Document:

exv10w22

Exhibit 10.22

Black Mountain Holdings, LLC

dba Black Mountain Properties, LLC

990 Industrial Road Commercial Lease Agreement

 basic lease information

	 	 	 
	LEASE DATE:

	 	March 20, 2008
	 

	 	NOTE: This Lease Date is for reference purposes only and does not necessarily represent the start of the
Lease Term.
	 
	 	 
	LANDLORD:

	 	BLACK MOUNTAIN HOLDINGS, LLC dba Black Mountain Properties, LLC.
	 
	 	 
	LANDLORD’S MAILING
ADDRESS:

	 	975 Industrial Road, Suite “A”, San Carlos, CA 94070.
	 
	 	 
	TENANT:

	 	BIOTROVE, INC., a Delaware corporation qualified to do business in California.
	 
	 	 
	TENANT’S ADDRESS:

(prior to Lease Term
Commencement)

	 	12 Gill Street, Suite 4000, Woburn, MA 01801

NOTE: For purposes of providing notices to Tenant subsequent to the Lease Term Commencement Date, such
notices shall be addressed to Tenant at the Premises, with a copy sent to Tenant at the above address.
	 
	 	 
	BUILDING:

	 	The approximately 25,960 ± square foot, two-story, building, commonly known as 990 Industrial Road, San
Carlos, California. The building is outlined in blue on Exhibit “A.”
	 
	 	 
	PREMISES:

	 	The approximately 1,969± square feet of rentable area known as 990 Industrial Road, Suite 206 (formerly
known as Suite 206 & 207), San Carlos, California, located on the second floor of the Building. The
Premises are outlined in red on Exhibit “A” attached hereto.
	 
	 	 
	PROPERTY:

	 	The Building, the Premises, and the land upon which the Building and Premises are situated, may, in the
aggregate, be referred to herein as the
“Property.”
	 
	 	 
	LEASE TERM
COMMENCEMENT
DATE:

	 	See Section 2: The later of (i) March 15, 2008 or (ii) substantial completion of Tenant Improvements.
	 
	 	 
	LENGTH OF LEASE TERM:

	 	See Section 2: Five (5) Years [equal to sixty (60) months].
	 
	 	 
	LEASE TERM EXPIRATION
DATE:

	 	See Section 2: The last day of the month in which the sixtieth month anniversary of the Lease Term
Commencement Date occurs.
	 
	 	 
	PERMITTED USE:

	 	See Section 3: General office, research, and development, as limited by any applicable governmental
rules, regulations and/or ordinances, and legally related uses. The Premises are subject to Landlord
Rules and Regulations. No hazardous materials shall be introduced onto the Property.
	 
	 	 
	BASE RENT:(1)

	 	Total useable square feet: 1,712± square feet.
Total rentable square feet: 1,969± square feet

	 	 	 	 	 
	Applicable	 	Period	 	Base Rent
	Months	 	Covered(2)	 	Per sq. ft. Per Month
	01-12

	 	03/15/08-03/31/09
	 	$4,134.90/ $2,100*
	 
	 	 	 	 
	13-24

	 	04/01/09-03/31/10
	 	$4,300.30/ $2,184*
	 
	 	 	 	 
	25-36

	 	04/01/10-03/31/11
	 	$4,472.31 / $2,271 *
	 
	 	 	 	 
	37-48

	 	04/01/11 -03/31/12
	 	$4,651.20/ $2,362*
	 
	 	 	 	 
	49-60

	 	04/01/12-03/31/13
	 	$4,837.25 / $2,457 *

 

			
	(1)	 	Base Rent does not include Additional Rent.
	 
	(2)	 	Period Covered is an estimate only and actual dates are
subject to change.
	 
	(*)	 	Rental rate per square foot per month has been rounded.
Actual Base Rent charged will be monthly amount shown above.

	 	 	 
	ADDITIONAL RENT, BASE YEAR:

	 	See Section 7: The Base Year
shall be the full calendar year
that includes the Lease Term
Commencement Date.
	 
	 	 
	TENANT’S SHARE OF COSTS:

	 	See Section 7: Tenant
Proportionate Share of
Operating Cost and Real
Property Taxes ( collectively
CAM Charges) is equal to 7.585%

1

 

	 	 	 
	RENT
COMMENCEMENT DATE:

	 	The later of (i) March 15, 2008, or (ii) substantial completion of Tenant Improvements.
	 
	 	 
	FIRST MONTH’S RENT
& SECURITY DEPOSIT:

	 	See Section 20: Total due upon Tenant’s execution of the Lease: Eight Thousand Nine
Hundred Seventy Two Dollars and 15/100 ($8,972.15), comprised of:
	 
	 	 
	 

	 	     (A) First month’s Rent, of Four Thousand One Hundred Thirty Four Dollars and 90/100
($4,134.90) and

	 
	 	 
	 

	 	     (B) Security Deposit, of an amount equal to last month’s Base Rent of Four Thousand
Eight Hundred Thirty Seven Dollars and 25/100 ($4,837.25). Security Deposit shall not
be credited toward the last month’s rent.

	 
	 	 
	OPTION TO RENEW:

	 	See Section 38:
	 
	 	 
	PARKING DENSITY:

	 	Six (6) unreserved parking stalls, free of charge, at 990 Industrial Road, San Carlos,
California, through the Lease Term.
	 
	 	 
	CONDITION OF
PREMISES/ TENANT
IMPROVEMENTS:

	 	Subject to Paragraph 2 and Paragraph 36 of this Lease, Landlord to provide the Tenant
Improvements to the Premises, as more specifically described in the Tenant Improvement
Agreement, substantially in the form of the attached Exhibit “B.”
	 
	 	 
	SIGNS:

	 	See Section 14: Landlord shall provide, at its cost, the suite address number to
Tenant’s Premises, and Tenant’s business name on the multi-tenant monument sign.
Landlord shall install, at Landlord’s cost, Tenant’s business name on the entrance
door to the Premises.
	 
	 	 
	 

	 	Tenant will have the right, at Tenant’s sole cost, to install building signage subject
to the master signage program for 990 Industrial Road, San Carlos, CA. All signage
shall be subject to Landlord’s review and will be mutually agreeable in design, and
subject to the City of San Carlos ordinances, regulations, and laws.
	 
	 	 
	LATE
 CHARGE:

	 	See Section 6: Late charge is the greater of one hundred dollars ($100) or ten percent
(10%) of delinquent payment.
	 
	 	 
	APPLICABLE
INTEREST
RATE:

	 	See Section 6: Interest Rate is the higher of ten percent (10%) or maximum legal rate,
but in no event shall the interest rate exceed the maximum interest rate allowed by
law.
	 
	 	 
	BROKERS:

	 	CB Richard Ellis represents Landlord and the Tenant.

The foregoing Basic Lease Information is incorporated into and made a part of this Lease.
Each reference in this Lease to any of the Basic Lease Information shall mean the respective
information above and shall be construed to incorporate all of the terms under the
particular Lease Section pertaining to such information. In the event of any conflict
between the Basic Lease Information and the Lease, the latter shall control.

2

 

Black Mountain Holdings, llc

dba Black Mountain Properties, LLC

990 Industrial Road Commercial Lease Agreement

	 	 	 
	 

	 	THIS LEASE is dated as of the twentieth (20th) day of March, 2008, by and between BLACK
MOUNTAIN HOLDINGS, LLC, dba Black Mountain Properties, LLC, a California limited liability
company (hereinafter called “Landlord’), and BIOTROVE, INC., a Delaware corporation
qualified to do business in California (hereinafter called “Tenant”). Landlord and Tenant
may be referred to, in the aggregate, as the “Parties.”
	 
	 	 
	PREMISES:

	 	1. A. Premises. Landlord leases to Tenant and Tenant leases from Landlord, upon the
terms and conditions hereinafter set forth, those premises (the “Premises”) outlined in red
on Exhibit “A” and described in the Basic Lease Information. The Premises may be all or
part of the “Building.” The Building is outlined in blue on Exhibit “A.” The Premises, and
Building, and the land upon which the Building and Premises are situated, may be referred
to, in the aggregate, as the “Property.” 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. Tenant is advised to
verify the actual size prior to executing this Lease.
	 
	 	 
	 

	 	     B. Appurtenant Rights. Tenant is granted the right at all times during the Lease Term to
the nonexclusive use of the main lobby of the Building, common corridors and hallways,
stairwells, elevators, restrooms, and other public or common areas, located in the Property.
Landlord, however, has the sole discretion to determine the manner in which those public
and common areas are maintained and operated, and the use of those areas shall be subject to
the Rules and Regulations, as defined in Section 5.
	 
	 	 
	 

	 	     C. Landlord’s Reservation of Rights. Except as otherwise provided in this Lease, the
following rights are reserved to Landlord:
	 
	 	 
	 

	 	          (1) The right to all of the Building, except for the space within the Premises;
	 
	 	 
	 

	 	          (2) The right to change all elements of the Property, subject to the terms of Section 23.B.;
	 
	 	 
	 

	 	          (3) The rights reserved to Landlord by provisions of this Lease or by operation of law;
	 
	 	 
	 

	 	          (4) The exclusive right to consent to the use or occupancy of the Premises by any person
other than Tenant; and
	 
	 	 
	 

	 	          (5) All rights in the economic value of the leasehold estate in the Premises.
	 
	 	 
	POSSESSION AND
LEASE TERM
COMMENCEMENT:

	 	2. A. Construction of Improvements. This Lease pertains to improvements to be
constructed within a Building, and the Term Commencement Date shall be the later of: (1)
March 15, 2008, or (2) the date the improvements to be constructed by Landlord in the
Premises shall have been substantially completed in accordance with the plans and
specifications described on Exhibit “B.” Tenant shall have the option of early occupancy of
the Premises, in their then unfinished condition, for a period of ten (10) days prior to the
Term Commencement Date, subject to Landlord’s continued right to construct the improvements
on the Premises. Delivery of possession of the Premises to Tenant shall be the later of (1)
March 15, 2008 or (2) the date the improvements to be constructed in the Premises by
Landlord shall have been substantially completed in accordance with Exhibit “B.” If, for
any reason, Landlord cannot deliver possession of the Premises to Tenant on or prior to the
Term Commencement Date, Landlord shall not be subject to any liability therefore, nor shall
Landlord be in default hereunder. If the Landlord, without the fault of Tenant, has not
delivered possession of the Premises by June 1, 2008, then the Tenant shall have the right
to terminate this Lease and shall receive a refund of the first month’s Base Rent and
Security Deposit previously paid to Landlord under this Lease. As provided in the preceding
sentence, if Tenant terminates this Lease and provided Landlord’s inability to deliver
possession is not the fault of Tenant or due to circumstances beyond Landlord’s control,
Tenant shall also receive an amount equal to Tenant’s actual reasonable costs for tenant
improvements to the Premises paid by Tenant. Substantial Completion” as used in the Lease
shall mean: (1) all of the Building systems are operational to the extent necessary to
service the Premises; (2) Landlord has sufficiently completed all the work required to be
performed by Landlord in accordance with this Lease in a good and workman-like manner
(except minor punch list items which Landlord shall thereafter promptly complete) such that
Tenant can conduct normal business operations from the Premises; (3) Landlord has obtained
a certificate of occupancy for the Premises, and (4) Tenant has been delivered complete
and uninterrupted access to the Premises. Substantial completion shall have occurred
notwithstanding Tenant’s submission of a punch list to Landlord, which punch list items
Landlord shall diligently complete, which Tenant shall submit, if at all, within thirty (30)
days after the Term Commencement Date. Subsequent to Tenant’s possession of the Premises,
Tenant shall, upon demand, execute and deliver to Landlord a letter of acceptance of
delivery of the Premises.

3

 

	 	 	 
	 

	 	     B. Insurance. Landlord shall not be required to deliver possession
of the Premises to Tenant and Tenant shall not have a right to
early occupancy as provided in Section 2 above, until Tenant
complies with its obligation to provide evidence of insurance
(Section 9). Pending delivery of such evidence, Tenant shall be
required to perform all of its obligations under this Lease from
and after the Term Commencement Date, including the payment of
Rent, notwithstanding Landlord’s election to withhold possession,
pending receipt of such evidence of insurance. Further, if
Tenant is required to perform any other conditions prior to or
concurrent with the Term Commencement Date, the Term
Commencement Date shall occur but Landlord may elect to withhold
possession until such conditions are satisfied.
	 
	 	 
	 

	 	     C. Inspection. Tenant acknowledges that (1) it has been advised by
Landlord and/or its agents 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 Regulations, Legal
Requirements, and the Americans with Disabilities Act), and their
suitability for Tenant’s intended use, (2) Tenant has made such
investigation as it deems necessary with reference to such matters
and assumes all responsibility therefore as the same relate to its
occupancy of the Premises, and (3) neither Landlord nor its agents
have made any oral or written representations or warranties with
respect to said matters other than as set forth in this Lease.
Prior to entering into this Lease, Tenant or Tenant’s broker shall
be provided the opportunity to enter the Premises and perform such
inspection as it deems prudent provided that if Tenant or its
broker fail to make such inspection on or prior to March 10, 2008,
Tenant shall be deemed to have voluntarily waived such inspection.
	 
	 	 
	USE:

	 	3. A. General. Tenant shall use the Premises for the Permitted
Use and for no other use or purpose. Tenant shall control Tenant’s
employees, agents, customers, visitors, invitees, licensees,
contractors, assignees and subtenants (collectively, “Tenant’s
Parties”) in such a manner that Tenant and Tenant’s Parties,
cumulatively, do not exceed the Parking Density specified in the
Basic Lease Information at any time. Tenant and Tenant’s Parties
shall have the nonexclusive right to use, in common with other
parties occupying the Building or Property, the parking areas and
driveways of the Property, subject to such reasonable rules and
regulations as Landlord may, from time, to time prescribe,
including, but not limited to, those rules and regulations
specified in the attached Schedule 1.
	 
	 	 
	 

	 	     B. Limitations. Tenant shall not permit any odors, smoke,
dust, gas, substances, noise or vibrations, to emanate from the
Premises, nor take any action which could, reasonably and
potentially, constitute a nuisance or could disturb, obstruct or
endanger, any other tenants of the Building or Property, in which
the Premises are situated, or interfere with their use of their
respective premises. Storage, outside the Premises, of materials,
vehicles or any other items is prohibited. Tenant shall not use or
allow the Premises to be used for any improper, immoral or
unlawful purpose, nor shall Tenant cause or maintain or permit any
nuisance in, on or about the Premises. Tenant shall not commit
or suffer the commission of any waste in, on or about the
Premises. Tenant shall not allow any sale by auction upon the
Premises, or place any loads upon the floors, walls or ceilings,
which endanger the structure, or place any harmful liquids in the
drainage system, of the Building or Property. No waste, materials
or refuse shall be dumped upon or permitted to remain outside the
Premises except in trash containers, placed inside exterior
enclosures designated for that purpose by Landlord. Landlord
shall not be responsible to Tenant for the non-compliance by any
other tenant or occupant of the Building or Property with any of
the above-referenced rules or any other terms or provisions of
such tenant’s or occupant’s lease or other contract.
	 
	 	 
	 

	 	     C. Compliance with Regulations and Legal Requirements. Tenant is
responsible for determining whether or not the Regulations and
Legal Requirements are appropriate for Tenant’s intended use, and
by entering the Premises, Tenant accepts the Premises in the
condition existing as of the date of such entry, subject to all
existing or future applicable municipal, state, federal, and other
governmental statutes, regulations, laws, and ordinances,
including zoning ordinances and regulations, governing and
relating to the use, occupancy, and possession of the Premises,
and the use, storage, generation, and disposal of Hazardous
Materials (hereinafter defined) in, on, and under the Premises
(collectively “Regulation”). Tenant, at its sole expense, shall
use and occupy the Premises in compliance with all laws,
including, without limitation, the Americans With Disabilities
Act, orders, judgments, ordinances, regulations, codes,
directives, permits, licenses, covenants and restrictions now or
hereafter applicable to the Premises (collectively, “Legal
Requirements”). The Premises shall not be used as a place of
public accommodation under the Americans With Disabilities Act or
similar state statutes or local ordinances or any regulations
promulgated thereunder, all as may be amended from time to time.
Tenant shall, at its expense, make any alterations or
modifications, within or without the Premises that are required by
Legal Requirements related to Tenant’s use or occupation of the
Premises. Except for pre-existing violations, Tenant shall, at
Tenant’s sole expense, strictly comply with all Regulations now in
force or which may hereafter be in force relating to the Premises
and Tenant’s use of the Premises and/or the use, storage or
generation of Hazardous Materials in, on and under the Premises by
Tenant or Tenant’s Parties. Tenant shall at its sole cost and
expense obtain any and all licenses or permits necessary for
Tenant’s particular use of the Premises. Tenant shall comply with
the requirements of any board of fire underwriters or other
similar body now or hereafter constituted. Tenant shall be solely
responsible for compliance with any requirements for modification
to the Premises to provide for fire prevention or suppression
improvements or modifications, including sprinkler requirements,
as public officials or law may require, related to Tenant’s use or
occupation of the Premises. Tenant shall not do or permit anything
to be done in, on, or about the Premises or bring or keep anything
which will in any way increase the rate of any insurance upon the
Premises, Building or Property, or upon any contents therein
(unless Tenant agrees to pay for the cost of such increase and the
cost of removing the cause of such increase upon termination of
the tenancy), or cause a cancellation of said insurance. Tenant
shall indemnify, defend, protect and hold Landlord harmless from
and against any loss, cost, expense, damage, attorneys’ fees,
experts1 fees or liability arising out of the failure
of Tenant to comply with any applicable law or regulation or
comply with the requirements as set forth herein. The taking of
possession of the Premises shall be conclusive evidence that
Tenant accepts the Premises and that the Premises were in good
condition at the time possession was taken.

4

 

	 	 	 
	 

	 	D. Hazardous Wastes Materials.
Tenant shall not cause, or allow any
of Tenant’s Parties to cause, any
Hazardous Materials to be used,
generated, stored or disposed of on
or about the Premises, the Building
or the Property. Notwithstanding
the foregoing, Tenant may use any
ordinary and customary household
cleaning materials and normal
quantities of standard office
supplies (e.g., copier toner), so
long as such use is in compliance
with all Regulations and does not
expose the Premises or neighboring
property to any meaningful risk of
contamination or damage or expose
Landlord to any liability. Landlord
may require Tenant to specify the
type and amount of any Hazardous
Materials to be brought onto the
Premises in the attached Schedule 2,
Hazardous Substance Disclosure
Schedule. As used in this Lease,
“Hazardous Materials” shall include,
but not be limited to, “hazardous
materials,” “hazardous wastes,”
“toxic substances,” or other similar
designations in any federal, state
or local law, regulation, or
ordinance.
	 
	 	 
	 

	 	          (1) Landlord shall have the right,
but not the obligation, at all
reasonable times, upon not less
than seventy-two (72) hours notice
to Tenant (except in the case of
emergency in which case no prior
notice shall be required), and
subject to all reasonable security
measures of Tenant, to inspect the
Premises and to conduct tests and
investigations to determine whether
Tenant is in compliance with the
foregoing provisions, the costs of
all such inspections, tests and
investigations to be borne by
Tenant, if such inspections, tests
and investigations show that Tenant
is not in compliance with the
foregoing provisions.
	 
	 	 
	 

	 	          (2) If Tenant 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 Landlord, Tenant
shall immediately give written
notice of such fact to Landlord, and
provide Landlord with a copy of any
report, notice, claim or other
documentation which it has
concerning the presence of such
Hazardous Materials.
	 
	 	 
	 

	 	          (3) At any time and upon prior
written notice to Tenant, Landlord
may require testing wells to be
drilled on or about the Property and
may require the ground water to be
tested to detect the presence of
Hazardous Materials by the use of
any tests that are then customarily
used for those purposes. The cost of
these tests and of the installation,
maintenance, repair, and replacement
of the wells shall be paid by Tenant
if the tests disclose the existence
of facts that give rise to liability
of Tenant pursuant to this Section.
Landlord shall have the right to
appoint a consultant to conduct an
investigation to determine whether
any Hazardous Materials are being
used, generated, discharged,
transported to or from, stored or
disposed of in, on, over, through,
or about the Premises, in an
appropriate and lawful manner. If
Tenant has violated any Regulations
and/or Legal Requirements or
covenant in this Lease during the
Term regarding the use, storage or
disposal of Hazardous Materials on
or about the Premises, Tenant shall
reimburse Landlord for the cost of
such investigation. Tenant, at its
expense, shall comply with all
reasonable recommendations of the
consultant required to conform
Tenant’s use, storage or disposal of
Hazardous Materials to the
requirements of applicable
Regulations and/or Legal
Requirements or to fulfill the
obligations of Tenant hereunder.
	 
	 	 
	 

	 	          (4) If the presence of Hazardous
Materials on the Premises or
Property caused or permitted by
Tenant results in the contamination
or deterioration of the Property or
any water or soil beneath the
Property, Tenant, at its sole cost,
shall promptly take all action
necessary to investigate and remedy
that contamination.
	 
	 	 
	 

	 	          (5) If any action of any kind is
required or requested to be taken,
during the Term, by any governmental
authority to clean-up, remove,
remediate or monitor any Hazardous
Materials (the presence of which is
the result of the acts or omissions
of Tenant or Tenant’s Parties during
the Term) and such action is not
completed prior to the expiration or
earlier termination of the Lease,
Tenant shall be deemed to have
impermissibly held over until such
time as such required action is
completed, and Landlord shall be
entitled to all damages directly or
indirectly incurred in connection
with such holding over, including
without limitation, damages
occasioned by the inability to
re-let the Premises or a reduction
of the fair market and/or rental
value of the Premises.
	 
	 	 
	 

	 	          (6) Tenant shall indemnify, defend,
protect and hold Landlord and its
members, officers, agents,
employees, and consultants, harmless
from and against all liabilities,
losses, costs and expenses
(including without limitation
reasonable attorneys’ and experts’
fees and expenses), demands, causes
of action, claims or judgments,
directly or indirectly arising out
of the use, generation, storage or
disposal of Hazardous Materials in,
on or under the Premises, Building
or Property by Tenant or any of
Tenant’s Parties, which indemnity
shall include, without limitation,
the cost of any required or
necessary repair, cleanup or
detoxification, and the preparation
of any closure or other required
plans, whether such action is
required or necessary prior to or
following the termination of this
Lease. Neither the written consent
by Landlord to the use, generation,
storage or disposal of Hazardous
Materials nor the strict compliance
by Tenant with all laws pertaining
to Hazardous Materials shall excuse
Tenant from Tenant’s obligation of
indemnification pursuant to this
Lease. Tenant’s obligations
pursuant to the foregoing indemnity
shall survive the expiration or
termination of this Lease.
	 
	 	 
	RULES AND REGULATIONS:

	 	4. In addition to Tenant’s
compliance with all Regulations and
Legal Requirements, Tenant shall
faithfully observe and comply with
any and all rules and regulations
set forth in Schedule 1 attached
hereto and as Landlord may from time
to time prescribe for the purpose of
maintaining the proper care,
cleanliness, safety, traffic flow
and general order of the Premises or
Property, including the Rules and
Regulations for Abatement of Mold
(in the aggregate, “Landlord Rules
and Regulations”). Tenant shall cause
Tenant’s Parties to comply with such
Landlord Rules and Regulations.
Landlord shall not be responsible to
Tenant for the non-compliance by any
other tenant or occupant of the
Building or Property with any of the
Landlord Rules and Regulations but
shall make reasonable efforts to
enforce such compliance after
receipt of written notice from
Tenant setting forth in detail the
nature of such noncompliance.
	 
	 	 
	RENT:

	 	5. A. Rent. Tenant shall pay to
Landlord, without demand throughout
the Term, Rent as specified in the
Basic Lease Information, together
with any and all rental, sales or
use taxes levied by any governmental
body having authority upon the use
or occupancy of the Premises and any
rent or other

5

 

	 	 	 
	 

	 	charges payable hereunder, payable in monthly installments in advance on or before the first day of each
calendar month, in lawful money of the United States, without deduction or offset whatsoever, at the
address specified for Landlord in the Basic Lease Information or to such other place as Landlord may
from time to time designate in writing. Payment must be in United States dollars, either in the form of
a check (drawn on a bank located in the State of California) or via electronically transmitted funds.
Rent does include Tenant’s share of Operating Costs. Rent due for any partial month at the
commencement or expiration (but not for termination due to the default of Tenant) of the Lease Term
shall be prorated based on the actual number of days in the applicable month.
	 
	 	 
	 

	 	     B. Partial Payments. Acceptance of a payment, which is less than the amount then due, shall not be a
waiver of Landlord’s rights to the balance of such Rent, regardless of Tenant’s endorsement of any check
so stating. In the event that any check, draft, or other instrument of payment given by Tenant to
Landlord is dishonored for any reason, Tenant agrees to pay to Landlord the sum of fifty dollars ($50)
in addition to any late charge. Payment will be applied first to accrued late charges and attorney’s
fees, second to accrued interest, then to Rent, and any remaining amount to any other outstanding
charges or costs.
	 
	 	 
	LATE CHARGE AND
INTEREST:

	 	6. A. Late Charge. Tenant hereby acknowledges that late payment by Tenant of Rent will cause
Landlord 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. Accordingly, in the event any installment of Rent is not paid within five (5) working
days after written notice that the same is overdue, Tenant shall pay Landlord a one-time late charge
equal to ten percent (10%) of each such delinquency or one hundred dollars ($100), whichever is greater
(not to exceed the maximum allowed by applicable law). The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by reason of such late
payment. Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant’s
Default or Breach with respect to such overdue amount, nor prevent the exercise of any of the other
rights and remedies granted hereunder.
	 
	 	 
	 

	 	     B. Interest. If any installment of Rent is not paid within three (3) business days after written notice
that the same is overdue, such amount shall bear interest at the rate of ten percent (10%) per annum
(not to exceed the maximum rate allowed by law) from the date on which said payment shall be due until
the date on which Landlord shall receive said payment. This provision shall not relieve Tenant of
Tenant’s obligation to pay Rent at the time and in the manner herein specified.
	 
	 	 
	ADDITIONAL RENT:

	 	7. A. Additional Rent. In addition to paying the Base Rent, Tenant shall pay as additional rent
Tenant’s Share of the annual Operating Costs (as defined in subparagraph B), that are in excess of the
amount of Operating Expenses applicable to the Base Year (as defined in subparagraph B). That
additional rent, together with other amounts of any kind (other than Base Rent) payable by Tenant to
Landlord under the terms of this Lease, shall be collectively referred to in this Lease as Additional
Rent (“Additional Rent”). Base Rent and Additional Rent are collectively referred to in this Lease as
Rent (“Rent”). All amounts due under this Section as Additional Rent are payable for the same periods
and in the same manner, time, and place as the Base Rent. Without limitation on other obligations of
Tenant that survive the expiration of the Lease Term, Tenant’s obligations to pay the Additional Rent
provided for in this Section shall survive the expiration of the Lease Term.
	 
	 	 
	 

	 	     B. Definitions. The following definitions apply in this Section:
	 
	 	 
	 

	 	          (1) Base Year. Base Year (“Base Year”) means the period stated in Summary of Basic Lease Information.
	 
	 	 
	 

	 	          (2) Direct
Costs. Direct Costs (“Direct Costs”) means Operating Costs plus Tax Expenses.
	 
	 	 
	 

	 	          (3)
Expense Year. Expense Year (“Expense Year”) means each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease Term expires.
	 
	 	 
	 

	 	          (4) Operating
Costs. Operating Costs (“Operating Costs”) means all expenses, costs, and amounts of every
kind that Landlord pays or incurs during any Expense Year because of or in connection with the
ownership, operation, management, maintenance, repair, replacement, or restoration of the
Property.
	 
	 	 
	 

	 	      C. Operating Costs. The definition of “Operating Costs” includes any amounts paid or incurred for:
	 
	 	 
	 

	 	          (1) the cost of supplying any utilities (except the actual cost of electric service supplied to the
Premises, to be paid by Tenant, as provided in Paragraph 16 of this Lease);
	 
	 	 
	 

	 	          (2) the cost of operating, managing, maintaining, and repairing the following systems: utility,
mechanical, sanitary, storm drainage, escalator, and elevator;
	 
	 	 
	 

	 	          (3) the cost of supplies and tools, and of equipment, maintenance, and service contracts, in connection
with those systems;
	 
	 	 
	 

	 	          (4) the cost of licenses, certificates, permits, and inspections.
	 
	 	 
	 

	 	          (5) the cost of contesting the validity or applicability of any government enactments that may affect
the Operating Costs;

6

 

	 	 	 
	 

	 	          (6) the costs incurred in connection with the implementation and operation of a
transportation system management program or similar program;
	 
	 	 
	 

	 	          (7) the cost of insurance carried by Landlord, in amounts reasonably determined by Landlord;
	 
	 	 
	 

	 	          (8) fees, charges, and other costs including management fees (or amounts in lieu of such fees
(management fees or amounts not to exceed five percent (5.0%) of annual fixed rent for the
Building), consulting fees, legal fees, and accounting fees, of all persons engaged by
Landlord or otherwise reasonably incurred by Landlord in connection with the
operation, management, maintenance, and repair of the Property;
	 
	 	 
	 

	 	          (9) the cost of parking area maintenance, repair, and restoration, including resurfacing,
repainting, re-striping, and cleaning;
	 
	 	 
	 

	 	          (10) wages, salaries, and other compensation and benefits of all persons engaged in the
operation, maintenance, or security of the Building at or below the level of manager, plus
employer’s Social Security taxes, unemployment taxes, insurance, and any other taxes imposed
on Landlord that may be levied on those wages, salaries, and other compensation and benefits.
If any of Landlord’s employees provide services for more than one building of Landlord,
only the prorated portion of those employees’ wages, salaries, other compensation and
benefits, and taxes reflecting the percentage of their working time devoted to the Property
shall be included in Operating Costs;
	 
	 	 
	 

	 	          (11) payments under any easement, license, operating agreement, declaration, restrictive
covenant, or instrument relating to the sharing of costs by the Building;
	 
	 	 
	 

	 	          (12) amortization, including interest on the unamortized cost at a rate equal to the floating
commercial loan rate announced from time to time by Bank of America, N.T.S.A. (San Francisco)
as its prime rate plus two (2) percentage points per annum of the cost of acquiring or
renting personal property used in the maintenance, repair, and operation of the Building and
Property;
	 
	 	 
	 

	 	          (13) the cost of capital improvements or other costs incurred in connection with the
Property that (1) are intended as a labor-saving device or to effect other economies in the
maintenance or operation of, or stability of services to, all or part of the Property, or (2)
are required under any government law or regulation but that were not required in connection
with the Property at the Term Commencement Date. All permitted capital expenditures shall be
amortized (including interest on the unamortized cost at the rate stated in subparagraph
(12)) over their useful life, as reasonably determined by Landlord.
	 
	 	 
	 

	 	     D. Adjustment of Operating Costs. Operating Costs shall be adjusted as follows:
	 
	 	 
	 

	 	          (1) Gross-Up Adjustment when Building is Less than Fully Occupied. If the occupancy of the
Building during any part of any Expense Year (including the Base Year) is less than one
hundred (100) percent, Landlord shall make an appropriate adjustment of the variable
components of Operating Costs for that Expense Year, as reasonably determined by
Landlord using sound accounting and management principles, to determine the amount of
Operating Costs that would have been incurred had the Building been one hundred (100) percent
occupied. This amount shall be considered to have been the amount of Operating Costs for that
Expense Year. For purposes of this Section, variable components (“ Variable Components”)
include only those component expenses that are affected by variations in occupancy levels.
	 
	 	 
	 

	 	          (2) Adjustment
When Landlord Does Not Furnish a Service to All Tenants. If, during any part
of any Expense Year (including the Base Year), Landlord is not furnishing a particular
service or work (the cost of which, if furnished by Landlord, would be included in Operating
Costs) to a tenant (other than Tenant), that has undertaken to perform such service or work
in lieu of receiving it from Landlord, Operating Costs for that Expense Year shall be
considered to be increased by an amount equal to the additional Operating Costs that Landlord
would reasonably have incurred, during this period, if Landlord had furnished such service or
work to that tenant.
	 
	 	 
	 

	 	     E. Exclusions From Operating Costs. Despite any other provision of Section 1, Operating
Costs shall not include:
	 
	 	 
	 

	 	          (1) depreciation, interest, or amortization on mortgages or ground lease payments, except as
otherwise stated in this Section;
	 
	 	 
	 

	 	          (2) legal fees incurred in negotiating and enforcing tenant leases;
	 
	 	 
	 

	 	          (3) real estate brokers’ leasing commissions;
	 
	 	 
	 

	 	          (4) initial improvements or alterations to tenant spaces;
	 
	 	 
	 

	 	          (5) the cost of providing any service directly to or paid directly by any tenant;
	 
	 	 
	 

	 	          (6) any costs expressly excluded from Operating Costs elsewhere in this Lease;

7

 

	 	 	 
	 

	 	          (7) costs of any items for which Landlord receives reimbursement from
insurance proceeds or a third party. Insurance proceeds shall be excluded
from Operating Costs in the year in which they are received, except that
any deductible amount under any insurance policy shall be included within
Operating Costs;
	 
	 	 
	 

	 	          (8) costs of capital improvements, except as otherwise stated in this Lease;
	 
	 	 
	 

	 	          (9) any cost paid to any entity related to Landlord to the extent such cost
exceeds the amount which would be paid in the absence of such relationship;
and
	 
	 	 
	 

	 	          (10) costs directly resulting from the gross negligence or willful
misconduct of Landlord, its employees, agents and contractor or any other
occupant of the Building except Tenant.
	 
	 	 
	 

	 	     F. Exclusion From Operating Costs for Base Year. Operating Costs for the
Base Year shall not include amortized costs relating to capital
improvement. In no event shall the components of Operating Costs for any
Expense Year related to electrical costs be less than the components of
Operating Costs related to electrical costs in the Base Year.
	 
	 	 
	 

	 	     G. Tax Expenses. Tax Expenses (“Tax Expenses”) means all federal,
state, county, or local government or municipal taxes, fees, charges, or
other impositions of every kind (whether general, special, ordinary, or
extraordinary) that are paid or incurred by Landlord during any Expense
Year (without regard to any different fiscal year used by any government or
municipal authority) because of or in connection with the ownership,
leasing, and operation of the Property. These expenses include taxes,
fees, and charges such as real property taxes, general and special
assessments, transit taxes, leasehold taxes, and taxes based on the receipt
of rent (including gross receipts or sales taxes applicable to the receipt
of rent, unless required to be paid by Tenant); personal property taxes
imposed on the fixtures, machinery, equipment, apparatus, systems, and
equipment; appurtenances; furniture; and other personal property used in
connection with the Building.
	 
	 	 
	 

	 	          (1) Adjustment of Taxes. For purposes of this Lease, Tax Expenses shall be
calculated as if the tenant improvements in the Building were fully
constructed and the Property, the Building, and all tenant improvements in
the Building were fully assessed for real estate tax purposes. Landlord
specifically agrees that the gross-receipts component of Tax Expenses for
the Base Year and each subsequent year shall be calculated as if the
Building were one-hundred percent (100%) occupied with rent-paying tenants.
Accordingly, during the portion of any Expense Year occurring after the
Base Year, Tax Expenses shall be considered to be increased appropriately.
	 
	 	 
	 

	 	          (2) Included Tax Expenses. Tax Expenses shall include:
	 
	 	 
	 

	 	               (a) Any assessment, tax, fee, levy, or charge in addition to, or in partial
or total substitution of, any assessment, tax, fee, levy, or charge
previously included within the definition of “real property tax.” Tenant
and Landlord acknowledge that Proposition 13 was adopted by the voters of
the State of California in June 1978 and that assessments, taxes, fees,
levies, and charges may be imposed by government agencies for services such
as fire protection; street, sidewalk, and road maintenance; conservation;
refuse removal; and other government services formerly provided without
charge to property owners or occupants. In further recognition of the
decrease in the level and quality of government services and amenities as a
result of Proposition 13 (or as a result of any other restriction on real
property taxes whether by law or by choice of the applicable legislative or
assessing body), Tax Expenses shall also include any government or private
assessments (or the Building’s contribution toward a government or private
cost-sharing agreement) for the purpose of augmenting or improving the
quality of services and amenities normally provided by government agencies.
Tenant and Landlord intend that all new and increased assessments, taxes,
fees, levies, and charges and all similar assessments, taxes, fees, levies,
and charges, be included within the definition of “Tax Expenses” for
purposes of this Lease.
	 
	 	 
	 

	 	               (b) Any assessment, tax, fee, levy, or charge allocable to, or measured by,
the area of the Premises and other premises at the Property or the rent
payable under this Lease and other leases at the Property (including any
gross income tax with respect to the receipt of that rent), or on or
relating to the possession, leasing, operating, management, maintenance,
alteration, repair, use, or occupancy by tenants of their respective
premises or any portion of such premises.
	 
	 	 
	 

	 	               (c) Any assessment, tax, fee, levy, or charge on this transaction or any
document to which any tenant is a party, creating or transferring an
interest or an estate in the Property or any portion thereof.
	 
	 	 
	 

	 	               (d) Any possessory taxes charged or levied in place of real property taxes.
	 
	 	 
	 

	 	          (3) Contest Costs; Refunds. Any expenses incurred by Landlord in
attempting to protest, reduce, or minimize Tax Expenses shall be included
in Tax Expenses in the Expense Year in which those expenses are paid. Such
tax refunds shall be deducted from Tax Expenses in the Expense Year in
which they are received by Landlord.
	 
	 	 
	 

	 	          (4) Excluded Taxes. Despite any other provision of this Section (except
as levied entirely or partially in lieu of Tax Expenses), the following
shall be excluded from Tax Expenses:
	 
	 	 
	 

	 	               (a) all transfer taxes, excess profits taxes, franchise taxes, gift
taxes, capital stock taxes, inheritance and succession taxes, estate taxes,
federal and state income taxes, and other taxes applied or measured by
Landlord’s general or net income (as opposed to rents, receipts, or income
attributable to operations at the Building);
	 
	 	 
	 

	 	               (b) any items included as Operating Costs; and

8

 

	 	 	 
	 

	 	               (c) any items paid by Tenant under subparagraph J of this Section.
	 
	 	 
	 

	 	     H. Tenant’s Share. Tenant’s Share (“Tenant’s Share”) means the
percentage stated in Basic Lease Information. Tenant’s Share is
calculated by multiplying the number of rentable square feet of the
Premises by 100 and dividing the product by the total rentable square
feet in the Building. If either the Premises or the Building is
expanded or reduced, Tenant’s Share shall be appropriately adjusted.
Tenant’s Share for the Expense Year in which that change occurs shall
be determined on the basis of the number of days during the Expense
Year in which each such Tenant’s Share was in effect.
	 
	 	 
	 

	 	     I. Calculation and Payment of Additional Rent. Tenant’s Share of
Operating Costs for any Expense Year shall be calculated and paid as
follows:
	 
	 	 
	 

	 	          (1) Calculation of Excess. If Tenant’s Share of Operating Costs for
any Expense Year ending or beginning within the Lease Term exceeds
Tenant’s Share of the amount of Operating Costs applicable to the
Base Year, Tenant shall pay as Additional Rent to Landlord an amount
equal to that excess (“Excess”), in the manner stated in
subparagraph(2) below.
	 
	 	 
	 

	 	          (2) Statement of Actual Operating Costs and Payment by Tenant.
Landlord shall endeavor to give to Tenant, on or before the first day
of April following the end of each Expense Year, a statement
(“Statement”) stating the Operating Costs incurred or accrued for
that preceding Expense Year, and indicating the amount, if any, of
any Excess. On receipt of the Statement for each Expense Year
ending during the Lease Term for which an Excess exists, Tenant shall
pay, with its next installment of Base Rent due, the full amount of
that Excess, less the amounts (if any) paid during that Expense Year
as Estimated Excess (as defined in Section 3(b)) Landlord’s failure
to furnish the Statement for any Expense Year in a timely manner
shall not prejudice Landlord from enforcing its rights under this
Lease. Even if the Lease Term has expired and Tenant has vacated the
Premises, if an Excess exists when the final determination is made of
Tenant’s Share of the Operating Costs for the Expense Year in which
this Lease terminates, Tenant shall immediately pay to Landlord the
amount calculated, as provided in this Lease. The provisions of this
Section shall survive the expiration or earlier termination of the
Lease Term.
	 
	 	 
	 

	 	          (3) Statement of Estimated Operating Costs. Landlord shall give
Tenant a yearly expense estimate statement (“Estimate Statement”)
stating:
	 
	 	 
	 

	 	               (a) Landlord’s reasonable estimate (“Estimate”) of the total amount
of Operating Costs for the then-current Expense Year; and
	 
	 	 
	 

	 	               (b) the estimated excess (“Estimated Excess”).
	 
	 	 
	 

	 	               The Estimated Excess shall be calculated by comparing estimated
Operating Costs (which shall be based on the Estimate) to the amount
of Operating Costs applicable to the Base Year. Landlord’s failure to
furnish the Estimate Statement for any Expense Year, in a timely
manner, shall not preclude Landlord from enforcing its rights to
collect any Estimated Excess under this Lease. If an Estimated
Excess is calculated for the then-current Expense Year, Tenant shall
pay, with its next installment of Base Rent due, a fraction of that
Estimated Excess for the then-current Expense Year (reduced by any
amounts paid as provided in the last sentence of this Section). The
numerator of that fraction shall be the number of months that have
elapsed in that current Expense Year (including the month of the
payment), and the denominator shall be twelve (12). Until a new
Estimate Statement is furnished, Tenant shall pay monthly, along with
the monthly Base Rent installments, an amount equal to one-twelfth
(1/12th) of the total Estimated Excess stated in the previous
Estimate Statement delivered by Landlord to Tenant.
	 
	 	 
	 

	 	     J. Taxes and Other Charges for Which Tenant Is Directly Responsible.
Tenant shall reimburse Landlord, on demand, as Additional Rent, for
any taxes required to be paid by Landlord that are not already
included in Tax Expenses, excluding state, local, and federal
personal or corporate income taxes measured by the net income of
Landlord from all sources and estate and inheritance taxes,
regardless of whether such taxes are now customary or within the
contemplation of the parties to this Lease, when those taxes are:
	 
	 	 
	 

	 	          (1) Measured by or reasonably attributable to:
	 
	 	 
	 

	 	               (a) the cost or value of Tenant’s equipment, furniture, fixtures,
and other personal property located in the Premises; or
	 
	 	 
	 

	 	               (b) the cost or value of any leasehold improvements made in or to the
Premises by or for Tenant (to the extent that the cost or value of
those leasehold improvements exceeds the cost or value of a
building-standard build-out, as reasonably determined by Landlord
regardless of whether title to those improvements is vested in Tenant
or Landlord);
	 
	 	 
	 

	 	          (2) Assessed on or related to the possession, leasing, operation,
management, maintenance, alteration, repair, use, or occupancy by
Tenant of:
	 
	 	 
	 

	 	               (a) the Premises;
	 
	 	 
	 

	 	               (b) any portion of the Property; or
	 
	 	 
	 

	 	               (c) the parking facility used by Tenant in connection with this Lease.

9

 

	 	 	 
	 

	 	          (3) Assessed either on this
transaction or on any document to
which Tenant is a party that creates
or transfers an interest or an
estate in the Premises.
	 
	 	 
	 

	 	     K. Landlord’s Books and Records. If
Tenant disputes the amount of
Additional Rent stated in the
Statement, Tenant may designate,
within thirty (30) days after
receipt of that Statement, an
independent certified public
accountant to inspect Landlord’s
records. Tenant is not entitled
to request that inspection, however,
if Tenant is then in default beyond
any applicable cure period under
this Lease. The accountant must be a
member of a recognized accounting
firm and must not charge a fee based
on the amount of Additional Rent
that the accountant is able to save
Tenant by the inspection. Tenant
must give reasonable written notice
to Landlord of the request for
inspection, and the inspection must
be conducted in Landlord’s offices
at the address stated in the Basic
Lease Information at a reasonable
time or times. If, after that
inspection, Tenant still disputes
the Additional Rent, a certification
of the proper amount shall be made,
at Tenant’s expense, by Landlord’s
independent certified public
accountant. That certification shall
be final and conclusive.
	 
	 	 
	 

	 	     L. Tenant’s Audit of Operating
Costs. Not more frequently than
once in any twelve (12) month period
during the Term, on Tenant’s written
request, given not more than ninety
(90) days after Tenant’s receipt of
a Statement for a particular Expense
Year, and provided that Tenant is
not then in default under this
Lease, beyond the applicable cure
period provided in this Lease, and
that Tenant has paid all amounts
required to be paid under the
applicable Statement or Estimate
Statement, then Landlord shall
provide Tenant with an audited
statement (“Accountant’s Statement)
of the Operating Costs for the
Property for such Expense Year from
Landlord’s independent certified
public accountants, and Landlord
shall also furnish Tenant with such
reasonable supporting documentation
in connection with the such
Operating Costs as Tenant may
reasonably request.
	 
	 	 
	 

	 	     Landlord shall provide this
information and the Accountant’s
Statement to Tenant within ninety
(90) days after Tenant’s written
request for it. The Accountant’s
Statement shall contain sufficient
detail to enable Tenant to verify
that, in computing the Operating
Costs payable by Tenant, Landlord
has adhered to the terms of
exclusions and inclusions for
Operating Costs, as set forth in
this Lease.
	 
	 	 
	 

	 	     Within fifteen (15) days following
Tenant’s receipt of the Accountant’s
Statement, Tenant and Landlord shall
concurrently be provided with any
audit report prepared for Tenant in
connection with Tenant’s review of
the Operating Costs, and Tenant
shall advise Landlord if Tenant
disputes the Operating Costs or
Tenant’s share of them as set forth
in the Statement for the applicable
Expense Year. Thereafter, if
Landlord ascertains that an error
has been made, Tenant’s sole remedy
shall be for the parties to make
such appropriate payments or
reimbursements, as the case may be,
to each other as are determined to
be owing, provided that any
reimbursements payable by Landlord
to Tenant may, at Landlord’s option,
instead be credited against the Base
Rent next coming due under this
Lease unless the Lease Term has
expired, in which event Landlord
shall refund the appropriate amount
to Tenant. Furthermore, if
Landlord ascertains that the actual
audited Operating Costs exceed by
more than 5% the amount of Operating
Costs paid by Tenant, then Landlord
shall reimburse Tenant for the
reasonable costs of Tenant’s audit
under this Section. If, on the
other hand, Landlord ascertains that
the actual audited Operating Costs
are less than five percent (5%) of
the amount of Operating Costs paid
by Tenant, then Tenant shall
reimburse Landlord for the
reasonable costs of complying with
Tenant’s audit rights under this
Section.
	 
	 	 
	 

	 	     Tenant shall keep any information
gained from its review of Landlord’s
records confidential and shall not
disclose it to any other party,
except as required by law. If
requested by Landlord, Tenant shall
require its employees or agents
reviewing Landlord’s records to sign
a confidentiality agreement as a
condition of Landlord providing the
Accountant’s Statement to Tenant.
In no event shall this section be
deemed to allow any review of any
Landlord’s records by any subtenant
of Tenant.
	 
	 	 
	COMMON AREAS: INSURANCE AND
INDEMNIFICATION:

	 	8. A. Common Areas. The term
“Common Areas” is defined as all
areas and facilities outside the
Premises and within the exterior
boundary line of the Property and
interior utility raceways within the
Premises that are provided and
designated by the Landlord, from
time to time, for the general
nonexclusive use of Landlord, Tenant
and other tenants of the Property
and their respective employees,
suppliers, shippers, customers,
contractors and invitees, including
parking areas, loading and unloading
areas, trash areas, roadways,
sidewalks, walkways, parkways,
driveways and landscaped areas.
	 
	 	 
	 

	 	      B.
Common Areas -Tenant’s Rights.
Landlord hereby grants to Tenant,
for the benefit of Tenant and Tenant
Parties, during the Term of this
Lease, provided that Tenant is not
in default beyond any applicable
cure period provided for under 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 Landlord
under the terms hereof or under the
terms of any rules and regulations
or restrictions governing the use of
the Property. Under no
circumstances shall the right herein
granted to use the Common Areas be
deemed to include the right to store
any property (including, without
limitation, any trash, trash
containers, debris, pallets, or
equipment) temporarily or
permanently, in the Common Areas.
Any such storage shall be permitted
only by the prior written consent of
Landlord or Landlord’s designated
agent, which consent may be revoked
at any time. In the event that any
unauthorized storage shall occur
then Landlord 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 Tenant, which
cost shall be immediately payable
upon demand by Landlord.

10

 

	 	 	 
	 

	 	     C. Common Areas-Rules and
Regulations. Landlord or such other
person(s) as Landlord may appoint
shall have the exclusive control and
management of the Common Areas and
shall have the right, from time to
time, to establish, modify, amend and
enforce reasonable rules and
regulations with respect thereto.
Tenant agrees to abide by and conform
to all such rules and regulations,
and to cause the Tenant Parties to so
abide and conform. Landlord shall
not be responsible to Tenant for the
noncompliance with said rules and
regulations by other tenants of the
Property, but shall make a reasonable
effort to enforce such compliance
after receipt of written notice from
Tenant setting forth in detail the
nature of such noncompliance.
	 
	 	 
	INSURANCE; INDEMNITY:

	 	9. A. Landlord’s Insurance.
Landlord agrees, to the extent
reasonably available, to maintain
insurance insuring the Building
against fire, lightning, vandalism
and malicious mischief (including, if
Landlord elects, “All Risk” coverage,
earthquake, and/or flood insurance),
in an amount not less than eighty
percent (80%) of the replacement cost
thereof, with deductibles and the
form and endorsements of such
coverage as reasonably selected by
Landlord. Such insurance may also
include, at Landlord’s option,
insurance against loss of Rent, in an
amount equal to the amount of Rent
payable by Tenant for a period of at
least twelve (12) months commencing
on the date of loss. Such insurance
shall be for the sole benefit of
Landlord and under Landlord’s sole
control. Landlord shall not be
obligated to insure any furniture,
equipment, machinery, goods or
supplies that Tenant may keep or
maintain in the Premises, or any
leasehold improvements, additions or
alterations within the Premises (but
Landlord may insure the Tenant
Improvements described on Exhibit “B”
hereto and any other alterations to
the Premises made and paid for by
Landlord). Landlord may also carry
such other insurance as other
landlords of similar buildings in San
Mateo County typically carry,
including, without limitation,
liability insurance in such amounts
and on such terms as Landlord shall
reasonably determine.
	 
	 	 
	 

	 	     B. Tenant’s Insurance.
	 
	 	 
	 

	 	          (1) Property Insurance. Tenant
shall procure at Tenant’s sole cost
and expense and keep in effect from
the Lease Date at all times until the
end of the Term, extended or broad
form coverage property insurance on
all personal property and fixtures of
Tenant and all improvements made by
or for Tenant to the Premises,
including plate glass coverage,
insuring such property for the full
replacement value of such property,
with coverage equal to not less than
ninety percent (90%) of the full
replacement value. In the event any
casualty occurs, Tenant agrees to pay
the difference between the insurance
coverage required to be maintained by
this subparagraph and an insurance
policy offering coverage of one
hundred percent (100%) of the full
replacement value of the property.
	 
	 	 
	 

	 	          (2) Liability Insurance. Tenant
shall procure, at Tenant’s sole cost
and expense, and keep in effect, from
the Lease Date and at all times until
the end of the Term, either
Comprehensive General Liability
Insurance or Commercial General
Liability insurance applying to the
use and occupancy of the Premises and
the Building, and any part of either,
and any areas adjacent thereto, and
the business operated by Tenant, or
by any other occupant on the
Premises. Such insurance shall
include Contractual Liability
insurance coverage insuring all of
Tenant’s indemnity obligations under
this Lease, subject to policy terms
and conditions, subject to Landlord’s
prior consent. Such coverage shall
have a minimum combined single limit
of liability of at least One Million
Dollars ($1,000,000), and a general
aggregate limit of Two Million
Dollars ($2,000,000) loss, personal
injury and other covered loss,
however occasioned, occurring during
the policy term, shall be endorsed to
add Landlord and any party holding an
interest to which this Lease may be
subordinated as an additional insured
(provided written notice of the name
of such party(ies) has been given to
Tenant), and shall provide that such
coverage shall be primary and that
any insurance maintained by Landlord
shall be excess insurance only. Such
coverage shall also contain
endorsements: (i) deleting any
employee exclusion on personal injury
coverage; (ii) including employees as
additional insureds; and (iii)
providing for coverage of employer’s
automobile non-ownership liability.
All such insurance shall provide for
severability of interests, shall
provide that an act or omission of
one of the named insureds shall not
reduce or avoid coverage to the other
named insureds; and shall afford
coverage for all claims based on
acts, omissions, injury and damage,
which claims occurred or arose (or
the onset of which occurred or arose)
in whole or in part during the policy
period. Said coverage shall be
written on an “occurrence” basis, if
available. If an “occurrence” basis
form is not available, Tenant must
purchase “tail” coverage for the most
number of years available, and Tenant
must also purchase “tail” coverage if
the retroactive date of an
“occurrence” basis form is changed so
as to leave a gap in coverage for
occurrences that might have occurred
in prior years. If a “claims made”
policy is ever used, the policy must
be endorsed so that Landlord is given
the right to purchase “tail” coverage
should Tenant for any reason not do
so or if the policy is to be canceled
for nonpayment of premium.
	 
	 	 
	 

	 	          (3) Workers Compensation. Workers
Compensation Insurance covering all
employees of Tenant, as required by
the laws of the State of California.
	 
	 	 
	 

	 	      C. General Insurance Requirements.
All coverages described in this
Section shall be endorsed to provide
Landlord with thirty (30) days’
notice of cancellation or change in
terms. If at any time during the
Term the amount or coverage of
insurance which Tenant is required to
carry under this Section is, in
Landlord’s reasonable judgment,
materially less than the amount or
type of insurance coverage typically
carried by owners or tenants of
properties located in the general
area in which the Premises are
located which are similar to and
operated for similar purposes as the
Premises, Landlord shall have the
right to require Tenant to increase
the amount or change the types of
insurance coverage required under
this Section. All insurance policies
required to be carried under this
Section shall be written by companies
rated A+XII or better in “Best’s
Insurance Guide” and authorized to do
business in California. Deductible
amounts under any insurance policies
required hereunder shall not exceed
Five Thousand Dollars ($5,000).
Tenant shall deliver to Landlord, on
or before the Term Commencement Date,
and thereafter at least thirty (30)
days before the expiration dates of
the expiring policies,
certified-copies of Tenant’s
insurance policies, or a certificate
evidencing the same issued by the
insurer thereunder, showing that all
premiums have been paid for the full
policy period. In the event Tenant
shall fail to procure such insurance,
or to deliver such policies or
certificates, Landlord may, at
Landlord’s option

11

 

	 	 	 
	 

	 	and in addition to Landlord’s other remedies in the event of
a default by Tenant hereunder, procure the same for the
account of Tenant, and the cost thereof shall be paid to
Landlord as Additional Rent.
	 
	 	 
	 

	 	     D. Indemnification. Landlord shall not be liable to
Tenant for any loss or damage to person or property caused by
theft, fire, acts of God, acts of a public enemy, riot,
strike, insurrection, war, court order, requisition or order
of governmental body or authority or for any damage or
inconvenience which may arise through repair or alteration of
any part of the Building or Property or failure to make any
such repair, except for Landlord’s gross negligence or
willful misconduct or as expressly otherwise provided in this
Lease.
	 
	 	 
	 

	 	          (1) Tenant shall indemnify, defend by counsel reasonably
acceptable to Landlord, protect and hold Landlord and its
members, managers, directors, officers, employees,
attorneys, agents, successors, assigns and lenders (in the
aggregate, “Landlord Parties”) harmless from and against any
and all liabilities, losses, costs, damages, injuries or
expenses, including reasonable attorneys’ fees, experts’ fees
and court costs, arising out of or related to: (1) claims of
injury to or death of persons or damage to property,
including the person and property of Landlord and/or Landlord
Parties, occurring or resulting directly or indirectly from
the use or occupancy of the Premises by Tenant and/or Tenant
Parties, or from any activities of Tenant and/or Tenant
Parties, in or about the Premises or Property, including but
not limited to claims of Petroleum Products and Hazardous
Material contamination on site (except to the extent caused
by willful acts or gross negligence of Landlord or
environmental conditions pre-existing Tenant’s tenancy); and
(2) claims for work or labor performed, or for materials or
supplies furnished to or at the request of Tenant in
connection with performance of any work done for the account
of Tenant in the performance of any covenant contained in
this Lease.
	 
	 	 
	 

	 	          (2) The indemnification in this Section shall apply
regardless of whether liability without fault or strict
liability is imposed or sought to be imposed on Landlord or
Landlord Parties.
	 
	 	 
	 

	 	          (3) The foregoing indemnification shall not apply to the
extent that a final judgment of a court of competent
jurisdiction establishes that a claim against Landlord and/or
Landlord Parties was proximately caused by the willful
misconduct or gross negligence of the Landlord and/or
Landlord Parties. In that event, however, this
indemnification shall remain valid for all other Landlord
Parties.
	 
	 	 
	 

	 	          (4) The provisions of this Section shall survive the
expiration or termination of this Lease with respect to any
claims or liability occurring prior to such expiration or
termination for a period of five (5) years after the
expiration or termination of this Lease, provided, however,
that claims or liability with respect to Hazardous Materials
shall not be so limited.
	 
	 	 
	 

	 	          (5) The indemnification provided in this Section may not be
construed or interpreted as in any way restricting, limiting,
or modifying Tenant’s insurance or other obligations under
this Lease and is independent of Tenant’s insurance and other
obligations. Tenant’s compliance with the insurance
requirements and other obligations under this Lease shall not
in any way restrict, limit, or modify Tenant’s
indemnification obligations under this Lease.
	 
	 	 
	 

	 	          (6) The prevailing party shall be entitled to recover its
reasonable attorneys’ costs and fees and court costs incurred
in enforcing the indemnification clauses set forth in this
Lease.
	 
	 	 
	 

	 	          (7) Tenant’s duty to defend Landlord and Landlord Parties is
separate and independent of Tenant’s duty to indemnify
Landlord and Landlord Parties. The duty to defend includes
claims for which Landlord and Landlord Parties may be liable
without fault or strictly liable. The duty to defend applies
regardless of whether the issues of negligence, liability,
fault, default, or other obligation on the part of Landlord
Parties have been determined. The duty to defend applies
immediately, regardless of whether Landlord or Landlord
Parties have paid any sums or incurred any detriment arising
out of or relating (directly or indirectly) to any claims. It
is the express intention of the Parties that Landlord and
Landlord Parties be entitled to obtain summary adjudication
or summary judgment regarding Tenant’s duty to defend
Landlord and Landlord Parties at any stage of any claim or
suit.
	 
	 	 
	WAIVER OF
SUBROGATION:

	 	10. Notwithstanding anything to the contrary provided in
this Lease, each party shall rely on its own insurance policy
coverage as provided in this Lease. To the extent permitted
by law and without affecting the coverage provided by
insurance to be maintained hereunder, Landlord and Tenant
each waive any right to recover against the other for: (a)
damages for injury to or death of persons; (b) damages to
property; (c) damages to the Premises or any part thereof,
and (d) claims arising by reason of the foregoing due to
hazards covered by insurance to the extent of proceeds
recovered therefrom or which would have been recovered if the
parties had maintained the insurance policies and coverage
required under this Lease. This provision is intended to
waive fully, and for the benefit of each party, any rights
and/or claims which might give rise to a right of subrogation
in favor of any insurance carrier. The coverage obtained by
each party pursuant to this Lease shall include, without
limitation, a waiver of subrogation by the carrier, which
conforms to the provisions of this Section.
	 
	 	 
	LANDLORD’S
REPAIRS
AND SERVICES:

	 	11. A. Services. Provided Tenant is not in default under this
Lease beyond any applicable cure period provided for under
this Lease, Landlord shall furnish the following services,
the costs of which shall be included in Operating Costs,
unless expressly excluded therefrom:
	 
	 	 
	 

	 	          (1) Elevator service for passenger needs.
	 
	 	 
	 

	 	          (2) Subject to government regulations, air conditioning and
heat at temperature levels similar to other first class
office buildings in the business area in which the Premises
is located, but consistent with all Federal and local energy
conservation regulations.
	 
	 	 
	 

	 	          (3) Running water for all restrooms, lavatories, and kitchens.

12

 

	 	 	 
	 

	 	          (4) Repair and maintenance of all building plumbing, electrical, HVAC,
and fire safety systems, including those located in the Premises;
provided, however, that costs of such repairs and maintenance shall be
included as Operating Costs. Notwithstanding the foregoing, Tenant
shall be entirely responsible for any costs incurred by Landlord in
connection with repairs to such systems that result from Tenant’s
negligent acts or omissions, except to the extent covered by insurance
carried by Landlord.
	 
	 	 
	 

	 	     B. Interior of Premises. Except as provided in this Lease, and
subject to Landlord’s right of access, Tenant shall be exclusively
responsible for the interior of the Premises, and Landlord shall be
under no obligation to inspect the Premises. Tenant shall promptly
report in writing to Landlord any defective condition known to it, which
Landlord is required to repair, and failure to so report such defects
shall make Tenant responsible to Landlord for any liability incurred by
Landlord by reason of such conditions. Tenant hereby waives the right to
make repairs at Landlord’s expense under any other law, statute or
ordinance now or hereafter in effect, provided, however, that in the
event Landlord shall unreasonably delay repairs (which Landlord is
obligated to make under this Lease), Tenant shall have the option, after
delivery to Landlord of adequate written notice, stating in detail the
requested reasonable repair to make such reasonable repair and deduct
the actual reasonable cost of such repair from Rent, provided Tenant
first provides to Landlord legible invoices (marked paid in full) for
such repair.
	 
	 	 
	 

	 	     C. Liability. Except to the extent of any liability arising from the
gross negligence or willful acts of Landlord or Landlord Parties,
Landlord’s liability with respect to any defects, repairs, or
maintenance for which Landlord is responsible under any of the
provisions of this Lease shall be limited to the cost of such repairs or
maintenance.
	 
	 	 
	TENANT’S REPAIRS
AND SERVICES:

	 	12. A. Repairs. Tenant shall maintain all parts of the Premises in a
good clean and secure condition, ordinary wear and tear excepted, and
promptly report in writing to Landlord any defective condition known to
it, which Landlord is required to repair or replace under this Lease,
requiring repairs and replacements, including, but not limited to all
windows, glass, doors, walls and wall finishes, floor covering, sinks,
cabinetry, and lighting fixtures.
	 
	 	 
	 

	 	     B. Services. Tenant shall engage, at its cost, its own janitorial
service, to provide services to the Premises, including, but not limited
to, services similar to that provided in comparable buildings, including
sanitizing, dusting, cleaning, mopping, vacuuming, waxing, polishing,
window washing, and trash removal.
	 
	 	 
	ALTERATIONS:

	 	13. A. Alterations. Except for the tenant improvements to be made
pursuant to Exhibit “B”, as well as any other work to be performed by
Tenant to prepare the Premises for its use and occupancy, Tenant shall
not make, or allow to be made, any alterations, physical additions or
improvements (“Tenant Owned Improvements”) in, about or to the Premises
without obtaining the prior written consent of Landlord, which consent
shall not be unreasonably withheld, conditioned or delayed with respect
to proposed Tenant Owned Improvements which:
	 
	 	 
	 

	 	          (1) comply with all applicable laws, ordinances, rules and regulations;
	 
	 	 
	 

	 	          (2) are in Landlord’s opinion compatible with the Property and its
mechanical, plumbing, electrical, heating/ventilation/air conditioning
systems; and
	 
	 	 
	 

	 	          (3) will not interfere with the use and occupancy of any other
portion of the Building or Property by any other tenant or their
invitees.
	 
	 	 
	 

	 	          Notwithstanding the foregoing, Tenant may construct nonstructural
alterations in the Premises without Landlord’s prior approval if the
aggregate cost of all such work in any 12 month period does not exceed
$5,000 (a “Notice-Only Alteration”), provided Tenant notifies Landlord
in writing of such intended Notice-Only Alteration not less than 15
business days in advance of any proposed construction.
	 
	 	 
	 

	 	     B. Prior Consent. Specifically, but without limiting the generality
of the foregoing, Landlord shall have the right of written consent for
all plans and specifications for all proposed Tenant Owned Improvements,
construction means and methods, all appropriate permits and licenses,
any contractor or subcontractor to be employed on the work of Tenant
Owned Improvements, and the time for performance of such work. Tenant
shall also supply to Landlord any documents and information reasonably
requested by Landlord in connection with Landlord’s consideration of a
request for approval hereunder. Tenant shall reimburse Landlord for
all actual, out-of-pocket costs, which Landlord may incur in connection
with the granting approval to Tenant for any such alterations and
additions, including any reasonable costs or expenses, which Landlord
may incur in electing to have outside architects, and engineers review
said plans and specifications, not to exceed $2,000.
	 
	 	 
	 

	 	     C. Tenant Owned Improvements.
	 
	 	 
	 

	 	          (1) Subject to Landlord’s rights to require their removal, approve
their removal or become owner thereof, as set forth below, all Tenant
Owned Improvements shall be the property of Tenant, but considered part
of the Premises. Unless instructed to remove the Tenant Owned
Improvements, upon expiration or sooner termination of this Lease, all
of the Tenant Owned Improvements shall become the property of Landlord.
During the Term of the Lease, including any extension or renewal
thereof, Tenant shall not remove any Tenant Owned Improvements unless
such removal is necessary for Tenant to make new alterations or physical
additions, or install new improvements that do not diminish the value of
the Premises, the Building or the Property as compared to the value of
the Premises, the Building or the Property with the existing Tenant
Owned Improvements, and in any event Tenant obtains the prior written
approval of Landlord which approval shall not be unreasonably withheld,
conditioned or delayed. Landlord may, as a condition to its approval of
the Tenant Owned Improvements, or upon receipt of notice from Tenant
regarding Notice-Only Alterations, or as to improvements made by Tenant in

13

 

	 	 	 
	 

	 	violation of the terms of this Lease, require that Tenant, at
Tenant’s expense, remove any or all Tenant Owned Improvements
and restore the Premises, by the expiration or sooner
termination of this Lease, to their condition existing prior
to the construction of any such Tenant Owned Improvements,
reasonable wear and tear, and damage by condemnation
excepted. All such removals and restoration shall be
accomplished in a good and workmanlike manner so as not to
cause any material damage to the Premises or Property
whatsoever. If Tenant fails to so remove such Tenant Owned
Improvements or Tenant’s trade fixtures or furniture,
Landlord may keep and use them or remove any of them and
cause them to be stored or sold in accordance with applicable
law, at Tenant’s sole expense. Notwithstanding anything to
the contrary provided in this Section, at the time Landlord
grants its written consent to a tenant alteration to the
Premises, Landlord shall specify whether, at the expiration
or termination of the Lease, Tenant shall be required to
remove all or any part of such improvement, provided that as
to the initial improvements to be made as specified on the
attached Exhibit B, Landlord shall only require the removal
of the sink and counter.
	 
	 	 
	 

	 	          (2) In addition to and wholly apart from Tenant’s
obligations to pay Tenant’s Share of Operating Costs, Tenant
shall be responsible for and shall pay, prior to delinquency,
any taxes or governmental service fees, possessory interest
taxes, fees or charges in lieu of any such taxes, capital
levies, or other charges imposed upon, levied with respect to
or assessed against its personal property, on the value of
the alterations, additions or improvements within the
Premises, and on Tenant’s interest pursuant to this Lease.
To the extent that any such taxes are not separately assessed
or billed to Tenant, Tenant shall pay the amount thereof as
invoiced to Tenant by Landlord.
	 
	 	 
	SIGNS:

	 	14. All signs, notices and graphics of every kind or
character, visible in or from public view or corridors, the
common areas or the exterior of the Premises, shall be
subject to Landlord’s prior written approval. Tenant shall
not place or maintain any banners whatsoever or any window
decor in or on any exterior window or windows fronting upon
any common areas or service area or upon any truck doors or
man doors without Landlord’s prior written approval. Any
installation of signs or graphics on or about the Premises
and Property shall be subject to any applicable governmental
laws, ordinances, and regulations and to any other
requirements imposed by Landlord. Tenant shall remove all
such signs and graphics prior to the termination of this
Lease. Such installations and removals shall be made in such
manner as to avoid injury or defacement of the Premises,
Building or Property, and any other impairment or
discoloration caused by such installation or removal.
Notwithstanding the above, Landlord shall allow Tenant to
install, at Tenant’s sole cost and expense, building signage
subject to approval of Landlord and, if and to the extent
required, the City of San Carlos, and consistent with the
master signage program approved for 990 Industrial Road San
Carlos, California ( Exhibit D).
	 
	 	 
	INSPECTION;
POSTING
NOTICES:

	 	15. A. Inspection. At
all reasonable times after
reasonable notice (except in emergencies where no such notice
shall be required), Landlord, and Landlord’s agents and
representatives, shall have the right to enter the Premises
to inspect the same, to perform such work as may be permitted
or required hereunder, to make repairs or alterations to the
Premises or Property or to other tenant spaces therein, to
deal with emergencies, to post such notices as may be
required by law to prevent the perfection of liens against
Landlord’s interest in the Property or to exhibit the
Premises to prospective tenants, purchasers, encumbrancers or
others, or for any other purpose as Landlord may reasonably
deem necessary or desirable; provided, however, that Landlord
shall be permitted to enter the portion of the Premises
identified as “Lab” on the Space Plan attached hereto as
Exhibit B only if accompanied by a representative of Tenant
which representative shall be provided not later than within
72 hours after Landlord’s request, otherwise, Landlord shall
have the right to entry without such representative. Tenant
shall not be entitled to any abatement of Rent by reason of
the exercise of any such right of entry.
	 
	 	 
	 

	 	     B. Posting of Notices. At any time within six (6) months
prior to the end of the Term, Landlord shall have the right
to erect on the Premises and/or Property suitable signs
indicating that the Premises are available for lease.
Tenant shall not place any sign upon the Premises without
Landlord’s prior written consent. All signs must comply with
all applicable Regulations and Landlord requirements.
	 
	 	 
	 

	 	     C. Entry. Landlord may enter the Premises, without the
abatement of Rent, to take steps to accomplish the stated
purposes in Section 15.A. above. Tenant waives any claims for
damages caused by Landlord’s entry, including damage claims
for: (1) injuries; (2) inconvenience to or interference with
Tenant’s business; (3) lost profits; and (4) loss of
occupancy or quiet enjoyment of the Premises; provided,
however, that in all cases Landlord exercises its rights
hereunder in a reasonable manner and uses reasonable efforts
to minimize interference with Tenant’s use and occupancy.
	 
	 	 
	 

	 	     D. Tenant’s Notice. Except at the end of the Term of the
Lease as provided in the Basic Lease Information, Tenant
shall give written notice to Landlord at least thirty (30)
days prior to vacating the Premises and shall meet with
Landlord for a joint inspection of the Premises at a mutually
convenient time prior to Tenant’s vacating the Premises. In
the event of Tenant’s failure to give such notice or
participate in such joint inspection, Landlord’s inspection
at or after Tenant’s vacating the Premises shall conclusively
be deemed correct for purposes of determining Tenant’s
responsibility for repairs and restoration.

14

 

	 	 	 
	UTILITIES:

	 	16. A. Utilities. Except to the extent such are
payable as a Basic Operating Cost under Paragraph 7,
Tenant shall pay directly for electrical, gas, and
telephone charges and other utilities and services used
on or from the Premises, together with any taxes,
penalties, surcharges or the like pertaining thereto,
and maintenance charges for utilities and shall furnish
all electric light bulbs, ballasts and tubes. If any
such services are not separately metered to Tenant,
Tenant shall pay a reasonable proportion, as determined
by Landlord, of all charges jointly serving other
premises. Landlord shall not be liable for any damages
directly or indirectly resulting from nor shall the Rent
or any monies owed Landlord under this Lease herein
reserved be abated by reason of: (a) the installation,
use or interruption of use of any equipment used in
connection with the furnishing of any such utilities or
services; (b) the failure to furnish or delay in
furnishing any such utilities or services when such
failure or delay is caused by acts of God or the
elements, labor disturbances of any character, or any
other accidents or other conditions beyond the
reasonable control of Landlord; or (c) the limitation,
curtailment, rationing or restriction on use of water,
electricity, gas or any other form of energy or any
other service or utility whatsoever serving the Premises
or the Project. Landlord shall be entitled to
cooperate voluntarily and in a reasonable manner with
efforts of national, state or local governmental
agencies or utility suppliers in reducing energy or
other resource consumption. The obligation to make
services available hereunder shall be subject to the
limitations of any such voluntary, reasonable program.
	 
	 	 
	 

	 	     B. Telecommunications Installations. Neither Tenant
nor its contractors, representatives, or service
providers shall, without Landlord’s prior written
consent, install, maintain, operate, alter, repair, or
replace any wire, line, cable, conduit, antenna,
satellite dish, or other facilities or equipment for use
in connection with any telephone, television,
telecommunications, computer, internet, or other
communications or electronic systems, services, or
equipment (which systems, services, and equipment are
referred to collectively as “Telecommunications
Equipment”) in, on, or about the Building or the roof or
exterior walls of the Building, except for installations
or alterations wholly within the Premises.
	 
	 	 
	 

	 	     C. Conditions. Without limiting the generality of the
foregoing, Landlord may limit the number of carriers,
vendors, or other operators installing,
maintaining, or operating Telecommunications
Equipment in or on the Building and may approve any
telecommunication services provider in the Building, as
deemed necessary or appropriate by Landlord for the
orderly and efficient management and operation of the
Building. Any determination made by Landlord under this
Section shall be made in accordance with Landlord’s
reasonable discretion, provided, however, that with
regard to any request by Tenant to install
Telecommunications Equipment on the roof of the
Building, Tenant agrees that Landlord may, without
limitation, condition its consent on (1) Tenant’s
payment of rent or fees for Tenant’s use of such roof
space, in an amount determined by Landlord in its sole
discretion, (2) Landlord’s approval or designation of
the pathway for any line, cable, wire, or conduit, and
(3) the installation by Tenant, at its sole cost and
expense, of a structural platform and/or access walkway
to protect the roof from damage from the placement of
and access to the Telecommunications Equipment installed
on the roof. Any installation, maintenance, operation,
alteration, repair, or replacement of Telecommunications
Equipment by or for Tenant shall be subject to all of
the requirements and provisions of this Lease. Landlord
may also require that any such work, including work on
or involving the roof (and including, without
limitation, any roof penetrations approved by Landlord),
be performed, at Tenant’s cost, by a contractor
designated or approved by Landlord. In addition, if
Landlord determines that the riser or telecommunications
closet space in the Building is inadequate to
accommodate any Telecommunications Equipment proposed by
Tenant along with the existing and/or future needs of
other occupants and users of the Building, Landlord may
condition Landlord’s approval of Tenant’s
Telecommunications Equipment on the construction of
additional riser or telecommunications closet space as
designated by Landlord at Tenant’s expense. Landlord may
require that Tenant, or the carrier or operator, as
applicable, enter into a telecommunications access
agreement on Landlord’s standard form prior to any
installation of Telecommunications Equipment. At the
end of the Lease Term if requested by Landlord, Tenant
shall remove all equipment and restore the Building to
its original condition.
	 
	 	 
	 

	 	     D. Government Approvals. If Tenant installs any
Telecommunications Equipment, Tenant shall do so at its
sole cost and expense, and Tenant shall obtain, at its
sole cost and expense, any and all permits,
authorizations, and certificates, including, without
limitation, zoning variances or changes, as may be
required with respect to such Telecommunications
Equipment from all governmental agencies. Landlord
agrees to reasonably cooperate with Tenant to obtain
same if required by applicable governmental agencies,
provided, however, that Landlord shall not be obligated
to incur any costs or accept the imposition of any
zoning change or use restrictions affecting the
Building.
	 
	 	 
	 

	 	     E. Noninterference. Telecommunications Equipment
installed or operated by or for Tenant shall not
interfere with the operation (including, without
limitation, transmissions or reception) of any other
Telecommunications Equipment located in, on, under
or about the Property or interfere with
telecommunication at any nearby airports.
	 
	 	 
	 

	 	      F. Cooperation with Landlord and Other Tenants.
Tenant acknowledges that the Building contains limited
space and facilities to accommodate Telecommunications
Equipment, and agrees to reasonably cooperate with
Landlord and with other providers and users of
Telecommunications Equipment to share the available
space and facilities and to coordinate the efficient
collocation of Telecommunications Equipment in the
Building. Access to and use of space within conduit,
utility closets, risers, raceways, switching rooms,
the roof, and other facilities in the Building for the
installation, maintenance, operation, alteration,
repair, or replacement of Telecommunications
Equipment shall be subject to Landlord’s approval and to
such rules and regulations as may be promulgated by
Landlord from time to time.
	 
	 	 
	 

	 	     G. Indemnity. Tenant shall repair any damage caused
by Tenant’s installation, maintenance, operation,
alteration, repair, or replacement of Telecommunications
Equipment, and shall indemnify, protect, defend, and
hold Landlord harmless from all claims, including,
without limitation: (1) any claims by other tenants of
the Building or other third parties, that Tenant’s
installation, maintenance, operation, alteration,
repair, or replacement of Telecommunications Equipment
has caused interference or interruption with the
operation of other Telecommunications Equipment; and (2)
any voiding of or other

15

 

	 	 	 
	 

	 	effect that Tenant’s
installation, maintenance,
operation, alteration, repair,
or replacement of
Telecommunications Equipment may
have on any warranty with respect to
the roof or other portions of the
Building. Landlord shall not be
liable for any damage to or
interference with Tenant’s business
or any loss of income from Tenant’s
business, or for loss of or damage
to Tenant’s Telecommunications
Equipment caused by or resulting
from any damage to or interference
with, or operation of Tenant’s
Telecommunications Equipment,
including, without limitation,
damage or interference caused by or
resulting from the installation,
maintenance, operation, alteration,
repair, or replacement of other
Telecommunications Equipment in the
Building, whether by or for
Landlord, other tenants of the
Building, or other third parties,
and Tenant waives all claims against
Landlord for the same, except that
Landlord shall indemnify, protect,
defend, and hold Tenant harmless
from all claims (but in no event
lost profits or other consequential
damages) to the extent arising out
of or in connection with the gross
negligence or willful acts of
Landlord or its agents, employees,
or representatives. Landlord’s
approval of Tenant’s installation of
any Telecommunications Equipment
shall not constitute a
representation that any such
Telecommunications Equipment will
function effectively in or on the
Building.
	 
	 	 
	SUBORDINATION:

	 	17. Without the necessity of
any additional document being
executed by Tenant for the purpose
of effecting a subordination, the
Lease shall be subject and
subordinate at all times to: (a)
all ground leases or underlying
leases which may now exist or affect
the Premises and/or the land upon
which the Premises and Property are
situated, or both; and (b) any
mortgage or deed of trust which may
now exist upon said Property, land,
ground leases or underlying leases,
or Landlord’s interest or estate in
any said items which is specified as
security. Tenant shall subordinate
the Lease to (a) any ground leases
or underlying leases which may
hereafter be executed affecting the
Premises and/or the land upon which
the Premises and Property are
situated, or both; and (b) any
mortgage or deed of trust which may
placed upon said Property, land,
ground leases or underlying leases,
or Landlord’s interest or estate in
any said items which is specified as
security, Landlord shall diligently
seek to obtain a non-disturbance
agreement with respect to Tenant’s
leasehold interest there under.
Notwithstanding the foregoing,
Landlord shall have the right to
subordinate or cause to be
subordinated any such ground leases
or underlying leases or any such
liens to this Lease. In the event
that any ground lease or underlying
lease terminates for any reason or
any mortgage or deed of trust is
foreclosed or a conveyance in lieu
of foreclosure is made for any
reason, Tenant shall,
notwithstanding any subordination,
attorn to and become the Tenant of
the successor in interest to
Landlord at the option of such
successor in interest. Within ten
(10) days after request, by
Landlord, Tenant shall execute and
deliver any additional documents
evidencing Tenant’s attornment or
the subordination of this Lease with
respect to any such ground leases or
underlying leases or any such
mortgage or deed of trust, in the
form reasonably requested by
Landlord or by any ground landlord,
mortgagee, or beneficiary under a
deed of trust.
	 
	 	 
	FINANCIAL STATEMENTS:

	 	18. Within fifteen (15)
business days after Landlord’s
written request Tenant shall deliver
to Landlord the unaudited financial
statements of Tenant for the prior
quarter and up to two prior years,
prepared in accordance with
generally accepted accounting
practices. Landlord shall keep
Tenant’s financial information
confidential.
	 
	 	 
	ESTOPPEL CERTIFICATE:

	 	19. Tenant agrees, from time
to time, within fifteen (15)
business days after written request
by Landlord, to execute,
acknowledge, and deliver to
Landlord, or Landlord’s designee, an
estoppel certificate stating that
this Lease is in full force and
effect, the date to which Rent has
been paid, the unexpired portion of
this Lease, and such other matters
pertaining to this Lease as may be
reasonably requested by Landlord.
Failure by Tenant to execute and
deliver such certificate within such
fifteen (15) day period shall
constitute an acceptance of the
Premises and acknowledgment by
Tenant that the statements included
are true and correct without
exception and Landlord may execute
an estoppel certificate so stating
and Tenant shall be estopped from
denying the truth of the facts
contained in said certificate.
Landlord and Tenant intend that any
statement delivered pursuant to this
Section may be relied upon by any
mortgagee, beneficiary, purchaser or
prospective purchaser of the
Property or any interest therein.
The parties agree that Tenant’s
obligation to furnish such estoppel
certificate in a timely fashion is a
material inducement for Landlord’s
execution of the Lease. If Tenant
fails to provide such estoppel
certificate within said fifteen (15)
day period and subsequently Landlord
gives Tenant a second written
request and Tenant fails to provide
said estoppel certificate within ten
(10) business days thereafter, then
such failure shall be an event of
default.
	 
	 	 
	SECURITY DEPOSIT:

	 	20. Tenant shall deposit with
Landlord, upon execution of this
Lease, a Security Deposit as stated
in the Basic Lease Information,
which sum shall be held by Landlord,
without obligation for interest, as
security for the performance of
Tenant’s covenants and obligations
under this Lease. The Security
Deposit is not an advance rental
deposit or a measure of damages
incurred by Landlord in case of
Tenant’s default. Upon the
occurrence of any event of default
by Tenant beyond any applicable cure
period provided for under this
Lease, Landlord may, from time to
time, without prejudice to any other
remedy provided herein or provided
by law, use such funds to the extent
necessary to make good any arrears
of Rent or other payments due to
Landlord hereunder, and any other
damage, injury, expense or liability
caused by such event of default, and
Tenant shall pay to Landlord, on
demand, the amount so applied in
order to restore the Security
Deposit to its original amount.
Although the Security Deposit shall
be deemed the property of Landlord,
any remaining balance of such
deposit shall be returned by
Landlord to Tenant at such time
after termination of this Lease, at
the earliest of the time required by
law or when all of Tenant’s
obligations under this Lease have
been fulfilled. Landlord may use
and commingle the Security Deposit
with other funds of Landlord. If
Landlord consents to a change in
control of Tenant and such change in
control occurs during this Lease and
following such change the financial
condition of Tenant is, in
Landlord’s reasonable judgment,
reduced, Tenant shall deposit such
additional monies with Landlord as
shall be sufficient to cause the
Security Deposit to be at a
commercially reasonable level based
on such change in financial
condition. Tenant waives the
provisions of California Civil Code
Section 1950.7, and all other
provisions of law now in force or
that become in force after the date
of execution of this Lease, that
provide that Landlord may claim from
a security deposit only those sums
reasonably necessary to remedy
defaults in the payment of Rent, to
repair damage caused by Tenant, or
to clean the Premises. Landlord
and tenant agree that Landlord may,
in addition, claim those sums
reasonably necessary to compensate
Landlord for any other foreseeable
or unforeseeable loss or damage
caused by the act or omission of
Tenant or Tenant’s officers, agents, employees, independent contractors, or invitees.

16

 

	 	 	 
	 

	 	
	 
	 	 
	TENANT’S REMEDIES:

	 	21. The liability of Landlord to Tenant for any default by
Landlord under the terms of this Lease are not personal
obligations of the members, partners, directors, and officers of
Landlord, and Tenant agrees to look solely to Landlord’s interest
in the Property for the recovery of any amount from Landlord, and
shall not look to other assets of Landlord nor seek recourse
against the assets of the members, partners, directors, and
officers of Landlord. Any lien obtained to enforce any such
judgment and any levy of execution thereon shall be subject and
subordinate to any lien, mortgage or deed of trust on the
Property.
	 
	 	 
	ASSIGNMENT AND 

SUBLETTING:

	 	22. A. General. Tenant shall not voluntarily or by operation
of law assign, transfer, mortgage or encumber (collectively,
“assign” or “assignment”) or sublet all or any part of Tenant’s
interest in the Premises or in this Lease without Landlord’s prior
written approval, which shall not be unreasonably withheld,
conditioned or delayed, except as provided herein.
	 
	 	 
	 

	 	          (1) If Tenant desires to assign this Lease or sublet any or
all of the Premises, Tenant shall give Landlord written notice
thirty (30) days prior to the anticipated effective date of the
assignment or sublease. Landlord shall then have a period of
twenty (20) days following receipt of such notice to notify Tenant
in writing that Landlord elects either: (1) to terminate this
Lease as to the space so affected as of the date so requested by
Tenant, or (2) to permit Tenant to assign this Lease or sublet
such space, subject, however, to Landlord’s prior written approval
of the proposed assignee or subtenant and of any related documents
or agreements associated with the assignment or sublease. In the
event that Landlord does not exercise option (1) above, then
Landlord shall have a period of thirty (30) days after receiving
the proposed documents associated with the proposed assignment or
sublease, to notify Tenant in writing whether Landlord approves of
the proposed assignee or subtenant and of any related documents or
agreements associated with the assignment or sublease. Landlord’s
consent shall not be required for any assignment by Tenant to any
wholly owned subsidiaries or commonly owned affiliates of Tenant,
or a corporation or other entity which is a successor-in-interest
to Tenant, by way of merger, consolidation or corporate
reorganization, or by the purchase of all or substantially all of
the assets or the ownership interests of Tenant; provided the
proposed use of the Premises by such subsidiary or affiliate or
successor-in-interest is conducive to the Property. In
addition, as to such permitted assignment, Tenant shall give to
Landlord, not less than 30 business days prior to such assignment,
written notice of such proposed assignment including the identity
of such assignee, its financial information and such additional
information as may be requested by Landlord. In the event Landlord
reasonably determines that such proposed assignee’s finances are
insufficient, Landlord has the right to require such additional
security or conditions as it may reasonably require.
	 
	 	 
	 

	 	          (2) Without limiting the other instances in which it may be
reasonable for Landlord to withhold Landlord’s consent to an
assignment or subletting, Landlord and Tenant acknowledge that it
shall be reasonable for Landlord to withhold consent in the
following instances: (a) the use of the Premises by such proposed
assignee or subtenant would not be a permitted use or would
increase the Parking Density of the Property; (b) the proposed
assignee or subtenant is not of sound financial condition in
Landlord’s reasonable judgment, (c) the proposed assignee or
subtenant is a governmental agency; (d) the proposed assignee or
subtenant does not have a good reputation as a tenant of property;
(e) the proposed assignee or subtenant is a person with whom
Landlord is then negotiating to lease space; (f) the assignment or
subletting would entail any alterations which would lessen the
value of the leasehold improvements in the Premises; (g) if Tenant
is in default of any monetary or material non-monetary obligation
of Tenant under this Lease beyond any applicable cure periods, or
(h) Tenant has defaulted under this Lease on three (3) or more
occasions during any twelve (12) months preceding the date that
Tenant shall request consent.
	 
	 	 
	 

	 	          (3) Failure by Landlord to approve a proposed assignee or
subtenant shall not cause a termination of this Lease.
	 
	 	 
	 

	 	          (4) Upon a termination under this Section, Landlord may lease
the Premises to any party, including parties with whom Tenant has
negotiated an assignment or sublease, without incurring any
liability to Tenant.
	 
	 	 
	 

	 	          (5) Regardless of Landlord’s consent, no assignment or
subletting shall: (a) be effective without the express written
assumption by such assignee or subtenant of the obligations of
Tenant under this Lease, (b) release Tenant of any obligations
hereunder, or (c) alter the primary liability of Tenant for the
payment of Rent or for the performance of any other obligations to
be performed by Tenant. Landlord may accept Rent or performance of
Tenant’s obligations from any person other than Tenant 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 nor estoppel of
Landlord’s right to exercise its remedies for Tenant’s Default.
Landlord’s consent to any assignment or subletting shall not
constitute consent to any subsequent assignment or subletting.
	 
	 	 
	 

	 	          (6) In the event of any default by Tenant beyond any applicable
cure period under this Lease, Landlord may proceed directly
against Tenant or anyone else responsible for the performance of
Tenant’s obligations under this Lease, including any assignee or
subtenant, without first exhausting Landlord’s remedies against
any other person or entity responsible to Landlord, or any
security held by Landlord.
	 
	 	 
	 

	 	          (7) Each assignee of, or subtenant under, this Lease shall, by
reason of accepting such assignment or entering into such
sublease, be deemed to have assumed and agreed to conform and
comply with each and every term, covenant, condition and
obligation herein to be observed or performed by Tenant 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 Landlord has specifically
consented to in writing.

17

 

	 	 	 
	 

	 	            (8) Tenant hereby irrevocably authorizes and directs any subtenant, upon receipt of a written
notice from Landlord stating that a Default exists in the performance of Tenant’s obligations under this
Lease, to pay to Landlord all Rent due and to become due under the sublease. Subtenant shall rely
upon any such notice from Landlord and shall pay all Rent to Landlord without any obligation or right to
inquire as to whether such Default exists, notwithstanding any claim from Tenant to the contrary.
	 
	 	 
	 

	 	           (9) In the event of a Breach by Tenant, Landlord may, at is option, require subtenant to attorn
to Landlord, in which event Landlord shall undertake the obligations of the sublandlord under such
sublease from the time of the exercise of said option to the expiration of such sublease; provided,
however, Landlord shall not be liable for any prepaid rents or security deposit paid by such sublesse to
such sublandlord or for any prior Default of such sublandlord.
	 
	 	 
	 

	 	          (10) Any matter requiring the consent of the sublandlord under a sublease shall also require the consent of
Landlord.
	 
	 	 
	 

	 	          (11) No subtenant shall further assign or sublet all or any part of the Premises without Landlord’s prior
written consent.
	 
	 	 
	 

	 	          (12) Landlord shall deliver a copy of any notice of Default by Tenant to the subtenant, who shall have the
right to cure the Default of Tenant within the grace period, if any, specified in such notice. The subtenant
shall have a right of reimbursement and offset from and against Tenant for any such Default cured by the
subtenant.
	 
	 	 
	 

	 	     B. Bonus Rent. During the initial Term of this Lease, any Rent or other consideration realized by Tenant
under any such sublease or assignment in excess of the Rent payable hereunder, after amortization of a
reasonable brokerage commission, shall be divided and paid, twenty percent (20%) to Tenant, eighty percent
(80%) to Landlord. In any subletting or assignment undertaken by Tenant, Tenant shall diligently seek to
obtain the maximum rental amount available in the marketplace for such subletting or assignment.
	 
	 	 
	 

	 	     C. Corporation. If Tenant is a corporation, a transfer of corporate shares by sale, assignment, bequest,
inheritance, operation of law or other disposition (including such a transfer to or by a receiver or trustee in
federal or state bankruptcy, insolvency or other proceedings), so as to result in a change in the present
management control of such corporation or any of its parent corporations by the person or persons owning a
majority of said corporate shares, shall constitute an assignment not requiring consent.
	 
	 	 
	 

	 	     D. Partnership. If Tenant is a partnership, joint venture or other incorporated business form, a transfer
of the interest of persons, firms or entities responsible for managerial control of Tenant by sale, assignment,
bequest, inheritance, operation of law or other disposition, so as to result in a change in the present control
of said entity and/or a change in the identity of the persons responsible for the general credit obligations of
said entity shall constitute an assignment requiring consent. The transfer on a cumulative basis, of
twenty-five percent (25%) or more of the interest of Tenant shall constitute a change in control for this
purpose.
	 
	 	 
	 

	 	     E. Net Worth. The involvement of Tenant or its assets in any transaction, or series of transactions (by way of
merger, sale, acquisition, financing, transfer, leveraged buy-out or otherwise), whether or not a formal
assignment or hypothecation of this Lease or Tenant’s assets occurs, which results or will result in a
reduction of the Net Worth of Tenant by an amount greater than twenty-five percent (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 Landlord 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 Landlord’s consent is not required. “Net Worth of Tenant” shall mean the net worth of Tenant (excluding
any guarantors) established under generally accepted accounting principles.
	 
	 	 
	 

	 	     F. Default. An assignment or subletting without Landlord’s prior written consent shall, at Landlord’s
option, be a Default. If Landlord elects to treat such unapproved assignment or subletting as a Default,
Landlord may (1) terminate this Lease, or (2) upon thirty (30) days written notice, increase the monthly Rent
to one hundred ten percent (110%) of the Rent then in effect. Further, in the event of such Default the
rental adjustment scheduled during the remainder of the Lease Term shall be increased to one hundred ten
percent (110%) of the scheduled adjusted rent.
	 
	 	 
	 

	 	     G. Liability. No assignment or subletting by Tenant shall relieve Tenant of any obligation under this
Lease. Any assignment or subletting which conflicts with the provisions hereof shall be void.
	 
	 	 
	 

	 	     H. Termination; Merger. Unless specifically stated otherwise in writing by Landlord, the voluntary or other
surrender of this Lease by Tenant, the mutual termination or cancellation hereof, or a termination hereof by
Landlord for breach by Tenant, shall automatically terminate any sublease or lesser estate in the Premises;
provided, however, that Landlord may elect to continue any or all existing subtenancies. Landlord’s
failure, within twenty (20) days following any such event, to elect to the contrary by written notice to the
holder of any such lesser interest, shall constitute Landlord’s election to have such event constitute the
termination of such interest.
	 
	 	 
	AUTHORITY OF
PARTIES; OTHER PREMISES:

	 	23. A. Authority of
Parties. If Tenant is a corporation, trust, limited liability company, partnership or
similar entity, each individual executing this Lease on behalf of such entity represents and warrants that
he or she is duly authorized to enter into this Lease, perform all obligations hereunder, and execute and deliver this Lease
on its behalf. Tenant shall, within thirty (30) days after request, deliver to Landlord satisfactory evidence of such authority. If this
Lease is executed by more than one person or entity as Tenant, each such person or entity shall be jointly and severally liable hereunder.
It is agreed that any one of the named Tenants shall be empowered to execute any amendment to this Lease, or other

18

 

	 	 	 
	 

	 	document ancillary thereto and bind all of the named Tenants, and Landlord may rely
on the same as if all of the named Tenants had executed such document.
	 
	 	 
	 

	 	     B. Other Premises. Following the expiration of the initial sixty-month-Term of this
Lease, Landlord shall have the right to relocate Tenant to other space of
comparable size, condition, proximity to a major highway, and quality to the
Premises and within five (5) miles of Premises, and all of the terms and provisions
of this Lease shall apply to the new space with equal force and effect. Tenant
agrees to relocate to such new space within thirty (30) days following notice from
Landlord that the new space is available for Tenant’s occupancy. If Landlord
decides to relocate Tenant, Landlord shall: (1) give Tenant prior written notice
not less than sixty (60) days prior to such relocation; (2) provide Tenant, at
Landlord’s expense, with tenant improvements substantially equal in size,
condition, and quality to those in the Premises; (3) Landlord will reimburse Tenant
for actual reasonable moving costs and (4) the parties shall execute an amendment
to this Lease stating the relocation of the Premises. In no event shall the
failure or refusal of either Landlord or Tenant to execute such confirmation affect
the rights and obligations of Landlord and Tenant with respect to such relocation
as set forth in this Section.
	 
	 	 
	CONDEMNATION:

	 	24. A. Condemnation Resulting in Termination. If the whole or any substantial part
of the Property of which the Premises are a part should be taken or condemned for
any public use under governmental law, ordinance or regulation, or by right of
eminent domain, or by private purchase in lieu thereof, and the taking would
prevent or materially interfere with the Permitted Use of the Premises, this Lease
shall terminate and the Rent shall be abated during the unexpired portion of this
Lease, effective when the physical taking of said Premises shall have occurred.
	 
	 	 
	 

	 	     B.
Condemnation Not Resulting in Termination. If a portion of the Property of which
the Premises are a part should be taken or condemned for any public use under any
governmental law, ordinance, or regulation, or by right of eminent domain, or by
private purchase in lieu thereof, and this Lease is not terminated as provided in
Section 24.A., above, this Lease shall not terminate, but the Rent payable
hereunder during the unexpired portion of the Lease shall be reduced, beginning on
the date when the physical taking shall have occurred, to such amount as may be
fair and reasonable under all of the circumstances.
	 
	 	 
	 

	 	     C. Award. Landlord shall be entitled to any and all payment, income, rent, award,
or any interest therein whatsoever which may be paid or made in connection with
such taking or conveyance and Tenant shall have no claim against Landlord or
otherwise for the value of any unexpired portion of this Lease. Notwithstanding
the foregoing, any compensation specifically awarded Tenant for loss of business,
Tenant’s personal property, moving costs or loss of goodwill, shall be and remain
the property of Tenant.
	 
	 	 
	CASUALTY DAMAGE:

	 	25. A. General. If the Premises or Building should be damaged or destroyed by
fire, earthquake or other casualty, Landlord shall give immediate written notice
thereof to Tenant. Within thirty (30) days thereafter, Landlord shall notify Tenant
whether in Landlord’s opinion such repairs can reasonably be made either: (1)
within ninety (90) days; (2) in more than ninety (90) days but in less than one
hundred eighty (180) days; or (3) in more than one hundred eighty (180) days from
the date of such notice. Landlord’s reasonable determination shall be binding on
Tenant. Landlord reasonably determines that such repairs can be made within ninety
(90) days, Landlord shall promptly and diligently undertake such repairs and the
Rent payable hereunder during the period in which the Premises are untenantable
shall be abated proportionately to the extent the Premises are unfit for occupancy.
	 
	 	 
	 

	 	     B. Greater than Ninety (90) Days. If the Premises or Building should be
damaged by fire, earthquake or other casualty but only to such extent that
rebuilding or repairs can in Landlord’s estimation be reasonably completed in more
than ninety (90) days but in less than one hundred eighty (180) days, then Landlord
shall have the option of either: (1) terminating the Lease effective upon the date
of the occurrence of such damage, in which event the Rent shall be abated during
the unexpired portion of the Lease; or (2) electing to rebuild or repair the
Premises to substantially the condition in which they existed prior to such damage,
provided that insurance proceeds are available to fully repair the damage, except
that Landlord shall not be required to rebuild, repair or replace any part of the
partitions, fixtures, additions and other improvements which may have been placed
in, on or about the Premises by Tenant. If the Premises are untenantable in whole
or in part following such damage, the Rent payable hereunder during the period
in which they are untenantable shall be abated proportionately to the
extent the Premises are unfit for occupancy.
	 
	 	 
	 

	 	     C. Greater Than One Hundred Eighty (180) Days. If the Premises or Building
should be so damaged by fire, earthquake or other casualty that rebuilding or
repairs cannot in Landlord’s estimation be completed within one hundred eighty
(180) days after written notice from Tenant of such damage, Tenant shall have the
right within ten (10) days after its receipt of notice of same from Landlord (which
notice shall be given to Tenant not later than ninety (90) days after the
occurrence of such damage), to terminate this Lease, whereupon this Lease shall
terminate and the Rent shall be abated during the unexpired portion of this Lease,
effective upon the date of the occurrence of such damage.
	 
	 	 
	 

	 	     D. Tenant’s Fault. If the Premises or any other portion of the Building are damaged
by fire or other casualty resulting from the fault, negligence, or breach of this
Lease, by Tenant or any of Tenant’s Parties, Rent shall not be diminished during
the repair of such damage and Tenant shall be liable to Landlord for the cost and
expense of the repair and restoration of the Building caused thereby to the
extent such cost and expense is not covered by any available insurance proceeds.

19

 

	 	 	 
	 

	 	     E. Uninsured Casualty.
Notwithstanding anything herein to
the contrary, in the event that the
Premises or Building are damaged or
destroyed and are not fully covered
by the insurance proceeds received
by Landlord or in the event that the
holder of any indebtedness secured
by mortgage or deed of trust
covering the Premises requires that
the insurance proceeds be applied to
such indebtedness, then in either
case Landlord shall have the right
to terminate this Lease by
delivering written notice of
termination to Tenant within thirty
(30) days after the date of notice
to Landlord that said damage or
destruction is not fully covered by
insurance or such requirement is
made by any such holder, as the case
may be, whereupon all rights and
obligations hereunder shall cease
and terminate, unless within ten (10) days thereafter, Tenant
notifies Landlord in writing that
Tenant will pay for the cost of any
such deficiency in excess of the
replacement cost of the Building, in
which case, upon Tenant’s deposit
with Landlord of sufficient funds to
cover the anticipated deficiency,
Landlord shall be obligated to keep
the Lease in full force and effect
and repair such damage
	 
	 	 
	 

	 	      F. Damage During Last Year.
Notwithstanding anything to the
contrary herein, if a casualty
occurs during the last year of the
Lease Term (or any extension
thereof), which casualty cannot be
repaired in the reasonable opinion
of Landlord within 90 days after the
date of the casualty, Tenant shall
have the right to terminate the
Lease effective as of the date of
casualty by giving Landlord notice
of such termination within 30 days
after Tenant’s receipt of Landlord’s
notice specifying the estimated
rebuilding period, as required under
subparagraph A, above.
	 
	 	 
	 

	 	     G. Waiver. The provisions of
this Lease, including those in this
Section, constitute an express
agreement between Landlord and
Tenant that applies in the event of
any casualty to the Premises,
Building, or Property. Except as
otherwise provided in this Section,
Tenant hereby fully waives the
provisions of any statute or
regulation, including Sections
1932(2) and 1933(4), of the Civil
Code of California, relating to any
rights or obligations concerning
casualty.
	 
	 	 
	HOLDING OVER:

	 	26. A. Holding Over. Tenant has
no right to retain possession of the
Premises or any part thereof beyond
the expiration or termination of
this Lease.
	 
	 	 
	 

	 	     B. Rent. In the event that Tenant
holds over, then the Rent shall be
increased to one hundred fifty
percent (150%) of the Rent
applicable immediately preceding the
expiration or termination.
	 
	 	 
	 

	 	     C. With Consent. If Tenant shall
retain possession of the Premises or
any portion thereof with Landlord’s
written consent following the
expiration of the Lease or sooner
termination for any reason, then
Tenant shall pay to Landlord the
fair market rent for the Premises
(but in no event less then the Rent
payable in the last month prior to
the expiration or termination) for
the first thirty (30) days of such
retention, and thereafter, shall pay
to Landlord for each day of such
retention twice the amount of the
daily rental as of the last month
prior to the date of expiration or
termination.
	 
	 	 
	DEFAULT; BREACH; REMEDIES:

	 	27. A. Default; Breach. A
“Default” is defined as a failure by
the Tenant 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 Tenant to cure such
Default within any applicable grace
period.
	 
	 	 
	 

	 	     B. Events of Default. The occurrence
of any of the following shall
constitute an event of Default on
the part of Tenant:
	 
	 	 
	 

	 	          (1) Abandonment of the Premises or
the vacating of the Premises for
more than thirty (30) days without
the prior delivery to Landlord of a
written notice stating the dates the
Premises will be vacant and
providing a commercially reasonable
level of security, or where the
coverage of the property insurance
described in this Lease is
jeopardized as a result thereof, or
without providing reasonable
assurances to minimize potential
vandalism. As to abandonment of
the Premises, pursuant to Section
1951.3 of the California Civil
Code, Landlord shall give a notice
of belief of abandonment to the
Tenant where the Rent on the
Premises has been due and unpaid for
at least 14 consecutive days and the
Landlord reasonably believes that
the Tenant has abandoned the
Premises. The date of termination of
the Lease shall be specified in the
Landlord’s notice and shall be not
less than 15 days after the notice
is served personally or, if mailed,
not less than 18 days after the
notice is deposited in the mail.
	 
	 	 
	 

	 	          (2) Failure to pay any installment
of Rent or any other amount due and
payable hereunder, when due, within
three (3) business days of the date
when said payment is due; provided,
however, that not more frequently
than once each twelve months during
the Lease Term, Tenant shall be
entitled to written notice that such
amount is overdue and three (3)
business days after receipt of such
written notice to cure such default.
	 
	 	 
	 

	 	          (3) Failure to provide reasonable
evidence of insurance or surety
bond, or fulfill any obligation
under this Lease which endangers or
threatens life or property, where
such failure continues for a period
of twenty (20) business days
following written notice to Tenant.
	 
	 	 
	 

	 	          (4) Failure by Tenant to provide
(a) reasonable written evidence of
compliance with Legal Requirements,
(b) the rescission of an
unauthorized assignment or subletting, (c) an Estoppel
Certificate, (d) a requested
subordination, (e) evidence
concerning any information which
Landlord may reasonably require of
Tenant under the terms of this
Lease, where any such failure
continues for a period of ten (10)
business days following written
notice to Tenant.
	 
	 	 
	 

	 	          (5) Failure to perform any
obligation, agreement or covenant
under this Lease other than those
matters specified in subparagraphs
(1) and subparagraph (2) of this
Section, such failure continuing for
fifteen (15) days after written
notice of such failure; provided,
however, that if the nature of
Tenant’s default is such that it
cannot be cured by the payment of
money and reasonably requires more
than fifteen (15) days to cure, then
Tenant shall not be deemed to be in
default if Tenant commences such
cure within said 15-day period and
thereafter diligently prosecutes the
same to completion.

20

 

	 	 	 
	 

	 	          (6) A general arrangement or assignment by Tenant for the benefit of creditors.
	 
	 	 
	 

	 	          (7) The filing of any voluntary petition in bankruptcy by Tenant, or the filing of an
involuntary
petition by Tenant’s creditors, which involuntary petition remains undischarged for a period
of thirty (30)
days. In the event that under applicable law the trustee in bankruptcy or Tenant has the right
to affirm
this Lease and continue to perform the obligations of Tenant hereunder, such trustee or Tenant
shall, in
such time period as may be permitted by the bankruptcy court having jurisdiction, cure all
defaults of
Tenant hereunder outstanding as of the date of the affirmance of this Lease and provide to
Landlord
such adequate assurances as may be necessary to ensure Landlord of the continued performance
of
Tenant’s obligations under this Lease.
	 
	 	 
	 

	 	          (8) The employment of a receiver to take possession of substantially all of Tenant’s assets or
the Premises, if such appointment remains undismissed or undischarged for a period of ten (10)
days
after the order therefore.
	 
	 	 
	 

	 	          (9) The attachment, execution or other judicial seizure of all or substantially all of
Tenant’s
assets or the Premises, if such attachment or other seizure remains undismissed or
undischarged for a
period of ten (10) days after the levy thereof.
	 
	 	 
	 

	 	          (10) The discovery that any financial statement of Tenant given to Landlord was materially
false at the given time or became materially false thereafter and Tenant failed to promptly
notify
Landlord of such condition.
	 
	 	 
	 

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

	 	          (1) Termination. In the event of the occurrence of any event of Default beyond any
applicable cure period provided for under this Lease, Landlord shall have the right to give a
written termination notice to Tenant, and on the date specified in such notice, Tenant’s right to
possession shall terminate, and this Lease shall terminate unless on or before such date all
arrears of rental and all other sums payable by Tenant under this Lease and all costs and
expenses incurred by or on behalf of Landlord hereunder shall have been paid by Tenant and all
other events of default of this Lease by Tenant at the time existing shall have been fully
remedied to the satisfaction of Landlord. At any time after such termination, Landlord may
recover possession of the Premises or any part thereof and expel and remove therefrom Tenant and
any other persons occupying the same, by any lawful means, and again repossess and enjoy the
Premises without prejudice to any of the remedies that Landlord may have under this Lease or at
law or equity by reason of Tenant’s Breach or of such termination.
	 
	 	 
	 

	 	          (2) Continuation After Breach. Even though Breach may have occurred, this Lease
shall
continue in effect for so long as Landlord does not terminate Tenant’s right to possession,
and Landlord
may enforce all of Landlord’s rights and remedies under this Lease, including without
limitation, the right
to recover Rent as it becomes due, and Landlord, without terminating this Lease, may exercise
all of the
rights and remedies of a Landlord under Section 1951.4 of the Civil Code of the State of
California or
any successor code section. Acts of maintenance, preservation or efforts to lease the
Premises or the
appointment of a receiver upon application of Landlord to protect Landlord’s interest under
this Lease
shall not constitute an election to terminate Tenant’s right to possession.
	 
	 	 
	 

	 	          (3) Damages After Breach. Should Landlord terminate this Lease, Landlord shall have
the
rights and remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State
of
California, or successor code sections. Upon such termination, in addition to any other
rights and
remedies to which Landlord may be entitled under applicable law, Landlord shall be entitled
to recover
from Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts which
had been
earned at the time of termination, (2) 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 Rent loss that Tenant proves could have been reasonably avoided; (3) 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 Rent loss that Tenant proves could be reasonably avoided; and (4)
any
other amount necessary to compensate Landlord for all the detriment proximately caused by
Tenant’s
failure to perform Tenant’s obligations under this Lease.
	 
	 	 
	 

	 	     G. Inducement Recapture. Any agreement for free or abated rent or other charges, or
for the giving or paying by Landlord to or for Tenant of any cash or other bonus inducement or
consideration for Tenant’s entering into this Lease, all of which concessions (excluding the
tenant improvements specified on the attached Exhibit B) are hereinafter refereed to as
“Inducement Provisions”, shall be deemed conditioned upon Tenant’s full and faithful performance
of all of the terms, covenants and conditions of this Lease. Upon Breach of this Lease by Tenant,
any such Inducement Provision shall automatically be deemed deleted from this Lease and of no
further force or affect, and any rent, other charge, bonus, inducement or consideration
heretofore abated, given or paid by Landlord under such an Inducement Provision shall be
immediately due and payable by Tenant to Landlord, notwithstanding any subsequent cure of said
Breach by Tenant. The acceptance by Landlord of rent or the cure of the Breach which initiated
the operation of this Section shall not be deemed a waiver by Landlord of the provisions of this
Section unless specifically so stated in writing by landlord as the time of such acceptance.

21

 

	 	 	 
	 

	 	     H. Remedies Cumulative. All
rights, privileges and elections or
remedies of the parties are
cumulative and not alternative, to
the extent permitted by law and
except as otherwise provided herein.
	 
	 	 
	 

	 	     I. Replacement of Statutory Notice
Requirements. When this Lease
requires service of a notice, that
notice shall replace rather than
supplement any equivalent or similar
statutory notice, including any
notices required by Code of Civil
Procedure Section 1161 or any
similar or successor statute. When a
statute requires service of a notice
in a particular manner, service of
that notice (or a similar notice
required by this Lease) in the
manner required by Section 31 shall
replace and satisfy the statutory
service-of-notice procedures,
including those required by Code of
Civil Procedure Section 1162 or any
similar or successor statute.
	 
	 	 
	LIENS:

	 	28. Tenant shall keep the Premises
free from liens arising out of or
related to work performed, materials
or supplies furnished or obligations
incurred by Tenant or in connection
with work made, suffered or done by
or on behalf of Tenant in or on the
Premises or Property. In the event
that Tenant shall not, within
fifteen (15) days following the
receipt by Tenant of notice of the
imposition of any such lien, cause
the same to be released of record by
payment or posting of a proper bond,
Landlord shall have in addition to
all other remedies provided herein
and by law, the right, but not the
obligation to cause the same to be
released by such means as Landlord
shall deem proper, including payment
of the claim giving rise to such
lien. All sums paid by Landlord on
behalf of Tenant and all expenses
incurred by Landlord in connection
therefore shall be payable to
Landlord by Tenant on demand with
interest at the Applicable Interest
Rate. Landlord shall have the right
at all times to post and keep posted
on the Premises any notices
permitting or required by law, or
which Landlord shall deem proper,
for the protection of Landlord, the
Premises, the Property and any other
party having an interest therein,
from mechanics’ and materialmen’s
liens, and Tenant shall give
Landlord not less than ten (10)
business days prior written notice
of the commencement of any work in
the Premises or Property which could
lawfully give rise to a claim for
mechanics’ or materialmen’s liens.
	 
	 	 
	TRANSFERS BY LANDLORD:

	 	29. If Landlord desires to finance,
refinance, or sell the Premises, or
any part thereof, Tenant and
guarantors (if any) shall deliver to
any potential lender or purchaser
designated by Landlord such
financial statements as may be
reasonable required by such lender
or purchaser, including but not
limited to Tenant’s financial
statements for the past five (5)
years. All such financial statements
shall be received by Landlord and
such lender or purchaser in strict
confidence and shall be used only
for the purposes herein set forth.
	 
	 	 
	WAIVER:

	 	30. If Landlord waives the
performance of any term, covenant or
condition contained in this Lease,
such waiver shall not be deemed to
be a waiver of any subsequent breach
of the same or any other term,
covenant or condition contained
herein. The acceptance of Rent by
Landlord shall not constitute a
waiver of any preceding breach by
Tenant of any term, covenant or
condition of this Lease, regardless
of Landlord’s knowledge of such
preceding breach at the time
Landlord accepted such Rent. Failure
by Landlord to enforce any of the
terms, covenants or conditions of
this Lease for any length of time
shall not be deemed to waive or to
decrease the right to insist
thereafter upon strict performance
by Tenant. Waiver by Landlord of any
term, covenant or condition
contained in this Lease may only be
made by a written document signed by
Landlord.
	 
	 	 
	NOTICES:

	 	31 . Each provision of this Lease
or of any applicable governmental
laws, ordinances, regulations and
other requirements with reference to
sending, mailing or delivery of any
notice or the making of any payment
by Landlord or Tenant to the other
shall be deemed to be complied with
when and if the following steps are
taken:
	 
	 	 
	 

	 	     A. Rent. All Rent and other
payments required to be made by
Tenant to Landlord hereunder shall
be payable to Landlord at the
address set forth in the Basic Lease
Information, or at such other
address as Landlord may specify from
time to time by written notice
delivered in accordance herewith or,
if via electronically transmitted
funds, to such account designated in
writing by Landlord. Tenant’s
obligation to pay Rent and any other
amounts to Landlord under the terms
of this Lease shall be deemed
satisfied if received by Landlord as
provided in Section C below.
	 
	 	 
	 

	 	     B. Other. All notices, demands,
consents and approvals which may or
are required to be given by either
party to the other hereunder shall
be in writing and either personally
delivered (by hand or courier), or
sent by recognized commercial
overnight courier, or sent by
certified or registered mail or U.
S. Postal Service Express Mail,
postage prepaid, or by facsimile
transmission, and addressed to the
other party to be notified at the
address for such party as specified
in the Basic Lease Information or to
such other place as the party to be
notified may from time to time
designate in writing by at least
fifteen (15) days notice to the
notifying party.
	 
	 	 
	 

	 	     C. 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 (3) business days
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 twenty-four (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. Any correctly
addressed notice that is refused,
unclaimed, or undeliverable because
of an act or omission of the party
to be notified shall be considered
to be effective as of the first date
that the notice was refused,
unclaimed, or considered
undeliverable by the postal
authorities, messenger, or overnight
delivery service.
	 
	 	 
	 

	 	     D. Agent. Tenant appoints as its
agent to receive the service of all
default notices and notice of
commencement of unlawful detainer
proceedings the person in charge of
or apparently in charge of occupying
the Premises at the time, and, if
there is no such person, then such
service may be made by

22

 

	 	 	 
	 

	 	attaching the same on the main
entrance of the Premises. A copy of
any notice delivered under this
Section shall also be sent to Tenant
at the address listed in the Basic
Lease Information under “Tenant’s
Address.”
	 
	 	 
	CONSENTS:

	 	32. A. Consents. Except as
otherwise provided herein, whenever
in this Lease Tenant requests any
approval or consent from Landlord
pursuant to this Lease, or in the
event of any proposed modification
of the terms of the Lease, Tenant
shall pay all Landlord’s actual
reasonable costs and expenses
(including, but not limited to,
architects’, attorneys’, engineers’
and other consultants’ fees and
costs incurred by Landlord in
consideration of, response to,
review of a request by Tenant for
any Landlord consent, including but
not limited to consents to an
assignment, a subletting or the
presence or use of a Hazardous
Substance), not to exceed $2,000 for
any one instance. Such costs shall
be paid by Tenant upon receipt of an
invoice and supporting documentation
therefore. Landlord’s consent to
any act, assignment or subletting
shall not constitute an
acknowledgement that no Default or
Breach by Tenant 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 Landlord at the time of
such consent. The failure to specify
therein any particular condition to
Landlord’s consent shall not
preclude the imposition by Landlord
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 ten
(10) days following such request
	 
	 	 
	 

	 	     B. Collection. In the event
that Landlord places the enforcement
of this Lease, or any part thereof,
or the collection of any Rent due,
or to become due hereunder, or
recovery of possession of the
Premises in the hands of an
attorney, Tenant shall pay to
Landlord, upon demand, Landlord’s
reasonable attorneys’ fees and court
costs, provided that Landlord
prevails.
	 
	 	 
	 

	 	     C. Proceedinq. In any action, in
which Landlord or Tenant brings an
action or proceeding involving the
Premises whether founded in tort,
contract or equity, or to enforce
its respective rights hereunder, the
unsuccessful party shall pay all
costs incurred by the prevailing
party including reasonable
attorneys’ fees, fees and costs of
arbitration, and said costs and
attorneys’ fees shall be a part of
the award in said action, whether or
not such action or proceeding is
pursued to decision or judgment. The
attorneys’ fees award shall not be
computed in accordance with any fee
schedule, but shall be such as to
fully reimburse all attorneys’ fees
reasonably incurred.
	 
	 	 
	SUCCESSORS AND ASSIGNS:

	 	33. This Lease shall be binding upon
and inure to the benefit of
Landlord, its successors and
assigns, and shall be binding upon
and inure to the benefit of Tenant,
its successors, and to the extent
assignment is approved by Landlord
hereunder, Tenant’s assigns.
Landlord may transfer its
obligations under this Lease to its
successors in title, in which event
Landlord shall be relieved of all
obligations under this Lease and
Tenant shall look solely to
Landlord’s successor for performance
of this Lease.
	 
	 	 
	FORCE MAJEURE:

	 	34. Whenever a period of time is
herein prescribed for action to be
taken by Landlord or Tenant,
Landlord or Tenant respectively
shall not be liable or responsible
for, and there shall be excluded
from the computation for any such
period of time, any delays due to
strikes, riots, acts of God,
shortages of labor or materials,
war, governmental laws, regulations
or restrictions or any other causes
of any kind whatsoever, except due
to the financial condition of
Landlord or Tenant, which are beyond
the control of Landlord or Tenant
respectively, provided, however,
that the foregoing shall not extend
the time at which Tenant shall be
entitled to terminate this Lease or
to an abatement of Rent pursuant to
any express provisions set forth
herein.
	 
	BROKERAGE COMMISSION:

	 	35. Landlord shall pay a brokerage
commission to Broker in accordance
with a separate agreement between
Landlord and Broker. Landlord and
Tenant each represents and warrants
that it has not dealt with any
broker, agent, finder or other
person in connection with this
transaction, and that no broker,
agent, finder or other person
brought about this transaction,
other than Broker. Landlord and
Tenant each hereby agree to
indemnify and hold the other
harmless from and against any claims
by any broker, agent, finder or
other person other than Broker
claiming a commission or other form
of compensation by virtue of having
dealt with Tenant or Landlord, as
applicable, with regard to this
leasing transaction.
	 
	 	 
	CONDITION OF PREMISES/ TENANT 

IMPROVEMENTS:

	 	36. A. Condition of Premises. On
the Term Commencement Date, the
Building shall be substantially
complete and the Building systems
shall be in good working order,
including: (i) substantial
completion of all common areas, (ii)
built-out with finishes in place,
including the lobby and finishes,
(iii) fire life safety, (iv) HVAC
units shall be on the roof and
functional HVAC service will be
provided, and the main duct loop
shall be delivered to the floor,
with VAV boxes to separate spaces,
(v) proper title 24 insulation, (vi)
functional elevators, including
finished cabs, (vii) all electrical
shall be delivered to the Premises,
and distribution to electrically
powered shell building equipment,
lighting, and convenience
receptacles of finished areas, and
one electrical distribution panel
per floor (and as noted above in the
Premises) is included, and a (viii)
based building fire alarm system is
furnished to meet all codes and
regulations, with adequate capacity
to accommodate future tenant
improvements.
	 
	 	 
	 

	 	     B. Tenant Improvements. Prior to the
Lease Term Commencement Date,
Landlord shall provide the
improvements in accordance with
Exhibit “B” attached hereto (“Tenant
Improvements”). Landlord will use
its own architect for design
services.
	 
	 	 
	EARLY OCCUPANCY; EXCULPATION:

	 	37. A. Early Occupancy. To the
extent available, prior to the Term
Commencement Date, Tenant shall be
allowed to occupy the Premises
provided it pays Rent. Tenant
shall perform all duties and
obligations imposed by this Lease,
including, but not limited to, those
provisions relating to insurance and
indemnification. Estimated early
occupancy to be March 1 , 2008.

23

 

	 	 	 
	 

	 	     B. Exculpation. For purposes of
this Section, the term Tenant
Parties (“Tenant Parties”) refers
singularly and collectively to
Tenant and Tenant’s officers,
shareholders, directors, members,
partners, agents, employees, and
independent contractors, licensees,
invitees, beneficiaries, and
servants, as well as to all persons
and entities claiming through any of
these persons or entities. The term
Landlord Parties (“Landlord
Parties”) refers singularly and
collectively to Landlord and its
members, partners, officers,
directors, licensees, invitees,
beneficiaries, agents, servants,
employees, and independent
contractors as well as to all
persons and entities claiming
through any of these persons or
entities.
	 
	 	 
	 

	 	          (1) To the fullest extent permitted
by law, Tenant, on its behalf and on
behalf of all Tenant Parties, waives
all claims (in law, equity, or
otherwise) against Landlord and
Landlord Parties arising out of,
knowingly and voluntarily assumes
the risk of, and agrees that neither
Landlord nor Landlord Parties shall
be liable to Tenant or Tenant
Parties for any of the following:
	 
	 	 
	 

	 	               (a) Injury to or death of any
person except resulting from the
willful acts or gross negligence of
Landlord or Landlord Parties; or
	 
	 	 
	 

	 	               (b) Loss of, injury or damage to,
or destruction of any tangible or
intangible property, including the
resulting loss of use, economic
losses, and consequential or
resulting damage of any kind from
any cause except resulting from the
willful acts or gross negligence of
Landlord or Landlord Parties.
	 
	 	 
	 

	 	          (2) Except for the gross
negligence or willful acts of
Landlord or Landlord Parties,
neither Landlord nor Landlord
Parties shall be liable under this
clause regardless of whether the
liability results from any active or
passive act, error, omission, of any
of the Landlord or Landlord Parties;
or is based on claims in which
liability without fault or strict
liability is imposed or sought to be
imposed on any of the Landlord or
Landlord Parties.
	 
	 	 
	 

	 	          (3) This exculpation clause shall
not apply to claims against Landlord
and Landlord Parties to the extent
that a final judgment of a court of
competent jurisdiction establishes
that the injury, loss, damage, or
destruction was proximately caused
by Landlord’s or Landlord Parties’
fraud, willful acts or gross
negligence to person or property, or
violation of law.
	 
	 	 
	 

	 	          (4) The clauses of this Section
shall survive the expiration or
earlier termination of this Lease
until all claims within the scope of
this Section are fully, finally, and
absolutely barred by the applicable
statutes of limitations.
	 
	 	 
	 

	 	          (5) Tenant acknowledges that
this Section was negotiated with
Landlord, that the consideration
for it is fair and adequate, and
that Tenant had a fair opportunity
to negotiate, accept, reject,
modify, or alter it.
	 
	 	 
	 

	 	          (6) This exculpation clause may not
be interpreted or construed as an
attempt by Landlord to be relieved
of liability arising out of a
nondelegable duty on the part of
Landlord.
	 
	 	 
	RENEWAL OPTION CONDITIONS:

	 	38. Landlord hereby grants
Tenant one (1) option (“Option”) to
extend the Term of the Lease for an
additional period of five (5) years
(“Option Period). In order to
exercise the Option, Tenant must
notify Landlord in writing at least
one hundred eighty (180) days prior
to the expiration of the then
expiring Lease Term. Tenant shall
not be entitled to exercise the
Option if, at the time of the
exercise by Tenant, Tenant is in
default beyond any applicable cure
period under the Lease or a Default
has taken place three (3) or more
times during the Lease Term or an
event of default has occurred two or
more times during the preceding
twelve month period (and such events
of default have not been cured to
the satisfaction of Landlord) or
Tenant has assigned this Lease or
sublet the Premises or any portion
thereof without consent of Landlord.
	 
	 	 
	 

	 	          During the Option Period all the
provisions of the Lease shall remain
in full force and effect except that
there shall be no additional option
period beyond the first option and
at the commencement of the Option
Period the Base Rent shall be
adjusted to be equal to one hundred
percent (100%) of the monthly fair
market rental value of the Premises
(“FMRV”) (based on the highest and
best use of the Premises) as
mutually determined by Landlord and
Tenant as provided herein. In no
event shall the Base Rent for the
first option be lower than the rent
applicable to the full last month of
the then expiring term. FMRV
shall mean the rate being charged to
similarly situated tenants for
comparable space in similar
buildings in the immediate vicinity
of the Premises, with similar
amenities, and without consideration
of any alterations or improvements
to the Premises installed or
constructed at Tenant’s cost and
expense. The annual Base Rent after
the first year of the option period
will have a five percent (5%) annual
increase for each year of the option
period.
	 
	 	 
	 

	 	          FMRV as of the commencement of the
Option Period shall be determined by
Landlord. Not later than 210 days
prior to the expiration of the
initial term of the Lease, Tenant
shall, by written notice (“Notice of
Option Term Rent”) given to
Landlord, request that Landlord
provide the FMRV to be applicable to
the Option Period. Not later than
thirty (30) days following receipt
of the Tenant’s written request,
Landlord shall provide to Tenant the
FMRV applicable to the Option
Period.
	 
	 	 
	 

	 	          If Tenant disputes the amount
claimed by Landlord as FMRV, Tenant
has the option to (i) give Landlord
written notice that it will not
exercise the Option and the Lease
will terminate at end of the term or
(ii) require that Landlord submit
the dispute to arbitration. Tenant
shall notify Landlord that it will
not exercise the Option or its
demand for arbitration in writing
within fifteen (15) days after
service of the Notice of Option Term
Rent. Tenant’s demand for
arbitration shall include the
designation by Tenant of its
appointed arbitrator, who shall be a
commercial real estate agent or
broker with at least ten (10) years
active, full-time, experience that
is familiar with the FMRV in the
commercial real estate rental
market, in San Mateo County. In the
event Tenant fails to timely provide
notice to Landlord, as provided in
this paragraph, Tenant will be
deemed to have exercised the Option
at the FMRV stated in the Notice of
Option Rent.

24

 

	 	 	 
	 

	 	          Within ten (10) business days after
receipt of Tenant’s demand for
arbitration, Landlord shall
designate in writing, its appointed
arbitrator, who shall meet the
qualifications set forth above.
Within thirty (30) days thereafter,
the two (2) arbitrators shall
simultaneously submit to Landlord
and Tenant their respective proposed
determinations of FMRV. If the
difference between the two (2) FMRV
determinations established by the
two (2) arbitrators varies by five
percent (5%) or less, the average of
the two (2) FMRV determinations
shall be controlling. If the
difference between the said two (2)
FMRV determinations varies by more
than five percent (5%), the said two
(2) arbitrators, within ten (10)
days thereafter, shall appoint a
third neutral arbitrator who shall
meet the qualifications set forth.
Such third arbitrator shall, within
twenty (20) business days after his
appointment, determine the FMRV and
submit his determination to Landlord
and Tenant. If a third arbitrator is
appointed to determine the FMRV, the
FMRV determined by the third
arbitrator shall be controlling.
Each party shall pay the costs and
fees of its arbitrator, and shall
share equally in the costs and fees
of the neutral arbitrator.
	 
	 	 
	 

	 	          Failure on the part of Tenant to
demand arbitration within fifteen
(15) days following receipt of the
Notice of Option Term Rent from
Landlord shall bind Tenant to the
FMRV as determined by Landlord.
Should Tenant elect to arbitrate and
should the arbitration not have been
concluded prior to the commencement
of the Option Period, Tenant shall
pay the Base Rent to Landlord after
the commencement of the Option
Period, adjusted to reflect the FMRV
as Landlord has so determined. If
the amount of the FMRV as determined
by arbitration is greater than or
less than Landlord’s determination,
then any adjustment required to
adjust the amount previously paid
shall be made by the appropriate
party within thirty (30) days after
such determination of FMRV.
	 
	 	 
	PARKING; TRANSPORTATION MANAGEMENT:

	 	39. A. Parking. Tenant shall
have the right to the nonexclusive
use of the number of parking spaces
set forth in Basic Lease
Information.
	 
	 	 
	 

	 	     B. Reservation. Landlord
specifically reserves the right
to change the location, size,
configuration, design, layout, and
all other aspects of the parking
facility. Landlord may close off
or restrict access to the parking
facility from time to time to
facilitate construction, alteration,
or improvements, without incurring
any liability to Tenant and without
any abatement of Rent under this
Lease, provided that Landlord gives
Tenant prior written notice thereof
and reasonably endeavors to find
alternative reasonable parking for
Tenant for any period in which
Tenant’s right to use its parking
spaces is materially impaired.
	 
	 	 
	 

	 	     C. Rules and Regulations.
Tenant’s continued right to use the
parking spaces is conditioned on
Tenant’s abiding by all rules and
regulations prescribed from time to
time for the orderly operation and
use of the parking facility. Tenant
shall use all reasonable efforts to
ensure that Tenant’s Parties also
comply with such rules and
regulations. The parking spaces
allocated to Tenant under this
Section are solely for use by Tenant
and may not be assigned, subleased,
or otherwise alienated by Tenant
without Landlord’s prior written
consent.
	 
	 	 
	MEDIATION AND ARBITRATION OF 

DISPUTES:

	 	40. A. Mediation of
Disputes. Except with regard to
any claim, counterclaim, dispute,
and other matter relating to the
payment of Rent or any other sum
owing from Tenant to Landlord under
this Lease, Landlord and Tenant
agree that, if and to the extent
that any claim, counterclaim,
dispute, and other matter in
question between them arising out of
or relating to this Lease or the
breach thereof (collectively,
“Non-Monetary Disputes”) cannot be
resolved through direct discussions,
such Non-Monetary Dispute shall be
sent to mediation administered by
the American Arbitration Association
(in San Mateo County) under its
Commercial Mediation Rules, prior to
either of them initiating against
the other a demand for arbitration
pursuant to this Section, unless
delay in initiating arbitration
would irrevocably prejudice one of
the parties. The mediator of any
dispute submitted to mediation under
this Lease shall not serve as
arbitrator of such dispute unless
otherwise agreed. All expenses of
the mediation shall be borne by the
parties equally; however, each party
shall bear the expense of its own
counsel, experts, witnesses, and
preparation and presentation of
proofs.
	 
	 	 
	 

	 	          B. Arbitration of Disputes. Except
with regard to any claim,
counterclaim, dispute, and other
matter relating to the payment of
Rent or any other sum owing from
Tenant to Landlord under this Lease,
Landlord and Tenant agree that, if
and to the extent that any
Non-Monetary Dispute cannot be
resolved through direct discussions
or through mediation in accordance
with Section A above, such
Non-Monetary Dispute shall at the
election of either party be
submitted to arbitration in
accordance with this Section B. In
the event either party (“Initiating
Party”) elects to submit any
Non-Monetary Dispute to arbitration,
the judgment or the award rendered
in any such arbitration may be
entered in any court having
jurisdiction in San Mateo County and
shall be final and binding upon the
parties. The arbitration shall be
conducted in accordance with the
then prevailing rules of the
American Arbitration Association or
its successor for arbitration of
commercial disputes, and the
provisions of California Code of
Civil Procedure Section 1283.05, or
any successor or amended statute or
law containing similar provisions,
except to the extent that the
procedures mandated by said rules
shall be modified as follows:
	 
	 	 
	 

	 	               1. The Initiating Party’s demand for
arbitration shall specify the name
and address of the person to act as
the arbitrator on its behalf. The
arbitrator shall be a member of the
American Institute of Real Estate
Appraisers (or its successor
organization) with a then current
senior designation of MAI (or then
comparable designation), currently
certified under the continuing
education program, and shall have at
least ten years’ experience in
appraising commercial properties in
the San Mateo, San Francisco
Counties. Within ten business days
after the service of the demand for
arbitration, the other party (“Non-Initiating Party”) shall give
notice to the Initiating Partv
specifying the name and address of
the person designated by the
Non-Initiating Party as arbitrator
on its behalf who shall be similarly
qualified. If the Non-Initiating
Party fails to notify the Initiating
Party of the appointment of its
arbitrator, within or by the time
above specified, then the arbitrator
appointed by the Initiating Party
shall be the arbitrator to determine
the issue.

25

 

	 	 	 
	 

	 	          2. The one or two arbitrators, as the case may be, chosen pursuant to Section B.1. above, shall attempt to
meet within 15 business days after being chosen, and if within ten business days after such first meeting
the arbitrators shall be unable to agree on a determination of the issue to be determined, they themselves
shall appoint a second or third arbitrator, as the case may be, who shall be a competent and impartial
person with qualifications similar to those required of the first two arbitrators pursuant to Section B.1.
above. In the event they are unable to agree on such appointment within such ten business day period, the
second or third arbitrator, as the case may be, shall be selected by the parties themselves, if they can
agree thereon, within a further period of 15 business days. If the parties do not so agree, then either
party, on behalf of both, may request appointment of such a qualified person by the then Presiding Judge of
the Superior Court for the County of San Mateo, and the other party shall not raise any question as to such
Judge’s full power and jurisdiction to entertain the application for and make the appointment. The three
arbitrators shall decide the dispute if it has not previously been resolved by following the procedure set
forth in Section B.3. below and shall attempt to so decide the issue within 15 business days of the
appointment of the third arbitrator.
	 
	 	 
	 

	 	          3. When an issue cannot be resolved by agreement between the two arbitrators selected by the parties or
settlement between the parties, the issue shall be resolved by the agreement of two of the three
arbitrators.
	 
	 	 
	 

	 	          4. In the event of a failure, refusal, or inability of any arbitrator to act, his or her successor shall
be appointed by the party who originally appointed said arbitrator, but in the case of the third arbitrator,
his or her successor shall be appointed in the same manner as provided for appointment of the third
arbitrator.
	 
	 	 
	 

	 	          5. The arbitrators shall award to the prevailing party, if any, as determined by the arbitrators, all of
its costs and fees. “Costs and fees” shall mean all expenses of the arbitration, including the
arbitrators’ fees, administrative fees, travel expenses, out-of-pocket expenses, such as copying and
telephone, court costs, witness fees and attorney fees.
	 
	 	 
	 

	 	          6. Notwithstanding the foregoing, nothing contained in this Section shall be deemed to limit or restrict
Landlord’s rights to file an unlawful detainer action under California Code of Civil Procedure §§1161 et seq. and obtain a judgment thereunder.
	 
	 	 
	 

	 	NOTICE: By initialing below you are agreeing to have disputes arising out of the matters included in the
Mediation and Arbitration of Disputes Provisions decided by mediation or by neutral binding arbitration as
provided by California Law and you are giving up any rights you may possess to have the dispute litigated in
a Court or jury trial. By signing the space below, you are giving up your judicial rights to discovery and
appeal, unless your rights are specifically included in the Mediation and Binding Arbitration of Disputes
provisions. If you refuse to submit to mediation or to binding arbitration after agreeing to this
provision, you may be compelled to mediate or arbitrate under the authority of the California Code of Civil
Procedure. Your agreement to this provision is voluntary. The undersigned represent and warrant that
he/she has read and understood the foregoing and agree to submit disputes arising out of or related to the
matters included in the Mediation and Binding Arbitration of Disputes provision to mediation or arbitration.
	 
	 	 
	 
	 	INITIALS:  Landlord:  SM
	 
	 	Tenant:  PEP
	 
	 	 
	MISCELLANEOUS:

	 	41.     
A. General. The term “Tenant” or any pronoun used in place thereof shall indicate and include
the masculine or feminine, the singular or plural number, individuals, firms or corporations, and their
respective successors, executors, administrators and permitted assigns, according to the context hereof.
	 
	 	 
	 

	 	     B. Time. Time is of the essence regarding this Lease and all of its provisions.
	 
	 	 
	 

	 	     C. Choice of Law. This Lease shall in all respects be governed by the laws of the State of California.
	 
	 	 
	 

	 	     D.
 Entire Agreement. This Lease, together with all exhibits, schedules, addenda, and
attachments, contains all the agreements of the parties hereto and supersedes any previous negotiations.
There have been no representations made by the Landlord or understandings made between the parties other
than those set forth in this Lease and its attachments.
	 
	 	 
	 

	 	     E. Severability. If, for any reason whatsoever, any of the provisions hereof shall be
unenforceable or ineffective; all of the other provisions shall be and remain in full force and effect.
	 
	 	 
	 

	 	     F.  Recordation. Tenant shall not record this Lease or a short form memorandum hereof.
	 
	 	 
	 

	 	     G. Examination of Lease. Submission of this Lease to Tenant does not constitute an option or offer to
lease and this Lease is not effective otherwise until execution and delivery by both Landlord and Tenant.
	 
	 	 
	 

	 	     H. Easements. Landlord may grant easements on the Property and dedicate for public use portions of the
Property without Tenant’s consent, provided that no such grant or dedication shall materially interfere with
Tenant’s access to or use of the Premises or Tenant’s parking rights, and Tenant is solely obligated to
ascertain the existence of any easements with respect to the Property and enters into this Lease subject to
any such easements. Upon Landlord’s demand, Tenant shall execute, acknowledge and deliver to Landlord
documents, instruments, maps and plats necessary to effectuate Tenant’s covenants hereunder.

26

 

	 	 	 
	 

	 	      I. Drafting and Determination. The parties acknowledge that this Lease has been
agreed to by the parties, that both Landlord and Tenant have consulted with attorneys with
respect to the terms of this Lease, and that no presumption shall be created against Landlord
because Landlord drafted this Lease.
	 
	 	 
	 

	 	      J. Exhibits. The Exhibits, Schedules, and Addenda attached hereto are hereby
incorporated herein by this reference.
	 
	 	 
	 

	 	      K. No Light, Air or View Easement. Any diminution or shutting off of light, air or
view by any structure which may be erected on lands adjacent to or in the vicinity of the
Building shall in no way affect this Lease or impose any liability on Landlord.
	 
	 	 
	 

	 	      L. No Third Party Benefit. This Lease is a contract between Landlord and Tenant and
nothing herein is intended to create any third party benefit.
	 
	 	 
	 

	 	      M. Security, Release and Indemnity. Tenant acknowledges and agrees that, while
Landlord may elect to patrol the Property, Landlord is not providing any security services with
respect to the Premises and that Landlord shall not be liable to Tenant for, and Tenant waives
any claim against Landlord with respect to any loss by theft or any other damage to person or
property suffered or incurred by Tenant Tenant’s employees and invitees, including, but not
limited to, in connection with any unauthorized entry into the Premises or any other breach of
security with respect to the Premises excluding Landlord and Landlord Parties’ willful misconduct
or gross negligence. Tenant shall be responsible for provisions of security for its Premises.
Tenant shall defend, indemnify and hold Landlord harmless with respect to the Premises and any
claims arising from or related to a purported breach of security or failure to provide security
to the Premises during the Term of the Lease excluding Landlord and Landlord Parties’ willful
misconduct or gross negligence.
	 
	 	 
	 

	 	      N. 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 riot legally required to pay.
	 
	 	 
	 

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

	 	      P. Days. Days shall be counted by excluding the first day and including the last
day. If the last day is a Saturday, Sunday, or legal holiday as described in Government Code
Sections 6700-6701, it shall be excluded. Any act required by this Lease to be performed by a
certain day shall be timely performed if completed before 5:00 p.m. local time on that date. If
the day for performance of any obligation under this Lease is a Saturday, Sunday, or legal
holiday, the time for performance of that obligation shall be extended to 5:00 p.m. local time on
the first following date that is not a Saturday, Sunday, or legal holiday.
	 
	 	 
	 

	 	      Q. Right to Lease. Landlord reserves the absolute right to contract with any other
person or entity to be a tenant in the Building, as Landlord, in Landlord’s sole business
judgment, determines best to promote the interests of the Building. Tenant does not rely on the
expectation, and Landlord does not represent, that any specific tenant or type or number of
tenants will, during the Lease Term, occupy any space in the Building.
	 
	 	 
	 

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

	 	      S. 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 Tenant’s
rights or obligations hereunder, Tenant 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 or the Property.
	 
	 	 
	 

	 	      T. Counterparts. 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.

27

 

IN ANY REAL ESTATE TRANSACTION, IT IS RECOMMENDED THAT TENANT CONSULT WITH ITS INDEPENDENT LEGAL
AND TAX PROFESSIONALS AND SUCH OTHER PROFESSIONALS AS TENANT DEEMS PRUDENT, INCLUDING, BUT NOT
LIMITED TO, A CIVIL ENGINEER OR OTHER PERSON WITH EXPERIENCE IN EVALUATING THE CONDITION OF THE
PROPERTY, INCLUDING THE POSSIBLE PRESENCE OF MOLD, ASBESTOS, HAZARDOUS MATERIALS AND UNDERGROUND
STORAGE TANKS.

IN WITNESS WHEREOF, the parties hereto have executed this Lease effective as of the Lease Date
stated in the Basic Lease Information herein above.

	 
	LANDLORD:

	BLACK MOUNTAIN HOLDINGS, LLC

	dba Black Mountain Properties, LLC

	a
California limited liability company

	 	 	 	 	 
	By:

	 	/s/ Steven J.
Mitchell       3/24/08
 

	 	 
	 

	 	Steven J. Mitchell, Chief Operations Officer	 	 

TENANT:

BIOTROVE, INC.

a Delaware corporation

	 	 	 	 	 
	By:

	 	/s/ Paul E. Pescatore
 

	 	 
	Name:

	 	PAUL E. PESCATORE	 	 
	Title:

	 	SENIOR VP QUALITY & OPERATIONS	 	 

28

 

990 Industrial Road Commercial Lease Agreement

EXHIBIT A

outline of the building and premises

29

 

 

 

 

 

990 Industrial Road Commercial Lease Agreement

exhibit b

construction of improvements

plans and specifications

Landlord shall construct certain improvements to the Premises, as more specifically identified in
the Space Plan. Landlord will provide the following:

	 	§	 	Carpet & pad
	 
	 	§	 	Paint
	 
	 	§	 	Baseboard
	 
	 	§	 	Plumbing and sanitary line for sink. Sink and counter provided by Tenant
	 
	 	§	 	VCT in lab.
	 
	 	§	 	New 3' X 7' Maple interior doors with aluminum frames and L series locksets.

     Such Tenant Improvements shall be provided by W.L. Butler or other mutually agreed upon
contractor and subcontractors. The total cost of such Tenant Improvements is not to exceed
Fourteen Dollars and 00/100 ($14.00) per square foot of useable space in the Premises (“Base
Tenant Improvement Allowance” or “Base TI
Allowance”). Based on the total of 1,712 ± useable
square feet in the Premises this will be a total not to exceed of Twenty Three Thousand Nine
Hundred Sixty Eight Dollars and 00/100 ($23,968.00). The Base Tenant Improvement Allowance shall
be applied toward all architectural, engineering, electrical, mechanical, general contractors, and
permit costs.

     All costs of Tenant Improvements to the Premises that exceed $23,968.00 shall be paid by
Tenant (“Tenant Improvement Coste” or
“TI Costs”). All such TI Costs shall be paid by
Tenant to Landlord: (i) one-half at commencement of the construction of Tenant Improvements, and
(ii) one-half upon Substantial Completion of the Tenant Improvements. In the event the actual
total Base Tenant Improvement Allowance is less than $23,968.00, the difference shall be amortized
over the term of the Lease to reduce the Base Rent per square foot. In such event, the parties
shall execute an addendum to this Lease setting forth the adjusted Base Rent. Landlord, in
Landlord’s absolute discretion, shall have the option, at the request of Tenant, to amortize the
Tenant Improvement Costs over the term of the Lease.

     Landlord, at its sole cost, will provide the Premises with sufficient H.V.A.C. units to
properly serve the Premises. Tenant will be responsible for the cost to distribute the H.V.A.C.
based on Tenant’s new layout.

     In no event will any modifications be made to the Premises without Landlord’s prior written
consent. At the request of Landlord, Tenant and Landlord shall enter into a Tenant Improvement
Agreement upon receipt of the bid from the general contractor for the Tenant Improvements, setting
forth, in greater detail, the Tenant Improvements to be performed and allocation of the costs
between the Tenant and Landlord.

30

 

990 Industrial
Road Commercial Lease Agreement

schedule 1 

landlord’s rules and regulations

Tenant agrees to the establishment of the following Rules and Regulations, as they may be
amended or modified by Landlord from time to time. Tenant will adhere to the Rules and
Regulations and will cause its employees, agents, contractors and invitees to abide and conform
to the Rules and Regulations. Tenant acknowledges that a breach of the Rules and Regulations may
constitute a Default as set forth in the Lease. Tenant shall comply with the following Rules and
Regulations.

     1. Locks; Keys. No additional locks or bolts of any kind will be placed upon any of the doors
or windows by Tenant, nor will any changes be made in existing locks or the mechanism thereof.
Landlord will furnish two keys to the Premises without charge to Tenant. Landlord will make a
reasonable charge for additional keys requested by Tenant. Tenant will, upon the termination of
this Lease, restore to Landlord all keys of stores, offices, and toilet rooms, either furnished to
or otherwise procured by such Tenant, and in the event of the loss of any keys so furnished, Tenant
will pay Landlord the cost of replacing the same or of changing the lock or locks opened by such
lost key if Landlord deems it necessary to make such change.

     2. Doors Opening to Public Corridors. All doors opening to public corridors must be kept
closed at all times except for normal ingress to and egress from the Premises.

     3. Securing Doors; Admission to Building. Tenant shall assume all responsibility, including
keeping doors locked and other means of entry to the Premises closed, for protecting the Premises
from theft, robbery, and pilferage. Tenant will see that the windows and doors of the Premises are
closed and securely locked before leaving the Premises. Tenant must observe strict care and caution
that all water faucets or other apparatus are entirely shut off before Tenant or Tenant’s employees
leave the Premises and that all electricity, gas, or air will likewise carefully be shut off so as
to prevent waste or damage. Tenant will be responsible for all injuries sustained by other
occupants of the Building, or Landlord as the result of Tenant’s default or carelessness.
Landlord reserves the right, in the event of invasion, mob, riot, public excitement, threat of
terrorism, or other commotion, to prevent access to the Building or Property during the continuance
of that event by any means it considers appropriate for the safety and protection of life and
property.

     4. Furniture, Freight, and Equipment; Service Deliveries. No furniture, freight, or
equipment of any kind may be brought into the Building without the consent of Landlord, and all
moving of the same into or out of the Premises will be done at such time and in such manner as
Landlord designates. No furniture, packages, supplies, equipment, or merchandise will be received
in the Premises except between such hours as are designated by Landlord. Landlord will have the
right to prescribe the weight, size, and position of all safes and other heavy equipment brought
into the Premises, and also the times and manner of moving the same in and out of the Premises.
Safes or other heavy objects will be placed as directed by Landlord to properly distribute the
weight. Landlord will not be responsible for loss of or damage to any such safe or property from
any cause, and all damage done to the Building by moving or maintaining any such safe or other
property will be repaired by Landlord at the expense of Tenant. Tenant will not use any hand trucks
in the Building except those equipped with rubber tires and side guards.

     5. Receipt of Deliveries; Use of Elevators. All deliveries of shipments of any kind to and
from the Premises, including loading and unloading of goods will be made only by way of the front
of the Premises between 7:00 A.M. and 7:00 P.M. Vehicles employed for such purposes will remain in
the parking areas at the front of the Premises for a period not to exceed 30 minutes and will in no
event be entitled to utilize any other parking facility. Materials delivered to the Premises are
not to be stored at or left in front of the Premises and at all times are to be received inside the
Premises by Tenant or its employees.

     6. Services Required by Tenant. The requirements of Tenant will be attended to only upon
application at the office of the Landlord. Employees of Landlord will not perform any work or do
anything outside of their regular duties unless under special instructions from Landlord.

     7. No Disturbance of Other Occupants. Tenant shall not disturb, solicit, or canvass any
occupant of the Property and shall cooperate with Landlord and Landlord’s agents to prevent those
actions.

     8. Use of Restrooms; Responsibility for Damage. The toilets and washbasins and other plumbing
fixtures will not be used by Tenant, its agents, employees, contractors, and invitees, for any
purpose other than those for which they were constructed, and no sweepings, rubbish, rags, or
other foreign substances will be thrown therein. All damage resulting from any misuse of the
fixtures will be borne by Tenant, if Tenant, its employees, agents, visitors, or licensees have
caused the damage. Landlord may install automatic lighting timers in the restrooms to provide for
reduced electricity usage.

     9. Restrictions on Defacement of Premises. Tenant shall not mark, drive nails or screws into,
or drill into the partitions, woodwork, or plaster, or in any way deface any part of the Building,
without Landlord’s prior written consent.

     10. Permitted Machines. Except for vending machines intended for the sole use of Tenant’s
employees and invitees, no machines other than standard office equipment shall be installed,
maintained, or operated on the Premises without Landlord’s prior written consent.

     11. Inflammable or Combustible Fluids or Materials. Tenant shall not use, or keep in or on
the Premises, Building, or Real Property, any kerosene, gasoline, or other flammable or
combustible fluid or material.

     12. Heating and Air-Conditioning. Tenant shall not use any method of heating or
air-conditioning, other than that supplied by Landlord, without Landlord’s prior written consent.

     13. Foul or Noxious Gases or Substances; Noninterference with Others. Tenant shall not use or
keep, or allow to be used or kept, any foul or noxious gas or substance in or on the Premises.
Tenant shall not allow the Premises to be occupied or used in a manner causing noise, odors, or
vibrations that are offensive or objectionable to Landlord or other occupants of the Property.
Tenant will not make or permit to be made any unseemly or disturbing noises or disturb or
interfere with occupants of

31

 

the Building or neighboring buildings or premises of those residing in or having business with
them, whether by the use of any musical instrument, radio, unusual noise, or in any other
manner. Tenant shall not interfere in any other manner with other tenants or those having
business in the Building or Property.

     14. Animals, Birds, and Vehicles. Tenant shall not bring into, or keep within, the Premises or
Building, any animals, birds, or powered vehicles except for: (a) guide dogs or other service
animals or vehicles required by any disabled employee or invitee of Tenant; or (b) hand trucks, as
permitted under these Rules and Regulations.

     15. Cooking; No Use of Premises for Improper Purposes. No cooking shall be done or permitted
on the Premises, except that Underwriters’ Laboratory (UL)-approved equipment and microwave ovens
may be used in the Premises for heating food and brewing beverages for employees and visitors. This
use must be in accordance with all applicable federal, state, and city laws, codes, ordinances,
rules, and regulations. The Premises shall not be used for the storage of merchandise, for lodging,
or for any improper, objectionable, or immoral purposes. Nothing in this clause shall prevent the
serving of catered lunches and other meals in the Premises.

     16. Telephone and Other Wires. Electric wires, cables, telephone, or other electric or
electronic apparatus, other than those installed by Landlord at the time Tenant occupies the
Premises will not be installed in the Premises, except with the prior written approval and under
the direction of Landlord. No such installation is to be made without first obtaining written
permission from Landlord to do such work.

     17. Exclusion/ Expulsion; Use. Landlord will have the right, but not the obligation, to
remove or exclude from or to restrain (or take legal action to do so), any unauthorized person
from, or from coming upon, the Property or any portion thereof, and to prohibit, abate, and recover
damages arising from any unauthorized act, whether or not such act is in express violation of the
Rules and Regulations set forth above. Landlord reserves the right to exclude or expel from the
Building and/or Property any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who in any manner does any act in violation of any of the Rules
and Regulations. Landlord will in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building and/or Property of any person. Neither Tenant nor any
other person on behalf of Tenant, without the prior written discretionary consent of Landlord, will
utilize all or any portion of the Property and common area for any of the following purposes:

               (a) to vend, peddle, or solicit orders for sale or distribution of any merchandise, device,
service, periodical, book, pamphlet, or other matter whatsoever;

               (b) to exhibit any sign, placard, banner, notice, or other written material;

               (c) to solicit signatures on any petition or for any other purpose, disseminate any
information in connection therewith, or distribute any circular, booklet, handbill, placard, or
other material;

               (d) to solicit membership in any organization, group, or association, or contribution for any
purpose, which has no relationship to the Property;

               (e) to parade, rally, patrol, picket, demonstrate, or engage in any conduct which might tend
to interfere with or impede the use of any of the common area by any business invitee, employee,
or occupant of the Building, or which creates a disturbance, attracts attention, or tends to
harass, annoy, disparage, or be detrimental to the interest of any of the tenants within the
Property;

               (f) to throw, discard, or deposit any paper, glass, or extraneous matter of any kind, except
in designated receptacles or create litter or hazards of any kind;

               (g) to use any sound-making device of any kind or create or produce in any manner noise or
sound that is annoying, unpleasant, or distasteful to any other tenant,

               (h) to deface, damage, or demolish any sign, light standard, or fixture, landscaping
material, or other improvement within the Property, or the property of tenants, business
invitees, or employees situated within the Building; or

               (i) to use any portion of the common area for special promotional events, such as, but not
limited to, parking lot sales, car shows, or displays.

          The listing of specific items as being prohibited is not intended to be exclusive, but to
indicate, in general, the manner in which the right to use the common area solely as a means of
access and convenience to and from the Building and Property is limited and controlled by
Landlord.

     18. Loitering Prohibited. Tenant and Tenant’s employees and agents shall not loiter in or on
the entrances, corridors, sidewalks, lobbies, halls, stairways, elevators, or common areas for the
purpose of smoking tobacco products or for any other purpose. The sidewalks, halls, passages,
exits, and entrances will not be obstructed by the Tenant or used for any purpose other than for
ingress to and egress from the Premises. The halls, passages, exits, entrances, terraces, and roof
are not for the use of the general public, and Landlord in all cases retains the right to control
and prevent access thereto by all persons whose presence in the judgment of Landlord will be
prejudicial to the safety, character, reputation, and interest of the Property and its occupants,
provided that nothing herein contained will be construed to prevent such access to the Premises to
persons with whom Tenant normally deals in the ordinary course of business unless such persons are
engaged in illegal activities. No Tenant and no employee or invitees of Tenant will go upon the
roof of the Building.

     19. Operation of Electricity, Water, and Air-Conditioning. Tenant shall not waste
electricity, water, or air-conditioning and shall cooperate fully with Landlord to ensure the most
effective operation of the Building’s heating and air-conditioning system. Tenant shall not adjust
any controls of the Building’s heating and air-conditioning system.

     20. Disposal of Trash and Garbage. Tenant shall store all trash and garbage within the
interior of the Premises. Tenant shall not place or have placed in the trash boxes or receptacles
any material that may not or cannot be disposed of in the ordinary and customary manner of
removing and disposing of trash in the vicinity of the Building. In disposing of trash and
garbage, Tenant shall comply fully with any law or ordinance governing that disposal. All trash,
garbage, and refuse disposal shall be made only through entryways and elevators provided for that
purpose and shall be made only at times designated by Landlord.

32

 

     21. Compliance with Safety Regulations. Tenant shall comply with all safety, fire
protection, and evacuation procedures and regulations established by Landlord or by any government
agency. Tenant will not install, suffer or permit to be installed or placed in or upon the Premises
any cover, fascia, partition, decoration, alteration or improvement or the like over, upon or under
the sprinkler heads within the Premises. All sprinkler heads are to remain exposed at all times.
Landlord will install and maintain, at a readily available location within the Premises, a fully
functional ABC type, or equal, all-purpose hand operated fire extinguisher containing a minimum
capacity of two and one-half (2-1/2) pounds or such other capacity as may be required by law.

     22. Awnings, Curtains, and Electrical Ceiling Fixtures. No awnings or other projection shall
be attached to the outside walls of the Premises without Landlord’s prior written consent. No
curtains, blinds, shades, or screens shall be attached to, hung in, or used in connection with any
window or door of the Premises without Landlord’s prior written consent. Tenant shall abide by
Landlord’s regulations concerning the opening and closing of window coverings attached to those
windows, if any, in the Premises that have a view of any interior portion of the Building or common
areas.

     23. Nonobstruction of Light. Tenant shall not cover or obstruct the windows, and doors that
reflect or admit light and air into the halls, passageways, or other public places in the Building.
Tenant shall not place any bottles, parcels, or other articles on the windowsills.

     24. Provision of Information to Tenant’s Employees. Tenant shall comply with requests by
Landlord that Tenant inform Tenant’s employees of items of importance to Landlord.

     25. Use of Building’s Name or Likeness. Without Landlord’s prior written consent, Tenant shall
not use the Building’s name or any photograph or other likeness of the Building in connection with,
or in promoting or advertising, Tenant’s business, except that Tenant may include the Building’s
name in Tenant’s address.

     26. Nontoxic Materials; Adhesives. All materials, fabrics, and products used in Tenant’s
furnishings, wall and floor coverings, and ceiling installations shall be nontoxic and subject to
the prior approval of Landlord’s architect or engineer. Tenant will not lay linoleum, tile, carpet,
or other similar floor covering so that the same is affixed to the floor of the Premises in any
manner, except by a paste, or other material that may easily be removed with water; use of cement
or other similar adhesive materials is expressly prohibited. The method of affixing any such
linoleum, tile, carpet, or other similar floor covering is subject to the approval of Landlord.
The expense of repairing any damage resulting from a violation of this Rule will be borne by
Tenant.

     27. Rules Changes; Waivers. Landlord reserves the right at any time to change or rescind any
one or more of these Rules and Regulations or to make any additional reasonable Rules and
Regulations that, in Landlord’s judgment, may be necessary for: (a) the management, safety, care,
and cleanliness of the Premises, Building, and Property; (b) the preservation of good order; and
(c) the convenience of other occupants and tenants in the Premises, Building, and Property.

Landlord may waive any one or more of these Rules and Regulations for the benefit of any
particular tenants. No waiver by Landlord shall be construed as a waiver of those Rules and
Regulations in favor of any other tenant, and no waiver shall prevent Landlord from enforcing
those Rules or Regulations against any other tenant of the Property. Tenant shall be considered to
have read these Rules and Regulations and to have agreed to abide by them as a condition of
Tenant’s occupancy of the Premises.

33

 

990 Industrial
Road Commercial Lease Agreement

exhibit d 

master sign program

Section I

1.0 Concept and Overview

Signage is an important element in the identity of this project. Our purpose with the Master Sign
Program is to set forth guidelines to ensure consistency in signage of all tenants to reinforce the
collective image of this building as an upscale commercial building.

Our intention is to enhance the overall appearance of the building by standardizing all exterior
tenant signage and all monument signage. Additionally, our purpose is to assist each business by
providing a means for adequate exposure to their customers and the visiting public in order to
benefit all parties involved and the community as a whole.

2.0 Monument Sign

The internally illuminated monument sign has been designed for this building to identify the
building and the tenants (exhibit 1 A). The maximum height of the monument sign shall not exceed
six (6) feet overall height (OAH) above grade and the total tenant sign area shall not exceed 150
sq. feet. Tenant panels to be routed out backed up style with day night acrylic and white diffuser
to show black during the day and white at night (exhibit 1B). Tenant copy to stay within tenant
sign copy area all per attached (exhibit 1 A). The business centers name Brittan Building and the
managed by Black Mountain Properties, LLC lettering is to be route out push through style as per
(exhibit 2).

3.0 Tenant Signage

All tenant signage should be compatible with the building and shall be reviewed and approved by the
Landlord and City of San Carlos. Two types of tenant signs will exist on the exterior of the 990
Industrial Building. First floor signage will be 18” high illuminated face lit channel lettering
and second floor signage will be 24” high internally illuminated reverse pan channel letters (halo
lit).

3.1 First Floor Tenants

The First Floor signage is 18” high illuminated face lit channel lettering not to exceed 70% of
the tenant sign area. Company logos are not to exceed 15% of the overall sign area. There shall be
a maximum number of six (6) tenant signs allowed on the East elevation and a maximum of two (2)
tenant signs allowed on the South elevation, for a total of eight (8) tenant signs (exhibits 5 &
6). Additionally, tenant may apply first surface exterior business name in 3” white vinyl
lettering and tenant hours in 1” white vinyl lettering and numbers on either side of their
entrance door. Suite address will be applied to 1st surface exterior above main
entrance door to suite, in 6”, white, vinyl lettering. All signs require Landlord and the City of
San Carlos approval with a required City of San Carlos permit (exhibit 3).

3.2 Second Floor Tenants

The Second Floor signage is 24” high internally illuminated reverse pan channel letters (halo lit)
not to exceed 70% of the tenant sign area. Company logos are not to exceed 15% of the overall sign
area. A maximum of three (3) tenant signs will be allowed on the east elevation of the second
floor (exhibit 5). Additionally, one (1) tenant sign will be allowed on the south elevation
(exhibit 6). All tenant signage on the 2 floor requires landlord approval. The location to be
determined by landlord as to the City pre-approved sign areas they may place their sign in. Second
floor sign copy and logo shall not exceed 24” in height and 75 sq. feet. Stacked copy overall
height shall not exceed 24” with a maximum of 75 sq. feet (exhibit 4).

 4.0 Building Address

Building address to be 18” non illuminated dark gray reverse channel numerals placed on the east
upper building fascia (exhibit
5).

34

 

Section II

	I.	 	Electrical and Illumination

	 	1)	 	Fabrication and installation shall comply with all Underwriters Laboratories
requirements and applicable state and local codes. All components shall bear the U.L.
label indicating approval, and be manufactured and installed by a U.L. certified
company.
	 
	 	2)	 	All wiring, raceways, conductors, transformers, ballasts and other equipment
shall be concealed from public view. (Except in the case of pre-approved raceways).
	 
	 	3)	 	Primary electrical service to all Tenants’ signs shall be tied to Tenant’s
electrical service. Tenant shall provide time clocks for use in conjunction with the
electrical service and be responsible for all associated costs.
	 
	 	4)	 	The illumination of all sign components shall be uniform in intensity over all
the illuminated surfaces. No noticeable hot spots or shadows will be allowed.
	 
	 	5)	 	Illumination and electrical specifications must appear on all shop drawings submitted for
approval.
	 
	 	6)	 	The external illumination of all Tenant signs shall not exceed that which is
approved by the Landlord during the submission process. There shall be no excessive
glare or coloration from lighting on surrounding areas or on Tenant facades.
	 
	 	7)	 	All illuminated signage must have a time clock provided by the tenant, which is
to be controlled by the Landlord.

	II.	 	Construction

	 	1)	 	All bolts, fasteners, clips, conduits shall be generally hidden from public
view. Where externally mounted, all sign parts shall be painted to match the exterior
color of the surfaces on which they are mounted.
	 
	 	2)	 	All manufacturers and installers are advised that prior to final acceptance,
each unit may be inspected for conformance by an authorized representative of the
Landlord. Any sign, before or after installation, found not to be in conformance with
these Guidelines will be rejected and required to be removed immediately by the Tenant
or Tenant’s contractor.
	 
	 	3)	 	Shop drawings are required to be submitted to, and approved by, Landlord prior
to the start of any work, detailing all specifications and methods or construction, see
the submittal procedures that follow.
	 
	 	4)	 	Exterior raceway is prohibited.
	 
	 	5)	 	Fabrication methods (exhibits 3 & 4).

	III.	 	Installation and Removals

	 	1)	 	All penetrations of any building structure required for sign
installations shall be neatly sealed and continuously maintained in watertight
condition.
	 
	 	2)	 	All contractors used by Tenants for installation, removal or service calls on
signage must be fully licensed, and must provide Landlord with certificates of
insurance prior to the commencement of any work.
	 
	 	3)	 	All methods of attachment to any structure must be detailed on shop drawings
and be approved by the Landlord.
	 
	 	4)	 	Sign removals shall include the patching and repairing of the entire work
area, plus the repainting of any hosted areas as directed by the Landlord.

	IV.	 	General Requirements and Submittal Procedures

No signs shall be fabricated or installed unless the following approvals have been obtained:

All permits required by the City of San Carlos and any associated fees, shall be obtained and
paid for by Tenant. All signs shall be constructed and installed at tenant’s expense. Tenants
shall be responsible for the fulfillment of all requirements and specifications mandated by
these Signage Guidelines and all applicable state and local codes including the Uniform
Building Codes. In case of a discrepancy between the requirements of these Signage Guidelines
and any City codes or ordinances, the provisions of these Guidelines shall prevail.

Tenant shall submit two (2) sets of professionally prepared sign designs for Landlord’s
review prior to application to the City of San Carlos or fabrication of any display.
Designs shall include the following:

	 	1)	 	Dimensioned, scaled drawings showing the sign(s) in elevation and section.
	 
	 	2)	 	Storefront elevations to scale and dimensioned showing the sign(s) in place,
clearly indicating exact size, type and placement of each display.
	 
	 	3)	 	Specifications of materials, colors, finishes, lighting and method of attachment.

35

 

	V.	 	Tenant Responsibilities

Tenants shall be responsible for the fulfillment of all requirements of these Signage Guidelines
and all applicable codes and ordinances. Each tenant is responsible for the cost of design,
fabrication, installation, maintenance and electricity for their own sign(s). Tenants shall be
responsible for the immediate repair of neon, which is damaged, or not illuminating properly,
and the proper maintenance of all tenant signs. All permits required by the City of San Carlos
and associated fees, shall be obtained and paid for by the tenant or tenant’s representative.
Tenants shall be required to perform or cause to have performed such necessary action to correct
or repair signage within 10 days of written notice from Landlord.

All sign contractors employed or retained by tenant must carry Workmen’s Compensation and Public
Liability insurance providing coverage against damage suffered or done to any and all persons
and/or property while engaged in the construction or erection of signs, in an amount deemed
appropriate by lessor. Tenants shall indemnify and hold harmless the Landlord and the City of
San Carlos from any damages that arise from the installation, maintenance or use of Tenant’s
signage.

Upon the termination or conclusion of tenant’s lease, the tenant is responsible at their sole
cost for the removal of all signs. All signs must be removed within 30 days of the lease’s
termination. The storefront fascia shall be patched, touch-up painted to match existing wall
color and otherwise repaired as detailed in previous section of these guidelines.

	VI.	 	Promotional Signs

No temporary signs shall be on building exteriors, secured to or suspended from a building wall
or flagpole. They may not be affixed to a tree, roof or fence.

Promotional signs may be placed interior to the tenants leased space and consist of flags,
banners, pennants or other similar devices that are professionally designed and fabricated. All
such signs shall be designated to an appropriate size and scope. A-Frame signs shall not be
permitted at any time. In addition, inflatable graphics, such as King Kong balloons are not
allowed. All promotional signage requires Landlord and comply with City codes and applicable
permit.

Promotional signs may be utilized for advertising and marketing special items, sales and events
only. The size of the temporary sign shall be in proportion to the tenant’s storefront.

36

 

EXHIBIT 1A

 

 

EXHIBIT
1B

 

 

EXHIBIT
2

 

 

EXHIBIT
3

 

 

EXHIBIT
4

 

 

EXHIBIT
5

 

 

990 Industrial
Road Commercial Lease Agreement

schedule 2

hazardous substance disclosure

TENANT SHALL IMMEDIATELY NOTIFY LANDLORD IN THE EVENT THE INFORMATION PROVIDED BELOW ON THIS
DISCLOSURE IS INACCURATE IN ANY WAY, INCLUDING, ADDITION OF NEW SUBSTANCES, REMOVAL OF SUBSTANCES
LISTED ABOVE, OR ANY CHANGE IN THE QUANTITY OF SUBSTANCES.

	 	 	 	 	 	 	 
	 	 	 	 	DATE TO BE	 	LANDLORD’S
	 	 	 	 	INTRODUCED	 	APPROVAL
	SUBSTANCE	 	QUANTITY	 	ONTO PREMISES	 	SIGNATURE
	 

	 	 
	 	 
	 	 

37

 

Hazardous Properties of Standard Reagents Used in OpenArray Products

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	Max 	 	 
	Reagent	 	Manufacturer	 	Item No.	 	CAS	 	Listed?*	 	NFPA**	 	Amount	 	Hazardous Properties
	SNP Reagents
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	TaqMan® assay
	 	Applied BioSystems
	 	Varies
	 	 	 	OSHA
	 	2/1/0
	 	100@ 0.75mL of 40x
solution
	 	 

	Pluronic F-38
	 	BioTrove
	 	 	 	Multiple
	 	TSCA CA Prop65
	 	1/1/0
	 	50mL of 20% solution
	 	Eyewash/ safety shower 

required
 Local exhaust
recommended

	Albumin, bovine (BSA)
	 	Sigma-Aldrich
	 	A7906
	 	9048-46-8
	 	TSCA
	 	0/1/0
	 	20mL of 10mg/mL
solution
	 	Requires BL1 containment

	Glycerol
	 	Sigma-Aldrich
	 	G5150
	 	56-81-5
	 	TSCA
	 	1/1/0
	 	1L
	 	Eyewash/ safety shower
required
 Local exhaust
recommended

	Reagent Alcohol
	 	Not specified
	 	Not specified
	 	Multiple
	 	TSCA SARA 313 RCRA
	 	1/3/0
	 	4 gallons (15L)
	 	Flammable, Poison  

Flammables storage
cabinet
required 

Eyewash/ safety shower
required
 Local exhaust
recommended

	Bleach
	 	Chlorox
	 	Not specified
	 	7681-52-9
	 	TSCA IARC Category 3
	 	2/0/1
	 	2 gallons (7.6L)
	 	Corrosive 

Eyewash/safety
shower required  

Local exhaust
recommended

	Real Time
Reagents
	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	Pluronic F-68 (10%

stock)
	 	Gibco
	 	24040-032
	 	9003-11-6
	 	TSCA
	 	1/0/0
	 	500mL
	 	 

	Glycerol, 99%
	 	Sigma
	 	G8778
	 	56-81-5
	 	TSCA
	 	1/1/0
	 	1L
	 	Eyewash/ safety shower
required
 Local exhaust
recommended

	Formamide
	 	Sigma (Aldrich)
	 	18,590-6
	 	75-12-7
	 	TSCA SARA 311/312
	 	2/1/0
	 	100mL
	 	Eyewash/ safety
shower required 

Local exhaust
recommended

 

 

			
	*	 	Designated hazardous according to one or more of the following regulatory authorities or state
statutes: RCRA 49 CFR 261.33 (RCRA), DOT 49 CFR 171.101 (DOT), California Proposition 65 (CA), OSHA 29CFR 1910.1200 (OSHA). In regards to SARA 302, 304, 311-312 Reporting requirements apply to
large quantities of material, far beyond amounts to be used at the proposed site.
	 
	**	 	NPFA Ratings Health/Flammability/Reactivity

Other materials necessary for lab set up:

	 	•	 	Plumbed eyewash/drench shower
	 
	 	•	 	At least 2@200ft3 compressed air or nitrogen
	 
	 	•	 	Ice machine
	 
	 	•	 	Vortex
	 
	 	•	 	NT Imager/cycler – 1 case sealing
	 
	 	•	 	Thermal cyclers (Bio-rad)
	 
	 	•	 	Speed vac
	 
	 	•	 	Heat block
	 
	 	•	 	Plate centrifuge
	 
	 	•	 	Tube centrifuge
	 
	 	•	 	4°C upright refrigerator
	 
	 	•	 	-20°C upright freezer
	 
	 	•	 	Incubator
	 
	 	•	 	Sink
	 
	 	•	 	Ventilation
	 
	 	•	 	Lab benches
	 
	 	•	 	Pipettes and pipette tips
	 
	 	•	 	DI/RODI (boxes)

 

 

	 	•	 	Portable fume hood (for use in handling formamide)
	 
	 	•	 	Vendor and process to handle biowaste
	 
	 	•	 	Vendor and process to handle sharps waste
	 
	 	•	 	Vendor and process to handle chemical waste

Assumptions:

	 	•	 	BL1 work only, no BL2 (i.e. no human or primate cell work, cell culture work, cell preps) BL2
requires a biosafety cabinet
	 
	 	•	 	No infectious agents
	 
	 	•	 	No ethidium bromide
	 
	 	•	 	No acrylamide
	 
	 	•	 	No radioactivity

 

 

			
	
	 	

April 18, 2008

Mr, Paul E. Pescatore

Senior VP of Quality and Operations

BioTrove, Inc.

12 Gill Street, Suite 4000

Woburn, MA 01801-1728

	 	 	 
	Re:

	 	Rent commencement date
	 

	 	990 Industrial Road, Suite 206 
San Carlos,
CA

Dear
Mr. Pescatore,

This letter shall confirm April 15, 2008 as the rent commencement date for the Lease Agreement
by and between Black Mountain Holdings LLC (Landlord) and BioTrove, lnc. (Tenant) dated March
20, 2008 for the property located at 990 Industrial Road, Suite 206, San Carlos, California.

The Base Rent schedule in the Lease on page 1 of “Basic Lease Information” will be modified as
follows:

Months
   1-12    (4/15/08 - 04/30/09)    $2.10/sq. ft./month -       $4,134.90

Months   13-24   (5/01/09 - 04/30/10)    $2.1840/sq.ft./month –   $4,300.30

Months   25-36   (5/01/10 - 04/30/11)    $2.2710/sq. ft./month     $4,472.31

Months   37-48   (5/01/11 - 04/30/12)    $2.3620/sq. ft./ month    $4,651.20

Months   49-60   (5/01/12 - 04/30/13)    $2.4570/sq. ft./ month    $4,837.25

The security deposit and first month’s rent paid is as follows:

Security
Deposit — security deposit of $4,837.25.

First
month’s rent —  $4,134.90.

BioTrove, Inc will owe the following amount as the pro rated base rent for May, 2008.
The first month’s rent is being applied to the period of
April 15, 2008 through May 14, 2008.

	 	 	 	 	 
	Base rent prorated May, 2008 ($137.83 x 15 days)
	 	$	2,067.45	 
	 
	 	 	 	 
	Total amount due May 1, 2008
	 	$	2,067.45	 

If you have any questions, please call me (650-595-8452-Ext. 104).

Sincerely

-s- Steven J. Mitchell

Steven J. Mitchell

 Chief Operations Officer

	 	 	 
	975 Industrial Road, Suite A    
San
Carlos, CA 94070    
	 	    Phone: (650) 595-8452

    Fax: (650) 412-0798exv10w25

Exhibit 10.25

BIOTROVE, INC.

BONUS AGREEMENT WITH JEFFREY LEATHE

          AGREEMENT made as of the 17th day of March 2008, between BioTrove, Inc., a Delaware
corporation (the “Company”), and Jeffrey Leathe (the “Employee”).

          WHEREAS, pursuant to an offer letter from the Company, the Company promised to grant to the
Employee an option to purchase shares of its common stock;

          WHEREAS, prior to granting the option, the Company obtained a valuation of its common stock
which indicated that the fair market value of its common stock was significantly higher than
originally believed, making it impossible to grant the option at the exercise price originally
contemplated without violating Section 409A of the U.S. Internal Revenue Code of 1986, as amended,
and the guidance issued thereunder (“Section 409A”);

          WHEREAS, the Company has determined that it is in the best interests of the Employee and the
Company to grant to the Employee an option under the Company’s Amended 2000 Stock Plan at the fair
market value of its common stock at the date of grant based on the valuation received by the
Company (the “Option”); and

          WHEREAS, the Company desires to grant a bonus to the Employee to compensate the Employee for
the increase in the exercise price for the Option that is being granted to the Employee.

          NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other
good and valuable consideration, the parties hereto agree as follows:

          The Employee will be eligible to receive a cash bonus in the amount of $165,000 (the “Bonus
Amount”), payable in installments, provided that the Employee is employed by the Company on the
date an installment is due to be eligible for that installment.

          Each installment of the bonus will be paid on the dates and in the amounts as follows:

25% of the Bonus Amount on October 29, 2008;

1/36th of 75% of the Bonus Amount on November 28, 2008 and the 28th day
of each month thereafter up to and including October 28, 2011.

          Notwithstanding the above schedule, in the event of an initial public offering of the Company
(“IPO”): (1) 25% of the Bonus Amount will be paid to the Employee on the closing date of the IPO
(the “IPO Payment”); and (2) the monthly payments set forth above will be recalculated so that the
remaining unpaid Bonus Amount after payment of the IPO Payment and the October 29, 2008 payment
will be paid ratably each month until

 

 

October 28, 2011 (but note that the amount payable on October 29, 2008 will not change).

          In addition notwithstanding the foregoing, in the event of a Change in Control all outstanding
amounts will be accelerated and any portion of the Bonus Amount that is still outstanding on the
date of the Change in Control shall be paid immediately prior to the consummation of the Change in
Control. Change in Control shall be deemed to have occurred upon the occurrence of any one of the
following events:

	 	(i)	 	any “Person,” as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the “Act”) (other
than the Company, any of its subsidiaries, or any trustee, fiduciary or other
person or entity holding securities under any employee benefit plan or trust
of the Company or any of its subsidiaries), together with all “affiliates” and
“associates” (as such terms are defined in Rule 12b-2 under the Act) of such
person, shall become the “beneficial owner” (as such term is defined in Rule
13d-3 under the Act), directly or indirectly, of securities of the Company
representing 50 percent or more of the combined voting power of the Company’s
then outstanding securities having the right to vote in an election of the
Company’s Board of Directors (“Voting Securities”) (in such case other than as
a result of an acquisition of securities directly from the Company); or
	 
	 	(ii)	 	persons who, as of the date hereof, constitute the Company’s
Board of Directors (the “Incumbent Directors”) cease for any reason,
including, without limitation, as a result of a tender offer, proxy contest,
merger or similar transaction, to constitute at least a majority of the Board,
provided that any person becoming a director of the company subsequent to the
date hereof shall be considered an Incumbent Director if such person’s
election was approved by or such person was nominated for election by either
(A) a vote of at least a majority of the Incumbent Directors or (B) a vote of
at least a majority of the Incumbent Directors who are members of a nominating
committee comprised, in the majority, of Incumbent Directors; but provided
further, that any such person whose initial assumption of office is in
connection with an actual or threatened election contest relating to the
election of members of the Board of Directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board, including by reason of agreement intended to avoid or settle any such
actual or threatened contest or solicitation, shall not be considered an
Incumbent Director; or

 

 

	 	(iii)	 	the consummation of (A) any consolidation or merger of the
Company where the stockholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule 13d-3 under the
Act), directly or indirectly, shares representing in the aggregate more than
50 percent of the voting shares of the Company issuing cash or securities in
the consolidation or merger (or of its ultimate parent corporation, if any),
or (B) any sale, lease, exchange or other transfer (in one transaction or a
series of transactions contemplated or arranged by any party as a single plan)
of all or substantially all of the assets of the Company; or
	 
	 	(iv)	 	the approval by the Company’s stockholders of any plan or
proposal for the liquidation or dissolution of the Company.

          All income and employment taxes required to be withheld from the bonus will be withheld and
will reduce the cash payments received by the Employee under this Agreement.

          It is intended that each installment of the payments and benefits provided under this
Agreement shall be treated as a separate “payment” for purposes of Section 409A. Neither the
Company nor Employee shall have the right to accelerate or defer the delivery of any such payments
or benefits except to the extent specifically permitted or required by Section 409A.

          By signing this Agreement and receiving the Option, you hereby agree and acknowledge that the
Company has satisfied its obligations to you under your offer letter dated October 9, 2007 and you
are not entitled to receive any additional options, shares or payments from the Company.

 

 

          IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly
authorized officer, and Jeffrey Leathe has hereunto set his hand, all as of the day and year first
above written.

	 	 	 	 	 
	 	BioTrove, Inc.

 	 
	 	By:  	/s/ Albert Luderer
 	 
	 	 	Name 	 
	 	 	Title  CEO 	 
	 

	 	 	 	 	 
	 	 	 
	 	                                   /s/ Jeffrey Leathe
 	 
	 	Jeffrey Leathe

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