parties cannot agree upon the selection of an arbitrator, the arbitrator shall be (1) selected
pursuant to the Commercial Rules of the American Arbitration Association and (2) a member of the
Appraisal Institute with at least five years experience appraising commercial property in San Diego
County and shall not have previously worked for either Party at any time in the past. At least
five days prior to the date set for the hearing for the arbitration, each party shall (1) make
available for an oral deposition any Expert whose testimony is
expected to be given at the time of
the arbitration and (2) deliver to the other party all exhibits that are intended to be entered
into evidence at the time of the arbitration.


 


3









 





1.5.3.2.4 Except as provided below, each party shall bear
its own attorney’s and Expert’s fees. Except as provided
below, each party shall share
equally
any administrative fees and the reasonable hourly fees owed to the arbitrator. Notwithstanding the
foregoing, if the amount of the Market Rental Rate stated in Lessee’s MRR Statement is less than
95 percent of the Market Rental Rate determined by the arbitrator, then the arbitrator may, in the
arbitrator’s discretion, assess against Lessee costs incurred by Lessor in connection with the
arbitration, including, without limitation, reasonable attorney’s fees, Expert’s fees,
arbitrator’s fees and administration fees. If the amount of the Market Rental Rate stated in
Lessor’s MRR Statement is greater than 105 percent of the Market Rental Rate determined by the
arbitrator, then the arbitrator may, in the arbitrator’s discretion, assess against the Lessor
costs incurred by Lessee in connection with the arbitration, including, without limitation,
reasonable attorney’s fees, Expert’s fees, arbitrator’s fees and administration fees.



Pending determination of the Market Rental Rate for the option period, Lessee shall pay to Lessor
monthly Rent in an amount equal to the monthly Rent payable by Lessor during the last month
preceding commencement of the option period. If the Market Rental Rate is greater than the amount
of Base Rent paid by Lessee pending determination of the Market Rental Rate, then, within 30 days
following the arbitrator’s decision determining the amount of the Market Rental Rate, Lessee shall
pay to Lessor the difference between (1) the Base Rent that should have been paid during the option
period based upon the Market Rental Rate and (2) the actual amount of the Base Rent paid by Lessee
during the option period. If the Market Rental Rate is less than the amount of Base Rent paid by
Lessee pending determination of the Market Rental Rate, then, within 30 days following the
arbitrator’s decision determining the amount of the Market
Rental Rate, Lessor shall pay to Lessee
(or Lessee may receive credit against Base Rent next due for) the difference between (1) the Base
Rent that should have been paid during the option period based upon the Market Rental Rate and (2)
the actual amount of the Base Rent paid by Lessee during the option period.



1.8 Agreed Use. Lessee’s Agreed Use is research and development and related office
and administrative uses and manufacturing, as permitted by applicable zoning and any other use
permitted under Applicable Requirements.



1.12 Business Hours for the Building. Lessee shall have access to the Premises 24
hours per day, seven days per week; however, Landlord may, by use of electronic access cards or
similar devices, restrict access to the Building at all times other than Business Hours. As used
herein, the term “Business Hours” shall mean 8:00 a.m. to 6:00 p.m. Monday through Friday
(excluding Building Holidays) and 9:00 a.m. to 1:00 p.m. on Saturdays (excluding Building
Holidays). As used herein, the term “Building Holidays” shall mean the dates of the observation of
New Year’s Day, President’s Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day, and any other holidays now or in the future customarily recognized as holidays for
private sector businesses.



2.2
Condition. Lessor shall deliver the Premises to Lessee in good, vacant,
broom-clean condition with Lessor’s Work substantially completed.


 


4









 





2.10
Common Areas — Exercise of Lessor’s Reserved Rights. Lessee acknowledges and
agrees that (1) the portion of the Project depicted on Exhibit 3 attached hereto is referred to as
“the Excluded Area,” (2) although the Excluded Area is part of the legal lot
and tax parcel that comprise the Project, the Excluded Area is not part of the Common Area, and (3)
Lessor may subdivide, use, and/or develop the Excluded Area, as
Lessor may, in Lessor’s reasonable
discretion, determine. Lessor shall not exercise Lessor’s reserved rights to make changes to the
Common Area in a manner that materially and adversely affects Lessee’s use of the Premises,
excluding dust, noise, and similar interference during periods of construction, provided that the
construction is diligently pursued in a reasonable manner. Lessor reserves the right to allocate
parking spaces as reserved for use by other tenants of the Project.



4.2.1
Included Operating Expenses — REA. In addition to the
items
listed in Paragraph 4.2(a) of the Lease, Operating Expenses shall include expenses assessed to
Lessor under the REA.



4.2.2
Excluded Operating Expenses. Notwithstanding anything to the
contrary herein, Operating Expenses do not include the following:



4.2.2.1
Any fines, penalty charges, or interest incurred by Lessor
due to violation of law or late payment.



4.2.2.2 Costs related to casualty or as a result of condemnation,
construction defect or code violation.



4.2.2.3 Expenses incurred in connection with the services
provided to others but not to Lessee.



4.2.2.4 Expenses incurred in connection with drafting or
enforcing leases, such as, but not limited to, accounting, legal, architectural, space planning, or
engineering fees, advertising, or promotions costs.



4.2.2.5 Repairs and maintenance necessary because of
negligence or willful misconduct of other tenants, their officers, agents, employees, invitees,
licensees, and those parties working through or under those tenants.



4.2.2.6 Costs for alterations of other tenants’ premises prior to
and during duration of leases.



4.2.2.7 Interest and principal payment on mortgages and other
debt costs.



4.2.2.8 Management fees; however, Lessee shall be obligated to
pay the separate management fee described below.



4.2.2.9 Costs incurred by Lessor to (1) maintain, repair, or
replace the basic structural elements of the Building, such as footings, foundations, slab,
exterior wall, interior support columns, structural elements of Building floors and structural
elements of roof or (2) repair or replace the roof membrane.


 


5









 





4.2.2.10 Costs incurred by Lessor to perform warranty work
required under Paragraph 2.2 or 2.3 of the Lease.



4.2.2.11 The cost of repairs or other work to the extent Lessor is
reimbursed by insurance or condemnation proceeds.



4.2.2.12 Lease concessions, rental abatements and construction
allowances granted to specific tenants.



4.2.2.13 Costs incurred in connection with the sale, financing or
refinancing of the Project or any portion thereof.



4.2.2.14 Cost due to the presence of any Hazardous Material,
except to the extent due to the release or emission thereof by Lessee.



4.2.2.15 Reserves.



4.2.2.16 Capital expenditures, except to the extent amortized as
set forth in Section 4.2(a)(viii).



4.2.3 Audit Rights. Lessor shall keep complete and accurate records in
accordance with good bookkeeping and accounting practices regarding all Operating Expenses.
Lessee shall have the right to audit such records for each calendar year during the Term by
notifying Lessor within 12 months following the later of the end of each such calendar year or
120 days after Lessor has furnished Lessee a statement of such actual Operating Expenses. If
an
audit reveals that Lessor has overcharged Lessee for Operating Expenses, Lessor shall refund
the
amount overcharged within 10 days after such determination has
been made. If Lessor has
overcharged Lessee by more than 5 percent of Lessee’s Share of Operating Expenses for a
calendar year, Lessor shall refund the overcharged amount and, in addition, shall pay the
costs of
Lessee’s audit related to such calendar year.



4.2.4 Management Fee. In lieu of including management costs (i.e., fees
paid to third-party managers or Lessor’s direct costs for self-managing the Project) in
Operating
Expenses and paying Lessee’s Share thereof, commencing on the Commencement Date and
continuing through the Term, Lessee shall pay to Lessor monthly on the first day of each
calendar month as Additional Rent a separate management fee equal to 3 percent of the then
current monthly Base Rent.



4.2.5
Allocation of Real Property Taxes. In addition to the above
exclusions, Operating Expenses shall not include Real Property Taxes attributable to the
Excluded Area. If the Excluded Area is not assessed as a separate tax parcel, then the Real
Property Taxes attributable to the Excluded Area shall be deemed to mean the sum of
(1) _______ percent of the assessed land value of the Project and (2) 100 percent of the assessed value
of improvements subsequently constructed by Lessor on the Excluded Area.


 


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4.2.6
Limit on 2008-2009 Operating Expenses. Lessor estimates that
Lessee’s Share of Operating Expenses for the period commencing on the Commencement Date
and ending on December 31, 2009, excluding utilities, will be $0.74/rsf-month. If the
actual
amount of Lessee’s Share of Operating Expenses for 2009 (or prorated for the remainder of
2008), excluding utilities, exceeds such estimate by more than 7 percent of such estimate,
then
Lessee shall not be obligated to pay the amount by which Lessee’s Share of the actual amount
of
2009 Operating Expenses (or prorated for the remainder of 2008), excluding utilities, exceeds
107 percent of such estimate. Lessor shall provide Lessee with Lessor’s estimate of each
subsequent calendar year’s Operating Expenses prior to the start of each such year.



4.2.7 Deductible Responsibility. With respect to all policies of insurance
maintained by Lessor pursuant to this Lease, the policies shall have claim deductible amounts
that
are commercially reasonable and generally consistent with prudent commercial practices of
lessors
in San Diego County as such practices may change from time to time during the term of this
Lease. Lessee’s obligation with respect to payment of any deductible amount under Lessor’s liability,
fire
and/or casualty policies of insurance shall be as follows:



4.2.7.1 If the damage or destruction is caused by a negligent or
intentional act or omission by Lessee or Lessee’s agents, employees, or contractors or otherwise
arises out of the operation of Lessee’s business and/or occupancy of the Premises, Lessee shall pay
the full deductible amount.



4.2.7.2 If the damage or destruction is caused by a negligent or
intentional act or omission by another lessee of the Building or such other lessee’s agents,
employees or contractors or otherwise arises out of the operation of such other lessee’s business
and/or such other lessee’s occupancy of another portion of the Building, such other lessee shall
pay the full deductible amount, Lessee shall have no responsibility or liability therefor, and such
amount shall not be included as an element of Operating Expenses.



4.2.7.3 If the damage or destruction is caused by a negligent or
intentional act or omission by Lessor or Lessor’s agents, employees or contractors or otherwise
arises out of Lessor’s management or maintenance of the Project, Lessor shall pay the full
deductible amount, Lessee shall have no responsibility or liability therefor, and such amount shall
not be included as an element of Operating Expenses.



4.2.7.4 If the damage or destruction arises from any cause other
than a cause described in Sections 4.2.7.1, 4.2.7.2 or 4.2.7.3, the deductible amount shall be an
item of Operating Expenses, and Lessee shall pay Lessee’s pro rata share in accordance with the
terms of this Lease, provided that such amount shall not exceed $30,000.00.





 


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6.2 Hazardous Materials. Lessor represents and warrants that Lessor has no actual
knowledge of the presence on the Premises of any Hazardous Materials that are stored or maintained
in violation of Applicable Requirements.



6.2.1 Definition of “Hazardous Materials.” As used herein, the term “Hazardous
Materials” means any hazardous or toxic substance, material or waste that is or
 becomes
regulated by any local governmental authority, the State of California or the United States
government. The term “Hazardous Materials” includes, without limitation, any material or substance
that is (i) defined as a “hazardous waste,” “extremely hazardous waste,” or “restricted hazardous
waste” under Section 25515 or 25117 or listed pursuant to Section 25140 of the California Health
and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law), (ii) defined as a
“hazardous substance” under Section 25316 of the
California Health and Safety Code, Division 2, Chapter 6.8
(Carpenter-Presly-Tanner Hazardous Materials Account Act), (iii) defined as a
“Hazardous Materials,” “hazardous substance,” or “hazardous waste” under Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials), (iv) petroleum,
(v) asbestos, (vi) listed under Article 9 and defined as hazardous or extremely hazardous pursuant
to Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vii)
designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. section 1317), (viii) defined as a “hazardous waste” pursuant to Section
1004 of the Federal Resource Conversation and Recovery Act, 42 U.S.C. section 6901, et seq. (42
U.S.C. section 6903), (ix) defined as “hazardous substance” pursuant to Section 101 of the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. section 9601, et
seq. (42 U.S.C. section 9601), or (x) any other material, substance, product or compound for which
Lessee must obtain a license or permit from California Department of Health Services or similar
federal, state, or local agency lawfully to use or store such material, substance, product or
compound anywhere in the Project. Any references in the Lease to Hazardous Substances shall be
deemed to mean Hazardous Materials, as defined above.



6.2.2 Prohibition/Compliance. Lessee shall not cause or permit Lessee’s agents,
employees, or contractors to bring, keep, or use in or about the Project any Hazardous Materials
in violation of Applicable Requirements. If Lessee breaches the obligation stated in the preceding
sentence, then Lessee shall indemnify, defend and hold harmless Lessor, its agents and contractors
from any and all claims, judgments, damages, penalties, fines, costs, liabilities, or losses
(including, without limitation, diminution in value of the Premises, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the Premises, damages arising
from any adverse impact on marketing of space in the Premises and sums paid in settlement of
claims, attorney’s fees, consultant’s fees and expert’s fees) that arise during or after the term
of this Lease as a result of such breach; however, the foregoing indemnification obligation shall
not cover losses and damages to the extent caused by Lessor’s negligence, willful misconduct or
breach of this Lease. Lessee’s indemnification obligation 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 Project. Without limiting the foregoing, if the presence of any Hazardous
Materials on the Premises, the Project, or any adjacent property, caused by Lessee’s employees,
agents, or contractors results in any unlawful contamination of the Premises, the Project, or
adjacent property, Lessee shall promptly take all actions at its sole expense as are necessary to
ensure that, with respect to such unlawful contamination, the Premises, the Project, and any
adjacent property meets all Applicable Requirements in effect now or in the future, including
Applicable Requirements by any governmental agency or imposed by any governmental order or court
having jurisdiction over the Premises, the Project, or any adjacent
property, provided that Lessor’s approval of such action shall first be obtained, which approval
shall not unreasonably be withheld so long as such actions would not potentially have any material
adverse long-term or short-term effect on the Premises.


 


8









 





6.2.3 Business. Lessor acknowledges that this Paragraph 6.2 does not prohibit Lessee
from operating its business in the Premises as described in Paragraph 1.8 above. Lessee 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 Applicable Requirements and pursuant
to and in compliance with all required licenses, approvals, and permits. As a material inducement
to Lessor to allow Lessee to use Hazardous Materials in connection with its business, Lessee agrees
to deliver to Lessor 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,
licenses, or permits required in connection with the presence of such Hazardous Materials on the
Premises (“Hazardous Materials List”). Lessee shall deliver to Lessor upon Lessor’s written
request an updated Hazardous Materials List. Lessee shall deliver to Lessor true and correct copies
of the following documents (hereinafter referred to as the “Documents”) relating to the handling,
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:
licenses, 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 that said installation of tanks shall be permitted only after Lessor
has given Lessee its written consent to do so, which consent may be withheld in Lessor’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. Lessee is not required, however, to provide
Lessor with any portion(s) of the Documents containing information of a proprietary nature that do
not contain a reference to any Hazardous Materials or hazardous activities.



6.2.4 Inspection/Compliance. Lessor and Lessor’s Lender and consultants shall have the
right to enter into the Premises at any time in the case of an emergency, the determination of
which shall require Lessor to be reasonable, and otherwise at reasonable times with reasonable
notice (of at least 48 hours) for the purpose of inspecting the condition of the Premises and for
verifying compliance by Lessee with this Lease, provided that Lessor and its agents or employees
comply with Lessee’s risk management policies (which may include having such person escorted at all
times by an employee of Lessee and having such person execute Lessee’s
non-disclosure/confidentiality agreement). In addition, except in the case of emergencies, Lessor
agrees to reasonably reschedule any entry upon the Premises made in accordance with this Lease if
Lessee notifies Lessor in writing that the proposed entry will materially and adversely affect
Lessee’s business operations. Lessor shall use reasonable efforts to provide Lessee with notice in
the event of an emergency. In the event of any entry by Lessor onto the Premises, Lessor shall be
subject to Lessee’s reasonable security requirements and shall use its best efforts not to
interfere with the conduct of Lessee’s business. Lessor shall pay the cost of any such
inspections, unless a material violation by Lessee is found to exist or be imminent, or the
inspection is requested or ordered of Lessee by a governmental authority and Lessee has failed to
adequately respond. In such case, Lessee shall, upon request, reimburse
Lessor for the reasonable cost of such inspections, provided that such inspection is directly
related to the violation or contamination.


 


9









 





6.2.5 Clearances Required upon Surrender. At the time Lessee surrenders possession of
the Premises following expiration of the term or termination of this Lease, Lessee shall deliver to
Lessor written evidence that (1) Lessee has obtained from all appropriate governmental agencies
approval of decontamination of the Premises and decommissioning of any licenses, permits, or
approvals received by Lessee pertaining to Hazardous Materials used or stored by Lessee at
the Project (collectively, “Surrender Approvals”) and (2) Lessee has removed from the Project all
Hazardous Materials brought onto the Project by or for Lessee or Lessee’s employees, agents, or
contractors. Lessee shall be deemed to be a holdover tenant if (1) Lessee has not obtained all
Surrender Approvals at the time Lessee surrenders possession and (2) Lessor may not lawfully allow
occupancy of the Premises without such Surrender Approvals (e.g., if (1) Lessee used radioactive
materials in the Premises pursuant to a license or permit issued by an agency of California and (2)
at the time Lessee surrendered possession, the agency had not approved the Premises to be occupied
by another tenant until the license or permit was fully decommissioned, then Lessee would be deemed
to be a holdover tenant until the agency decommissioned the license and allowed the Premises to be
re-occupied).



6.2.6 Lessor Representation. To the knowledge of Lessor, no Hazardous Material is
present at the Project or the soil, surface water, or groundwater thereof. Under no circumstance
shall Lessee be liable for, and Lessor shall indemnify, defend, protect, and hold harmless Lessee,
Lessee’s agents, contractors, stockholders, directors, successors, representatives, and
assigns from and against, all losses, costs, claims, liabilities, and damages in connection with
any Hazardous Material (1) present prior to the Commencement Date in, on, or about the Project or
the soil, improvements, groundwater, or surface water thereof or (2) released after the
Commencement Date on, in, or about the Project by Lessor or Lessor’s employees, agents, or
contractors.



7.4 Utility Installations; Surrender. All Alterations, trade fixtures and personal
property installed in the Premises at Lessee’s expense (“Lessee’s Property”) shall at Lessee’s
election remain Lessee’s property. Except for Alterations that cannot be removed without structural
injury to the Premises, at any time Lessee may remove Lessee’s Property from the Premises, provided
Lessee repairs all damage caused by such removal. Lessee shall not be required to move any
Alterations at the end of the Term unless Lessor so notifies Lessee at the time Lessor consents to
such Alterations. Lessee’s obligations with respect to the surrender of the Premises shall be
fulfilled if Lessee surrenders possession of the Premises in the condition existing at the
Commencement Date, ordinary wear and tear, casualties, condemnation, Hazardous Materials (other
than those released or emitted by Lessee), and alterations that Lessee is permitted to surrender at
the termination of the Lease excepted.


 


10









 





9.6 Lessee’s Remedies. In addition to the remedies in Paragraph 9.6 of this Lease,
Lessee shall have the right to terminate this Lease following Premises Partial Damage under the
following circumstances:



9.6.1 If (1) the Premises Partial Damage materially affects Lessee’s use of the Premises and
(2) the reasonably estimated time to repair the damage will exceed four months, then Lessee may
terminate this Lease by delivering to Lessor written notice of termination with 30 days following
the date of the occurrence of such Premises Partial Damage. If Lessee elects to terminate this
Lease as provided in the preceding sentence, then (1) the Parties’ obligations under this Lease
shall be the same as if the Term of this Lease had naturally expired on the date of such
termination and (2) termination of this Lease shall be effective on a date specified in Lessee’s
notice, which date shall not be earlier than the date of Lessor’s receipt of the notice or later
than 30 days following the date of Lessor’s receipt of the notice.



9.6.2 If (1) the Premises Partial Damage materially affects Lessee’s use of the Premises and
(2) Lessor has not substantially completed the repair of such Premises Partial Damage within, four
months following the date of such Premises Partial Damage, then Lessee may deliver to Lessor a
written notice (“Lessee’s Repair Notice”) that Lessee intends to terminate this Lease unless Lessor
substantially completes the repairs within 30 days following Lessor’s receipt of Lessee’s Repair
Notice. If Lessor does not substantially complete the repairs within 30 days following Lessor’s
receipt of Lessee’s Repair Notice, then this Lease shall terminate on the date that is 30 days
following Lessor’s receipt of Lessee’s Repair Notice. If (1) Lessee elects to terminate this Lease
as provided in the preceding sentence and (2) prior to such termination, Lessor has used reasonable
diligence to complete the repair of such Premises Partial Damage, then the Parties’ obligations
under this Lease following such termination shall be the same as if the Term of this Lease
naturally expired on the date of such termination (i.e., Lessee will not have any claim against
Lessor arising out of such termination).



9.6.3 If at any time during the last six months of this Lease the Premises is damaged and (1)
such damage materially affects Lessee’s use of the Premises, (2) the cost of repair exceeds two
months’ Base Rent, and (3) such damage was not caused by Lessee or Lessee’s employees, agents, or
contractors, then Lessee may terminate this Lease following the occurrence of such damage by giving
a written termination notice to Lessor within 30 days after the date of occurrence of such damage.
If Lessee elects to terminate this Lease as allowed under the preceding sentence, then (1) such
termination shall be effective as of the date Lessee specifies in such notice and (2) the
obligations of the Parties under this Lease shall be the same as if this Lease naturally expired on
the date of such termination.



10.1 Real Property Taxes. The definition of Real Property Taxes includes use taxes
that may subsequently imposed by the city of San Diego or other governmental entity with respect
to Rent paid under this Lease; however, with respect to such use taxes or other Real Property
Taxes that are assessed with reference to the amount of Rent paid to Lessor, Lessee shall pay 100
percent of such taxes attributable to Rent paid by Lessee, and such taxes shall not be included in
Operating Expenses.


 


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11.5 Utilities. Lessor shall provide house RODI water, vacuum, and compressed air
systems, which shall be shared with other tenants in the Building. If the (1) the Premises becomes
not reasonably suitable for Lessee’s use as a consequence of cessation of utilities or other
services, interference with access to the Premises or the presence of Hazardous Materials, (2)
such cessation of utilities, interference with access or presence of Hazardous
Materials is caused by Lessor’s action or omission and (3) such cessation of utilities,
interference with access or presence of Hazardous Materials continues for a period of seven days
following Lessee’s delivery to Lessor of written notice of such cessation, interference or
presence, then Lessee shall be entitled to equitable abatement of Rent to the extent of the
interference with Lessee’s use of the Premises occasioned thereby. If the cessation, interference
or presence continues for more than 90 days, then Lessee shall have the right to deliver to Lessor
a written notice of intention to terminate this Lease and this Lease will terminate within 10 days
following Lessor’s receipt of such notice if the cessation, interference or presence in not cured
within such 10-day period.



12.1 Permitted Lease Assignments. As used in this Lease, the definition of an
assignment shall include (1) a transfer of more than 60 percent of the ownership interests (shares,
partnership interests, membership interests, etc.) of Lessee, (2) Lessee’s merger or consolidation
with another entity, and/or (3) a sale of substantially all of Lessee’s assets; however, Lessor’s
consent shall not be required for an assignment of this Lease (i) to any person(s) or entity that
controls, is controlled by, or is under common control with Lessee, (ii) to any entity resulting
from the merger, acquisition, consolidation, or other reorganization with Lessee, whether or not
Lessee is the surviving entity, (iii) to any person or legal entity that acquires all or
substantially all of the assets or stock of Lessee (each of the foregoing is hereinafter referred
to as a “Tenant Affiliate”), provided that before such assignment shall be effective, (a) the
Tenant Affiliate shall deliver to Lessor a written document by which the Tenant Affiliate assumes
the obligations of Lessee under this Lease if the transaction involves an actual assignment of this
Lease (e.g., if this Lease is assigned in connection with a sale of Lessee’s assets), (b) Lessor
shall be given written notice of such assignment, including a copy of the document(s) that evidence
the assignment, and (c) the use of the Premises by the Tenant Affiliate shall be as set forth in
Paragraph 1.8 above. The term “control” means possession, directly or indirectly, of the power to
direct or cause the direction of the management, affairs, and policies of anyone, whether through
the ownership of voting securities, by contract, or otherwise.



12.2 Lessor’s Consent to Assignment or Subletting/Excess Rent Recapture. Lessor shall
have not less than 20 days following receipt by Lessor of the documents to be reviewed in
connection with the proposed assignment or subletting within which to provide to Lessee written
notice of Lessor’s approval or disapproval. Any request for Lessor’s consent to an assignment or
subletting shall be accompanied by appropriate financial information pertaining to the proposed
assignee or sublessee, including a financial statement (consisting of balance sheet and income and
expense statement for the preceding 12 months, certified as accurate by the proposed assignee or
sublessee) and tax returns for the preceding two tax years. For transfers other than to a Tenant
Affiliate, Lessee shall pay to Lessor, as additional Rent, if and when received by Lessee, 50
percent of any Excess Rent (defined below) received by Lessee for (1) the assignment of this Lease
or (2) subleasing the Premises if 25 percent or more of the floor area of the Premises is occupied
by subtenants. As used herein, the term “Excess Rent” means the amount that the assignee or
subtenant is to pay to Lessee in excess of the Rent due under this Lease, whether such payment
shall be in the form of an increased monthly or annual rental, lump sum payment in consideration of
the assignment or sublease or consideration of any other form, including a sale of goodwill and/or
a covenant not to compete or payment for furniture, fixtures or inventory in an amount in excess of
the reasonable value thereof after first deducting the reasonable costs incurred by Lessee in obtaining the assignment or sublease, including, without limitation, reasonable brokerage
commissions, reasonable costs of leasehold improvements made by Lessee, legal fees, and any other
concessions reasonably required to induce the subtenant or assignee. If Excess Rent is being
determined for subtenant(s) that occupy(ies) less than all of the Premises, then Excess Rent shall
be the difference between (1) the amount of the rent and other amounts paid by the subtenant and
(2) the amount of Rent due under this Lease multiplied by a fraction, the numerator of which is the
floor area of the Premises occupied by the subtenant(s) and the denominator of which is the total
floor area of the Premises.



 


12









 






23. Notices. As an alternative to the means of service of notices described in Section
23 of this Lease, any notices required to be served as a condition precedent to the initiation of a
special proceeding for unlawful detainer (including any notices under Section 13.1 of this Lease)
may be served in accordance with California law pertaining to service of such notices. With respect
to all notices, the Parties acknowledge and agree that, in addition to the manner of delivery
provided in Paragraph 23.1 of this Lease, notices may be delivered by FedEx or other similar
overnight delivery service that provides evidence of receipt. If notice is delivered by FedEx or
such other overnight delivery service, the notice shall be deemed delivered as of the date shown by
the evidence of receipt (or the first business day thereafter if the day of receipt is not a
business day). The Parties’ addresses for notice and delivery of Rent are:



	 	 	 	 	 
	 

	 	Notices to Lessor:
	 	William Abbate
	 

	 	 	 	Angelo, Gordon & Co.
	 

	 	 	 	9440 Santa Monica Boulevard, Suite 708
	 

	 	 	 	Beverly Hills, California 92010
	 
	 	 	 	 
	 

	 	and:
	 	Greg Erickson
	 

	 	 	 	Touchstone Investments
	 

	 	 	 	15901 Red Hill Avenue, Suite 201
	 

	 	 	 	Tustin, California 92780
	 
	 	 	 	 
	 

	 	Rent to Lessor:
	 	AG/Touchstone TP, LLC
	 

	 	 	 	Dept. LA 22977
	 

	 	 	 	Pasadena, California 91185-2977
	 
	 	 	 	 
	 

	 	Notices to Lessee:
	 	General Counsel
	 

	 	 	 	Amicus Therapeutics, Inc.
	 

	 	 	 	6 Cedar Brook Drive
	 

	 	 	 	Cranbury, New Jersey 08512
	 
	 	 	 	 
	 

	 	and
	 	(following the Commencement Date)
	 
	 	 	 	 
	 

	 	 	 	Office Manager
	 

	 	 	 	Amicus Therapeutics, Inc.
	 

	 	 	 	11099 North Torrey Pines Road, Suite 200
	 

	 	 	 	La Jolla, California 92037





 


13









 





30. Attornment and Nondisturbance. Lessee acknowledges that the Subordination,
Nondisturbance and Attornment Agreement attached hereto as Exhibit 2 is in form and of content
acceptable to Lessee and constitutes a commercially reasonable nondisturbance agreement
within the meaning of Paragraph 30.3 of this Lease.



31. Attorney’s Fees. Lessor shall be entitled to recover reasonable attorney’s fees
incurred in connection with (1) any hearing or motion for assumption or rejection of this Lease
under Title 11 of the United States Code and (2) any hearing or adversary proceedings related to
this Lease in any bankruptcy case filed by or against Lessor.



34. Signage. Lessor shall provide Lessee with standard lobby and directional signage.
Lessee shall be entitled to install, at Lessee’s expense, its name on the existing monument sign
and other exterior building signage in the design and at the location as depicted in the drawings
previously reviewed and approved by Lessor and Lessee.



49. Americans with Disabilities Act. Notwithstanding anything to the contrary in the
Lease, Lessee shall not be required to cause the Premises to comply with any Applicable
Requirements requiring the construction of Alterations unless such compliance is necessitated
solely due to Lessee’s particular use of the Premises for a purpose other than the specified use.



50. Arbitration. If (1) either Party to this Lease asserts against the other Party a
claim or cross-claim that relates to this Lease, the Premises, or the Project, whether such claim
is founded upon contract, tort, or equity, and (2) the amount in controversy with respect to such
claim exceeds the then current jurisdictional limit of Small Claims Court or the primary relief
sought by the claimant is not relief that may be awarded in Small Claims Court (e.g., injunctive
relief), such claim or cross-claim shall be submitted to arbitration, and in connection with such
arbitration, the following shall apply:



50.1 The arbitration shall be conducted by a single arbitrator. The arbitrator shall be
selected by the Parties; however, if after 10 days the Parties cannot agree upon the selection of
an arbitrator, the arbitrator shall be selected pursuant to the Commercial Rules of the American
Arbitration Association.



50.2 The venue for the arbitration shall be in San Diego County, California.



50.3
The parties shall have the right to conduct full discovery.



50.4 Pending issuance of the arbitrator’s award, the Parties shall equally pay all fees and
administrative expenses charged by the arbitrator. Following issuance of the arbitrator’s award,
the arbitrator may, in the arbitrator’s discretion, award to the prevailing Party the amount
incurred by the prevailing Party for the arbitrator’s fees and administrative expenses.



50.5 After issuance of the arbitrator’s award, either Party may file a petition to have the
award entered as a judgment.


 


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Notwithstanding the foregoing, this paragraph shall not apply to (1) any civil action commenced by
Lessor for unlawful or forcible detainer against Lessee and/or any other occupants of the Premises
(i.e., if Lessor sues Lessee to recover possession of the Premises in a civil action for unlawful
detainer, the arbitration provision shall not apply) or (2) any action that may be initiated and
determined in Small Claims Court.



51. Delivery of Financial Statements. For purposes of this Lease, “Principal
Market” means the NASD Over The Counter Bulletin Board, NASDAQ Global Market, American Stock
Exchange or New York Stock Exchange (whichever of the foregoing is at the time the principal
trading exchange or market for the stock of Lessee). If (1) Lessor is in the process of selling or
refinancing the Building and (2) Lessee is not listed or quoted on a Principal Market, Lessee
shall, within 20 days following Lessor’s written request therefor, deliver to Lessor Lessee’s most
recently prepared financial statement as maintained by Lessee for the period commencing at the
beginning of the then current fiscal year. As used herein, the term
“financial statement” shall
mean a detailed balance sheet and detailed statement of income and expenses prepared in accordance
with generally accepted accounting principles and otherwise in the manner Lessee customarily
prepares such documents.



52. Lender’s Consent and Nondisturbance. The obligations of Lessor and Lessee under
this Lease are subject to the condition precedent (“the SNDA
Condition Precedent”) that on or
before the date that is 45 days after the date of this Lease
(“the Lender’s Approval Date”) Lessor
and Lessee shall have received (1) written approval from Mesa
Capital (“Lender”) of the
terms of this Lease and (2) a nondisturbance agreement
(“Lender Nondisturbance Agreement”)
signed by Lender in a form reasonably acceptable to Lessee. If on or before the Lender’s Approval
Date Lender fails to deliver written approval of this Lease and a signed Lender Nondisturbance
Agreement reasonably acceptable to Lessee, then the following shall apply:



52.1 At any time after the Lender’s Approval Date either Party may deliver to the other Party
written notice of intention to terminate this Lease (“a
Lender’s Approval Termination Notice”).



52.2 If Lessee delivers to Lessor a Lender’s Approval Termination Notice, then this Lease will
terminate unless, within 15 days following receipt of the Lender’s Approval Termination Notice, (1)
Lender delivers written approval of this Lease and a signed Lender Nondisturbance Agreement
reasonably acceptable to Lessee and (2) Lessor delivers to Lessee a written waiver of Lessor’s
right to deliver a Lender’s Approval Termination Notice.



52.3 If Lessor delivers to Lessee a Lender’s Approval Termination Notice, then this Lease will
terminate unless, within 15 days following receipt of the Lender’s Approval Termination Notice, (1)
Lender delivers written approval of this Lease and (2) Lessee delivers to Lessor a written waiver
of Lessee’s right to deliver a Lender’s Approval Termination Notice. If this Lease terminates as a
consequence of the SNDA Condition precedent not being timely satisfied or waived, this Lease shall
terminate, and Lessee and Lessor shall have no continuing obligations arising out of or relating to
this Lease.


 


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53. Lessor’s Work. Lessor has caused to be prepared a schematic space plan (“the Space
Plan”) pertaining to the proposed interior improvements to
be constructed in the Premises. Lessor
shall cause to be prepared working plans and specifications (collectively, “the Working Drawings”)
that (i) define the scope of work, hereinafter referred to as “Lessor’s Work,” (ii) shall be based
upon the Space Plan, and (iii) shall be sufficiently detailed to submit to the city of San Diego
for application for a building permit and to subcontractors and material suppliers to prepare and
submit fixed bids. Following preparation of the Working Drawings, Lessor shall (1) deliver to
Lessee a copy of the Working Drawings for Lessee’s approval (which shall not be unreasonably
withheld or delayed) and (2) deliver to Lessor’s contractor (“Contractor”) a copy of the Working
Drawings for Contractor to solicit bids from subcontractors. If Lessee approves the Working
Drawings, Lessor shall, pursuant to a written contract (“the Improvement Contract”), engage the
services of Contractor to construct and install Lessor’s Work in the Premises in an expeditious,
diligent and workmanlike manner in accordance with the Working Drawings and all Applicable
Requirements.



53.1 Payment For Lessor’s Work. Lessor shall pay for the costs of accomplishing
Lessor’s Work.



53.2 Substantial Completion. Once commenced, Lessor shall diligently proceed to
achieve Substantial Completion of Lessor’s Work. As used herein, the term “Substantial Completion”
shall mean that (1) Lessor shall have substantially completed Lessor’s Work, with the exception of
minor punch list items that do not materially impede Lessee’s moving into the Premises for Lessee’s
use and occupancy of the Premises and (2) Lessor shall have received from the building inspection
department of the city of San Diego such approvals as may be necessary for Lessee lawfully to
occupy the Premises. Following Substantial Completion, repair and/or replacement of any portion of
Lessor’s Work shall be subject to the other provisions of this Lease regarding maintenance and
repair of the Premises; however, if any portion of Lessor’s Work that requires repair or
replacement is covered by a guaranty or warranty by the Contractor, a subcontractor and/or a
material supplier, Lessor shall assign to Lessee such guaranty or warranty. In addition to (1) any
warranties or guaranties issued by the Contractor, subcontractors, or material suppers relating to
Lessor’s Work and (2) Lessor’s warranty in
Paragraph 2.2 of the Lease, Lessor warrants that
Lessor’s Work shall be free from material defects for a period of one year following the date of
Substantial Completion. Lessor also warrants that existing equipment included in the Premises is,
and for a period of 12 months following the Commencement Date will be, (1) in good condition and
repair, (2) in compliance with Applicable Requirements, and (3) fully operational.



53.3 Lessee’s Access. While Contractor is performing Lessor’s Work, Lessee’s
contractors shall have reasonable access to the Premises, at no cost and without payment of any
Rent, including Base Rent or Operating Expenses, to install Lessee’s cables, security system,
fixtures, and equipment; however, Lessee’s contractors shall not impede Contractor’s completion of
Lessor’s Work. Lessor also warrants that existing equipment included in the Premises is, and for a
period of 12 months following the Commencement Date will be, (1) in good condition and repair, (2)
in compliance with Applicable Requirements, and (3) fully operational.


 


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54. Interpretation. Except as the context may otherwise require, references to “the
Lease” shall mean the Standard Multi-Tenant Office Lease—Net dated September 11, 2008, by
and between Lessee and Lessor, and “this Lease”
shall mean collectively (1) the Lease and all
exhibits attached thereto and (2) this Addendum.



	 	 	 	 	 
	Lessor:

	 	Lessee:	 	 
	 
	 	 	 	 
	AG/Touchstone TP, LLC,

	 	Amicus Therapeutics, Inc.,	 	 
	a Delaware limited liability company

	 	a Delaware corporation	 	 
	 
	 	 	 	 
	By AG/Touchstone TP Parent, L.P.,
	 	 	 	 
	a Delaware limited partnership,

its sole member


By AG TP Parent GP, L.L.C.,

a Delaware limited liability company,

its general partner

	 	By /s/ John F. Crowley
 


Print name John F. Crowley
 


Title President & CEO
 


	 	   
	 
	 	 	 	 
	By AG Real Estate Manager, Inc.,
	 	 	 	 
	a Delaware corporation,
	 	 	 	 
	its manager
	 	 	 	 
	 
	 	 	 	 
	By Touchstone Investments, Inc.
 


G. Erickson, President


	 	 	 	 






Schedule of Exhibits



Exhibit 1    Diagram Depicting the Premises


Exhibit 2    Subordination, Nondisturbance and Attornment Agreement


Exhibit 3    Diagram of the Excluded Area





 


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