Document:

Exhibit
10.2

 

LEASE

(Multi-Tenant;
Net; ”AS IS”)

 

 

BETWEEN

 

 

THE
IRVINE COMPANY

 

 

AND

 

 

4-D NEUROIMAGING

 

 

INDEX
TO LEASE

 

	
  ARTICLE I. 
  BASIC LEASE PROVISIONS

  
	
   

  
	
  ARTICLE II.  PREMISES

  
	
  SECTION 2.1.

  	
   

  	
  LEASED PREMISES

  
	
  SECTION 2.2.

  	
   

  	
  ACCEPTANCE OF PREMISES

  
	
  SECTION 2.3.

  	
   

  	
  BUILDING NAME AND ADDRESS

  
	
   

  	
   

  	
   

  
	
  ARTICLE III.  TERM

  
	
  SECTION 3.1.

  	
   

  	
  GENERAL

  
	
  SECTION 3.2.

  	
   

  	
  RIGHT TO EXTEND THIS LEASE

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV.  RENT AND OPERATING EXPENSES

  
	
  SECTION 4.1.

  	
   

  	
  BASIC RENT

  
	
  SECTION 4.2.

  	
   

  	
  OPERATING EXPENSES

  
	
  SECTION 4.3.

  	
   

  	
  SECURITY DEPOSIT

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  V.  USES

  
	
  SECTION 5.1.

  	
   

  	
  USE

  
	
  SECTION 5.2.

  	
   

  	
  SIGNS

  
	
  SECTION 5.3.

  	
   

  	
  HAZARDOUS MATERIALS

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI.  COMMON AREAS; SERVICES

  
	
  SECTION 6.1.

  	
   

  	
  UTILITIES AND SERVICES

  
	
  SECTION 6.2.

  	
   

  	
  OPERATION AND MAINTENANCE OF COMMON AREAS

  
	
  SECTION 6.3.

  	
   

  	
  USE OF COMMON AREAS

  
	
  SECTION 6.4.

  	
   

  	
  PARKING

  
	
  SECTION 6.5.

  	
   

  	
  CHANGES AND ADDITIONS BY LANDLORD

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII.  MAINTAINING THE PREMISES

  
	
  SECTION 7.1.

  	
   

  	
  TENANT’S MAINTENANCE AND REPAIR

  
	
  SECTION 7.2.

  	
   

  	
  LANDLORD’S MAINTENANCE AND REPAIR

  
	
  SECTION 7.3.

  	
   

  	
  ALTERATIONS

  
	
  SECTION 7.4.

  	
   

  	
  MECHANIC’S LIENS

  
	
  SECTION 7.5.

  	
   

  	
  ENTRY AND INSPECTION

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII.  TAXES AND ASSESSMENTS ON TENANT’S PROPERTY

  
	
   

  
	
  ARTICLE IX.  ASSIGNMENT AND SUBLETTING

  
	
  SECTION 9.1.

  	
   

  	
  RIGHTS OF PARTIES

  
	
  SECTION 9.2.

  	
   

  	
  EFFECT OF TRANSFER

  
	
  SECTION 9.3.

  	
   

  	
  SUBLEASE REQUIREMENTS

  
	
  SECTION 9.4.

  	
   

  	
  CERTAIN TRANSFERS

  
	
   

  	
   

  	
   

  
	
  ARTICLE X. 
  INSURANCE AND INDEMNITY

  
	
  SECTION 10.1.

  	
   

  	
  TENANT’S INSURANCE

  
	
  SECTION 10.2.

  	
   

  	
  LANDLORD’S INSURANCE

  
	
  SECTION 10.3.

  	
   

  	
  TENANT’S INDEMNITY

  
	
  SECTION 10.4.

  	
   

  	
  LANDLORD’S NONLIABILITY

  
	
  SECTION 10.5.

  	
   

  	
  WAIVER OF SUBROGATION

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI.  DAMAGE OR DESTRUCTION

  
	
  SECTION 11.1.

  	
   

  	
  RESTORATION

  
	
  SECTION 11.2.

  	
   

  	
  LEASE GOVERNS

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII.  EMINENT DOMAIN

  
	
  SECTION 12.1.

  	
   

  	
  TOTAL OR PARTIAL TAKING

  
	
  SECTION 12.2.

  	
   

  	
  TEMPORARY TAKING

  
	
  SECTION 12.3.

  	
   

  	
  TAKING OF PARKING AREA

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII.  SUBORDINATION; ESTOPPEL CERTIFICATE; FINANCIALS

  
	
  SECTION 13.1.

  	
   

  	
  SUBORDINATION

  
	
  SECTION 13.2.

  	
   

  	
  ESTOPPEL CERTIFICATE

  
	
  SECTION 13.3.

  	
   

  	
  FINANCIALS

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIV.  EVENTS OF DEFAULT AND REMEDIES

  
	
  SECTION 14.1.

  	
   

  	
  TENANT’S DEFAULTS

  
	
  SECTION 14.2.

  	
   

  	
  LANDLORD’S REMEDIES

  
	
  SECTION 14.3.

  	
   

  	
  LATE PAYMENTS

  
	
  SECTION 14.4.

  	
   

  	
  RIGHT OF LANDLORD TO PERFORM

  
	
  SECTION 14.5.

  	
   

  	
  DEFAULT BY LANDLORD

  
	
  SECTION 14.6.

  	
   

  	
  EXPENSES AND LEGAL FEES

  

 

 

	
  SECTION 14.7.

  	
   

  	
  WAIVER OF JURY TRIAL

  
	
  SECTION 14.8.

  	
   

  	
  SATISFACTION OF JUDGMENT

  
	
  SECTION 14.9.

  	
   

  	
  LIMITATION OF ACTIONS AGAINST LANDLORD

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV.  END OF TERM

  
	
  SECTION 15.1.

  	
   

  	
  HOLDING OVER

  
	
  SECTION 15.2.

  	
   

  	
  MERGER ON TERMINATION

  
	
  SECTION 15.3.

  	
   

  	
  SURRENDER OF PREMISES; REMOVAL OF PROPERTY

  
	
   

  	
   

  	
   

  
	
  ARTICLE XVI.  PAYMENTS AND NOTICES

  
	
   

  
	
  ARTICLE XVII.  RULES AND REGULATIONS

  
	
   

  
	
  ARTICLE XVIII.  BROKER’S COMMISSION

  
	
   

  
	
  ARTICLE XIX.  TRANSFER OF LANDLORD’S INTEREST

  
	
   

  
	
  ARTICLE XX.  INTERPRETATION

  
	
  SECTION 20.1.

  	
   

  	
  GENDER AND NUMBER

  
	
  SECTION 20.2.

  	
   

  	
  HEADINGS

  
	
  SECTION 20.3.

  	
   

  	
  JOINT AND SEVERAL LIABILITY

  
	
  SECTION 20.4.

  	
   

  	
  SUCCESSORS

  
	
  SECTION 20.5.

  	
   

  	
  TIME OF ESSENCE

  
	
  SECTION 20.6.

  	
   

  	
  CONTROLLING LAW/VENUE

  
	
  SECTION 20.7.

  	
   

  	
  SEVERABILITY

  
	
  SECTION 20.8.

  	
   

  	
  WAIVER AND CUMULATIVE REMEDIES

  
	
  SECTION 20.9.

  	
   

  	
  INABILITY TO PERFORM

  
	
  SECTION
  20.10.

  	
   

  	
  ENTIRE AGREEMENT

  
	
  SECTION 20.11.

  	
   

  	
  QUIET ENJOYMENT

  
	
  SECTION 20.12.

  	
   

  	
  SURVIVAL

  
	
  SECTION 20.13.

  	
   

  	
  INTERPRETATION

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXI.  EXECUTION AND RECORDING

  
	
  SECTION 21.1.

  	
   

  	
  COUNTERPARTS

  
	
  SECTION 21.2.

  	
   

  	
  CORPORATE, LIMITED LIABILITY COMPANY AND
  PARTNERSHIP AUTHORITY

  
	
  SECTION 21.3.

  	
   

  	
  EXECUTION OF LEASE; NO OPTION OR OFFER

  
	
  SECTION 21.4.

  	
   

  	
  RECORDING

  
	
  SECTION 21.5.

  	
   

  	
  AMENDMENTS

  
	
  SECTION 21.6.

  	
   

  	
  EXECUTED COPY

  
	
  SECTION 21.7.

  	
   

  	
  ATTACHMENTS

  
	
   

  	
   

  	
   

  
	
  ARTICLE XXII.  MISCELLANEOUS

  
	
  SECTION 22.1.

  	
   

  	
  NONDISCLOSURE OF LEASE TERMS

  
	
  SECTION 22.2.

  	
   

  	
  GUARANTY

  
	
  SECTION 22.3.

  	
   

  	
  CHANGES REQUESTED BY LENDER

  
	
  SECTION 22.4.

  	
   

  	
  MORTGAGEE PROTECTION

  
	
  SECTION 22.5.

  	
   

  	
  COVENANTS AND CONDITIONS

  
	
  SECTION 22.6.

  	
   

  	
  SECURITY MEASURES

  
	
  SECTION 22.7.

  	
   

  	
  EXPIRATION OF EXISTING LEASE

  

 

 

	
  EXHIBITS

  	
   

  
	
  Exhibit A

  	
  Description of
  Premises

  
	
  Exhibit B

  	
  Environmental Questionnaire

  
	
  Exhibit C

  	
  Landlord’s
  Disclosures

  
	
  Exhibit D

  	
  Insurance
  Requirements

  
	
  Exhibit E

  	
  Rules and
  Regulations

  
	
  Exhibit Y

  	
  Project Site Plan

  

 

 

LEASE

(Multi-Tenant;
Net; As Is)

 

THIS LEASE is
made as of the 18th day of February, 2003, by and between THE IRVINE
COMPANY, a Delaware corporation hereafter called “Landlord,” and 4-D
NEUROIMAGING, a California corporation, hereinafter called “Tenant.”

 

ARTICLE I.  BASIC LEASE PROVISIONS

 

Each reference
in this Lease to the “Basic Lease Provisions” shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

 

1.                                       Premises: 
Suite No. N/A (the Premises are more particularly described in
Section 2.1).

 

Address of
Building:  9727 Pacific Heights
Boulevard, San Diego, CA

 

2.                                       Project
Description (if applicable): 
Cornerstone Corporate Center

 

3.                                       Use of
Premises:  General office, research and
development and light manufacturing.

 

4.                                       Commencement
Date:  March 1, 2003

 

5.                                       Expiration
Date:  February 29, 2008

 

6.                                       Basic Rent:
Twenty Seven Thousand Six Hundred Sixty-Six Dollars ($27,666.00) per month,
based on $.60 per rentable square foot.

 

Basic Rent is subject to adjustment as follows:

 

Commencing March 1, 2004, the Basic Rent shall be Thirty Four Thousand
Five Hundred Eighty-Three Dollars ($34,583.00) per month, based on $.75 per
rentable square foot.

 

Commencing March 1, 2005, the Basic Rent shall be Forty Eight Thousand
Eight Hundred Seventy-Seven Dollars ($48,877.00) per month, based on $1.06 per
rentable square foot.

 

Commencing March 1, 2006, the Basic Rent shall be Fifty Thousand Two
Hundred Sixty Dollars ($50,260.00) per month, based on $1.09 per rentable
square foot.

 

Commencing March 1, 2007, the Basic Rent shall be Fifty Two Thousand
One Hundred Four Dollars ($52,104.00) per month, based on $1.13 per rentable
square foot.

 

7.                                       Guarantor(s):   None

 

8.                                       Floor
Area:  Approximately 46,110 rentable
square feet

 

9.                                       Security
Deposit:  $57,314.00

 

10.                                 Broker(s):   None

 

11.                                 Additional
Insureds:  Insignia/ESG, Inc.

 

12.                                 Address
for Payments and Notices:

 

	
  LANDLORD

  	
   

  	
  TENANT

  
	
   

  	
   

  	
   

  
	
  THE IRVINE COMPANY

  c/o Insignia/ESG, Inc.

  3655 Nobel Drive, Suite 510

  San Diego, CA  92122

  	
   

  	
  4-D NEUROIMAGING

  9727 Pacific Heights Boulevard

  San Diego, CA  92121

  
	
   

  	
   

  	
   

  
	
  with a copy of notices to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  THE IRVINE COMPANY

  dba Office Properties

  8105 Irvine Center Drive, Suite 300

  Irvine, CA  92618

  Attn:  Senior Vice President,
  Operations

  Office Properties

  	
   

  	
   

  

 

13.                                 Tenant’s Liability
Insurance Requirement:  $2,000,000.00

 

14.                                 Vehicle Parking
Spaces:  One hundred fifty-seven (157)

 

1

 

ARTICLE II. 
PREMISES

 

SECTION 2.1.                  LEASED
PREMISES.  Landlord leases to
Tenant and Tenant leases from Landlord the premises shown in Exhibit A
(the “Premises”),
containing approximately the rentable square footage set forth as the “Floor Area”  in
Item 8 of the Basic Lease Provisions and known by the suite number identified
in Item 1 of the Basic Lease Provisions. 
The Premises are located in the building identified in Item 1 of the
Basic Lease Provisions (the Premises together with such building and the
underlying real property, are called the “Building”), and is a portion of the project
identified in Item 2 of the Basic Lease Provisions and shown in Exhibit Y,
if any (the “Project”).  If the
Project is not already completed, Landlord makes no representation that the
Project, if any, as shown on Exhibit Y, (a) will be completed or that
it will be constructed as shown on Exhibit Y without change, or
(b) to the extent the Project is constructed, it will not be changed from
the Project as shown on Exhibit Y. 
All references to “Floor Area” in this Lease shall mean the rentable
square footage set forth in Item 8 of the Basic Lease Provisions.  The rentable square footage set forth in
Item 8 may include or have been adjusted by various factors, including,
without limitation, a load factor to allocate a proportionate share of any
vertical penetrations, stairwells, common lobby or common features or areas of
the Building.  Tenant agrees that the
Floor Area set forth in Item 8 shall be binding on Landlord and Tenant for
purposes of this Lease regardless of whether any future or differing
measurements of the Premises or the Building are consistent or inconsistent
with the Floor Area set forth in Item 8.

 

SECTION 2.2.                  ACCEPTANCE
OF PREMISES.  Tenant
acknowledges that neither Landlord nor any representative of Landlord has made
any representation or warranty with respect to the Premises, the Building or
the Project or their respective suitability or fitness for any purpose,
including without limitation any representations or warranties regarding the
compliance of Tenant’s use of the Premises with the applicable zoning or
regarding any other land use matters, and Tenant shall be solely responsible as
to such matters.  Further, neither
Landlord nor any representative of Landlord has made any representations or
warranties regarding (i) what other tenants or uses may be permitted or
intended in the Building or the Project, (ii) any exclusivity of use by
Tenant with respect to its permitted use of the Premises as set forth in
Item 3 of the Basic Lease Provisions, or (iii) any construction of
portions of the Project not yet completed. 
Tenant further acknowledges that neither Landlord nor any representative
of Landlord has agreed to undertake any alterations or additions or construct
any improvements to the Premises. 
Tenant is currently in possession of the Premises pursuant to the
“Existing Lease” (as hereinafter defined), and Tenant’s lease of the Premises
shall be on an “as is” basis.  As of the
Commencement Date, Tenant shall be conclusively deemed to have accepted the
Premises and those portions of the Building and Project in which Tenant has any
rights under this Lease, which acceptance shall mean that it is conclusively
established that the Premises and those portions of the Building and Project in
which Tenant has any rights under this Lease were in satisfactory condition and
in conformity with the provisions of this Lease.

 

SECTION 2.3.                  BUILDING
NAME AND ADDRESS.  Tenant
shall not utilize any name selected by Landlord from time to time for the
Building and/or the Project as any part of Tenant’s corporate or trade
name.  Landlord shall have the right to
change the name, address, number or designation of the Building or Project
without liability to Tenant.

 

ARTICLE III.  TERM

 

SECTION 3.1.                  GENERAL.  Subject to the provisions of
Section 3.2 below, the term of this Lease (“Term”) shall commence on the
date set forth in Item 4 of the Basic Lease Provisions (the “Commencement
Date”), and shall expire on the date set forth in Item 5 of the
Basic Lease Provisions (the “Expiration Date”).

 

SECTION 3.2.                  RIGHT TO
EXTEND THIS LEASE.  Provided
that no Event of Default has occurred under any provision of this Lease, either
at the time of exercise of the extension right granted herein or at the time of
the commencement of such extension, and provided further that Tenant is
occupying the entire Premises and has not assigned or sublet any of its
interest in this Lease, then Tenant may extend the Term of this Lease for one
(1) period of sixty (60) months.  Tenant
shall exercise its right to extend the Term by and only by delivering to
Landlord, not less than nine (9) months or more than twelve (12) months prior
to the expiration date of the Term, Tenant’s irrevocable written notice of its
commitment to extend (the “Commitment Notice”).  The Basic Rent payable under the Lease
during any extension of the Term shall be determined as provided in the following
provisions.

 

If Landlord and Tenant have not by then been able to agree upon the
Basic Rent for the extension of the Term, then within one hundred twenty (120)
and ninety (90) days prior to the expiration date of the Term, Landlord shall
notify Tenant in writing of the Basic Rent that would reflect the prevailing
market rental rate for a 60-month renewal of comparable space in the Project
(together with any increases thereof during the extension period) as of the
commencement of the extension period (“Landlord’s Determination”).  Should Tenant disagree with the Landlord’s
Determination, then Tenant shall, not later than twenty (20) days thereafter,
notify Landlord in writing of Tenant’s determination of those rental terms (“Tenant’s
Determination”).   In no
event, however, shall Landlord’s Determination or Tenant’s Determination be
less than the Basic Rent payable by Tenant during the final month of the
initial Term.  Within ten (10) days
following delivery of the Tenant’s Determination, the parties shall attempt to
agree on an appraiser to determine the fair market rental.  If the parties are unable to agree in that
time, then each party shall designate an appraiser within ten (10) days
thereafter.  Should either party fail to
so designate an appraiser within that time, then the appraiser designated by
the other party shall determine the fair market rental.  Should each of the parties timely designate
an appraiser, then the two appraisers so designated shall appoint a third
appraiser who shall, acting alone, determine the fair market rental for the
Premises.  Any appraiser designated
hereunder shall have an MAI certification with not less than five (5) years
experience in the valuation of commercial industrial buildings in the vicinity
of the Project.

 

Within thirty (30) days following the selection of the appraiser and
such appraiser’s receipt of the Landlord’s Determination and the Tenant’s
Determination, the appraiser shall determine whether the rental rate

 

2

 

determined by Landlord or by
Tenant more accurately reflects the fair market rental rate for the 60-month
renewal of the Lease for the Premises, as reasonably extrapolated to the
commencement of the extension period. 
Accordingly, either the Landlord’s Determination or the Tenant’s
Determination shall be selected by the appraiser as the fair market rental rate
for the extension period.   In making
such determination, the appraiser shall consider rental comparables for the
Project (provided that if there are an insufficient number of comparables
within the project, the appraiser shall consider rental comparables for
similarly improved space within the vicinity of the Project with appropriate
adjustment for location and quality of project), but the appraiser shall not
attribute any factor for market tenant improvement allowances or brokerage
commissions in making its determination of the fair market rental rate.  At any time before the decision of the
appraiser is rendered, either party may, by written notice to the other party,
accept the rental terms submitted by the other party, in which event such terms
shall be deemed adopted as the agreed fair market rental.  The fees of the appraiser(s) shall be borne
entirely by the party whose determination of the fair market rental rate was
not accepted by the appraiser.

 

Within twenty (20) days after the determination of the fair market
rental, Landlord shall prepare an appropriate amendment to this Lease for the
extension period, and Tenant shall execute and return same to Landlord within
twenty (20) days.  Should the fair
market rental not be established by the commencement of the extension period,
then Tenant shall continue paying rent at the rate in effect during the last
month of the initial Term, and a lump sum adjustment shall be made promptly
upon the determination of such new rental.

 

If Tenant fails to timely comply with any of the provisions of this
paragraph, Tenant’s right to extend the Term shall be extinguished and the
Lease shall automatically terminate as of the expiration date of the Term,
without any extension and without any liability to Landlord.  Any attempt to assign or transfer any right
or interest created by this paragraph shall be void from its inception.  Tenant shall have no other right to extend
the Term beyond the single sixty (60) month extension period created by this
paragraph.  Unless agreed to in a
writing signed by Landlord and Tenant, any extension of the Term, whether
created by an amendment to this Lease or by a holdover of the Premises by
Tenant, or otherwise, shall be deemed a part of, and not in addition to, any
duly exercised extension period permitted by this paragraph.

 

ARTICLE IV.  RENT AND OPERATING EXPENSES

 

SECTION 4.1.                  BASIC RENT.  From and after the Commencement Date, Tenant
shall pay to Landlord without deduction or offset, the rental amount for the
Premises shown in Item 6 of the Basic Lease Provisions (the “Basic Rent”),
including subsequent adjustments, if any. 
If adjustments to Basic Rent in Item 6 are to occur on the monthly
anniversary of the Commencement Date, then such adjustments shall be deemed to
occur on the specified monthly anniversary of the Commencement Date, whether or
not the Commencement Date occurs at the end of a calendar month.  The rent shall be due and payable in advance
commencing on the Commencement Date (as prorated for any partial month) and
continuing thereafter on the first day of each successive calendar month of the
Term.  No demand, notice or invoice
shall be required for the payment of Basic Rent.

 

SECTION 4.2.                  OPERATING
EXPENSES.

 

(a)                                  Tenant
shall pay to Landlord, as additional rent, Tenant’s Share of all Operating
Expenses, as defined in Section 4.2(f), incurred by Landlord in the operation
of the Building and the Project.  The term
“Tenant’s
Share” means that portion of any Operating Expenses determined by
multiplying the cost of such item by a fraction, the numerator of which is the
Floor Area and the denominator of which is the total rentable square footage,
as determined from time to time by Landlord, of (i) the Building, for expenses
determined by Landlord to benefit or relate substantially to the Building
rather than the entire Project, (ii) all of the buildings in the Project, as
determined by Landlord, for expenses determined by Landlord to benefit or
relate substantially to the entire Project rather than any specific building or
(iii) all or some of the buildings within the Project as well as all or a
portion of other property owned by Landlord and/or its affiliates, for expenses
which benefit or relate to such buildings within the Project and such other
real property.  In the event that
Landlord determines in its sole and absolute discretion that any premises
within the Building or any building within the Project or any portion of a
building or project within a larger area incurs a non-proportional benefit from
any expense, or is the non-proportional cause of any such expense, Landlord
may, allocate a greater percentage of such Operating Expense to such premises,
building or project, as applicable.  The
full amount of any management fee payable by Landlord for the management of
Tenant’s Premises that is calculated as a percentage of the rent payable by
Tenant shall be paid in full by Tenant as additional rent.

 

(b)                                 Prior
to the start of each full Expense Recovery Period (as defined in this Section
4.2), Landlord shall give Tenant a written estimate of the amount of Tenant’s
Share of Operating Expenses for the applicable Expense Recovery Period.  Failure to provide such estimate shall not
relieve Tenant from its obligation to pay Tenant’s Share of Operating Expenses
or estimated amounts thereof, if and when Landlord provides such estimate or
final payment amount.  Tenant shall pay
the estimated amounts to Landlord in equal monthly installments, in advance
concurrently with payments of Basic Rent. 
If Landlord has not furnished its written estimate for any Expense
Recovery Period by the time set forth above, Tenant shall continue to pay monthly
the estimated Tenant’s Share of Operating Expenses in effect during the prior
Expense Recovery Period; provided that when the new estimate is delivered to
Tenant, Tenant shall, at the next monthly payment date, pay any accrued
estimated Tenant’s Share of Operating Expenses based upon the new
estimate.  For purposes hereof, “Expense
Recovery Period” shall mean every twelve month period during the
Term (or portion thereof for the first and last lease years) commencing
July 1 and ending June 30, provided that Landlord shall have the
right to change the date on which an Expense Recovery Period commences in which
event appropriate reasonable adjustments shall be made to Tenant’s Share of
Operating Expenses so that the amount payable by Tenant shall not materially
vary as a result of such change.

 

3

 

(c)                                  Within
one hundred twenty (120) days after the end of each Expense Recovery Period,
Landlord shall furnish to Tenant a statement showing in reasonable detail the
actual or prorated Tenant’s Share of Operating Expenses incurred by Landlord
during the period, and the parties shall within thirty (30) days thereafter
make any payment or allowance necessary to adjust Tenant’s estimated payments
of Tenant’s Share of Operating Expenses, if any, to the actual Tenant’s Share
of Operating Expenses as shown by the annual statement.  Any delay or failure by Landlord in
delivering any statement hereunder shall not constitute a waiver of Landlord’s
right to require Tenant to pay Tenant’s Share of Operating Expenses pursuant
hereto.  Any amount due Tenant shall be
credited against installments next coming due under this Section 4.2, and any
deficiency shall be paid by Tenant together with the next installment.  Should Tenant fail to object in writing to
Landlord’s determination of Tenant’s Share of Operating Expenses, or fail to
give written notice of its intent to audit Landlord’s Operating Expenses
pursuant to the provisions of the next succeeding paragraph, within sixty (60)
days following delivery of Landlord’s expense statement, Landlord’s
determination of Tenant’s Share of Operating Expenses for the applicable
Expense Recovery Period shall be conclusive and binding on the parties for all
purposes and any future claims to the contrary shall be barred.

 

Provided no Event
of Default has occurred, Tenant shall have the right to cause a certified
public accountant, engaged on a non-contingency fee basis, to audit Operating
Expenses by inspecting Landlord’s general ledger of expenses not more than once
during any Expense Recovery Period. 
However, to the extent that insurance premiums or any other component of
Operating Expenses is determined by Landlord on the basis of an internal
allocation of costs utilizing information Landlord in good faith deems
proprietary, such expense component shall not be subject to audit so long as it
does not exceed the amount per square foot typically imposed by landlords of
other first class business parks in San Diego County, California.  Tenant shall give notice to Landlord of
Tenant’s intent to audit within sixty (60) days after Tenant’s receipt of
Landlord’s expense statement which sets forth Tenant’s Share of Landlord’s
actual Operating Expenses.  Such audit
shall be conducted at a mutually agreeable time during normal business hours at
the office of Landlord or its management agent where such accounts are
maintained.  If Tenant’s audit
determines that actual Operating Expenses have been overstated by more than
five percent (5%), then subject to Landlord’s right to review and/or contest the
audit results, Landlord shall reimburse Tenant for the reasonable out-of-pocket
costs of such audit.  Tenant’s rent
shall be appropriately adjusted to reflect any overstatement in Operating
Expenses.  In the event of a dispute
between Landlord and Tenant regarding such audit, such dispute shall be
submitted and resolved by binding arbitration pursuant to Section 22.7
below.  All of the information obtained
by Tenant and/or its auditor in connection with such audit, as well as any
compromise, settlement, or adjustment reached between Landlord and Tenant as a
result thereof, shall be held in strict confidence and, except as may be
required pursuant to litigation, shall not be disclosed to any third party,
directly or indirectly, by Tenant or its auditor or any of their officers,
agents or employees.  Landlord may
require Tenant’s auditor to execute a separate confidentiality agreement
affirming the foregoing as a condition precedent to any audit.  In the event of a violation of this
confidentiality covenant in connection with any audit, then in addition to any
other legal or equitable remedy available to Landlord, Tenant shall forfeit its
right to any reconciliation or cost reimbursement payment from Landlord due to
said audit (and any such payment theretofore made by Landlord shall be promptly
returned by Tenant), and Tenant shall have no further audit rights under this
Lease.  Notwithstanding the foregoing,
Tenant shall have no right of audit with respect to any Expense Recovery Period
unless the total Operating Expenses per square foot for such Expense Recovery
Period, as set forth in Landlord’s annual expense reconciliation, exceed the
total Operating Expenses per square foot during the initial Expense Recovery
Period during the Term, as increased by the percentage change in the United
States Department of Labor, Bureau of Labor Statistics, Consumer Price Index
for all Urban Consumers, Los Angeles — Riverside — Orange County Area Average,
all items (1982-84 = 100) (the “Index”), which change in the Index shall be
measured by comparing the Index published for January of the initial Expense
Recovery Period during the Term with the Index published for January of the
applicable Expense Recovery Period.

 

(d)                                 Even
though this Lease has terminated and the Tenant has vacated the Premises, when
the final determination is made of Tenant’s Share of Operating Expenses for the
Expense Recovery Period in which this Lease terminates, Tenant shall within
thirty (30) days of written notice pay the entire increase over the estimated
Tenant’s Share of Operating Expenses already paid.  Conversely, any overpayment by Tenant shall be rebated by
Landlord to Tenant not later than thirty (30) days after such final
determination..

 

(e)                                  If,
at any time during any Expense Recovery Period, any one or more of the
Operating Expenses are increased to a rate(s) or amount(s) in excess of the
rate(s) or amount(s) used in calculating the estimated Tenant’s Share of
Operating Expenses for the year, then the estimate of Tenant’s Share of
Operating Expenses may be increased by written notice from Landlord for the
month in which such rate(s) or amount(s) becomes effective and for all
succeeding months by an amount equal to Tenant’s Share of the increase.  If Landlord gives Tenant written notice of
the amount or estimated amount of the increase, the month in which the increase
will or has become effective, then Tenant shall pay the increase to Landlord as
a part of Tenant’s monthly payments of the estimated Tenant’s Share of
Operating Expenses as provided in Section 4.2(b), commencing with the
month following Tenant’s receipt of Landlord’s notice.  In addition, Tenant shall pay upon written
request any such increases which were incurred prior to the Tenant commencing
to pay such monthly increase.

 

(f)                                    The
term “Operating
Expenses” shall mean and include all Project Costs, as defined in
subsection (g), and Property Taxes, as defined in subsection (h).

 

(g)                                 The
term “Project
Costs” shall include all expenses of operation, repair and
maintenance of the Building and the Project, including without limitation all
appurtenant Common Areas (as defined in Section 6.2), and shall include the
following charges by way of illustration but not limitation:  water and sewer charges; insurance premiums
and deductibles and/or reasonable premium and deductible equivalents should
Landlord elect to self-insure all or any portion of any risk that Landlord is
authorized to insure hereunder; license, permit, and inspection fees; light;
power; window washing; trash pickup; janitorial services to any interior Common
Areas;

 

4

 

heating, ventilating and air
conditioning; supplies; materials; equipment; tools; the cost of any
environmental, insurance, tax or other consultant utilized by Landlord in
connection with the Building and/or Project; establishment of reasonable
reserves for replacements and/or repairs; costs incurred in connection with
compliance with any laws or changes in laws applicable to the Building or the
Project; the cost of any capital investments or replacements (other than tenant
improvements for specific tenants) to the extent of the amortized amount
thereof over the useful life of such capital investments or replacements
calculated at a market cost of funds, all as determined by Landlord, for each
such year of useful life during the Term; costs associated with the maintenance
of an air conditioning, heating and ventilation service agreement, and
maintenance of an intrabuilding network cable service agreement for any intrabuilding
network cable telecommunications lines within the Project, and any other
installation, maintenance, repair and replacement costs associated with such
lines; capital costs associated with a requirement related to demands on
utilities by Project tenants, including without limitation the cost to obtain
additional phone connections; labor; reasonably allocated wages and salaries,
fringe benefits, and payroll taxes for administrative and other personnel
directly applicable to the Building and/or Project, including both Landlord’s
personnel and outside personnel; reasonable charges for the accelerated
depreciation of the HVAC equipment serving the Building in connection with
Tenant’s “after-hours” HVAC usage (that is, after 7:00 A.M. to 6 P.M. Monday through
Friday and 9:00 A.M. to 1 P.M. on Saturdays); any expense incurred pursuant to
Sections 6.1, 6.2, 6.4, 7.2, and 10.2; and a reasonable overhead/management fee
for the professional operation of the Project. 
It is understood and agreed that Project Costs may include competitive
charges for direct services provided by any subsidiary, division or affiliate
of Landlord.

 

(h)                                 The
term “Property
Taxes” as used herein shall include any form of federal, state,
county or local government or municipal taxes, fees, charges or other
impositions of every kind (whether general, special, ordinary or extraordinary)
related to the ownership, leasing or operation of the Premises, Building or
Project, including without limitation, the following:  (i) all real estate taxes or personal property taxes, as such
property taxes may be reassessed from time to time; and (ii) other taxes,
charges and assessments which are levied with respect to this Lease or to the
Building and/or the Project, and any improvements, fixtures and equipment and
other property of Landlord located in the Building and/or the Project, (iii)
all assessments and fees for public improvements, services, and facilities and
impacts thereon, including without limitation arising out of any Community
Facilities Districts, “Mello Roos” districts, similar assessment districts, and
any traffic impact mitigation assessments or fees; (iv) any tax, surcharge
or assessment which shall be levied in addition to or in lieu of real estate or
personal property taxes, other than taxes covered by Article VIII; and (v)
taxes based on the receipt of rent (including gross receipts or sales taxes
applicable to the receipt of rent), and (vi) costs and expenses incurred in
contesting the amount or validity of any Property Tax by appropriate
proceedings.  Notwithstanding the
foregoing, general net income or franchise taxes imposed against Landlord shall
be excluded.

 

SECTION 4.3.                  SECURITY
DEPOSIT.  Concurrently with
Tenant’s delivery of this Lease, Tenant shall deposit with Landlord the sum, if
any, stated in Item 9 of the Basic Lease Provisions, to be held by Landlord as
security for the full and faithful performance of all of Tenant’s obligations
under this Lease (the “Security Deposit”). Landlord shall not be
required to keep this Security Deposit separate from its general funds, and
Tenant shall not be entitled to interest on the Security Deposit.  Subject to the last sentence of this
Section, the Security Deposit shall be understood and agreed to be the property
of Landlord upon Landlord’s receipt thereof, and may be utilized by Landlord in
its sole and absolute discretion towards the payment of all expenses by
Landlord for which Tenant would be required to reimburse Landlord under this
Lease, including without limitation brokerage commissions and Tenant
Improvement costs.  Upon any Event of
Default by Tenant (as defined in Section 14.1), Landlord may, in its sole and
absolute discretion, retain, use or apply the whole or any part of the Security
Deposit to pay any sum which Tenant is obligated to pay under this Lease, sums
that Landlord may expend or be required to expend by reason of the Event of
Default by Tenant or any loss or damage that Landlord may suffer by reason of
the Event of Default or costs incurred by Landlord in connection with the
repair or restoration of the Premises pursuant to Section 15.3 of this Lease
upon expiration or earlier termination of this Lease.  In no event shall Landlord be obligated to apply the Security
Deposit upon an Event of Default and Landlord’s rights and remedies resulting
from an Event of Default, including without limitation, Tenant’s failure to pay
Basic Rent, Tenant’s Share of Operating Expenses or any other amount due to
Landlord pursuant to this Lease, shall not be diminished or altered in any respect
due to the fact that Landlord is holding the Security Deposit.  If any portion of the Security Deposit is
applied by Landlord as permitted by this Section, Tenant shall within five (5)
days after written demand by Landlord deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to its original amount. If Tenant
fully performs its obligations under this Lease, the Security Deposit shall be
returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s
interest in this Lease) within thirty (30) days after the expiration of the
Term, provided that Tenant agrees that Landlord may retain the Security Deposit
to the extent and until such time as all amounts due from Tenant in accordance
with this Lease have been determined and paid in full and Tenant agrees that
Tenant shall have no claim against Landlord for Landlord’s retaining such
Security Deposit to the extent provided in this Section.  Tenant hereby authorizes Landlord to retain
any remaining balance of the security deposit funded to Landlord under the
Existing Lease (as defined in Section 22.7), which balance shall be applied by
Landlord to offset the sums owing under this Section 4.3, and Tenant shall also
deposit with Landlord any difference between the amount set forth in Item 9 of
this Lease and said remaining balance of the security deposit under the
Existing Lease in cash concurrently with Tenant’s execution and delivery of
this Lease.

 

ARTICLE V.  USES

 

SECTION 5.1.                  USE. 
Tenant shall use the Premises only for the purposes stated in Item 3 of
the Basic Lease Provisions, all in accordance with applicable laws and
restrictions and pursuant to approvals to be obtained by Tenant from all
relevant and required governmental agencies and authorities.  The parties agree that any contrary use
shall be deemed to cause material and irreparable harm to Landlord and shall
entitle Landlord to injunctive relief in addition to any other available
remedy.  Tenant, at its expense, shall
procure, maintain and make available for Landlord’s inspection throughout the
Term, all governmental approvals, licenses and permits required for the proper

 

5

 

and lawful conduct of Tenant’s
permitted use of the Premises.  Tenant
shall not do or permit anything to be done in or about the Premises which will
in any way interfere with the rights of other occupants of the Building or the
Project, or use or allow the Premises to be used for any unlawful purpose, nor
shall Tenant permit any nuisance or commit any waste in the Premises or the
Project.  Tenant shall not perform any
work or conduct any business whatsoever in the Project other than inside the
Premises.  Tenant shall not do or permit
to be done anything which will invalidate or increase the cost of any insurance
policy(ies) covering the Building, the Project and/or their contents, and shall
comply with all applicable insurance underwriters rules.  Tenant shall comply at its expense with all
present and future laws, ordinances, restrictions, regulations, orders, rules
and requirements of all governmental authorities that pertain to Tenant or its
use of the Premises, including without limitation all federal and state
occupational health and safety requirements, whether or not Tenant’s compliance
will necessitate expenditures or interfere with its use and enjoyment of the
Premises.  Tenant shall comply at its
expense with all present and future covenants, conditions, easements or
restrictions now or hereafter affecting or encumbering the Building and/or
Project, and any amendments or modifications thereto, including without
limitation the payment by Tenant of any periodic or special dues or assessments
charged against the Premises or Tenant which may be allocated to the Premises
or Tenant in accordance with the provisions thereof.  Tenant shall promptly upon demand reimburse Landlord for any
additional insurance premium charged by reason of Tenant’s failure to comply
with the provisions of this Section, and shall indemnify Landlord from any liability
and/or expense resulting from Tenant’s noncompliance.

 

SECTION 5.2.                  SIGNS.  Provided Tenant continues to occupy the
entire Building, Tenant shall have the exclusive right to one (1) exterior sign
on the Building and the non-exclusive right to one (1) monument sign, such
signage to be in its existing location. 
Except as provided in the foregoing or as otherwise approved in writing
by Landlord, in its sole and absolute discretion, Tenant shall have no right to
maintain signs in any location in, on or about the Premises, the Building or
the Project and shall not place or erect any signs that are visible from the
exterior of the Building.  The size,
design, graphics, material, style, color and other physical aspects of any
permitted sign shall be subject to Landlord’s written determination, as
determined solely by Landlord, prior to installation, that signage is in
compliance with any covenants, conditions or restrictions encumbering the
Premises and Landlord’s signage program for the Project, as in effect from time
to time and approved by the City in which the Premises are located (“Signage
Criteria”).  Prior to placing
or erecting any such signs, Tenant shall obtain and deliver to Landlord a copy
of any applicable municipal or other governmental permits and approvals and
comply with any applicable insurance requirements for such signage.  Tenant shall be responsible for the cost of
any permitted sign, including the fabrication, installation, maintenance and
removal thereof and the cost of any permits therefor; provided, however, that
if Landlord shall reconfigure or reinstall the monument sign to accommodate
another tenant of the Project, such cost shall be borne solely by
Landlord.  If Tenant fails to maintain
its sign in good condition, or if Tenant fails to remove same upon termination
of this Lease and repair and restore any damage caused by the sign or its
removal, Landlord may do so at Tenant’s expense.  Landlord shall have the right to temporarily remove any signs in
connection with any repairs or maintenance in or upon the Building.  The term “sign” as used in this Section
shall include all signs, designs, monuments, displays, advertising materials,
logos, banners, projected images, pennants, decals, pictures, notices,
lettering, numerals or graphics.

 

SECTION 5.3.                  HAZARDOUS
MATERIALS.

 

(a)                                  For
purposes of this Lease, the term “Hazardous Materials” includes (i) any
“hazardous material” as defined in Section 25501(o) of the California
Health and Safety Code, (ii) hydrocarbons, polychlorinated biphenyls or
asbestos, (iii) any toxic or hazardous materials, substances, wastes or
materials as defined pursuant to any other applicable state, federal or local
law or regulation, and (iv) any other substance or matter which may result
in liability to any person or entity as result of such person’s possession,
use, release or distribution of such substance or matter under any statutory or
common law theory.

 

(b)                                 Tenant
shall not cause or permit any Hazardous Materials to be brought upon, stored,
used, generated, released or disposed of on, under, from or about the Premises
(including without limitation the soil and groundwater thereunder) without the
prior written consent of Landlord, which consent may be given or withheld in
Landlord’s sole and absolute discretion. 
Notwithstanding the foregoing, Tenant shall have the right, without
obtaining prior written consent of Landlord, to utilize within the Premises a
reasonable quantity of standard office products that may contain Hazardous
Materials (such as photocopy toner, “White Out”, and the like), provided
however, that (i) Tenant shall maintain such products in their
original retail packaging, shall follow all instructions on such packaging with
respect to the storage, use and disposal of such products, and shall otherwise
comply with all applicable laws with respect to such products, and
(ii) all of the other terms and provisions of this Section 5.3 shall
apply with respect to Tenant’s storage, use and disposal of all such products.  Landlord may, in its sole and absolute
discretion, place such conditions as Landlord deems appropriate with respect to
Tenant’s use of any such Hazardous Materials, and may further require that
Tenant demonstrate that any such Hazardous Materials are necessary or useful to
Tenant’s business and will be generated, stored, used and disposed of in a
manner that complies with all applicable laws and regulations pertaining
thereto and with good business practices. 
Tenant understands that Landlord may utilize an environmental consultant
to assist in determining conditions of approval in connection with the storage,
generation, release, disposal or use of Hazardous Materials by Tenant on or
about the Premises, and/or to conduct periodic inspections of the storage,
generation, use, release and/or disposal of such Hazardous Materials by Tenant
on and from the Premises, and Tenant agrees that any costs incurred by Landlord
in connection therewith shall be reimbursed by Tenant to Landlord as additional
rent hereunder upon demand.

 

(c)                                  Prior
to the execution of this Lease, Tenant shall complete, execute and deliver to
Landlord an Environmental Questionnaire and Disclosure Statement (the “Environmental
Questionnaire”) in the form of Exhibit B attached
hereto.  The completed Environmental
Questionnaire shall be deemed incorporated into this Lease for all purposes,
and Landlord shall be entitled to rely fully on the information contained
therein.  On each anniversary of the
Commencement Date until the expiration or sooner termination of this Lease,
Tenant shall

 

6

 

disclose to Landlord in writing the names and amounts of all Hazardous
Materials which were stored, generated, used, released and/or disposed of on,
under or about the Premises for the twelve-month period prior thereto, and
which Tenant desires to store, generate, use, release and/or dispose of on,
under or about the Premises for the succeeding twelve-month period.  In addition, to the extent Tenant is
permitted to utilize Hazardous Materials upon the Premises, Tenant shall
promptly provide Landlord with complete and legible copies of all the following
environmental documents relating thereto: 
reports filed pursuant to any self-reporting requirements; permit applications,
permits, monitoring reports, emergency response or action plans, workplace
exposure and community exposure warnings or notices and all other reports,
disclosures, plans or documents (even those which may be characterized as
confidential) relating to water discharges, air pollution, waste generation or
disposal, and underground storage tanks for Hazardous Materials; orders,
reports, notices, listings and correspondence (even those which may be
considered confidential) of or concerning the release, investigation of,
compliance, cleanup, remedial and corrective actions, and abatement of
Hazardous Materials; and all complaints, pleadings and other legal documents
filed by or against Tenant related to Tenant’s use, handling, storage, release
and/or disposal of Hazardous Materials.

 

(d)                                 Landlord
and its agents shall have the right, but not the obligation, to inspect, sample
and/or monitor the Premises and/or the soil or groundwater thereunder at any
time to determine whether Tenant is complying with the terms of this
Section 5.3, and in connection therewith Tenant shall provide Landlord
with full access to all facilities, records and personnel related thereto.  If Tenant is not in compliance with any of
the provisions of this Section 5.3, or in the event of a release of any
Hazardous Material on, under or about the Premises caused or permitted by
Tenant, its agents, employees, contractors, licensees or invitees, Landlord and
its agents shall have the right, but not the obligation, without limitation
upon any of Landlord’s other rights and remedies under this Lease, to
immediately enter upon the Premises without notice and to discharge Tenant’s
obligations under this Section 5.3 at Tenant’s expense, including without
limitation the taking of emergency or long-term remedial action.  Landlord and its agents shall endeavor to
minimize interference with Tenant’s business in connection therewith, but shall
not be liable for any such interference. 
In addition, Landlord, at Tenant’s expense, shall have the right, but
not the obligation, to join and participate in any legal proceedings or actions
initiated in connection with any claims arising out of the storage, generation,
use, release and/or disposal by Tenant or its agents, employees, contractors,
licensees or invitees of Hazardous Materials on, under, from or about the
Premises.

 

(e)                                  If
the presence of any Hazardous Materials on, under, from or about the Premises
or the Project caused or permitted by Tenant or its agents, employees,
contractors, licensees or invitees results in (i) injury to any person,
(ii) injury to or any contamination of the Premises or the Project, or
(iii) injury to or contamination of any real or personal property wherever
situated, Tenant, at its expense, shall promptly take all actions necessary to
return the Premises and the Project and any other affected real or personal
property owned by Landlord to the condition existing prior to the introduction
of such Hazardous Materials and to remedy or repair any such injury or
contamination, including without limitation, any cleanup, remediation, removal,
disposal, neutralization or other treatment of any such Hazardous
Materials.  Notwithstanding the
foregoing, Tenant shall not, without Landlord’s prior written consent, which
consent may be given or withheld in Landlord’s sole and absolute discretion,
take any remedial action in response to the presence of any Hazardous Materials
on, from, under or about the Premises or the Project or any other affected real
or personal property owned by Landlord or enter into any similar agreement, consent,
decree or other compromise with any governmental agency with respect to any
Hazardous Materials claims; provided however, Landlord’s prior written consent
shall not be necessary in the event that the presence of Hazardous Materials
on, under or about the Premises or the Project or any other affected real or
personal property owned by Landlord (i) imposes an immediate threat to the
health, safety or welfare of any individual and (ii) is of such a nature
that an immediate remedial response is necessary and it is not possible to
obtain Landlord’s consent before taking such action.  To the fullest extent permitted by law, Tenant shall indemnify,
hold harmless, protect and defend (with attorneys acceptable to Landlord)
Landlord and any successors to all or any portion of Landlord’s interest in the
Premises and the Project and any other real or personal property owned by
Landlord from and against any and all liabilities, losses, damages, diminution
in value, judgments, fines, demands, claims, recoveries, deficiencies, costs
and expenses (including without limitation attorneys’ fees, court costs and
other professional expenses), whether foreseeable or unforeseeable, arising
directly or indirectly out of the use, generation, storage, treatment, release,
on- or off-site disposal or transportation of Hazardous Materials (A) on, into,
from, under or about the Premises during the Term regardless of the source of
such Hazardous Materials unless caused solely by Landlord or (B) on, into,
from, under or about the Premises, the Building or the Project and any other
real or personal property owned by Landlord caused or permitted by Tenant, its
agents, employees, contractors, licensees or invitees.  Such indemnity obligation shall specifically
include, without limitation, the cost of any required or necessary repair,
restoration, cleanup or detoxification of the Premises, the Building and the
Project and any other real or personal property owned by Landlord, the
preparation of any closure or other required plans, whether or not such action
is required or necessary during the Term or after the expiration of this Lease
and any loss of rental due to the inability to lease the Premises or any
portion of the Building or Project as a result of such Hazardous Material or
remediation thereof.  If it is at any
time discovered that Hazardous Materials have been released on, into, from,
under or about the Premises during the Term, or that Tenant or its agents,
employees, contractors, licensees or invitees may have caused or permitted the
release of a Hazardous Material on, under, from or about the Premises, the
Building or the Project or any other real or personal property owned by
Landlord, Tenant shall, at Landlord’s request, immediately prepare and submit
to Landlord a comprehensive plan, subject to Landlord’s approval, specifying
the actions to be taken by Tenant to return the Premises, the Building or the
Project or any other real or personal property owned by Landlord to the
condition existing prior to the introduction of such Hazardous Materials.  Upon Landlord’s approval of such cleanup
plan, Tenant shall, at its expense, and without limitation of any rights and
remedies of Landlord under this Lease or at law or in equity, immediately
implement such plan and proceed to cleanup such Hazardous Materials in
accordance with all applicable laws and as required by such plan and this
Lease.  The provisions of this Section
5.3(e) shall expressly survive the expiration or sooner termination of this Lease.

 

7

 

(f)                                    Landlord
hereby discloses to Tenant, and Tenant hereby acknowledges, certain facts
relating to Hazardous Materials at the Project known by Landlord to exist as of
the date of this Lease, as more particularly described in Exhibit C
attached hereto.  Tenant shall have no
liability or responsibility with respect to the Hazardous Materials facts
described in Exhibit C, nor with respect to any Hazardous Materials
which Tenant proves were neither released on the Premises during the Term nor
caused or permitted by Tenant, its agents, employees, contractors, licensees or
invitees.  Notwithstanding the preceding
two sentences, Tenant agrees to notify its agents, employees, contractors,
licensees, and invitees of any exposure or potential exposure to Hazardous
Materials at the Premises that Landlord brings to Tenant’s attention.  Tenant hereby acknowledges that this
disclosure satisfies any obligation of Landlord to Tenant pursuant to
California Health & Safety Code Section 25359.7, or any amendment or
substitute thereto or any other disclosure obligations of Landlord.

 

ARTICLE VI.  COMMON AREAS; SERVICES

 

SECTION 6.1.                  UTILITIES
AND SERVICES.  Tenant shall
be responsible for and shall pay promptly, directly to the appropriate
supplier, all charges for water, gas, electricity, sewer, heat, light, power,
telephone, telecommunications service, refuse pickup, janitorial service,
interior landscape maintenance and all other utilities, materials and services
furnished directly to Tenant or the Premises or used by Tenant in, on or about
the Premises during the Term, together with any taxes thereon.  If any utilities or services are not
separately metered or assessed to Tenant, Landlord shall make a reasonable
determination of Tenant’s proportionate share of the cost of such utilities and
services, including without limitation, after-hours HVAC usage, and Tenant
shall pay such amount to Landlord, as an item of additional rent, within ten
(10) days after receipt of Landlord’s statement or invoice therefor.  Alternatively, Landlord may elect to include
such cost in the definition of Project Costs in which event Tenant shall pay
Tenant’s proportionate share of such costs in the manner set forth in
Section 4.2.  Tenant shall also pay
to Landlord as an item of additional rent, within ten (10) days after receipt
of Landlord’s statement or invoice therefore or as part of “Project costs”, any
after-hours HVAC usage charges incurred by Tenant.  Landlord shall not be liable for damages or otherwise for any
failure or interruption of any utility or other service furnished to the
Premises, and no such failure or interruption shall be deemed an eviction or
entitle Tenant to terminate this Lease or withhold or abate any rent due
hereunder.  Landlord shall at all
reasonable times have free access to the Building and Premises to install,
maintain, repair, replace or remove all electrical and mechanical installations
of Landlord.  Tenant acknowledges that
the costs incurred by Landlord related to providing above-standard utilities to
Tenant, including, without limitation, telephone lines, may be charged to
Tenant.

 

SECTION 6.2.                  OPERATION
AND MAINTENANCE OF COMMON AREAS.  During
the Term, Landlord shall operate all Common Areas within the Building and the
Project.  The term “Common Areas” shall mean all
areas within the exterior boundaries of the Building and other buildings in the
Project which are not held for exclusive use by persons entitled to occupy
space, and all other appurtenant areas and improvements within the Project
provided by Landlord for the common use of Landlord and tenants and their
respective employees and invitees, including without limitation parking areas
and structures, driveways, sidewalks, landscaped and planted areas, hallways
and interior stairwells not located within the premises of any tenant, common
electrical rooms and roof access entries, common entrances and lobbies,
elevators, and restrooms not located within the premises of any tenant.

 

SECTION 6.3.                  USE OF
COMMON AREAS.  The occupancy
by Tenant of the Premises shall include the use of the Common Areas in common
with Landlord and with all others for whose convenience and use the Common
Areas may be provided by Landlord, subject, however, to compliance with all
rules and regulations as are prescribed from time to time by Landlord.  Landlord shall operate and maintain the
Common Areas in the manner Landlord may determine to be appropriate.  All costs incurred by Landlord for the
maintenance and operation of the Common Areas shall be included in Project Costs
except to the extent any particular cost incurred is related to or associated
with a specific tenant and can be charged to such tenant of the Project.  Landlord shall at all times during the Term
have exclusive control of the Common Areas, and may restrain or permit any use
or occupancy, except as authorized by Landlord’s rules and regulations.  Tenant shall keep the Common Areas clear of
any obstruction or unauthorized use related to Tenant’s operations or use of
Premises, including without limitation, planters and furniture.  Nothing in this Lease shall be deemed to
impose liability upon Landlord for any damage to or loss of the property of, or
for any injury to, Tenant, its invitees or employees.  Landlord may temporarily close any portion of the Common Areas
for repairs, remodeling and/or alterations, to prevent a public dedication or
the accrual of prescriptive rights, or for any other reason deemed sufficient
by Landlord, without liability to Landlord.

 

SECTION 6.4.                  PARKING.  Tenant shall be entitled to the number of
vehicle parking spaces set forth in Item 14 of the Basic Lease Provisions,
which spaces shall be unreserved and unassigned, on those portions of the
Common Areas designated by Landlord for parking.  Tenant shall not use more parking spaces than such number.  All parking spaces shall be used only for
parking of vehicles no larger than full size passenger automobiles, sports
utility vehicles or pickup trucks.  Tenant
shall not permit or allow any vehicles that belong to or are controlled by Tenant
or Tenant’s employees, suppliers, shippers, customers or invitees to be loaded,
unloaded or parked in areas other than those designated by Landlord for such
activities.  If Tenant permits or allows
any of the prohibited activities described above, then Landlord shall have the
right, without notice, in addition to such other rights and remedies that
Landlord may have, to remove or tow away the vehicle involved and charge the
costs to Tenant.  Parking within the
Common Areas shall be limited to striped parking stalls, and no parking shall
be permitted in any driveways, access ways or in any area which would prohibit
or impede the free flow of traffic within the Common Areas.  There shall be no parking of any vehicles
for longer than a forty-eight (48) hour period unless otherwise authorized by
Landlord, and vehicles which have been abandoned or parked in violation of the
terms hereof may be towed away at the owner’s expense.  Nothing contained in this Lease shall be
deemed to create liability upon Landlord for any damage to motor vehicles of
visitors or employees, for any loss of property from within those motor
vehicles, or for any injury to Tenant, its visitors or employees, unless
ultimately determined to be caused by the sole active negligence or willful
misconduct of Landlord.  Landlord shall
have the right to establish, and from

 

8

 

time to time amend, and to enforce against all users all reasonable
rules and regulations (including the designation of areas for employee parking)
that Landlord may deem necessary and advisable for the proper and efficient
operation and maintenance of parking within the Common Areas.  Landlord shall have the right to construct,
maintain and operate lighting facilities within the parking areas; to change
the area, level, location and arrangement of the parking areas and improvements
therein; to restrict parking by tenants, their officers, agents and employees
to employee parking areas; to enforce parking charges (by operation of meters
or otherwise); and to do and perform such other acts in and to the parking
areas and improvements therein as, in the use of good business judgment,
Landlord shall determine to be advisable. 
Any person using the parking area shall observe all directional signs
and arrows and any posted speed limits. 
In no event shall Tenant interfere with the use and enjoyment of the
parking area by other tenants of the Project or their employees or invitees.  Parking areas shall be used only for parking
vehicles.  Washing, waxing, cleaning or
servicing of vehicles, or the storage of vehicles for longer than 48-hours, is
prohibited unless otherwise authorized by Landlord.  Tenant shall be liable for any damage to the parking areas caused
by Tenant or Tenant’s employees, suppliers, shippers, customers or invitees,
including without limitation damage from excess oil leakage.  Tenant shall have no right to install any
fixtures, equipment or personal property in the parking areas.

 

SECTION 6.5.                  CHANGES AND
ADDITIONS BY LANDLORD. 
Landlord reserves the right to make alterations or additions to the
Building or the Project, or to the attendant fixtures, equipment and Common
Areas.  Landlord may at any time
relocate or remove any of the various buildings, parking areas, and other
Common Areas, and may add buildings and areas to the Project from time to
time.  No change shall entitle Tenant to
any abatement of rent or other claim against Landlord, provided that the change
does not deprive Tenant of reasonable access to or use of the Premises.

 

ARTICLE VII.  MAINTAINING THE PREMISES

 

SECTION 7.1.                  TENANT’S
MAINTENANCE AND REPAIR. 
Tenant at its sole expense shall maintain and make all repairs and
replacements necessary to keep the Premises in the condition as existed on the
Commencement Date (or on any later date that the improvements may have been
installed), excepting ordinary wear and tear, including without limitation all
interior glass, doors, door closures, hardware, fixtures, electrical, plumbing,
fire extinguisher equipment and other equipment installed in the Premises and
all Alterations constructed by Tenant pursuant to Section 7.3 below.  Any damage or deterioration of the Premises
shall not be deemed ordinary wear and tear if the same could have been
prevented by good maintenance practices by Tenant.  As part of its maintenance obligations hereunder, Tenant shall,
at Landlord’s request, provide Landlord with copies of all maintenance
schedules, reports and notices prepared by, for or on behalf of Tenant.  All repairs and replacements shall be at
least equal in quality to the original work, shall be made only by a licensed
contractor approved in writing in advance by Landlord and shall be made only at
the time or times approved by Landlord. 
Any contractor utilized by Tenant shall be subject to Landlord’s
standard requirements for contractors, as modified from time to time.  Landlord may impose reasonable restrictions
and requirements with respect to repairs, as provided in Section 7.3, and the
provisions of Section 7.4 shall apply to all repairs.  Alternatively, Landlord may elect to perform any repair and
maintenance of the electrical and mechanical systems and any air conditioning,
ventilating or heating equipment serving the Premises and include the cost
thereof as part of Tenant’s Share of Operating Expenses.  If Tenant fails to properly maintain and/or
repair the Premises as herein provided following Landlord’s notice and the
expiration of the applicable cure period (or earlier if Landlord determines
that such work must be performed prior to such time in order to avoid damage to
the Premises or Building or other detriment), then Landlord may elect, but
shall have no obligation, to perform any repair or maintenance required
hereunder on behalf of Tenant and at Tenant’s expense, and Tenant shall
reimburse Landlord upon demand for all costs incurred upon submission of an
invoice.

 

SECTION 7.2.                  LANDLORD’S
MAINTENANCE AND REPAIR. 
Subject to Section 7.1 and Article XI, Landlord shall provide
service, maintenance and repair with respect to any air conditioning,
ventilating or heating equipment which serves the Premises (exclusive, however,
of supplemental HVAC equipment serving only the Premises), and shall maintain
in good repair the roof, foundations, footings, the exterior surfaces of the
exterior walls of the Building (including exterior glass), and the structural,
electrical and mechanical systems, except that Tenant at its expense shall make
all repairs which Landlord deems reasonably necessary as a result of the act or
negligence of Tenant, its agents, employees, invitees, subtenants or
contractors.  Landlord shall have the
right to employ or designate any reputable person or firm, including any
employee or agent of Landlord or any of Landlord’s affiliates or divisions, to
perform any service, repair or maintenance function.  Landlord need not make any other improvements or repairs except
as specifically required under this Lease, and nothing contained in this
Section shall limit Landlord’s right to reimbursement from Tenant for
maintenance, repair costs and replacement costs as provided elsewhere in this
Lease.  Tenant understands that it shall
not make repairs at Landlord’s expense or by rental offset.  Tenant further understands that Landlord
shall not be required to make any repairs to the roof, foundations, footings,
the exterior surfaces of the exterior walls of the Building (excluding exterior
glass), or structural, electrical or mechanical systems unless and until Tenant
has notified Landlord in writing of the need for such repair and Landlord shall
have a reasonable period of time thereafter to commence and complete said
repair, if warranted.  All costs of any
maintenance, repairs and replacement on the part of Landlord provided hereunder
shall be considered part of Project Costs. 
Tenant further agrees that if Tenant fails to report any such need for
repair in writing within sixty (60) days of its discovery by Tenant, Tenant
shall be responsible for any costs and expenses and other damages related to
such repair which are in excess of those which would have resulted had such
need for repair been reported to Landlord within such sixty (60) day period.

 

SECTION 7.3.                  ALTERATIONS.  Except as otherwise provided in this
Section, Tenant shall make no alterations, additions, fixtures or improvements
(“Alterations”)  to
the Premises or the Building without the prior written consent of Landlord,
which consent may be granted or withheld in Landlord’s sole and absolute
discretion.  In the event that any
requested Alteration would result in a change from Landlord’s building standard
materials and specifications for the Project (“Standard Improvements”),
Landlord may withhold consent to such Alteration in its

 

9

 

sole and absolute discretion.  In the event Landlord so consents to a
change from the Standard Improvements (such change being referred to as a “Non-Standard
Improvement”), Tenant shall be responsible for the cost of replacing
such  Non-Standard
Improvement with the applicable Standard Improvement (“Replacements”) which
Replacements shall be completed prior to the Expiration Date or earlier
termination of this Lease.  Landlord
shall not unreasonably withhold its consent to any Alterations which cost less
than One Dollar ($1.00) per square foot of the improved portions of the
Premises (excluding warehouse square footage) and do not (i) affect the
exterior of the Building or outside areas (or be visible from adjoining sites),
or (ii) affect or penetrate any of the structural portions of the
Building, including but not limited to the roof, or (iii) require any
change to the basic floor plan of the Premises (including, without limitation,
the adding of any additional “office” square footage) or any change to any
structural or mechanical systems of the Premises, or (iv) fail to comply with
any applicable governmental requirements or require any governmental permit as
a prerequisite to the construction thereof, or (v) result in the Premises
requiring building services beyond the level normally provided to other
tenants, or (vi) interfere in any manner with the proper functioning of,
or Landlord’s access to, any mechanical, electrical, plumbing or HVAC systems,
facilities or equipment located in or serving the Building, or (vii) diminish
the value of the Premises including, without limitation, using lesser quality
materials than those existing in the Premises, or (viii) alter or replace
Standard Improvements.  Landlord may
impose any condition to its consent, including but not limited to a requirement
that the installation and/or removal of all Alterations and Replacements be
covered by a lien and completion bond satisfactory to Landlord in its sole and
absolute discretion and requirements as to the manner and time of performance
of such work.  Landlord shall in all
events, whether or not Landlord’s consent is required, have the right to
approve the contractor performing the installation and removal of Alterations
and Replacements and Tenant shall not permit any contractor not approved by
Landlord to perform any work on the Premises or on the Building.  Tenant shall obtain all required permits for
the installation and removal of Alterations and Replacements and shall perform
the installation and removal of Alterations and Replacements in compliance with
all applicable laws, regulations and ordinances, including without limitation
the Americans with Disabilities Act, all covenants, conditions and restrictions
affecting the Project, and the Rules and Regulations as described in
Article XVII.  Tenant understands
and agrees that Landlord shall be entitled to a supervision fee in the amount
of five percent (5%) of the cost of the Alterations.  Under no circumstances shall Tenant make any Alterations or
Replacements which incorporate any Hazardous Materials, including without
limitation asbestos-containing construction materials into the Premises, the
Building or the Common Area.  If any
governmental entity requires, as a condition to any proposed Alterations by Tenant,
that improvements be made to the Common Areas, and if Landlord consents to such
improvements to the Common Areas (which consent may be withheld in the sole and
absolute discretion of Landlord), then Tenant shall, at Tenant’s sole expense,
make such required improvements to the Common Areas in such manner, utilizing
such materials, and with such contractors, architects and engineers as Landlord
may require in its sole and absolute discretion.  Any request for Landlord’s consent to any proposed Alterations
shall be made in writing and shall contain architectural plans describing the
work in detail reasonably satisfactory to Landlord.  Unless Landlord otherwise agrees in writing, all Alterations made
or affixed to the Premises, the Building or to the Common Area during the Term
of this Lease (excluding moveable trade fixtures and furniture), shall become
the property of Landlord and shall be surrendered with the Premises at the end
of the Term; except that Landlord may, as provided in the next succeeding
paragraph of this Section 7.3, require Tenant to remove by the Expiration Date
or sooner termination date of this Lease, all or any of the Alterations
installed either by Tenant or by Landlord at Tenant’s request during the Term
of this Lease, and to repair any damage to the Premises, the Building or the
Common Area arising from that removal and restore the Premises to their
condition prior to making such Alterations.

 

As of the
Expiration Date or earlier termination date of this Lease, Landlord shall have
the right to require Tenant to remove any Alterations made by Tenant to the
Premises during the Term of this Lease and to replace same with the applicable
Replacements, whether or not Landlord’s consent was required for such
Alterations.  Notwithstanding the
foregoing, if at the time of requesting Landlord’s consent to any such
Alterations, Tenant shall request in writing whether or not Landlord shall
require such Alterations to be removed and replaced as of the Expiration Date
or earlier termination date of this Lease, then Landlord’s right to require
Tenant to remove and replace such Alterations shall be exercised, if at all, at
the time of Landlord’s consent thereto.

 

SECTION 7.4.                  MECHANIC’S
LIENS.  Tenant shall keep the
Premises free from any liens arising out of any work performed, materials furnished,
or obligations incurred by or for Tenant. 
Upon request by Landlord, Tenant shall promptly (but in no event later
than five (5) business days following such request) cause any such lien to be
released by posting a bond in accordance with California Civil Code Section
3143 or any successor statute.  In the
event that Tenant shall not, within thirty (30) days following the imposition
of any lien, cause the lien to be released of record by payment or posting of a
proper bond, Landlord shall have, in addition to all other available remedies,
the right to cause the lien to be released by any means it deems proper,
including payment of or defense against the claim giving rise to the lien.  All expenses so incurred by Landlord,
including Landlord’s attorneys’ fees, and any consequential or other damages
incurred by Landlord arising out of such lien, shall be reimbursed by Tenant
upon demand, together with interest from the date of payment by Landlord at the
maximum rate permitted by law until paid. 
Tenant shall give Landlord no less than twenty (20) days’ prior notice
in writing before commencing construction of any kind on the Premises or Common
Area and shall again notify Landlord that construction has commenced, such
notice to be given on the actual date on which construction commences, so that
Landlord may post and maintain notices of nonresponsibility on the Premises or
Common Area, as applicable, which notices Landlord shall have the right to post
and which Tenant agrees it shall not disturb. 
Tenant shall also provide Landlord notice in writing within ten (10)
days following the date on which such work is substantially completed.  The provisions of this Section shall
expressly survive the expiration or sooner termination of this Lease.

 

SECTION 7.5.                  ENTRY AND
INSPECTION.  Landlord shall
at all reasonable times, upon written or oral notice (except in emergencies,
when no notice shall be required) have the right to enter the Premises to
inspect them, to supply services in accordance with this Lease, to have access
to install, repair, maintain, replace or remove all electrical and mechanical
installations of Landlord and to protect the interests of Landlord in the
Premises, and to

 

10

 

submit the Premises to
prospective or actual purchasers or encumbrance holders (or, during the last
one hundred and eighty (180) days of the Term or when an uncured Tenant Event
of Default exists, to prospective tenants), all without being deemed to have
caused an eviction of Tenant and without abatement of rent except as provided
elsewhere in this Lease.  Landlord shall
have the right, if desired, to retain a key which unlocks all of the doors in
the Premises, excluding Tenant’s vaults and safes, and Landlord shall have the
right to use any and all means which Landlord may deem proper to open the doors
in an emergency in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord shall not under any circumstances be deemed to be
a forcible or unlawful entry into, or a detainer of, the Premises, or any
eviction of Tenant from the Premises.

 

ARTICLE VIII.  TAXES AND ASSESSMENTS ON TENANT’S PROPERTY

 

Tenant shall
be liable for and shall pay, at least ten (10) days before delinquency, all
taxes and assessments levied against all personal property of Tenant located in
the Premises, and, if required by Landlord, against all Non Standard
Improvements to the Premises (as defined in Section 7.3) made by Landlord or
Tenant, and against any Alterations (as defined in Section 7.3) made to the
Premises or the Building by or on behalf of Tenant.  If requested by Landlord, Tenant shall cause its personal
property, Non-Standard Improvements  and Alterations to be assessed and billed
separately from the real property of which the Premises form a part.  If any taxes required to be paid by Tenant
on Tenant’s personal property, Non-Standard Improvements and/or Alterations are
levied against Landlord or Landlord’s property and if Landlord pays the same,
or if the assessed value of Landlord’s property is increased by the inclusion
of a value placed upon the personal property, Non-Standard Improvements and/or
Alterations and if Landlord pays the taxes based upon the increased assessment,
Landlord shall have the right to require that Tenant pay to Landlord the taxes
so levied against Landlord or the proportion of the taxes resulting from the
increase in the assessment.  In
calculating what portion of any tax bill which is assessed against Landlord
separately, or Landlord and Tenant jointly, is attributable to Tenant’s
Non-Standard Improvements, Alterations and personal property, Landlord’s
reasonable determination shall be conclusive.

 

ARTICLE IX.  ASSIGNMENT AND
SUBLETTING

 

SECTION 9.1.                  RIGHTS OF
PARTIES.

 

(a)                                  Notwithstanding
any provision of this Lease to the contrary, and except as to transfers
expressly permitted without Landlord’s consent pursuant to Section 9.4, Tenant
will not, either voluntarily or by operation of law, assign, sublet, encumber,
or otherwise transfer all or any part of Tenant’s interest in this Lease or the
Premises, or permit the Premises to be occupied by anyone other than Tenant,
without Landlord’s prior written consent, which consent shall not unreasonably
be withheld in accordance with the provisions of Section 9.1(b).  No assignment (whether voluntary,
involuntary or by operation of law) and no subletting shall be valid or
effective without Landlord’s prior written consent and, at Landlord’s election,
any such assignment or subletting shall be void and of no force and effect and
any such attempted assignment or subletting shall constitute an Event of
Default of this Lease.  Landlord shall
not be deemed to have given its consent to any assignment or subletting by any
course of action, including its acceptance of any name for listing in the
Building directory, other than written consent.  To the extent not prohibited by provisions of the Bankruptcy
Code, 11 U.S.C. Section 101 et seq., (the “Bankruptcy Code”), including
Section 365(f)(1), Tenant on behalf of itself and its creditors, administrators
and assigns waives the applicability of Section 365(e) of the Bankruptcy Code
unless the proposed assignee of the Trustee for the estate of the bankrupt
meets Landlord’s standard for consent as set forth in Section 9.1(b) of this
Lease.  If this Lease is assigned to any
person or entity pursuant to the provisions of the Bankruptcy Code, any and all
monies or other considerations to be delivered in connection with the assignment
shall be delivered to Landlord, shall be and remain the exclusive property of
Landlord and shall not constitute property of Tenant or of the estate of Tenant
within the meaning of the Bankruptcy Code. 
Any person or entity to which this Lease is assigned pursuant to the
provisions of the Bankruptcy Code shall be deemed to have assumed all of the
obligations arising under this Lease on and after the date of the
assignment,  and shall upon demand
execute and deliver to Landlord an instrument confirming that assumption.

 

(b)                                 If
Tenant desires to transfer an interest in this Lease or the Premises, it shall
first notify Landlord of its desire and shall submit in writing to
Landlord:  (i) the name and address of
the proposed transferee; (ii) the nature of any proposed transferee’s business
to be carried on in the Premises; (iii) the terms and provisions of any
proposed sublease, assignment or other transfer, including a copy of the
proposed assignment, sublease or transfer form; (iv) evidence that the
proposed assignee, subtenant or transferee will comply with the requirements of
Exhibit D hereto; (v) a completed Environmental Questionnaire
from the proposed assignee, subtenant or transferee; (vi) any other information
requested by Landlord and reasonably related to the transfer and (vii) the fee
described in Section 9.1(e).  Except as
provided in Section 9.1 (c), Landlord shall not unreasonably withhold its
consent, provided that the parties agree that it shall be reasonable for
Landlord to withhold its consent if: 
(1) the use of the Premises will not be consistent with the provisions
of this Lease or with Landlord’s commitment to other tenants of the Building
and Project; (2) the proposed assignee or subtenant has been required by any
prior landlord, lender or governmental authority to take remedial action in
connection with Hazardous Materials contaminating a property arising out of the
proposed assignee’s or subtenant’s actions or use of the property in question
or is subject to any enforcement order issued by any governmental authority in
connection with the use, disposal or storage of a Hazardous Material; (3)
insurance requirements of the proposed assignee or subtenant may not be brought
into conformity with Landlord’s then current leasing practice; (4) a proposed
subtenant or assignee has not demonstrated to the reasonable satisfaction of
Landlord that it is financially responsible or has failed to submit to Landlord
all reasonable information as requested by Landlord concerning the proposed
subtenant or assignee, including, but not limited to, a certified balance sheet
of the proposed subtenant or assignee as of a date within ninety (90) days of
the request for Landlord’s consent, statements of income or profit and loss of
the proposed subtenant or assignee for the two-year period preceding the request
for Landlord’s consent, and/or a certification signed by the proposed subtenant
or assignee that it has not been evicted or been in arrears in rent at any
other leased premises for the 3-year period

 

11

 

preceding the request for
Landlord’s consent; (5) any proposed subtenant or assignee has not demonstrated
to Landlord’s reasonable satisfaction a record of successful experience in
business; (6) the proposed assignee or subtenant is an existing tenant of the
Building or Project or a prospect with whom Landlord is negotiating to become a
tenant at the Building or Project; or (7) the proposed transfer will impose
additional burdens or adverse tax effects on Landlord.  If Tenant has any exterior sign rights under
this Lease, such rights are personal to Tenant and may not be assigned or
transferred to any assignee of this Lease or subtenant of the Premises without
Landlord’s prior written consent, which may be withheld in Landlord’s sole and
absolute discretion.

 

If Landlord
consents to the proposed transfer, Tenant may within ninety (90) days after the
date of the consent effect the transfer upon the terms described in the
information furnished to Landlord; provided that any material change in the
terms shall be subject to Landlord’s consent as set forth in this Section
9.1.  Landlord shall approve or
disapprove any requested transfer within thirty (30) days following receipt of
Tenant’s written request, the information set forth above, and the fee set
forth below.

 

(c)                                  Notwithstanding
the provisions of Section 9.1(b) above, in lieu of consenting to a proposed
assignment or subletting, Landlord may elect, within the thirty (30) day period
permitted for Landlord to approve or disapprove a requested transfer, to (i)
sublease the Premises (or the portion proposed to be subleased), or take an
assignment of Tenant’s interest in this Lease, upon substantially the same
terms as offered to the proposed subtenant or assignee (excluding terms
relating to the purchase of personal property, the use of Tenant’s name or the
continuation of Tenant’s business), or (ii) terminate this Lease as to the
portion of the Premises proposed to be subleased or assigned with a
proportionate abatement in the rent payable under this Lease, effective thirty
(30) days’ following written notice by Landlord of its election to so sublease
or terminate.  Landlord may thereafter,
at its option, assign, sublet or re-let any space so sublet, obtained by
assignment or obtained by termination to any third party, including without
limitation the proposed transferee of Tenant.

 

(d)                                 In
the event that Landlord approves the requested assignment or subletting, Tenant
agrees that fifty percent (50%) of any amounts paid by the assignee or
subtenant, however described, in excess of (i) the Basic Rent payable by
Tenant hereunder, or in the case of a sublease of a portion of the Premises, in
excess of the Basic Rent reasonably allocable to such portion as determined by
Landlord, plus (ii) Tenant’s direct out-of-pocket costs which Tenant
certifies to Landlord have been paid to provide occupancy related services to
such assignee or subtenant of a nature commonly provided by landlords of
similar space, shall be the property of Landlord and such amounts shall be
payable directly to Landlord by the assignee or subtenant or, at Landlord’s
option, by Tenant within ten (10) days of Tenant’s receipt thereof.  Landlord shall have the right to review or
audit the books and records of Tenant, or have such books and records reviewed or
audited by an outside accountant, to confirm any such direct out-of-pocket
costs.  In the event that such direct
out-of-pocket costs claimed by Tenant are overstated by more than five percent
(5%), Tenant shall reimburse Landlord for any of Landlord’s costs related to
such review or audit.  At Landlord’s
request, a written agreement shall be entered into by and among Tenant,
Landlord and the proposed assignee or subtenant confirming the requirements of
this Section 9.1(d).

 

(e)                                  Tenant
shall pay to Landlord a fee equal to the greater of (i) Landlord’s actual costs
related to such assignment, subletting or other transfer or (ii) Five Hundred
Dollars ($500.00), to process any request by Tenant for an assignment,
subletting or other transfer under this Lease. 
Tenant shall pay Landlord the sum of Five Hundred Dollars ($500.00)
concurrently with Tenant’s request for consent to any assignment, subletting or
other transfer, and Landlord shall have no obligation to consider such request
unless accompanied by such payment. 
Tenant shall pay Landlord upon demand any costs in excess of such
payment to the extent Landlord’s actual costs related to such request exceeds
$500.00.  Such fee is hereby
acknowledged as a reasonable amount to reimburse Landlord for its costs of
review and evaluation of a proposed transfer.

 

SECTION 9.2.                  EFFECT OF
TRANSFER.  No subletting or
assignment, even with the consent of Landlord, shall relieve Tenant of its
obligation to pay rent and to perform all its other obligations under this
Lease.  Moreover, Tenant shall indemnify
and hold Landlord harmless, as provided in Section 10.3, for any act or
omission by an assignee or subtenant. 
Each assignee, other than Landlord, shall assume all obligations of
Tenant under this Lease and shall be liable jointly and severally with Tenant
for the payment of all rent, and for the due performance of all of Tenant’s
obligations, under this Lease.  No
assignment or subletting shall be effective or binding on Landlord unless
documentation in form and substance satisfactory to Landlord in its reasonable
discretion evidencing the transfer, and in the case of an assignment, the
assignee’s assumption of the obligations of Tenant under this Lease, is
delivered to Landlord and both the assignee/subtenant and Tenant deliver to
Landlord an executed consent to transfer instrument prepared by Landlord and
consistent with the requirements of this Article.  The acceptance by Landlord of any payment due under this Lease
from any other person shall not be deemed to be a waiver by Landlord of any
provision of this Lease or to be a consent to any transfer.  Consent by Landlord to one or more transfers
shall not operate as a waiver or estoppel to the future enforcement by Landlord
of its rights under this Lease or as a consent to any subsequent transfer.

 

SECTION 9.3.                  SUBLEASE
REQUIREMENTS.  The following
terms and conditions shall apply to any subletting by Tenant of all or any part
of the Premises and shall be deemed included in each sublease:

 

(a)                                  Each
and every provision contained in this Lease (other than with respect to the
payment of rent hereunder) is incorporated by reference into and made a part of
such sublease, with “Landlord” hereunder meaning the sublandlord
therein and “Tenant” hereunder meaning the subtenant therein.

 

(b)                                 Tenant
hereby irrevocably assigns to Landlord all of Tenant’s interest in all rentals
and income arising from any sublease of the Premises, and Landlord may collect
such rent and income and apply same toward Tenant’s obligations under this
Lease; provided, however, that until there is an Event of Default by Tenant,
Tenant shall have the right to receive and collect the sublease rentals.  Landlord shall not, by reason of this
assignment or

 

12

 

the collection of sublease
rentals, be deemed liable to the subtenant for the performance of any of
Tenant’s obligations under the sublease. 
Tenant hereby irrevocably authorizes and directs any subtenant, upon
receipt of a written notice from Landlord stating that an uncured Event of
Default exists in the performance of Tenant’s obligations under this Lease, to
pay to Landlord all sums then and thereafter due under the sublease.  Tenant agrees that the subtenant may rely on
that notice without any duty of further inquiry and notwithstanding any notice
or claim by Tenant to the contrary. 
Tenant shall have no right or claim against the subtenant or Landlord
for any rentals so paid to Landlord.

 

(c)                                  In
the event of the termination of this Lease for any reason, including without
limitation as the result of an Event of Default by Tenant or by the mutual
agreement of Landlord and Tenant, Landlord may, at its sole option, take over
Tenant’s entire interest in any sublease and, upon notice from Landlord, the
subtenant shall attorn to Landlord.  In
no event, however, shall Landlord be liable for any previous act or omission by
Tenant under the sublease or for the return of any advance rental payments or
deposits under the sublease that have not been actually delivered to Landlord,
nor shall Landlord be bound by any sublease modification executed without
Landlord’s consent or for any advance rental payment by the subtenant in excess
of one month’s rent.  The general
provisions of this Lease, including without limitation those pertaining to
insurance and indemnification, shall be deemed incorporated by reference into
the sublease despite the termination of this Lease.  In the event Landlord does not elect to take over Tenant’s
interest in a sublease in the event of any such termination of this Lease, such
sublease shall terminate concurrently with the termination of this Lease and
such subtenant shall have no further rights under such sublease and Landlord
shall have no obligations to such subtenant.

 

SECTION 9.4.                  CERTAIN
TRANSFERS.  The following
shall be deemed to constitute an assignment of this Lease; (a) the sale of
all or substantially all of Tenant’s assets (other than bulk sales in the
ordinary course of business), (b) if Tenant is a corporation, an
unincorporated association, a limited liability company or a partnership, the
transfer, assignment or hypothecation of any stock or interest in such
corporation, association, limited liability company or partnership in the
aggregate of twenty-five percent (25%) (except for publicly traded shares of
stock constituting a transfer of twenty-five percent (25%) or more in the
aggregate, so long as no change in the controlling interest of Tenant occurs as
a result thereof), or (c) any other direct or indirect change of control of
Tenant, including, without limitation, change of control of Tenant’s parent
company or a merger by Tenant or its parent company.  Notwithstanding the foregoing, Landlord’s consent shall not be
required for the assignment of this Lease as a result of a merger by Tenant
with or into another entity or a reorganization of Tenant, so long as
(i) the net worth of the successor or reorganized entity after such merger
is at least equal to the greater of the net worth of Tenant as of the execution
of this Lease by Landlord or the net worth of Tenant immediately prior to the
date of such merger or reorganization, evidence of which, satisfactory to
Landlord, shall be presented to Landlord prior to such merger or
reorganization, (ii) Tenant shall provide to Landlord, prior to such
merger or reorganization, written notice of such merger or reorganization and
such assignment documentation and other information as Landlord may require in
connection therewith, and (iii) all of the other terms and requirements
Section 9.2 and 9.3 shall apply with respect to such assignment.

 

ARTICLE X.  INSURANCE AND
INDEMNITY

 

SECTION 10.1.           TENANT’S INSURANCE.  Tenant, at its sole cost and expense, shall
provide and maintain in effect the insurance described in Exhibit D.  Evidence of that insurance must be delivered
to Landlord prior to the Commencement Date.

 

SECTION 10.2.           LANDLORD’S INSURANCE.  Landlord may, at its election, provide any
or all of the following types of insurance, with or without deductible and in
amounts and coverages as may be determined by Landlord in its sole and absolute
discretion:  property insurance, subject
to standard exclusions, covering the Building and/or Project, and such other
risks as Landlord or its mortgagees may from time to time deem appropriate,
including coverage for the Tenant Improvements constructed by Landlord pursuant
to the Work Letter (if any) attached hereto, and commercial general liability
coverage.  Landlord shall not be
required to carry insurance of any kind on Tenant’s Alterations or on Tenant’s other
property, including, without limitation, Tenant’s trade fixtures, furnishings,
equipment, signs and all other items of personal property, and Landlord shall
not be obligated to repair or replace that property should damage occur.  All proceeds of insurance maintained by
Landlord upon the Building and/or Project shall be the property of Landlord,
whether or not Landlord is obligated to or elects to make any repairs.  At Landlord’s option, Landlord may
self-insure all or any portion of the risks for which Landlord elects to
provide insurance hereunder.

 

SECTION 10.3.           TENANT’S INDEMNITY.  To the fullest extent permitted by law,
Tenant shall defend, indemnify, protect, save and hold harmless Landlord, its
agents, and any and all affiliates of Landlord, including, without limitation,
any corporations or other entities controlling, controlled by or under common
control with Landlord, from and against any and all claims, liabilities, costs
or expenses arising either before or after the Commencement Date from Tenant’s
use or occupancy of the Premises, the Building or the Common Areas, including,
without limitation, the use by Tenant, its agents, employees, invitees or
licensees of any recreational facilities within the Common Areas, or from the
conduct of its business, or from any activity, work, or thing done, permitted
or suffered by Tenant or its agents, employees, invitees or licensees in or
about the Premises, the Building or the Common Areas, or from any Event of
Default in the performance of any obligation on Tenant’s part to be performed
under this Lease, or from any act or negligence of Tenant or its agents,
employees, visitors, patrons, guests, invitees or licensees.  Landlord may, at its option, require Tenant
to assume Landlord’s defense in any action covered by this Section through
counsel satisfactory to Landlord.  The
provisions of this Section shall expressly survive the expiration or sooner
termination of this Lease.  Tenant’s
obligations under this Section shall not apply in the event that the claim,
liability, cost or expense is caused solely by the active negligence or willful
misconduct of Landlord.

 

13

 

SECTION 10.4.           LANDLORD’S NONLIABILITY.  Landlord shall not be liable to Tenant, its
employees, agents and invitees, and Tenant hereby waives all claims against
Landlord and knowingly assumes the risk of for loss of or damage to any
property, or loss or interruption of business or income, or any other loss,
cost, damage, injury or liability whatsoever (including without limitation any
consequential damages and lost profit or opportunity costs) resulting from, but
not limited to, Acts of God, acts of civil disobedience or insurrection, acts
or omissions of third parties and/or of other tenants within the Project or
their agents, employees, contractors, guests or invitees, fire, explosion,
falling plaster, steam, gas, electricity, water or rain which may leak or flow
from or into any part of the Premises or from the breakage, leakage,
obstruction or other defects of the pipes, sprinklers, wires, appliances,
plumbing, air conditioning, electrical works, roof, windows or other fixtures
in the Building, whether the damage or injury results from conditions arising
in the Premises or in other portions of the Building.  It is understood that any such condition may require the
temporary evacuation or closure of all or a portion of the Building.  Landlord shall have no liability (including
without limitation consequential damages and lost profit or opportunity costs)
and, except as provided in Sections 11.1 and 12.1 below, there shall be no
abatement of rent, by reason of any injury to or interference with Tenant’s
business arising from the making of any repairs, alterations or improvements to
any portion of the Building, including repairs to the Premises, nor shall any
related activity by Landlord constitute an actual or constructive eviction;
provided, however, that in making repairs, alterations or improvements,
Landlord shall interfere as little as reasonably practicable with the conduct
of Tenant’s business in the Premises. 
Should Tenant elect to receive any service or products from a
concessionaire, licensee or third party tenant of Landlord, Landlord shall have
no liability for any services or products so provided or for any breach of
contract by such third party provider. 
Neither Landlord nor its agents shall be liable for interference with
light or other similar intangible interests. 
Tenant shall immediately notify Landlord in case of fire or accident in the
Premises, the Building or the Project and of defects in any improvements or
equipment.

 

SECTION 10.5.           WAIVER OF SUBROGATION.  Landlord and Tenant each hereby waives all
rights of recovery against the other and the other’s agents on account of loss
and damage occasioned to the property of such waiving party to the extent that
the waiving party is entitled to proceeds for such loss or damage under any
property insurance policies carried or required to be carried by the provisions
of this Lease; provided however, that the foregoing waiver shall not apply to
the extent of Tenant’s obligations to pay deductibles under any such policies
and this Lease.  By this waiver it is
the intent of the parties that neither Landlord nor Tenant shall be liable to
any insurance company (by way of subrogation or otherwise) insuring the other
party for any loss or damage insured against under any property insurance
policies contemplated by this Lease, even though such loss or damage might be
occasioned by the negligence of such party, its agents, employees, contractors,
guests or invitees.

 

ARTICLE
XI.  DAMAGE OR DESTRUCTION

 

SECTION 11.1.           RESTORATION.

 

(a)                                  If
the Premises or the Building or a part thereof are materially damaged by any
fire, flood, earthquake or other casualty, Landlord shall have the right to
terminate this Lease upon written notice to Tenant if:  (i) Landlord reasonably determines that
proceeds necessary to pay the full cost of repair is not available from
Landlord’s insurance, including without limitation earthquake insurance, plus
such additional amounts Tenant elects, at its option, to contribute, excluding
however the deductible (for which Tenant shall be responsible for Tenant’s
Share); (ii) Landlord reasonably determines that the Premises cannot, with
reasonable diligence, be fully repaired by Landlord (or cannot be safely
repaired because of the presence of hazardous factors, including without
limitation Hazardous Materials, earthquake faults, and other similar dangers)
within two hundred seventy (270) days after the date of the damage;
(iii) an uncured Event of Default by Tenant has occurred; or (iv) the
material damage occurs during the final twelve (12) months of the Term.  Landlord shall notify Tenant in writing (“Landlord’s
Notice”) within sixty (60) days after the damage occurs as to (A)
whether Landlord is terminating this Lease as a result of such material damage
and (B) if Landlord is not terminating this Lease, the number of days within
which Landlord has estimated that the Premises, with reasonable diligence, are
likely to be fully repaired.  In the
event Landlord elects to terminate this Lease, this Lease shall terminate as of
the date specified for termination by Landlord’s Notice (which termination date
shall in no event be later than sixty (60) days following the date of the
damage, or, if no such date is specified, such termination shall be the date of
Landlord’s Notice).

 

(b)                                 If
Landlord has the right to terminate this Lease pursuant to Section 11.1(a) and
does not elect to so terminate this Lease, and provided that at the time of
Landlord’s Notice neither an Event of Default exists nor has Landlord delivered
Tenant a notice of any failure by Tenant to fulfill an obligation under this
Lease which, unless cured by Tenant within the applicable grace period, would
constitute an Event of Default, then within ten (10) days following delivery of
Landlord’s Notice pursuant to Section 11.1(a), Tenant may elect to terminate
this Lease by written notice to Landlord, but only if (i) Landlord’s Notice specifies
that Landlord has determined that the Premises cannot be repaired, with
reasonable diligence, within two hundred seventy (270) days after the date of
damage or (ii) the casualty has occurred within the final twelve (12) months of
the Term and such material damage has a materially adverse impact on Tenant’s
continued use of the Premises.  If
Tenant fails to provide such termination notice within such ten (10) day
period, Tenant shall be deemed to have waived any termination right under this
Section 1l.1(b) or any other applicable law.

 

(c)                                  In
the event that neither Landlord nor Tenant terminates this Lease pursuant to
this Section 11.1 as a result of material damage to the Building or Premises
resulting from a casualty, Landlord shall repair all material damage to the
Premises or the Building as soon as reasonably possible and this Lease shall
continue in effect for the remainder of the Term.  Landlord shall have the right, but not the obligation, to repair
or replace any other leasehold improvements made by Tenant or any Alterations
(as defined in Section 7.3) constructed by Tenant.  If Landlord elects to repair or replace such
leasehold improvements and/or Alterations, all insurance proceeds available for
such repair or replacement shall be made available to Landlord.  Landlord shall have no liability to Tenant
in the event that the Premises or the Building has not been fully repaired
within the time period specified by Landlord in

 

14

 

Landlord’s Notice to Tenant as
described in Section 11.1(a). 
Notwithstanding the foregoing, the repair of damage to the Premises to
the extent such damage is not material shall be governed by Sections 7.1 and
7.2.

 

(d)                                 Commencing
on the date of such material damage to the Building, and ending on the sooner
of the date the damage is repaired or the date this Lease is terminated, the
rental to be paid under this Lease shall be abated in the same proportion that
the Floor Area of the Premises that is rendered unusable by the damage from
time to time bears to the total Floor Area of the Premises, as determined by
Landlord, but only to the extent that Landlord is entitled to reimbursement
from the proceeds of the business interruption insurance required of Tenant
pursuant to Exhibit D.

 

(e)                                  Landlord
shall not be required to repair or replace any improvements or fixtures that
Tenant is obligated to repair or replace pursuant to Section 7.1 or any other
provision of this Lease and Tenant shall continue to be obligated to so repair
or replace any such improvements or fixtures, notwithstanding any provisions to
the contrary in this Article XI.  In
addition, but subject to the provisions of Section 10.5, in the event the
damage or destruction to the Premises or Building are due in substantial part
to the fault or neglect of Tenant or its employees, subtenants, invitees or
representatives, the costs of such repairs or replacement to the Premises or
Building shall be borne by Tenant, and in addition, Tenant shall not be
entitled to terminate this Lease as a result, notwithstanding the provisions of
Section 11.1(b).

 

(f)                                    Tenant
shall fully cooperate with Landlord in removing Tenant’s personal property and
any debris from the Premises to facilitate all inspections of the Premises and
the making of any repairs. 
Notwithstanding anything to the contrary contained in this Lease, if
Landlord in good faith believes there is a risk of injury to persons or damage
to property from entry into the Building or Premises following any damage or
destruction thereto, Landlord may restrict entry into the Building or the
Premises by Tenant, its employees, agents and contractors in a
non-discriminatory manner, without being deemed to have violated Tenant’s
rights of quiet enjoyment to, or made an unlawful detainer of, or evicted
Tenant from, the Premises.  Upon
request, Landlord shall consult with Tenant to determine if there are safe
methods of entry into the Building or the Premises solely in order to allow
Tenant to retrieve files, data in computers, and necessary inventory, subject
however to all indemnities and waivers of liability from Tenant to Landlord
contained in this Lease and any additional indemnities and waivers of liability
which Landlord may require.

 

SECTION 11.2.           LEASE GOVERNS.  Tenant agrees that the provisions of this
Lease, including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of
law.

 

ARTICLE XII.  EMINENT DOMAIN

 

SECTION 12.1.           TOTAL OR PARTIAL TAKING.  If all or a material portion of the Premises
is taken by any lawful authority by exercise of the right of eminent domain, or
sold to prevent a taking, either Tenant or Landlord may terminate this Lease
effective as of the date possession is required to be surrendered to the
authority.  In the event title to a
portion of the Building or Project, whether or not including a portion of the
Premises, is taken or sold in lieu of taking, and if Landlord elects to restore
the Building in such a way as to alter the Premises materially, either party
may terminate this Lease, by written notice to the other party, effective on
the date of vesting of title.  In the
event neither party has elected to terminate this Lease as provided above, then
Landlord shall promptly, after receipt of a sufficient condemnation award,
proceed to restore the Premises to substantially their condition prior to the
taking, and a proportionate allowance shall be made to Tenant for the rent
corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of the taking and restoration.  In the event of a taking, Landlord shall be
entitled to the entire amount of the condemnation award without deduction for
any estate or interest of Tenant; provided that nothing in this Section shall
be deemed to give Landlord any interest in, or prevent Tenant from seeking any
award against the taking authority for, the taking of personal property and
fixtures belonging to Tenant or for relocation or business interruption
expenses recoverable from the taking authority.

 

SECTION 12.2.           TEMPORARY TAKING.  No temporary taking of the Premises shall
terminate this Lease or give Tenant any right to abatement of rent, and any
award specifically attributable to a temporary taking of the Premises shall
belong entirely to Tenant.  A temporary
taking shall be deemed to be a taking of the use or occupancy of the Premises
for a period of not to exceed ninety (90) days.

 

SECTION 12.3.           TAKING OF PARKING AREA.  In the event there shall be a taking of the
parking area such that Landlord can no longer provide sufficient parking to
comply with this Lease, Landlord may substitute reasonably equivalent parking
in a location reasonably close to the Building; provided that if Landlord fails
to make that substitution within ninety (90) days following the taking and if
the taking materially impairs Tenant’s use and enjoyment of the Premises,
Tenant may, at its option, terminate this Lease by written notice to Landlord.  If this Lease is not so terminated by
Tenant, there shall be no abatement of rent and this Lease shall continue in
effect.

 

ARTICLE
XIII.  SUBORDINATION; ESTOPPEL
CERTIFICATE; FINANCIALS

 

SECTION 13.1.           SUBORDINATION.  At the option of Landlord or any lender of
Landlord’s that obtains a security interest in the Building, this Lease shall
be either superior or subordinate to all ground or underlying leases, mortgages
and deeds of trust, if any, which may hereafter affect the Building, and to all
renewals, modifications, consolidations, replacements and extensions thereof;
provided, that so long as no Event of Default exists under this Lease, Tenant’s
possession and quiet enjoyment of the Premises shall not be disturbed and this
Lease shall not terminate in the event of termination of any such ground or
underlying lease, or the foreclosure of any such mortgage or deed of trust, to
which this Lease has been subordinated pursuant to this Section.  Tenant shall

 

15

 

execute and deliver any documents
or agreements requested by Landlord or such lessor or lender which provide
Tenant with the non-disturbance protections set forth in this Section.  In the event of a termination or
foreclosure, Tenant shall become a tenant of and attorn to the successor-in-interest
to Landlord upon the same terms and conditions as are contained in this Lease,
and shall execute any instrument reasonably required by Landlord’s successor
for that purpose.  Tenant shall also,
upon written request of Landlord, execute and deliver all instruments as may be
required from time to time to subordinate the rights of Tenant under this Lease
to any ground or underlying lease or to the lien of any mortgage or deed of
trust (provided that such instruments include the nondisturbance and attornment
provisions set forth above), or, if requested by Landlord, to subordinate, in
whole or in part, any ground or underlying lease or the lien of any mortgage or
deed of trust to this Lease.  Tenant
agrees that any purchaser at a foreclosure sale or lender taking title under a
deed-in-lieu of foreclosure shall not be responsible for any act or omission of
a prior landlord, shall not be subject to any offsets or defenses Tenant may
have against a prior landlord, and shall not be liable for the return of the
security deposit to the extent it is not actually received by such purchaser or
bound by any rent paid for more than the current month in which the foreclosure
occurred.

 

SECTION
13.2.           ESTOPPEL
CERTIFICATE.

 

(a)                                  Tenant
shall, at any time upon not less than ten (10) days prior written notice from
Landlord, execute, acknowledge and deliver to Landlord, in any form that
Landlord may reasonably require, a statement in writing (i) certifying that
this Lease is unmodified and in full force and effect (or, if modified, stating
the nature of the modification and certifying that this Lease, as modified, is
in full force and effect) and the dates to which the rental, additional rent
and other charges have been paid in advance, if any, and (ii) acknowledging that,
to Tenant’s knowledge, there are no uncured defaults on the part of Landlord,
or specifying each default if any are claimed, and (iii) setting forth all
further information that Landlord or any purchaser or encumbrancer may
reasonably require.  Tenant’s statement
may be relied upon by any prospective purchaser or encumbrancer of all or any
portion of the Building or Project.

 

(b)                                 Notwithstanding
any other rights and remedies of Landlord, Tenant’s failure to deliver any
estoppel statement within the provided time shall be conclusive upon Tenant
that (i) this Lease is in full force and effect, without modification except as
may be represented by Landlord, (ii) there are no uncured Events of Default in
Landlord’s performance, and (iii) not more than one month’s rental has been
paid in advance.

 

SECTION
13.3.           FINANCIALS.

 

(a)                                  Tenant
shall deliver to Landlord, prior to the execution of this Lease and thereafter
at any time upon Landlord’s request, Tenant’s current tax returns and financial
statements, certified true, accurate and complete by the chief financial
officer of Tenant, including a balance sheet and profit and loss statement for
the most recent prior year, or, in the event Tenant is a publicly traded
corporation on a nationally recognized stock exchange, Tenant’s current
financial reports filed with the Securities and Exchange Commission
(collectively, the “Statements”), which Statements shall
accurately and completely reflect the financial condition of Tenant.  Landlord agrees that it will keep the Statements
confidential, except that Landlord shall have the right to deliver the same to
any proposed purchaser of the Building or Project, and to any encumbrancer of
all or any portion of the Building or Project.

 

(b)                                 Tenant
acknowledges that Landlord is relying on the Statements in its determination to
enter into this Lease, and Tenant represents to Landlord, which representation
shall be deemed made on the date of this Lease and again on the Commencement
Date, that no material change in the financial condition of Tenant, as
reflected in the Statements, has occurred since the date Tenant delivered the
Statements to Landlord.  The Statements
are represented and warranted by Tenant to be correct and to accurately and fully
reflect Tenant’s true financial condition as of the date of submission by any
Statements to Landlord.

 

ARTICLE XIV.  EVENTS OF DEFAULT AND REMEDIES

 

SECTION 14.1.           TENANT’S DEFAULTS.  In addition to any other breaches of this
Lease which are defined as Events of Default in this Lease, the occurrence of
any one or more of the following events shall constitute an Event of Default by
Tenant:

 

(a)                                  The
failure by Tenant to make any payment of Basic Rent or additional rent required
to be made by Tenant, as and when due, where the failure continues for a period
of three (3) days after written notice from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure Section 1161 and
1161(a) as amended.  For purposes of
these Events of Default and remedies provisions, the term “additional rent” shall be
deemed to include all amounts of any type whatsoever other than Basic Rent to
be paid by Tenant pursuant to the terms of this Lease.

 

(b)                                 The
assignment, sublease, encumbrance or other transfer of this Lease by Tenant,
either voluntarily or by operation of law, whether by judgment, execution,
transfer by intestacy or testacy, or other means, without the prior written
consent of Landlord when consent is required by this Lease.

 

(c)                                  The
discovery by Landlord that any financial statement provided by Tenant, or by
any affiliate, successor or guarantor of Tenant, was materially false.

 

(d)                                 The
failure of Tenant to timely and fully provide any subordination agreement,
estoppel certificate or financial statements in accordance with the
requirements of Article XIII.

 

(e)                                  The
abandonment of the Premises by Tenant.

 

16

 

(f)                                    The
failure or inability by Tenant to observe or perform any of the express or
implied covenants or provisions of this Lease to be observed or performed by
Tenant, other than as specified in this Section 14.1, where the failure
continues for a period of thirty (30) days after written notice from Landlord
to Tenant or such shorter period as is specified in any other provision of this
Lease; provided, however, that any such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure
Section 1161 and 1161(a) as amended. However, if the nature of the failure is
such that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to have committed an Event of Default if Tenant
commences the cure within thirty (30) days, and thereafter diligently pursues
the cure to completion.

 

(g)                                 (i)
The making by Tenant of any general assignment for the benefit of creditors;
(ii) the filing by or against Tenant of a petition to have Tenant adjudged a
Chapter 7 debtor under the Bankruptcy Code or to have debts discharged or a
petition for reorganization or arrangement under any law relating to bankruptcy
(unless, in the case of a petition filed against Tenant, the same is dismissed
within thirty (30) days); (iii) the appointment of a trustee or receiver to
take possession of substantially all of Tenant’s assets located at the Premises
or of Tenant’s interest in this Lease, if possession is not restored to Tenant
within thirty (30) days; (iv) the attachment, execution or other judicial seizure
of substantially all of Tenant’s assets located at the Premises or of Tenant’s
interest in this Lease, where the seizure is not discharged within thirty (30)
days; (v) Tenant’s convening of a meeting of its creditors for the purpose of
effecting a moratorium upon or composition of its debts or (vi) the failure of
Tenant to pay its material obligations to creditors as and when they become due
and payable, other than as a result of a good faith dispute by Tenant as to the
amount due to such creditors.  Landlord
shall not be deemed to have knowledge of any event described in this Section
14.1(g) unless notification in writing is received by Landlord, nor shall there
be any presumption attributable to Landlord of Tenant’s insolvency.  In the event that any provision of this
Section 14.1(g) is contrary to applicable law, the provision shall be of no
force or effect.

 

SECTION 14.2.           LANDLORD’S REMEDIES.

 

(a)                                  If
an Event of Default by Tenant occurs, then in addition to any other remedies
available to Landlord, Landlord may exercise the following remedies:

 

(i)                                     Landlord
may terminate Tenant’s right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Tenant shall immediately surrender
possession of the Premises to Landlord. 
Such termination shall not affect any accrued obligations of Tenant
under this Lease.  Upon termination,
Landlord shall have the right to reenter the Premises and remove all persons
and property.  Landlord shall also be
entitled to recover from Tenant:

 

(1)                                  The
worth at the time of award of the unpaid Basic Rent and additional rent which
had been earned at the time of termination;

 

(2)                                  The
worth at the time of award of the amount by which the unpaid Basic Rent and
additional rent which would have been earned after termination until the time
of award exceeds the amount of such loss that Tenant proves could have been
reasonably avoided;

 

(3)                                  The
worth at the time of award of the amount by which the unpaid Basic Rent and
additional rent for the balance of the Term after the time of award exceeds the
amount of such loss that Tenant proves could be reasonably avoided;

 

(4)                                  Any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result from Tenant’s Event
of Default, including, but not limited to, the cost of recovering possession of
the Premises, refurbishment of the Premises, marketing costs, commissions and
other expenses of reletting, including necessary repair, the unamortized
portion of any tenant improvements and brokerage commissions funded by Landlord
in connection with this Lease, reasonable attorneys’ fees, and any other
reasonable costs; and

 

(5)                                  At
Landlord’s election, all other amounts in addition to or in lieu of the
foregoing as may be permitted by law. 
The term “rent” as used in the Lease shall be deemed to mean the Basic
Rent, Tenant’s Share of Operating Expenses and any other sums required to be
paid by Tenant to Landlord pursuant to the terms of this Lease, including,
without limitation, any sums that may be owing from Tenant pursuant to Section
4.3 of this Lease.  Any sum, other than
Basic Rent, shall be computed on the basis of the average monthly amount
accruing during the twenty-four (24) month period immediately prior to the
Event of Default, except that if it becomes necessary to compute such rental
before the twenty-four (24) month period has occurred, then the computation
shall be on the basis of the average monthly amount during the shorter
period.  As used in Sections 14.2(a)(i)
(1) and (2) above, the “worth at the time of award” shall be computed by
allowing interest at the rate of ten percent (10%) per annum.  As used in Section 14.2(a)(i)(3) above, the
“worth at the time of award” shall be computed by discounting the amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent (1%).

 

(ii)                                  Landlord
may elect not to terminate Tenant’s right to possession of the Premises, in
which event Landlord may continue to enforce all of its rights and remedies
under this Lease, including the right to collect all rent as it becomes
due.  Efforts by the Landlord to
maintain, preserve or relet the Premises, or the appointment of a receiver to
protect the Landlord’s interests under this Lease, shall not constitute a
termination of the Tenant’s right to possession of the Premises.  In the event that Landlord elects to avail
itself of the remedy provided by this Section 14.2(a)(ii), Landlord shall not
unreasonably withhold its consent to an assignment or subletting of the
Premises subject to the reasonable standards for Landlord’s consent as are
contained in this Lease.

 

17

 

(b)                                 Landlord
shall be under no obligation to observe or perform any covenant of this Lease
on its part to be observed or performed which accrues after the date of any
Event of Default by Tenant unless and until the Event of Default is cured by
Tenant, it being understood and agreed that the performance by Landlord of its
obligations under this Lease are expressly conditioned upon Tenant’s full and
timely performance of its obligations under this Lease.  The various rights and remedies reserved to
Landlord in this Lease or otherwise shall be cumulative and, except as
otherwise provided by California law, Landlord may pursue any or all of its
rights and remedies at the same time.

 

(c)                                  No
delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any breach or Event of
Default by Tenant.  The acceptance by
Landlord of rent shall not be a (i) waiver of any preceding breach or Event of
Default by Tenant of any provision of this Lease, other than the failure of
Tenant to pay the particular rent accepted, regardless of Landlord’s knowledge
of the preceding breach or Event of Default at the time of acceptance of rent,
or (ii) a waiver of Landlord’s right to exercise any remedy available to
Landlord by virtue of the breach or Event of Default.  The acceptance of any payment from a debtor in possession, a
trustee, a receiver or any other person acting on behalf of Tenant or Tenant’s
estate shall not waive or cure a breach or Event of Default under Section
14.1.  No payment by Tenant or receipt
by Landlord of a lesser amount than the rent required by this Lease shall be
deemed to be other than a partial payment on account of the earliest due stipulated
rent, nor shall any endorsement or statement on any check or letter be deemed
an accord and satisfaction and Landlord shall accept the check or payment
without prejudice to Landlord’s right to recover the balance of the rent or
pursue any other remedy available to it. 
No act or thing done by Landlord or Landlord’s agents during the Term
shall be deemed an acceptance of a surrender of the Premises, and no agreement
to accept a surrender shall be valid unless in writing and signed by
Landlord.  No employee of Landlord or of
Landlord’s agents shall have any power to accept the keys to the Premises prior
to the termination of this Lease, and the delivery of the keys to any employee
shall not operate as a termination of this Lease or a surrender of the
Premises.

 

(d)                                 Any
agreement for free or abated rent or other charges, or for the giving or paying
by Landlord to or for Tenant of any cash or other bonus, inducement or
consideration for Tenant’s entering into this Lease (“Inducement Provisions”) shall
be deemed conditioned upon Tenant’s full and faithful performance of the terms,
covenants and conditions of this Lease. 
Upon an Event of Default under this Lease by Tenant, any such Inducement
Provisions shall automatically be deemed deleted from this Lease and of no
further force or effect and the amount of any rent reduction or abatement or
other bonus or consideration already given by Landlord or received by Tenant as
an Inducement shall be immediately due and payable by Tenant to Landlord,
notwithstanding any subsequent cure of said 
Event of Default by Tenant.  The
acceptance by Landlord of rent or the cure of the  Event of Default which initiated the operation of this Section
14.1 shall not be deemed a waiver by Landlord of the provisions of this Section
14.2(d).

 

SECTION
14.3.           LATE
PAYMENTS.

 

(a)                                  Any
payment due to Landlord under this Lease, including without limitation Basic
Rent, Tenant’s Share of Operating Expenses or any other payment due to Landlord
under this Lease, that is not received by Landlord within five (5) days
following the date due shall bear interest at the maximum rate permitted by law
from the date due until fully paid.  The
payment of interest shall not cure any breach or  Event of Default by Tenant under this Lease.  In addition, Tenant acknowledges that the
late payment by Tenant to Landlord of Basic Rent and Tenant’s Share of
Operating Expenses will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult and impracticable
to ascertain.  Those costs may include,
but are not limited to, administrative, processing and accounting charges, and
late charges which may be imposed on Landlord by the terms of any ground lease,
mortgage or trust deed covering the Premises. 
Accordingly, if any Basic Rent or Tenant’s Share of Operating Expenses
due from Tenant shall not be received by Landlord or Landlord’s designee within
five (5) days following the date due, then Tenant shall pay to Landlord, in
addition to the interest provided above, a late charge, which the Tenant agrees
is reasonable, in a sum equal to the greater of five percent (5%) of the amount
overdue or Two Hundred Fifty Dollars ($250.00) for each delinquent
payment.  Acceptance of a late charge by
Landlord shall not constitute a waiver of Tenant’s breach or  Event of Default with respect to the overdue
amount, nor shall it prevent Landlord from exercising any of its other rights
and remedies.

 

(b)                                 Following
each second installment of Basic Rent and/or the payment of Tenant’s Share of
Operating Expenses within any twelve (12) month period that is not paid within
five (5) days following the date due, Landlord shall have the option (i) to
require that beginning with the first payment of Basic Rent next due, Basic
Rent and the Tenant’s Share of Operating Expenses shall no longer be paid in
monthly installments but shall be payable quarterly three (3) months in advance
and/or (ii) to require that Tenant increase the amount, if any, of the Security
Deposit by one hundred percent (100%). 
Should Tenant deliver to Landlord, at any time during the Term, two (2)
or more insufficient checks, the Landlord may require that all monies then and
thereafter due from Tenant be paid to Landlord by cashier’s check.  If any check for any payment to Landlord
hereunder is returned by the bank for any reason, such payment shall not be
deemed to have been received by Landlord and Tenant shall be responsible for
any applicable late charge, interest payment and the charge to Landlord by its
bank for such returned check.  Nothing
in this Section shall be construed to compel Landlord to accept Basic Rent,
Tenant’s Share of Operating Expenses or any other payment from Tenant if there
exists an Event of Default unless such payment fully cures any and all such
Event of Default.  Any acceptance of any
such payment shall not be deemed to waive any other right of Landlord under
this Lease.  Any payment by Tenant to
Landlord may be applied by Landlord, in its sole and absolute discretion, in
any order determined by Landlord to any amounts then due to Landlord.

 

SECTION 14.4.           RIGHT OF LANDLORD TO PERFORM.  All covenants and agreements to be performed
by Tenant under this Lease shall be performed at Tenant’s sole cost and expense
and without any abatement of rent or right of set-off.  If Tenant fails to pay any sum of money,
other than rent payable to Landlord, or fails to perform any other act on its
part to be performed under this Lease, and the failure continues beyond any

 

18

 

applicable grace period set
forth in Section 14.1, then in addition to any other available remedies,
Landlord may, at its election make the payment or perform the other act on
Tenant’s part and Tenant hereby grants Landlord the right to enter onto the
Premises in order to carry out such performance.  Landlord’s election to make the payment or perform the act on
Tenant’s part shall not give rise to any responsibility of Landlord to continue
making the same or similar payments or performing the same or similar acts nor
shall Landlord be responsible to Tenant for any damage caused to Tenant as the
result of such performance by Landlord. 
Tenant shall, promptly upon demand by Landlord, reimburse Landlord for
all sums paid by Landlord and all necessary incidental costs, together with
interest at the maximum rate permitted by law from the date of the payment by
Landlord.

 

SECTION 14.5.           DEFAULT BY LANDLORD.  Landlord shall not be deemed to be in
default in the performance of any obligation under this Lease, and Tenant shall
have no rights to take any action against Landlord, unless and until Landlord
has failed to perform the obligation within thirty (30) days after written
notice by Tenant to Landlord specifying in reasonable detail the nature and
extent of the failure; provided, however, that if the nature of Landlord’s
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion.  In the event of
Landlord’s default under this Lease, Tenant’s sole remedies shall be to seek
damages or specific performance from Landlord, provided that any damages shall
be limited to Tenant’s actual out-of-pocket expenses and shall in no event
include any consequential damages, lost profits or opportunity costs.

 

SECTION 14.6.           EXPENSES AND LEGAL FEES.  All sums reasonably incurred by Landlord in
connection with any Event of Default by Tenant under this Lease or holding over
of possession by Tenant after the expiration or earlier termination of this
Lease, or any action related to a filing for bankruptcy or reorganization by
Tenant, including without limitation all costs, expenses and actual
accountants, appraisers, attorneys and other professional fees, and any
collection agency or other collection charges, shall be due and payable to
Landlord on demand, and shall bear interest at the rate of ten percent (10%)
per annum.  Should either Landlord or
Tenant bring any action in connection with this Lease, the prevailing party
shall be entitled to recover as a part of the action its reasonable attorneys’
fees, and all other costs.  The
prevailing party for the purpose of this Section shall be determined by the
trier of the facts.

 

SECTION 14.7.           WAIVER OF JURY TRIAL.  LANDLORD AND TENANT EACH ACKNOWLEDGES THAT
IT IS AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO
ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY
WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST
ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED
ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF
INJURY OR DAMAGE.  FURTHERMORE,
THIS WAIVER AND RELEASE OF ALL RIGHTS TO A JURY TRIAL IS DEEMED TO BE
INDEPENDENT OF EACH AND EVERY OTHER PROVISION, COVENANT, AND/OR CONDITION SET
FORTH IN THIS LEASE.

 

SECTION 14.8.           SATISFACTION OF JUDGMENT.  The obligations of Landlord do not
constitute the personal obligations of the individual partners, trustees,
directors, officers or shareholders of Landlord or its constituent
partners.  Should Tenant recover a money
judgment against Landlord, such judgment shall be satisfied only from the
interest of Landlord in the Project and out of the rent or other income from
such property receivable by Landlord or out of consideration received by
Landlord from the sale or other disposition of all or any part of Landlord’s
right, title or interest in the Project and no action for any deficiency may be
sought or obtained by Tenant.

 

SECTION 14.9.           LIMITATION OF ACTIONS AGAINST LANDLORD.  Any claim, demand or right of any kind by
Tenant which is based upon or arises in connection with this Lease, including
without limitation any arising under a tort or contract cause of action, shall
be barred unless Tenant commences an action thereon within six (6) months after
the date that the act, omission, event or default upon which the claim, demand
or right arises, has occurred.

 

ARTICLE XV.  END OF
TERM

 

SECTION 15.1.           HOLDING OVER.  This Lease shall terminate without further
notice upon the expiration of the Term, and any holding over by Tenant after
the expiration shall not constitute a renewal or extension of this Lease, or
give Tenant any rights under this Lease, except when in writing signed by both
parties.  Any period of time following the
Expiration Date or earlier termination of this Lease required for Tenant to
remove its property or to place the Premises in the condition required pursuant
to Section 15.3 (or for Landlord to do so if Tenant fails to do so) shall
be deemed a holding over by Tenant.  If
Tenant holds over for any period after the Expiration Date (or earlier
termination) of the Term without the prior written consent of Landlord, such
possession shall constitute a tenancy at sufferance only and an Event of
Default under this Lease; such holding over with the prior written consent of
Landlord shall constitute a month-to-month tenancy commencing on the first
(1st) day following the termination of this Lease and terminating thirty (30)
days following delivery of written notice of termination by either Landlord or
Tenant to the other.  In either of such
events, possession shall be subject to all of the terms of this Lease, except
that the monthly Basic Rent shall be the greater of (a) one hundred fifty
percent (150%) of the Basic Rent for the month immediately preceding the date
of termination, or (b) the then currently scheduled Basic Rent for comparable
space in the Project.  The acceptance by
Landlord of monthly holdover rental in a lesser amount shall not constitute a
waiver of Landlord’s right to recover the full amount due for any holdover by
Tenant, unless otherwise agreed in writing by Landlord.  If Tenant fails to surrender the Premises
upon the

 

19

 

expiration of this Lease despite
demand to do so by Landlord, Tenant shall indemnify and hold Landlord harmless
from all loss or liability, including without limitation, any claims made by
any succeeding tenant relating to such failure to surrender.  The foregoing provisions of this Section are
in addition to and do not affect Landlord’s right of re-entry or any other
rights of Landlord under this Lease or at law.

 

SECTION 15.2.           MERGER ON TERMINATION.  The voluntary or other surrender of this
Lease by Tenant, or a mutual termination of this Lease, shall terminate any or
all existing subleases unless Landlord, at its option, elects in writing to
treat the surrender or termination as an assignment to it of any or all
subleases affecting the Premises.

 

SECTION 15.3.           SURRENDER OF PREMISES; REMOVAL OF
PROPERTY.  Subject to the
provisions of 7.3 of this Lease, upon the Expiration Date or upon any earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in as good order, condition and repair as when received or
as hereafter may be improved by Landlord or Tenant, reasonable wear and tear
and repairs which are Landlord’s obligation excepted, and shall, without
expense to Landlord, remove or cause to be removed from the Premises all
personal property and debris, except for any items that Landlord may by written
authorization allow to remain.  Tenant
shall repair all damage to the Premises resulting from the removal, which
repair shall include the patching and filling of holes and repair of structural
damage, provided that Landlord may instead elect to repair any structural
damage at Tenant’s expense.  If Tenant
shall fail to comply with the provisions of this Section, Landlord may effect
the removal and/or make any repairs, and the cost to Landlord shall be
additional rent payable by Tenant upon demand. 
If Tenant fails to remove Tenant’s personal property from the Premises
upon the expiration of the Term, Landlord may remove, store, dispose of and/or
retain such personal property, at Landlord’s option, in accordance with then
applicable laws, all at the expense of Tenant. 
If requested by Landlord, Tenant shall execute, acknowledge and deliver
to Landlord an instrument in writing releasing and quitclaiming to Landlord all
right, title and interest of Tenant in the Premises.

 

ARTICLE XVI.  PAYMENTS AND NOTICES

 

All sums
payable by Tenant to Landlord shall be deemed to be rent under this Lease and
shall be paid, without deduction or offset, in lawful money of the United
States to Landlord at its address set forth in Item 12 of the Basic Lease
Provisions, or at any other place as Landlord may designate in writing.  Unless this Lease expressly provides
otherwise, as for example in the payment of Basic Rent and the Tenant’s Share
of Operating Costs pursuant to Sections 4.1 and 4.2, all payments shall be
due and payable within five (5) days after demand.  All payments requiring proration shall be prorated on the basis
of a thirty (30) day month and a three hundred sixty (360) day year.  Any notice, election, demand, consent,
approval or other communication to be given or other document to be delivered
by either party to the other may be delivered in person or by courier or
overnight delivery service to the other party, or may be deposited in the
United States mail, duly registered or certified, postage prepaid, return
receipt requested, and addressed to the other party at the address set forth in
Item 12 of the Basic Lease Provisions, or if to Tenant, at that address or,
from and after the Commencement Date, at the Premises (whether or not Tenant
has departed from, abandoned or vacated the Premises).  Either party may, by written notice to the
other, served in the manner provided in this Article, designate a different address.  If any notice or other document is sent by
mail, it shall be deemed served or delivered seventy-two (72) hours after
mailing.  If more than one person or
entity is named as Tenant under this Lease, service of any notice upon any one
of them shall be deemed as service upon all of them.

 

ARTICLE XVII.  RULES AND REGULATIONS

 

Tenant agrees
to observe faithfully and comply strictly with the Rules and Regulations,
attached as Exhibit E, and any reasonable and nondiscriminatory
amendments, modifications and/or additions as may be adopted and published by
written notice to tenants by Landlord for the safety, care, security, good
order, or cleanliness of the Premises, Building, Project and Common Areas.  Landlord shall not be liable to Tenant for
any violation of the Rules and Regulations or the breach of any covenant or
condition in any lease by any other tenant or such tenant’s agents, employees,
contractors, guests or invitees.  One or
more waivers by Landlord of any breach of the Rules and Regulations by Tenant
or by any other tenant(s) shall not be a waiver of any subsequent breach of
that rule or any other.  Tenant’s
failure to keep and observe the Rules and Regulations shall constitute a breach
of this Lease.  In the case of any
conflict between the Rules and Regulations and this Lease, this Lease shall be
controlling.

 

ARTICLE XVIII.  BROKER’S COMMISSION

 

The parties
recognize as the broker(s) who negotiated this Lease the firm(s), if any, whose
name(s) is (are) stated in Item 10 of the Basic Lease Provisions, and agree
that Landlord shall be responsible for the payment of brokerage commissions to
those broker(s) unless otherwise provided in this Lease.  Tenant warrants that it has had no dealings
with any other real estate broker or agent in connection with the negotiation
of this Lease, and Tenant agrees to indemnify and hold Landlord harmless from
any cost, expense or liability (including reasonable attorneys’ fees) for any
compensation, commissions or charges claimed by any other real estate broker or
agent employed or claiming to represent or to have been employed by Tenant in
connection with the negotiation of this Lease. 
The foregoing agreement shall survive the termination of this
Lease.  If Tenant fails to take
possession of the Premises or if this Lease otherwise terminates prior to the
Expiration Date as the result of failure of performance by Tenant, Landlord
shall be entitled to recover from Tenant the unamortized portion of any
brokerage commission funded by Landlord in addition to any other damages to
which Landlord may be entitled.

 

20

 

ARTICLE XIX.  TRANSFER OF LANDLORD’S INTEREST

 

In the event
of any transfer of Landlord’s interest in the Premises, the transferor shall be
automatically relieved of all further obligations on the part of Landlord, and
the transferor shall be relieved of any obligation to pay any funds in which
Tenant has an interest to the extent that such funds have been turned over,
subject to that interest, to the transferee and Tenant is notified of the
transfer as required by law .  No
beneficiary of a deed of trust to which this Lease is or may be subordinate,
and no landlord under a so-called sale-leaseback, shall be responsible in
connection with the Security Deposit, unless the mortgagee or beneficiary under
the deed of trust or the landlord actually receives the Security Deposit.  It is intended that the covenants and
obligations contained in this Lease on the part of Landlord shall, subject to
the foregoing, be binding on Landlord, its successors and assigns, only during
and in respect to their respective successive periods of ownership.

 

ARTICLE XX.  INTERPRETATION

 

SECTION 20.1.           GENDER AND NUMBER.  Whenever the context of this Lease requires,
the words “Landlord” and “Tenant” shall include the plural as well as
the singular, and words used in neuter, masculine or feminine genders shall
include the others.

 

SECTION 20.2.           HEADINGS.  The captions and headings of the articles
and sections of this Lease are for convenience only, are not a part of this
Lease and shall have no effect upon its construction or interpretation.

 

SECTION 20.3.           JOINT AND SEVERAL LIABILITY.  If more than one person or entity is named
as Tenant, the obligations imposed upon each shall be joint and several and the
act of or notice from, or notice or refund to, or the signature of, any one or
more of them shall be binding on all of them with respect to the tenancy of
this Lease, including, but not limited to, any renewal, extension, termination
or modification of this Lease.

 

SECTION 20.4.           SUCCESSORS.  Subject to Articles IX and XIX, all rights
and liabilities given to or imposed upon Landlord and Tenant shall extend to
and bind their respective heirs, executors, administrators, successors and
assigns.  Nothing contained in this
Section is intended, or shall be construed, to grant to any person other than
Landlord and Tenant and their successors and assigns any rights or remedies
under this Lease.

 

SECTION 20.5.           TIME OF ESSENCE.  Time is of the essence with respect to the
performance of every provision of this Lease.

 

SECTION 20.6.           CONTROLLING LAW/VENUE.  This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.  Any litigation commenced concerning any
matters whatsoever arising out of or in any way connected to this Lease shall
be initiated in the Superior Court of the county in which the Project is
located.

 

SECTION 20.7.           SEVERABILITY.  If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any material
benefit by either party or the deletion of which is consented to by the party
adversely affected, shall be held invalid or unenforceable to any extent, the
remainder of this Lease shall not be affected and each term and provision of
this Lease shall be valid and enforceable to the fullest extent permitted by
law.

 

SECTION 20.8.           WAIVER AND CUMULATIVE REMEDIES.  One or more waivers by Landlord or Tenant of
any breach of any term, covenant or condition contained in this Lease shall not
be a waiver of any subsequent breach of the same or any other term, covenant or
condition.  Consent to any act by one of
the parties shall not be deemed to render unnecessary the obtaining of that
party’s consent to any subsequent act. 
No breach by Tenant of this Lease shall be deemed to have been waived by
Landlord unless the waiver is in a writing signed by Landlord.  The rights and remedies of Landlord under
this Lease shall be cumulative and in addition to any and all other rights and
remedies which Landlord may have.

 

SECTION 20.9.           INABILITY TO PERFORM.  In the event that either party shall be
delayed or hindered in or prevented from the performance of any work or in
performing any act required under this Lease by reason of any cause beyond the
reasonable control of that party, other than financial inability, then the
performance of the work or the doing of the act shall be excused for the period
of the delay and the time for performance shall be extended for a period
equivalent to the period of the delay. 
The provisions of this Section shall not operate to excuse Tenant from
the prompt payment of rent or from the timely performance of any other
obligation under this Lease within Tenant’s reasonable control.

 

SECTION 20.10.    ENTIRE
AGREEMENT.  This Lease and
its exhibits and other attachments cover in full each and every agreement of
every kind between the parties concerning the Premises, the Building, and the
Project, and all preliminary negotiations, oral agreements, understandings
and/or practices, except those contained in this Lease, are superseded and of
no further effect.  Tenant waives its
rights to rely on any representations or promises made by Landlord or others
which are not contained in this Lease. 
No verbal agreement or implied covenant shall be held to modify the
provisions of this Lease, any statute, law, or custom to the contrary
notwithstanding.

 

SECTION 20.11.    QUIET ENJOYMENT.  Upon the observance and performance of all
the covenants, terms and conditions on Tenant’s part to be observed and
performed, and subject to the other provisions of this Lease, Tenant shall have
the right of quiet enjoyment and use of the Premises for the Term without
hindrance or interruption by Landlord or any other person claiming by or
through Landlord.

 

21

 

SECTION 20.12.    SURVIVAL.  All covenants of Landlord or Tenant which
reasonably would be intended to survive the expiration or sooner termination of
this Lease, including without limitation any warranty or indemnity hereunder,
shall so survive and continue to be binding upon and inure to the benefit of
the respective parties and their successors and assigns.

 

SECTION 20.13.    INTERPRETATION.  This Lease shall not be construed
in favor of or against either party, but shall be construed as if both parties
prepared this Lease.

 

ARTICLE XXI.  EXECUTION AND RECORDING

 

SECTION 21.1.           COUNTERPARTS.  This Lease may be executed in one or more
counterparts, each of which shall constitute an original and all of which shall
be one and the same agreement.

 

SECTION 21.2.           CORPORATE, LIMITED LIABILITY COMPANY AND
PARTNERSHIP AUTHORITY.  If
Tenant is a corporation, limited liability company or partnership, each
individual executing this Lease on behalf of the corporation, limited liability
company or partnership represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of the corporation,
limited liability company or partnership, and that this Lease is binding upon
the corporation, limited liability company or partnership in accordance with
its terms.  Tenant shall, at Landlord’s
request, deliver a certified copy of its board of directors’ resolution,
operating agreement or partnership agreement or certificate authorizing or
evidencing the execution of this Lease.

 

SECTION 21.3.           EXECUTION OF
LEASE; NO OPTION OR OFFER. 
The submission of this Lease to Tenant shall be for examination purposes
only, and shall not constitute an offer to or option for Tenant to lease the
Premises.  Execution of this Lease by
Tenant and its return to Landlord shall not be binding upon Landlord,
notwithstanding any time interval, until Landlord has in fact executed and
delivered this Lease to Tenant, it being intended that this Lease shall only
become effective upon execution by Landlord and delivery of a fully executed
counterpart to Tenant.

 

SECTION 21.4.           RECORDING.  Tenant shall not record this Lease without
the prior written consent of Landlord. 
Tenant, upon the request of Landlord, shall execute and acknowledge a “short form”
memorandum of this Lease for recording purposes.

 

SECTION 21.5.           AMENDMENTS.  No amendment or termination of this Lease
shall be effective unless in writing signed by authorized signatories of Tenant
and Landlord, or by their respective successors in interest.  No actions, policies, oral or informal
arrangements, business dealings or other course of conduct by or between the
parties shall be deemed to modify this Lease in any respect.

 

SECTION 21.6.           EXECUTED COPY.  Any fully executed photocopy or similar
reproduction of this Lease shall be deemed an original for all purposes.

 

SECTION 21.7.           ATTACHMENTS.  All exhibits, amendments, riders and addenda
attached to this Lease are hereby incorporated into and made a part of this
Lease.

 

ARTICLE XXII. 
MISCELLANEOUS

 

SECTION 22.1.           NONDISCLOSURE OF LEASE TERMS.  Tenant acknowledges and agrees that the
terms of this Lease are confidential and constitute proprietary information of
Landlord.  Disclosure of the terms could
adversely affect the ability of Landlord to negotiate other leases and impair
Landlord’s relationship with other tenants. 
Accordingly, Tenant agrees that it, and its partners, officers,
directors, employees and attorneys, shall not intentionally and voluntarily
disclose, by public filings or otherwise, the terms and conditions of this
Lease (“Confidential Information”) to any third party, either directly or
indirectly, without the prior written consent of Landlord, which consent may be
given or withheld in Landlord’s sole and absolute discretion.  The foregoing restriction shall not apply if
either: (i) Tenant is required to disclose the Confidential Information in
response to a subpoena or other regulatory, administrative or court order, (ii)
independent legal counsel to Tenant delivers a written opinion to Landlord that
Tenant is required to disclose the Confidential Information to, or file a copy
of this Lease with, any governmental agency or any stock exchange; provided
however, that in such event, Tenant shall, before making any such disclosure
(A) provide Landlord with prompt written notice of such required disclosure,
(B) at Tenant’s sole cost, take all reasonable legally available steps to
resist or narrow such requirement, including without limitation preparing and
filing a request for confidential treatment of the Confidential Information and
(C) if disclosure of the Confidential Information is required by subpoena or
other regulatory, administrative or court order, Tenant shall provide Landlord
with as much advance notice of the possibility of such disclosure as practical
so that Landlord may attempt to stop such disclosure or obtain an order
concerning such disclosure.  The form
and content of a request by Tenant for confidential treatment of the
Confidential Information shall be provided to Landlord at least five (5)
business days before its submission to the applicable governmental agency or
stock exchange and is subject to the prior written approval of Landlord.  In addition, Tenant may disclose the terms
of this Lease to prospective assignees of this Lease and prospective subtenants
under this Lease with whom Tenant is actively negotiating such an assignment or
sublease.

 

SECTION 22.2.           GUARANTY.  As a condition to the execution of this
Lease by Landlord, the obligations, covenants and performance of the Tenant as
herein provided shall be guaranteed in writing by the Guarantor(s) listed in
Item 7 of the Basic Lease Provisions (“Guarantor”), if any, on a
form of guaranty provided by Landlord (“Guaranty”).  Any default by a Guarantor under the Guaranty shall be deemed to
be an Event of Default under the terms of this Lease.  In addition, any filing by or against a Guarantor of a petition
to have such

 

22

 

Guarantor adjudged a Chapter 7
debtor under the Bankruptcy Code or to have debts discharged or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against such Guarantor, the same is dismissed
within thirty (30) days), a Guarantor’s convening of a meeting of its creditors
for the purpose of effecting a moratorium upon or composition of its debts or
the failure of a Guarantor to pay its material obligations to creditors as and
when they become due and payable, other than as a result of a good faith
dispute by such Guarantor, shall be deemed to be an Event of Default by Tenant.

 

SECTION 22.3.           CHANGES REQUESTED BY LENDER.  If, in connection with obtaining financing
for the Project, the lender shall request reasonable modifications in this
Lease as a condition to the financing, Tenant will not unreasonably withhold or
delay its consent, provided that the modifications do not materially increase
the obligations of Tenant or materially and adversely affect the leasehold
interest created by this Lease.

 

SECTION 22.4.           MORTGAGEE PROTECTION.  No act or failure to act on the part of
Landlord which would otherwise entitle Tenant to be relieved of its obligations
hereunder shall result in such a release or termination unless (a) Tenant has
given notice by registered or certified mail to any beneficiary of a deed of
trust or mortgage covering the Building whose address has been furnished to
Tenant and (b) such beneficiary is afforded a reasonable opportunity to cure
the default by Landlord (which in no event shall be less than sixty (60) days),
including, if necessary to effect the cure, time to obtain possession of the
Building by power of sale or judicial foreclosure provided that such
foreclosure remedy is diligently pursued. 
Tenant agrees that each beneficiary of a deed of trust or mortgage
covering the Building is an express third party beneficiary hereof, Tenant
shall have no right or claim for the collection of any deposit from such
beneficiary or from any purchaser at a foreclosure sale unless such beneficiary
or purchaser shall have actually received and not refunded the deposit, and
Tenant shall comply with any written directions by any beneficiary to pay rent
due hereunder directly to such beneficiary without determining whether a
default exists under such beneficiary’s deed of trust.

 

SECTION 22.5.           COVENANTS AND CONDITIONS.  All of the provisions of this Lease shall be
construed to be conditions as well as covenants as though the words
specifically expressing or imparting covenants and conditions were used in each
separate provision.

 

SECTION 22.6.           SECURITY MEASURES.  Tenant hereby acknowledges that Landlord
shall have no obligation whatsoever to provide guard service or other security
measures for the benefit of the Premises or the Project.  Tenant assumes all responsibility for the
protection of Tenant, its employees, agents, invitees and property from acts of
third parties.  Nothing herein contained
shall prevent Landlord, at its sole option, from providing security protection
for the Project or any part thereof, in which event the cost thereof shall be
included within the definition of Project Costs.

 

SECTION 22.7.           EXPIRATION OF EXISTING LEASE.  It is understood that Tenant is presently
leasing the Premises pursuant to a lease dated April 3, 1989 (the “Existing
Lease”), which Lease was subsequently amended. 
The parties agree that the Existing Lease shall expire in accordance
with its terms as of the day preceding the Commencement Date of this Lease.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
  THE IRVINE COMPANY

  	
  4-D NEUROIMAGING,

  
	
   

  	
   

  	
  a California corporation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ William R. Halford

  	
   

  	
  By:

  	
   /s/ D. Scott Buchanan

  	
   

  
	
   

  	
  William R. Halford, President

  	
   

  	
  Name: D. Scott Buchanan

  
	
   

  	
  Office Properties

  	
   

  	
  Title: President & CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Christopher Popma

  	
   

  	
  By:

  	
   /s/ Eugene C. Hirschkoff

  	
   

  
	
   

  	
  Christopher Popma, Vice President

  	
   

  	
  Name:  Eugene C. Hirschkoff

  
	
   

  	
  Asset Management, Office Properties

  	
   

  	
  Title:  Corporate Secretary

  

 

23

 

EXHIBIT B

 

THE IRVINE COMPANY - INVESTMENT PROPERTIES GROUP

 

HAZARDOUS MATERIAL SURVEY FORM

 

The purpose of
this form is to obtain information regarding the use of hazardous substances on
Investment Properties Group (“IPG”) property. 
Prospective tenants and contractors should answer the questions in light
of their proposed activities on the premises. Existing tenants and contractors
should answer the questions as they relate to ongoing activities on the
premises and should update any information previously submitted.

 

If additional
space is needed to answer the questions, you may attach separate sheets of
paper to this form. When completed, the form should be sent to the following
address:

 

INSIGNIA/ESG, INC.

8105 Irvine Center Drive, Suite 350

Irvine, CA 92618

 

Your
cooperation in this matter is appreciated. 
If you have any questions, please call your property manager at
(949) 753-4744 for assistance.

 

1.                                       GENERAL
INFORMATION.

 

	
  Name of
  Responding Company:

  	
   

  	
  4D Neuroimaging

  
	
  Check all
  that apply:

  	
   

  	
  Tenant

  	
   

  	
  ý

  	
   

  	
  Contractor

  	
   

  	
  o

  
	
   

  	
   

  	
  Prospective

  	
   

  	
  o

  	
   

  	
  Existing

  	
   

  	
  ý

  

 

Mailing
Address:  9727 Pacific Heights Blvd, San
Diego, California 92121

Contact person
& Title:  Johanna Meyers - Director
of Manufacturing

Telephone
Number:  (858) 458-5682

 

Current TIC Tenant(s):

 

Address of
Lease Premises:  9727 Pacific Heights
Blvd, San Diego, CA 92121

 

Length of
Lease or Contract Term:  5 years

 

Prospective TIC Tenants(s):

 

Address of
Leased Premises:

 

Address of
Current Operations:

 

Describe the
proposed operations to take place on the property, including principal products
manufactured or services to be conducted. 
Existing tenants and contractors should describe any proposed changes to
ongoing operations.

Medical
diagnostic equipment

 

24

 

2.                                     HAZARDOUS
MATERIALS.  For the purposes of this
Survey Form, the term “hazardous material” means any raw material, product or
agent considered hazardous under any state or federal law.  The term does not include wastes which are
intended to be discarded.

 

2.1                                 Will
any hazardous materials be used or stored on site?

 

	
  Chemical
  Products

  	
   

  	
  Yes

  	
   

  	
  ý

  	
   

  	
  No

  	
   

  	
  o

  
	
  Biological
  Hazards/ Infectious Wastes

  	
   

  	
  Yes

  	
   

  	
  o

  	
   

  	
  No

  	
   

  	
  ý

  
	
  Radioactive
  Materials

  	
   

  	
  Yes

  	
   

  	
  o

  	
   

  	
  No

  	
   

  	
  ý

  
	
  Petroleum
  Products

  	
   

  	
  Yes

  	
   

  	
  ý

  	
   

  	
  No

  	
   

  	
  o

  

 

2.2                                 List
any hazardous materials to be used or stored, the quantities that will be
on-site at any given time, and the location and method of storage (e.g.,
bottles in storage closet on the premises).

 

	
  Hazardous
  Materials

  	
   

  	
  Location and Method

  of Storage

  	
   

  	
  Quantity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  See attached
  sheet

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

2.3                                 Is
any underground storage of hazardous materials proposed or currently conducted
on the premises?  Yes  o  No  ý

 

If yes,
describe the materials to be stored, and the size and construction of the
tank.  Attach copies of any permits
obtained for the underground storage of such substances.

 

 

3.                                       HAZARDOUS
WASTE.  For the purposes of this
Survey Form, the term “hazardous waste” means any waste (including biological,
infectious or radioactive waste) considered hazardous under any state or
federal law, and which is intended to be discarded.

 

3.1                                 List
any hazardous waste generated or to be generated on the premises, and indicate
the quantity generated on a monthly basis.

 

	
  Hazardous
  Materials

  	
   

  	
  Location and Method

  of Storage

  	
   

  	
  Quantity

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  See attached
  sheet.

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

25

 

3.2                                 Describe
the method(s) of disposal (including recycling) for each waste.  Indicate where and how often disposal will
take place.

 

	
  Hazardous
  Materials

  	
   

  	
  Location and Method

  of Storage

  	
   

  	
  Disposal Method

  
	
   

  
	
  all
  Hazardous Waste disposed by a Hazardous Waste Transporter Company - PFR
  Environmental Services Inc. 1-2 times a year. 100 N [ILLEGIBLE] - West
  Covina  CA 91791

  

 

3.3                                 Is
any treatment or processing of hazardous, infectious or radioactive wastes
currently conducted or proposed to be conducted on the premise?

Yes  o   No  ý

 

If yes, please
describe any existing or proposed treatment methods.

 

 

3.4                                 Attach
copies of any hazardous waste permits or licenses issued to your company with
respect to its operations on the premises.

 

4.                                       SPILLS

 

4.1                                 During
the past year, have any spills or releases of hazardous materials occurred on
the premises?      Yes o          No ý

 

If so, please
describe the spill and attach the results of any testing conducted to determine
the extent of such spills.

 

 

4.2                                 Were
any agencies notified in connection with such spills?  Yes  o   No  ý

 

If so, attach
copies of any spill reports or other correspondence with regulatory agencies.

 

4.3                                 Were
any clean-up actions undertaken in connection with the spills?

Yes  o   No  ý

 

If so, briefly
describe the actions taken. Attach copies of any clearance letters obtained
from any regulatory agencies involved and the results of any final soil or
groundwater sampling done upon completion of the clean-up work.

 

 

5.                                       WASTEWATER
TREATMENT/DISCHARGE

 

5.1                                 Do
you discharge industrial wastewater to:

 

	
  o    storm drain?

  	
   

  	
  o    sewer?

  
	
  o    surface water?

  	
   

  	
  ý   no industrial discharge

  

 

26

 

5.2                                 Is
your industrial wastewater treated before discharge?    Yes  o  No  ý

 

If yes,
describe the type of treatment conducted.

 

 

*5.3                          Attach
copies of any wastewater discharge permits issued to your company with respect
to its operations on the premises.

 

6.                                       AIR
DISCHARGES.

 

6.1                                 Do
you have any air filtration systems or stacks that discharge into the air?

Yes  o   No  ý

 

6.2                                 Do
you operate any equipment that require air emissions permits?

Yes  o   No  ý

 

*6.3                          Attach
copies of any air discharge permits pertaining to these operations.

 

7.                                       HAZARDOUS
MATERIALS DISCLOSURES.

 

7.1                                 Does
your company handle an aggregate of at least 500 pounds, 55 gallons or 200
cubic feet of hazardous material at any given time?    Yes  o   No  ý

 

7.2                                 Has
your company prepared a Hazardous Materials Disclosure – Chemical Inventory and
Business Emergency Plan or similar disclosure document pursuant to state or
county requirements?      
Yes  ý  No  o

 

If so, attach
a copy.

 

7.3                                 Are
any of the chemicals used in your operations regulated under Proposition 65?

   No-

If so,
describe the procedures followed to comply with these requirements.

 

 

7.4                                 Is
your company subject to OSHA Hazard Communication Standard Requirements?     Yes  ý  No  o

 

If so,
describe the procedures followed to comply with these requirements.

Company has a Safety plan & procedures that are used to train employees and
communicate to employees.

 

8.                                       ANIMAL
TESTING.

 

8.1                                 Does
your company bring or intend to bring live animals onto the premises for
research or development purposes? 
Yes    o       No  ý

 

If so,
describe the activity.

 

 

27

 

8.2                                 Does
your company bring or intend to bring animal body parts or bodily fluids onto
the premises for research or development purposes?     Yes  o    No  ý

 

If so,
describe the activity.

 

 

9.                                       ENFORCEMENT
ACTIONS, COMPLAINTS.

 

9.1                                 Has
your company ever been subject to any agency enforcement actions,
administrative orders, lawsuits, or consent orders/decrees regarding
environmental compliance or health and safety?    Yes  o      No  ý

 

If so,
describe the actions and any continuing obligations imposed as a   result of these actions.

 

 

9.2                                 Has
your company ever received any request for information, notice of violation or
demand letter, complaint, or inquiry regarding environmental compliance or
health and safety?    Yes  o     No  ý

 

9.3                                 Has
an environmental audit ever been conducted which concerned operations or
activities on premises occupied by you? Yes    o      No  ý

 

9.4                                 If
you answered “yes” to any questions in this section, describe the environmental
action or complaint and any continuing compliance obligation imposed as a
result of the same

 

 

	
   

  	
  By:

  	
  /s/ Johanna
  Meyers

  
	
   

  	
   

  	
  Name:

  	
  Johanna
  Meyers

  
	
   

  	
   

  	
  Title:

  	
  Director of
  Mfg.

  
	
   

  	
   

  	
  Date:

  	
  2/14/2003

  

 

28

 

	
  DEC

  	
   

  	
  DEPARTMENT OF ENVIRONMENTAL HEALTH

  UNIFIED PROGRAM FACILITY PERMIT

  	
   

  	
  2003

  

 

P.O. BOX 129261, SAN DIEGO, CA 92112-9261 619-338-2222/1-800-253-9933
FAX 619-338-2377 www.sdcdeh.org

 

	
  OWNER/OPERATOR
  NAME:

  	
   

  	
   

  	
  

  
	
  FACILITY
  NAME:

  	
   

  	
  4-D
  NEUROIMAGING

  
	
  FACILITY LOCATED
  AT:

  	
   

  	
  9717 PACIFIC
  HEIGHTS BLVD San Diego, CA 92121

  

 

	
  Mailing

  Address

  	
   

  	
  4-D
  NEUROIMAGING

  	
   

  	
  Gary
  Erbec?    
DIRECTOR, DEH

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4-D
  NEUROIMAGING

  9717-27 PACIFIC HEIGHTS BL

  SAN DIEGO CA 92121-3719

  	
  PERMIT:

  	
  HK07-129644

  6HK67

  

 

 

 

ISSUE
DATE:    31-DEC-2001

 

EXPIRATION DATE :    31-DEC-2003,   RENEWAL IS REQUIRED BEFORE EXPIRATION DATE.

ANY CHANGES IN THE ABOVE OWNER, LOCATION OR NOTIFICATION(S) MUST BE
REPORTED

BY SUBMITTING A NEW UNIFIED FACILITY PERMIT APPLICATION

VERIFY THE ABOVE MAILING ADDRESS AND REPORT ANY CHANGES

 

PERMIT IS NOT VALID FOR ANY FACILITY LOCATION
OR OWNER NOT LISTED ABOVE

POST IN A CONSPICUOUS PLACE

A COPY OF THIS PERMIT MUST BE MAINTAINED AT
THE FACILITY LOCATION

 

This
permit is provisional.  The Director or
designee of the Director may order that the Unified Program Facility Permit or
any permit element be denied, suspended or revoked for violation of any
relevant requirement established or provided by law.

 

 

	
  

  	
   

  	
  COUNTY OF SAN DIEGO

  
	
  DEPARTMENT OF ENVIRONMENTAL HEALTH

  
	
  P.O. BOX 129261, SAN DIEGO, CA 92112-9261

  
	
  (619) 338-2222/(800) 253-9933 FAX (619) 338-2377

  
	
  Web Site : www.sdcdeh.org

  

 

INVOICE/RENEWAL
NOTICE

 

	
  Permit Type:

  	
   

  	
  HK07

  	
   

  	
  GENERAL HAZARDOUS MATERIALS PERMIT

  	
   

  	
  Permit Number:

  	
   

  	
  129644

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Business Name and Mailing Address

  	
   

  	
  Billing Date:

  	
   

  	
  10/17/2002

  
	
   

  	
   

  	
  4-D NEUROIMAGING

  	
   

  	
  Owner/Operator Name(s):

  	
   

  	
  9717 PACIFIC HEIGHTS BLVD

  
	
   

  	
   

  	
   

  	
   

  	
  Business Location:

  	
   

  	
  SAN DIEGO, CA 92121

  
	
   

  	
   

  	
  4-D NEUROIMAGING

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  9717-27 PACIFIC HEIGHTS BL

  	
   

  	
  Payment Due Date:

  	
   

  	
  12/31/2002

  
	
   

  	
   

  	
  SAN DIEGO CA 92121-3719

  	
   

  	
  Amount Due:

  	
   

  	
  $672.50

  
	
   

  	
   

  	
   

  	
   

  	
  Unit:

  	
   

  	
   

  
													

 

PERMIT RENEWAL PERIOD 12/31/2002-12/31/2003

 

BILLING ITEMIZATION

 

	
  Fee Code

  	
   

  	
  Units

  	
   

  	
  Description

  	
   

  	
  Amount

  	
   

  	
  Fee Code

  	
   

  	
  Units

  	
   

  	
  Description

  	
   

  
	
  6HBASE-EF

  	
   

  	
  0

  	
   

  	
  BASE FEE FOR NON-MEDICAL HAZ

  	
   

  	
  $

  	
  180.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6HCUPA1E

  	
   

  	
  0

  	
   

  	
  GENERAL STATE CUPA OVERSITE/S

  	
   

  	
  $

  	
  17.50

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6HWASTEE

  	
   

  	
  240

  	
   

  	
  HAZARDOUS WASTE FEE

  	
   

  	
  $

  	
  240.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6HMAT—EF

  	
   

  	
  235

  	
   

  	
  HAZ MAT INVENTORY FEE

  	
   

  	
  $

  	
  235.00

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Current Fees:

  	
   

  	
  $

  	
  672.50

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Payments:

  	
   

  	
  $

  	
  0.00

  	
   

  	
  TOTAL AMOUNT DUE:

  	
   

  	
  $

  	
  672.50

  	
   

  
										

 

*
Penalty fees are assessed at the rate of 50% or $50.00, whichever is less, if
the payment is received after the expiration date on your permit.  An additional 100% or $100.00, for a total
of 150% or $150.00, whichever is less, will be assessed, if payment is not
received on or before the last day of the month following the expiration date
of your permit.  YOUR PERMIT
EXPIRES: 12/31/2002

 

Please detach and
return the bottom stub with your payment.

 

Make check payable
to: COUNTY OF SAN DIEGO, DEH.  Please
make any changes on the reverse side of your payment sn

 

 

	
   

  	
   

  	
  Permit Type:

  	
   

  	
  HK07

  
	
   

  	
   

  	
  Permit Number:

  	
   

  	
  129644

  
	
  COUNTY OF SAN DIEGO

  	
   

  	
  Business Name:

  	
   

  	
  4-D NEUROIMAGING

  
	
  DEPARTMENT OF ENVIRONMENTAL HEALTH

  	
   

  	
  Owner Name:

  	
   

  	
   

  
	
  P.O. BOX 129261

  SAN DIEGO, CA 92112-9261

  	
   

  	
  Business Location:

  	
   

  	
  9717 PACIFIC HEIGHTS BLVD

  SAN DIEGO, CA 92121

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  o

  	
  Location/Ownership changes to your account?

  Check here and see reverse.

  	
   

  	
  APN #:

  	
   

  	
  341-370-11-00

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  PAYMENT DUE DATE:

  	
   

  	
  12/31/2002

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  AMOUNT DUE:

  	
   

  	
  $672.50

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  AMOUNT PAID:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  If payment is made by Credit Card, Please
  write your

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Confirmation #

  
									

 

 

	
   

  	
  HAZARDOUS MATERIALS BUSINESS
  PLAN

  	
  OFFICE USE ONLY

  
	
   

  	
   

  	
   

  
	
   

  	
  II. EMERGENCY RESPONSE PLAN

  	
  REVIEWED BY:         

  
	
   

  	
   

  	
   

  
	
  Date 12-Feb-2003

  	
   

  	
  DATE
  :                  

  
	
   

  	
   

  	
   

  
	
  UPFP # 29644

  	
   

  	
   

  

 

Dunn
and Bradstreet #

 

1.               Business Name : 4D Neuroimaging

 

2.               Business Site Address: 9727 Pacific Heights
Blvd

 

3.               Business Telephone: (858) 453-6300                                                                                                                                                                                                  24-Hour: (619) 890-6350 x

 

Brief description of product manufactured any/or service provided:
Medical Diagnostic Equipment

 

Evacuation Procedures: 1) Sound fire alarm. 2) Employees to exit by
means of closest egress and assemble in the northwest area of the parking lot.
3) Supervisors take roll call, everyone to remain outside until safety
coordinator allows for re-entry.

 

5.               Notification Procedures:

 

In the event of a release or threatened release of a hazardous material
the following agencies are to be notified.

 

	
   

  	
   

  	
   

  	
  Phone #

  
	
  A.

  	
  Local Emergency Response Agencies

  	
   

  	
  911

  
	
  B.

  	
  Hazardous Materials Division

  	
   

  	
  338-2222 (911 after working hours)

  
	
  C.

  	
  State Office of Emergency Services

  	
   

  	
  (916) 845-8991

  
	
   

  	
  Toll-Free Number

  	
   

  	
  (800) 852-7550

  

 

Name of person(s) responsible for completing notifications: Mike
Pollard or Alternate: Johanna Meyers

 

Describe notification procedures : Call 911 if emergency response is
needed or after hours

 

Emergency Procedures : For large spill or fire : 1) Sound fire alarm
and evacuate building. 2) Call 911. 3) Authorized personnel to evaluate the
situation and take measures to contain spill or use portable fire
extinguishers.

 

For Small spill : 1) Notify above agencies. 2) Authorized personnel
will contain and clean spill.  Used
absorbent and PPE will be handled and disposed of as hazardous material.

 

County of San Diego

Department of Environmental Health

 

23

 

	
  DATE   2/11/2003

  	
   

  	
  Submit to HMD

  
	
   

  	
   

  	
  HE58

  

 

	
  (OFFICE USE ONLY)

  	
   

  	
  HAZARDOUS MATERIALS BUSINESS PLAN

  	
   

  
	
  ESTAB NUMBER

  	
   

  	
  II. EMERGENCY RESPONSE PLAN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  H 296444

  	
   

  	
  EMERGENCY COORDINATOR INFORMATION

  	
   

  

2

 

PLEASE LIST THE NAME,
TITLE/POSITION AND PHONE NUMBERS (OFFICE AND HOME/24-HR) OF THE EMERGENCY
COORDINATOR AND ALTERNATES WHO ARE QUALIFIED AND AUTHORIZED TO ASSIST EMERGENCY
RESPONSE PERSONNEL (FOR EXAMPLE, FIRE PERSONNEL) IN THE EVENT OF AN EMERGENCY.

 

	
  ITEM

  	
   

  	
  NAME OF
  EMERGENCY COORDINATOR

  
	
  01

  	
   

  	
  MIKE POLLARD

  
	
  15

  	
   

  	
  21

  

 

	
  TITLE

  	
   

  	
  WORK PHONE

  	
   

  	
  HOME/24-HR
  PHONE

  
	
  Production
  Supervisor

  	
   

  	
  4585625

  	
   

  	
  8584877359

  
	
  51

  	
  71

  	
   

  	
  78

  	
   

  

 

	
  NUMBER

  	
   

  	
  STREET

  	
   

  	
  CITY

  
	
  16760

  	
   

  	
  Palmero
  Drive

  	
   

  	
  San Diego

  
	
  88

  	
   

  	
  93

  	
  110

  	
   

  

 

	
  ITEM

  	
   

  	
  NAME OF
  ALTERNATE

  
	
  02

  	
   

  	
  Johanna
  Meyers

  
	
  15

  	
   

  	
  21

  

 

	
  TITLE

  	
   

  	
  WORK PHONE

  	
   

  	
  HOME/24-HR
  PHONE

  
	
  Director of
  MFG.

  	
   

  	
  4585682

  	
   

  	
  6198906350

  
	
  51

  	
  71

  	
   

  	
  78

  	
   

  

 

	
  NUMBER

  	
   

  	
  STREET

  	
   

  	
  CITY

  
	
  9454

  	
   

  	
  Twin Trails
  # 102

  	
   

  	
  San Diego

  
	
  88

  	
   

  	
  93

  	
  110

  	
   

  

 

	
  ITEM

  	
   

  	
  NAME OF
  ALTERNATE

  
	
  03

  	
   

  	
  Scott
  Buchanan

  
	
  15

  	
   

  	
  21

  

 

	
  TITLE

  	
   

  	
  WORK PHONE

  	
   

  	
  HOME/24-HR
  PHONE

  
	
  President,
  CEO

  	
   

  	
  4585657

  	
   

  	
  6199926365

  
	
  51

  	
  71

  	
   

  	
  78

  	
   

  

 

	
  NUMBER

  	
   

  	
  STREET

  	
  CITY

  	
   

  
	
  4124

  	
   

  	
  Stone Bridge
  Lane

  	
   

  	
  Rancho Santa
  Fe

  
	
  88

  	
   

  	
  93

  	
  110

  	
   

  

 

County of San Diego

Department of Environmental Health

 

20

 

	
  Date:  2003-02-12

  

  UPFP# 29644

  	
   

  	
  HAZARDOUS MATERIALS BUSINESS PLAN

  

  III.  EMPLOYEE TRAINING DESCRIPTION

  	
   

  	
  OFFICE USE ONLY

   

  REVIEWED
  BY:              

   

  DATE:                                

  

 

The following describes the
employee training provided for all employees that handle hazardous substances.

 

	
  1.

  	
  Training
  Topic - Procedures for handling hazardous materials, including hazardous
  wastes:

  
	
   

  	
  Persons
  Trained: Mike Pollard

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Training
  Time: 4 Hours

  	
   

  	
  Refresher
  Frequency: Annual

  	
   

  	
  Refresher
  Time: 1 Hour

  
	
   

  	
  Training
  Content:  Hazardous Waste Operations
  and Emergency Response 1st Responder at the awareness level

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Training
  Topic - Procedures for coordination with emergency response agencies:

  
	
   

  	
  Persons Trained:
  Mike Pollard

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Training
  Time: 4 Hours

  	
   

  	
  Refresher
  Frequency:  Annual

  	
   

  	
  Refresher
  Time 1 Hour

  
	
   

  	
  Training
  Content:  In house procedures define
  actions to be taken for various type of emergencies to include fire and
  chemical spills.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Training
  Topic - Use of emergency response equipment and materials under the business
  control:

  
	
   

  	
  Persons
  Trained: Mandatory Meeting for all Employees

  
	
   

  	
  Training
  Time: 1 hour refresher

  	
   

  	
  Refresher
  Frequency:  Annual

  	
   

  	
  Refresher
  Time: 1 Hour

  
	
   

  	
  Training
  Content: Hazcom “Right to Know”

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Training
  Topic - Emergency Response Plan Implementation:

  
	
   

  	
  Persons
  Trained:  1) Mike Pollard, 2) Shannon
  Micheal

  
	
   

  	
  Training
  Time: 4 Hours

  	
   

  	
  Refresher
  Frequency: Annual

  	
   

  	
  Refresher
  Time: 1 Hours

  
	
   

  	
  Training
  Content:  Hazardous waste operations
  and emergency response.  “1st
  Responder” at awareness level

  

 

25

 

 

 

The following information shall
be submitted for determination of occupancy group classification and/or a
CEDMAT inspection declaration.  Any
deviations may require reclassification of this building.

 

List all of the following
hazardous materials, including waste materials, used or stored in your
business:

 

	
  Explosives
  or Blasting Agents

  	
   

  	
  Unstable
  (Reactive) Materials

  	
   

  	
  Organic
  Peroxides

  	
   

  	
  Radioactives

  
	
  Compressed
  Gases

  	
   

  	
  Water-Reactive
  Materials

  	
   

  	
  Oxidizers

  	
   

  	
  Corrosives

  
	
  Flammable
  and Combustible Liquids

  	
   

  	
  Cryogenic
  Fluids

  	
   

  	
  Pyrophoric
  Materials

  	
   

  	
  Other Health
  Hazards

  
	
  Flammable
  Solids

  	
   

  	
  Highly Toxic
  or Toxic Materials

  	
   

  	
   

  	
   

  	
   

  

 

	
  1.

  	
   

  	
  2.

  	
   

  	
  3.

  	
   

  	
  4.

  	
   

  	
  5.

  	
   

  	
  6.

  	
  QUANTITIES

  	
   

  	
  7.

  	
   

  
	
  CHEMICAL NAME

  	
   

  	
  CAS NO.

  	
   

  	
  CONCEN-

  TRATION

  (PERCENT-

  AGE)

  	
   

  	
  CLASSIFICATION

  (UFC APPENDIX VI-A) 

  (MSDS)

  	
   

  	
  PROPERTIES
  (FLASH POINT,

  LD-50,

  pH)

  	
   

  	
  a.

  IN USE

  OPEN

  SYSTEM

  	
   

  	
  B. 

  IN USE

  CLOSED

  SYSTEM

  	
   

  	
  c.

  

  

  STORAGE

  	
   

  	
  LOCATION

  	
   

  
	
  ACETONE

  	
   

  	
  67-64-1

  	
   

  	
  100

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  0°  F

  	
   

  	
  800ML

  	
   

  	
  0

  	
   

  	
  4
  GAL.

  	
   

  	
  MFG. STORAGE & FLOOR

  	
   

  
	
  ISOPROPATIC ALCOHOL

  	
   

  	
  67-63-0

  	
   

  	
  100

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  53°  F

  	
   

  	
  500ML

  	
   

  	
  0

  	
   

  	
  4
  GAL.

  	
   

  	
  MFG STORAGE  & FLOOR

  	
   

  
	
  KESTER FLUX CLEANER

  	
   

  	
  127-18-4

  	
   

  	
  100

  	
   

  	
  OTHER

  	
   

  	
  NONE

  	
   

  	
  1
  QT.

  	
   

  	
  0

  	
   

  	
  5
  GAL.

  	
   

  	
  MFG. STORAGE & FLOOR

  	
   

  
	
  EPOXY PRIMER 5001-01A

  	
   

  	
  VARIED

  	
   

  	
  VARIED

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  100°  F

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  2
  GAL.

  	
   

  	
  MFG. STORAGE

  	
   

  
	
  EPOXY PRIMER 5001-02B

  	
   

  	
  VARIED

  	
   

  	
  VARIED

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  100°  F

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  2
  GAL.

  	
   

  	
  MFG. STORAGE

  	
   

  
	
  POLYURETHANE PAINT 4801

  	
   

  	
  VARIED

  	
   

  	
  VARIED

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  101°  F

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  2
  GAL.

  	
   

  	
  MFG. STORAGE

  	
   

  
	
  POLYURETHANE PAINT CATALYST 4801

  	
   

  	
  VARIED

  	
   

  	
  VARIED

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  101°  F

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  1
  GAL.

  	
   

  	
  MFG. STORAGE

  	
   

  
	
  PAINT THINNER 29E

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  21°  F

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  1
  GAL.

  	
   

  	
  MFG. STORAGE

  	
   

  
	
  PRIMER THINNER #8

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  FLAMMABLE LIQUID

  	
   

  	
  101°  F

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  1
  GAL.

  	
   

  	
  MFG. STORAGE

  	
   

  
	
  EPOXY RESIN CU 303 A

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  OTHER

  	
   

  	
  200°  F

  	
   

  	
  1
  QT.

  	
   

  	
  0

  	
   

  	
  3
  QT.

  	
   

  	
  MFG. STORAGE & FLOOR

  	
   

  
	
  EPOXY RESIN CU 303 B

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  OTHER

  	
   

  	
  200°  F

  	
   

  	
  1
  QT.

  	
   

  	
  0

  	
   

  	
  3
  QT.

  	
   

  	
  MFG. STORAGE & FLOOR

  	
   

  
	
  EPOXY RESIN WEST SYSTEMS 105

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  OTHER

  	
   

  	
  200° F

  	
   

  	
  1
  GAL.

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  EPOXY RESIN WEST SYSTEMS 205

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  OTHER

  	
   

  	
  200°  F

  	
   

  	
  1
  QT.

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  CREAM WIRE STRIPPER

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  CORROSIVE

  	
   

  	
  230°  F

  	
   

  	
  1
  QT.

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  VACCUM PUMP OIL

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  OTHER

  	
   

  	
  425°  F

  	
   

  	
  1
  GAL.

  	
   

  	
  0

  	
   

  	
  1
  GAL.

  	
   

  	
  MFG. STORAGE & FLOOR

  	
   

  
	
  ACETYLENE

  	
   

  	
  VARIED

  	
   

  	
  VARIED
  

  	
   

  	
  FLAMMABLE GAS

  	
   

  	
  0°  F

  	
   

  	
  0

  	
   

  	
  250.CU.FT.

  	
   

  	
  0

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  OXYGEN

  	
   

  	
  7782-44-7

  	
   

  	
  100

  	
   

  	
  OXIDIZER

  	
   

  	
  NONE

  	
   

  	
  0

  	
   

  	
  125
  CU.FT

  	
   

  	
  0

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  [ILLEGIBLE]

  	
   

  	
  7440-59-7

  	
   

  	
  100

  	
   

  	
  SIMPLE

  ASPHYXSANT

  	
   

  	
  NONE

  	
   

  	
  0

  	
   

  	
  870
  CU.FT.

  	
   

  	
  291
  CU.FT.

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  [ILLEGIBLE], LIQUID

  	
   

  	
  7440-59-7

  	
   

  	
  100

  	
   

  	
  SIMPLE

  ASPHYXSANT

  	
   

  	
  NONE

  	
   

  	
  0

  	
   

  	
  100CT.

  	
   

  	
  100.
  CT.

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  [ILLEGIBLE], LIQUID

  	
   

  	
  7727-37-9

  	
   

  	
  100

  	
   

  	
  SIMPLE

  ASPHYXSANT

  	
   

  	
  NONE

  	
   

  	
  0

  	
   

  	
  230CT.

  	
   

  	
  0

  	
   

  	
  MFG. FLOOR

  	
   

  
	
  HYDROCHLORIC ACID

  	
   

  	
  7647-01-0

  	
   

  	
  100

  	
   

  	
  CORROSIVE

  	
   

  	
  NONE

  	
   

  	
  1
  GAL.

  	
   

  	
  0

  	
   

  	
  0

  	
   

  	
  MFG. FLOOR

  	
   

  
																			

 

 

 

	
   

  	
  MIWP

  
	
  THE CITY OF SAN DIEGO

  
	
   

  	
  2000066906

  

 

November 21, 2000

 

 

4-D Neuroimaging

9727 Pacific Heights Boulevard

San Diego, CA 92121

 

	
  Attention:

  	
   

  	
  Scott
  Buchanan

  
	
   

  	
   

  	
   

  
	
  Subject:

  	
   

  	
  No
  Requirement for Industrial User Discharge Permit

  
	
   

  	
   

  	
  Industry Number 02-0403

  

 

The Industrial Wastewater
Control Program has evaluated the information supplied in your Industrial User
Discharge Permit Application for, and obtained in our on-site inspection of,
the facility addressed above.

 

There is no current or proposed
discharge of industrial wastewater to sewer, therefore it has been determined
that the subject permit is not required for this facility at this time.  Should the
character or volume of industrial wastewater generated on-site change
significantly in the future, or should an industrial discharge to sewer be
proposed in the future, you must file a new application, and permit
applicability will be reevaluated at that time.

 

If we can be of further
assistance, please call 654-4100.

 

Sincerely,

 

 

	
  /s/ Barbara
  Sharatz

  	
   

  
	
  BARBARA
  SHARATZ

  
	
  Program
  Manager

  

 

 

JRD:bjl

 

 

	
  

  	
  Metropolitan Pretreatment Program •
  Metropolitan Wastewater

  9192 Topaz Way •
  San Diego, CA 92123-1119

  Tel (619) 654-4100 Fax (619) 654-4110Exhibit 10.1

IRREVOCABLE STANDBY LETTER OF CREDIT

 

Letter of Credit No. 1158

 

 

 

Date of Issuance:        February 28, 2003

 

	
  Issuer:

  	
   

  	
  Home Federal
  Bank

  
	
   

  	
   

  	
  225 South
  Main Avenue

  
	
   

  	
   

  	
  Sioux Falls,
  SD 57104

  
	
   

  	
   

  	
   

  
	
  To:

  	
   

  	
  Northwestern
  Services Group, Inc.

  
	
   

  	
   

  	
  4930 South
  Western Avenue

  
	
   

  	
   

  	
  P. O. Box
  88130

  
	
   

  	
   

  	
  Sioux Falls,
  SD 57109-8130

  

 

1.       Home Federal Bank (the “Bank”) hereby
establishes in favor of NorthWestern Services Group, Inc. (“NorthWestern”) an
Irrevocable Standby Letter of Credit (the “Letter of Credit”) at the request
and for the account of Great Plains Ethanol,
LLC, a South Dakota limited liability company (“Great Plains”),
whereby the Bank, subject to the terms and conditions contained herein,
authorizes NorthWestern to draw on it at any time or times before the Expiration
Date (as defined below), by its draft (the “Draft”), in the form of Appendix 1
hereto, an amount up to an initial aggregate amount of $1,600,000.00, as set
forth on an accompanying certificate (the “Draw Certificate”), in the form of
Appendix 2 hereto.

 

2.       This Letter of Credit shall expire at the
close of business on March 1, 2004 (the “Expiration Date”), unless extended.

 

3.       This Letter of Credit is issued in
conjunction with a Natural Gas Distribution Delivery Agreement between
NorthWestern and Great Plains dated September 2, 2002 (the “Agreement”), under
which Great Plains agreed to transport a minimum quantity of natural gas to its
plant at a fixed price for delivery by NorthWestern through a pipeline
constructed by NorthWestern to serve the plant and the obligations of Great
Plains under the Agreement.

 

4.       Funds under this Letter of Credit are
available to NorthWestern and against its Draft and Draw Certificate, each
dated the date of presentation and executed by an officer of NorthWestern, referring
to the number of this Letter of Credit and presented at our office at 225 South
Main Avenue, Sioux Falls, South Dakota 57104 during normal banking hours on or
prior to the Expiration Date or any extension thereof.

 

 

5.       This Letter of Credit sets forth in full
the terms of our undertaking, and such undertaking shall not in any way be
modified or amended, without the consent of the Bank, except as to the
completion of the Draft and Draw Certificates referred to herein.

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  HOME FEDERAL
  BANK

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  By

  	
  /s/ David A.
  Brown

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Its

  	
  David A.
  Brown/Senior Vice President

  

 

2

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