Document:

Exhibit 10.23

 

MARINA VILLAGE

INDUSTRIAL GROSS LEASE

 

THIS LEASE (“Lease”)  is made and
entered into as of the Effective Date by and between ALAMEDA REAL ESTATE
INVESTMENTS, a California limited partnership (“Landlord”),  and BERKELEY HEARTLAB,
INC., a California corporation (“Tenant”).

 

WITNESSETH

 

1.             Premises. 
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord for the term of this Lease and at the rental and upon the conditions
set forth below, the Premises (the “Premises”)  described in the Basic Lease
Information and identified on the drawing attached hereto as Exhibit A.  The Premises are located within the building
identified in the Basic Lease Information (the “Building”).  The
Building is located within the approximately 200-acre development (the “Project”)  commonly
known as Marina Village, Alameda, California. 
Subject to substantial completion by Landlord of any improvements to the
Building or the Premises which Landlord is explicitly required to make under
this Lease, Tenant shall accept the Premises in its “as-is” condition as of the
date of delivery by Landlord.

 

2.             Term. 
The term of this Lease shall commence and, unless sooner terminated
as hereinafter provided, shall end on the dates respectively specified in the
Basic Lease Information.  If Landlord
permits Tenant to occupy the Premises prior to the date of Term Commencement,
such occupancy shall be subject to all the terms of this Lease.  If Landlord, for any reason whatsoever,
cannot deliver possession of the Premises to Tenant on the date of term
commencement, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, but in that event,
subject to any contrary provisions in any agreement with Landlord covering
initial improvement of the Premises, the obligation to pay Base Rent shall be
waived for the period between the date of Term Commencement and the time when
Landlord can deliver possession.  The
date of Term Expiration shall be extended by the number of days of delay in
delivery of possession and any additional period required so that it will
expire on the last day of a calendar month, and the dates of Term Commencement
and Term Expiration dates shall be confirmed in a Verification Memorandum in
the form of Exhibit C executed by Landlord and Tenant promptly
following delivery of possession.

 

3.             Rent.

 

a.             Base
Rent.  Tenant shall pay to Landlord
as rental the amount specified in the Basic Lease Information as the Base
Rent.  The first month’s Base Rent shall
be payable upon Tenant’s execution of this Lease and Base Rent shall thereafter
be payable in advance on or before the first day of the first (1st) full
calendar month following commencement of the term and of each successive
calendar month thereafter during the term. 
If the term commences on other than the first day of a calendar month
any excess payment of Base Rent shall be credited against the last payment of
Base Rent otherwise due.

 

b.             CPI
Increase.  Effective as of each
anniversary date of the commencement of the term, the Base Rent shall be
increased to equal the sum of (i) the Base Rent as specified in the Basic
Lease Information, plus (ii) the product obtained by multiplying such
amount by the 

 

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percentage
increase in the Consumer Price Index measured from the measuring month which is
two months preceding the commencement of the term to the measuring month two
months preceding the anniversary date in question.  As used herein, the term “Consumer Price
Index” (“Consumer Price Index”)  shall mean
the United States Department of Labor’s Bureau of Labor Statistics Consumer
Price Index, All Urban Consumers, All Items, San Francisco-Oakland-San Jose,
California (1982-84 equals 100), or the successor of such index.  Tenant shall continue paying the current Base
Rent until the increased Base Rent has been calculated.  Upon such calculation, Landlord shall give
notice to Tenant of the amount of the new Base Rent which shall be due and
payable effective as of the anniversary date and Tenant shall upon the giving
of such notice pay Landlord any shortage in Base Rent accruing between the
current anniversary date and the date of the notice.

 

c.             Additional
Rent.  Tenant shall pay, as
additional rent, all amounts of money required to be paid to Landlord by Tenant
under this Lease in addition to monthly rent, whether or not the same be
designated “additional rent” (“additional
rent”).

 

d.             Late
Charges.  Tenant hereby acknowledges
that late payment by Tenant to Landlord of Base Rent and other amounts due
under this Lease 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 which may be imposed on
Landlord by the terms of any loan secured by the Building.  Accordingly, if any installment of Base Rent
or any other sums due from Tenant shall not be received by Landlord on the date
due, Tenant shall pay to Landlord a late charge equal to ten percent (10%) of
such overdue amount.  The parties hereby
agree that such late charge represents a fair and reasonable estimate of the
costs Landlord will incur by reason of late payment by Tenant.  Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenant’s event of default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted under this Lease.

 

e.             Default
Rate.  Any amount payable by Tenant
to Landlord, if not paid when due, shall bear interest from the date due until
paid at the “prime” rate as announced from time to time in the Wall Street
Journal for short term commercial loans, plus four percent (4%) per annum, or
such lower rate as is the maximum rate permitted by law (the “Default Rate”), provided
that interest shall not be payable on late charges incurred by Tenant nor on
any amounts upon which late charges are paid by Tenant to the extent such
interest would cause the total interest to be in excess of that legally
permitted. Payment of interest shall not excuse or cure any event of default by
Tenant.

 

f.              Payment.  All payments due from Tenant to Landlord
under this Lease shall be made to Landlord without deduction or offset in
lawful money of the United States of America at the address for payment set
forth in the Basic Lease Information, or to such other person or at such other
place as Landlord may from time to time designate by notice to Tenant.  Following Landlord’s notice, Tenant shall
make all payments of Base Rent and monthly payments of Tenant’s percentage
share of increases in Property Taxes and Operating Expenses by federal funds
wire transfer as designated by Landlord.

 

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4.             Taxes
and Operating Expenses.

 

a.             Obligation.  For each calendar year during the term after
the year specified in the Basic Lease Information as the Base Year, Tenant
shall pay its percentage share, as specified in the Basic Lease Information, of
the increase in Property Taxes over Base Property Taxes and its percentage
share of the increase in Operating Expenses for such calendar year over Base
Operating Expenses.

 

b.             Definitions.  For the purposes hereof, “Property Taxes”  shall mean
all real property taxes and assessments or governmentally imposed fees or
charges (and any tax, assessment or fee levied wholly or partly in lieu
thereof) levied, assessed, confirmed, imposed or which have become a lien
against the Building (which for the purposes of defining “Property Taxes” shall
include the land underlying the Building). 
If the Building is not separately assessed for tax purposes, then the
Property Taxes to be paid by Tenant shall be Tenant’s percentage share of the
product obtained by multiplying the total of the real property taxes and
assessments levied against the tax parcel of which the Building is a part by a
fraction, the numerator of which is the rentable area of the Building and the
denominator of which is total rentable area of all improvements located within
the tax parcel of which the Building is a part. “Operating Expenses”  shall mean
all expenses and costs of every kind and nature which Landlord shall pay or
become obligated to pay because of or in connection with the ownership and
operation of the Building and the Project as allocated to the Building,
including, without limitation: (i) all license, permit, and inspection
fees; (ii) premiums for insurance; (iii) wages, salaries and related
expenses and benefits of all on-site and off-site employees engaged in
operation, maintenance and security; (iv) all supplies, materials, and
equipment rental; (v) all maintenance, repair, replacement, janitorial,
security, and service costs; (vi) management fees or a management cost
recovery equal to a market rate management fee; (vii) management office
rent or rental equivalent; (viii) professional services fees; (ix) costs
incurred which are intended to decrease other Operating Expenses; (x) amortization
across the useful life of the cost of capital improvements (together with
interest thereon at the rate paid by Landlord or which would have been paid if
Landlord had borrowed such funds); (xi) all charges for heat, water, gas,
electricity and other utilities used or consumed in the Building and
surrounding areas; and (xii) all other operating, management, and other
expenses incurred by Landlord in connection with the ownership and operation of
the Building including expenses in the nature of other Operating Expenses which
are payable with respect to the Building under any reciprocal easement or
common area maintenance agreements or declaration or by any owners’
associations affecting the Building. Landlord shall not collect in excess of
100% of all of Landlord’s Operating Expenses and Landlord shall not recover,
through Operating Expenses, any item of cost more than once.  Operating Expenses shall not include the cost
of repairs or restoration occasioned by a casualty to the extent covered by
insurance proceeds made available to Landlord, taxes on Landlord’s income from
all sources, expenses incurred in leasing to or procuring of tenants, leasing
commissions, legal fees related to other tenants’ leases, advertising expenses,
expenses for the renovating of space for new tenants, debt service payments by
Landlord except as allowed above, nor any depreciation allowance or expense.
Landlord may determine some items of Operating Expenses and Property Taxes on a
cash basis and other items on an accrual basis so long as such determination is
consistently applied to the same item during all accounting periods.  “Base Property Taxes”  shall mean those Property Taxes
payable during the fiscal year ending in June of the Base Year, and “Base Operating Expenses”  shall mean
Operating Expenses incurred by 

 

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Landlord
during the Base Year.  Operating Expenses
for both the Base Year and each subsequent calendar year shall be adjusted to
equal Landlord’s reasonable estimate of Operating Expenses had the total rentable
area of the Building been 95% occupied.

 

c.             Payment.  Tenant shall pay to Landlord each month at
the same time and in the same manner as Base Rent, 1/12th of Landlord’s
estimate of Tenant’s percentage share of the increase in Property Taxes and
Operating Expenses from Base Property Taxes and Base Operating Expenses for the
then current calendar year.  Within
ninety (90) days after the close of each calendar year, or as soon after such
ninety (90) day period as practicable, Landlord shall deliver to Tenant a
statement of actual Property Taxes and Operating Expenses for such calendar
year.  If on the basis of such statement
Tenant owes an amount that is less than the estimated payments for such
calendar year previously made by Tenant, Landlord shall refund such excess to
Tenant.  If on the basis of such
statement Tenant owes an amount that is more than the estimated payments for
such calendar year previously made by Tenant, Tenant shall pay the deficiency
to Landlord within thirty (30) days after delivery of the statement.  The obligations of Landlord and Tenant under
this paragraph with respect to the reconciliation between estimated payments
and actual Property Taxes and Operating Expenses for the last year of the term
shall survive the end of the Lease.

 

5.             Other Taxes.  Tenant shall pay or reimburse Landlord
within thirty (30) days following its demand for any taxes (other than local,
state or federal, personal or corporate income taxes measured by the net income
of Landlord from all sources), assessments, excises, levies, business taxes,
license, permit, inspection, authorization, service payments in lieu of taxes
and any other fees or charges of any kind, which are levied, assessed,
confirmed or imposed by any public authority: (a) upon, measured by or reasonably
attributable to the cost or value of Tenant’s equipment, furniture, fixtures
and other personal property located in the Premises or leasehold improvements
made in or to the Premises at Tenant’s expense; (b) upon or by reason of
the development, possession, use or occupancy of the Premises or the parking
facilities used by Tenant in connection with the Premises; (c) imposed
with respect to the rental payable under this Lease; or (d) upon this
transaction or any document to which Tenant is a party.

 

6.             Use.

 

a.             Restrictions.  The Premises shall be used and occupied by
Tenant for the use set forth in the Basic Lease Information and for no other
purpose.  Tenant shall not use or permit
the use of the Premises in any manner that exceeds an occupying density of five
(5) persons per 1,000 square feet of useable area or a demand for parking
in excess of 3.4 automobiles per 1,000 square feet of useable area.  Tenant shall, at Tenant’s expense, comply
promptly with all applicable statutes, ordinances, rules, regulations, orders
and requirements in effect during the term regulating the use by Tenant of the
Premises.  Tenant shall not use or permit
the use of the Premises in any manner that will tend to create waste or a nuisance,
or which disturbs other tenants of the Building, nor shall Tenant, its
employees, agents or invitees damage the Premises, the Building or any portion
of the Project, nor place or maintain any signs on or visible from the exterior
of the Premises, or use any corridors, sidewalks or other areas outside of the
Premises for storage or any purpose other than access to the Premises.  Tenant shall not conduct any auction at the
Premises.  Notwithstanding any other provision
of this Lease, Tenant shall not use, keep or permit to be used or kept on the
Premises any foul or noxious gas 

 

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or
substance, nor shall Tenant do or permit to be done anything in and about the
Premises, either in connection with activities under this Lease expressly
permitted or otherwise, which would cause an increase in premiums payable
under, or a cancellation of, any policy of insurance maintained by Landlord in
connection with the Building or the Project or which would violate the terms of
any covenants, conditions or restrictions affecting the Building or the land on
which it is located.

 

b.             Hazardous
Materials.  Tenant shall strictly
comply with all statutes, laws, ordinances, rules, regulations, and precautions
now or hereafter mandated or advised by any federal, state, local or other
governmental agency with respect to the use, generation, storage, or disposal
of hazardous, toxic, or radioactive materials (collectively, “Hazardous Materials”). 
As herein used, Hazardous Materials shall include,
but not be limited to, those materials identified in Sections 66680 through
66685 of Title 22 of the California Code of Regulations, Division 4, Chapter
30, as amended from time to time, and those substances defined as “hazardous
substances,” “hazardous materials,” “hazardous wastes,” “chemicals known to
cause cancer or reproductive toxicity,” “radioactive materials,” or other
similar designations in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.,
the Hazardous Materials Transportation Act, 49 U.S.C. Section 1801 et
seq., 33 U.S.C. Section 1251 et  seq., 42 U.S.C. Section 300(f) et
seq., 42 U.S.C. 7401 et seq., California Health and Safety Code Section 25249.5
et seq., California Water Code Section 13000 et seq., California Health
and Safety Code Section 39000 et seq. and any other governmental statutes,
ordinances, rules, regulations, and precautions adopted pursuant to the
preceding laws or other similar laws, regulations and guidelines now or
hereafter in effect. Tenant shall not cause, or allow anyone else to cause, any
Hazardous Materials to be used, generated, stored, or disposed of on or about
the Premises or the Building other than reasonable quantities of office and
cleaning supplies in their retail containers. 
Tenant shall defend (with counsel approved by Landlord), indemnify and
hold Landlord, its members and its and their officers, directors, employees and
agents, any entity having a security interest in the Premises or the Building,
and its and their employees and agents (collectively, “Indemnitees”)  harmless from
and against all liabilities, claims, costs, damages, and depreciation of
property value, including all foreseeable and unforeseeable consequential
damages, directly or indirectly arising out of the use, generation, storage, or
disposal of Hazardous Materials by Tenant or any person claiming under Tenant,
including, without limitation, the cost of any required or necessary
investigation, monitoring, 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, as
well as penalties, fines and claims for contribution to the full extent that
such action is attributable, directly or indirectly, to the use, generation,
storage, or disposal of Hazardous Materials by Tenant or any person claiming
under Tenant. Neither the consent by Landlord to the use, generation, storage,
or disposal of Hazardous Materials nor the strict compliance by Tenant with all
statutes, laws, ordinances, rules, regulations, and precautions pertaining to
Hazardous Materials shall excuse Tenant from Tenant’s obligation of indemnification
set forth above.  Tenant’s obligations
unless this Section 6 shall survive the end of this Lease.

 

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7.             Services.

 

a.             Services.  Tenant shall pay for all water, sewer, gas,
electricity, heat, cooling, energy, telephone, refuse collection, alarm
monitoring services, and other utility-type services furnished to Tenant or the
premises, together with all related installation or connection charges or
deposits.  Wherever it is practical to do
so such service shall be separately metered or charged to Tenant by the
provider thereof and paid for directly by Tenant.  To the extent any of the foregoing services
are provided by Landlord, Tenant shall reimburse Landlord for all actual
out-of-pocket costs incurred by Landlord in connection will the provision of
such services as billed by the provider thereof based on Landlord’s reasonable
estimate of the level of Tenant’s use or consumption of such services.  Landlord shall bill Tenant for such services
as incurred and payment shall be made by Tenant within ten (10) days after
submittal of Landlord’s statement.

 

b.             No
Landlord Liability.  Landlord shall
not be in default under this Lease or be liable to Tenant or those claiming
through it for any damages direct, consequential or otherwise, resulting nor
shall there be any abatement of amounts payable by Tenant under this Lease, by
reason of any interruption or curtailment whatsoever in utility services.

 

c.             Excess
Use.  Whenever heat generating
equipment or lighting other than building standard lights are used in the
premises by Tenant which affect the temperature otherwise maintained by the air
conditioning system, Landlord shall have the right, after notice to Tenant, to
install supplementary air conditioning facilities in the premises or otherwise
modify the ventilating and air conditioning system serving the Premises, and
the cost of such facilities and modifications shall be borne by Tenant, Tenant
shall also pay as additional rent the cost of providing all cooling energy to
the Premises in excess of that required for normal office use or required
during other than Normal Office Hours as well as lighting at other than Normal
Office Hours.  If Tenant installs
lighting requiring power in excess of that required for normal office use in
the Building of if Tenant installs equipment requiring power in excess of that
required for normal desk-top office equipment or normal copying equipment,
Tenant shall pay for the cost of such excess power as additional rent, together
with the cost of installing any additional risers or other facilities that may
be necessary to furnish such excess power to the premises.

 

8.             Maintenance, Repairs and Alterations.

 

a.             Landlord’s
Obligation/Tenant’s Waiver.  Subject
to the provisions of Section 10 below, and except for damages caused by
Tenant, its agents or invitees, Landlord shall keep in good condition and
repair the foundations and exterior walls and roof of the Building and all
common areas within the Building not leased to tenants.  Tenant expressly waives the benefits of any
statute now or hereafter in effect which would otherwise afford Tenant the
right to make repairs at Landlord’s expense or to terminate this Lease because
of Landlord’s failure to keep the Premises or the Building in good order,
condition and repair.

 

b.             Tenant’s
Obligations.  Tenant shall, at Tenant’s
expense, maintain the interior portion of the Premises including, but not
limited to, all plumbing and electrical fixtures and outlets, all computer and
telecommunications wiring and outlets, and any interior glass in good condition
and repair.  If Tenant falls to do so
Landlord may, but shall not be required to, enter the Premises and put them in
good condition, and Landlord’s costs thereof as set forth in 

 

6

 

Landlord’s
demand to Tenant shall automatically become due and payable as additional
rent.  Tenant shall reimburse Landlord
within thirty (30) days following its demand for all costs incurred by
Landlord, plus an administrative fee of fifteen percent (15%) of such costs, in
making alterations to the structural, mechanical, electrical, plumbing or life
safety systems of the Building and to the common areas of the Building which
may be required under applicable law as a result of Tenant’s particular use of
the Premises or alterations made within the Premises by Tenant or by Landlord
at the request of Tenant. At the expiration or earlier termination of the term
Tenant shall deliver up possession of the Premises in good condition and
repair, only ordinary wear and tear excepted, and with only such improvements
and alterations as shall have been made with Landlord’s consent which have not
been required to be removed by Landlord upon the granting of such consent.  In all events, unless Landlord otherwise
elects, upon the expiration or earlier termination of this Lease, Tenant shall
cause all telecommunications wiring and devices installed by Tenant to be
removed, wherever located in the Building.

 

c.             Tenant’s
Alterations.  Tenant shall not,
without Landlord’s prior consent, make any alterations, improvements or
additions in or about the Premises.  As a
condition to giving such consent, Landlord may require that Tenant remove any
such alterations, improvements or additions at the expiration of the term, and
to restore the Premises to their prior condition.  Before commencing any work relating to
alterations, additions or improvements affecting the Premises, Tenant shall
notify Landlord of the expected date of commencement thereof and of the
anticipated cost thereof, and shall furnish complete drawings and
specifications describing such work as well as such information as shall
reasonably be requested by Landlord substantiating Tenant’s ability to pay for
such work.  Tenant shall not commence any
such work until Landlord has reviewed and consented to the work as described in
such drawings and specifications, which consent shall not unreasonably be
withheld, conditioned or delayed.  Tenant
shall reimburse Landlord within thirty (30) days following its demand for any
costs incurred by Landlord in having such drawings and specifications reviewed
by its consultants.  Tenant shall give
Landlord at least five (5) business days’ notice prior to commencing any
of Tenant’s Alterations and Landlord shall then have the right at any time and
from time to time to post and maintain on the Premises such notices as Landlord
reasonably deems necessary to protect the Premises, the Building and Landlord
from mechanics’ liens or any other liens. 
In any event, Tenant shall pay when due all claims for labor or
materials furnished to or for Tenant at or for use in the Premises.  Tenant shall not permit any mechanics’ liens
to be levied against the Premises for any labor or materials furnished to
Tenant or claimed to have been furnished to Tenant or to Tenant’s agents or
contractors in connection with work performed or claimed to have been performed
on the Premises by or at the direction of Tenant.  All alterations, improvements or additions in
or about the Premises performed by or on behalf of Tenant shall be done by
contractors designated or approved by Landlord, in a first-class, workmanlike
manner which does not disturb or interfere with other tenants and is in
compliance with all applicable laws, ordinances, regulations and orders of any
governmental authority having jurisdiction thereover, as well as the
requirements of insurers of the Premises and the Building.  Prior to commencing any such work, if
required by Landlord, Tenant shall purchase and thereafter maintain builder’s
risk insurance in an amount no less than the value of the completed work of
alteration, addition or improvement on an all-risk basis, covering all perils
then customarily covered by such insurance. 
In addition, prior to the commencement of any such work, if Landlord so
requests, Tenant shall furnish to Landlord performance and payments bonds in
forms and issued by a surety reasonably acceptable to Landlord in an amount
equal to 

 

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the
cost of such work of alteration, improvement or addition.  Notwithstanding anything in this Section 8
to the contrary, upon Landlord’s request, Tenant shall remove any contractor,
subcontractor or material supplier from the Premises and the Building if the
work or presence of such person or entity results in labor disputes in or about
the Building or damage to the Premises or the Building.  Upon completion of work performed for Tenant,
at Landlord’s request Tenant shall deliver to Landlord evidence of full payment
therefor and full and unconditional waivers and releases of liens for all
labor, services and/or materials used. 
Unless Landlord requires their removal, as set forth above, all
alterations, improvements or additions which may be made on the Premises shall,
at Landlord’s option, become the property of Landlord and remain upon and be
surrendered with the Premises at the termination or expiration of the term;
provided, however, that Tenant’s machinery, equipment and trade fixtures, other
than any which may be affixed to the Premises so that they cannot be removed
without material damage to the Premises, shall remain the property of Tenant
and shall be removed by Tenant on or before such time.

 

9.             Insurance and Indemnity.

 

a.             Tenant’s
Insurance.  Tenant shall obtain and
maintain during the term of this Lease commercial general liability insurance
with a combined single limit for personal injury and property damage in an
amount not less than $2,000,000 each occurrence and $5,000,000 general aggregate,
and employer’s liability and workers’ compensation insurance as required by
law.  Tenant’s commercial general
liability insurance policy shall (i) include coverage for premises and
operations liability, products and completed operations liability, broad form
property damage, blanket contractual liability and personal and advertising
liability; (ii) provide that the insurer has the duty to defend all
insureds, and (iii) provide that defense costs do not deplete policy
limits.  Such insurance shall also be
endorsed to provide that (1) it may not be canceled or altered in such a
manner as adversely to affect the coverage afforded thereby without thirty (30)
days’ prior written notice to Landlord, (2) Landlord and other entities
designated by Landlord are named as additional insureds, (3) the insurer
acknowledges acceptance of the mutual waiver of claims by Landlord and Tenant
pursuant to paragraph (b) below, and (4) such insurance is primary
with respect to Landlord and that any other insurance maintained by Landlord is
excess and noncontributing with such insurance. If, in the opinion of Landlord’s
insurance adviser, based on an increase in recovered liability claims generally
or in amounts of insurance which tenants in similar premises are then being
required to maintain, the specified amounts of coverage are no longer adequate,
within thirty (30) days following Landlord’s request, such coverage shall be
appropriately increased.  Tenant shall
also obtain and maintain insurance (“Personal Property Insurance”)  covering
leasehold improvements paid for by Tenant and Tenant’s personal property and
fixtures from time to time in, on, or at the Premises, in an amount not less
than one hundred percent(100%) of the full replacement cost, without deduction
for depreciation, providing protection against events protected under “All Risk
Coverage,” as well as against sprinkler damage, vandalism, and malicious
mischief.  Any proceeds from the Personal
Property Insurance shall be used for the repair or replacement of the property
damaged or destroyed, unless this Lease is terminated under an applicable
provision herein.  If the Premises are
not repaired or restored following damage or destruction in accordance with
other provisions of this Lease, Tenant shall assign or pay to Landlord and
Landlord shall receive any proceeds from the Personal Property Insurance
allocable to Tenant’s leasehold improvements. 
Tenant shall obtain and maintain business interruption insurance in an
amount not less than the greater of Tenant’s annual gross revenue or an amount
adequate to provide for payment of Base Rent 

 

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and
other amounts due Landlord under this Lease during a one year interruption of
Tenant’s business by fire or other casualty. 
Prior to the commencement of the term, Tenant shall deliver to Landlord
copies of such policies or, at Landlord’s option, certificates thereof with
endorsements, and at least thirty (30) days prior to the expiration of such
policy or any renewal thereof, Tenant shall deliver to Landlord replacement or
renewal binders, followed by copies of such policies or, at Landlord’s option,
certificates within a reasonable time thereafter.  If Tenant fails to obtain such insurance or
to furnish Landlord any such duplicate policies or certificates as herein
required, Landlord may, at its election, upon notice to Tenant but without any
obligation so to do, procure and maintain such coverage and Tenant shall
reimburse Landlord on demand as additional rent for any premium so paid by
Landlord.  Tenant shall have the right to
provide all insurance coverage required herein to be provided by Tenant
pursuant to blanket policies so long as such coverage is expressly afforded by
such policies for the location which is the Premises.  All insurance shall be written by carriers
which are admitted in California and which have a rating by A.M. Best
Insurance Service, or its successor, of at least “A/VIII” or equivalent.

 

b.             Mutual
Waiver.  Landlord hereby waives all
claims against Tenant, and Tenant’s partners, and its and their officers,
directors, partners, members, employees, agents and representatives for loss or
damage to the extent that such loss or damage is insured against under any
valid and collectable insurance policy insuring Landlord or would have been
insured against but for any deductible amount under any such policy, and Tenant
waives all claims against Landlord including Landlord’s partners, and its and
their officers, directors, partners, members, employees, agents and representatives
(collectively, “Landlord’s Parties”)  for loss or
damage to the extent such loss or damage is insured against under any valid and
collectable insurance policy insuring Tenant or required to be maintained by
Tenant under this Lease, or would have been insured against but for any
deductible amount under any such policy.

 

c.             Tenant’s
Waiver and Indemnity.  As insurance
is available to protect it, and as long as such waiver does not violate public
policy, Tenant hereby waives all claims against Landlord and Landlord’s Parties
for claims, liabilities, damages and expenses arising out of or related to
damage to any property or injury to or death of any person in, upon or about
the Premises, the Building or the Project arising at any time and from any cause,
and Tenant shall hold Landlord and Landlord’s Parties harmless from and defend
Landlord and Landlord’s Parties against (i) all claims for damage to any
property or injury to or death of any person arising in the Premises or from
the use of the Premises by Tenant, except as to Landlord or any of Landlord’s
Parties such as is caused by the sole negligence or willful misconduct of
Landlord or that of Landlord’s Parties otherwise entitled to indemnification,
or (ii) arising from the negligence or willful misconduct of Tenant, its
employees, agents or contractors in, upon or about those portions of the
Building other than the Premises or the Project. The foregoing indemnity
obligation of Tenant shall include attorneys’ fees, investigation costs and all
other costs and expenses incurred by Landlord or any of Landlord’s Parties from
the first notice that any claim or demand is to be made or may be made.  The provisions of this Section 9 shall
survive the expiration or termination of this Lease with respect to any damage,
injury or death occurring prior to such time.

 

9

 

10.           Damage or Destruction.

 

a.             Insured
Loss.  If during the term the
Premises are totally or partially destroyed, or any other portion of the
Building is damaged in such a way that Tenant’s use of the Premises is
materially interfered with, from a risk which is wholly covered by insurance
proceeds made available to Landlord for such purpose, Landlord shall proceed
with reasonable diligence to repair the damage or destruction and this Lease
shall not be terminated; provided, however, that if in the opinion of Landlord’s
architect or contractor the work of repair cannot be completed in ninety (90)
days following commencement of such repair, Landlord may at its election
terminate this Lease by notice given to Tenant within thirty (30) days
following the event or such longer period as may reasonably be necessary to
obtain information from its architect or contractor.

 

b.             Uninsured
Loss.  If during the term the
Premises are totally or partially destroyed, or any other portion of the
Building is damaged in such a way that Tenant’s use of the Premises is
materially interfered with, from a risk which is not wholly covered by
insurance proceeds made available to Landlord for repair or reconstruction,
Landlord may at its election by notice to Tenant given within thirty (30) days
following the event or such longer period as may reasonably be necessary for
Landlord to obtain information from its architect or contractor, either restore
the Premises or terminate this Lease.

 

c.             Abatement
of Rent.  In case of destruction or
damage which materially interferes with Tenant’s use of the Premises, if this
Lease is not terminated as above provided, Base Rent and Tenant’s obligations
for payment of Operating Expenses and Property Taxes shall be abated during the
period required for the work of repair based upon the degree of interference
with Tenant’s use of the Premises. 
Except for abatement of rent, Tenant shall have no claim against
Landlord for any loss suffered by Tenant due to damage or destruction of the
Premises or any work of repair undertaken as herein provided.  Tenant expressly waives the provisions of
applicable law which would otherwise provide for termination of a hiring upon
destruction of the thing hired, which are superseded by this Section 10.

 

11.           Eminent Domain.  If all or any part of the Premises shall
be taken as a result of the exercise of the power of eminent domain or sold by
Landlord under threat thereof, this Lease shall terminate as to the part so
taken as of the date of taking or sale and, in the case of a partial taking,
either Landlord or Tenant shall have the right to terminate this Lease as to
the balance of the Premises by notice to the other within thirty (30) days
after such date if the portion of the Premises taken shall be of such extent
and nature as substantially to handicap, impede or impair Tenant’s use of the
balance of the Premises for Tenant’s purposes. In the event of any taking or
such sale, Landlord shall be entitled to any and all compensation, damages,
income, rent, awards, or any interest therein whatsoever which may be paid or
made in connection therewith, and Tenant shall have no claim against Landlord
for the value of any unexpired term of this Lease or otherwise.  In the event of a partial taking of the
Premises which does not result in a termination of this Lease, the monthly
rental thereafter to be paid shall be equitably reduced on a pro rata basis
based upon relative area.  To the extent
permitted by applicable law, Tenant waives any benefit of California Code of
Civil Procedure Sections 1265.130 and 1256.150, their successors and any other
law that provides a tenant with any abatement or termination rights or the
rights to 

 

10

 

receive any condemnation awards by virtue of the power of eminent
domain, other than as described above.

 

12.           Assignment
and Subletting.

 

a.             General Restriction. 
Tenant shall not assign this Lease or any interest herein or sublet the
Premises or any part thereof, either directly or by operation of law, without
the prior consent of Landlord, which consent shall not be unreasonably
withheld; Tenant shall not hypothecate this Lease or any interest herein or permit
the use of the Premises by any party other than Tenant without the prior
consent of Landlord, which consent may be withheld by Landlord in its absolute
discretion.  Any of the foregoing acts
without such consent shall be void and shall, at the option of Landlord,
terminate this Lease.  In connection with
each consent requested by Tenant, Tenant shall submit to Landlord the terms of
the proposed transaction, the identity of the parties to the transaction, the
proposed documentation for the transaction, current financial statements of any
proposed assignee or sublessee and all other information reasonably requested
by Landlord concerning the proposed transaction and the parties involved
therein.  As a further condition to any
consent of Landlord, the proposed assignee or sublessee shall agree in writing
to perform for the benefit of Landlord all of the Tenant’s obligations under
this Lease or, in the case of subletting, so much thereof as are allocable to
any portion of the Premises proposed to be sublet.

 

b.             Bases of Withholding Consent. 
Without limiting the other instances in which it may be reasonable for
Landlord to withhold its consent to an assignment or subletting, Landlord and
Tenant acknowledge that it shall be reasonable for Landlord to withhold its
consent in the following instances:

 

(1)           the proposed assignee or sublessee is a governmental
agency,

 

(2)           in Landlord’s reasonable judgment, the use of the
Premises would entail any alterations which would lessen the value of the
leasehold improvements in the Premises, or would require increased services by
Landlord;

 

(3)           in Landlord’s reasonable judgment, the financial worth
of the proposed assignee or sublessee does not meet the credit standards
applied by Landlord for other tenants under leases with comparable terms, or
the character, reputation or business of the proposed assignee or sublessee is
not consistent with the quality of the other tenancies in the Project;

 

(4)           in Landlord’s reasonable judgment, the proposed
assignee or sublessee does not have a good reputation as a tenant of property;

 

(5)           Landlord has received from any prior lessor to the
proposed assignee or subtenant a negative report concerning such prior lessor’s
experience with the proposed assignee or subtenant;

 

(6)           Landlord has experienced previous defaults by or is in
litigation with the proposed assignee or subtenant;

 

11

 

(7)           the use of the Premises by the
proposed assignee or subtenant will violate any applicable law, ordinance or
regulation;

 

(8)           the proposed assignee or subtenant is
a person with whom Landlord is negotiating to lease space in the Project or is
currently a tenant in the Project;

 

(9)           There is an event of Tenant default
under this Lease, or there has been an event of Tenant default under this Lease
on more than one occasion during the 12 months preceding the date that Tenant
shall request consent; or

 

(10)         in the case of a subletting of less
than the entire Premises, if the subletting would result in the division of the
Premises into more than two subparcels or would require access to be provided
through space leased or held for lease to another tenant or improvements to be
made outside of the Premises.

 

c.                                       Recapture. 
If at any time or from time to time during the term of this Lease Tenant
desires to sublet all or any part of the Premises, Tenant shall give notice to
Landlord setting forth the terms of the proposed subletting and the space so
proposed to be sublet.  Landlord shall
have the option, exercisable by notice given to Tenant within thirty (30) days
after Tenant’s notice is given, to terminate the Lease as to that portion of
the Premises proposed to be sublet, effective as of the date of the proposed
subletting.  Landlord may enter into a
lease with the proposed subtenant.  If
Tenant proposes to assign this Lease, Landlord may, by notice given within
thirty (30) days of Tenant’s notice, elect to terminate this Lease as of the
date of the proposed assignment.  If
Landlord so terminates this Lease, Landlord may, if it elects, enter into a new
lease covering the Premises or a portion thereof with the intended assignee or
subtenant on such terms as Landlord and such person may agree, or enter into a
new lease covering the Premises or a portion thereof with any other person; in
such event, Tenant shall not be entitled to any portion of the profit, if any,
which Landlord may realize on account of such termination and reletting.  Landlord’s exercise of its aforesaid option
shall not be construed to impose any liability upon Landlord with respect to
any real estate brokerage commission(s) or any other costs or expenses
incurred by Tenant in connection with its proposed subletting or
assignment.  If Landlord does not
exercise its options to terminate this Lease or sublet the Premises, Tenant
shall be free to sublet such space to any third party on the same terms set
forth in the notice given to Landlord, subject to obtaining Landlord’s prior
consent as hereinabove provided.

 

As used in
this Section 12, the term “assign” or
“assignment”  shall include, without limitation,
any sale, transfer or other disposition of all or any portion of Tenant’s
estate under this Lease, whether voluntary or involuntary, and whether by
operation of law or otherwise including any of the following:

 

(1)           If Tenant is a corporation or a
limited liability company: (A) any dissolution, merger, consolidation or
other reorganization of Tenant, or (B) a sale of more than 50% of the
value of the assets of Tenant, or (C) if Tenant is a corporation with
fewer than 500 shareholders or a limited 

 

12

 

liability company,
sale or other transfer of a controlling percentage of the capital stock or the
managing members’ interests in Tenant, of (D) the transfer of a majority
beneficial interest in Tenant.  The
phrase “controlling percentage”  means the
ownership of, and the right to vote, stock possessing at least fifty percent
(50%) of the total combined voting power of all classes of Tenant’s stock
issued, outstanding and permitted to vote for the election of directors, or at
least fifty percent (50%) of the voting right of the managing members’
interests;

 

(2)           If Tenant is a trust, the transfer of
more than fifty percent (50%) of the beneficial interest of Tenant, or the
dissolution of the trust;

 

(3)           If Tenant is a partnership or joint
venture, the withdrawal, or the transfer of the interest of any general partner
or joint venturer or the dissolution of the partnership or joint venture; or

 

(4)           If Tenant is composed of
tenants-in-common, the transfer of interest of any co-tenants, or the partition
or dissolution of the co-tenancy.

 

d.             Assignment or Subletting by Sublessee. 
No sublessee shall have a right further to sublet, and any assignment by
a sublessee of its sublease shall be subject to Landlord’s prior consent in the
same manner as if Tenant were entering into a new sublease.

 

e.             Sharing of Assignment Consideration. 
In the case of an assignment, all sums or other economic consideration
received by Tenant as compensation for such assignment shall be paid to
Landlord after first deducting the cost of any real estate commissions incurred
in connection with such assignment.  In
the event such consideration is received by Tenant in installments, the portion
of each installment to be paid to Landlord shall be determined by subtracting
from the installment an amount equal to the total amount of the foregoing
permitted deductions divided by the total number of installments.

 

f.              Sharing of Subletting Consideration. 
In the case of a subletting, all sums or economic consideration received
by Tenant as a result of such subletting shall be paid to Landlord after first
deducting (i) the rental due under this Lease, prorated to reflect only
rental allocable to the sublet portion of the Premises, and (ii) the cost
of any real estate commissions incurred in connection with such subletting,
amortized over the term of the sublease.

 

g.             Effect of Assignment or Subletting. 
Regardless of Landlord’s consent, no subletting or assignment shall
release Tenant of Tenant’s obligations or alter the primary liability of Tenant
to pay the rental and to perform all other obligations to be performed by
Tenant under this Lease.  The acceptance
of rental by Landlord from any other person shall not be deemed to be a waiver
by Landlord of any provision hereof.  Consent
to one assignment or subletting shall not be deemed consent to any subsequent
assignment or subletting.  If there is an
event of default by any assignee of Tenant or any successor of Tenant in the
performance of any of the terms hereof, Landlord may proceed directly against
Tenant without the necessity of exhausting remedies against such assignee or
successor.  Landlord may consent to
subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees of 

 

13

 

Tenant,
without notifying Tenant, or any successor of Tenant, and without obtaining its
or their consent thereto and such action shall not relieve Tenant of liability
under this Lease.

 

h.             Reimbursement of Landlord’s Costs. 
If Tenant shall assign or sublet the Premises or request the consent of
Landlord to any assignment or subletting or if Tenant shall request the consent
of Landlord for any act that Tenant proposes to do, then Tenant shall pay
Landlord’s reasonable attorneys’ fees incurred in connection therewith.

 

i.              No Merger. 
The voluntary or other surrender of this Lease by Tenant, the mutual
cancellation thereof or the termination of this Lease by Landlord as a result
of an event of default by Tenant shall, at the option of Landlord, terminate
all or any existing subtenancies or may, at the option of Landlord, operate as
an assignment to Landlord of any or all of such subtenancies.

 

13.           Default
by Tenant.

 

a.                                       Any of the following events shall
constitute events of default under this Lease:

 

(1)           Tenant’s failure to pay any Base Rent
or other sum payable under this Lease when due;

 

(2)           the bankruptcy or insolvency of
Tenant, any transfer by Tenant in fraud of creditors, assignment by Tenant for
the benefit of creditors, or the commencement of any proceedings of any kind by
or against Tenant under any provision of Title 11 of the United States Code, or
its successor (the “Bankruptcy
Code”)
or under any other insolvency, bankruptcy or
reorganization act unless, in the event any such proceedings are such
proceedings are dismissed within 60 days thereafter; the appointment of a
receiver for a substantial part of the assets of Tenant; or the levy upon this
Lease or any estate of Tenant under this Lease by any attachment or execution;

 

(3)           the abandonment of the Premises; or

 

(4)           Tenant’s failure to perform any of
the other terms, covenants, agreements or conditions contained herein (other
than Tenant’s breach of paragraph 12(a) or Section 17 as to which no
cure period shall apply) and, if the default is curable, the continuation of
such default for a period of thirty (30) days after notice by Landlord or
beyond the time reasonably necessary for cure if the default is of the nature
to require more than thirty (30) days to remedy, but in any event, within sixty
(60) days following Landlord’s notice, provided that if Tenant has defaulted in
the performance of the same obligation more than one time in any twelve-month
period and notice of such default has been given by Landlord in such instance,
no cure period shall thereafter be applicable under this Lease.

 

14

 

b.             Landlord’s Remedies. 
Upon the occurrence of any event of default by Tenant under this Lease,
Landlord may, at its option and without any further notice or demand, in
addition any other rights and remedies given under this Lease or by law, do any
of the following:

 

(1)           Landlord shall have the right, so
long as such event of default continues, to give notice of termination to
Tenant, and on the date specified in such notice this Lease shall terminate.

 

(2)           In the event of any such termination
of this Lease, Landlord may then or at any time thereafter, reenter the
Premises and remove therefrom all persons and property and again repossess and
enjoy the Premises, without prejudice to any other remedies that Landlord may
have by reason of Tenant’s default or of such termination.

 

(3)           In the event of any such termination
of this Lease, and in addition to any other rights and remedies Landlord may
have, Landlord shall have all of the rights and remedies of a landlord provided
by Section 1951.2 of the California Civil Code.  The amount of damages which Landlord may
recover in event of such termination shall include, without limitation, (i) the
worth at the time of award (computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award plus one
percent) of the amount by which the unpaid Base Rent for balance of the term
after the time of award exceeds the amount of rental loss that Tenant proves
could be reasonably avoided, (ii) all legal expenses and other related
costs incurred by Landlord following Tenant’s event of default, (iii) all
costs incurred by Landlord in restoring the Premises to good order and
condition, or in remodeling, renovating or otherwise preparing the Premises for
reletting, and (iv) all costs (including, without limitation, any
brokerage commissions) incurred by Landlord in reletting the Premises.

 

(4)           Landlord shall also have the remedy
described in California Civil Code Section 1951.4 (lessor may continue the
lease in effect after lessee’s breach and abandonment and recover Base Rent and
additional rent as it becomes due, if lessee has right to sublet or assign,
subject only to reasonable limitations).

 

(5)           For the purpose of determining the
unpaid Base Rent in the event of a termination of this Lease, or the Base Rent
due under this Lease in the event of a reletting of the Premises, the monthly
Base Rent reserved in this Lease shall be deemed to be the sum of the Base Rent
due under Section 3 above and the amounts last payable by Tenant pursuant
to Section 4 above and any “free rent” or Base Rent and additional rent
waived or abated by Landlord as an inducement for Tenant to enter into this
Lease.

 

15

 

(6)           Landlord’s acceptance of payment from
Tenant of less than the amount of Base Rent then due shall not constitute a
waiver of any rights of Landlord or Tenant including, without limitation, any
right of Landlord to recover possession of the Premises.

 

(7)           After terminating this Lease,
Landlord may remove any and all personal property located in the Premises and
place such property in a public or private warehouse or elsewhere at the sole
cost and expense of Tenant.

 

c.             Continuation of the Lease in Effect. 
Even though Tenant has breached this Lease and abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant’s right to possession, and Landlord may enforce all its rights and remedies
under this Lease, including the right to recover rental as it becomes due under
this Lease.  Acts of maintenance or
preservation, efforts to relet the Premises, or the appointment of a receiver
upon initiative of Landlord to protect Landlord’s interest under this Lease,
shall not constitute a termination of Tenant’s right to possession.

 

d.             Waiver of Reinstatement. 
Tenant hereby waives all rights under California Code of Civil Procedure
Section 1179 and California Civil Code Section 3275 providing for
relief from forfeiture, and any other right now or hereafter existing to redeem
the Premises or reinstate this Lease after termination pursuant to this Section 13
or by order or judgment of any court or by any legal process.

 

e.             Waiver of Jury Trial. 
Landlord and Tenant shall not seek jury trial and hereby waive trial by
jury and any objection to venue in the county in which the Building is located
and consents to personal jurisdiction of the courts of the state in which the
Building is located in any action, proceeding or counterclaim brought by either
of the parties hereby against the other on any matters not relating to personal
injury or property damage but otherwise arising out of or in any way connected
with this Lease, the relationship of Landlord and Tenant, Tenant’s use or
occupancy of the Premises, or any claim or injury or damage, of the enforcement
of any remedy under any stature, whether any of the foregoing is based upon
this Lease or law.

 

f.              Non-Exclusive Remedies. 
The remedies provided for in this Lease are in addition to any other
remedies available to Landlord at law or in equity, by statute or otherwise.

 

14.           Landlord’s Right to Cure Default.  If Tenant shall fail to pay any sum of
money, other than rental, required to be paid by it under this Lease or shall
fail to perform any other act on its part to be performed under this Lease and
such failure shall continue for thirty (30) days after notice thereof by
Landlord, Landlord may, but shall not be obligated so to do, and without waiving
or releasing Tenant from any obligations of Tenant, make any such payment or
perform any such other act on Tenant’s part to be made or performed as in this
Lease provided. All sums so paid by Landlord and all necessary incidental costs
shall be deemed additional rent under this Lease and shall be payable to
Landlord on demand, and Landlord shall have (in addition to any other right or
remedy of Landlord) the same rights and remedies in the event of the nonpayment
thereof by Tenant as in the case of default by Tenant in the payment of rental.

 

16

 

15.           Default by
Landlord.  Landlord
shall not be in default under this Lease unless Landlord fails to perform
obligations required of Landlord under this Lease within a reasonable time, but
in no event later than thirty (30) days after notice by Tenant to Landlord
specifying wherein Landlord has failed to perform such obligation; provided,
however, that if the nature of Landlord’s obligation is such that more than
thirty (30) days are required for performance, then Landlord shall not be in
default if Landlord commences performance within such 30 day period and
thereafter diligently prosecutes the same to completion.

 

16.           Security Deposit.  On execution of this Lease Tenant shall
deliver to Landlord the sum specified in the Basic Lease Information (the “Deposit”). 
The Deposit shall be held by Landlord as security
for the performance by Tenant of all of the provisions of this Lease.  Following an event of default by Tenant under
this Lease, Landlord may use, apply or retain all or any portion of the Deposit
for the payment of any rent or other charge in default, or the payment of any
other sum to which Landlord may become obligated by Tenant’s default, or to
compensate Landlord for any expense, loss or damage which Landlord may suffer
thereby.  If Landlord so uses or applies
all or any portion of the Deposit, then within ten (10) days after demand
therefor Tenant shall deposit cash with Landlord in an amount sufficient to restore
the Deposit to the full amount thereof, and Tenant’s failure to do so shall be
a material breach of this Lease. 
Landlord shall not be required to keep the Deposit separate from its
general accounts.  If Tenant performs all
of Tenant’s obligations under this Lease, the Deposit, or so much thereof as
has not theretofore been applied by Landlord, shall be returned, without
payment of interest for its use, to Tenant (or, at Landlord’s option, to the
last assignee, if any, of Tenant’s interest under this Lease) at the expiration
of the term hereof, and after Tenant has vacated the Premises.  No trust relationship is created herein
between Landlord and Tenant with respect to the Deposit.  Tenant waives the provisions of California
Civil Code Section 1950.7, and all other present and future laws which
restrict the amount or types of claim that a landlord may make upon a security
deposit or imposes upon a landlord or a successor any obligation with respect
to the handling or return of security deposits.

 

17.          Estoppel
Certificate.

 

a.             Tenant’s
Estoppel Certificate.  Tenant shall
at any time within ten (10) days following request from Landlord execute,
acknowledge and deliver to Landlord a statement certifying (i) that this
Lease is unmodified and in full force and effect (or, if modified, stating the
nature of such modification and certifying that this Lease, as so modified, is
in full force and effect), (ii) the date to which the rent, the Deposit,
and other sums payable under this Lease have been paid, (iii) acknowledging
that there are not, to Tenant’s knowledge, any uncured defaults on the part of
Landlord under this Lease, or specifying such defaults, if any, which are
claimed, and (iv) such other matters as may reasonably be requested by
Landlord. Any such statement may be conclusively relied upon by any prospective
purchaser or encumbrancer of the Building.

 

b.             Reliance
and Failure to Deliver.  Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Building.  Tenant’s
failure to deliver such statement within such time shall be deemed Tenant’s
confirmation that: (i) this Lease is in full force and effect, without
modification except as may be represented by Landlord, (ii) there are no
uncured defaults in Landlord’s performance, and (iii) not more than one
month’s Base Rent has been paid in advance.

 

17

 

c.             Tenant’s
Financial Statements.  Tenant shall
deliver to Landlord within ten (10) days following Landlord’s request,
complete and accurate financial statements of Tenant covering a period ending
not more than 120 days prior to Landlord’s request.  Such statements shall be prepared in
accordance with generally accepted accounting principles, to the extent
applicable to Tenant’s business, consistently applied, and shall be certified
as accurate and complete by an independent certified public accountant.  All such financial statements shall be
received by Landlord in confidence and may only be disclosed by Landlord to its
current and/or prospective lenders and/or purchasers who shall also be
instructed to maintain such information in confidence.

 

18.           Relocation. 
Landlord shall have the right to relocate the Premises to other
space in the Building designated by Landlord, provided that such other space is
of equal or larger size than the Premises and the Base Rent shall be at the
same per square foot rate in effect under this Lease at the time of relocation
with the same increases, if any, for the remainder of the initial Term (the per
square foot rate is determined by dividing the annual amount(s) of Base
Rent then in effect or to be in effect, as set forth in Paragraph 3(a) by
the rentable square footage of the existing Premises). Landlord shall pay all
reasonable out-of-pocket expenses of any such relocation, including the
expenses of moving and reconstruction of all Tenant furnished and Landlord
furnished improvements.  In the event of
such relocation, this Lease shall continue in full force and effect without any
change in the terms or other conditions, but with the new location substituted
for the old location as described in a new Exhibit A under an
amendment of this Lease.

 

19.           Subordination,
Amendment for Lender.

 

a.             Subordination.  This Lease, at Landlord’s option, shall be
subordinate to any ground lease, first mortgage, first deed of trust, or any
other hypothecation for security now or hereafter placed upon the Building and
to any and all advances made on the security thereof and to all renewals,
modifications, consolidations, replacements and extensions thereof.  Notwithstanding such subordination, Tenant’s
right to quiet possession of the Premises shall not be disturbed if Tenant has
not committed any events of default and so long as there shall not be an event
of default of Tenant, unless this Lease is otherwise terminated pursuant to its
terms.  If any mortgagee, deed of trust
beneficiary, trustee or ground lessor shall elect to have this Lease prior to
the lien of its mortgage, deed of trust or ground lease, and shall give notice
thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of
trust, or ground lease, whether this Lease is dated prior to or subsequent to
the date of said mortgage, deed of trust or ground lease or the date of recording
thereof.  If any mortgage or deed of
trust to which this Lease is subordinate is foreclosed or a deed in lieu of
foreclosure is given to the mortgagee or beneficiary, Tenant shall attorn to
the purchaser at the foreclosure sale or to the grantee under the deed in lieu
of foreclosure; if any ground lease to which this Lease is subordinate is
terminated, Tenant shall attorn to the ground lessor.  Promptly following the request of any such
purchaser, grantee, or ground lessor, Tenant shall execute and deliver a new
lease, in the form of this Lease, with such requesting party as the
Landlord.  Within ten (10) days
following Landlord’s request or the request of any such mortgagee, beneficiary
or ground lessor, Tenant shall execute any documents required to effectuate
such subordination or to make this Lease prior to the lien of any mortgage,
deed of trust or ground lease, as the case may be, or to evidence such
attornment.

 

18

 

b.             Landlord
Defaults.  Tenant shall give any
holder of a first mortgage or deed of trust placed upon the Building (“Holder”), in
compliance with the notice provisions of this Lease, a copy of any notice of
default served upon Landlord, provided that prior to such notice Tenant has
been notified in writing (by way of notice of assignment of rents and leases or
otherwise) of the address of such Holder. 
If Landlord shall have failed to cure such default within thirty (30) or
such longer period of time as Landlord shall have the right to cure the default
under the Lease, Holder shall have the right, but not the duty, to cure such
default within an additional thirty (30) day period or if such default cannot
be cured within that time, then such additional time as may be necessary to
cure such default, including the time necessary to foreclose or otherwise
terminate its first mortgage or deed of trust if necessary to effectuate such
cure.

 

c.             Modification
for Lender.  Within ten (10) days
of Landlord’s request therefor, Tenant shall execute and deliver such
amendments of this Lease as shall have been required by Landlord’s lender in
connection with the making of a loan to be secured by the Property, provided
such amendment does not increase the obligations of Tenant under this Lease or
materially and adversely affect Tenant’s leasehold interest.

 

20.           Attorneys’ Fees.  If either party commences an action or
proceeding against the other party arising out of or in connection with this
Lease, or institutes any proceeding in a bankruptcy or similar court which has
jurisdiction over the other party or any or all of its property or assets, the
prevailing party in such action or proceeding and in any appeal in connection
therewith shall be entitled to have and recover from the unsuccessful party
reasonable attorneys’ fees, court costs, expenses and other costs of
investigation and preparation. If such prevailing party recovers a judgment in
any such action, proceeding, or appeal, such attorneys’ fees, court costs and
expenses shall be included in and as a part of such judgment.  In addition to the foregoing, Tenant shall
pay Landlord within thirty (30) days following its demand all fees, expenses
and damages, including, without limitation, attorneys’ fees and paralegal and
other professional fees and expenses, including expert witness or appraisal
fees and expenses, that Landlord incurs in connection with protecting its
interests in any bankruptcy or insolvency proceeding involving Tenant
including, without limitation, any proceeding under the Bankruptcy Code, by exercising
and advocating rights under Section 365 of the Bankruptcy Code; by
proposing a plan of reorganization and objecting to competing plans; and by
filing motions for relief from stay.

 

21.           Notices. 
All notices, consents, demands and other communications from one
party to the other given pursuant to the terms of this Lease shall be in
writing and shall be deemed to have been fully given when deposited in the
United States mail, certified or registered, postage prepaid, or delivered to a
generally recognized overnight courier service, charges prepaid, and addressed
as follows: to Tenant at the address specified in the Basic Lease Information
or to such other place as Tenant may from time to time designate in a notice to
Landlord; to Landlord at the address specified in the Basic Lease Information,
or to such other place and with such other copies as Landlord may from time to
time designate in a notice to Tenant; or, in the case of Tenant, delivered to
Tenant at the Premises. In addition, such communications shall be deemed given
when transmitted to a party by electronic facsimile, with confirmation of
receipt, to the telephone number specified in the Basic Lease Information, as
it may be changed by notice.

 

19

 

22.           General Provisions.

 

a.             Governing
Law.  This Lease shall be governed by
and construed in accordance with the laws of the State of California.

 

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

 

c.             Prior
Agreements.  This Lease contains all
agreements of the parties with respect to any matter mentioned herein and
supersedes any verbal and any prior written understanding, conditions,
representations, agreements or covenants, and may be modified in writing only,
signed by the parties.

 

d.             No
Waiver.  No waiver by Landlord of any
provision hereof shall be deemed a waiver of any other provision or of any
subsequent breach by Tenant of the same or any other provision.  Landlord’s consent to or approval of any act
shall not be deemed to render unnecessary the obtaining of Landlord’s consent
to or approval of any subsequent act by Tenant. 
The acceptance of Base Rent, additional rent or any partial payment
under this Lease by Landlord shall not be a waiver of any preceding breach by
Tenant of any provision hereof, other than the failure of Tenant to pay the
particular base Rent or additional rent accepted, regardless of Landlord’s
knowledge of such preceding breach at the time of acceptance of such payment.

 

e.             Holding
Over.  If Tenant remains in
possession of the Premises or any part thereof after the expiration of the
term, such occupancy shall be a tenancy from month to month at a rental in the
amount of two hundred percent (200%) of the last month’s Base Rent and Tenant’s
monthly obligation regarding Operating Expenses and Property Taxes during the
term plus all other charges payable under this Lease, and upon all of the other
terms of this Lease.  Tenant shall also
defend and indemnify Landlord from all loss, liabilities, damages and costs,
including consequential damages and attorneys’ fees, incurred by Landlord and
resulting from Tenant’s failure to surrender possession of the Premises to
Landlord when and as required under this Lease. 
The provisions of this Section shall survive the expiration or
earlier termination of this Lease.

 

f.              Successors
and Assigns.  Subject to the
provisions of this Lease restricting assignment or subletting by Tenant, this
Lease shall bind the parties, their personal representatives, successors and
assigns.

 

g.             Landlord’s
Entry.  Landlord and Landlord’s
agents shall have the right to enter the Premises at reasonable times for the
purpose of inspecting the same, showing the same to prospective purchasers or
lenders, and making such alterations, repairs, improvements or additions to the
Premises or to the Building as Landlord may deem necessary or desirable.  Landlord may at any time during the last one
hundred twenty (120) days of the term place on or about the Premises any
ordinary “For Lease” sign.

 

h.             Authority.  If Tenant is a corporation, limited liability
company or other entity, each individual executing this Lease on behalf of
Tenant represents and warrants that he 

 

20

 

or
she is duly authorized to execute and deliver this Lease on behalf of the
entity and that this Lease is binding upon the entity in accordance with its
terms.

 

i.              Landlord
Liable.  The term “Landlord” as used
in this Lease means the then owner of the Building and in the event of a sale
of the Building the selling owner shall be automatically relieved of all
obligations of Landlord under this Lease, except for acts or omissions of
Landlord theretofore occurring.

 

j.              Brokers.  Tenant warrants that it has had no dealings
with any real estate broker or agent other than the Broker(s) identified
in the Basic Lease Information in connection with the Premises or this
Lease.  Tenant shall indemnify Landlord
and hold it harmless from and against all claims, demands, costs or liabilities
(including, without limitation, attorneys’ fees) asserted by any party other
than such Broker(s) based upon dealings of that party with Tenant in
connection with the Premises or this Lease.

 

k.             Non-Discrimination.  Tenant covenants for itself, its heirs,
executors, personal representatives, administrators, and assigns, and all
persons claiming under or through Tenant, and this Lease is made and accepted
upon it subject to the condition that there shall be no discrimination against
or segregation of any person or group of persons, on account of race, color,
creed, religion, sex, sexual orientation, marital status, national origin, or
ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or
enjoyment of the premises herein leased nor shall the Tenant itself, or any
person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use, or occupancy of tenants, subtenants, or vendees in the
Premises.

 

l.              Confidentiality.  Subject to obligations, if any, under
applicable Laws to disclose information to third parties, the terms of this
Lease and any other confidential or financial nonpublic information that is
disclosed in connection with the negotiation and performance of this Lease
shall be confidential and constitute proprietary information of Landlord and
Tenant.  Neither party, nor its respective
owners, shareholders, partners, officers, directors, employees, agents or
attorneys, shall disclose the terms and conditions of this Lease to any other
person without the prior written consent of the other party hereto, except that
(i) Landlord may disclose the terms hereof to its appraisers, consultants,
insurers, and lenders, and (ii) either party may disclose the terms hereof
to its shareholders, partners, officers, directors, employees, attorneys,
independent accountants, to persons who would receive the party’s financial
statements in the ordinary course of business, to any prospective transferee of
all or any portion of its interests under this Lease, to any lender or
prospective lender of such prospective transferee, to any governmental entity,
agency or person to whom disclosure is required by applicable law or ordered by
a court of competent jurisdiction, and in connection with any action brought to
enforce the terms of this Lease. Any party disclosing any material information
about this Lease shall require the recipient of the information to keep it
confidential.  Any failure to keep the
information confidential as required by this provision may be equitably
enforced by Landlord or Tenant, as the case may be, and any such equitable
remedies shall be the sole remedies available to the aggrieved party.

 

23.           Exhibits. 
The exhibits, if any, specified in the Basic Lease Information are
attached to this Lease and by this reference made a part hereof.

 

21

 

IN WITNESS WHEREOF, the parties have executed this Lease as of the date
first set forth above.

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  	
   

  
	
  BERKELEY HEARTLAB, INC.,

  a California corporation

  	
   

  	
  ALAMEDA REAL ESTATE INVESTMENTS, a 

  California limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Vintage Alameda Investments, LP, 

  
	
  By:

  	
   

  	
   

  	
   

  	
  a California limited partnership,

  
	
   

  	
   

  	
   

  	
  its operating general partner 

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  Vintage Properties-Alameda Commercial 

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
  a California corporation, 

  
	
   

  	
   

  	
   

  	
   

  	
  its managing general partner 

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Joseph R. Seiger 

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
												

 

22

 

EXHIBIT A

 

OUTLINE OF THE PREMISES

 

 

A-1

 

MARINA VILLAGE

 

EXHIBIT B

 

INITIAL IMPROVEMENT OF THE PREMISES

 

THIS EXHIBIT B
is incorporated into that certain MARINA VILLAGE OFFICE LEASE (the “Lease”)  by and
between ALAMEDA REAL ESTATE INVESTMENTS, a California limited partnership (“Landlord”),
and BERKELEY HEARTLAB, INC., a California corporation (“Tenant”).  All of the defined terms as used in
the Lease shall have the same meanings herein.

 

1.             Tenant
Improvements.

 

Landlord, through its general
contractor, shall furnish and install within the Premises substantially in
accordance with the Construction Documents (as defined below) finally approved
by Landlord, partitions, doors, lighting fixtures, acoustical ceilings, window
coverings, electrical outlets, telephone outlets, plumbing, heating,
ventilating and air conditioning, fire sprinklers, including fire/life safety
upgrades (Title 24), restrooms, including ADA upgrades, refurbishing and
installing lab benches and cubicles to be described on Exhibit E,
demolition, build out of lab rooms (R&D and wet lab) and other items of
general construction (the “Tenant
Improvements”).  The
quantities, character and manner of installation of all of the Tenant
Improvements shall be subject to the limitations imposed by any applicable laws
and governmental regulations.

 

2.             Allocation
of Cost.

 

Landlord shall pay up to
$402,620.00 (the “Tenant
Improvement Allowance”)  of the cost of the Tenant
Improvements (based upon $20 per rentable square foot).  Tenant shall bear the cost of all Tenant
Improvements, permits and professional services in excess of the Tenant
Improvement Allowance.  Landlord shall pay
a share of each progress billing from its general contractor (which shall reflect
a retention of 10%) determined by multiplying the amount of such billing by a
fraction, the numerator of which is the Tenant Improvement Allowance, and the
denominator of which is the estimated construction cost of all Tenant
Improvements, including the costs of professional services and permits.  Tenant shall not be responsible either as an
Operating Expense under paragraph 4 of the Lease or as a charge against the
Tenant Improvement Allowance, for any expenses incurred by Landlord relating to
Landlord’s obligations under paragraphs 1 or 2 above.  Tenant shall, however, be responsible for the
cost of any Tenant Improvements that exceed the Tenant Improvement
Allowance.  If the cost of the Tenant
Improvements is less than the Tenant Improvement Allowance, then, at any time
during the first year of the term of the Lease, provided Tenant is not then in
default under the Lease, Landlord shall reimburse Tenant for the cost of any
Tenant’s Work (as defined below) up to an amount equal to the difference between
the Tenant Improvement Allowance and the actual cost of the Tenant Improvements
within fifteen (15) days following Tenant’s request accompanied by appropriate
invoices, proof of payment and lien releases, if any. Landlord’s contractor
shall be required to obtain three (3) bids from its licensed 

 

B-1

 

subcontractors to insure fair
pricing for Tenant Improvements and submit such bids to Tenant for review.

 

3.             Payment
of Tenant’s Cost.

 

Tenant shall pay to Landlord
all amounts due under the terms of this Exhibit within ten (10) days
after billing by Landlord, supported by appropriate documentation of the
amounts requested completion and acceptance. 
Landlord shall not be obligated to continue installation of the Tenant
Improvements if Tenant does not pay its share of the cost of the Tenant
Improvements to Landlord when due.  If
Tenant does not make timely payment to Landlord, Landlord may, but shall not be
obligated to, advance Landlord’s funds to pay Tenant’s share of the cost of the
Tenant’s Improvements and any funds so advanced shall be payable to Landlord
upon demand as additional rent and shall bear interest as provided in the
Lease.

 

4.             Drawings
and Specifications.

 

a.                                       Tenant, through its architects and
engineers or the Landlord’s architect and engineer, Burns & Nettle,
shall furnish drawings and specifications required for the pricing and
construction of the Tenant Improvements (the “Construction 
Documents”).  Such
pricing shall not include any previous costs associated with work performed and
associated with the space plan.

 

b.                                      The Construction Documents shall
describe works of improvement which comply with all applicable laws,
regulations and governmental interpretations thereof.  The Construction Documents shall be subject
to Landlord’s approval, which shall not unreasonably be withheld.

 

c.                                       Upon completion of the Construction
Documents and approval by Landlord, Landlord shall obtain and submit to Tenant
a quotation of the cost of the Tenant Improvements from Landlord’s
contractor.  Tenant shall have the right
to review all pricing information obtained by Landlord.  If the quotation is not greater than one
hundred percent (100%) of the Tenant Improvement Allowance, then the quotation
shall be deemed approved by Tenant after three (3) business days.  If the quotation is greater than one hundred
percent (100%) of the Tenant Improvement Allowance, Tenant shall approve or
disapprove such estimate within the time provided in paragraph 7 below.  If disapproved, within five (5) business
days following disapproval Tenant shall provide Landlord with revisions of the
Construction Documents approved by Landlord and adequate to permit repricing of
the Tenant Improvements.  This process of
revision and repricing shall continue for a maximum of two (2) times at
which time the cost of the Tenant Improvements shall be deemed approved by
Tenant.

 

5.             Changes
to Tenant Improvements.

 

Tenant shall bear the cost of
any changes in the Tenant Improvements which would cause the cost of the Tenant
Improvements to exceed the Tenant Improvement Allowance, together with a fee
for Landlord’s construction administration in an amount not to exceed 

 

B-2

 

fifteen percent (15%) of the
cost of such changes.  In the event
Landlord or its general contractor is instructed to proceed with such changes
without approval of such cost by Tenant, the amount thereof shall be as
determined by Landlord upon completion of the Tenant Improvements, subject only
to Landlord’s furnishing to Tenant appropriate backup information from Landlord’s
general contractor concerning increased costs and construction delays.

 

6.             Tenant’s
Work.

 

a.                                       Any items or work beyond the scope
of the Tenant Improvements for which Tenant contracts separately (hereinafter “Tenant’s Work”),  shall be
subject to Landlord’s and its contractor’s policies and schedules and shall be
conducted in such a way as not to hinder, cause any disharmony with or delay
Landlord’s completion of the Tenant Improvements.  To this end, Tenant’s Work shall conform with
a schedule determined by Landlord’s contractor and no work shall be done by
Tenant which would cause Landlord’s contractor to be dependent upon such work
for completion of Landlord’s contractor’s work. 
Upon Landlord’s request, Tenant shall remove any contractor,
subcontractor or material supplier from the Premises and the Building if the
work or the presence of such person or entity results in labor disputes in or
about the Building or damage to the Premises or the Building.  In no event shall work involving the roof,
sprinkler, plumbing, mechanical, electrical or life safety systems of the
Building be performed by other than Landlord’s approved subcontractors.

 

b.                                      Not less than ten (10) business
days prior to the date Tenant desires to commence Tenant’s Work, it shall give
a written request to Landlord setting forth or accompanied by all of the
following:

 

(1)           A
description and schedule for the work to be performed;

 

(2)           The
names and addresses of all contractors, subcontractors and material suppliers
who will perform Tenant’s Work,

 

(3)           The
approximate number of individuals, itemized by trade, who will be present in
the Premises;

 

(4)           Copies
of all drawings and specifications pertaining to that portion of Tenant’s Work,
and or computer disk using Autocad 12;

 

(5)           Copies
of all licenses and permits which may be required in connection with the
performance of Tenant’s Work;

 

(6)           Certificates
of insurance indicating compliance with the insurance requirements set forth in
the Lease; and

 

(7)           Performance
and labor and materials payments bonds in an amount not less than Landlord’s
reasonable estimate of the total cost of such Tenant’s 

 

B-3

 

Work; and, at
Landlord’s request, evidence of the availability of funds sufficient to pay for
all Tenant’s Work.

 

For those portions of Tenant’s
Work consisting of work station installation and phone and data cabling, Tenant
shall not be required to submit the items described in subparagraphs 6(b)(3), (4) and
(7) above.

 

All of the foregoing shall be
subject to Landlord’s approval, which approval shall not unreasonably be
withheld.

 

c.                                       Tenant shall be responsible for any
hoisting charges incurred in connection with Tenant’s Work and for any expenses
incurred by Landlord due to inadequate cleanup by those performing Tenant’s
Work.

 

d.                                      If, in Landlord’s opinion, any
supplier, contractor or worker performing Tenant’s Work hinders or delays,
directly or indirectly, completion of the Tenant Improvements by Landlord’s
contractor or performs any work which may or does impair the quality, integrity
or performance of any portion of the building, Landlord may give notice to
Tenant and immediately thereafter, Tenant shall cause such supplier, contractor
or worker immediately to remove all of its tools, equipment and materials and
to cease working in the building. As additional rent under the Lease, Tenant
shall reimburse Landlord for any repairs or corrections of the improvements
constituting the Premises or the cost of any delays caused by or resulting from
the actions or omissions of anyone performing Tenant’s Work.

 

7.             Progress
Schedule for Tenant Improvements.

 

Landlord shall use reasonable
efforts to cause its contractor to complete construction of the Tenant
Improvements to accommodate occupancy of the Premises by Tenant on or before
the date for Term Commencement as shown on the Basic Lease Information.  To accomplish this estimated completion date,
Landlord and Tenant shall maintain the following progress schedule, with dates
and times for performance of actions as follows, subject to delays for events
beyond the control of either party:

 

	
  ACTION

  	
   

  	
  DATE OR TIME

  
	
   

  	
   

  	
   

  
	
  a.

  	
  Delivery of complete Construction Documents ready for commencement of
  construction and without errors or omissions by Tenant to Landlord under
  Paragraph 4 above

  	
   

  	
  No later than August 25, 2004

  
	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Approval by Landlord of drawings and specifications after submission
  or resubmission to Landlord by Tenant’s architect

  	
   

  	
  5 business days after submission or resubmission

  

 

B-4

 

	
  c.

  	
  Approval of cost quotation by Tenant after submission or resubmission
  of Tenant

  	
   

  	
  5 business days after submission or resubmission

  

 

8.             Completion
and Rental Commencement Date.

 

Notwithstanding anything to the
contrary contained in the Lease, subject only to the completion of punch list
items, as determined by Landlord’s architect, if Landlord is delayed in
substantially completing the Tenant Improvements as a result of:

 

a.                                       Tenant’s
failure to comply with the schedule set forth in Paragraph 7 above;

 

b.                                      Tenant’s
changes to the Construction Documents approval thereof by Landlord;

 

c.                                       Tenant’s
request for changes in the Tenant Improvements after commencement of
construction;

 

d.                                      Hindrance
or disruption of the Landlord’s contractor resulting from Tenant’s Work or any
other reason under Tenant’s control; or

 

e.                                       Cessation
or termination of the Tenant Improvements due to Tenant’s failure to pay when
due all amounts payable by Tenant pursuant to this Agreement;

 

then the commencement of Base
Rent and shall be advanced by the number of days of such delay.  Unless otherwise noted, all time periods
referred to in this Agreement shall be computed on a calendar basis with no
allowance for holidays or weekends.

 

B-5

 

IN WITNESS WHEREOF, the parties have executed this Exhibit B
on the respective dates they executed the Lease.

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  	
   

  
	
  BERKELEY HEARTLAB, INC.,

  a California corporation

  	
   

  	
  ALAMEDA REAL ESTATE INVESTMENTS, 

  a California limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Vintage Alameda Investments, LP, 

  
	
  By:

  	
   

  	
   

  	
   

  	
  a California limited partnership, 

  
	
   

  	
   

  	
   

  	
   

  	
  its operating general partner

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Vintage Properties-Alameda Commercial, 

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
  a California corporation, 

  
	
   

  	
   

  	
   

  	
   

  	
  its managing general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Joseph R. Seiger

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
										

 

B-6

 

MARINA VILLAGE

 

EXHIBIT C

 

VERIFICATION MEMORANDUM

 

Re: Industrial
Gross Lease dated as of
                            ,
2004 between ALAMEDA REAL ESTATE INVESTMENTS, a California limited partnership (“Landlord”), and BERKELEY HEARTLAB, INC., a
California corporation (“Tenant”),
and for Premises known as 960 Atlantic Avenue, Suite 100, Alameda,
California.  Tenant hereby verifies that
the dates and amounts stated below are correct and further acknowledges and
accepts possession of the Premises.

 

	
  Area:

  	
   

  	
  20,131
  rentable square feet

  
	
   

  	
   

  	
   

  
	
  Commencement
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Expiration
  Date:

  	
   

  	
                                       (excluding
  any options)

  
	
   

  	
   

  	
   

  
	
  Option(s) to
  Extend:

  	
   

  	
  1 option to
  extend

  
	
   

  	
   

  	
   

  
	
  Initial Base
  Rent:

  	
   

  	
  $21,641.00
  per month

  

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  	
   

  
	
  BERKELEY HEARTLAB, INC.,

  	
   

  	
  ALAMEDA REAL ESTATE INVESTMENTS,

  
	
  a California corporation

  	
   

  	
  a California limited partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Vintage Alameda Investments, LP,

  
	
  By:

  	
   

  	
   

  	
   

  	
  a California limited partnership,

  
	
   

  	
   

  	
   

  	
   

  	
  its operating general partner

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  Vintage Properties-Alameda Commercial

  
	
  Title:

  	
   

  	
   

  	
   

  	
   

  	
  a California corporation,

  
	
   

  	
   

  	
   

  	
   

  	
  its managing general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Joseph R. Seiger

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
										

 

C-1

 

EXHIBIT D
 OPERATING EXPENSE EXCLUSIONS

 

Operating Expenses shall include the reasonable and necessary expenses,
which are actually paid by Landlord in connection with the operation,
maintenance and repair of the Building, Premises and Project (collectively, the
“Project”)  as reasonably
determined in accordance with generally accepted accounting principles (“GAAP”), consistently applied,
but specifically excluding the following:

 

	
  i)

  	
  interest, principal, points and fees on,
  and any other costs relating to, any debt instrument encumbering, or any
  other financing relating to, all or any portion of the Project;

  
	
   

  	
   

  
	
  ii)

  	
  [Intentionally deleted];

  
	
   

  	
   

  
	
  iii)

  	
  ground lease rental;

  
	
   

  	
   

  
	
  iv)

  	
  costs for utilities, services and other
  benefits that are provided selectively to other tenants or occupants for
  their benefit and not provided to Tenant;

  
	
   

  	
   

  
	
  v)

  	
  costs, which are paid or reimbursed to
  Landlord by warranties or guarantees, insurers or governmental authorities,
  or which are exclusively provided to and paid by Tenant, other tenants or
  occupants;

  
	
   

  	
   

  
	
  vi)

  	
  leasing, brokers’ and other fees and
  commissions, attorneys’ fees, court costs and other legal expenses, space
  preparation costs, leasing inducements and concessions, and other costs
  incurred in connection with leasing of the Project (including advertising,
  marketing and promotional expenses) or negotiations or disputes with past,
  present, future or prospective tenants or other occupants, or in enforcing
  leases, or in defense of Landlord’s interest in or title to the Project;

  
	
   

  	
   

  
	
  vii)

  	
  management, administrative, coordination,
  supervision or similar fees, or Landlord’s general and administrative and
  overhead expenses, except for a property management fee not to exceed three
  percent (3%) of gross revenues for the Project;

  
	
   

  	
   

  
	
  viii)

  	
  any improvements, alterations or other
  capital expenditures, or depreciation or amortization thereof or of any
  portion of the Project or any improvements or equipment (and the costs of
  leasing HVAC, elevators and other equipment normally considered to be of a
  capital nature) other than capital expenditures required by laws which become
  effective following the date of this Lease, amortized over their useful
  lives, and those intended to reduce other Operating Expenses, but only to the
  extent of such reduction;

  
	
   

  	
   

  
	
  ix)

  	
  tenant improvement costs and other costs
  (including permit, license, inspection and other fees) incurred in renovating
  or otherwise improving, decorating, painting or altering space for Tenant,
  other tenants or occupants or vacant space at the Project;

  
	
   

  	
   

  
	
  x)

  	
  repairs, alterations, additions,
  improvements, or replacements made to rectify or correct any defect in the
  design, materials or workmanship of any portion of the Project, or to 

  

 

D-1

 

	
   

  	
  comply with any laws or governmental
  regulations in effect as of the date of this Lease including ADA and state
  and local disability access requirements;

  
	
   

  	
   

  
	
  xi)

  	
  the cost of repairing damage covered under
  any insurance policy carried by, or required to be carried by, Landlord in
  connection with the Project in excess of the deductibles under such policy;

  
	
   

  	
   

  
	
  xii)

  	
  compensation, benefits and other costs of
  executives and employees above the grade of building manager;

  
	
   

  	
   

  
	
  xiii)

  	
  compensation, benefits and other costs of
  all other personnel to the extent such personnel provide services not solely
  in connection with the operation or maintenance of the Project;

  
	
   

  	
   

  
	
  xiv)

  	
  interest, penalties or other costs arising
  out of Landlord’s failure to make timely payment and performance of its
  obligations;

  
	
   

  	
   

  
	
  xv)

  	
  costs of or other amounts paid to
  subsidiaries or affiliates of Landlord for management or other services for
  the Project or for supplies or other materials to the extent that such costs
  or amounts exceed the competitive cost of similar services, supplies or
  materials available from third parties unrelated to Landlord;

  
	
   

  	
   

  
	
  xvi)

  	
  costs (including expert and consulting fees
  and expenses) incurred to test, monitor, survey, cleanup, contain, abate,
  remove or otherwise remedy Hazardous Substances from the Project;

  
	
   

  	
   

  
	
  xvii)

  	
  rent for space within the Project or other
  locations other than the Project management office and storage space for
  Project maintenance supplies and equipment;

  
	
   

  	
   

  
	
  xviii)

  	
  costs of sculptures, paintings, decorations
  and other objects of art;

  
	
   

  	
   

  
	
  xix)

  	
  costs of any political, charitable, civic
  or other contribution or donation;

  
	
   

  	
   

  
	
  xx)

  	
  costs incurred in connection with any
  portion of the Project which is used for parking and for which parking, valet
  or other fees are charged;

  
	
   

  	
   

  
	
  xxi)

  	
  any duplication of costs between Operating
  Expenses and Taxes;

  
	
   

  	
   

  
	
  xxii)

  	
  any cost or expense that would not be
  considered a normal or reasonable maintenance and operating expense for
  similar projects in the same geographical area.

  

 

D-2

 

EXHIBIT E

LANDLORD’S FF&E

 

[To be completed after delivery of the Premises]

 

E-1

 

EXHIBIT F

 

LETTER OF CREDIT

 

	
  

  	
   Silicon Valley Bank

  

 

IRREVOCABLE
STANDBY LETTER OF CREDIT NO. SVBSF002989

 

DATED:
AUGUST 19, 2004

 

BENEFICIARY:

ALAMEDA REAL
ESTATE INVESTMENTS

1150 MARINA
VILLAGE PARKWAY, SUITE 100 

ALAMEDA,
CALIFORNIA 94501

 

ATTENTION: ALICE
CHAN

 

AS “LANDLORD”

 

APPLICANT:

BERKELEY
HEARTLAB, INC. 

839 MITTEN
ROAD, SUITE 100 

BURLINGAME,
CALIFORNIA 94010

 

AS “TENANT”

 

	
  AMOUNT:

  	
   

  	
  US$81,000.00
  (EIGHTY-ONE THOUSAND AND NO/100 U.S. DOLLARS)

  
	
   

  	
   

  	
   

  
	
  EXPIRATION
  DATE:

  	
   

  	
  NOVEMBER
  1, 2005

  
	
   

  	
   

  	
   

  
	
  LOCATION:

  	
   

  	
  SANTA
  CLARA, CALIFORNIA

  

 

LADIES AND
GENTLEMEN:

 

WE HEREBY
ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF002989 IN YOUR
FAVOR. THIS LETTER OF CREDIT IS AVAILABLE BY SIGHT PAYMENT WITH OURSELVES ONLY
AGAINST PRESENTATION AT THIS OFFICE OF THE FOLLOWING DOCUMENTS:

 

1.                                      THE ORIGINAL OF THIS LETTER
OF CREDIT AND ALL AMENDMENT (S), IF ANY.

 

2.                                      YOUR SIGHT DRAFT DRAWN ON US
IN THE FORM ATTACHED HERETO AS EXHIBIT “A”.

 

3.                                      A DATED CERTIFICATION PURPORTEDLY
SIGNED BY AN AUTHORIZED OFFICER OR REPRESENTATIVE OF THE BENEFICIARY, FOLLOWED
BY HIS/HER PRINTED NAME AND DESIGNATED TITLE, STATING EITHER OF THE FOLLOWING:

 

(A.)                            “AN EVENT OF DEFAULT (AS
DEFINED IN THE LEASE) HAS OCCURRED BY BERKELEY HEARTLAB, INC. AS TENANT UNDER
THAT CERTAIN MARINA VILLAGE INDUSTRIAL GROSS LEASE BY AND BETWEEN TENANT AND
BENEFICIARY, AS LANDLORD.” 

 

                 OR

 

(B.)                            “WITHIN THIRTY (30) DAYS
PRIOR TO THE EXPIRY DATE OF SILICON VALLEY BANK, IRREVOCABLE STANDBY LETTER OF
CREDIT NO. SVBSF002989 BENEFICIARY HAS NOT RECEIVED AN EXTENSION AT LEAST FOR
ONE YEAR TO THE LETTER OF CREDIT OR A REPLACEMENT LETTER OF CREDIT SATISFACTORY
TO THE BENEFICIARY.”

 

F-1

 

	
  

  	
   Silicon Valley Bank

  

 

IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF002989

 

DATED: AUGUST 19, 2004

 

THE LEASE AGREEMENT MENTIONED ABOVE IS FOR
IDENTIFICATION PURPOSES ONLY AND IS NOT INTENDED THAT SAID LEASE AGREEMENT BE
INCORPORATED HEREIN OR FORM PART OF THIS LETTER OF CREDIT.

 

PARTIAL DRAWINGS ARE ALLOWED.

 

THIS LETTER OF CREDIT MUST ACCOMPANY ANY
DRAWINGS HEREUNDER FOR ENDORSEMENT OF THE DRAWING AMOUNT AND WILL BE RETURNED
TO THE BENEFICIARY UNLESS IT IS FULLY UTILIZED.

 

THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY
EXTENDED FOR AN ADDITIONAL PERIOD OF ONE YEAR, WITHOUT AMENDMENT, FROM THE
PRESENT OR EACH FUTURE EXPIRATION DATE UNLESS AT LEAST THIRTY (30) DAYS PRIOR
TO THE THEN CURRENT EXPIRATION DATE WE NOTIFY YOU BY REGISTERED MAIL/OVERNIGHT
COURIER SERVICE AT THE ABOVE ADDRESS THAT THIS LETTER OF CREDIT WILL NOT BE
EXTENDED BEYOND THE CURRENT EXPIRATION DATE.  BUT IN ANY EVENT THIS
LETTER OF CREDIT WILL NOT BE EXTENDED BEYOND NOVEMBER 1, 2011, WHICH SHALL BE
THE FINAL EXPIRATION DATE OF THIS LETTER OF CREDIT.

 

THE DATE THIS LETTER OF CREDIT EXPIRES IN
ACCORDANCE WITH THE ABOVE PROVISION IS THE “FINAL EXPIRATION DATE”. UPON THE
OCCURRENCE OF THE FINAL EXPIRATION DATE THIS LETTER OF CREDIT SHALL FULLY AND
FINALLY EXPIRE AND NO PRESENTATIONS MADE UNDER THIS LETTER OF CREDIT AFTER SUCH
DATE WILL BE HONORED.

 

THIS LETTER OF CREDIT IS TRANSFERABLE ONE OR
MORE TIMES, BUT IN EACH INSTANCE ONLY TO A SINGLE BENEFICIARY AS TRANSFEREE AND
ONLY IN THE FULL AMOUNT AVAILABLE TO BE DRAWN UNDER THE LETTER
OF CREDIT AT THE TIME OF SAID TRANSFER. ANY SUCH TRANSFER SHALL BE EFFECTED
ONLY UPON PRESENTATION TO US AT BANK’S OFFICE AS SPECIFIED IN THIS LETTER OF
CREDIT OF A DULY EXECUTED INSTRUMENT SUBSTANTIALLY IN THE FORM OF EXHIBIT “B”
ATTACHED HERETO TOGETHER WITH THE ORIGINAL LETTER OF CREDIT INCLUDING ANY
AMENDMENTS, IF ANY., TOGETHER WITH THE PAYMENT OF OUR TRANSFER FEE OF 1/4. OF
1% OF THE TRANSFER AMOUNT (MINIMUM USD250.00). ANY TRANSFER OF THIS LETTER OF
CREDIT MAY NOT CHANGE THE PLACE OR DATE OF EXPIRATION OF THE LETTER OF
CREDIT FROM OUR ABOVE SPECIFIED OFFICE. EACH TRANSFER SHALL BE EVIDENCED BY OUR
ENDORSEMENT ON THE REVERSE OF THE LETTER OF CREDIT AND WE SHALL
FORWARD THE ORIGINAL OF THE LETTER OF CREDIT SO ENDORSED TO THE TRANSFEREE.

 

DRAFT(S) AND DOCUMENTS MUST INDICATE THE
NUMBER AND DATE OF THIS LETTER OF CREDIT.

 

DOCUMENTS MUST BE DELIVERED TO US DURING
REGULAR BUSINESS HOURS ON A BUSINESS DAY OR FORWARDED TO US BY OVERNIGHT
DELIVERY SERVICE TO: SILICON VALLEY BANK, 3003 TASMAN DRIVE, 2nd°FLOOR,
MAIL SORT HF210, SANTA CLARA, CALIFORNIA 95054, ATTENTION:
INTERNATIONAL DIVISION - STANDBY LETTER OF CREDIT NEGOTIATION DEPARTMENT (THE “BANK’S
OFFICE”).

 

F-2

 

	
  

  	
   Silicon Valley Bank

  

 

IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSF002989

 

DATED: AUGUST 19, 2004

 

AS USED HEREIN, THE TERM “BUSINESS DAY” MEANS
A DAY ON WHICH WE ARE OPEN AT OUR ABOVE ADDRESS IN SANTA CLARA, CALIFORNIA TO
CONDUCT OUR LETTER OF CREDIT BUSINESS. NOTWITHSTANDING ANY PROVISION TO THE
CONTRARY IN THE UCP (AS HEREINAFTER DEFINED), IF THE EXPIRATION DATE OR THE
FINAL EXPIRATION DATE IS NOT A BUSINESS DAY THEN SUCH DATE SHALL BE
AUTOMATICALLY EXTENDED TO THE NEXT SUCCEEDING DATE WHICH IS A BUSINESS DAY.

 

WE HEREBY ENGAGE WITH YOU THAT DRAFT(S) DRAWN
AND/OR DOCUMENTS PRESENTED UNDER AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS
OF THIS LETTER OF CREDIT SHALL BE DULY HONORED UPON PRESENTATION TO SILICON
VALLEY BANK, IF PRESENTED ON OR BEFORE THE EXPIRATION DATE OF THIS CREDIT.

 

EXCEPT AS OTHERWISE STATED HEREIN, THIS LETTER
OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES (“ISP98”),
INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 590 AND, AS TO MATTERS NOT
GOVERNED BY THE ISP98, SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA AND APPLICABLE U.S. FEDERAL LAW.

 

 

	
  SILICON VALLEY BANK,

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Alice E. Deluz

  	
   

  	
  /s/ John M. Dossantos

  
	
  AUTHORIZED SIGNATURE

  	
   

  	
  AUTHORIZED SIGNATURE

  
	
   

  	
   

  	
   

  
	
  Alice E. Deluz

  	
   

  	
  John M. Dossantos

  

 

F-3

 

EXHIBIT “ A “

 

	
  DATE:

  	
   

  	
  REF. NO.

  
	
   

  	
   

  	
   

  
	
  AT
  SIGHT OF THIS DRAFT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PAY TO THE
  ORDER OF

  	
   

  	
             US$

  
	
   

  	
   

  	
   

  
	
  USDOLLARS

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  DRAWN
  UNDER SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA, STANDBY LETTER OF CREDIT
  NUMBER NO.
                                   DATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  To:

  	
  SILICON
  VALLEY 

  	
   

  	
   

  
	
   

  	
  BANK 3003 TASMAN DRIVE 

  	
   

  	
   

  
	
   

  	
  SANTA
  CLARA, CA 95054

  	
   

  	
  (BENEFICIARY’S NAME)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Authorized Signature

  

 

GUIDELINES TO PREPARE THE DRAFT

 

1.              DATE: ISSUANCE DATE OF DRAFT.

2.              REF. NO.: BENEFICIARY’S
REFERENCE NUMBER, IF ANY.

3.              PAY TO THE ORDER OF: NAME OF
BENEFICIARY AS INDICATED IN THE L/C (MAKE SURE BENEFICIARY ENDORSES IT ON THE
REVERSE SIDE).

4.              US$: AMOUNT OF DRAWING IN  FIGURES.

5.              USDOLLARS: AMOUNT OF DRAWING
IN WORDS.

6               LETTER OP CREDIT NUMBER: SILICON
VALLEY BANK’S STANDBY L/C NUMBER THAT PERTAINS TO THE DRAWING.

7               DATED: ISSUANCE DATE OF THE STANDBY L./C.

8.              BENEFICIARY’S NAME: NAME OF
BENEFICIARY AS INDICATED IN THE L/C.

9.              AUTHORIZED SIGNATURE: SIGNED
BY AN AUTHORIZED SIGNER OF BENEFICIARY.

 

IF YOU NEED
FURTHER ASSISTANCE IN COMPLETING THIS DRAFT. PLEASE CALL OUR L/C PAYMENT SECTION AND
ASK FOR:

 

ALICE DA LUZ
408-654-7120 

EFRAIN TUVILLA: 408-654-6349

 

F-4

 

EXHIBIT “B”

 

DATE:

 

	
  TO:

  	
   

  	
  SILICON VALLEY BANK

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3003 TASMAN DRIVE

  	
   

  	
  RE:

  	
   

  	
  STANDBY LETTER OF CREDIT

  
	
   

  	
   

  	
  SANTA CLARA, CA 95054

  	
   

  	
   

  	
   

  	
  NO.    ISSUED BY

  
	
   

  	
   

  	
  AITN: INTERNATIONAL
  DIVISION.

  	
   

  	
   

  	
   

  	
  SILICON VALLEY BANK, SANTA
  CLARA

  
	
   

  	
   

  	
     STANDBY LETTERS OF CREDIT

  	
   

  	
   

  	
   

  	
  L/C AMOUNT:

  

 

GENTLEMEN:

 

FOR VALUE RECEIVED, THE UNDERSIGNED
BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:

 

(NAME OF TRANSFEREE)

(ADDRESS)

 

 

ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO
DRAW UNDER THE ABOVE LETTER OF CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE
AS OF THE DATE OF THIS TRANSFER.

 

BY THIS TRANSFER, ALL RIGHTS OF THE
UNDERSIGNED BENEFICIARY IN SUCH LETTER OF CREDIT ARE TRANSFERRED TO THE
TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS AS BENEFICIARY THEREOF,
INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS, WHETHER INCREASES OR  EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR HEREAFTER MADE.
ALL AMENDMENTS ARE TO BE ADVISED DIRECT TO THE TRANSFEREE WITHOUT NECESSITY OF ANY  CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.

 

THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED  HEREWITH, AND WE ASK YOU
TO ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE
TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.

 

	
  SINCERELY.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (BENEFICIARY’S NAME)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNATURE
  OF BENEFICIARY

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  SIGNATURE
  AUTHENTICATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (NAME OF BANK)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

AUTHORIZED SIGNATURE** By affixing
his/her signature, he or she is certifying that the Bank on whose behalf he or
she is signing is regulated either by the FED, the OCC, or the FDIC, and that
the Bank has implemented AML (Anti-Money Laundering) procedures in accordance
with the Bank Secrecy Act, and that the Transferor named above has been
approved under his/her Bank’s own CIP (Customer Information Program).  VERIFICATION OF TRANSFEROR’S SIGNATURE(S) BY
A NOTARY PUBLIC IS UNACCEPTABLE.

 

F-5

 

MARINA VILLAGE

 

ADDENDUM

TO

INDUSTRIAL GROSS LEASE

 

THIS ADDENDUM
TO MARINA VILLAGE INDUSTRIAL GROSS LEASE shall constitute part of that certain
Marina Village Lease by and between ALAMEDA REAL ESTATE INVESTMENTS, a
California limited partnership (“Landlord”), and BERKELEY HEARTLAB,
INC., a California corporation (“Tenant”), and the terms hereof
shall for all purposes be considered part of the Lease and supersede any
provisions of the Lease to the contrary.

 

1.                                       Amendment of Paragraph 2.  Paragraph 2 of the Lease is hereby amended to
read as follows:

 

“Subject to the substantial
completion of the Tenant Improvements (defined below), the term of this Lease
shall commence and, unless sooner terminated as hereinafter provided, shall end
on the dates respectively specified in the Basic Lease Information.  Subject to all of the terms of this Lease,
except the provisions relating to the payment of Base Rent, Tenant may access
the Premises twenty one (21) days prior to the commencement of the term to
install Tenant’s fixtures, furniture and equipment.  If Landlord, for any reason whatsoever,
cannot deliver possession of the Premises to Tenant on the date of Term
Commencement, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, provided, that if
Landlord is unable to deliver possession of the Premises to Tenant within
(ninety) 90 days of term commencement for reasons solely under Landlord’s
control, Tenant may, but shall not be obligated to, terminate this Lease.  In the event Landlord cannot deliver
possession of the Premises to Tenant on the date of term commencement, subject
to any contrary provisions in any agreement with Landlord covering initial
improvement of the Premises, the obligation to pay Base Rent shall be waived
for the period between the date of Tem’ Commencement and the time when Landlord
can deliver possession.  The date of Term
Expiration shall be extended by the number of days of delay in delivery of
possession and any additional period required so that it will expire on the
last day of a calendar month, and the dates of Term Commencement and Term
Expiration dates shall be confirmed in a Verification Memorandum in the form of
Exhibit C attached hereto executed by Landlord and Tenant promptly
following delivery of possession.”

 

 

2.                                      Amendment
of Paragraph 3.

 

a.                             Paragraph 3(b) of the Lease is
hereby deleted in its entirety and the following language is substituted in its
place:

 

“Intentionally omitted.”

 

ADD-1

 

b.                                      Paragraph 3(d) of the Lease is
hereby amended by adding the following text at the end of the paragraph:

 

“Notwithstanding the foregoing,
for Tenant’s first failure in any twelve (12) month period during the term of
this Lease to pay when due any amount payable to Landlord herein, such late
charge shall not accrue until the fifth day after the date Landlord gives
notice to Tenant of such overdue amount.”

 

c.                                       Paragraph 3(f) of the Lease is
hereby amended to read as follows:

 

“f. Payment.  All payments due from Tenant to Landlord
under this Lease shall be made to Landlord without deduction or offset in
lawful money of the United States of America at the address for payment set
forth in the Basic Lease Information, or to such other person or at such other
place as Landlord may from time to time designate by notice to Tenant.”

 

3.                                      Amendment
of Paragraph 4.

 

a.                                       Paragraph 4(a) of the Lease is
hereby amended to read as follows:

 

“a. Obligation.  For each calendar year during the term of
this Lease after the year specified in the Basic Lease Information as the Base
Year, Tenant shall pay Tenant’s Percentage Share, as specified in the Basic
Lease Information, of the increase in Property Taxes over Base Property Taxes
and its percentage share of the increase in Operating Expenses for such
calendar year over Base Operating Expenses (as defined below).  The foregoing notwithstanding, the annual
increase in Operating Expenses which are to be paid by Tenant (excluding
increases in insurance and utility charges or costs not controlled by Landlord)
over the Base Operating Expenses, shall not exceed the lesser of (i) Tenant’s
Percentage Share of actual Operating Expense increases or (ii) the Base
Operating Expenses as increased by four percent (4%) per year.  Increases in Operating Expenses which result
from increases in insurance and utility charges or costs not controlled by
Landlord, shall be Tenant’s obligation to pay with no limitation; provided,
however, when calculating increases in Operating Expense, Landlord shall not
include in Operating Expenses the cost of earthquake or terrorism insurance if
such cost is not included in Base Operating Expenses.  The annual increase cap in Operating Expenses
described above shall be cumulative and compounded from year to year.”

 

b.                                      Paragraph 4(b) of the Lease is
hereby amended to read as follows:

 

“b. Definitions.  For the purposes hereof, “Property Taxes”
shall mean all real property taxes and assessments or governmentally imposed
fees or charges (and any tax, assessment or fee levied wholly or partly in lieu
thereof) levied, assessed, confirmed, imposed or which have become a lien
against the Building (which for the purposes of defining “Property Taxes” 

 

ADD-2

 

shall include the land
underlying the Building) excluding, however, any income, or estate and gift
taxes.  If the Building is not separately
assessed for tax purposes, then the Property Taxes to be paid by Tenant shall
be Tenant’s percentage share of the product obtained by multiplying the total
of the real property taxes and assessments levied against the tax parcel of
which the Building is a part by a fraction, the numerator of which is the
rentable area of the Building and the denominator of which is total rentable
area of all improvements located within the tax parcel of which the Building is
a part. “Operating Expenses”  shall mean
all expenses and costs of every kind and nature which Landlord shall pay or
become obligated to pay because of or in connection with the ownership and
operation of the Building and the Project as allocated to the Building,
including, without limitation: (i) all license, permit, and inspection
fees; (ii) premiums for insurance; (iii) wages, salaries and related
expenses and benefits of all on-site and off-site employees engaged in
operation, maintenance and security; (iv) all supplies, materials, and
equipment rental; (v) all maintenance, repair, replacement, janitorial,
security, and service costs; (vi) management fees or a management cost
recovery equal to a market rate management fee; (vii) management office
rent or rental equivalent; (viii) professional services fees; (ix) costs
incurred which are intended to decrease other Operating Expenses; (x) capital
improvements, amortized over such improvement’s useful life (together with
interest thereon at the rate paid by Landlord or which would have been paid if
Landlord had borrowed such funds), to the extent such capital improvements are
made in connection with Landlord’s compliance with any changes in the Legal
Requirements (as defined below) or to otherwise reduce Operating Expenses; (xi)
all charges for heat, water, gas, electricity and other utilities used or
consumed in the Building and surrounding areas; and (xii) all other operating,
management, and other expenses incurred by Landlord in connection with the
ownership and operation of the Building including expenses in the nature of
other Operating Expenses which are payable with respect to the Building under
any reciprocal easement or common area maintenance agreements or declaration or
by any owners’ associations affecting the Building. Landlord shall not collect
in excess of 100% of all of Landlord’s Operating Expenses and Landlord shall
not recover, through Operating Expenses, any item of cost more than once.  Operating Expenses shall not include the cost
of repairs or restoration occasioned by a casualty to the extent covered by
insurance proceeds made available to Landlord, taxes on Landlord’s income from
all sources, expenses incurred in leasing to or procuring of tenants, leasing
commissions, legal fees related to other tenants’ leases, advertising expenses,
expenses for the renovating of space for new tenants, debt service payments by
Landlord except as allowed above, nor any depreciation allowance or expense. In
addition to the foregoing, Operating Expenses shall not include costs
associated with the items listed in Exhibit D attached hereto.  Landlord may determine some items of

 

ADD-3

 

Operating Expenses and Property
Taxes on a cash basis and other items on an accrual basis so long as such
determination is consistently applied to the same item during all accounting
periods.  “Base Property Taxes”  shall mean
those Property Taxes payable during the fiscal year ending in June of the
Base Year, and “Base Operating Expenses”  shall mean
Operating Expenses incurred by Landlord during the Base Year.  Operating Expenses for both the Base Year and
each subsequent calendar year shall be adjusted to equal Landlord’s reasonable
estimate of Operating Expenses had the total rentable area of the Building been
100% occupied.”

 

c.                                       The following paragraph is hereby
added to the end of Paragraph 4 of the Lease as Paragraph 4(d):

 

“d. Tenant shall be entitled to
audit Landlord’s records relating to Operating Expenses for a given year in the
manner and subject to the terms and conditions set forth below by notice given
within one (1) calendar year following Landlord’s delivery of the
statement described in Paragraph 4(c) above.  Any audit shall be conducted in accordance
with generally accepted rules of auditing practice, not more frequently
than once per year, at the regular accounting office of Landlord in Alameda,
California.  Tenant shall give Landlord
not less than sixty (60) days’ prior notice of any audit, and Landlord may
defer the audit for up to thirty (30) days while Landlord is closing its books,
is preparing financial statements or tax returns, or for other reasons is
anticipating unusual demands on its accounting office and personnel.  Subject to the terms of this Paragraph,
Landlord shall make available for inspection all Landlord’s records that are
necessary for the auditor to perform the audit. 
Any such audit shall cover only the calendar year most recently
concluded prior to the date that Tenant gives notice of the audit unless such
audit reveals costs associated with an increase that is a result of an item
that occurred in a previous year other than the current calendar year in
question.  Upon completion of the audit,
if Tenant claims Tenant’s Percentage Share of Property Taxes and Operating
Expenses is less than that charged by Landlord, Tenant shall forward to
Landlord a copy of the audit report and all accompanying data and workpapers
available to Tenant relating thereto.”

 

Any audit by Tenant shall be
made upon and subject to the following terms and conditions:

 

(1)                      The audit shall be performed by a
firm or individual having no previously existing business relationship with Tenant
(although such firm or individual shall not be disqualified hereunder if the
firm or individual has conducted prior audits for Tenant in connection with
this Lease) and experienced in auditing real property operating expense
records, unless such firm is a reputable national accounting firm with
experience in accounting and auditing and subject to Landlord’s consent, and in
no event shall 

 

ADD-4

 

the auditor or any other person directly or
indirectly involved in the audit (collectively with the auditor, an “Auditor-Related Person”)  be
compensated pursuant to a commission or other arrangement pursuant to which the
nature or extent of fees or other compensation is dependent upon the results of
the audit;

 

(2)                      In no event shall any
Auditor-Related Person solicit or otherwise communicate to any other tenant or
occupant of the Building in any manner which discloses that Tenant has a right
to audit the records of Landlord, or that Tenant or the Auditor-Related Person
is planning to or has audited Landlord’s records;

 

(3)                      Tenant and its auditor shall not be
entitled to review Landlord’s financial statements or tax returns or any
leases, operating agreements, reciprocal easement agreements or other
agreements with tenants or occupants of the Building that are not otherwise a
matter of public record;

 

(4)                      Tenant and each Auditor-Related
Person shall keep confidential the existence and nature of the audit provisions
of this Lease and shall not disclose that any audit hereunder is to be or has
been conducted or the results thereof, except to its professional advisors in
connection with a sale or financing; to the extent that disclosure in
confidence to its accountants is necessary in connection with the performance
of an audit; as may be required by law after giving Landlord notice and an
opportunity to evaluate the disclosure and challenges the same if desired; or
in connection with Tenant’s pursuit of its rights and remedies in connection
with this Lease; and

 

(5)                      At Landlord’s request, prior to
commencement of the audit, Tenant and each Auditor-Related Person shall sign
and deliver to Landlord written assurances of compliance with the matters set
forth in clauses (1) through (4) above, inclusive.

 

If Tenant establishes that
Landlord’s computation of Tenant’s Percentage Share of Operating Expenses and
Property Taxes for the previous year exceeds the actual amount of Tenant’s
Percentage Share of Operating Expenses and Property Taxes for such year by more
than five percent (5%) of such actual amount, then Landlord shall reimburse
Tenant for Tenant’s reasonable expenses incurred in connection with such
audit.  Within thirty (30) business days
following delivery to Landlord of the written report of such audit, Landlord
shall, at Tenant’s election, either credit the Base Rent next due or refund to
Tenant all overpaid amounts, with interest, together with reimbursement of
Tenant’s reasonable out-of-pocket expenses, as appropriate.”

 

ADD-5

 

4.                                      Amendment
of Paragraph 6.

 

a.                                       Paragraph 6(a) of the Lease is
hereby amended to read as follows:

 

“a. Restrictions.  The Premises shall be used and occupied by
Tenant for the use set forth in the Basic Lease Information and for no other
purpose.  Tenant shall not use or permit
the use of the Premises in any manner that exceeds an occupying density of
eight (8) persons per 1,000 square feet of useable area or a demand for
parking in excess of 3.4 automobiles per 1,000 square feet of useable area.  Tenant shall, at Tenant’s expense, comply
promptly with all applicable statutes, ordinances, rules, regulations, orders
and requirements in effect during the term regulating the use by Tenant of the
Premises.  Tenant shall not use or permit
the use of the Premises in any manner that will tend to create waste or a
nuisance, or which disturbs other tenants of the Building, nor shall Tenant,
its employees, agents or invitees damage the Premises, the Building or any
portion of the Project, nor place or maintain any signs on or visible from the
exterior of the Premises, or use any corridors, sidewalks or other areas
outside of the Premises for storage or any purpose other than access to the
Premises.  Tenant shall not conduct any
auction at the Premises.  Notwithstanding
any other provision of this Lease, Tenant shall not use, keep or permit to be
used or kept on the Premises any foul or noxious gas or substance, nor shall
Tenant do or permit to be done anything in and about the Premises, either in
connection with activities under this Lease expressly permitted or otherwise,
which would cause an increase in premiums payable under, or a cancellation of,
any policy of insurance maintained by Landlord in connection with the Building
or the Project or which would violate the terms of any covenants, conditions or
restrictions affecting the Building or the land on which it is located.”

 

b.                                      Paragraph 6(b) of the Lease is
hereby amended as follows:

 

“b. Hazardous Materials.  Tenant shall strictly comply with all
statutes, laws, ordinances, rules, regulations, and precautions now or
hereafter mandated or advised by any federal, state, local or other
governmental agency with respect to the use, generation, storage, or disposal
of hazardous, toxic, or radioactive materials (collectively, “Hazardous Materials”). 
As herein used, Hazardous Materials shall include,
but not be limited to, those materials identified in Sections 66680 through
66685 of Title 22 of the California Code of Regulations, Division 4, Chapter
30, as amended from time to time, and those substances defined as “hazardous
substances,” “hazardous materials,” “hazardous wastes,” “chemicals known to
cause cancer or reproductive toxicity,” “radioactive materials,” or other
similar designations in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. Section 9601 et seq., the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.,
the Hazardous Materials Transportation Act,

 

ADD-6

 

49 U.S.C. Section 1801 et
seq., 33 U.S.C. Section 1251 et seq., 42 U.S.C. Section 300(f) et
seq., 42 U.S.C. 7401 et seq., California Health and Safety Code Section 25249.5
et seq., California Water Code Section 13000 et seq., California Health
and Safety Code Section 39000 et seq. and any other governmental statutes,
ordinances, rules, regulations, and precautions adopted pursuant to the
preceding laws or other similar laws, regulations and guidelines now or
hereafter in effect. Tenant shall not cause, or allow anyone else under Tenant’s
control to cause, any Hazardous Materials to be used, generated, stored, or
disposed of on or about the Premises or the Building other than reasonable
quantities of office and cleaning supplies in their retail containers.  Tenant shall defend (with counsel approved by
Landlord), indemnify and hold Landlord, its members and its and their officers,
directors, employees and agents, any entity having a security interest in the
Premises or the Building, and its and their employees and agents (collectively,
“Indemnitees”)  harmless from
and against all liabilities, claims, costs, damages, and depreciation of
property value, including all foreseeable and unforeseeable consequential
damages, directly or indirectly arising out of the use, generation, storage, or
disposal of Hazardous Materials by Tenant, or any person claiming under Tenant,
including, without limitation, the cost of any required or necessary
investigation, monitoring, 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, as
well as penalties, fines and claims for contribution to the full extent that
such action is attributable, directly or indirectly, to the use, generation,
storage, or disposal of Hazardous Materials by Tenant or any person claiming
under Tenant. Neither the consent by Landlord to the use, generation, storage,
or disposal of Hazardous Materials nor the strict compliance by Tenant with all
statutes, laws, ordinances, rules, regulations, and precautions pertaining to
Hazardous Materials shall excuse Tenant from Tenant’s obligation of
indemnification set forth above.  Tenant’s
obligations under this Section 6 shall survive the expiration or earlier
termination of this Lease.”

 

5.                                      Amendment
of Paragraph 7.

 

a.                            Paragraph 7(a) of the Lease is
hereby amended to add the following language after the second sentence:

 

“In addition to the foregoing,
Landlord shall cause the Premises to be separately metered for gas and
electricity, with its own roof-mounted HVAC package units servicing the
Premises.”

 

b.                           Paragraph 7(b) of the Lease is
hereby amended as follows:

 

“b. No Landlord Liability.  Landlord shall not be in default under this
Lease or be liable to Tenant or those claiming through it for any damages

 

ADD-7

 

direct, consequential or
otherwise, resulting nor shall there be any abatement of amounts payable by
Tenant under this Lease, by reason of any interruption or curtailment
whatsoever in utility services. 
Notwithstanding the foregoing, if there is an interruption in utility
service for longer than five (5) continuous days that is (a) caused by
Landlord, (b) specific to the Building, (c) causes the Premises to be
untenantable, and (d) is not caused by an act of God or similar causes
beyond Landlord’s reasonable control, then Tenant will be entitled to an
abatement of Basic Rent for the period of such untenantability.”

 

6.                                      Amendment
of Paragraph 8.

 

a.                                       Paragraph 8(a) of the Lease is
hereby amended as follows:

 

“a. Landlord’s
Obligation/Tenant’s Waiver.  Subject
to the provisions of Section 10 below, and except for damages caused by
Tenant, its agents or invitees, Landlord shall keep in good condition and
repair the foundations and exterior walls and roof of the Building and all
common areas within the Building not leased to tenants.  Landlord shall keep all Building systems in
good working order for the first one hundred eighty (180) days of the term of
the Lease.  Tenant expressly waives the
benefits of any statute now or hereafter in effect which would otherwise afford
Tenant the right to terminate this Lease because of Landlord’s failure to keep
the Premises or the Building in good order, condition and repair.”

 

b.                                      Paragraph 8(b) of the Lease is
hereby amended as follows:

 

“b. Tenant’s Obligations.  Tenant shall, at Tenant’s expense, maintain
the interior portion of the Premises including, but not limited to, all
plumbing and electrical fixtures and outlets, all computer and
telecommunications wiring and outlets, and any interior glass in good condition
and repair.  If Tenant falls to do so
Landlord may, but shall not be required to, enter the Premises and put them in
good condition, and Landlord’s costs thereof as set forth in Landlord’s demand
to Tenant shall automatically become due and payable as additional rent.  Tenant shall reimburse Landlord within thirty
(30) days following its demand for all costs incurred by Landlord, plus an
administrative fee of ten percent (10%) of such costs, in making alterations to
the structural, mechanical, electrical, plumbing or life safety systems of the
Building and to the common areas of the Building which may be required under
applicable law as a result of Tenant’s particular use of the Premises or
alterations made within the Premises by Tenant or by Landlord at the request of
Tenant. At the expiration or earlier termination of the term Tenant shall
deliver up possession of the Premises in good condition and repair, only
ordinary wear and tear excepted, and with only such improvements and
alterations as shall have been made with Landlord’s consent which have not been
required to be removed by Landlord upon the granting of such consent.  In all events, unless Landlord 

 

ADD-8

 

otherwise elects, upon the
expiration or earlier termination of this Lease, Tenant shall cause all
telecommunications devices installed by Tenant to be removed, wherever located
in the Building.  Tenant shall not be
required to remove telecommunications wiring and cabling installed by Tenant
wherever located in the Building upon the expiration or earlier termination of
this Lease unless Landlord, in its sole discretion, elects to remove from the
Premises telecommunications wiring and cabling installed by the previous
tenant.”

 

c.                                       The following paragraph is hereby
added to the end of Paragraph 8 of the Lease as Paragraph 8(d):

 

“d. Prior to Term Commencement,
Landlord shall place all Building systems (including, but not limited to, fire
and life safety) in good working order, and in compliance with all applicable
laws (including environmental laws and Title 24 of the Americans with
Disabilities Act), regulations, rules and orders (collectively “Legal Requirements”).  Tenant shall only be responsible for (i) the
cost of complying with the Legal Requirements related to Tenant’s particular
use of the Premises or alterations made within the Premises by Tenant or by
Landlord at the request of Tenant, and (ii) the cost of increases in
Operating Expenses incurred by Landlord in maintaining the Building and common
area in compliance with the Legal Requirements. 
Notwithstanding anything herein to the contrary, Tenant shall have no
obligation to pay any amount of the costs incurred by Landlord (x) for
alterations or improvements required as a result of other tenants’ particular
use of the Building or Project, or (y) subject to the provisions of
Paragraph 4(b) of this Lease relating to capital improvements or
alterations which reduce Operating Expenses, for capital improvements or
alterations performed on the Building or Project.”

 

7.                                      Amendment
of Paragraph 9.

 

a.                                       Paragraph 9(a) of the Lease is
hereby amended as follows:

 

“a. Tenant’s Insurance.  Tenant shall obtain and maintain during the
term of this Lease commercial general liability insurance with a combined
single limit for personal injury and property damage in an amount not less than
$2,000,000 each occurrence and $5,000,000 general aggregate, and employer’s
liability and workers’ compensation insurance as required by law.  Tenant’s commercial general liability
insurance policy shall (i) include coverage for premises and operations
liability, products and completed operations liability, broad form property
damage, blanket contractual liability; (ii) provide that the insurer has
the duty to defend all insureds, and (iii) provide that defense costs do
not deplete policy limits.  Such
insurance shall also be endorsed to provide that (1) it may not be
canceled or altered in such a manner as adversely to affect the coverage

 

ADD-9

 

afforded thereby without thirty
(30) days’ prior written notice to Landlord, (2) Landlord and other
entities designated by Landlord are named as additional insureds, (3) the
insurer acknowledges acceptance of the mutual waiver of claims by Landlord and
Tenant pursuant to paragraph (b) below, and (4) such insurance is
primary with respect to Landlord and that any other insurance maintained by
Landlord is excess and noncontributing with such insurance. If, in the opinion
of Landlord’s insurance adviser, based on an increase in recovered liability
claims generally or in amounts of insurance which tenants in similar premises
are then being required to maintain, the specified amounts of coverage are no
longer adequate, within thirty (30) days following Landlord’s request, such
coverage shall be appropriately increased. 
Tenant shall also obtain and maintain insurance (“Personal Property Insurance”)  covering
leasehold improvements paid for by Tenant and Tenant’s personal property and
fixtures from time to time in, on, or at the Premises, in an amount not less
than one hundred percent (100%) of the full replacement cost, without deduction
for depreciation, providing protection against events protected under “All Risk
Coverage,” as well as against sprinkler damage, vandalism, and malicious
mischief.  Any proceeds from the Personal
Property Insurance shall be used for the repair or replacement of the property
damaged or destroyed, unless this Lease is terminated under an applicable
provision herein.  If the Premises are
not repaired or restored following damage or destruction in accordance with
other provisions of this Lease, Tenant shall assign or pay to Landlord and
Landlord shall receive any proceeds from the Personal Property Insurance
allocable to Tenant’s leasehold improvements. 
Tenant shall obtain and maintain business interruption insurance in an
amount not less than the greater of $2,000,000 or an amount adequate to provide
for payment of Base Rent and other amounts due Landlord under this Lease during
a one year interruption of Tenant’s business by fire or other casualty.  Prior to the commencement of the term, Tenant
shall deliver to Landlord copies of such policies or, at Landlord’s option,
certificates thereof with endorsements, and at least thirty (30) days prior to
the expiration of such policy or any renewal thereof, Tenant shall deliver to
Landlord replacement or renewal binders, followed by copies of such policies
or, at Landlord’s option, certificates within a reasonable time
thereafter.  If Tenant fails to obtain
such insurance or to furnish Landlord any such duplicate policies or
certificates as herein required, Landlord may, at its election, upon notice to
Tenant but without any obligation so to do, procure and maintain such coverage
and Tenant shall reimburse Landlord on demand as additional rent for any
premium so paid by Landlord.  Tenant shall
have the right to provide all insurance coverage required herein to be provided
by Tenant pursuant to blanket policies so long as such coverage is expressly
afforded by such policies for the location which is the Premises.  All insurance shall be written by carriers
which are

 

ADD-10

 

admitted in California and
which have a rating by A.M. Best Insurance Service, or its successor, of
at least “A/VIII” or equivalent.”

 

b.                                      The following language is hereby
added as Paragraph 9(d) of the Lease:

 

“d. Landlord’s Indemnity.  Landlord shall indemnify and hold Tenant and
Tenant’s officers, directors, members, employees, agents and representatives (“Tenant’s Parties”)  harmless from
all claims for damage to any property or injury to or death of any person
arising in or upon those portions of the Building or the Project other than the
Premises, except as to Tenant or any of Tenant’s Parties as is caused by the
negligence or willful misconduct of Tenant or that of Tenant’s Parties.  The foregoing indemnity obligation of
Landlord shall include attorneys’ fees, investigation costs and all other costs
and expenses incurred by Tenant or any of Tenant’s Parties from the first
notice that any claim or demand is to be made or may be made.”

 

8.                                       Amendment of Paragraph 10.  Paragraph 10(a) of the Lease is
hereby amended as follows:

 

“a. Insured Loss.  If during the term the Premises are totally
or partially destroyed, or any other portion of the Building is damaged in such
a way that Tenant’s use of the Premises is materially interfered with, from a
risk which is wholly covered by insurance proceeds made available to Landlord
for such purpose, Landlord shall proceed with reasonable diligence to repair
the damage or destruction and this Lease shall not be terminated; provided,
however, that if in the opinion of Landlord’s architect or contractor the work
of repair cannot be completed within one hundred eighty (180) days following
commencement of such repair, Landlord or Tenant may at its election terminate
this Lease by notice given to the other party within thirty (30) days following
the event or such longer period as may reasonably be necessary to obtain
information from its architect or contractor.”

 

9.                                       Amendment of Paragraph 16.  Paragraph 16 of the Lease is hereby
amended to read as follows:

 

“Security Deposit.  On execution of this Lease,
Tenant shall deliver to Landlord the sum specified in the Basic Lease
Information (the “Deposit”). 
If at any time during the term of this Lease, Tenant’s
unrestricted cash reserves as shown on Tenant’s (a) monthly bank statement
and (b) the balance sheet of Tenant for the period ended not more than
thirty (30) days prior, certified by the chief financial officer or chief
executive officer or president of Tenant as true and correct (collectively, the
“Tenant Financials”)
fall below $350,000.00, then within seven (7) business days after
demand therefor, Tenant shall deliver to Landlord as an increase in the
Deposit, an additional amount of $81,000.00 (the “Additional Deposit”);  provided,
however, if at any time thereafter, Tenant maintains for a consecutive six (6) month
period as shown on the Tenant Financials, minimum unrestricted cash reserves of
at least $390,000.00, Landlord will return to Tenant 

 

ADD-11

 

within seven (7) days
after Tenant’s demand, an amount equal to the Additional Deposit. At such time
as Tenant demonstrates to Landlord’s reasonable satisfaction that during four (4) consecutive
financial quarters Tenant has (i) had positive cash flow, and (ii) has
maintained unrestricted cash reserves of at least $5,000,000.00 (as shown on
the Tenant Financials), Landlord will reduce the Deposit to an amount equal to
$32,000.00.  The Deposit, as increased by
the Additional Deposit, shall be held by Landlord as security for the
performance by Tenant of all of the provisions of this Lease.  Following an event of default by Tenant under
this Lease, Landlord may use, apply or retain all or any portion of the
Deposit, if necessary, for the payment of any rent or other charge in default,
or the payment of any other sum to which Landlord may become obligated by
Tenant’s default, or to compensate Landlord for any expense, loss or damage
which Landlord may suffer thereby as a result of the default.  If Landlord so uses or applies all or any
portion of the Deposit, if necessary, then within ten (10) days after
demand therefor Tenant shall deposit cash with Landlord in an amount sufficient
to restore the Deposit to the full amount thereof, and Tenant’s failure to do
so shall be a material breach of this Lease. 
Landlord shall not be required to keep the Deposit separate from its
general accounts.  If Tenant performs all
of Tenant’s obligations under this Lease, the Deposit, or so much thereof as
has not theretofore been applied by Landlord, shall be returned, without
payment of interest for its use, to Tenant (or, at Landlord’s option, to the
last assignee, if any, of Tenant’s interest under this Lease) at the expiration
of the term hereof, and after Tenant has vacated the Premises.  No trust relationship is created herein
between Landlord and Tenant with respect to the Deposit.  Tenant waives the provisions of California
Civil Code Section 1950.7, and all other present and future laws which
restrict the amount or types of claim that a landlord may make upon a security
deposit or imposes upon a landlord or a successor any obligation with respect
to the handling or return of security deposits.

 

At any time during the term of
this Lease, in lieu of the Deposit, Tenant may deliver to Landlord an
irrevocable stand-by letter of credit in an amount equal to the Deposit, as may
be increased by the Additional Deposit for the account of Tenant and for the
benefit of Landlord and any successor in interest to Landlord, issued by a
National Banking Association member satisfactory to the Landlord, and in the
form attached hereto as Exhibit F, or such other form as may be
reasonably acceptable to Landlord (the “Letter of Credit”).  If
Tenant delivers the Letter of Credit to Landlord at any time after the
execution of this Lease, then promptly following such delivery, Landlord shall
return the cash then held as the Deposit to Tenant.  Following an event of default by Tenant under
this Lease, Landlord may draw down a portion of the amount of the Letter of
Credit, as it may have been amended from time to time as provided in this
Lease, and use, apply or retain all or any such portion of the amount so drawn,
for the payment of any Base Rent or other charge payable by Tenant and then in
default, or the payment of any other sum to which Landlord may become obligated
by Tenant’s event of default, or to compensate Landlord for any loss or damage
which Landlord may suffer as a result of Tenant’s event of default. If Landlord
so draws the Letter of Credit, then within ten (10) days after demand
therefor Tenant shall

 

ADD-12

 

give to Landlord another letter
of credit or cash which is similarly reasonably acceptable to Landlord in an
amount sufficient, when taken together with the amount remaining undrawn under
any other letter of credit given by Tenant to Landlord and the proceeds of any
letter of credit drawn by Landlord and not previously applied as described
above, to be equal to the full amount of the Letter of Credit, and Tenant’s
failure to do so shall be a material breach of this Lease. Landlord shall not
be required to keep any proceeds of any letter of credit provided by Tenant
separate from its general accounts.  If
Tenant performs all of Tenant’s obligations under this Lease, the Letter of
Credit, any replacements thereof or additions thereto, and any proceeds
therefrom (without any interest for the use of such proceeds) not previously
applied as described above, shall be returned to Tenant (or, at Landlord’s
option, to the last assignee, if any, of Tenant’s interest under this Lease) at
the expiration of the teen hereof, and after Tenant has vacated the
Premises.  No trust relationship is created
herein between Landlord and Tenant with respect to the Letter of Credit and any
replacements thereof, additions thereto and proceeds of any of the foregoing.”

 

10.                               Amendment
to Paragraph 12.

 

a.                                  Paragraph 12(a) of the Lease is
hereby amended to read as follows:

 

“a. Tenant
shall have the right at any time to sublease or assign all or any reasonable
subdivision as approved by Landlord of the Premises to any unrelated entities,
subject to Landlord’s prior written consent, which shall not be unreasonably withheld,
conditioned or delayed and shall be received within twenty (20) business days
or such consent shall be deemed approved. 
Notwithstanding anything to the contrary in this Paragraph 12, Tenant
shall have the right at any time without Landlord’s consent to assign this
Lease or sublease the Premises or reasonable subdivisions as approved by
Landlord (collectively “transfer”)
of the Premises to any entity, that is controlled by or which controls or is
under common control of Tenant and which remains so related.  Further notwithstanding anything to the
contrary in this Paragraph 12, Tenant also may transfer without consent the
lease to any successor entity, whether by merger, consolidation or otherwise,
and to any entity that purchases all or substantially all of the Tenant’s
assets as a going concern, provided the net worth of the successor entity is
equal to or greater than Tenant at the date of transfer.  Tenant shall have the right to keep all of
the profit, if any, from any transfer which does not require Landlord’s
consent.  Upon a transfer, Tenant will
provide Landlord with a copy of the transfer agreement for Landlord’s
records.  In connection with each consent
requested by Tenant under this paragraph 12(a), Tenant shall submit to Landlord
the terms of the proposed transaction, the identity of the parties to the
transaction, the proposed documentation for the transaction, current financial
statements of any proposed assignee or sublessee and all other information
reasonably requested by Landlord concerning the proposed transaction and the
parties involved therein.  As a further
condition to any

 

ADD-13

 

consent of Landlord, the
proposed assignee or sublessee shall agree in writing to perform for the benefit
of Landlord all of the Tenant’s obligations under this Lease or, in the case of
subletting, so much thereof as are allocable to any portion of the Premises
proposed to be sublet.”

 

b.             Paragraph 12(b)(8) of the Lease is hereby deleted
in its entirety.

 

c.             Paragraph 12(c) of the Lease is hereby amended to
read as follows:

 

“c. Recapture.  If at any time or from time to time during
the term of this Lease Tenant desires to sublet or assign all of the Premises
and the expiration of the term of such release or assignment falls within the
last twelve (12) months of the Term, Tenant shall give notice to Landlord
setting forth the terms of the proposed subletting and the space so proposed to
be sublet.  Landlord shall have the
option, exercisable by notice given to Tenant within thirty (30) days after
Tenant’s notice is given, to terminate the Lease effective as of the date of
the proposed subletting.  Landlord may
enter into a lease with the proposed subtenant. 
If Tenant proposes to assign this Lease, Landlord may, by notice given
within thirty (30) days of Tenant’s notice, elect to terminate this Lease as of
the date of the proposed assignment.  If
Landlord so terminates this Lease, Landlord may, if it elects, enter into a new
lease covering the Premises or a portion thereof with the intended assignee or
subtenant on such terms as Landlord and such person may agree, or enter into a
new lease covering the Premises or a portion thereof with any other person; in
such event, Tenant shall not be entitled to any portion of the profit, if any,
which Landlord may realize on account of such termination and reletting.  Landlord’s exercise of its aforesaid option
shall not be construed to impose any liability upon Landlord with respect to
any real estate brokerage commission(s) or any other costs or expenses
incurred by Tenant in connection with its proposed subletting or
assignment.  If Landlord does not
exercise its options to terminate this Lease or sublet the Premises, Tenant
shall be free to sublet such space to any third party on the same terms set
forth in the notice given to Landlord, subject to obtaining Landlord’s prior
consent as hereinabove provided.”

 

d.             Paragraph 12(f) of the Lease is hereby amended to
read as follows:

 

“f. In the case of an
assignment, fifty percent (50%) all sums or other economic consideration
received by Tenant as compensation for such assignment shall be paid to
Landlord after first deducting the cost of any real estate commissions and
reasonable assignment costs incurred in connection with such assignment.  In the event such consideration is received
by Tenant in installments, the portion of each installment to be paid to
Landlord shall be determined by subtracting from the installment an amount
equal to the total amount of the foregoing permitted deductions divided by the
total number of installments.”

 

ADD-14

 

e.                                       Paragraph 12(e) of the Lease is
hereby amended to read as follows:

 

“e. In the case of a
subletting, fifty percent (50%) of all sums or economic consideration received
by Tenant as a result of such subletting shall be paid to Landlord after first
deducting (i) the rental due hereunder, prorated to reflect only rental
allocable to the sublet portion of the Premises, and (ii) the cost of any
real estate commissions and reasonable subletting costs incurred in connection
with such subletting, amortized over the term of the sublease.”

 

11.                                 Amendment of Paragraph 17.  Paragraph
17(c) of the Lease is hereby amended to read as follows:

 

“c. Tenant’s Financial
Statements.  No more than once during
any 12-month period, Tenant shall deliver to Landlord within ten (10) days
following Landlord’s request, Tenant’s most recent complete and accurate (i) unaudited
financial statements covering a period ending not more than 90 days prior to
Landlord’s request and (ii) audited financial statements covering the year
period ending on December 31 of the year immediately prior to Landlord’s
request.  Such statements shall be
prepared in accordance with generally accepted accounting principles, to the
extent applicable to Tenant’s business, consistently applied.  The audited financial statements shall be
certified as accurate and complete by an independent certified public
accountant.  All such financial
statements shall be received by Landlord in confidence and may only be
disclosed by Landlord to its current and/or prospective lenders and/or
purchasers who shall also be instructed to maintain such information in
confidence.”

 

12.                                 Amendment of Paragraph 18.  Paragraph
18 of the Lease is hereby deleted in its entirety and the following language is
substituted in its place:

 

“Intentionally omitted.”

 

13.                               Amendment
of Paragraph 19.

 

a.                                  The last sentence of Paragraph 19(a) of
the Lease is hereby amended as follows:

 

“Within twenty (20) days
following Landlord’s request or the request of any such mortgagee, beneficiary
or ground lessor, Tenant shall execute any documents required to effectuate
such subordination or to make this Lease prior to the lien of any mortgage,
deed of trust or ground lease, as the case may be, or to evidence such
attornment.”

 

b.                            Paragraph 19(c) of the Lease is
hereby amended as follows:

 

“Within twenty (20) days of
Landlord’s request therefore, Tenant shall execute and deliver such amendments
of this Lease as shall have been required by Landlord’s lender in connection
with the making of a loan to

 

ADD-15

 

be secured by the Property,
provided such amendment does not increase the obligations of Tenant under this
Lease or materially and adversely affect Tenant’s leasehold interest.”

 

c.                               The following paragraph is hereby
added as Paragraph 19(d) of the Lease:

 

“d. Non-Disturbance
Agreement.  Upon Tenant’s written
request therefor, Landlord shall make commercially reasonable efforts to obtain
from any Holder a non-disturbance agreement acknowledging Tenant’s right to quiet
possession of the Premises (as described in Paragraph 19(a) of this Lease)
in Holder’s standard form.”

 

14.                               Amendment
of Paragraph 22.

 

a.                                Paragraph 22(e) of the Lease is
hereby amended as follows:

 

“e. Holding Over.  If Tenant remains in possession of the
Premises or any part thereof after the expiration of the term, such occupancy
shall be a tenancy from month to month at a rental in the amount of one hundred
fifty percent (150%) of the last month’s Base Rent and Tenant’s monthly
obligation regarding Operating Expenses and Property Taxes during the term plus
all other charges payable under this Lease, and upon all of the other terms of
this Lease.  Tenant shall also defend and
indemnify Landlord from all loss, liabilities, damages and costs, including
consequential damages and attorneys’ fees, incurred by Landlord and resulting
from Tenant’s failure to surrender possession of the Premises to Landlord when
and as required under this Lease.  The
provisions of this Section shall survive the expiration or earlier
termination of this Lease.”

 

b.                               Paragraph 22(j) is hereby
amended to read as follows:

 

“j.  Brokers.  Each of Landlord and Tenant warrants to the
other that it has had no dealings with any real estate broker or agent other
than the Broker(s) identified in the Basic Lease Information in connection
with the Premises or this Lease.  Each of
Landlord and Tenant shall indemnify the other party and hold the other party
harmless from and against all claims, demands, costs or liabilities (including,
without limitation, attorneys’ fees) asserted by any third party other than
such Broker(s) based upon dealings of that third party with Landlord or
Tenant, as applicable, in connection with the Premises or this Lease.”

 

ADD-16

 

15.                                 Improvement Loan.  Subject to any amounts
reimbursed to Tenant by Landlord in accordance with paragraph 2 of Exhibit B
to this Lease, in the event the cost of Tenant’s Work (as defined in Exhibit B
to the Lease) exceeds the Tenant Improvement Allowance (as defined in Exhibit B),
Tenant shall either pay such additional cost to Landlord upon its demand as set
forth in Exhibit B or, at Tenant’s request, Landlord shall advance
such excess cost for Tenant’s account as a loan, in a total amount not to
exceed $100,655.00 (based on $5.00 per rentable square foot of the Premises)
(the “Additional Tenant Improvement
Allowance”), in accordance with the terms and
conditions of this paragraph.

 

a.                                       Landlord shall not be obligated to
advance the Additional Tenant Improvement Allowance for so long as any material
default of Tenant remains uncured.

 

b.                                      The Additional Tenant Improvement
Allowance shall constitute a loan from Landlord to Tenant and shall bear
interest at ten percent (10%) per annum on the unpaid principal balance
thereof, from the date of disbursement by Landlord until repayment by
Tenant.  Tenant shall repay the
Additional Tenant Improvement Allowance to Landlord or its order in accordance
with the following provisions:

 

(1)                       Principal and interest (except as
provided in subparagraph (2) below) shall be paid in equal monthly
installments in an amount that will fully amortize the Additional Tenant
Improvement Allowance over the initial term of the Lease, as additional rent;
provided that the Additional Tenant Improvement Allowance and interest accrued
thereon, shall not be included in Base Rent for purposes of the calculation of
holdover rent pursuant to Paragraph 22(e) except to the extent that any
portion of the Additional Tenant Improvement Allowance and interest accrued
thereon remains unpaid at the end of the initial term. The first such monthly
installment shall be due and payable on the first (1st) day of the
second (2nd) full calendar month following advancement of the
Additional Tenant Improvement Allowance and subsequent installments shall be
due and payable on the first (1st) day of each and every successive
calendar month thereafter until the Additional Tenant Improvement Allowance and
all interest accrued thereon is paid in full. 
All payments shall be credited first to interest then due and the
balance to principal.

 

(2)                        Tenant shall have the right to
prepay the principal of the Additional Tenant Improvement Allowance in whole or
in part at anytime without penalty or interest, and each such prepayment shall
be applied to the most recently due installments.

 

ADD-17

 

16.                               Right
of First Offer.

 

a.                                       Tenant shall have a right of first
offer, to expand the Premises by adding the adjacent premises as shown on Exhibit A
to the Lease (the “Expansion  Space”).  At any time during the term of this
Lease, upon Landlord’s receipt of a bona fide offer and before entering into
any lease negotiation for the Expansion Space for a term that overlaps the term
of this Lease, in whole or in part, Landlord shall provide Tenant with seven (7) business
days’ prior notice (“First Offer
Notice”)
of Landlord’s intention to enter into lease negotiations
and Tenant shall have the option, exercisable by notice to Landlord given prior
to the expiration of such seven (7) day period to cause the Expansion
Space to be added to the Premises.

 

b.                                      Within five (5) days following
Tenant’s notice as described above, Landlord and Tenant shall enter into an
amendment of this Lease adding the Expansion Space to the Premises, effective
on the earlier of the commencement date set forth in the First Offer Notice or
sixty (60) days following the date of Landlord’s First Offer Notice.  If the right of first offer is exercised
prior to October 1, 2005, such amendment shall provide that the Base Rent
and Tenant’s percentage share of increases in Operating Expenses and Property
Taxes shall be increased in direct proportion to the increase in the rentable
area of the Premises resulting from adding the Expansion Space, and Landlord
shall provide a tenant improvement allowance in an amount equal to the product
of the rentable area of the Expansion Space multiplied by the number of months
in the term of this Lease remaining after Tenant takes possession of the
Expansion Space multiplied by $0.238. If the right of first offer is exercised
after October 1, 2005, the amendment adding the Expansion Premises to the
Lease shall provide that the Base Rent shall be increased by the amount of the
then fair market rental of the Expansion Space, Tenant’s percentage share of
increases in Operating Expenses and Property Taxes shall be increased in direct
proportion to the increase in the rentable area of the Premises resulting from
adding the Expansion Space and there shall be an additional tenant improvement
allowance, if any, which is commensurate with the determination of fair market
rent for the Expansion Space. If Landlord and Tenant are unable to agree upon
the fair market rental value of the Expansion Space, the same shall be
determined in accordance with Paragraph 10(d) of this Addendum.”

 

c.                                       If Tenant does not elect to lease
the Expansion Space, Landlord shall be free to lease it to others without
further reference to Tenant.

 

ADD-18

 

17.           Option to Extend.  Tenant shall have one (1) option to
extend the term of this Lease for a three (3) year period (“Option Period”),  with the
Option Period commencing on the day after the last day of the initial term of
this Lease and subject to the following terms and conditions:

 

a.             At the time the option is exercised, this Lease shall
be in full force and effect, Tenant shall not be in default hereunder
(following the expiration of all cure periods), and Tenant shall not have sublet
the Premises, unless in a transaction for which Landlord’s consent is not
required or as to a shared use sublet of a portion of the Premises; and

 

b.             The option must be exercised by notice given to
Landlord not earlier than twelve (12) months and not later than nine (9) months
prior to the expiration of the term of this Lease (“Exercise Period”); and

 

c.            In
the event the option is timely and effectively exercised, the term shall be
extended for a period of three (3) years, upon all of the terms and conditions
of the Lease; provided, however, that the Base Rent shall be the then fair
market rental value of the Premises and provided further that the base year for
calculation of Tenant’s Percentage Share of Operating Expenses and Property
Taxes shall be amended to a base year consistent with the fair market rental
value of the Premises, but in no event shall the amount payable by Tenant as
Base Rent and Tenant’s Percentage Share of Operating Expenses and Property
taxes be less than the sum of the average Base Rent for the term of this Lease
and Tenant’s Percentage Share of Operating Expenses and Property Taxes in
effect immediately prior to the Option Period, and there shall be no further
options to extend. Fair market rental value may include periodic increases.

 

d.             Determination of the fair market rent during the
Option Period shall be as follows: For the purposes hereof, the fair market
rent of the Premises shall be product of (1) the annual amount per square
foot that a willing, comparable tenant would pay and a willing, comparable
landlord of a comparable building in the immediate area would accept at “arm’s
length,” giving appropriate consideration to the credit of the Tenant, free
rent and other tenant inducements then being offered for comparable space,
length of lease term, size and location of premises being leased, tenant
improvement allowances, if any, and other generally applicable terms and
conditions of tenancy for comparable space, and (2) the rentable area of
the Premises. At Tenant’s request, within thirty (30) days of commencement of
the Exercise Period, Landlord shall provide Tenant with the proposed fair
market rent for the Premises.  Tenant may
dispute Landlord’s determination of fair market rent by notice given to
Landlord within fifteen (15) days after Landlord’s determination is given to
Tenant, and the parties shall then negotiate in good faith to resolve the
dispute.  If such dispute is not resolved
by negotiation between the parties within thirty (30) days following Tenant’s
notice of its dispute of Landlord’s

 

ADD-19

 

determination, then fair market rent shall be
determined by baseball-type arbitration before a single arbitrator in
accordance with the commercial arbitration rules of the American
Arbitration Association then in effect.

 

(1)                                  If Tenant does not timely dispute
Landlord’s determination, then Landlord’s determination shall be deemed the
fair market rent during the Option Period. 
If fair market rent has not been determined prior to the commencement of
the Option Period, Tenant shall pay Base Rent when due based upon Landlord’s
determination of fair market rent, subject to retroactive adjustment between
the parties if the determination by appraisal is different from Landlord’s determination.

 

(2)                                  When fair market rent is to be
determined by arbitration, within ten (10) days after the expiration of
the thirty (30) day negotiation period, Landlord and Tenant shall agree upon a
mutually acceptable arbitrator to determine the fair market rent of the
Premises.  Should Landlord and Tenant be
unable to agree upon an arbitrator, then either Landlord or Tenant may submit
to the American Arbitration Association (“AAA”)
for appointment of the arbitrator pursuant to its applicable rules then in
effect.  This Paragraph 10(d) is an
agreement to arbitrate.  The arbitrator
selected pursuant to the AAA process shall be a real estate appraiser with at
least ten years of experience in appraising commercial real property in Alameda
County.  Within thirty (30) days after
the appointment, each party shall submit to the arbitrator its proposed fair
market rental for the Premises for the Option Period, together with supporting
documentation thereof and the arbitrator shall, within thirty (30) days of
receipt of the last party’s submittal, select one of the proposed fair market
rental amounts as the Base Rent for the Option Period.  All fees and costs of the arbitrator in
connection with the determination of fair market rent shall be paid by the
party whose proposal is rejected by the arbitrator.

 

e.                                       Prior to the commencement of the
Option Period, or as soon thereafter as the Base Rent is established, Tenant
and Landlord shall execute an amendment to this Lease extending the term and
setting forth the Base Rent during the Option Period.

 

ADD-20

 

18.                                 Furniture. 
As of the delivery of possession of the Premises to
Tenant, the parties anticipate that there will be located therein certain
furniture, fixtures and equipment owned by Landlord, including a minimum of
twenty (20) cubicles and cubicle-related office furniture currently located in
the Premises, and Tenant shall also relocate and refurbish the lab benches from
850 Marina Village Parkway (all of such items are, collectively, “Landlord’s FF&E”).  Tenant
shall accept the use of Landlord’s FF&E in its “as-is” condition, subject
to wear and tear and any damage caused by Landlord’s relocation of such
FF&E. Landlord shall reassemble the cubicles for Tenant in accordance with
the construction documents.  Each item of
Landlord’s FF&E shall be listed on Exhibit E, to be completed
and attached hereto by Landlord following delivery of possession of the
Premises.  Tenant shall maintain all of
Landlord’s FF&E in good condition and repair and shall promptly repair to
good condition any of such items which are damaged and shall replace any items
which are damaged beyond repair with items for the same purpose and of at least
equivalent replacement cost.  Tenant
shall not remove any of Landlord’s FF&E from the Premises without Landlord’s
prior consent, which consent shall not unreasonably be withheld so long as such
removal is in exchange for items for the same purpose and of at least
equivalent replacement cost.

 

19.                                   Base Rent Credit. 
Provided that there is not an event of default by
Tenant, Landlord shall credit $64,923.00 against the first amounts of Base Rent
otherwise becoming due.  Landlord shall
credit an additional $698.00 per day after November 1, 2004, against the
first amounts of Base Rent otherwise becoming due in the event that Landlord is
unable to deliver possession of the Premises to Tenant on or before November 1,
2004, due solely to reasons under Landlord’s control.

 

20.                                 Signage. 
Tenant shall be allowed, at its expense, to place a building sign at
the entry to the Premises and install a monument sign at the entry to the
Building in a location designated by Landlord in accordance with Marina Village
Signage Criteria and any applicable governmental regulations.

 

21.                                 Parking.  Tenant shall be entitled to the free
non-exclusive use of parking, on a non-designated basis, at the rate of 3.4
spaces per 1,000 rentable square feet of Tenant’s leased Premises throughout
the Term and any option term.

 

ADD-21

 

IN WITNESS
WHEREOF, Landlord and Tenant have executed this Addendum to the Lease as of the
date first set forth above.

 

	
  TENANT:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  BERKELEY HEARTLAB, INC., 

  	
  ALAMEDA REAL ESTATE INVESTMENTS, a 

  
	
  a California corporation

  	
  California limited partnership

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  Vintage Alameda Investments, LP,  
  

  
	
  By: 

  	
   

  	
   

  	
   

  	
  a California limited partnership,

  
	
   

  	
   

  	
  its operating general partner

  
	
  Name: 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
    

  	
  By:

  	
  Vintage Properties-Alameda Commercial,

  
	
  Title:

  	
   

  	
   

  	
   

  	
  a California corporation, 

  
	
   

  	
   

  	
  its managing general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Joseph R. Seiger 

  
	
   

  	
   

  	
  President

  
									

 

ADD-22

 

AMENDMENT
NO. 1

TO

MARINA VILLAGE INDUSTRIAL GROSS LEASE

 

THIS AMENDMENT NO. 1 TO MARINA VILLAGE OFFICE
LEASE is made and entered into as of March 7, 2005, by and between ALAMEDA
REAL ESTATE INVESTMENTS, a California limited partnership (“Landlord”), and BERKELEY HEARTLAB, INC., a California
corporation (“Tenant”).

 

Landlord and Tenant have previously entered
into that certain Marina Village Industrial Gross Lease dated August 20,
2004 (the “Lease”) with respect to certain
premises located in 960 Atlantic Avenue, Suite 100, Alameda,
California.  Landlord and Tenant now
desire to amend the Lease to expand the premises effective March 15, 2005
as hereinafter provided and, accordingly, Landlord and Tenant hereby agree as
follows (unless otherwise defined, all capitalized terms used in this Amendment
shall have the same meanings as set forth in the Lease):

 

1              Amendment of Basic Lease Information.  The following provisions of the Basic Lease
Information are hereby amended to read as follows:

 

	
  Premises:

  	
   

  	
  Effective
  March 15, 2005 (the “Expansion Date”),
  approximately 26,891 rentable square feet (“rsf”)
  located at 960 Atlantic Avenue, consisting of approximately 20,131 square
  feet for the Initial Premises and approximately 6,760 square feet for the
  Expansion Premises as outlined on Exhibit A-1 attached to
  Amendment No. 1.

  
	
   

  	
   

  	
   

  
	
  Base
  Rent:

  	
   

  	
  Previous
  rent schedule remains unchanged except as follows:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  11/1/04
  – 1/31/05

  	
  $21,641.00/month

  
	
   

  	
   

  	
  2/1/05
  – 2/28/05

  	
  $22,817.70/month

  
	
   

  	
   

  	
  3/1/05
  – 3/15/05

  	
  $10,304.77/month

  
	
   

  	
   

  	
  3/15/05
  – 3/31/05

  	
  $16,498.06/month

  
	
   

  	
   

  	
  4/1/05
  – 1/31/06

  	
  $30,631.40/month

  
	
   

  	
   

  	
  2/1/06
  – 1/31/07

  	
  $45,421.40/month

  
	
   

  	
   

  	
  2/1/07
  – 1/31/08

  	
  $46,739.40/month

  
	
   

  	
   

  	
  2/1/08
  – 1/31/09

  	
  $48,083.40/month

  
	
   

  	
   

  	
  2/1/09
  – 1/31/10

  	
  $49,481.40/month

  
	
   

  	
   

  	
  2/1/10
  – 1/31/11

  	
  $50,907.40/month

  
	
   

  	
   

  	
  2/1/11
  – 10/31/11

  	
  $52,305.40/month

  
	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s
  Percentage

  Share:

  	
   

  	
  26,891
  rsf  ̧ 40,003 rsf =
  67.22%, Effective March 15, 2005

  
	
   

  	
   

  	
   

  
	
  Security
  Deposit:

  	
   

  	
  $105,000

  
	
   

  	
   

  	
   

  
	
  Exhibits:

  	
   

  	
  Exhibit A
  to the Lease is deleted and replaced by Exhibit A-1 attached to Amendment
  No. 1.

  

 

1

 

2              Amendment of Paragraph 9 of the Addendum to the Lease.  Paragraph 9 of the Addendum to the Lease is
hereby amended to read as follows:

 

Security
Deposit.  On execution of this Lease, Tenant shall
deliver to Landlord the sum specified in the Basic Lease Information (the “Deposit”).  If at any time during the term of this Lease,
Tenant’s unrestricted cash reserves as shown on Tenant’s (a) monthly bank
statement and (b) the balance sheet of Tenant for the period ended not
more than thirty (30) days prior, certified by the chief financial officer or
chief executive officer or president of Tenant as true and correct
(collectively, the “Tenant
Financials”) fall below $350,000.00, then within seven (7) business
days after demand therefore, Tenant shall deliver to Landlord as an increase in
the Deposit, an additional amount of $105,000 for a total Security Deposit of
$210,000.00 (the “Additional
Deposit”); provided, however, if at any time thereafter, Tenant
maintains for a consecutive six (6) month period as shown on the Tenant
Financials, minimum unrestricted cash reserves of at least $390,000.00,
Landlord will return to Tenant within seven (7) days after Tenant’s
demand, an amount equal to the Additional Deposit.  At such time as Tenant demonstrates to
Landlord’s reasonable satisfaction that during four (4) consecutive
financial quarters Tenant has (i) had positive cash flow, and (ii) has
maintained unrestricted cash reserves of at least $5,000,000.00 (as shown on
the Tenant Financials), Landlord will reduce the Deposit to an amount equal to
$43,000.00.  The Deposit, as increased by
the Additional Deposit, shall be held by Landlord as security for the performance
by Tenant of all of the provisions of this Lease.  Following an event of default by Tenant under
this Lease, Landlord may use, apply or retain all or any portion of the
Deposit, if necessary, for the payment of any rent or other charge in default,
or the payment of any other sum to which Landlord may become obligated by
Tenant’s default, or to compensate Landlord for any expense, loss or damage
which Landlord may suffer thereby as a result of the default.  If Landlord so uses or applies all or any
portion of the Deposit, if necessary, then within ten (10) days after
demand therefor Tenant shall deposit cash with Landlord in an amount sufficient
to restore the Deposit to the full amount thereof, and Tenant’s failure to do
so shall be a material breach of this Lease. 
Landlord shall not be required to keep the Deposit separate from its
general accounts.  If Tenant performs all
of Tenant’s obligations under this Lease, the Deposit, or so much thereof as
has not theretofore been applied by Landlord, shall be returned, without
payment of interest for its use, to Tenant (or, at Landlord’s option, to the
last assignee, if any, of Tenant’s interest under this Lease) at the expiration
of the term hereof, and after Tenant has vacated the Premises.  No trust relationship is created herein
between Landlord and Tenant with respect to the Deposit.  Tenant waives the provisions of California
Civil Code Section 1950.7, and all other present and future laws which
restrict the amount or types of claim that a landlord may make upon a security
deposit or imposes upon a landlord or a successor any obligation with respect
to the handling or return of security deposits. 
Notwithstanding the foregoing, Tenant shall have the right to increase
the current letter of credit by $24,000.00 within fifteen (15) days after the
date of this Amendment.

 

At any time during the term of this Lease, in
lieu of the Deposit, Tenant may deliver to Landlord an irrevocable stand-by
letter of credit in an amount equal to the Deposit, as 

 

2

 

may be increased by the Additional Deposit
for the account of Tenant and for the benefit of Landlord and any successor in
interest to Landlord, issued by a National Banking Association member
satisfactory to the Landlord, and in the form attached hereto as Exhibit F,
or such other form as may be reasonably acceptable to Landlord (the “Letter of Credit”).  If Tenant delivers the Letter of Credit to
Landlord at any time after the execution of this Lease, then promptly following
such delivery, Landlord shall return the cash then held as the Deposit to
Tenant.  Following an event of default by
Tenant under this Lease, Landlord may draw down a portion of the amount of the
Letter of Credit, as it may have been amended from time to time as provided in
this Lease, and use, apply or retain all or any such portion of the amount so
drawn, for the payment of any Base Rent or other charge payable by Tenant and
then in default, or the payment of any other sum to which Landlord may become
obligated by Tenant’s event of default, or to compensate Landlord for any loss
or damage which Landlord may suffer as a result of Tenant’s event of
default.  If Landlord so draws the Letter
of Credit, then within ten (10) days after demand therefor Tenant shall
give to Landlord another letter of credit or cash which is similarly reasonably
acceptable to Landlord in an amount sufficient, when taken together with the
amount remaining undrawn under any other letter of credit given by Tenant to
Landlord and the proceeds of any letter of credit drawn by Landlord and not
previously applied as described above, to be equal to the full amount of the
Letter of Credit, and Tenant’s failure to do so shall be a material breach of
this Lease.  Landlord shall not be
required to keep any proceeds of any letter of credit provided by Tenant
separate from its general accounts.  If
Tenant performs all of Tenant’s obligations under this Lease, the Letter of
Credit, any replacements thereof or additions thereto, and any proceeds
therefrom (without any interest for the use of such proceeds) not previously
applied as described above, shall be returned to Tenant (or, at Landlord’s
option, to the last assignee, if any, of Tenant’s interest under this Lease) at
the expiration of the term hereof, and after Tenant has vacated the
Premises.  No trust relationship is
created herein between Landlord and Tenant with respect to the Letter of Credit
and any replacements thereof, additions thereto and proceeds of any of the
foregoing.”

 

3              Condition of the Premises.  Landlord shall deliver and Tenant shall
accept the Expansion Premises in it “as-is” condition as of the commencement of
the Expansion Date, and within thirty (30) days following the date of this
Amendment, Landlord shall complete the work described in the attached Schedule
1.  Landlord shall have no obligation
to improve or otherwise alter the Premises in connection with this Amendment No. 1.
Landlord and Tenant acknowledge that Tenant desires to effect substantial
improvements to the Expansion Premises to adapt the Expansion Premises for
Tenant’s occupancy.  Tenant shall have
the right to complete alterations to the Expansion Premises pursuant to
paragraph 8 of the Lease.

 

4              Tenant Improvement Allowance.  Landlord shall reimburse Tenant for costs it
incurs to complete alterations and improvements within the Expansion Premises
with the Landlord’s reimbursement not exceeding $127,906.00 (the “Improvement Allowance”). 
Landlord shall reimburse Tenant within 

 

3

 

                                                thirty (30)
days after Tenant’s request, made prior to March 1, 2006, for up to half
the Tenant Improvement Allowance ($63,953), and Tenant shall be allowed to use
such Improvement Allowance towards any costs associated with Tenant’s existing
Premises.  Landlord shall reimburse
Tenant within thirty (30) days after Tenant’s request, made on or before March 1,
2007, for the remaining half of the Tenant Improvement Allowance
($63,953).  Such reimbursement shall
occur provided that: (i) Tenant is not in default under the Lease at the
time the Improvement Allowance is payable, (ii) Tenant’s request is
accompanied by copies of invoices for the work of alterations in the Premises
paid by Tenant to third parties in an amount equal to or in excess of the
amount requested, and (iii) the request is accompanied by evidence, such
as final unconditional waivers and releases of liens, reasonably satisfactory
to Landlord, of the absence of unsatisfied claims relating to the work.

 

5              Right of First Offer.  Tenant’s expansion of the Premises under this
Amendment No. 1 shall be deemed as in full satisfaction of Landlord’s
obligations under paragraph 16 of the Addendum to the Lease and Tenant shall
have no further Right of First Offer.

 

6              Ratification. 
Landlord and Tenant hereby ratify and confirm all of the terms of the
Lease as modified by paragraphs 1 through 5 above.  Except as expressly set forth to the contrary
in this Amendment, the Lease, as amended, remains unmodified and in full force
and effect.  To the extent of any
conflict between the terms of this Amendment and terms of the Lease, the terms
of this Amendment shall control.

 

IN WITNESS WHEREOF, Landlord and Tenant have
executed this Amendment No. 1 as of the date first set forth above.

 

	
  TENANT:

  	
  LANDLORD:

  
	
   

  	
   

  
	
  BERKELEY
  HEARTLAB, INC.,

  a California corporation

  	
  ALAMEDA
  REAL ESTATE INVESTMENTS,

  a California limited partnership

  
	
   

  	
   

  
	
  By:

  	
      
  /s/ 

  	
   

  	
  By:

  	
  Vintage
  Alameda Investments, LP, a

  
	
   

  	
   

  	
   

  	
  California
  limited partnership, its

  
	
  Name:

  	
  Chief
  Financial Officer 

  	
   

  	
   

  	
  operating
  general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  W.
  Andy Ambrose 

  	
   

  	
  By:

  	
  Vintage
  Properties-Alameda

  
	
   

  	
   

  	
   

  	
   

  	
  Commercial,
  a California corporation, its

  
	
  By:

  	
   

  	
   

  	
   

  	
  managing
  general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  By:

  	
      /s/
  

  
	
   

  	
   

  	
   

  	
   

  	
  Joseph
  R. Seiger 

  
	
  Title:

  	
   

  	
   

  	
   

  	
  President

  
							

 

4

 

SCHEDULE
1

 

BASE
BUILDING IMPROVEMENTS

 

The base building
improvements and systems as described below shall be furnished by Landlord at
Landlord’s sole cost and expense and shall be delivered in good condition and
repair and in compliance with all laws (“Base Building Improvements”).

 

1.             The base Building shall be in compliance with applicable
ordinances, codes and governmental regulations in accordance with the
provisions of paragraph 8(c) of the Lease.

 

2.             A separate electricity meter shall be installed for the
Expansion Premises and the Expansion Premises shall be served by a 200 amp
service with the circuit breaker panel located in the janitorial closet.

 

3.             All equipment presently located in the server room
adjacent to the janitorial closet, including wall-mounted distribution boards
and security panels shall be removed.

 

4.             All damaged or missing ceiling tiles shall be replaced.

 

5.             All systems furniture presently stored in the Expansion
Premises shall be removed.

 

5

 

EXHIBIT A-1

 

OUTLINE OF
PREMISES

 

 

A-1

 

MARINA
VILLAGE 

Alameda, California

 

INDUSTRIAL
GROSS LEASE

BASIC LEASE INFORMATION

 

	
  Effective Date:

  	
   

  	
  August 20, 2004

  	
   

  	
  Lease

  Reference

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Landlord:

  	
   

  	
  ALAMEDA
  REAL ESTATE INVESTMENTS, a California limited partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant:

  	
   

  	
  BERKELEY
  HEARTLAB, INC., a California corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Premises
  and Building Address:

  	
   

  	
  960
  Atlantic Avenue, Suite 100  Alameda, CA
  94501

  	
   

  	
  Paragraph
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Approximate
  Area of Premises:

  	
   

  	
  Approximately
  20,131 rentable square feet

  	
   

  	
  Paragraph
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term
  Commencement:

  	
   

  	
  The
  later date of (i) October 1, 2004, or (ii) the date on which
  Landlord delivers possession of the Premises to Tenant, with the Tenant
  Improvements substantially complete

  	
   

  	
  Paragraph
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Term
  Expiration:

  	
   

  	
  The
  last day of the eighty-fourth (84th) month following the Term
  Commencement Date

  	
   

  	
  Paragraph
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Base
  Rent:

  	
   

  	
  Term
  Commencement

  	
   

  	
  Paragraph
  3(a)

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date
  – 12/31/05

  	
  $ 21,642/month

  	
   

  	
   

  
	
   

  	
   

  	
  1/1/06
  – 12/31/06

  	
  $ 32,713/month

  	
   

  	
   

  
	
   

  	
   

  	
  1/1/07
  – 12/31/07

  	
  $ 33,694/month

  	
   

  	
   

  
	
   

  	
   

  	
  1/1/08
  – 12/31/08

  	
  $ 34,705/month

  	
   

  	
   

  
	
   

  	
   

  	
  1/1/09
  – 12/31/09

  	
  $ 35,746/month

  	
   

  	
   

  
	
   

  	
   

  	
  1/1/10
  – 12/31/10

  	
  $ 36,818/month

  	
   

  	
   

  
	
   

  	
   

  	
  1/1/11
  – Term Expiration Date

  	
  $ 37,923/month

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s
  Percentage Share:

  	
   

  	
  20,131
  rsf  ̧ 40,003 rsf =
  50.32%

  	
   

  	
  Paragraph
  4(a)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Base
  Year:

  	
   

  	
  2005

  	
   

  	
  Paragraph
  4(a)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Use:

  	
   

  	
  General
  office, administrative and wet research laboratory

  	
   

  	
  Paragraph
  6(a)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Security
  Deposit:

  	
   

  	
  $81,000.00

  	
   

  	
  Paragraph
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Tenant’s
  Address for Notices:

  	
   

  	
  Berkeley
  Heartlab, Inc.

  839
  Mitten Road

  Burlingame,
  CA 94010

  Attn:
  Chief Financial Officer

  Telecopier
  No. (650) 697-4501

  	
   

  	
  Paragraph
  21

  

 

I

 

	
  Landlord’s
  Address for Notices:

  	
   

  	
  Alameda
  Real Estate Investments

  2479
  East Bayshore Road, Suite 704

  Palo Alto, CA 94303

  Attn: Joseph R. Seiger

  Facsimile
  No. (650) 463-1615

  	
   

  	
  Paragraph
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  With
  a copy to (and address for payment of rent):

  	
   

  	
  Alameda
  Real Estate Investments

  1150
  Marina Village Parkway, Suite 100

  Alameda,
  California 94501

  Facsimile
  No. (510) 523-1638

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Broker(s):

  	
   

  	
  Robert
  Tasker of CM Realty, Inc.

  	
   

  	
  Paragraph
  22(j)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibits &
  Other Attachments:

  	
   

  	
  Exhibit A:
  Outline of Premises

  Exhibit B:
  Initial Improvement of the Premises

  Exhibit C:
  Verification Memorandum

  Exhibit D:
  Operating Expense Exclusions

  Exhibit E:
  Landlord’s FF&E

  Exhibit F:
  Letter of Credit

  Addendum
  to Industrial Gross Lease

  	
   

  	
   

  

 

The provisions of the Lease
identified above in the margin are those provisions where references to
particular Basic Lease Information appear. 
Each such reference shall incorporate the applicable Basic Lease
Information.  In the event of any
conflict between any Basic Lease Information and the Lease, the latter shall
control.

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  
	
  BERKELEY HEARTLAB, INC.,

  a California corporation

  	
   

  	
  ALAMEDA REAL ESTATE
  INVESTMENTS,

  a California limited partnership

  
	
   

  	
   

  	
   

  
	
  By: 

  	
      /s/

  	
   

  	
  By:

  	
     Vintage
  Alameda Investments, LP, 

  
	
   

  	
   

  	
   

  	
   

  	
     a California
  limited partnership,

  
	
  Name:

  	
  Chief Financial Officer

  	
   

  	
   

  	
     its
  operating general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Warren Ambrose

  	
   

  	
  By:

  	
     Vintage
  Properties-Alameda Commercial,

  
	
   

  	
   

  	
   

  	
   

  	
     a
  California corporation,

  
	
   

  	
   

  	
   

  	
   

  	
     its
  managing general partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
      /s/
  

  
	
   

  	
   

  	
   

  	
   

  	
     Joseph
  R. Seiger

  
	
   

  	
   

  	
   

  	
     President

  
							

 

II

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
  Premises

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Term

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Rent

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Base Rent

  	
   

  	
  1

  
	
   

  	
  b.

  	
  CPI Increase

  	
   

  	
  1

  
	
   

  	
  c.

  	
  Additional Rent

  	
   

  	
  2

  
	
   

  	
  d.

  	
  Late Charges

  	
   

  	
  2

  
	
   

  	
  e.

  	
  Default Rate

  	
   

  	
  2

  
	
   

  	
  f.

  	
  Payment

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Taxes and Operating Expenses

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Obligation

  	
   

  	
  3

  
	
   

  	
  b.

  	
  Definitions

  	
   

  	
  3

  
	
   

  	
  c.

  	
  Payment

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Other Taxes

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Use

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Restrictions

  	
   

  	
  4

  
	
   

  	
  b.

  	
  Hazardous Materials

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Services

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Landlord’s Services

  	
   

  	
  6

  
	
   

  	
  b.

  	
  No Landlord Liability

  	
   

  	
  6

  
	
   

  	
  c.

  	
  Excess Use

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Maintenance, Repairs and Alterations

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Landlord’s Obligation/Tenant’s
  Waiver

  	
   

  	
  6

  
	
   

  	
  b.

  	
  Tenant’s Obligations

  	
   

  	
  6

  
	
   

  	
  c.

  	
  Tenant’s Alterations

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Insurance and Indemnity

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Tenant’s Insurance

  	
   

  	
  8

  
	
   

  	
  b.

  	
  Mutual Waiver

  	
   

  	
  9

  
						

 

i

 

	
   

  	
  c.

  	
  Tenant’s Waiver and Indemnity

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Damage or Destruction

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Insured Loss

  	
   

  	
  10

  
	
   

  	
  b.

  	
  Uninsured Loss

  	
   

  	
  10

  
	
   

  	
  c.

  	
  Abatement of Rent

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Eminent Domain

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Assignment and Subletting

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  General Restriction

  	
   

  	
  11

  
	
   

  	
  b.

  	
  Bases of Withholding Consent

  	
   

  	
  11

  
	
   

  	
  c.

  	
  Recapture

  	
   

  	
  12

  
	
   

  	
  d.

  	
  Assignment or Subletting by
  Sublessee

  	
   

  	
  13

  
	
   

  	
  e.

  	
  Sharing of Assignment Consideration

  	
   

  	
  13

  
	
   

  	
  f.

  	
  Sharing of Subletting
  Consideration

  	
   

  	
  13

  
	
   

  	
  g.

  	
  Effect of Assignment or
  Subletting

  	
   

  	
  13

  
	
   

  	
  h.

  	
  Reimbursement of Landlord’s
  Costs

  	
   

  	
  14

  
	
   

  	
  i.

  	
  No Merger

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Default by Tenant

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Event of Default

  	
   

  	
  14

  
	
   

  	
  b.

  	
  Landlord’s Remedies

  	
   

  	
  15

  
	
   

  	
  c.

  	
  Continuation of the Lease in
  Effect

  	
   

  	
  16

  
	
   

  	
  d.

  	
  Waiver of Reinstatement

  	
   

  	
  16

  
	
   

  	
  e.

  	
  Waiver of Jury Trial

  	
   

  	
  16

  
	
   

  	
  f.

  	
  Non-Exclusive Remedies

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Landlord’s Right to Cure Default

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Default by Landlord

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  Security Deposit

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  Estoppel Certificate

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Tenant’s Estoppel Certificate

  	
   

  	
  17

  
	
   

  	
  b.

  	
  Reliance and Failure to Deliver

  	
   

  	
  17

  
	
   

  	
  c.

  	
  Tenant’s Financial Statements

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
  Relocation

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  Subordination, Amendment for Lender

  	
   

  	
  18

  

 

ii

 

	
   

  	
  a.

  	
  Subordination

  	
   

  	
  18

  
	
   

  	
  b.

  	
  Landlord Defaults

  	
   

  	
  19

  
	
   

  	
  c.

  	
  Modification for Lender

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  Attorneys’ Fees

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Notices

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  General Provisions

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  a.

  	
  Governing Law

  	
   

  	
  20

  
	
   

  	
  b.

  	
  Severability

  	
   

  	
  20

  
	
   

  	
  c.

  	
  Prior Agreements

  	
   

  	
  20

  
	
   

  	
  d.

  	
  No Waiver

  	
   

  	
  20

  
	
   

  	
  e.

  	
  Holding Over

  	
   

  	
  20

  
	
   

  	
  f.

  	
  Successors and Assigns

  	
   

  	
  20

  
	
   

  	
  g.

  	
  Landlord’s Entry

  	
   

  	
  20

  
	
   

  	
  h.

  	
  Authority

  	
   

  	
  20

  
	
   

  	
  i.

  	
  Landlord Liable

  	
   

  	
  21

  
	
   

  	
  j.

  	
  Brokers

  	
   

  	
  21

  
	
   

  	
  k.

  	
  Non-Discrimination

  	
   

  	
  21

  
	
   

  	
  1.

  	
  Confidentiality

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  Exhibits

  	
   

  	
  21

  

 

iii

 

AMENDMENT NO. 2

TO

MARINA VILLAGE INDUSTRIAL GROSS LEASE

 

THIS
AMENDMENT NO. 2 TO MARINA VILLAGE INDUSTRIAL GROSS LEASE (this “Second Amendment”)
is made and entered into as of May 30, 2007, by and between LEGACY
PARTNERS I ALAMEDA, LLC, a Delaware limited liability company (“Landlord”),
and BERKELEY HEARTLAB, INC., a California corporation (“Tenant”).

 

R  E  C
I  T  A  L  S:

 

A.            Alameda Real Estate Investments, a
California limited partnership (“Alameda”), and Tenant entered into that certain Marina
Village Industrial Gross Lease dated as of August 20, 2004 (the “Original Lease”), pursuant to which Alameda leased to
Tenant and Tenant leased from Alameda certain premises commonly known as Suite 100,
containing approximately 20,131 rentable square feet of space (the “Original Premises”)
located within that certain building located at 960 Atlantic Avenue (the “Building”),
all as more particularly described in the Original Lease.

 

B.            Alameda and Tenant entered into that
certain Marina Village Verification Memorandum dated as of August 20, 2004
(the “Verification
Memorandum”), pursuant to which the parties, among other things,
confirmed the Commencement Date, the Expiration Date and certain other terms
relating to the Original Premises.

 

C.            Alameda and Tenant entered into that
certain Amendment No. 1 to Marina Village Industrial Gross Lease dated as
of March 7, 2005 (the “First Amendment”), pursuant to which the parties, among
other things, expanded the Original Premises to include certain premises
containing approximately 6,760 rentable square feet located within the Building
and more particularly described in the First Amendment (the “Expansion Space”).  The Original Lease, Verification Memorandum
and First Amendment are collectively referred to herein as the “Lease.” The Original Premises and Expansion Space are collectively
referred to herein as the “Existing Premises”.  The Existing Premises is part of a
multi-building commercial project known as “Marina
Village” and located on an approximately 200-acre site on the estuary
side of the island of Alameda (the “Project”).

 

D.            Landlord has succeeded to the
interests of Alameda as landlord under the Lease.

 

E.             Landlord and Tenant now desire to
amend the Lease to (i) extend the term of the Lease for the Existing
Premises, (ii) expand the Existing Premises to include certain premises
containing approximately 13,233 rentable square feet commonly known as Suite 102
and comprising the remainder of the rentable area of the Building, as depicted
on Exhibit A attached
hereto (the “Second Expansion Space”),
and (iii) modify various terms and provisions of the Lease, all as
hereinafter provided.

 

F.             All capitalized terms when used
herein shall have the same meanings given such terms in the Lease unless
expressly superseded by the terms of this Second Amendment.

 

 

NOW
THEREFORE, in consideration of the foregoing recitals and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

1.                                       Extension of Term.  The term of the Lease for the Existing
Premises, which is currently scheduled to expire on October 31, 2011, is
hereby extended for a period of three (3) years (the “Extended Term”) commencing as of November 1,
2011 and continuing until October 31, 2014 (the “Extended Term Expiration Date”), unless
sooner terminated in accordance with the terms of the Lease, as hereby amended.

 

2.                                       Existing Premises Base Rent.  Notwithstanding anything in the Lease to the
contrary, commencing on November 1, 2011 and ending on the Extended Term
Expiration Date, the Base Rent payable by Tenant for the Existing Premises
shall be paid separate and apart from the Base Rent payable for the Second
Expansion Space, and shall be as set forth in the following schedule:

 

	
  Period of 

  Extended Term

  	
   

  	
  Annual Base

  Rent

  	
   

  	
  Monthly

  Installment of Base

  Rent

  	
   

  	
  Monthly Rental

  Rate per Rentable Square

  Foot of the Existing Premises

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11/1/11 – 10/31/12

  	
   

  	
  $

  	
  671,199.36

  	
   

  	
  $

  	
  55,933.28

  	
   

  	
  $

  	
  2.08

  	
   

  
	
  11/1/12 – 10/31/13

  	
   

  	
  $

  	
  690,560.88

  	
   

  	
  $

  	
  57,546.74

  	
   

  	
  $

  	
  2.14

  	
   

  
	
  11/1/13 – 10/31/14

  	
   

  	
  $

  	
  713,149.32

  	
   

  	
  $

  	
  59,429.11

  	
   

  	
  $

  	
  2.21

  	
   

  

 

3.                                       Addition of Second Expansion Space.  Commencing upon the
Second Expansion Space Commencement Date (as defined in Section 4 below),
the Existing Premises shall be expanded to include the Second Expansion Space,
thereby increasing the size of the Existing Premises to 40,124 rentable square
feet (i.e., 26,891 rentable square feet in the Existing Premises +
13,233 rentable square feet in the Second Expansion Space).  The Second Expansion Space shall be leased on
the same terms and conditions set forth in the Lease, subject to the
modifications set forth in this Second Amendment.  Effective from and after the Second Expansion
Space Commencement Date, the “Premises”
shall mean the Existing Premises and the Second Expansion Space.

 

4.                                       Second Expansion Space Commencement Date.  For purposes of this
Second Amendment, the term “Second Expansion
Space Commencement Date” shall mean the earlier of: (i) the
date Tenant commences business operations in the Second Expansion Space; (ii) the
date of Substantial Completion of the Second Expansion Space Tenant
Improvements (as defined in Exhibit B
attached hereto); and (iii) September 1, 2007.  The term of the Second Expansion Space (the “Second Expansion Space Term”) shall
commence on the Second Expansion Space Commencement Date and expire
conterminously with the Extended Term with respect to the Existing Premises on October 31,
2014.  The date that the Second Expansion
Space Commencement Date actually occurs shall be confirmed by the parties in
writing in an Amendment No. 3 to Marina Village Office Industrial Gross
Lease (“Amendment No. 3”),
which Amendment No. 3 shall be in substantially the form of Exhibit C attached hereto.  Amendment No. 3 shall be delivered by
Landlord to Tenant after the Second Expansion Space Commencement 

 

2

 

                                                Date occurs, and Tenant shall execute and return such
Amendment No. 3 to Landlord within five (5) business days after
Tenant’s receipt thereof.

 

5.                                       Second Expansion Space Base Rent.

 

5.1           Second
Expansion Space Base Rent.  During
the Second Expansion Space Term, the Base Rent payable by Tenant for the Second
Expansion Space shall be calculated separate and apart from the Base Rent
payable for the Existing Premises, and shall be as set forth in the following
schedule (subject to abatement as set forth in Section 5.2 below):

 

	
  Period of Second

  Expansion

  Space Term

  	
   

  	
  Annual

  Base Rent

  	
   

  	
  Monthly

  Installment of 

  Base Rent

  	
   

  	
  Monthly Base Rental Rate

  per Rentable Square Foot of

  the Second Expansion Space

  	
   

  
	
  Second Expansion Space
  Commencement Date – 7/31/08

  	
   

  	
  $

  	
  230,254.20

  	
   

  	
  $

  	
  19,187.85

  	
   

  	
  $

  	
  1.45

  	
   

  
	
  8/1/08 – 7/31/09

  	
   

  	
  $

  	
  236,606.04

  	
   

  	
  $

  	
  19,717.17

  	
   

  	
  $

  	
  1.49

  	
   

  
	
  8/1/09 – 7/31/10

  	
   

  	
  $

  	
  244,545.84

  	
   

  	
  $

  	
  20,378.82

  	
   

  	
  $

  	
  1.54

  	
   

  
	
  8/1/10 – 7/31/11

  	
   

  	
  $

  	
  250,897.68

  	
   

  	
  $

  	
  20,908.14

  	
   

  	
  $

  	
  1.58

  	
   

  
	
  8/1/11 – 7/31/12

  	
   

  	
  $

  	
  258,837.48

  	
   

  	
  $

  	
  21,569.79

  	
   

  	
  $

  	
  1.63

  	
   

  
	
  8/1/12 – 7/31/13

  	
   

  	
  $

  	
  266,777.28

  	
   

  	
  $

  	
  22,231.44

  	
   

  	
  $

  	
  1.68

  	
   

  
	
  8/1/13-7/31/14

  	
   

  	
  $

  	
  274,717.08

  	
   

  	
  $

  	
  22,893.09

  	
   

  	
  $

  	
  1.73

  	
   

  
	
  8/1/14-10/31/14

  	
   

  	
  $

  	
  282,656.88

  	
   

  	
  $

  	
  23,554.74

  	
   

  	
  $

  	
  1.78

  	
   

  

 

5.2           Abatement
of Base Rent.  Notwithstanding
anything to the contrary contained herein and provided that Tenant faithfully
performs all of the terms and conditions of the Lease, as hereby amended, and
is not in default under the Lease, as hereby amended, beyond all applicable
notice and cure periods, Landlord hereby agrees to abate Tenant’s obligation to
pay monthly Base Rent for the Second Expansion Space for the first three (3) months
of the initial Second Expansion Space Term (the “Second Expansion Space Abated Rent”).  During such abatement period, Tenant shall
remain responsible for the payment of all of its other monetary obligations
under the Lease, as hereby amended, including without limitation, the Base Rent
payable for the Existing Premises and all amounts payable pursuant to Paragraph
4 of the Original Lease (as amended by Section 8 below).

 

5.3           Advance
Base Rent.  The Base Rent applicable
to Second Expansion Space, only, for the fourth (4th) month of the
Second Expansion Space Term (i.e., $19,187.85) shall be paid at the time
of Tenant’s execution of this Second Amendment.

 

3

 

6.                                       Tenant Improvements.  Tenant hereby agrees to accept the Existing
Premises and the Second Expansion Space in their “AS IS” condition as of the
date hereof and the Second Expansion Commencement Date, and except for Landlord’s
obligation to contribute the Tenant Improvement Allowance pursuant to the
Tenant Work Letter attached hereto as Exhibit B,
Landlord shall have no obligation whatsoever to construct or pay for any
improvements or alterations in or to the Existing Premises or the Second
Expansion Space.  Tenant shall construct
certain Tenant Improvements (as defined in Exhibit B
attached hereto) for the Premises (i.e., the Existing Premises and the
Second Expansion Space) pursuant to and in accordance with the terms and
provisions of Exhibit B.

 

7.                                       Parking.  Effective from and after the Second Expansion
Space Commencement Date, Paragraph 21 of the Addendum attached to the Original
Lease shall be deleted in its entirety and replaced with the following:

 

“21.         Parking.  Throughout the Second Expansion Space Term,
Tenant shall have the right to use, on a “first-come, first-serve” basis
(subject to the terms of this Paragraph 21 below), in common with other tenants
of the Project and free of parking charges, one hundred thirty-two (132)
parking spaces (i.e., 3.3 parking spaces per 1,000 rentable square feet
of the Premises), which parking spaces are located in the common surface
parking areas servicing the Building as shall be designated by Landlord from
time to time for parking for the Building. 
All such parking spaces shall be unreserved parking spaces, except that
Landlord shall designate three (3) of such parking spaces as reserved
parking spaces in a location in the surface parking area in close proximity to
the entrance of the Building.  Tenant’s
continued right to use such parking spaces is conditioned upon: (i) Tenant
abiding by (A) all rules and regulations which are prescribed by
Landlord (and/or any common area association of the Project having rights over
such parking areas) from time to time for the orderly operation and use of the
parking areas where such parking spaces are located, and (B) all recorded
covenants, conditions and restrictions affecting the Building and/or the
Project; and (ii) Tenant’s cooperation in seeing that Tenant’s employees
and visitors also comply with such rules and regulations, covenants,
conditions and restrictions.  Landlord
(and/or any other owners of the Project) specifically reserve the right to
change the size, configuration, design, layout, location and all other aspects
of the Building’s or Project’s parking areas and facilities (including without
limitation, implementing paid visitor parking), and Tenant acknowledges and
agrees that Landlord may, without incurring any liability to Tenant and without
any abatement of Rent under the Lease, from time to time, temporarily close-off
or restrict access to any or all of the Building’s or Project’s parking areas
so long as during such temporary closure, Landlord, at its sole cost, uses
commercially reasonable efforts to provide Tenant with replacement parking spaces
in other parking structures and/or surface parking areas within a reasonable
distance from the Building.  Landlord may
delegate its responsibilities hereunder to a parking operator in which case
such parking operator shall have all the rights of control attributed hereby to
Landlord.  Any parking tax or other
charges imposed by governmental authorities in connection with the use of such
parking shall be paid directly by Tenant or the parking users, or, if directly
imposed against Landlord,

 

4

 

Tenant shall reimburse Landlord for all such taxes and/or charges
within ten (10) days after Landlord’s demand therefor.  The parking rights provided to Tenant
pursuant to this Paragraph 21 are provided solely for use by Tenant’s own
personnel and such rights may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord’s prior approval, except in
connection with an assignment of the Lease or sublease of the Premises made in
accordance with Paragraph 12 of the Lease (as amended by Paragraph 10 of this
Addendum).  All visitor parking by Tenant’s
visitors shall be subject to availability, as reasonably determined by
Landlord, parking in such visitor parking areas as may be designated by Landlord
(and/or any common area association of the Project having rights over the
Project’s parking facilities) from time to time, and payment by such visitors
of the prevailing visitor parking rate (if any) charged by Landlord (and/or
such common area association) from time to time.”

 

8.                                       Tenant’s Percentage Shares; Operating Expenses and Property
Taxes. 
With respect to Tenant’s obligation to pay Tenant’s Percentage Share of
Operating Expenses and Property Taxes, the parties hereby agree as follows:

 

8.1           During
the period commencing on the Second Expansion Space Commencement Date and
ending on the day before the Extended Term Commencement Date (the “Separate Calculation
Period”), “Tenant’s Percentage Share” with respect to the Existing
Premises shall be calculated separate and apart from “Tenant’s Percentage Share”
with respect to the Second Expansion Space. 
Accordingly, during the Separate Calculation Period, with respect to the
Existing Premises, only: (i) Tenant’s Percentage Share for the Existing
Premises shall be 67.02% (i.e., 26,891 rentable square feet in the
Existing Premises/40,124 rentable square feet in the Building); and (ii) Tenant
shall continue to pay Operating Expenses and Property Taxes with respect to the
Existing Premises on a “gross basis” in accordance with the applicable terms
and provisions of the Lease (i.e., Tenant shall pay Tenant’s Percentage
Share for the Existing Premises of increases in Operating Expenses and Property
Taxes over the Operating Expenses and Property Taxes in the Base Year).

 

8.2           During
the Separate Calculation Period, with respect to the Second Expansion Space,
only: (i) Tenant’s Percentage Share for the Second Expansion Space shall
be 32.98% (i.e., 13,233 rentable square feet in the Second Expansion
Space/40,124 rentable square feet in the Building); and (ii) Tenant shall
pay Tenant’s Percentage Share for the Second Expansion Space of Operating
Expenses and Property Taxes on a net basis, without reference to a “Base Year”,
“Base Property Taxes,” “Base Operating Expenses” or “increase”.

 

8.3           From
and after the Extended Term Commencement Date: (i) Tenant’s Percentage
Share with respect to the entire Premises (i.e., the Existing Premises
and the Second Expansion Space) shall be calculated together and shall equal
100% (i.e., 40,124 rentable square feet in the Premises/40,124 rentable
square feet in the Building); and (ii) Tenant shall pay Tenant’s
Percentage Share for the entire Premises of Operating Expenses and Property
Taxes on a net basis, without reference to a “Base Year”, “Base Property Taxes,”
“Base Operating Expenses” or “increase”.

 

5

 

8.4           In
accordance with the foregoing, effective from and after the Second Expansion
Space Commencement Date, the Lease shall be modified in the following respects,
but such modifications shall not apply to the Existing Premises until the
Extended Term Commencement Date:

 

(a)     The
phrase “Base Year” as set forth in the Basic Lease Information of the Original
Lease shall be deleted in its entirety and of no further force or effect.

 

(b)     The
phrase “increases in” in Paragraph 3(f) of the Original Lease shall be
deleted in its entirety and of no further force or effect.

 

(c)     Paragraph
3(a) of the Addendum attached to the Original Lease shall be deleted and
replaced with the following:

 

“a. Paragraph 4(a) of the Lease is hereby
amended to read as follows:

 

a.   Obligation.  Tenant shall pay Tenant’s Percentage Share of
the Operating Expenses and Property Taxes for each Expense Year.  As used herein “Expense Year”
shall mean each calendar year during the Second Expansion Space Term.”

 

(d)     Clause
(v) of Paragraph 3(b) of the Addendum attached to the Original Lease
shall be deleted and replaced with the following: “(v) the cost of
operating, maintaining, repairing, renovating and managing the utility systems,
mechanical systems, sanitary and storm drainage systems and all other systems
and equipment which serve the Building and/or any other building in the Project
(including, without limitation, the existing fire/life safety systems and
equipment located in the Building, the existing HVAC equipment on the roof of
the Building and the equipment providing distribution within the Building of
the HVAC from such existing HVAC equipment), and the cost of supplies and
equipment and maintenance and service contracts in connection therewith
(provided, however, Operating Expenses shall not include any such costs
pertaining to the systems and equipment located in the Building to the extent
Tenant is responsible for directly providing or paying for the cost of such
operation, maintenance, repair, renovation and management of such systems and
equipment located in the Building pursuant to Paragraph 8(a) below (as
amended by Section 9.3 of the Second Amendment));”.

 

(e)     Clause
(xi) of Paragraph 3(b) of the Addendum attached to the Original Lease
shall be deleted and replaced with the following: “(xi) all actual charges for
utilities for the Project which Landlord shall pay during any Expense Year,
including, but not limited to, the costs of water, sewer and electricity, and
the costs of HVAC and other utilities, as well as related fees, assessments and
surcharges; provided, however, such utilities charges shall not include the
cost of utilities provided to the Premises or the premises of other tenants of
the Project since Tenant is responsible for directly paying for all such
utilities charges pursuant to Paragraph 7 below.”

 

(f)      Clause
(x) of Paragraph 3(b) of the Addendum attached to the Original Lease
shall be deleted and replaced with the following: “(x) capital
improvements, amortized over such improvements useful life (together with
interest thereon at the rate paid by 

 

6

 

Landlord or which would have been paid if Landlord had
borrowed such funds) as determined by Landlord in accordance with standard real
estate accounting practices, to the extent such capital improvements (1) relate
to items located in or servicing the Building that are Landlord’s obligation to
repair and maintain pursuant to 9.3(a) of the Second Amendment, including,
without limitation, repairs of such items to the extent the repairs of such
items constitute capital improvements, or (2) are made in connection with
Landlord’s compliance with any changes in the Legal Requirements (as defined
below in this Lease) or to otherwise reduce Operating Expenses;”.

 

(g)     Clause
(viii) of Exhibit D attached to the Original Lease shall be deleted
and replaced with the following: “(viii) any improvements, alterations or
other capital improvements, or depreciation or amortization thereof or any
portion of the Project or any improvements or equipment other than those
capital improvements that are expressly included as part of Operating Expenses
pursuant to clause (x) of Paragraph 3(b) of the Addendum attached to
the Original Lease (as amended by Section 8.4(f) of the Second
Amendment);”.

 

(h)     The
last two (2) sentences of Paragraph 4(b) of the Original Lease shall
be deleted in their entirety and of no further force and effect.

 

(i)      Paragraph
4(c) of the Original Lease shall be deleted and replaced with the
following:

 

“c.           Payment.

 

(1)           Payment of Operating Expenses and
Property Taxes.  For each Expense
Year ending or commencing within the Second Expansion Space Term, Tenant shall
pay to Landlord, as additional rent, Tenant’s Percentage Share of the annual
Operating Expenses and Property Taxes in each Expense Year, which payment shall
be made in the manner set forth in Paragraph 4(c)(2) below.

 

(2)           Statement of Actual Operating
Expenses and Property Taxes and  Payment
by Tenant.  Landlord shall endeavor
to give to Tenant on or before the first day of May following the end of
each Expense Year, a statement (the “Statement”)
which shall state the Operating Expenses and Property Taxes incurred or accrued
for such preceding Expense Year, and which shall indicate therein Tenant’s
Percentage Share thereof.  Upon receipt
of the Statement for each Expense Year ending during the Second Expansion Space
Term, Tenant shall pay, with its next installment of Base Rent due, the full
amount of Tenant’s Percentage Share of Operating Expenses and Property Taxes
for such Expense Year, less the amounts, if any, paid during such Expense Year
as “Estimated Expenses,” as that term is defined in Paragraph 4(c)(3) below.  The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice Landlord from enforcing its
rights under this Paragraph 4.  Even
though the Second Expansion Space Term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant’s Percentage Share of
the Operating Expenses and Property Taxes for the Expense Year in which this
Lease (as amended by the Second Amendment), terminates, Tenant shall
immediately pay to Landlord an 

 

7

 

amount as calculated pursuant to the provisions of Paragraph 4(c)(1) above.  The provisions of this Paragraph 4(c)(2) shall
survive the expiration or earlier termination of the Second Expansion Space
Term.

 

Page 8 is missing from the
original .pdf document.

 

9.                                       SECTION 9 STARTS SOMEWHERE IN HERE

 

9.1           placeholder

 

9.2           placeholder

 

8

 

“7.           Services.

 

a.             Tenant’s Responsibility.  Tenant shall be solely responsible, at its
sole cost and expense, for the furnishing of all services and utilities to the
Premises, including, but not limited to HVAC, electricity, water, telephone,
telecommunications, janitorial, cleaning, pest control, trash removal, security
services, and replacement of all light bulbs, lamps, starters and ballasts for
lighting fixtures within the Premises (as well as maintenance and repairs of
the Premises in accordance with the provisions of Paragraph 8(a) below).  In connection with the foregoing, Tenant
hereby agrees that (i) Landlord shall have absolutely no obligation to
provide any such or other services or utilities to the Premises, it being
agreed that this Lease is in the nature of a “single-tenant building” lease
(although Landlord shall maintain and keep in service the existing utility
connections located outside the Building and connected to the exterior of the
Building as necessary for distribution of such utilities to the Premises by
Tenant), (ii) Tenant shall contract directly with the applicable utility
providers to provide all such utilities to the Premises, which utilities shall
be separately metered, at Tenant’s cost, and (iii) Tenant shall pay for
the cost of such utilities consumed at the Premises (and for all services
provided to the Premises) directly to the applicable provider thereof.  All such services and utilities for the
Premises shall be provided in such a manner so as to maintain the Premises and
Building in first-class condition consistent with the first-class nature of the
Project, and if Tenant fails to do so, and such failure shall continue for
fifteen (15) days after notice from Landlord (which notice shall not be
required in the event of an emergency), Landlord shall have the right to
provide such services and/or such utilities and any charges or costs incurred
by Landlord in connection therewith shall be deemed additional rent due and
payable by Tenant upon receipt by Tenant of a written statement thereof from
Landlord.

 

b.            Overstandard Tenant Use.  In the event that Tenant shall use, or desire
to use, electricity, water, heating and air conditioning or any other utilities
for the Premises in quantities that exceed the capacity of the equipment supplying
the same to the Building or that are in excess of the quantities normally
required for ordinary office and R&D use for premises in comparable office
and R&D buildings in the vicinity of the Building, then, (i) subject
to applicable law, and subject to Landlord’s approval, which shall not be
unreasonably withheld, conditioned or delayed, Tenant shall, at Tenant’s sole
cost and expense, install such supplemental equipment as may be reasonably
required to provide such excess capacity, and (ii) Tenant shall pay for
the cost of any increased wear and tear on the Building’s existing systems and
equipment (and repair and replacement of any such systems and equipment in
accordance with Paragraph 8(a) below) caused by such excess use.

 

c.             Interruption of Use.  Except as provided in Paragraph 7(d) below,
Tenant agrees that Landlord shall not be liable for damages, by abatement of
rent or otherwise, for failure to furnish or delay in furnishing any utilities
or services (including telephone and telecommunication services), or for any 

 

9

 

diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by repairs,
replacements, or improvements, by any strike, lockout or other labor trouble,
by inability to secure electricity, gas, water, or other fuel at the Building
or Project after reasonable effort to do so, by any accident or casualty
whatsoever, by act or default of Tenant or other parties, or by any other
cause; and such failures or delays or diminution shall never be deemed to
constitute an eviction or disturbance of Tenant’s use and possession of the
Premises or relieve Tenant from paying rent (except as provided in Paragraph 7(d) below)
or performing any of its obligations under this Lease.  Furthermore, Landlord shall not be liable
under any circumstances for a loss of, or injury to, property or for injury to,
or interference with, Tenant’s business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any services or utilities to the Premises.

 

d.             Special Abatement.  In the event that Tenant’s use of the
Premises (or any portion thereof) is materially and adversely interfered with
as a result of, and Tenant in fact does not use the Premises or any portion
thereof, as a result of, (i) Landlord’s failure to maintain and keep in
service the existing utility connections located outside the Building and
connected to the exterior of the Building as necessary for distribution of such
utilities to the Premises by Tenant in accordance with Paragraph 7(a) above,
and (ii) any failure by Landlord to perform any repairs required to be
performed by Landlord pursuant to Paragraph 8(a) below, within ten (10) business
days after Landlord has received notice from Tenant of the need for such
repairs (or such longer period of time as is reasonably required for such
repair work if Landlord commences such repair work within such 10-business day
period and thereafter diligently prosecutes same to completion) (each, an “Abatement Event”), then Tenant shall deliver written notice
to Landlord of such Abatement Event.  If
such Abatement Event continues for five (5) consecutive business days
after Landlord’s receipt of any such notice from Tenant (“Eligibility
Period”), then Tenant’s obligation to pay Base Rent and Tenant’s
Percentage Share of Operating Expenses and Property Taxes shall be abated or
reduced, as the case may be, from and after the first (1st) day following the
Eligibility Period and continuing during such time that such Abatement Event
continues to so materially and adversely interfere with Tenant’s use of (and
Tenant does not use) the Premises or any portion thereof, with such abatement
to be in the proportion that the rentable square feet of the portion of the
Premises so materially and adversely interfered with (and that Tenant does not
use) bears to the total rentable square feet of the Premises.  Solely for purposes of assisting Landlord in
determining what area of the Premises, if any, is the subject of an Abatement
Event, Tenant may, at its sole cost and expense, sequester the area of the
Premises that is the subject of the Abatement Event (e.g., Tenant may
tape off such area of the Premises); provided, however, that if Tenant or
Tenant’s employees or visitors enter into and use any portion of the area so
sequestered by Tenant, Tenant shall not be entitled to any abatement of Base
Rent and Tenant’s Percentage Share of Operating Expenses and Property Taxes
pursuant to this Paragraph 7(d) from and after the date of such entry and
use.  To the extent 

 

10

 

Tenant shall be entitled to abatement of Base Rent and Tenant’s
Percentage Share of Operating Expenses and Property Taxes because of a damage
or destruction pursuant to Paragraph 10 of this Lease (as amended by Paragraph
8 of the Addendum attached to this Lease and Section 9.5 of the Second
Amendment) or a taking pursuant to Paragraph 11 of this Lease, then the
Eligibility Period shall not be applicable.”

 

9.3           Maintenance,
Repairs and Alterations.  Paragraph 8
of the Original Lease shall be modified in the following respects:

 

(a)     Paragraphs
8(a) and 8(b) of the Original Lease (as amended by Paragraphs 6(a) and
6(b), respectively, of the Addendum attached to the Original Lease) shall be
deleted in their entirety and replaced with the following:

 

“a.           Tenant’s Repairs.  Subject to Landlord’s repair obligations in Section 8(b) below,
and except for any damage by casualty which is not Tenant’s obligation to
repair pursuant to Paragraph 10 below, Tenant shall, at Tenant’s own expense,
and with contractors reasonably acceptable to Landlord and subject to Tenant’s
compliance with the following provisions of this Paragraph 8(a) and the
provisions of Paragraph 8(c) below, keep the Building and every part
thereof (except those portions of the Building which are Landlord’s obligation
to maintain pursuant to Paragraph 8(b) below), including, without limitation,
all tenant improvements, alterations, additions, equipment, restrooms, fixtures
and furnishings therein (including all of the Building’s systems and equipment
located within the Building, but excluding the existing fire/life safety
systems and equipment located in the Building, the existing HVAC equipment on
the roof of the Building and the equipment providing distribution within the
Building of the HVAC from such existing HVAC equipment, all of which shall be
the responsibility of Landlord in accordance with Section 8(b) below),
all interior walls and wall coverings, doors, windows, glass, plate glass,
ceilings, and skylights, in first-class order, repair and condition at all
times throughout the Second Expansion Space Term.  Such repair obligations shall include,
without limitation, replacement of items as may be necessary to keep same in
the condition required hereinabove, notwithstanding that such replacements may
be considered capital expenditures in accordance with accounting practices, and
shall also include repairs of items above the ceiling, repairs of items below
the floors (but not the floor slabs), and/or repairs of items within walls,
such as, but not limited to, all plumbing and pipes for restrooms, and the
equipment providing distribution within the Building of all electricity and all
other utilities required for the Premises (including all electrical panels in
equipment rooms or elsewhere within the Building).  Landlord shall have approval rights with
respect to repairs and/or replacements which: (i) may affect the roof
and/or the HVAC equipment thereon; (ii) may affect or consist of any of
the structural components of the Building; (iii) which may adversely
affect or consist of any of the Building’s systems and equipment; (iv) which
may affect the exterior of the Building or any portion of the Project located
outside of the Building, or can be seen from outside the Building; and/or (v) which
may change the character of the Building as a first 

 

11

 

class office/R&D building (any of such items set forth in clauses (i) through
(v) hereinabove shall sometimes be referred to as the “Landlord’s Approval Items”). 
Tenant’s repair obligations set forth hereinabove shall include, without
limitation, the obligation to promptly and adequately repair all damage to the
Building and replace or repair all damaged or broken fixtures and appurtenances
(subject, however, to the provisions of Paragraph 10 below regarding casualty
damage to the Building); provided however, that, at Landlord’s option, or if
Tenant fails to commence such repairs within ten (10) business days and
thereafter diligently pursue such repairs to completion, Landlord may, but need
not, make such repairs and replacements, and Tenant shall pay Landlord the cost
thereof, including a ten percent (10%) administration fee sufficient to
reimburse Landlord for all overhead, general conditions, fees and other costs
or expenses arising from Landlord’s involvement with such repairs and
replacements forthwith upon being billed for same.  Tenant shall, at its own cost and expense,
enter into regularly scheduled preventive maintenance/service contracts (and
with maintenance contractors) reasonably approved by Landlord for the
maintenance and service of all of the items listed above in this Paragraph 8(a) which
Tenant is obligated to maintain.  Tenant
shall deliver to Landlord full and complete copies of all such contracts
entered into by Tenant prior to entering into same.

 

b.             Landlord’s Repairs.  Anything contained in Paragraph 8(a) above
to the contrary notwithstanding, and subject to Paragraphs 10 and 11 of this
Lease, Landlord shall maintain, as part of Operating Expenses, the common areas
of the Project (including those systems and equipment located outside the
Building but serving the Building), the existing HVAC equipment located on the
roof of the Building and the equipment providing distribution within the
Building of the HVAC from such existing HVAC equipment, the structural portions
of the roof (including the roof membrane), the foundation and floor slabs of
the Building and the load-bearing portions of walls (excluding wall coverings,
painting, glass and doors) of the Building and the existing fire/life safety
systems and equipment located in the Building; provided, however, to the extent
such maintenance and repairs are caused by the act, neglect, fault of or
omission of any duty by Tenant, its agents, employees or invitees, Tenant shall
pay directly to Landlord as additional rent (but not as part of Operating
Expenses), the reasonable cost of such maintenance and repairs.  Except as expressly provided in Paragraph 7(d) above,
Landlord shall not be liable for any failure to make any such repairs, or to
perform any maintenance and there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with Tenant’s
business arising from the making of any repairs, alterations or improvements in
or to any portion of the Project, Building or the Premises or in or to
fixtures, appurtenances and equipment therein. 
Tenant hereby waives and releases its right to make repairs at Landlord’s
expense under Sections 1941 and 1942 of the California Civil Code; or under any
similar law, statute, or ordinance now or hereafter in effect.”

 

(b)     The
following language shall be added to the end of the sentence ending with the
phrase “which consent shall not be unreasonably withheld, conditioned or 

 

12

 

delayed” in the twelfth line of Paragraph 8(c) of the
Original Lease: “provided, however, Landlord may withhold its consent in its
sole and absolute discretion with respect to any alterations, additions or
improvements which would constitute Landlord Approval Items (as defined in
Paragraph 8(a) of this Lease, as amended by Section 9.2(a) of
the Second Amendment)”.

 

(c)     In
Paragraph 8(c) of the Original Lease, the phrase “of the Project” shall be
added in between the words “tenants” and “and” in the ninth (9th)
line from the bottom on page 7 of the Original Lease.

 

(d)     Paragraph
6(c) of the Addendum attached to the Original Lease shall be deleted and
replaced with the following:

 

“d.           Tenant shall not do anything or
suffer anything to be done in or about the Premises which will in any way conflict
with any law, statute, ordinance or other governmental rule, regulation or
requirement now in force or which may hereafter be enacted or promulgated.  At its sole cost and expense, Tenant shall
promptly comply with all such governmental measures, other than the making of
structural changes to the Building (collectively the “Excluded
Changes”) except to the extent such Excluded Changes are required
due to Tenant’s alterations to or manner of use of the Premises.  In addition, Tenant shall fully comply with
all present or future programs intended to manage parking, transportation or
traffic in and around the Project, and in connection therewith, Tenant shall
take responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities. 
The judgment of any court of competent jurisdiction or the admission of
Tenant in any judicial action, regardless of whether Landlord is a party
thereto, that Tenant has violated any of said governmental measures, shall be
conclusive of that fact as between Landlord and Tenant.”

 

9.4           Physical
Damage Insurance on the Building.  On
or prior to the Second Expansion Space Commencement Date, in addition to the
Personal Property Insurance Tenant is required to maintain pursuant to
Paragraph 9(a) of the Original Lease (as amended by Paragraph 7(a) of
the Addendum attached to the Original Lease), Tenant shall procure Physical
Damage Insurance covering the Building, including all improvements, alterations
and additions now existing or hereafter made to the Building (including,
without limitation, the Tenant Improvements installed pursuant to the terms and
provisions of Exhibit B attached
hereto, but excluding the base, shell and core of the Building).  Such insurance shall be written on the same
basis and shall be maintained in the same manner as the Personal Property
Insurance pursuant to and in accordance with the terms and provisions of
Paragraph 9(a) of the Original Lease (as amended by Paragraph 7(a) of
the Addendum attached to the Original Lease).

 

9.5           Damage
or Destruction.  Paragraph 10 of the
Original Lease (as amended by Paragraph 8 of the Addendum attached to the
Original Lease) shall be amended in the following respects:

 

13

 

(a)           In the event of a damage to or
destruction of the Building, Landlord shall not be obligated to repair or
restore Tenant’s personal property in the Premises.

 

(b)           In the event the cost of any repair
by Landlord of any damage to any portion of the Building which is other than
the base, shell and core pursuant to Paragraph 10 of the Original Lease (as
amended by Paragraph 8 of the Addendum attached to the Original Lease) exceeds
the amount of insurance proceeds received by Landlord from Tenant’s insurance
carrier, as assigned by Tenant, the cost of such repairs shall be paid by
Tenant to Landlord prior to Landlord’s repair of the damage.

 

10.                                 Option to Extend Extended Term and Second Expansion Space
Term. 
Tenant shall continue to have its option to extend the Lease, as hereby
amended, as set forth in and pursuant to Paragraph 17 of the Addendum attached
to the Original Lease, except that: (i) Tenant shall have two (2) options
to extend the term of the Lease for periods of three (3) years each (each,
individually an “Option Period”,
and collectively, the “Option Periods”);
(ii) the first Option Period shall be for the three (3) year period
immediately following the expiration of the Second Expansion Space Term, and
the second Option Period shall be for the three (3) year period
immediately following the expiration of the first Option Period; (iii) the
Base Rent payable for the entire Premises during the Option Period or Option
Periods, as the case may be, shall be determined on a “net” basis, not a “gross
basis” (i.e., without regard to an “increase” or “base year”); and (iv) such
option to extend shall be personal to the original Tenant executing this Second
Amendment (the “Original Tenant”),
and may be exercised only by such Original Tenant (and any Affiliate (as
defined in Section 12 below) to which Tenant’s entire interest in the
Lease, as hereby amended, has been assigned pursuant to Paragraph 10(a) of
the Addendum attached to the Original Lease), and not any other assignee,
sublessee or other transferee of Tenant’s interest in the Lease, as hereby
amended, or the Premises, and only when the Original Tenant (or such Affiliate
assignee, as the case may be) is in actual physical occupancy and possession of
the entire Premises as of the date the Original Tenant (or such Affiliate
assignee, as the case may be) delivers to Landlord its written notice
exercising such option to extend.

 

11.                                 Signs.

 

11.1         Monument Signage. 
Subject to the approval of all applicable governmental entities, and
subject to all applicable governmental laws, rules, regulations and codes,
Landlord hereby grants Tenant the non-exclusive right to have Tenant’s name “Berkeley
Heartlab, Inc.” (but no other markings) displayed on one (1) strip of
the existing monument sign for the Project located along Atlantic Avenue (the “Signage Monument”).  The design, size, specifications, graphics,
materials, colors, lighting (if applicable) and exact location with respect to
Tenant’s name on the Signage Monument shall be (i) consistent with the
other names and signs (if any) on or to be placed on the Signage Monument and
the quality and appearance of the Project, and (ii) designated by
Landlord, subject to the approval of all applicable governmental
authorities.  Landlord shall install
Tenant’s name on the Signage Monument at Tenant’s sole cost and expense.  In addition, Tenant shall pay to Landlord,
within ten (10) days after demand, from time to time, all other costs
attributable to the fabrication, installation, insurance, lighting (if 

 

14

 

applicable), maintenance and repair of Tenant’s name on the
Signage Monument, plus a pro-rata share (determined by Landlord based upon the
number of tenant signs on the Signage Monument) of the costs of maintenance,
insurance, and repair of the Signage Monument. 
Landlord shall have the right to relocate, redesign and/or reconstruct
the Signage Monument from time to time. 
The signage rights granted to Tenant under this Section 11.1: (A) are
personal to the Original Tenant and any assignee to which Tenant’s entire
interest in the Lease, as hereby amended, has been assigned pursuant to
Paragraph 10(a) of the Addendum attached to the Original Lease; provided,
however, that any name change on the Signage Monument to reflect the name of
such assignee shall be subject to Landlord’s prior approval, which shall not be
unreasonably withheld or delayed; and (B) shall only be available to and
exercisable by the Original Tenant (or such assignee, as the case may be) when
the Original Tenant (or such assignee, as the case may be) is in actual and
physical possession of the entire Premises. 
Upon termination or expiration of the Lease, as hereby amended, or upon
the earlier termination of Tenant’s signage rights under this Section 11.1,
Landlord shall have the right to permanently remove Tenant’s name from the
Signage Monument and to restore and repair all damage to the Signage Monument
resulting from such removal, and Tenant shall pay to Landlord, within ten (10) days
after demand, all costs incurred in connection with such removal, restoration
and repair.

 

11.2         No Other Signs. 
Except for such identification sign permitted in Section 11.1
above, Tenant may not install any signs on the exterior or roof of the
Building, the other existing buildings in the Project, the common areas of the
Project or any other areas outside the Building.  Any signs, window coverings, or blinds (even
if the same are located behind the Landlord approved window coverings for the
Building), or other items visible from outside of the Building are subject to
the prior approval of Landlord, in its sole and absolute discretion.

 

12.                                 Affiliates.  Any person or entity to which Tenant may
enter into a transfer without the consent of Landlord as described in the
second (2”) and third (3”1) sentences of Paragraph 10(a) of the Addendum
attached to the Original Lease (herein referred to individually as an “Affiliate” and collectively as “Affiliates”) must have a tangible net worth
equal to or greater than Tenant as of the date of such transfer in order to
qualify as a permitted transfer thereunder.

 

13.                                 Landlord’s Address for Notices.  Landlord’s address for notices set forth in
the Basic Lease Information of the Original Lease is hereby deleted in its
entirety and replaced with the following:

 

c/o
Legacy Partners Commercial, Inc.  

4000 East Third Avenue, Suite 600 

Foster City, California 94404-4805 

Attention: Regional Vice President

 

with
a copy to:

 

c/o
Legacy Partners Commercial, Inc.  

1150 Marina Village Parkway

Alameda, California 94501

Attention: Property Manager

 

15

 

14.                                 Landlord Exculpation.  It is expressly understood and agreed that
notwithstanding anything in the Lease, as hereby amended, to the contrary, and
notwithstanding any applicable law to the contrary, the liability of Landlord
and its members, partners, submembers and subpartners, and their respective
officers, agents, property managers, servants, employees, and independent
contractors (collectively, “Landlord Parties”)
hereunder (including any successor landlord) and any recourse by Tenant against
Landlord or the Landlord Parties shall be limited solely and exclusively to an
amount which is equal to the interest of Landlord in the Project, and neither
Landlord, nor any of the Landlord Parties shall have any personal liability
therefor, and Tenant hereby expressly waives and releases such personal
liability on behalf of itself and all persons claiming by, through or under
Tenant.

 

15.                                 Miscellaneous Deletions.  Paragraph 20 of the Addendum attached to the
Original Lease is hereby deleted in its entirety and is of no further force and
effect.

 

16.                                 Broker.  Tenant represents and warrants to Landlord
that Tenant has not dealt with any broker in connection with this Second
Amendment except for CM Realty (the “Broker”),
and insofar as Tenant knows, no other broker negotiated or participated in the
negotiations of this Second Amendment or is entitled to any commission in
connection herewith.  Tenant agrees to
indemnify, protect and defend Landlord against and hold Landlord harmless from
any and all claims, demands, losses, liabilities, lawsuits, judgments, and
costs and expenses (including without limitation reasonable attorneys’ fees)
with respect to any leasing commissions or equivalent compensation alleged to
be owing on account of Tenant’s dealings with any real estate broker or agent,
except for the Broker.

 

17.                                 No Further Modification.  Except as set forth in this Second Amendment,
all of the terms and provisions of the Lease shall remain unmodified and in
full force and effect.

 

18.                                 Counterparts.  This Second Amendment may be executed in
multiple counterparts, each of which is to be deemed original for all purposes,
but all of which together shall constitute one and the same instrument.

 

[SIGNATURES APPEAR ON THE
FOLLOWING PAGE]

 

16

 

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

 

	
  LANDLORD:

  	
  LEGACY PARTNERS I ALAMEDA,
  LLC,

  	
   

  
	
   

  	
  a Delaware limited
  liability company,

  	
   

  
	
   

  	
  Owner

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Legacy Partners
  Commercial, L.P.,

  
	
   

  	
   

  	
  a California limited
  partnership,

  
	
   

  	
   

  	
  as Property Manager and
  Agent for Owner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Legacy Partners
  Commercial, Inc.,

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
     /s/

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Rick Wada

  
	
   

  	
   

  	
   

  	
   

  	
  Its:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TENANT:

  	
  BERKELEY HEARTLAB, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/

  
	
   

  	
   

  	
  Name:

  	
  Warren A. Ambrose

  
	
   

  	
   

  	
  Title:

  	
  Chief Finance and
  Operations 

  
	
   

  	
   

  	
  Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  /s/

  
	
   

  	
   

  	
  Name:

  	
  Jonathan Wolin

  
	
   

  	
   

  	
  Title:

  	
  General Counsel

  
											

 

17

 

EXHIBIT
A

 

DEPICTION
OF SECOND EXPANSION SPACE

 

 

A-1

 

EXHIBIT B

 

TENANT WORK LETTER

 

This
Tenant Work Letter (“Tenant Work Letter”) shall set forth the terms and
conditions relating to the construction of the Premises.  All references in this Tenant Work Letter to “the Lease” shall mean the relevant portions of the Lease, as
amended by the Second Amendment to which this Tenant Work Letter is attached as
Exhibit “B”.

 

SECTION 1

 

BASE, SHELL AND CORE

 

Landlord
has previously constructed the base, shell and core of the Building
(collectively, the “Base,
Shell and Core”), and Tenant shall accept the Base, Shell
and Core in its current “As-Is” condition existing as of the date of the Second
Amendment and the Second Expansion Space Commencement Date.  Except for the Tenant Improvement Allowance
set forth below, Landlord shall not be obligated to make or pay for any
alterations or improvements to the Premises, the Building or the Project.

 

SECTION 2

 

TENANT IMPROVEMENTS

 

2.1           Tenant
Improvement Allowance.  Tenant shall be entitled to a one-time tenant
improvement allowance (the “Tenant Improvement Allowance”) in the amount equal to Five
Hundred Eighty-Seven Thousand Three Hundred Fifty Dollars ($587,350.00), for the
costs relating to the initial design and construction of Tenant’s improvements
which are permanently affixed to the Premises (the “Tenant Improvements”) and
installed during the period (the “Improvement Period”) from and after the date of execution of
the Second Amendment until the date which is six (6) months after the
Second Expansion Space Commencement Date; provided, however, that Landlord
shall have no obligation to disburse all or any portion of the Tenant
Improvement Allowance to Tenant (i) with respect to any disbursement
request made by Tenant for Tenant Improvements constructed or installed after
the expiration of the Improvement Period, and (ii) with respect to any
disbursement request made by Tenant after the date which is sixty (60) days
after the expiration of the Improvement Period. 
In no event shall Landlord be obligated to make disbursements pursuant
to this Tenant Work Letter in a total amount which exceeds the Tenant
Improvement Allowance.  Tenant shall not
be entitled to receive any cash payment or credit against rent or otherwise for
any unused portion of the Tenant Improvement Allowance which is not used to pay
for the Tenant Improvement Allowance Items (as such term is defined
below).  The portion of the Tenant
Improvements that relate only to the Second Expansion Space are referred to
herein as the “Second Expansion Space Tenant Improvements”.

 

B-1

 

2.2           Disbursement of the Tenant Improvement Allowance.

 

2.2.1        Tenant
Improvement Allowance Items.  Except as otherwise set forth in this Tenant
Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord
only for the following items and costs (collectively, the “Tenant
Improvement Allowance Items”):

 

2.2.1.1     payment of
the fees of the “Architect” and the “Engineers,” as those terms are defined in Section 3.1
of this Tenant Work Letter, and payment of the fees incurred by, and the cost
of documents and materials supplied by, Landlord and Landlord’s consultants in
connection with the preparation and review of the “Construction Drawings,” as
that term is defined in Section 3.1 of this Tenant Work Letter;

 

2.2.1.2     the payment
of plan check, permit and license fees relating to construction of the Tenant
Improvements;

 

2.2.1.3     the cost of
materials and construction of the Tenant Improvements, including, without
limitation, plumbing, heating and ventilation and cooling systems, flooring and
floor coverings, contractors’ fees and general conditions, testing and
inspection costs, costs of utilities, trash removal, parking and hoists, and
the costs of after-hours freight elevator usage.

 

2.2.1.4     the cost of
any changes in the Base, Shell and Core work when such changes are required by
the Construction Drawings (including if such changes are due to the fact that
such work is prepared on an unoccupied basis), such cost to include all direct
architectural and/or engineering fees and expenses incurred in connection
therewith;

 

2.2.1.5     the cost of
any changes to the Construction Drawings or Tenant Improvements required by
applicable laws;

 

2.2.1.6     sales and
use taxes and Title 24 fees;

 

2.2.1.7     the “Coordination
Fee,” as that term is defined in Section 4.2.2.2 of this Tenant Work
Letter; and

 

2.2.1.8     all other
reasonable, third party, out-of-pocket costs actually incurred and paid for by
Landlord (as evidenced by invoices and paid receipts) in connection with the
construction of the Tenant Improvements.

 

2.2.2        Disbursement
of Tenant Improvement Allowance.  Subject to Section 2.1 above, during the
construction of the Tenant Improvements, Landlord shall make monthly
disbursements of the Tenant Improvement Allowance for Tenant Improvement
Allowance Items for the benefit of Tenant and shall authorize the release of
monies for the benefit of Tenant as follows:

 

2.2.2.1     Monthly
Disbursements.  On or before the first (1st) day
of each calendar month during the construction of the Tenant Improvements (or
such other date as Landlord may designate), Tenant shall deliver to Landlord: (i) a
request for payment of the “Contractor,” as that term is defined in Section 4.1
below, approved by Tenant, in a form to be

 

B-2

 

provided by Landlord, showing the schedule, by trade, of
percentage of completion of the Tenant Improvements in the Premises, detailing
the portion of the work completed and the portion not completed, and
demonstrating that the relationship between the cost of the work completed and
the cost of the work to be completed complies with the terms of the “Construction
Budget,” as that term is defined in Section 4.2.1 below; (ii) invoices
from all of “Tenant’s Agents,” as that term is
defined in Section 4.1.2 below, for labor rendered and materials delivered
to the Premises; (iii) executed mechanic’s lien releases from all of
Tenant’s Agents which shall comply with the appropriate provisions of
California Civil Code Section 3262(d); and (iv) all other information
reasonably requested by Landlord.  Tenant’s
request for payment shall be deemed Tenant’s acceptance and approval of the
work furnished and/or the materials supplied as set forth in Tenant’s payment
request.  On or before the twentieth (20th)
day of the following calendar month, Landlord shall deliver a check to
Contractor made payable to Contractor (and/or a separate check made payable
directly to Tenant for that portion, if any, of the requested amount
representing reimbursement to Tenant of amounts previously paid directly by
Tenant from Tenant’s own funds to the Contractor, and/or the Architect and Engineers,
which amounts shall be evidenced by invoices and paid receipts delivered by
Tenant to Landlord concurrently with the delivery of any such request for
disbursement) in payment of the lesser of (A) the amounts so requested by
Tenant, as set forth in this Section 2.2.2.1, above, less a ten percent
(10%) retention (the aggregate amount of such retentions to be known as the “Final Retention”)
and (B) the balance of any remaining available portion of the Tenant
Improvement Allowance (not including the Final Retention), provided that
Landlord does not reasonably dispute any request for payment based on
non-compliance of any work with the “Approved Working Drawings”, as that term
is defined in Section 3.4 below, or due to any substandard work, or for
any other reason; provided, however, if there is an Over-Allowance Amount
required to be paid by Tenant pursuant to Section 4.2 below for any such
disbursement, Landlord shall only be required to make a disbursement of the
applicable portion of the Tenant Improvement Allowance in accordance with the
foregoing equal to Landlord’s pro rata share of the Tenant Improvement
Allowance applicable to such disbursement and only after Tenant has paid (or
only if Tenant concurrently pays) Tenant’s pro rata share of the Over-Allowance
Amount applicable to such disbursement. 
For purposes hereof, Landlord’s pro rata share applicable to each such
disbursement amount of the Tenant Improvement Allowance shall equal the
percentage resulting from dividing the Tenant Improvement Allowance by the
total cost of the Tenant Improvement Allowance Items as estimated in the Final
Costs Statement delivered pursuant to Section 4.2 below, and Tenant’s pro
rata share applicable to each such disbursement of the Over-Allowance Amount
shall equal the Over-Allowance Amount divided by such total cost of the Tenant
Improvement Allowance Items, subject to adjustment pursuant to the last
sentence of Section 4.2.1 below. 
Landlord’s payment of such amounts shall not be deemed Landlord’s
approval or acceptance of the work furnished or materials supplied as set forth
in Tenant’s payment request.

 

2.2.2.2     Final
Retention.  Subject to the provisions of this Tenant Work
Letter, a check for the Final Retention payable jointly to
Tenant and Contractor shall be delivered by Landlord to Tenant
following the completion of construction of the Premises, provided that (i) Tenant
delivers to Landlord properly executed mechanics lien releases in compliance
with both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or
Section 3262(d)(4), and (ii) Landlord has determined that no
substandard work exists which adversely affects the mechanical, electrical,
plumbing, heating, ventilating and air conditioning, life-safety or other
systems of the Building, the curtain wall of the Building, or the structure or

 

B-3

 

exterior appearance of the Building.  Landlord shall make any such determination as
to whether substandard work exists within ten (10) days following Landlord’s
receipt from Tenant of notice of substantial completion of the Tenant
Improvements.

 

2.2.2.3     Other
Terms.  Landlord shall only be
obligated to make disbursements from the Tenant Improvement Allowance to the
extent costs are incurred by Tenant for Tenant Improvement Allowance Items.

 

2.2.3        Specifications
for Building Standard Components. 
Landlord has established specifications (the “Specifications”)
for the Building standard components to be used in the construction of the
Tenant Improvements in the Premises which Specifications have been received by
Tenant.  Unless otherwise agreed to by
Landlord, the Tenant Improvements shall comply with the Specifications.  Landlord may make changes to the
Specifications from time to time; provided, however, that Landlord shall pay
for the cost of revising the Construction Drawings to conform to such changes,
if any, to the Specifications.

 

SECTION 3

 

CONSTRUCTION DRAWINGS

 

3.1           Selection
of Architect/Construction Drawings.  Tenant shall retain, and Landlord hereby
approves the retention of, Bums and Nettle (the “Architect”) as the
architect/space planner to prepare the Construction Drawings.  Tenant shall retain the engineering
consultants designated by Landlord (the “Engineers”) to prepare all plans
and engineering working drawings relating to the structural, mechanical,
electrical, plumbing, HVAC, lifesafety, and sprinkler work in the
Premises.  The plans and drawings to be
prepared by Architect and the Engineers hereunder shall be known collectively
as the “Construction
Drawings”.
All Construction Drawings shall comply with the drawing format and
specifications reasonably determined by Landlord, and shall be subject to
Landlord’s approval.  Tenant and
Architect shall verify, in the field, the dimensions and conditions as shown on
the relevant portions of the base building plans, and Tenant and Architect
shall be solely responsible for the same, and Landlord shall have no
responsibility in connection therewith. 
Landlord’s review of the Construction Drawings as set forth in this Section 3,
shall be for its sole purpose and shall not imply Landlord’s review of the
same, or obligate Landlord to review the same, for quality, design, compliance
with applicable laws and building codes (collectively, “Code”) or
other like matters.  Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord’s
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings.

 

3.2           Final
Space Plan.  Prior to the execution of the Second
Amendment, Landlord and Tenant have approved a detailed space plan for the
construction of the Tenant Improvements, a copy of which is attached hereto as Schedule 1 (the “Final Space Plan”).

 

3.3           Final
Working Drawings.  Promptly following the mutual execution and
delivery of the Second Amendment, Tenant shall cause the Architect and the
Engineers to complete the

 

B-4

 

architectural and engineering drawings for the Premises
consistent with and based upon the Final Space Plan, and cause the Architect to
compile a fully coordinated set of architectural, structural, mechanical,
electrical and plumbing working drawings in a form which is complete to allow
subcontractors to bid on the work and to obtain all applicable permits for the
Tenant Improvements (collectively, the “Final Working Drawings”), and
shall submit the same to Landlord for Landlord’s approval.  Tenant shall supply Landlord with four (4) copies
signed by Tenant of such Final Working Drawings.  Landlord shall advise Tenant within five (5) business
days after Landlord’s receipt of the Final Working Drawings for the Premises if
the same is unsatisfactory or incomplete in any respect.  If Tenant is so advised, Tenant shall promptly
(i) revise the Final Working Drawings in accordance with such review and
any disapproval of Landlord in connection therewith, and (ii) deliver such
revised Final Working Drawings to Landlord.

 

3.4           Approved
Working Drawings.  The Final Working Drawings shall be approved
by Landlord (the “Approved
Working Drawings”) prior to the commencement of construction of the
Premises by Tenant.  After approval by
Landlord of the Final Working Drawings, Tenant shall promptly submit the same
to the appropriate governmental authorities for all applicable building
permits.  Tenant hereby agrees that
neither Landlord nor Landlord’s consultants shall be responsible for obtaining
any building permit or certificate of occupancy for the Premises and that
obtaining the same shall be Tenant’s responsibility; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit or certificate of occupancy.  No changes, modifications or alterations in
the Approved Working Drawings may be made without the prior written consent of
Landlord, which consent shall not be unreasonably withheld or delayed.

 

SECTION 4

 

CONSTRUCTION OF THE TENANT
IMPROVEMENTS

 

4.1           Tenant’s
Selection of Contractor and Tenant’s Agents.

 

4.1.1        The
Contractor.  Tenant has retained, and Landlord hereby
approves, JAE (“Contractor”) as the general
contractor to construct the Tenant Improvements.

 

4.1.2        Tenant’s
Agents. 
All subcontractors, laborers, materialmen, and suppliers used by Tenant
(such subcontractors, laborers, materialmen, and suppliers, and the Contractor
to be known collectively as “Tenant’s Agents”) must be approved in writing by Landlord,
which approval shall not be unreasonably withheld or delayed; provided that, in
any event, Tenant must contract with Landlord’s base building subcontractors
for any mechanical, electrical, plumbing, life safety, structural, heating,
ventilation, and air-conditioning work in the Premises.  If requested by Landlord, Tenant’s Agents
shall all be union labor in compliance with the master labor agreements
existing between trade unions and the local chapter of the Associated General
Contractors of America.

 

B-5

 

4.2           Construction of Tenant Improvements by Tenant’s Agents.

 

4.2.1        Construction
Contract; Cost Budget.  Prior to Tenant’s execution of the
construction contract and general conditions with Contractor (the “Contract”),
Tenant shall submit the Contract to Landlord for its approval, which approval
shall not be unreasonably withheld or delayed. 
Prior to the commencement of the construction of the Tenant
Improvements, and after Tenant has accepted all bids for the Tenant
Improvements, Tenant shall provide Landlord with a written detailed cost
breakdown (the “Final
Costs Statement”), by trade, of the final costs to be incurred, or
which have been incurred, as set forth more particularly in Section 2.2.1.1
through 2.2.1.8 above, in connection with the design and construction of the
Tenant Improvements to be performed by or at the direction of Tenant or the
Contractor (which costs form a basis for the amount of the Contract, if any
(the “Final
Costs”).  The amount by which
the Final Costs exceed the Tenant Improvement Allowance (less any portion
thereof already disbursed by Landlord, or in the process of being disbursed by
Landlord, on or before the commencement of construction of the Tenant
Improvements) is referred to herein as the “Over-Allowance Amount”.  With respect to each disbursement of Landlord’s
pro rata portion of the Tenant Improvement Allowance required to be made by
Landlord pursuant to Section 2.2.2.1 above, Tenant shall pay directly to
the Contractor, no later than the date Landlord is required to disburse or pay
such Landlord’s pro rata portion of the Tenant Improvement Allowance, Tenant’s
pro rata share of such Over-Allowance Amount applicable to such disbursement as
determined pursuant to Section 2.2.2.1 above.  In the event that, after the Final Costs have
been delivered by Landlord to Tenant, the costs relating to the design and
construction of the Tenant Improvements shall change, such changes shall be
incorporated into the last approved Final Costs Statement and Landlord’s and
Tenant’s pro rata share of such additional costs shall be adjusted to take into
account such changes.

 

4.2.2        Tenant’s
Agents.

 

4.2.2.1     Landlord’s
General Conditions for Tenant’s Agents and Tenant  Improvement Work.  Tenant’s and Tenant’s
Agents’ construction of the Tenant Improvements shall comply with the
following: (i) the Tenant Improvements shall be constructed in strict
accordance with the Approved Working Drawings; (ii) Tenant and Tenant’s
Agents shall not, in any way, interfere with, obstruct, or delay, the work of
Landlord’s base building contractor and subcontractors with respect to the
Base, Shell and Core or any other work in the Building or Project; (iii) Tenant’s
Agents shall submit schedules of all work relating to the Tenant’s Improvements
to Contractor and Contractor shall, within five (5) business days of
receipt thereof, inform Tenant’s Agents of any changes which are necessary
thereto, and Tenant’s Agents shall adhere to such corrected schedule; and (iv) Tenant
shall abide by all rules made by Landlord’s Building contractor or
Landlord’s Building manager with respect to the use of freight, loading dock
and service elevators, storage of materials, coordination of work with the
contractors of other tenants, and any other matter in connection with this
Tenant Work Letter, including, without limitation, the construction of the
Tenant Improvements.

 

4.2.2.2     Coordination
Fee. 
Tenant shall pay a logistical coordination fee (the “Coordination Fee”)
to Landlord in an amount equal to Twenty Thousand Dollars ($20,000.00), which
Coordination Fee shall be for services relating to the coordination of the
construction of the Tenant Improvements.

 

B-6

 

4.2.2.3     Indemnity.  Tenant’s indemnity
of Landlord as set forth in the Lease, as amended by the Second Amendment,
shall also apply with respect to any and all costs, losses, damages, injuries
and liabilities related in any way to any act or omission of Tenant or Tenant’s
Agents, or anyone directly or indirectly employed by any of them, or in
connection with Tenant’s non-payment of any amount arising out of the Tenant
Improvements and/or Tenant’s disapproval of all or any portion of any request
for payment.

 

4.2.2.4     Insurance
Requirements.

 

4.2.2.4.1          General
Coverages.  All of Tenant’s Agents shall carry worker’s
compensation insurance covering all of their respective employees, and shall
also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in the Lease, as amended by the Second Amendment.

 

4.2.2.4.2          Special
Coverages.  Tenant shall carry “Builder’s All Risk”
insurance in an amount approved by Landlord covering the construction of the
Tenant Improvements, and such other insurance as Landlord may require, it being
understood and agreed that the Tenant Improvements shall be insured by Tenant
pursuant to the Lease, as amended by the Second Amendment, immediately upon
completion thereof Such insurance shall be in amounts and shall include such
extended coverage endorsements as may be reasonably required by Landlord, and
in form and with companies as are required to be carried by Tenant as set forth
in the Lease, as amended by the Second Amendment.

 

4.2.2.4.3          General
Terms. 
Certificates for all insurance carried pursuant to this Section 4.2.2.4
shall be delivered to Landlord before the commencement of construction of the
Tenant Improvements and before the Contractor’s equipment is moved onto the
site.  All such policies of insurance
must contain a provision that the company writing said policy will give
Landlord thirty (30) days prior written notice of any cancellation or lapse of
the effective date or any reduction in the amounts of such insurance.  In the event that the Tenant Improvements are
damaged by any cause during the course of the construction thereof, Tenant
shall immediately repair the same at Tenant’s sole cost and expense.  All policies carried under this Section 4.2.2.4
shall insure Landlord and Tenant, as their interests may appear, as well as
Contractor and Tenant’s Agents, and shall name as additional insureds Landlord’s
Property Manager, Landlord’s Asset Manager, and all mortgagees and ground
lessors of the Building and/or Project. 
All insurance, except Workers’ Compensation, maintained by Tenant’s
Agents shall preclude subrogation claims by the insurer against anyone insured
thereunder.  Such insurance shall provide
that it is primary insurance as respects the owner and that any other insurance
maintained by owner is excess and noncontributing with the insurance required
hereunder.  The requirements for the
foregoing insurance shall not derogate from the provisions for indemnification
of Landlord by Tenant under Section 4.2.2.3 of this Tenant Work Letter.

 

4.2.3        Governmental
Compliance.  The Tenant Improvements shall comply in all
respects with the following: (i) the Code and other state, federal, city
or quasi-governmental laws, codes, ordinances and regulations, as each may
apply according to the rulings of the controlling public official, agent or
other person; (ii) applicable standards of the American Insurance

 

B-7

 

Association (formerly, the National Board of Fire
Underwriters) and the National Electrical Code; and (iii) building
material manufacturer’s specifications.

 

4.2.4        Inspection
by Landlord.  Landlord shall have the right to inspect the
Tenant Improvements at all times, provided however, that Landlord’s failure to
inspect the Tenant Improvements shall in no event constitute a waiver of any of
Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant
Improvements constitute Landlord’s approval of the same.  Should Landlord disapprove any portion of the
Tenant Improvements based on non-compliance thereof with applicable laws or the
Approved Working Drawings, or due to any defects or substandard work, Landlord
shall notify Tenant in writing of such disapproval and shall specify the items
disapproved.  Any defects or deviations
in the Tenant Improvements, and/or disapproval by Landlord of the Tenant
Improvements in accordance with the foregoing, shall be rectified by Tenant at
no expense to Landlord, provided however, that in the event Landlord determines
that a defect or deviation exists or disapproves any portion of the Tenant
Improvements based on non-compliance thereof with applicable laws or the
Approved Working Drawings, or due to substandard work, and such defect, deviation
or other matter so disapproved by Landlord would adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of
the Building or any other tenant’s use of such other tenant’s leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant’s expense
and without incurring any liability on Landlord’s part, to correct any such
defect, deviation and/or other Landlord disapproved matter, including, without
limitation, causing the cessation of performance of the construction of the
Tenant Improvements until such time as the defect, deviation and/or other
Landlord disapproved matter is corrected to Landlord’s satisfaction.

 

4.2.5        Meetings.  Commencing upon the
execution of the Second Amendment, Tenant shall hold weekly meetings at a
reasonable time, with the Architect and the Contractor regarding the progress
of the preparation of Construction Drawings and the construction of the Tenant
Improvements, which meetings shall be held at a location designated by
Landlord, and Landlord and/or its agents shall receive prior notice of, and
shall have the right to attend, all such meetings, and, upon Landlord’s
request, certain of Tenant’s Agents shall attend such meetings.  One such meeting each month shall include the
review of Contractor’s current request for payment.

 

4.3           Notice
of Completion; Copy of “As Built” Plans.  Within ten (10) days after completion of
construction of the Tenant Improvements, Tenant shall cause a Notice of
Completion to be recorded in the office of the Recorder of the County in which
the Building is located in accordance with Section 3093 of the Civil Code
of the State of California or any successor statute, and shall furnish a copy
thereof to Landlord upon such recordation. 
If Tenant fails to do so, Landlord may execute and file the same on
behalf of Tenant as Tenant’s agent for such purpose, at Tenant’s sole cost and
expense.  At the conclusion of construction,
(i) Tenant shall cause the Architect and Contractor (A) to update the
Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (B) to
certify to the best of their knowledge that the “record-set” of as-built
drawings are true and correct, which certification shall survive the expiration
or termination of the Lease, as amended by the Second Amendment, (C) to
deliver to Landlord two (2) sets of sepias of such as-built drawings within
ninety (90) days following issuance of a certificate of

 

B-8

 

occupancy for the Premises, and (D) to deliver to
Landlord a computer disk containing the Approved Working Drawings in AutoCAD
format, and (ii) Tenant shall deliver to Landlord a copy of all
warranties, guaranties, and operating manuals and information relating to the
improvements, equipment, and systems in the Premises.

 

4.4           Coordination
by Tenant’s Agents with Landlord.  Upon Tenant’s delivery of the Contract to
Landlord under Section 4.2.1 of this Tenant Work Letter, Tenant shall
furnish Landlord with a schedule setting forth the projected date of the
completion of the Tenant Improvements and showing the critical time deadlines
for each phase, item or trade relating to the construction of the Tenant
Improvements.

 

SECTION 5

 

SUBSTANTIAL COMPLETION OF THE
SECOND EXPANSION SPACE TENANT 

IMPROVEMENTS; TI FORCE MAJEURE DELAYS

 

5.1           Substantial
Completion.  For purposes of the Second Amendment, “Substantial Completion of the Second Expansion Space Tenant
Improvements” shall occur upon the completion of construction of the
Second Expansion Space Tenant Improvements pursuant to the Approved Working
Drawings which relate specifically to the Second Expansion Space Tenant
Improvements, with the exception of (A) any punch list items (i.e.,
minor defects or conditions in the Second Expansion Space Tenant Improvements
that do not materially and adversely interfere with Tenant’s use and occupancy
of the Second Expansion Space for the permitted use set forth in the Lease, as
amended by the Second Amendment, and (B) any tenant fixtures,
work-stations, built-in furniture, or equipment to be installed by Tenant or
under the supervision of Contractor in the Second Expansion Space.

 

5.2           TI
Force Majeure Delays.  To the extent that Substantial Completion of
the Second Expansion Space Tenant Improvements is actually delayed beyond September 1,
2007 as a result of any TI Force Majeure Delays (as defined below), then, subject
to the provisions of Section 5.3 below, the Second Expansion Space
Commencement Date shall be extended by the number of days of such TI Force
Majeure Delays (but in no event shall the Second Expansion Space Commencement
Date be delayed pursuant to this Section 5.2 beyond the date Tenant
commences business operations in the Second Expansion Space).  For purposes hereof, “TI Force Majeure
Delays” shall mean any actual delay in Substantial Completion of the
Second Expansion Space Tenant Improvements beyond September 1, 2007 as a
result of the following: fire, wind, damage or destruction to the Building,
explosion, casualty, flood, hurricane, tornado, the elements, acts of God or
the public enemy, strikes, sabotage, war, invasion, insurrection, rebellion, civil
unrest, riots, or earthquakes, failure of utilities, inability to secure labor
or materials or reasonable substitutions therefor or inability to secure
permits and governmental inspections beyond the time period that would normally
be required to secure such labor or materials or reasonable substitutions
therefor or permits and inspections, as the case may be, on an objective basis
by any other person or entity constructing improvements comparable to the
Second Expansion Space Tenant Improvements.

 

5.3           Special
Provisions.  Notwithstanding the foregoing provisions of Section 5.2
above to the contrary:

 

B-9

 

(i)            no
TI Force Majeure Delay shall be deemed to have occurred with respect to any
contended delay unless Tenant has delivered to Landlord written notice (the “Delay Notice”)
specifying in reasonable detail the actions, inactions or circumstances Tenant
claims constitute such TI Force Majeure Delay within three (3) business
days after Tenant becomes aware of the occurrence of the action, inactions or
circumstances; provided, however, in the event Tenant provides such Delay
Notice after the expiration of such third (3rd) business day, the
applicable TI Force Majeure Delay shall be deemed to have occurred (subject,
however, to the following limitations in clauses (ii) and (iii) hereinbelow)
commencing on the day that Tenant actually provides such applicable Delay
Notice to Landlord; and

 

(ii)           no
such extension of the Second Expansion Space Commencement Date shall occur to
the extent the applicable TI Force Majeure Delay could have been avoided had
Tenant used commercially reasonable efforts to avoid such delay and to adapt
and compensate for such delay.

 

SECTION 6

 

MISCELLANEOUS

 

6.1           Tenant’s
Representative.  Tenant has designated Douglas Robertson as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who shall have full authority and responsibility to act on behalf
of the Tenant as required in this Tenant Work Letter.

 

6.2           Landlord’s
Representative.  Landlord has designated Steve Haver as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

 

6.3           Time
of the Essence in This Tenant Work Letter.  Unless otherwise indicated, all references
herein to a “number of days” shall mean and refer to calendar days.  If any item requiring approval is timely
disapproved by Landlord, the procedure for preparation of the document and
approval thereof shall be repeated until the document is approved by Landlord.

 

6.4           Tenant’s
Lease Default.  Notwithstanding any provision to the contrary
contained in the Lease, as the amended by the Second Amendment, if an event of
default by Tenant of this Tenant Work Letter or the Lease, as amended by the
Second Amendment, has occurred at any time on or before the substantial
completion of the Premises, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to the Lease, at law and/or in equity,
Landlord shall have the right to withhold payment of all or any portion of the
Tenant Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the Premises (in which case, Tenant shall be responsible for
any delay in the substantial completion of the Premises caused by such work
stoppage), and (ii) all other obligations of Landlord under the terms of
this Tenant Work Letter shall be forgiven until such time as such default is
cured pursuant to the terms of the Lease (in which case, Tenant shall be
responsible for any delay in the substantial completion of the Premises caused
by such inaction by Landlord).  In
addition, if the Lease, as amended by the Second Amendment, is terminated prior
to the Second Expansion

 

B-10

 

Space Commencement Date, for any reason due to a default by
Tenant as described in Paragraph 13 of the Original Lease or under this Tenant
Work Letter, in addition to any other remedies available to Landlord under the
Lease, as amended by the Second Amendment, at law and/or in equity, Tenant
shall pay to Landlord, as additional rent under the Lease, as amended by the
Second Amendment, within five (5) days of receipt of a statement therefor,
any and all costs (if any) incurred by Landlord (including any portion of the
Tenant Improvement Allowance disbursed by Landlord) and not reimbursed or
otherwise paid by Tenant through the date of such termination in connection
with the Tenant Improvements to the extent planned, installed and/or
constructed as of such date of termination, including, but not limited to, any
costs related to the removal of all or any portion of the Tenant Improvements
and restoration costs related thereto.

 

B-11

 

SCHEDULE 1

 

FINAL SPACE PLAN

 

1

 

[Attached]

 

2

 

AMENDMENT
NO. 3

TO

MARINA VILLAGE INDUSTRIAL GROSS LEASE

 

THIS
AMENDMENT NO. 3 TO MARINA VILLAGE INDUSTRIAL GROSS LEASE (this “Third Amendment”) is made
and entered into as of September 1, 2007, by and between LEGACY PARTNERS I
ALAMEDA, a Delaware limited liability company (“Landlord”), and BERKELEY HEARTLAB, INC., a California
corporation (“Tenant”).

 

RECITALS:

 

A.            Alameda Real Estate
Investments, a California limited partnership (“Alameda”), and Tenant entered into that certain Marina
Village Industrial Gross Lease dated as of August 20, 2004 (the “Original Lease”), pursuant
to which Alameda leased to Tenant and Tenant leased from Alameda certain
premises commonly known as Suite 100, containing approximately 20,131
rentable square feet of space (the “Original Premises”) located within that certain building located at
960 Atlantic Avenue (the “Building”), all as more particularly described in the
Original Lease.

 

B.            Alameda and Tenant entered
into that certain Marina Village Verification Memorandum dated as of August 20,
2004 (the “Verification Memorandum”), pursuant to which the parties, among other
things, confirmed the Commencement Date, the Expiration Date and certain other
terms relating to the Original Premises.

 

C.            Alameda and Tenant entered
into that certain Amendment No. 1 to Marina Village Industrial Gross Lease
dated as of March 7, 2005 (the “First Amendment”), pursuant to which the parties, among other
things, expanded the Original Premises to include certain premises containing
approximately 6,760 rentable square feet located within the Building and more
particularly described in the First Amendment (the “Expansion Space”).  The
Original Premises and Expansion Space are collectively referred to herein as
the “Existing Premises”.

 

D.            Landlord succeeded to the
interests of Alameda as landlord under the Original Lease, the Verification
Memorandum and the First Amendment.

 

E.             Landlord and Tenant entered
into that certain Amendment No. 2 to Marina Village Industrial Gross Lease
dated as of May 30, 2007 (the “Second Amendment”), pursuant to which the parties, among other
things, expanded the Existing Premises to include certain premises containing
approximately 13,233 rentable square feet commonly known as Suite 102 and
comprising the remainder of the rentable area of the Building (the “Second Expansion Space”).  The Original Lease, Verification Memorandum,
First Amendment and Second Amendment are collectively referred to herein as the
“Lease.”

 

F.             Except as otherwise set
forth herein, all capitalized terms used in this Third Amendment shall have the
same meaning as given such terms in the Lease.

 

G.            Landlord and Tenant desire
to amend the Lease to confirm the Second Expansion Space Commencement Date, as
hereinafter provided.

 

1

 

NOW,
THEREFORE, in consideration of the foregoing Recitals and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

 

1.             Confirmation of Dates.  The parties hereby confirm that the Second
Expansion Space Term commenced as of September 1, 2007 (the “Second Expansion Space Commencement Date”) for a term ending on October 31, 2014
(unless sooner terminated as provided in the Lease).

 

2.             No Further Modification.  Except as set forth in this Third Amendment,
all of the terms and provisions of the Lease shall remain unmodified and in
full force and effect.

 

[SIGNATURES
APPEAR ON THE FOLLOWING PAGE]

 

2

 

IN WITNESS WHEREOF, this Third Amendment to Lease has been executed as
of the day and year first above written.

 

	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
   

  	
  LEGACY PARTNERS I ALAMEDA,
  LLC,

  a Delaware limited liability company,

  Owner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Legacy Partners
  Commercial, L.P., a

  California limited partnership, as Property

  Manager and Agent for Owner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Legacy Partners
  Commercial, Inc., its

  General Partner

  
	
   

  	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Debra Smith

  
	
   

  	
  Name: 

  	
  Debra Smith

  
	
   

  	
  Its:

  	
  Executive Vice President

  
	
   

  
	
  TENANT:

  	
   

  
	
   

  	
   

  
	
   

  	
  BERKELEY HEARTLAB, INC.,

  
	
   

  	
  a California corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren A. Ambrose

  
	
   

  	
  Name:

  	
  Warren A. Ambrose

  
	
   

  	
  Title:Chief Finance and
  Operations Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jonathan Wolin

  
	
   

  	
  Name:

  	
  Jonathan Wolin

  
	
   

  	
  Title:General Counsel

  
								

 

3================================================================================

                                 Exhibit 10.32

                             EQUITY SOURCE PARNTERS
                              575 Jericho Turnpike
                             Jericho, New York 11753

                                                                 August 14, 2007

Raymond Cannefax
CEO
Paradigm Medical Industries, Inc.
2355 South 1070 West
Salt Lake City, Utah  84119

Dear Ray;

         As per our discussions of earlier dates,  Equity Source  Partners,  LLC
("ESP") is pleased to act as  exclusive  financial  advisor to Paradigm  Medical
Industries,  Inc. (the "Company") in connection  with the Company's  interest in
raising private capital,  creating a strategy for growing the core business, the
pursuit of a  follow-on  offering  and  providing  general  strategic  corporate
advice.

1.       Strategic Advisory Services
         ---------------------------

         ESP will provide  strategic and fund raising  assistance  and advice as
the Company may reasonably request, including the following:

         a)   Assist in identifying and introducing the company to third parties
              in connection with potential strategic relationships;

         b)   Assist the Company in  reviewing  presentations  to third  parties
              interested in strategic relationships;

         c)   Provide advice  regarding  issues relating to potential  strategic
              relations,   capital  raises  and  potential   investment  banking
              contacts;

         d)   Establish contact with prospective  providers of capital and their
              advisors

         e)   Assist the Company in  establishing  a value  range for  potential
              transactions;

         f)   Assist  the  Company,  where  practicable,  in its  due  diligence
              procedures;

         g)   Counsel  the Company as to  strategy  and tactics for  negotiating
              with the prospective providers of capital;

         h)   Advise as to the structure and form of potential transactions; and

         i)   Assuming an  agreement  is reached  for a  potential  transaction,
              assist in reviewing  matters necessary to consummate the potential
              transaction.

                                       1
<PAGE>

2.       Financing Services
         ------------------

The  Services to be  performed  on behalf of the Company  respecting a Financing
include the following:

         a)   Visiting with  representatives  of the Company to learn more about
              its operations, business and financial condition;

         b)   Advise  the  Company  as  to  appropriate   terms  and  conditions
              respecting any Financing;

         c)   Review an executive  summary prepared by the Company to be used to
              solicit prospective providers of capital;

         d)   Solicit prospective  providers of capital on the Company's behalf;
              and

         e)   Assist  the  Company  in  negotiating  the  terms of a  definitive
              agreement  with  one or more  providers  of  capital  on the  most
              favorable possible terms to it.

3.       Terms of Agreement
         ------------------

ESP will act for the Company as provided above from  the date of this letter for
a period of twelve months unless this assignment is extended by mutual consent.

4.       General Retainer, Strategic Advisory Fee, Success Fees and Expenses
         -------------------------------------------------------------------

         a)   As  compensation  for ESP's services in providing such  consulting
              services,  advice and assistance,  the Company agrees to issue ESP
              an advisory  fee equal to an  aggregate  of 3% of the  outstanding
              shares of Paradigm  Medical  Industries,  Inc. common stock. It is
              understood  that these  shares will be adjusted to the extent that
              any additional shares of Paradigm Medical are issued subsequent to
              signing this agreement. To the extent practicable, the shares will
              be  included  in the  next  registration  statement  filed  by the
              Company.

         b)   As compensation  for ESP's services in providing access to capital
              and potential banking relationships, the Company agrees to pay ESP
              as follows:

              (i)    A cash fee to equal to 7.5% of the gross proceeds  received
                     from  the  sale  of   securities   to  investors  who  were
                     introduced to the Company by ESP and a cash fee equal to 3%
                     of the gross proceeds  received from the sale of securities
                     to investors who were not introduced by ESP.

5.       Governing Law
         -------------

This letter  agreement shall be governed by and construed in accordance with the
laws of the  State of New  York,  without  giving  effect  to  conflicts  of law
principles.  The Company hereby agrees that any suit or proceedings  arising out
of or relating to the engagement contemplated hereby shall be had in the federal
or state  courts in New York and hereby  consents to  jurisdiction  and venue in
such courts.  ESP hereby agrees and the Company hereby agrees, on its own behalf
and on behalf of its security holders,  to waive any right to trial by jury with
respect to any claim,  counter-claim  or action  arising out of or in connection
with this letter agreement.

6.       Sole and Entire Agreement; Binding Effect
         -----------------------------------------

This agreement is the sole and entire agreement  between the parties  pertaining
to its subject matter and supersedes all prior agreements,  representations  and
understandings  of the parties.  No  modifications  of this  agreement  shall be
binding unless agreed to in writing by ESP and the Company. This agreement shall
be binding on and shall insure to the benefit of the  successors  and assigns of
the parties hereto.

                                                /s/ Cary Sucoff
                                                ----------------------
                                                Cary Sucoff
                                                Equity Source Partners

Agreed and Accepted:

/s/ Raymond Cannefax
------------------------------
Raymond Cannefax
Paradigm Medical Industries, Inc.

--------------------------------------------------------------------------------

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