EX-10.1 2 bcab-ex10_1.htm EX-10.1

Exhibit 10.1

Certain information in this document identified by brackets [***] has been omitted because it is both (i) not material and (ii) the type that BioAtla, Inc. customarily and actually treats as private and confidential.

11085 TORREYANA ROAD
LEASE

This Lease (this “Lease”), dated as of the date set forth in Section 1 of the Summary of Basic Lease Information (the “Summary”), below, is made by and between HCP TORREYANA, LLC, a Delaware limited liability company (“Landlord”), and BIOATLA, LLC, a Delaware limited liability company (“Tenant”).

SUMMARY OF BASIC LEASE INFORMATION

TERMS OF LEASE | DESCRIPTION
1. Date: | June 2, 2017
2. Premises (Article 1). |
2.1 Building: | That certain three (3)-story building containing approximately 43,375 rentable square feet of space and located at 11085 Torreyana Road, San Diego, California.
2.2 Premises: | Approximately 20,825 rentable square feet of space consisting of the entire first (1st) floor of the Building, as further set forth in Exhibit A to the Office Lease.
3. Lease Term (Article 2). |
3.1 Length of Term: | Approximately seven (7) years and two (2) months.
3.2 Lease Commencement Date: | The earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Premises, and (ii) the later to occur of (A) December 1, 2017 and (B) the date upon which the Premises are Ready for Occupancy (as that term is defined in Section 4.1 of the Tenant Work Letter attached hereto as Exhibit B (the “Tenant Work Letter”)), which Lease Commencement Date is anticipated to be December 1, 2017.
3.3 Lease Expiration Date: | If the Lease Commencement Date shall be the first day of a calendar month, then the day immediately preceding the eighty-sixth (86th) month anniversary of the Lease Commencement Date; or if the Lease Commencement Date shall be other than the first day of a calendar month, then the last day of the month in which the eighty-sixth (86th) month anniversary of the Lease Commencement Date occurs.
4. Base Rent (Article 3): |

| Lease Year | Annual Base Rent | Monthly Installment of Base Rent*
| 1** | $799,680.00 | $66,640.00
| 2 | $823,670.40 | $68,639.20
| 3 | $848,380.56 | $70,698.38
| 4 | $873,831.96 | $72,819.33
| 5 | $900,046.92 | $75,003.91
| 6 | $927,048.36 | $77,254.03
| 7 | $954,859.80 | $79,571.65
| 8 | N/A | $81,958.80

* The Monthly Installment of Base Rent for Lease Year 1 was calculated by multiplying $3.20 by the number of rentable square feet of space in the Premises, and the initial Annual Base Rent amount was calculated by multiplying the initial Monthly Installment of Base Rent amount by twelve (12). In all subsequent periods, the calculation of Monthly Installment of Base Rent reflects an annual increase of 3.0%, rounded to the nearest cent, and each Annual Base Rent amount was calculated by multiplying the corresponding Monthly Installment of Base Rent amount by twelve (12).

** Subject to the terms set forth in Section 3.2 below, the Base Rent attributable to the three (3) month period commencing on the first (1st) day of the second (2nd) full calendar month of the Lease Term and ending on the last day of the fourth (4th) full calendar month of the Lease Term shall be abated.

5. Operating Expenses and Tax Expenses (Article 4): | This is a “TRIPLE NET” lease and as such, certain applicable provisions contained in this Lease are intended to pass on to Tenant and reimburse Landlord for certain costs and expenses (including, without limitation, Operating Expenses and Tax Expenses) incurred by Landlord and reasonably associated with this Lease, the Building, and Tenant’s operation therefrom, all as more fully set forth below. To the extent such costs and expenses payable by Tenant cannot be charged directly to, and paid by, Tenant, such costs and expenses shall be paid by Landlord but reimbursed by Tenant as Additional Rent, all as more fully set forth below.

- 2 -

6. Tenant’s Share (Article 4): | Forty eight and 1/100 percent (48.01%).
7. Permitted Use (Article 5): | The Premises shall be used only for (a) general office uses, (b) research and development and laboratory uses, and (c) all other lawful uses reasonably related to or incidental to such uses specified in items (a) and (b) above, all (i) consistent with first-class life sciences projects in San Diego, California (“First-Class Life Sciences Projects”), and (ii) in compliance with, and subject to, applicable laws and the terms of this Lease.
8. Security Deposit (Article 21): | $96,813.84.
9. Parking (Article 28): | An amount equal to three (3) unreserved parking spaces for each 1,000 rentable square feet of space in the Premises (i.e., an amount equal to 62 parking spaces based on the Premises containing 20,825 rentable square feet of space) at the Project parking facilities. Tenant’s rights to use such parking space shall be subject to the terms of Article 28 of this Lease.
10. Address of Tenant (Section 29.18): | BioAtla, LLC 11011 Torreyana Road San Diego, California 92121 Attention: Monica Sullivan (Prior to Lease Commencement Date) And BioAtla, LLC 11085 Torreyana Road San Diego, California 92121 Attention: Monica Sullivan (After Lease Commencement Date) In either case, with a copy to: Cooley LLP 4401 Eastgate Mall San Diego, CA 92121 Attention: Sean Clayton, Esq.

- 3 -

11. Address of Landlord (Section 29.18): | See Section 29.18 of this Lease.
12. Broker(s) (Section 29.24): | Tenant: Cresa San Diego Landlord: CBRE, Inc.
13. Tenant Improvement Allowance (Exhibit B): | An amount equal to $101.00 per rentable square foot of the Premises (i.e., $2,103,325.00 based upon 20,825 rentable square feet in the Premises).

- 4 -

1.
PREMISES, BUILDING, PROJECT, AND COMMON AREAS.
1.1
Premises, Building, Project and Common Areas.
1.1.1
The Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the premises set forth in Section 2.2 of the Summary (the “Premises”). The outline of the Premises is set forth in Exhibit A attached hereto. The outline of the “Building” and the “Project,” as those terms are defined in Section 1.1.2 below, are further depicted on the Site Plan attached hereto as Exhibit A-1, and the Premises has the number of rentable square feet as set forth in Section 2.2 of the Summary. The parties hereto agree that the lease of the Premises is upon and subject to the terms, covenants and conditions herein set forth, and Tenant covenants as a material part of the consideration for this Lease to keep and perform each and all of such terms, covenants and conditions by it to be kept and performed and that this Lease is made upon the condition of such performance. The parties hereto hereby acknowledge that the purpose of Exhibit A is to show the approximate location of the Premises only, and such Exhibit is not meant to constitute an agreement, representation or warranty as to the construction of the Premises, the precise area thereof or the specific location of the “Common Areas,” as that term is defined in Section 1.1.3, below, or the elements thereof or of the accessways to the Premises or the “Project,” as that term is defined in Section 1.1.2, below. Except as specifically set forth in this Lease and in the Tenant Work Letter attached hereto as Exhibit B (the “Tenant Work Letter”), Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of the Premises. Tenant also acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty regarding the condition of the Premises, the Building or the Project or with respect to the suitability of any of the foregoing for the conduct of Tenant’s business, except as specifically set forth in this Lease and the Tenant Work Letter. Subject to Landlord’s ongoing maintenance and repair obligations specifically set forth in this Lease and the terms and conditions of Section 1.2 of the Tenant Work Letter, and except for matters that could not reasonably be discovered by Tenant prior to taking possession of the Premises, the taking of possession of the Premises by Tenant shall conclusively establish that the Premises and the Building were at such time in good and sanitary order, condition and repair. Subject to applicable laws and the other provisions of this Lease, and except in the event of an emergency, Tenant shall have access to the Building, the Premises and the common areas of the Building, other than common areas requiring access with a Building engineer, twenty-four (24) hours per day, seven (7) days per week, every day of the year, including, without limitation, with respect to any loading area; provided, however, that Tenant shall only be permitted to have access to and use of the mailroom and other limited-access areas of the Building during the normal operating hours of such portions of the Building.
1.1.2
The Building and The Project. The Premises are a part of the building set forth in Section 2.1 of the Summary (the “Building”). The Building is part of an office/laboratory project described below. The term “Project,” as used in this Lease, shall mean (i) the Building and the Common Areas, (ii) the land (which is improved with landscaping, parking facilities and other improvements) upon which the Building and the Common Areas are located, and (iii) the office building located at 11095 Torreyana Road, and the land upon which such adjacent office/laboratory buildings are located, and (iv) at Landlord’s reasonable discretion, any additional real property, areas, land, buildings or other improvements added thereto which is owned by Landlord (or an affiliate of Landlord) and located adjacent to the Project.

- 5 -

1.1.3
Common Areas. Tenant shall have the non-exclusive right to use in common with other tenants in the Project, and subject to the rules and regulations referred to in Article 5 of this Lease, those portions of the Project which are provided, from time to time, for use in common by Landlord, Tenant and any other tenants of the Project (such areas, together with such other portions of the Project reasonably designated by Landlord, are collectively referred to herein as the “Common Areas”). The Common Areas shall consist of the “Project Common Areas” and the “Building Common Areas.” The term “Project Common Areas,” as used in this Lease, shall mean the portion of the Project designated as such by Landlord. The term “Building Common Areas,” as used in this Lease, shall mean the portions of the Common Areas located within the Building reasonably designated as such by Landlord. The manner in which the Common Areas are maintained and operated shall be at the sole discretion of Landlord (but shall at least be consistent with the manner in which the common areas of Comparable Buildings are maintained (provided that, except as otherwise expressly set forth in this Lease, in no event shall Landlord be required to improve or enhance the Common Areas in existence as of the date of this Lease)) and the use thereof shall be subject to such reasonable non-discriminatory rules, regulations and restrictions as Landlord may make from time to time; provided that Landlord shall not enforce such rules, regulations and restrictions in a discriminatory manner against Tenant as opposed to other tenants of the Project. Landlord reserves the right to close temporarily, make alterations or additions to, or change the location of elements of the Project and the Common Areas, provided that, in connection therewith, (i) Landlord shall perform such closures, alterations, additions or changes in a commercially reasonable manner and, in connection therewith, shall use commercially reasonable efforts to minimize any unreasonable interference with Tenant’s use of and/or access to the Premises for the Permitted Use and/or Tenant’s parking rights under this Lease (provided that to the extent Landlord provides Tenant with “Reasonable Alternate Parking,” as that term is defined in Section 19.5.2 below, then no unreasonable interference with Tenant’s parking rights shall be deemed to have occurred), and (ii) Landlord shall give Tenant at least five (5) business days prior notice if such closures, alterations, additions or changes will interfere with, or limit, on other than a non-material basis (except in the event of an emergency, where no prior notice shall be required, except that Landlord shall nonetheless use commercially reasonable efforts to notify Tenant): (a) Tenant’s access to or from the Premises, (b) Tenant’s use of the Premises for the Permitted Use, or (c) Tenant’s parking passes, Tenant’s signage rights specifically set forth in Article 23 below or Tenant’s rooftop rights specifically set forth in Section 29.32 below.
1.1.3.1
Fitness Facility. Landlord shall construct a fitness facility the “Fitness Facility”) as part of the Building Common Areas; provided that the location, specifications and all other aspects of the Fitness Facility (including, without limitation, the construction thereof) shall be determined by Landlord in its sole discretion; provided further that the use of the Fitness Facility by the tenants of the Project, when constructed, shall be subject to reasonable and non-discriminatory rules and regulations promulgated from time to time by Landlord in connection with such fitness facility. Subject to Force Majeure (as that term is defined in Section 29.16 below), Landlord’s temporary closure of the Fitness Facility to repair, improve or maintain the same, and/or any closure of the Fitness Facility caused by an act or omission of Tenant, the hours of operation of the Fitness Facility shall be at least 8:00 a.m. to 6:00 p.m. Monday through Friday, excluding Holidays (as that term is defined in Section 6.1.1 below). Notwithstanding anything to the contrary in this Lease, if, following the date (the “Fitness Facility Outside Date”) which occurs four (4) months following the date upon which the Premises is Ready for Occupancy (provided that the Fitness Facility Outside Date shall be delayed on a day-

- 6 -

for-day basis for each day that the substantial completion of the Fitness Facility (subject to punch list items) is delayed by an act or omission of Tenant or Force Majeure), either (i) Landlord has failed to substantially complete the Fitness Facility (subject to punch list items) or (ii) Tenant is prevented from accessing the Fitness Facility between 4:00 a.m. to 10:00 p.m. Monday through Friday, excluding Holidays (provided that such prevention of access is not the result of (A) Force Majeure, (B) Landlord’s temporary closure (which temporary closure shall not exceed an aggregate of fifteen (15) consecutive business days) of the Fitness Facility to repair, improve or maintain the same, and/or (C) any closure of the Fitness Facility caused by an act or omission of Tenant) (any such set of circumstances as set forth in items (i) or (ii), above, to be known as a “Fitness Facility Abatement Event”), then Tenant shall give Landlord notice of such Fitness Abatement Event (provided that in no event shall Tenant delivery such notice prior to the Fitness Facility Outside Date, as the same may be delayed pursuant to this Section 1.1.3.1 above), and if such Fitness Abatement Event continues for five (5) consecutive business days after Landlord’s receipt of any such notice (the “Fitness Facility Eligibility Period”), then the Base Rent payable by Tenant under this Lease shall be reduced by an amount equal to Two Hundred and 00/100 Dollars ($200.00) per day during each day that such Fitness Facility Abatement Event continues to occur following the expiration of the Fitness Facility Eligibility Period. Such right to reduce Base Rent shall be Tenant’s sole and exclusive remedy for rent abatement or rent reduction at law or in equity for a Fitness Facility Abatement Event. At any time during the Lease Term, Landlord may deliver to Tenant a notice that sets forth the date upon which the Fitness Facility is substantially complete (subject to punch list items), which Tenant shall execute and return to Landlord within ten (10) days of receipt thereof, provided that if such notice is not factually correct, then Tenant shall make such changes as are necessary to make such notice factually correct and shall thereafter return such notice to Landlord within said ten (10) day period.

1.1.4
Torrey Pines Amenities. Landlord and Ten ant hereby acknowledge that an affiliate of Landlord constructed a fitness center, a café, and a shared executive conference/training facility (collectively, the “Torrey Pines Amenities”) in that certain building located at 11085 North Torrey Pines Road, San Diego, California (the “Torrey Pines Building”), and, provided that Landlord or an affiliate of Landlord continues to own the Torrey Pines Building, Tenant and Tenant’s employees shall have access to any such Torrey Pines Amenities to the same extent as the similarly situated tenants of the Building and/or the Torrey Pines Building.
1.2
Rentable Square Feet of Premises. The rentable square footage of the Premises is hereby deemed to be as set forth in Section 2.2 of the Summary and shall not be subject to measurement or adjustment during the Lease Term.
1.3
Right of First Refusal. Commencing on the date (the “ROFR Effective Date”) which occurs six (6) months following the Lease Commencement Date, Landlord hereby grants to the Tenant originally named herein (the “Original Tenant”) and any Permitted Transferee Assignee (as that term is defined in Section 14.8 below) a one-time right of first refusal with respect to any space in the Building not included in the initial Premises (“First Refusal Space”). Notwithstanding the foregoing, such right of first refusal shall commence with respect to any particular applicable First Refusal Space only following the expiration or earlier termination of any leases which are existing as of the ROFR Effective Date of such First Refusal Space (or portion thereof) (including renewals of any such lease, irrespective of whether any such renewal is currently set forth in such lease or is subsequently granted or agreed upon, and regardless of

- 7 -

whether such renewal is consummated pursuant to a lease amendment or a new lease). Such right of first refusal shall be subordinate to all rights of other tenants of the Project, which rights relate to the First Refusal Space and are set forth in leases of space in the Project existing as of the date hereof, including, without limitation, any expansion, first offer, first refusal, first negotiation and other rights, regardless of whether such rights are executed strictly in accordance with their respective terms or pursuant to a lease amendment or a new lease (the “First Refusal Superior Rights”). Notwithstanding any contrary provision in the lease of any First Refusal Superior Right Holder, such rights of any First Refusal Superior Right Holder shall continue to be First Refusal Superior Rights in the event that such First Refusal Superior Right Holder’s lease is renewed or otherwise modified (and irrespective of whether any such renewal is currently set forth in such lease or is subsequently granted or agreed upon, and regardless of whether such renewal is consummated pursuant to a lease amendment or a new lease). All such tenants of the First Refusal Space as of the ROFR Effective Date and all such third party tenants in the Project holding First Refusal Superior Rights, are collectively referred to as the “First Refusal Superior Right Holders”.

1.3.1
Procedure for Offer. Subject to the terms hereof, commencing on the ROFR Effective Date, Landlord shall notify Tenant (the “First Refusal Notice”) when and if Landlord receives a “bona-fide third‑party offer” for the First Refusal Space (or any portion thereof). Pursuant to such First Refusal Notice, Landlord shall offer to lease to Tenant such Refusal Space. The First Refusal Notice shall describe the space so offered to Tenant and shall set forth all the “Economic Terms,” as that term is defined in Section 1.3.2, below, applicable to the First Refusal Space. For the avoidance of doubt, Landlord shall have no obligation to deliver a First Refusal Notice to Tenant with respect to any bona-fide third party offer first received by Landlord prior to the ROFR Effective Date. For purposes of this Section 1.4, a “bona-fide third-party offer” shall mean a counter-offer received by Landlord to lease the Refusal Space from a qualified and unaffiliated third party which Landlord would otherwise be willing to accept (but for Tenant’s or any other First Refusal Superior Right Holder’s rights) or an offer made by Landlord to a qualified and unaffiliated third party (subject to Tenant’s and any other First Refusal Superior Right Holder’s rights) which the third party is willing to accept. For purposes of example only, but not by way of limitation, the following would each constitute a bone-fide third-party offer:
1.3.1.1
Landlord receives a request for proposal from a qualified third party. Landlord responds to the request for proposal with a lease proposal and subsequently receives a written bona-fide counter proposal from the qualified third party.
1.3.1.2
Landlord receives a written offer to lease from a qualified third party. Landlord responds to the offer with a written counter-offer and subsequently receives a bona-fide counter to Landlord’s counteroffer from the qualified third party.
1.3.2
Procedure for Acceptance. If Tenant wishes to exercise Tenant’s right of first refusal with respect to the First Refusal Space described in the First Refusal Notice, then within five (5) business days after delivery of the First Refusal Notice to Tenant, Tenant shall deliver notice (an “Election Notice”) to Landlord of Tenant’s irrevocable exercise of its right of first refusal with respect to all of the First Refusal Space described in the First Refusal Notice on the Economic Terms provided for therein. If Tenant does not so notify Landlord within such five (5) business day period of Tenant’s exercise of its first refusal right, then Landlord shall be free to

- 8 -

negotiate and enter into a lease for the First Refusal Space to anyone whom Landlord desires on any terms Landlord desires; provided, however, prior to leasing such First Refusal Space to any third party at a rental (taking into consideration the Economic Terms, calculated on a “Net Equivalent Lease Rate” basis pursuant to the process set forth below), which is less than ninety percent (90%) of the Net Equivalent Lease Rate of the Economic Term set forth in Landlord’s most recent First Refusal Notice for such First Refusal Space, Landlord shall first again offer such First Refusal Space to Tenant on the Economic Terms offered to such third-party tenant by delivering another First Refusal Notice to Tenant, which shall be subject to all of the terms and conditions of this Section 1.3.2, except Tenant shall have three (3) business days (instead of five (5) business days) after delivery of a second First Refusal Notice to exercise Tenant’s right to lease such First Offer Space. For purposes hereof, the “Economic Terms” shall mean the following items: (i) base rent and free rent, including escalations thereto, expressed as a dollar amount per rentable square foot, (ii) operating expense and tax protection such as a base year or expense stop (if any), and (iii) all other monetary concessions (e.g., free rent, improvement allowances). Notwithstanding anything to the contrary contained herein, Tenant must elect to exercise its right of first Refusal, if at all, with respect to all of the space offered by Landlord to Tenant at any particular time, and Tenant may not elect to lease only a portion thereof. The “Net Equivalent Lease Rate” for the Economic Terms shall be determined using the following steps.

1.3.2.1
The contractual rent payments for set forth in the Economic Terms should be arrayed monthly over the term of the First Refusal Space.
1.3.2.2
Any free rent or similar inducements received over time should be deducted in the time period in which they occur, resulting in the net cash flow arrayed over the term of the First Refusal Space.

- 9 -

1.3.2.3
The resultant net cash flow from the First Refusal Space should be then discounted (using an 8% annual discount rate) to the First Refusal Commencement Date (as that term is defined in Section 1.3.4 below), resulting in a net present value estimate.
1.3.2.4
From the net present value, up front inducements (improvements allowances and other concessions) should be deducted. These items should be deducted directly, on a “dollar for dollar” basis, without discounting since they are typically incurred at lease commencement, while rent (which is discounted) is a future receipt.
1.3.2.5
The net present value should then amortized back over the term of the First Refusal Space as a level monthly net rent payment using the same annual discount rate of 8.0% used in the present value analysis. This calculation will result in a hypothetical level or even payment over the term of the First Refusal Space.
1.3.3
Construction of First Refusal Space. Subject to the Economic Terms provided to Tenant for the First Refusal Space, Tenant shall take the First Refusal Space in its “as is” condition, and Landlord shall not be obligated to provide or pay for any improvement of the First Refusal Space. For the avoidance of doubt, if the Economic Terms include a tenant improvement allowance, Tenant shall receive the same allowance.

- 10 -

1.3.4
Lease of First Refusal Space. If Tenant timely exercises Tenant’s right of first refusal to lease First Refusal Space as set forth herein, Landlord and Tenant shall within thirty (30) days thereafter enter an amendment to this Lease (the “First Refusal Space Amendment”) for such First Refusal Space pursuant to this Section 1.3. Tenant’s lease of such First Refusal Space shall be upon the express terms set forth in the First Refusal Notice, but otherwise upon the same general terms and conditions set forth in this Lease and this Section 1.3. The First Refusal Space Amendment shall not contain the rights set forth in Section 2.2, below, unless such rights were set forth in the First Refusal Notice. The term of Tenant’s lease of the First Refusal Space shall commence on the date set forth in the First Refusal Notice (the “First Refusal Commencement Date”), and terminate on the date set forth in the First Refusal Notice.
1.3.5
Termination of Right of First Refusal. The rights contained in this Section 1.3 shall be personal to the Original Tenant and any Permitted Transferee Assignee, and may only be exercised by the Original Tenant and such Permitted Transferee Assignee (and not any other assignee, sublessee or other transferee of the Original Tenant’s interest in this Lease) if the Original Tenant or such Permitted Transferee Assignee occupies the entire Premises as of the date of the attempted exercise of the right of first refusal by Tenant. The right of first refusal granted herein shall terminate (i) with respect to any particular First Refusal Space upon the failure by Tenant to exercise its right of first refusal with respect to the First Refusal Space so offered by Landlord pursuant to the terms of this Section 1.3. Tenant shall not have the right to lease any First Refusal Space pursuant to the terms of this Section 1.3 in the event that less than two (2) years remains prior to the Lease Expiration Date; provided, however, to the extent Tenant then has an unexpired Lease Term renewal option pursuant to Section 2.2 of this Lease, Tenant shall have the right to irrevocably exercise such renewal option simultaneously with Tenant’s exercise of its first refusal right hereunder in order to cause the Lease Expiration Date to occur more than two (2) years following the First Refusal Commencement Date. Tenant shall not have the right to lease First Refusal Space, as provided in this Section 1.3, if, as of the date of the attempted exercise of any right of first refusal by Tenant, or, as of the scheduled date of delivery of such First Refusal Space to Tenant, Tenant is in default under this Lease beyond the applicable notice and cure period provided in this Lease or Tenant has previously been in default under this Lease (beyond any applicable notice and cure periods) more than once during the prior twelve (12) month period.
2.
LEASE TERM; OPTION TERM.
2.1
Lease Term. The terms and provisions of this Lease shall be effective as of the date of this Lease. The term of this Lease (the “Lease Term”) shall be as set forth in Section 3.1 of the Summary, shall commence on the date set forth in Section 3.2 of the Summary (the “Lease Commencement Date”), and shall terminate on the date set forth in Section 3.3 of the Summary (the “Lease Expiration Date”) unless this Lease is sooner terminated as hereinafter provided. For purposes of this Lease, the term “Lease Year” shall mean each consecutive twelve (12) month period during the Lease Term; provided, however, that the first (1st) Lease Year shall commence on the Lease Commencement Date and end on the last day of the month in which the first anniversary of the Lease Commencement Date occurs (or if the Lease Commencement Date is the first (1st) day of a calendar month, then the first (1st) Lease Year shall commence on the Lease Commencement Date and end on the day immediately preceding the first (1st) anniversary of the Lease Commencement Date), and further provided that the last Lease Year shall end on the Lease Expiration Date. At any time during the Lease Term, Landlord may deliver to Tenant a notice in

- 11 -

the form as set forth in Exhibit C, attached hereto, as a confirmation only of the information set forth therein, which Tenant shall execute and return to Landlord within ten (10) days of receipt thereof, provided that if such notice is not factually correct, then Tenant shall make such changes as are necessary to make such notice factually correct and shall thereafter return such notice to Landlord within said ten (10) day period.

2.2
Option Term.
2.2.1
Option Right. Subject to the remaining terms of this Section 2.2, Landlord hereby grants to the Original Tenant and any Permitted Transferee Assignee one (1) option to extend the Lease Term for a period of five (5) years (the “Option Term”), which option shall be irrevocably exercised only by written notice delivered by Tenant to Landlord not earlier than twelve (12) months before the commencement of the Option Term and not later than nine (9) months before the commencement of the Option Term, provided that the following conditions (the “Option Conditions”) are satisfied: (i) as of the date of delivery of such notice, Tenant is not in monetary or other material default under this Lease beyond any applicable notice and cure period expressly set forth in this Lease; and (ii) as of the end of the Lease Term, Tenant is not in monetary or other material default under this Lease; (iii) Tenant has not previously been in monetary or other material default under this Lease (beyond any applicable notice and cure period expressly set forth in this Lease) more than twice; and (iv) the Lease then remains in full force and effect and the Original Tenant or any Permitted Transferee Assignee occupies at least fifty percent (50%) of the entire Premises at the time the option to extend is exercised and as of the commencement of the Option Term. beyond any applicable notice and cure period expressly set forth in this Lease. Landlord may, at Landlord’s option, exercised in Landlord’s sole and absolute discretion, waive any of the Option Conditions in which case the option, if otherwise properly exercised by Tenant, shall remain in full force and effect. Upon the proper exercise of such option to extend, and provided that Tenant satisfies all of the Option Conditions (except those, if any, which are waived by Landlord), the Lease Term, as it applies to the Premises, shall be extended for a period of five (5) years. The rights contained in this Section 2.2 shall be personal to Original Tenant or its Permitted Transferee Assignee and may be exercised by Original Tenant or its Permitted Transferee Assignee only (and not by any other assignee, sublessee or other “Transferee,” as that term is defined in Section 14.1 of this Lease, of Tenant’s interest in this Lease).
2.2.2
Option Base Rent. The annual Base Rent (as that term is defined in Section 3.1 below) payable by Tenant during the Option Term (the “Option Rent”) shall be equal to the “Fair Rental Value,” as that term is defined below, for the Premises as of the commencement date of the Option Term; provided, however, the Option Rent, on an average annual, effective (including free rent, if applicable, on a straight line basis) basis, for each Lease Year during the Option Term shall not be lower than the one hundred three percent (103%) of the annual Base Rent in effect immediately prior to the commencement of the Option Term. The “Fair Rental Value,” as used in this Lease, shall be equal to the annual base rent per rentable square foot (considering additional rent and any “base year” or “expense stop” applicable thereto), including all escalations, at which tenants (pursuant to leases consummated within the twelve (12) month period preceding the first day of the Option Term), are leasing non-sublease, non-encumbered, non-equity space which is not significantly greater or smaller in size than the subject space, for a comparable lease term, in an arm’s length transaction, which comparable space is located in the “Comparable Buildings,” as that term is defined in this Section 2.2.2, below (transactions satisfying the

- 12 -

foregoing criteria shall be known as the “Comparable Transactions”), taking into consideration the following concessions (the “Concessions”): (a) rental abatement concessions, if any, being granted such tenants in connection with such comparable space; (b) tenant improvements or allowances provided or to be provided for such comparable space, and taking into account the value, if any, of the existing improvements in the subject space, such value to be based upon the age, condition, design, quality of finishes and layout of the improvements and the extent to which the same can be utilized by a general office user other than Tenant; and (c) other reasonable monetary concessions being granted such tenants in connection with such comparable space; provided, however, that in calculating the Fair Rental Value, no consideration shall be given to any period of rental abatement, if any, granted to tenants in comparable transactions in connection with the design, permitting and construction of tenant improvements in such comparable spaces. The Fair Rental Value shall additionally include a determination as to whether, and if so to what extent, Tenant must provide Landlord with financial security, such as a letter of credit or guaranty, for Tenant’s Rent obligations in connection with Tenant’s lease of the Premises during the Option Term. Such determination shall be made by reviewing the extent of financial security then generally being imposed in Comparable Transactions from tenants of comparable financial condition and credit history to the then existing financial condition and credit history of Tenant (with appropriate adjustments to account for differences in the then-existing financial condition of Tenant and such other tenants). In addition, in connection with the determination of the Fair Rental Value, the age (based on the date of original construction or the latest major renovation) and location of any Comparable Building used in connection therewith shall be a factor in determining the Fair Rental Value. The Concessions (A) shall be reflected in the effective rental rate (which effective rental rate shall take into consideration the total dollar value of such Concessions as amortized on a straight-line basis over the applicable term of the Comparable Transaction (in which case such Concessions evidenced in the effective rental rate shall not be granted to Tenant)) payable by Tenant, or (B) at Landlord’s election, all such Concessions shall be granted to Tenant in kind. If there are not a sufficient number of Comparable Transactions to reasonably determine the Fair Rental Value, then the definition of Comparable Transactions shall be expanded to include smaller or larger transactions, provided that appropriate adjustments shall be made to such additional Comparable Transactions, as is necessary, given the size of such transactions. The term “Comparable Buildings” shall mean the Building and those other first-class life science buildings located in the Torrey Pines area of San Diego, California. Notwithstanding the foregoing, during the Option Term, the Option Rent shall increase by three percent (3%) per annum on each anniversary of the first (1st) day of the Option Term; provided that such annual increases shall be taken into consideration in connection with the determination of Fair Rental Value.

2.2.3
Determination of Option Rent. Notwithstanding any provision to the contrary contained herein, within fifteen (15) business days following Landlord’s receipt of written request from Tenant (which request shall not be delivered earlier than fifteen (15) months prior to the commencement of the Option Term nor later than ten (10) months prior to the commencement of the Option Term), Landlord shall provide Tenant with Landlord’s nonbinding good faith estimate of the Fair Rental Value for the Premises during the Option Term. In the event Tenant timely and appropriately exercises an option to extend the Lease Term, Landlord shall notify Tenant of Landlord’s determination of the Option Rent on or before the date which occurs six (6) months prior to the Lease Expiration Date. If Tenant, on or before the date which is thirty (30) days following the date upon which Tenant receives Landlord’s determination of the Option Rent, in good faith objects to Landlord’s determination of the Option Rent, then Landlord and Tenant

- 13 -

shall attempt to agree upon the Option Rent using their best good-faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s objection to the Option Rent (the “Outside Agreement Date”), then each party shall make a separate determination of the Option Rent, as the case maybe, within five (5) days, and such determinations shall be submitted to arbitration in accordance with Sections 2.2.3.1 through 2.2.3.7, below. If Tenant fails to object to Landlord’s determination of the Option Rent within the time period set forth herein, then Tenant shall be deemed to have accepted Landlord’s determination of Option Rent.

2.2.3.1
Landlord and Tenant shall each appoint one arbitrator who shall be, at the option of the appointing party, a real estate broker, appraiser or attorney who shall have been active over the five (5) year period ending on the date of such appointment in the leasing or appraisal, as the case may be, of commercial office properties in North San Diego, California. The determination of the arbitrators shall be limited solely to the issue of whether Landlord’s or Tenant’s submitted Option Rent is the closest to the actual Option Rent, taking into account the requirements of Section 2.2.2 of this Lease, as determined by the arbitrators. Each such arbitrator shall be appointed within fifteen (15) days after the Outside Agreement Date. Landlord and Tenant may consult with their selected arbitrators prior to appointment and may select an arbitrator who is favorable to their respective positions. The arbitrators so selected by Landlord and Tenant shall be deemed “Advocate Arbitrators.”
2.2.3.2
The two (2) Advocate Arbitrators so appointed shall be specifically required pursuant to an engagement letter within ten (10) days of the date of the appointment of the last appointed Advocate Arbitrator to agree upon and appoint a third arbitrator (“Neutral Arbitrator”) who shall be qualified under the same criteria set forth hereinabove for qualification of the two Advocate Arbitrators, except that neither the Landlord or Tenant or either parties’ Advocate Arbitrator may, directly or indirectly, consult with the Neutral Arbitrator prior or subsequent to his or her appearance. The Neutral Arbitrator shall be retained via an engagement letter jointly prepared by Landlord’s counsel and Tenant’s counsel.
2.2.3.3
The three arbitrators shall, within thirty (30) days of the appointment of the Neutral Arbitrator, reach a decision as to whether the parties shall use Landlord’s or Tenant’s submitted Option Rent, and shall notify Landlord and Tenant thereof.
2.2.3.4
The decision of the majority of the three arbitrators shall be binding upon Landlord and Tenant.
2.2.3.5
If either Landlord or Tenant fails to appoint an Advocate Arbitrator within fifteen (15) days after the Outside Agreement Date, then the single Advocate Arbitrator appointed shall be deemed the Neutral Arbitrator.
2.2.3.6
If the two (2) Advocate Arbitrators fail to agree upon and appoint the Neutral Arbitrator, then either party may petition the presiding judge of the Superior Court of San Diego County to appoint the Neutral Arbitrator, subject to criteria in Section 2.2.3.2 of this Lease, or if he or she refuses to act, either party may petition any judge having jurisdiction over the parties to appoint such arbitrator.

- 14 -

2.2.3.7
The cost of the arbitration shall be paid by Landlord and Tenant equally.
2.2.3.8
In the event that the Option Rent shall not have been determined pursuant to the terms hereof prior to the commencement of the Option Term, Tenant shall be required to pay the Option Rent initially provided by Landlord to Tenant, and upon the final determination of the Option Rent, the payments made by Tenant shall be reconciled with the actual amounts of Option Rent due, and the appropriate party shall make any corresponding payment to the other party.
3.
BASE RENT.
3.1
In General. Tenant shall pay, without prior notice or demand, at Tenant’s election either (a) by ACH Transfer (pursuant to transfer instructions provided by Landlord upon request from Tenant), or (b) to Landlord or Landlord’s agent (i) at the management office of the Project, or, (ii) at Landlord’s option, at such other place as Landlord may from time to time designate in writing, by a check for currency which, at the time of payment, is legal tender for private or public debts in the United States of America, base rent (“Base Rent”) as set forth in Section 4 of the Summary, payable in equal monthly installments as set forth in Section 4 of the Summary in advance on or before the first day of each and every calendar month during the Lease Term, without any setoff or deduction whatsoever. The Base Rent and Tenant’s Share of the Estimate Direct Expenses (as that term is defined in Section 4.4.2 below) for the first full month of the Lease Term, in an aggregate amount equal to $78,718.50, shall be paid at the time of Tenant’s execution of this Lease. If any Rent payment date (including the Lease Commencement Date) falls on a day of the month other than the first day of such month or if any payment of Rent is for a period which is shorter than one month, the Rent for any fractional month shall accrue on a daily basis for the period from the date such payment is due to the end of such calendar month or to the end of the Lease Term at a rate per day which is equal to 1/365 of the applicable annual Rent. All other payments or adjustments required to be made under the terms of this Lease that require proration on a time basis shall be prorated on the same basis.
3.2
Abated Base Rent. Provided that Tenant is not then in default of this Lease (beyond all applicable notice and cure periods), then during the three (3) month period commencing on the first day of the second (2nd) full calendar month of the Lease Term and continuing through and including the last day of the fourth (4th) full calendar month of the Lease Term (the “Base Rent Abatement Period”), Tenant shall not be obligated to pay any Base Rent otherwise attributable to the Premises during such Base Rent Abatement Period (the “Base Rent Abatement”), subject to Section 2.2 of the Tenant Work Letter. Landlord and Tenant acknowledge that the aggregate amount of the Base Rent Abatement equals One Hundred Ninety-Nine Thousand Nine Hundred Twenty and 00/100 Dollars ($199,920.00). Tenant acknowledges and agrees that the foregoing Base Rent Abatement has been granted to Tenant as additional consideration for entering into this Lease, and for agreeing to pay the rental and performing the terms and conditions otherwise required under this Lease. If Tenant shall be in default under this Lease during the Base Rent Abatement Period, and shall fail to cure such default within the notice and cure period, if any, permitted for cure pursuant to terms and conditions of this Lease, or if this Lease is terminated for any reason other than Landlord’s breach of this Lease, then the dollar amount of the unapplied portion of the Base Rent Abatement as of the date of such default or termination, as the case may be, shall be converted to a credit to be applied to the Base Rent applicable at the end of the Lease Term and Tenant shall immediately be obligated to begin paying Base Rent for the Premises in full.

- 15 -

4.
ADDITIONAL RENT.
4.1
General Terms. In addition to paying the Base Rent specified in Article 3 of this Lease, Tenant shall pay “Tenant’s Share” of the annual “Direct Expenses,” as those terms are defined in Sections 4.2.6 and 4.2.2 of this Lease, respectively. Such payments by Tenant, together with any and all other amounts payable by Tenant to Landlord pursuant to the terms of this Lease, are hereinafter collectively referred to as the “Additional Rent”, and the Base Rent and the Additional Rent are herein collectively referred to as “Rent.” All amounts due under this Article 4 as Additional Rent shall be payable for the same periods and in the same manner as the Base Rent. Without limitation on other obligations of Tenant which survive the expiration of the Lease Term, the obligations of Tenant to pay the Additional Rent provided for in this Article 4 shall survive the expiration of the Lease Term.
4.2
Definitions of Key Terms Relating to Additional Rent. As used in this Article 4, the following terms shall have the meanings hereinafter set forth:
4.2.1
Intentionally Omitted.
4.2.2
“Direct Expenses” shall mean “Operating Expenses” and “Tax Expenses.”
4.2.3
“Expense Year” shall mean each calendar year in which any portion of the Lease Term falls, through and including the calendar year in which the Lease Term expires, provided that Landlord, upon notice to Tenant, may change the Expense Year from time to time to any other twelve (12) consecutive month period, and, in the event of any such change, Tenant’s Share of Direct Expenses shall be equitably adjusted for any Expense Year involved in any such change.
4.2.4
“Operating Expenses” shall mean all expenses, costs and amounts of every kind and nature which Landlord pays or accrues during any Expense Year because of or in connection with the ownership, management, maintenance, security, repair, replacement, restoration or operation of the Project, or any portion thereof. Without limiting the generality of the foregoing, Operating Expenses shall specifically include any and all of the following: (i) the cost of supplying all utilities, the cost of operating, repairing, maintaining, and renovating the utility, telephone, mechanical, sanitary, storm drainage, and elevator systems, and the cost of maintenance and service contracts in connection therewith; (ii) the cost of licenses, certificates, permits and inspections and the cost of contesting any governmental enactments which may affect Operating Expenses, and the costs incurred in connection with a governmentally mandated transportation system management program or similar program; (iii) the cost of all insurance carried by Landlord in connection with the Project and Premises as reasonably determined by Landlord; (iv) the cost of landscaping, relamping, and all supplies, tools, equipment and materials used in the operation, repair and maintenance of the Project, or any portion thereof; (v) the cost of parking area operation, repair, restoration, and maintenance; (vi) fees and other costs, including management and/or incentive fees, consulting fees, legal fees and accounting fees, of all

- 16 -

contractors and consultants in connection with the management, operation, maintenance and repair of the Project; (vii) payments under any equipment rental agreements and the fair rental value of any management office space; (viii) subject to item (f), below, wages, salaries and other compensation and benefits, including taxes levied thereon, of all persons engaged in the operation, maintenance and security of the Project; (ix) costs under any instrument pertaining to the sharing of costs by the Project; (x) operation, repair, maintenance and replacement of all systems and equipment and components thereof of the Project; (xi) the cost of janitorial, alarm, security and other services, replacement of wall and floor coverings, ceiling tiles and fixtures in common areas, maintenance and replacement of curbs and walkways, repair to roofs and re-roofing; (xii) amortization (including interest on the unamortized cost) over such period of time as Landlord shall reasonably determine, of the cost of acquiring or the rental expense of personal property used in the maintenance, operation and repair of the Project, or any portion thereof; (xiii) the cost of capital improvements or other costs incurred in connection with the Project (A) which are intended to effect economies in the operation or maintenance of the Project, or any portion thereof, or to reduce current or future Operating Expenses (provided that the amount included in Operating Expenses for any Expense Year shall not exceed the amount of the reasonably anticipated reduction on Operating Expenses during such Lease Year), (B) that are required to comply with mandatory conservation programs, (C) which are replacements or modifications of nonstructural items located in the Common Areas required to keep the Common Areas in good order or condition, (D) that are required under any governmental law or regulation, except for capital expenditures to remedy a condition existing prior to the Lease Commencement Date which an applicable governmental authority, if it had knowledge of such condition prior to the Lease Commencement Date, would have then required to be remedied pursuant to then-current governmental laws or regulations in their form existing as of the Lease Commencement Date and pursuant to the then current interpretation of such governmental laws or regulations by the applicable governmental authority as of the Lease Commencement Date, or (E) which are repairs or replacements to the Building Systems (as defined in Section 7.1, below); provided, however, that any capital expenditure shall be amortized (including interest on the amortized cost) over its reasonable useful life as Landlord shall reasonably determine in accordance with sound real estate management and accounting principles; and (xiv) costs, fees, charges or assessments imposed by, or resulting from any mandate imposed on Landlord by, any federal, state or local government for fire and police protection, trash removal, community services, or other services which do not constitute “Tax Expenses” as that term is defined in Section 4.2.5, below, (xv) cost of tenant relation programs reasonably established by Landlord, and (xvi) payments under any easement, license, operating agreement, declaration, restrictive covenant, or instrument pertaining to the sharing of costs by the Building, including, without limitation, any covenants, conditions and restrictions affecting the property, and reciprocal easement agreements affecting the property, any parking licenses, and any agreements with transit agencies affecting the Property (collectively, “Underlying Documents”). Notwithstanding the foregoing, for purposes of this Lease, Operating Expenses shall not, however, include:

(a)
costs, including legal fees, space planners’ fees, advertising and promotional expenses, and brokerage fees incurred in connection with the original construction or development, or original or future leasing of the Project, and costs, including permit, license and inspection costs, incurred with respect to the installation of tenant improvements (including, without limitation, the Tenant Improvements) made for tenants of the Project (including Tenant) or incurred in renovating or otherwise improving, decorating, painting or redecorating vacant space for tenants or other occupants of the Project (excluding, however, such costs relating to any common areas of the Project or parking facilities);

- 17 -

(b)
except as set forth in items (xii) and (xiii), above, depreciation, interest and principal payments on mortgages and other debt costs, if any, penalties and interest, costs of capital repairs and alterations, and costs of capital improvements and equipment;
(c)
costs for which the Landlord is reimbursed by any tenant or occupant of the Project or by insurance by its carrier or any tenant’s carrier or by anyone else, and electric power costs for which any tenant directly contracts with the local public service company;
(d)
any bad debt loss, rent loss, or reserves of any kind;
(e)
costs associated with the operation of the business of the partnership or entity which constitutes the Landlord, as the same are distinguished from the costs of operation of the Project (which shall specifically include, but not be limited to, accounting costs associated with the operation of the Project). Costs associated with the operation of the business of the partnership or entity which constitutes the Landlord include costs of partnership accounting and legal matters, costs of defending any lawsuits with any mortgagee (except as the actions of the Tenant may be in issue), costs of selling, syndicating, financing, mortgaging or hypothecating any of the Landlord’s interest in the Project, and costs incurred in connection with any disputes between Landlord and its employees, between Landlord and Project management, or between Landlord and other tenants or occupants;
(f)
the wages and benefits of any employee who does not devote substantially all of his or her employed time to the Project unless such wages and benefits are prorated to reflect time spent on operating and managing the Project vis-a-vis time spent on matters unrelated to operating and managing the Project; provided, that in no event shall Operating Expenses for purposes of this Lease include wages and/or benefits attributable to personnel above the level of Project manager;
(g)
amount paid as ground rental for the Project by the Landlord;
(h)
except for a Project management fee to the extent allowed pursuant to item 4.2.4(q) below, overhead and profit increment paid to the Landlord or to subsidiaries or affiliates of the Landlord for services in the Project to the extent the same exceeds the costs of such services rendered by qualified, first-class unaffiliated third parties on a competitive basis;
(i)
any compensation paid to clerks, attendants or other persons in commercial concessions operated by the Landlord, provided that any compensation paid to any concierge at the Project shall be includable as an Operating Expense;
(j)
rentals and other related expenses incurred in leasing air conditioning systems, elevators or other equipment which if purchased the cost of which would be excluded from Operating Expenses as a capital cost, except equipment not affixed to the Project which is used in providing janitorial or similar services and, further excepting from this exclusion such equipment rented or leased to remedy or ameliorate an emergency condition in the Project;

- 18 -

(k)
all items and services for which Tenant or any other tenant in the Project reimburses Landlord or which Landlord provides selectively to one or more tenants (other than Tenant) without reimbursement;
(l)
any costs expressly excluded from Operating Expenses elsewhere in this Lease;
(m)
rent for any office space occupied by Project management personnel to the extent the size or rental rate of such office space exceeds the size or fair market rental value of office space occupied by management personnel of the comparable buildings in the vicinity of the Building, with adjustment where appropriate for the size of the applicable project;
(n)
penalties, fines, interest or other costs due to (1) the violation by Landlord, its employees, agents or contractors or any tenant of the terms and conditions of any lease of space in the Building or the Project or any Applicable Laws (as defined below), (2) incurred as a result of Landlord’s inability or failure to make payment of taxes and/or to file any tax or informational returns when due or (3) the gross negligence or willful misconduct of Landlord or its employees, officers, directors, contractors or agents;
(o)
costs incurred to comply with Applicable Laws relating to the removal of hazardous materials (as defined under Applicable Law) which (1) were in existence in the Building or on the Project prior to the Lease Commencement Date or (2) is brought into the Building or onto the Project after the date hereof by Landlord or any other tenant of the Project, or any employees, invitees, agents or contractors of Landlord or any such other tenant;
(p)
if Tenant is paying directly for the electrical service and janitorial service provided to the Premises, the cost of electrical service and janitorial service provided to other tenant spaces in the Project;
(q)
fees payable by Landlord for management of the Project in excess of percent (3%) (the “Management Fee Cap”) of Landlord’s gross rental revenues, adjusted and grossed up to reflect a one hundred percent (100%) occupancy of the Project with all tenants paying full rent, as contrasted with free rent, half-rent and the like, including base rent, pass-throughs, and parking fees from the Project for any calendar year or portion thereof;
(r)
costs of Landlord’s charitable or political contributions, or for the acquisition of fine art maintained at the Building or the Project;
(s)
the cost of installing or upgrading any utility metering for any part of the Building or the Project;
(t)
costs of replacements, alterations or improvements necessary to make the Building or the Project comply with Applicable Laws (as that term is defined in Article 24 below) in effect and applicable to the Building and/or the Project prior to the date of this Lease, provided, however, that the provisions of this sub-item (t) shall not preclude the inclusion of costs of compliance with Applicable Laws enacted prior to the date of this Lease if such compliance is required for the first time by reason of any amendment, modification or reinterpretation of an Applicable Law which is imposed after the date of this Lease;

- 19 -

(u)
costs (including attorneys’ fees and costs of settlement, judgments and payments in lieu thereof) incurred in connection with disputes with tenants or other occupants, or prospective tenants, and costs and expenses, including legal fees, incurred in connection with negotiations or disputes with employees, consultants, management agents, leasing agents, purchasers or mortgagees of the Project; and
(v)
costs incurred by Landlord due to the violation by Landlord, its employees, agents or contractors or any tenant of the terms and conditions of any lease of space in the Project (but only to the extent Landlord would not have incurred such costs absent the violation).
(w)
Landlord shall not (1) make a profit by charging items to Operating Expenses that are otherwise also charged separately to tenants (including Tenant) of the Project, and (2) collect Operating Expenses from Tenant and all other tenants in the Project in an amount in excess of what Landlord incurs for the items included in Operating Expenses.
4.2.5
Taxes.
4.2.5.1
“Tax Expenses” shall mean all federal, state, county, or local governmental or municipal taxes, fees, charges or other impositions of every kind and nature, whether general, special, ordinary or extraordinary (including, without limitation, real estate taxes, general and special assessments, transit taxes, leasehold taxes or taxes based upon the receipt of rent, including gross receipts or sales taxes applicable to the receipt of rent, unless required to be paid by Tenant, personal property taxes imposed upon the fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances, furniture and other personal property used in connection with the Project, or any portion thereof), which shall be paid or accrued during any Expense Year (without regard to any different fiscal year used by such governmental or municipal authority) because of or in connection with the ownership, leasing and operation of the Project, or any portion thereof.
4.2.5.2
Tax Expenses shall include, without limitation: (i) Any tax on the rent, right to rent or other income from the Project, or any portion thereof, or as against the business of leasing the Project, or any portion thereof; (ii) Any assessment, tax, fee, levy or charge in addition to, or in substitution, partially or totally, of any assessment, tax, fee, levy or charge previously included within the definition of real property tax; (iii) Any assessment, tax, fee, levy, or charge allocable to or measured by the area of the Premises or the Rent payable hereunder, including, without limitation, any business or gross income tax or excise tax with respect to the receipt of such rent, or upon or with respect to the possession, leasing, operating, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises, or any portion thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this transaction or any document to which Tenant is a party, creating or transferring an interest or an estate in the Premises or the improvements thereon.

- 20 -

4.2.5.3
Any costs and expenses (including, without limitation, reasonable attorneys’ and consultants’ fees) incurred in attempting to protest, reduce or minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such expenses are incurred. Tax refunds shall be credited against Tax Expenses and refunded to Tenant regardless of when received, based on the Expense Year to which the refund is applicable, provided that in no event shall the amount to be refunded to Tenant for any such Expense Year exceed the total amount paid by Tenant as Additional Rent under this Article 4 for such Expense Year. If Tax Expenses for any period during the Lease Term or any extension thereof are increased after payment thereof for any reason, including, without limitation, error or reassessment by applicable governmental or municipal authorities, Tenant shall pay Landlord upon demand Tenant’s Share of any such increased Tax Expenses. Notwithstanding anything to the contrary contained in this Section 4.2.5, there shall be excluded from Tax Expenses (i) all excess profits taxes, franchise taxes, documentary transfer taxes, gift taxes, capital stock taxes, inheritance and succession taxes, estate taxes, federal and state income taxes, and other taxes to the extent applicable to Landlord’s general or net income (as opposed to rents, receipts or income attributable to operations at the Project), (ii) any items included as Operating Expenses, and (iii) any items paid by Tenant under Section 4.5 of this Lease.
4.2.6
“Tenant’s Share” shall mean the percentage set forth in Section 6 of the Summary.
4.3
Allocation of Direct Expenses.
4.3.1
Method of Allocation. The parties acknowledge that the Building is a part of a multi-building project and that the costs and expenses incurred in connection with the Project (i.e., the Direct Expenses) should be shared between the Building and the other buildings in the Project. Accordingly, as set forth in Section 4.2 above, Direct Expenses (which consist of Operating Expenses and tax Expenses) are determined annually for the Project as a whole, and a portion of the Direct Expenses, which portion shall be determined by Landlord on an equitable basis, shall be allocated to the Building (as opposed to other buildings in the Project). Such portion of Direct Expenses allocated to the Building shall include all Direct Expenses attributable solely to the Building and an equitable portion of the Direct Expenses attributable to the Project as a whole, and shall not include Direct Expenses attributable solely to other buildings in the Project.
4.3.2
Cost Pools. Landlord shall have the right, from time to time, to equitably allocate some or all of the Direct Expenses for the Project among different portions or occupants of the Project (the “Cost Pools”), in Landlord’s commercially reasonable discretion. Such Cost Pools may include, but shall not be limited to, the office space tenants of the Building or another building of the Project or of the Project, and the retail space tenants of the Building or another building of the Project or of the Project. The Direct Expenses within each such Cost Pool shall be allocated and charged to the tenants within such Cost Pool in a reasonable and equitable manner.
4.4
Calculation and Payment of Additional Rent. Tenant shall pay to Landlord, in the manner set forth in Section 4.4.1, below, and as Additional Rent, Tenant’s Share of Direct Expenses for each Expense Year.
4.4.1
Statement of Actual Direct Expenses and Payment by Tenant. Landlord shall endeavor to give to Tenant within 150 days following the end of each Expense Year, a

- 21 -

statement (the “Statement”) which shall state the Direct Expenses incurred or accrued for such preceding Expense Year, and which shall indicate the amount of Tenant’s Share of Direct Expenses. Upon receipt of the Statement for each Expense Year commencing or ending during the Lease Term, Tenant shall pay, with its next installment of Base Rent due, the full amount of Tenant’s Share of Direct Expenses for such Expense Year, less the amounts, if any, paid during such Expense Year as “Estimated Direct Expenses,” as that term is defined in Section 4.4.2, below, and if Tenant paid more as Estimated Direct Expenses than the actual Tenant’s Share of Direct Expenses, Tenant shall receive a credit in the amount of Tenant’s overpayment against Rent next due under this Lease. The failure of Landlord to timely furnish the Statement for any Expense Year shall not prejudice Landlord or Tenant from enforcing its rights under this Article 4. Even though the Lease Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant’s Share of Direct Expenses for the Expense Year in which this Lease terminates, Tenant shall immediately pay to Landlord such amount, and if Tenant paid more as Estimated Direct Expenses than the actual Tenant’s Share of Direct Expenses, Landlord shall, within thirty (30) days, deliver a check payable to Tenant in the amount of the overpayment. The provisions of this Section 4.4.1 shall survive the expiration or earlier termination of the Lease Term. Notwithstanding the immediately preceding sentence, Tenant shall not be responsible for Tenant’s Share of any Direct Expenses attributable to any Expense Year which are first billed to Tenant more than two (2) calendar years after the Lease Expiration Date.

4.4.2
Statement of Estimated Direct Expenses. In addition, Landlord shall endeavor to give Tenant a yearly expense estimate statement (the “Estimate Statement”) which shall set forth Landlord’s reasonable estimate (the “Estimate”) of what the total amount of Direct Expenses for the then-current Expense Year shall be and the estimated Tenant’s Share of Direct Expenses (the “Estimated Direct Expenses”). The failure of Landlord to timely furnish the Estimate Statement for any Expense Year shall not preclude Landlord from enforcing its rights to collect any Estimated Direct Expenses under this Article 4, nor shall Landlord be prohibited from revising any Estimate Statement or Estimated Direct Expenses theretofore delivered to the extent necessary. Thereafter, Tenant shall pay, with its next installment of Base Rent due (provided Tenant has received at least thirty (30) days’ notice of the Estimated Direct Expenses), a fraction of the Estimated Direct Expenses for the then-current Expense Year (reduced by any amounts paid pursuant to the last sentence of this Section 4.4.2). Such fraction shall have as its numerator the number of months which have elapsed in such current Expense Year, including the month of such payment, and twelve (12) as its denominator. Until a new Estimate Statement is furnished (which Landlord shall have the right to deliver to Tenant at any time, provided no more than twice in any Lease Year), Tenant shall pay monthly, with the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated Direct Expenses set forth in the previous Estimate Statement delivered by Landlord to Tenant.
4.5
Taxes and Other Charges for Which Tenant Is Directly Responsible. Tenant shall be liable for and shall pay ten (10) days before delinquency, taxes levied against Tenant’s equipment, furniture, fixtures and any other personal property located in or about the Premises. If any such taxes on Tenant’s equipment, furniture, fixtures and any other personal property are levied against Landlord or Landlord’s property or if the assessed value of Landlord’s property is increased by the inclusion therein of a value placed upon such equipment, furniture, fixtures or any other personal property and if Landlord pays the taxes based upon such increased assessment, which Landlord shall have the right to do regardless of the validity thereof but only under proper protest if requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so levied against Landlord or the proportion of such taxes resulting from such increase in the assessment, as the case may be.

- 22 -

4.6
Landlord’s Books and Records. Upon Tenant’s written request given not more than six (6) months after Tenant’s receipt of a Statement for a particular Expense Year, and provided that Tenant is not then in default under this Lease beyond the applicable notice and cure period provided in this Lease, specifically including, but not limited to, a default beyond the applicable notice and cure period provided in this Lease with respect to the timely payment of Additional Rent (whether or not the same is the subject of the audit contemplated herein), Landlord shall furnish Tenant with such reasonable supporting documentation in connection with said Direct Expenses as Tenant may reasonably request. Landlord shall provide said documentation to Tenant within sixty (60) days after Tenant’s written request therefor. Within sixty (60) days after receipt of said documentation from Landlord (the “Audit Period”), if Tenant disputes the amount of Direct Expenses set forth in the Statement, an independent certified public accountant (which accountant (A) is a member of a nationally or regionally recognized certified public accounting firm which has previous experience in auditing financial operating records of landlords of office buildings, (B) is not working on a contingency fee basis [i.e., Tenant must be billed based on the actual time and materials that are incurred by the certified public accounting firm in the performance of the audit], and (C) shall not currently be providing or provide in the future accounting and/or lease administration services to another tenant in the Building and/or the Project in connection with a review or audit by such other tenant of the expense records being audited by Tenant), designated and paid for by Tenant, may, after reasonable notice to Landlord and at reasonable times, audit Landlord’s records with respect to the Statement at Landlord’s corporate offices, provided that (i) Tenant is not then in default under this Lease (beyond the applicable notice and cure periods provided under this Lease), (ii) Tenant has paid all amounts required to be paid under the applicable Estimate Statement and Statement, and (iii) a copy of the audit agreement between Tenant and its particular certified public accounting firm has been delivered to Landlord prior to the commencement of the audit. In connection with such audit, Tenant and Tenant’s certified public accounting firm must agree in advance to follow Landlord’s reasonable rules and procedures regarding an audit of the aforementioned Landlord records, and shall execute a commercially reasonable confidentiality agreement regarding such audit. Any audit report prepared by Tenant’s certified public accounting firm shall be delivered concurrently to Landlord and Tenant within the Audit Period. Tenant’s failure to audit the amount of Direct Expenses set forth in any Statement within the Audit Period shall be deemed to be Tenant’s approval of such Statement and Tenant, thereafter, waives the right or ability to audit the amounts set forth in such Statement. If after such audit, Tenant still disputes such Direct Expenses, an audit to determine the proper amount shall be made, at Tenant’s expense, by an independent certified public accountant (the “Accountant”) selected by Landlord and subject to Tenant’s reasonable approval; provided that if such audit by the Accountant proves that Direct Expenses set forth in the particular Statement were overstated by more than five percent (5%), then the cost of the Accountant, the cost of Tenant’s accounting, and the cost of such audit (and the actual and reasonable out-of-pocket cost of Tenant’s audit and auditor, not to exceed $10,000.00) shall be paid for by Landlord. Tenant hereby acknowledges that Tenant’s sole right to audit Landlord’s records and to contest the amount of Direct Expenses payable by Tenant shall be as set forth in this Section 4.6, and Tenant hereby waives any and all other rights pursuant to applicable law to audit such records and/or to contest the amount of Direct Expenses payable by Tenant.

- 23 -

5.
USE OF PREMISES.
5.1
Permitted Use. Tenant shall use the Premises solely for the Permitted Use set forth in Section 7 of the Summary and Tenant shall not use or permit the Premises or the Project to be used for any other purpose or purposes whatsoever without the prior written consent of Landlord, which may be withheld in Landlord’s sole discretion.
5.2
Prohibited Uses. Tenant further covenants and agrees that Tenant shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose contrary to the provisions of the Rules and Regulations set forth in Exhibit D, attached hereto, or any Underlying Documents, and Tenant shall comply with, and Tenant’s rights and obligations under this Lease and Tenant’s use of the Premises shall be subject and subordinate to, all recorded easements, covenants, conditions, and restrictions now or hereafter affecting the Project; provided, however, that in no event shall any Underlying Documents interfere with or adversely affect, other than in a non-material manner, Tenant’s use of the Premises for the Permitted Use (or, subject to the terms of Section 1.1.3, above, access to or from the Premises or parking for the Premises or any of Tenant’s rights under this Lease). In addition, Tenant further covenants and agrees that Tenant shall not use, or suffer or permit any person or persons to use, the Premises or any part thereof for any use or purpose in violation of the laws of the United States of America, the State of California, the ordinances, regulations or requirements of the local municipal or county governing body or other lawful authorities having jurisdiction over the Project, including, without limitation, any such laws, ordinances, regulations or requirements relating to hazardous materials or substances, as those terms are defined by Applicable Laws now or hereafter in effect. Tenant shall not do or permit anything to be done in or about the Premises which will in any way materially obstruct or interfere with the rights of other tenants or occupants of the Project, or injure or annoy them or use or allow the Premises to be used for any unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises.
5.3
Hazardous Materials.
5.3.1
Tenant’s Obligations.
5.3.1.1
Prohibitions. As a material inducement to Landlord to enter into this Lease with Tenant, Tenant has fully and accurately completed Landlord’s Pre-Leasing Environmental Exposure Questionnaire (the “Environmental Questionnaire”), which is attached as Exhibit F. Tenant agrees that except for those chemicals or materials, and their respective quantities, specifically listed on the Environmental Questionnaire, neither Tenant nor Tenant’s employees, contractors and subcontractors of any tier, entities with a contractual relationship with Tenant (other than Landlord), or any entity acting as an agent or sub-agent of Tenant (collectively, “Tenant’s Agents”) will produce, use, store or generate any “Hazardous Materials,” as that term is defined below, on, under or about the Premises, nor cause or permit any Hazardous Material to be brought upon, placed, stored, manufactured, generated, blended, handled, recycled, used or “Released,” as that term is defined below, on, in, under or about the Premises. If any information provided to Landlord by Tenant on the Environmental Questionnaire, or otherwise relating to information concerning Hazardous Materials is false, incomplete, or misleading in any material respect, the same shall be deemed a default by Tenant under this Lease. Tenant shall deliver to Landlord an updated Environmental Questionnaire at least once a year. Landlord’s prior written

- 24 -

consent shall be required to any Hazardous Materials use for the Premises not described on the initial Environmental Questionnaire, such consent to be withheld in Landlord’s sole discretion. Tenant shall not install or permit any underground storage tank on the Premises. For purposes of this Lease, “Hazardous Materials” means all flammable explosives, petroleum and petroleum products, waste oil, radon, radioactive materials, toxic pollutants, asbestos, polychlorinated biphenyls (“PCBs”), medical waste, chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances or related materials, including without limitation any chemical, element, compound, mixture, solution, substance, object, waste or any combination thereof, which is or may be hazardous to human health, safety or to the environment due to its radioactivity, ignitability, corrosiveness, reactivity, explosiveness, toxicity, carcinogenicity, infectiousness or other harmful or potentially harmful properties or effects, or defined as, regulated as or included in, the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” or “toxic substances” under any Environmental Laws. The term “Hazardous Materials” for purposes of this Lease shall also include any mold, fungus or spores, whether or not the same is defined, listed, or otherwise classified as a “hazardous material” under any Environmental Laws, if such mold, fungus or spores may pose a risk to human health or the environment or negatively impact the value of the Premises. For purposes of this Lease, “Release” or “Released” or “Releases” shall mean any release, deposit, discharge, emission, leaking, spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping, dumping, disposing, or other movement of Hazardous Materials into the environment.

5.3.1.2
Notices to Landlord. Tenant shall notify Landlord in writing as soon as possible but in no event later than five (5) days after (i) Tenant becomes aware of the occurrence of any actual, alleged or threatened Release of any Hazardous Material in, on, under, from, about or in the vicinity of the Premises (whether past or present), regardless of the source or quantity of any such Release, or (ii) Tenant becomes aware of any regulatory actions, inquiries, inspections, investigations, directives, or any cleanup, compliance, enforcement or abatement proceedings (including any threatened or contemplated investigations or proceedings) relating to or potentially affecting the Premises, or (iii) Tenant becomes aware of any claims by any person or entity relating to any Hazardous Materials in, on, under, from, about or in the vicinity of the Premises, whether relating to damage, contribution, cost recovery, compensation, loss or injury. Collectively, the matters set forth in clauses (i), (ii) and (iii) above are hereinafter referred to as “Hazardous Materials Claims”. Tenant shall promptly forward to Landlord copies of all orders, notices, permits, applications and other communications and reports in connection with any Hazardous Materials Claims. Additionally, Tenant shall promptly advise Landlord in writing of Tenant’s discovery of any occurrence or condition on, in, under or about the Premises that could subject Tenant or Landlord to any liability, or restrictions on ownership, occupancy, transferability or use of the Premises under any “Environmental Laws,” as that term is defined below. Tenant shall not enter into any legal proceeding or other action, settlement, consent decree or other compromise with respect to any Hazardous Materials Claims without first notifying Landlord of Tenant’s intention to do so and affording Landlord the opportunity to join and participate, as a party if Landlord so elects, in such proceedings and in no event shall Tenant enter into any agreements which are binding on Landlord or the Premises without Landlord’s prior written consent. Landlord shall have the right to appear at and participate in, any and all legal or other administrative proceedings concerning any Hazardous Materials Claim. For purposes of this Lease, “Environmental Laws” means all applicable present and future laws relating to the protection of human health, safety, wildlife or the environment, including, without limitation, (i)

- 25 -

all requirements pertaining to reporting, licensing, permitting, investigation and/or remediation of emissions, discharges, Releases, or threatened Releases of Hazardous Materials, whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of Hazardous Materials; and (ii) all requirements pertaining to the health and safety of employees or the public. Environmental Laws include, but are not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 USC § 9601, et seq., the Hazardous Materials Transportation Authorization Act of 1994, 49 USC § 5101, et seq., the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976, and Hazardous and Solid Waste Amendments of 1984, 42 USC § 6901, et seq., the Federal Water Pollution Control Act, as amended by the Clean Water Act of 1977, 33 USC § 1251, et seq., the Clean Air Act of 1966, 42 USC § 7401, et seq., the Toxic Substances Control Act of 1976, 15 USC § 2601, et seq., the Safe Drinking Water Act of 1974, 42 USC §§ 300f through 300j, the Occupational Safety and Health Act of 1970, as amended, 29 USC § 651 et seq., the Oil Pollution Act of 1990, 33 USC § 2701 et seq., the Emergency Planning and Community Right-To-Know Act of 1986, 42 USC § 11001 et seq., the National Environmental Policy Act of 1969, 42 USC § 4321 et seq., the Federal Insecticide, Fungicide and Rodenticide Act of 1947, 7 USC § 136 et seq., California Carpenter-Presley-Tanner Hazardous Substance Account Act, California Health & Safety Code §§ 25300 et seq., Hazardous Materials Release Response Plans and Inventory Act, California Health & Safety Code, §§ 25500 et seq., Underground Storage of Hazardous Substances provisions, California Health & Safety Code, §§ 25280 et seq., California Hazardous Waste Control Law, California Health & Safety Code, §§ 25100 et seq., and any other state or local law counterparts, as amended, as such applicable laws, are in effect as of the Lease Commencement Date, or thereafter adopted, published, or promulgated.

5.3.1.3
Releases of Hazardous Materials. Except to the extent caused by other tenants of the Project, Landlord or any Landlord Parties (as defined below), if any Release of any Hazardous Material in, on, under, from or about the Premises shall occur at any time during the Lease Term and/or if any other Hazardous Material condition exists at the Premises that first arises after the Lease Commencement Date that requires response actions of any kind, then in addition to notifying Landlord as specified above, Tenant, at its own sole cost and expense, shall (i) immediately comply with any and all reporting requirements imposed pursuant to any and all Environmental Laws, (ii) provide a written certification to Landlord indicating that Tenant has complied with all applicable reporting requirements, (iii) take any and all necessary investigation, corrective and remedial action in accordance with any and all applicable Environmental Laws, utilizing an environmental consultant approved by Landlord, all in accordance with the provisions and requirements of this Section 5.3, including, without limitation, Section 5.3.4, and (iv) take any such additional investigative, remedial and corrective actions as Landlord shall in its reasonable discretion deem necessary such that the Premises are remediated to the condition existing prior to such Release.
5.3.1.4
Indemnification.
5.3.1.4.1
In General. Without limiting in any way Tenant’s obligations under any other provision of this Lease, Tenant shall be solely responsible for and shall protect, defend, indemnify and hold the Landlord Parties harmless from and against any and all claims, judgments, losses, damages, costs, expenses, penalties, enforcement actions, taxes, fines,

- 26 -

remedial actions, liabilities (including, without limitation, actual attorneys’ fees, litigation, arbitration and administrative proceeding costs, expert and consultant fees and laboratory costs) including, without limitation, consequential damages and sums paid in settlement of claims, which arise during or after the Lease Term, whether foreseeable or unforeseeable, that arise during or after the Lease Term in whole or in part, foreseeable or unforeseeable, directly or indirectly arising out of or attributable to the presence, use, generation, manufacture, treatment, handling, refining, production, processing, storage, Release or presence of Hazardous Materials in, on, under or about the Premises by Tenant or Tenant’s Agents.

5.3.1.4.2
Limitations. Notwithstanding anything in Section 5.3.1.4, above, to the contrary, Tenant’s indemnity of Landlord as set forth in Section 5.3.1.4, above, shall not be applicable to claims based upon Hazardous Materials which are brought onto the Project, permitted to be brought onto the Project, or Released on the Project, by other tenants of the Project, Landlord or any Landlord Parties (as defined below), or based upon Hazardous Materials which may exist in, on or about the Premises as of the date of this Lease (“Existing Hazardous Materials”), except to the extent that Tenant’s construction activities and/or Tenant’s other acts or omissions (including Tenant’s failure to remove, remediate or otherwise treat or “Clean-up,” as that term is defined in Section 5.3.4, below, the subject Existing Hazardous Materials during the tenancy of the Premises) caused or exacerbated the subject claim.
5.3.1.5
Compliance with Environmental Laws. Without limiting the generality of Tenant’s obligation to comply with applicable laws as otherwise provided in this Lease, Tenant shall, at its sole cost and expense, comply with all Environmental Laws. Tenant shall obtain and maintain any and all necessary permits, licenses, certifications and approvals appropriate or required for the use, handling, storage, and disposal of any Hazardous Materials used, stored, generated, transported, handled, blended, or recycled by Tenant on the Premises. Landlord shall have a continuing right, without obligation, to require Tenant to obtain, and to review and inspect any and all such permits, licenses, certifications and approvals, together with copies of any and all Hazardous Materials management plans and programs, any and all Hazardous Materials risk management and pollution prevention programs, and any and all Hazardous Materials emergency response and employee training programs respecting Tenant’s use of Hazardous Materials. Upon request of Landlord, Tenant shall deliver to Landlord a narrative description explaining the nature and scope of Tenant’s activities involving Hazardous Materials and showing to Landlord’s satisfaction compliance with all Environmental Laws and the terms of this Lease.
5.3.2
Assurance of Performance.
5.3.2.1
Environmental Assessments In General. Landlord may, but shall not be required to, engage from time to time such contractors as Landlord determines to be appropriate to perform environmental assessments of a scope reasonably determined by Landlord (an “Environmental Assessment”) to ensure Tenant’s compliance with the requirements of this Lease with respect to Hazardous Materials.
5.3.2.2
Costs of Environmental Assessments. All costs and expenses incurred by Landlord in connection with any such Environmental Assessment initially shall be paid by Landlord; provided that if any such Environmental Assessment shows that Tenant has failed to comply with the provisions of this Section 5.3, then all of the costs and expenses of such Environmental Assessment shall be reimbursed by Tenant as Additional Rent within ten (10) days after receipt of written demand therefor.

- 27 -

5.3.3
Tenant’s Obligations upon Surrender. At the expiration or earlier termination of the Lease Term, Tenant, at Tenant’s sole cost and expense, shall: (i) cause an Environmental Assessment of the Premises to be conducted in accordance with Section 15.3; (ii) cause all Hazardous Materials to be removed from the Premises and disposed of in accordance with all Environmental Laws and as necessary to allow the Premises to be used for any purpose; and (iii) cause to be removed all containers installed or used by Tenant or Tenant’s Agents to store any Hazardous Materials on the Premises, and cause to be repaired any damage to the Premises caused by such removal.
5.3.4
Clean-up.
5.3.4.1
Environmental Reports; Clean-Up. If any written report, including any report containing results of any Environmental Assessment (an “Environmental Report”) shall indicate (i) the presence of any Hazardous Materials as to which Tenant has a removal or remediation obligation under this Section 5.3, and (ii) that as a result of same, the investigation, characterization, monitoring, assessment, repair, closure, remediation, removal, or other clean-up (the “Clean-up”) of any Hazardous Materials is required, Tenant shall immediately prepare and submit to Landlord within thirty (30) days after receipt of the Environmental Report a comprehensive plan, subject to Landlord’s written approval, specifying the actions to be taken by Tenant to perform the Clean-up so that the Premises are restored to the conditions required by this Lease. Upon Landlord’s approval of the Clean-up plan, Tenant shall, at Tenant’s sole cost and expense, without limitation on any rights and remedies of Landlord under this Lease, immediately implement such plan with a consultant reasonably acceptable to Landlord and proceed to Clean-Up Hazardous Materials in accordance with all applicable laws and as required by such plan and this Lease. If, within thirty (30) days after receiving a copy of such Environmental Report, Tenant fails either (a) to complete such Cleanup, or (b) with respect to any Clean-up that cannot be completed within such thirty-day period, fails to proceed with diligence to prepare the Clean-up plan and complete the Clean-up as promptly as practicable, then Landlord shall have the right, but not the obligation, and without waiving any other rights under this Lease, to carry out any Clean-up recommended by the Environmental Report or required by any governmental authority having jurisdiction over the Premises, and recover all of the costs and expenses thereof from Tenant as Additional Rent, payable within ten (10) days after receipt of written demand therefor.
5.3.4.2
No Rent Abatement. Tenant shall continue to pay all Rent due or accruing under this Lease during any Clean-up, and shall not be entitled to any reduction, offset or deferral of any Base Rent or Additional Rent due or accruing under this Lease during any such Clean-up.
5.3.4.3
Surrender of Premises. Tenant shall complete any Clean-up prior to surrender of the Premises upon the expiration or earlier termination of this Lease. Tenant shall obtain and deliver to Landlord a letter or other written determination from the overseeing governmental authority confirming that the Clean-up has been completed in accordance with all requirements of such governmental authority and that no further response action of any kind is required for the unrestricted use of the Premises (“Closure Letter”). Upon the expiration or earlier termination of this Lease, Tenant shall also be obligated to close all permits obtained in connection with Hazardous Materials in accordance with applicable laws.

- 28 -

5.3.4.4
Failure to Timely Clean-Up. Should any Clean-up for which Tenant is responsible not be completed, or should Tenant not receive the Closure Letter and any governmental approvals required under Environmental Laws in conjunction with such Clean-up prior to the expiration or earlier termination of this Lease, then Tenant shall be liable to Landlord as a holdover tenant (as more particularly provided in Article 16) until Tenant has fully complied with its obligations under this Section 5.3.
5.3.5
Confidentiality. Unless compelled to do so by applicable law, Tenant agrees that Tenant shall not disclose, discuss, disseminate or copy any information, data, findings, communications, conclusions and reports regarding the environmental condition of the Premises to any Person (other than Tenant’s consultants, attorneys, property managers and employees that have a need to know such information), including any governmental authority, without the prior written consent of Landlord. In the event Tenant reasonably believes that disclosure is compelled by applicable law, it shall provide Landlord ten (10) days’ advance notice of disclosure of confidential information so that Landlord may attempt to obtain a protective order. Tenant may additionally release such information to attorneys, accountants and other advisors, and to bona fide prospective purchasers or lenders, subject to any such parties’ written agreement to be bound by the terms of this Section 5.3.
5.3.6
Copies of Environmental Reports. Within thirty (30) days of receipt thereof, Tenant shall provide Landlord with a copy of any and all environmental assessments, audits, studies and reports regarding Tenant’s activities with respect to the Premises, or ground water beneath the Land, or the environmental condition or Clean-up thereof. Tenant shall be obligated to provide Landlord with a copy of such materials without regard to whether such materials are generated by Tenant or prepared for Tenant, or how Tenant comes into possession of such materials.
5.3.7
Intentionally Omitted.
5.3.8
Signs, Response Plans, Etc. Tenant shall be responsible for posting on the Premises any signs required under applicable Environmental Laws. Tenant shall also complete and file any business response plans or inventories required by any applicable laws. Tenant shall concurrently file a copy of any such business response plan or inventory with Landlord.
5.3.9
Survival. Each covenant, agreement, representation, warranty and indemnification made by Tenant set forth in this Section 5.3 shall survive the expiration or earlier termination of this Lease and shall remain effective until all of Tenant’s obligations under this Section 5.3 have been completely performed and satisfied.

- 29 -

6.
SERVICES AND UTILITIES.
6.1
In General. Landlord shall provide the following services on all days (unless otherwise stated below) during the Lease Term.
6.1.1
Subject to limitations imposed by all governmental rules, regulations and guidelines applicable thereto, Landlord shall provide heating and air conditioning (“HVAC”) from 8:00 A.M. to 6:00 P.M. Monday through Friday, and on Saturdays from 9:00 A.M. to 1:00 P.M, when necessary for normal comfort for normal office use in the Premises from (collectively, the “Building Hours”), except for the date of observation of New Year’s Day, Independence Day, Labor Day, Memorial Day, Thanksgiving Day, Christmas Day and, at Landlord’s discretion, other locally or nationally recognized holidays which are observed by other buildings comparable to and in the vicinity of the Building (collectively, the “Holidays”).
6.1.2
Landlord shall provide city water from the regular Building outlets for drinking, kitchen, lavatory and toilet purposes in the Building Common Areas and the Premises.
6.1.3
Electricity is separately metered (or sub-metered) at the Premises and shall be paid directly by Tenant to the applicable utility provider. If electricity is separately sub-metered (as opposed to separately metered), then Tenant shall pay to Landlord the cost of such utilities based on such sub-meter, including an administrative charge for Landlord’s supervision and reimbursement for any penalties for usage or other surcharges imposed by any utility company. Within twenty (20) days after receipt of Landlord’s statement of apportionment or statement setting forth the charges payable by Tenant, Tenant shall pay to Landlord, as Additional Rent, the cost of such electrical services so apportioned or so provided by Landlord. Notwithstanding anything to the contrary set forth herein, to the extent the Premises generates electricity demand on a shared resource (e.g. electricity for the central plant), the cost of such electricity shall be allocated to Tenant on a pro rata basis or other reasonable basis consistent with commercial reasonable property management practices.
6.1.4
Landlord shall not provide janitorial services for the Premises. Tenant shall be solely responsible for performing all janitorial services and other cleaning of the Premises, all in compliance with applicable laws. The janitorial and cleaning of the Premises shall be adequate to maintain the Premises in a manner consistent with First-Class Life Sciences Projects.
6.1.5
Landlord shall provide reasonable access control services for the Building; provided that Landlord shall in no event be liable for personal injury or property damage for any error with regard to the admission to, or exclusion from, the Building or Project of any person.
6.1.6
Landlord shall cause gas (as provided by the applicable gas utility) to be provided to the Premises.

Tenant shall cooperate fully with Landlord at all times and abide by all regulations and requirements that Landlord may reasonably prescribe for the proper functioning and protection of the HVAC, electrical, mechanical and plumbing systems.

6.2
Overstandard Tenant Use. Tenant shall not, without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed, use heat-generating machines, machines other than normal fractional horsepower office machines, or equipment or lighting other than Building standard lights in the Premises, which may affect the

- 30 -

temperature otherwise maintained by the air conditioning system or increase the water normally furnished for the Premises by Landlord pursuant to the terms of Section 6.1 of this Lease. If Tenant uses water, heat or air conditioning in excess of that supplied by Landlord pursuant to Section 6.1 of this Lease, Tenant shall pay to Landlord, upon billing, Landlord’s actual cost of providing such excess consumption, without profit or overhead, but including the cost of the installation, operation, and maintenance of equipment which is installed in order to supply such excess consumption, and the cost of the increased wear and tear on existing equipment caused by such excess consumption; and Landlord may install devices to separately meter (or sub-meter) any increased use and in such event Tenant shall pay the increased cost directly to Landlord, on demand, at the rates charged by the public utility company furnishing the same, including the cost of such additional metering (or sub-metering) devices. Tenant’s use of electricity shall never exceed the capacity of the feeders to the Project or the risers or wiring installation If Tenant desires to use heat, ventilation or air conditioning during hours other than those for which Landlord is obligated to supply such utilities pursuant to the terms of Section 6.1 of this Lease, Tenant shall give Landlord such prior notice, if any, as Landlord shall from time to time establish as appropriate (provided that in no event shall Tenant be required to give more than two (2) hours’ prior written notice in connection therewith), of Tenant’s desired use in order to supply such utilities, and Landlord shall supply such utilities to Tenant at such hourly cost to Tenant (which shall be treated as Additional Rent) as Landlord shall from time to time calculate to reimburse Landlord for its actual cost of supplying such utilities, as set forth in this Section 6.2 above.

6.3
Interruption of Use. Tenant agrees that Landlord shall not be liable for damages, by abatement of Rent or otherwise, for failure to furnish or delay in furnishing any service (including telephone and telecommunication services), or for any diminution in the quality or quantity thereof, when such failure or delay or diminution is occasioned, in whole or in part, by breakage, repairs, replacements, or improvements, by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building or Project after reasonable effort to do so, by any riot or other dangerous condition, emergency, accident or casualty whatsoever, by act or default of Tenant or other parties, or by any other cause; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant’s use and possession of the Premises or relieve Tenant from paying Rent or performing any of its obligations under this Lease. Furthermore, Landlord shall not be liable under any circumstances for a loss of, or injury to, property or for injury to, or interference with, Tenant’s business, including, without limitation, loss of profits, however occurring, through or in connection with or incidental to a failure to furnish any of the services or utilities as set forth in this Article 6.
7.
REPAIRS. Subject to the provisions of Article 11 and to Landlord’s repair obligations set forth below in this Article 7, Tenant shall, at Tenant’s own expense, keep the Premises, including all improvements, fixtures, furnishings, and systems and equipment therein (including, without limitation, plumbing fixtures and equipment such as dishwashers, garbage disposals, and insta-hot dispensers), in good order, repair and condition at all times during the Lease Term. In addition, Tenant shall, at Tenant’s own expense, but subject to the terms and conditions of Article 8 below, and within any reasonable period of time specified by Landlord, promptly and adequately repair all damage to the Premises and replace or repair all damaged, broken, or worn fixtures and appurtenances, except for damage caused by ordinary wear and tear or beyond the reasonable control of Tenant; provided however, that, at Landlord’s option, or if Tenant fails to make such repairs, Landlord may, but need not, upon at least five (5) business days prior written notice to

- 31 -

Tenant, (except in the event of an emergency), make such repairs and replacements, and Tenant shall pay Landlord the cost thereof, including a percentage of the cost thereof (to be uniformly established for the Building and/or the Project) sufficient to reimburse Landlord for all overhead, general conditions, fees and other costs or expenses arising from Landlord’s involvement with such repairs and replacements forthwith upon being billed for same; provided further that, that if such repairs are due to the negligence or willful misconduct of Landlord, then Tenant shall nevertheless make such repairs at Landlord’s expense, or, if covered by Tenant’s insurance, then Landlord shall only be obligated to pay any deductible in connection therewith. Landlord agrees that at all times it will maintain the structural portions of the Building, including the foundation, floor/ceiling slabs, roof, curtain walls, exterior walls, exterior glass and mullions, columns, beams, shafts (including elevator shafts), stairs, stairwells, elevator cabs, mechanical, electrical and telephone closets and the Common Areas (collectively, the “Building Structure”) and the base Building mechanical, electrical, life safety, plumbing, sprinkler and HVAC systems installed or furnished by Landlord which serve the Premises (collectively, the “Building Systems”) in good order, condition and repair. The term “Base Building” shall mean the Building Structure and the Building Systems. Notwithstanding the foregoing, Landlord shall, at Landlord’s sole cost and expense, repair the Base Building, except to the extent that such repairs are required due to the negligence or willful misconduct of Tenant; provided, however, that if such repairs are due to the negligence or willful misconduct of Tenant, Landlord shall nevertheless make such repairs at Tenant’s expense, or, if covered by Landlord’s insurance, Tenant shall only be obligated to pay any deductible in connection therewith. Subject to the terms of Section 19.5.2 and Article 27, below, Landlord may, but shall not be required to, enter the Premises at all reasonable times to make such repairs, alterations, improvements or additions to the Premises or to the Project or to any equipment located in the Project as Landlord shall desire or deem necessary or as Landlord may be required to do by governmental or quasi-governmental authority or court order or decree. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil Code or under any similar law, statute, or ordinance now or hereafter in effect.

8.
ADDITIONS AND ALTERATIONS.
8.1
Landlord’s Consent to Alterations. Tenant may not make any improvements, alterations, additions or changes to the Premises or any mechanical, plumbing or HVAC facilities or systems pertaining to the Premises (collectively, the “Alterations”) without first procuring the prior written consent of Landlord to such Alterations, which consent shall be requested by Tenant not less than twenty-five (25) days prior to the commencement thereof, and which consent shall not be unreasonably withheld by Landlord, provided it shall be deemed reasonable for Landlord to withhold its consent to any Alteration which adversely affects the structural portions or the systems or equipment of the Building or is visible from the exterior of the Building. If Landlord fails to provide approve or disapprove of an Alteration within said twenty-five (25) day period, then Tenant may deliver a second request for approval at the expiration of said twenty-five (25) day period setting forth such failure containing the following sentence at the top of such notice in bold, capitalized font at least twelve (12) points in size: “LANDLORD’S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN LANDLORD’S DEEMED APPROVAL OF TENANT’S ALTERATION” (the “Reminder Notice”). Any such Reminder Notice shall include a complete copy of Tenant’s plans and specification for such Alteration. Landlord’s failure to provide approval or disapproval within five

- 32 -

(5) business days following Landlord’s receipt of a Reminder Notice shall conclusively be deemed approval of Tenant’s Alteration as presented. Notwithstanding the foregoing, Tenant shall be permitted to make Alterations following ten (10) business days’ notice to Landlord, but without Landlord’s prior consent, to the extent that such Alterations (i) do not adversely affect the building systems or equipment, (ii) are not visible from the exterior of the Building, and (iii) (A) are decorative only (e.g., installation of carpeting or painting of the Premises) or (B) cost less than $50,000.00 for a particular job of work. The construction of the initial improvements to the Premises shall be governed by the terms of the Tenant Work Letter and not the terms of this Article 8.

8.2
Manner of Construction. Landlord may impose, as a condition of its consent to any and all Alterations or repairs of the Premises or about the Premises, such requirements as Landlord in its reasonable discretion may deem desirable, including, but not limited to, the requirement that upon Landlord’s request, Tenant shall, at Tenant’s expense, remove such Alterations upon the expiration or any early termination of the Lease Term if such Alterations are Specialty Alterations (as that term is defined in Section 8.5 below). Tenant shall construct such Alterations and perform such repairs in a good and workmanlike manner, in conformance with any and all applicable federal, state, county or municipal laws, rules and regulations and pursuant to a valid building permit, issued by the city in which the Building is located (or other applicable governmental authority). Tenant shall not use (and upon notice from Landlord shall cease using) contractors, services, workmen, labor, materials or equipment that, in Landlord’s reasonable judgment, would disturb labor harmony with the workforce or trades engaged in performing other work, labor or services in or about the Building or the Common Areas. Upon completion of any Alterations (or repairs), Tenant shall deliver to Landlord final lien waivers from all contractors, subcontractors and materialmen who performed such work. In addition to Tenant’s obligations under Article 9 of this Lease, upon completion of any Alterations, Tenant agrees to cause a Notice of Completion to be recorded in the office of the Recorder of the County of San Diego in accordance with Section 8182 of the Civil Code of the State of California or any successor statute, and Tenant shall deliver to the Project construction manager a reproducible copy of the “as built” drawings of the Alterations as well as all permits, approvals and other documents issued by any governmental agency in connection with the Alterations.
8.3
Payment for Improvements. If Tenant orders any work directly from Landlord, Tenant shall pay to Landlord an amount equal to five percent (5%) of the cost of such work to compensate Landlord for all overhead, general conditions, fees and other costs and expenses arising from Landlord’s involvement with such work. If Tenant does not order any work directly from Landlord, Tenant shall reimburse Landlord for Landlord’s reasonable, actual, out-of-pocket costs and expenses actually incurred in connection with Landlord’s review of such work.
8.4
Construction Insurance. In addition to the requirements of Article 10 of this Lease, in the event that Tenant makes any Alterations, prior to the commencement of such Alterations, Tenant shall provide Landlord with evidence that Tenant carries “Builder’s All Risk” insurance in an amount reasonably approved by Landlord covering the construction of such Alterations, and such other insurance as Landlord may reasonably require, it being understood and agreed that all of such Alterations shall be insured by Tenant pursuant to Article 10 of this Lease immediately upon completion thereof. In addition, Tenant’s contractors and subcontractors shall be required to carry (i) Commercial General Liability Insurance in an amount reasonably approved

- 33 -

by Landlord, with Landlord, and, at Landlord’s option, Landlord’s property manager and project manager, as additional insureds in an amount reasonably approved by Landlord, and otherwise in accordance with the requirements of Article 10 of this Lease, and (ii) workers compensation insurance with a waiver of subrogation in favor of Landlord. Landlord may, if commercially reasonable under the circumstances, require Tenant to obtain a lien and completion bond or some alternate form of security satisfactory to Landlord in an amount sufficient to ensure the lien-free completion of such Alterations and naming Landlord as a co-obligee.

8.5
Landlord’s Property. All Alterations, improvements, fixtures, equipment and/or appurtenances which may be installed or placed in or about the Premises, from time to time, shall be at the sole cost of Tenant and shall be and become the property of Landlord and remain in place at the Premises following the expiration or earlier termination of this Lease, except that Tenant may remove any Alterations, improvements, fixtures and/or equipment which have not been paid for with any Tenant improvement allowance funds provided to Tenant by Landlord (including, without limitation, the Tenant Improvement Allowance (as that term is defined in Section 1.2 of the Work Letter), provided Tenant repairs any damage to the Premises and Building caused by such removal and returns the affected portion of the Premises to a building standard tenant improved condition. Notwithstanding the foregoing, Landlord may, by written notice to Tenant prior to the end of the Lease Term, or given following any earlier termination of this Lease, require Tenant, at Tenant’s expense, to remove any Alterations and/or improvements and/or systems and equipment within the Premises that are Specialty Alterations and to repair any damage to the Premises and Building caused by such removal and return the affected portion of the Premises to a building standard tenant improved condition as determined by Landlord; provided, however, that notwithstanding the foregoing, upon request by Tenant at the time of Tenant’s request for Landlord’s consent to any Alteration or improvement, Landlord shall notify Tenant whether any applicable Alteration or improvement that constitutes a Specialty Alteration will be required to be removed pursuant to the terms of this Section 8.5 (and, if following Tenant’s request Landlord fails to specify that any such Specialty Alteration will be subject to the removal requirement described herein, Landlord shall not have a subsequent right to designate such Specialty Alteration as subject to removal). If Tenant fails to complete such removal and/or to repair any damage caused by such removal and return the affected portion of the Premises to a building standard tenant improved condition as reasonably determined by Landlord, then Landlord may do so and may charge the cost thereof to Tenant. Tenant hereby protects, defends, indemnifies and holds Landlord harmless from any liability, cost, obligation, expense or claim of lien in any manner relating to the installation, placement, removal or financing of any such Alterations, improvements, fixtures and/or equipment in, on or about the Premises, which obligations of Tenant shall survive the expiration or earlier termination of this Lease. As used herein, “Specialty Alterations” shall mean any improvement that is not a normal and customary general office improvement, including, but not limited to, improvements which: (i) perforate, penetrate or require reinforcement of a floor slab (including, without limitation, interior stairwells or high-density filing or racking systems), (ii) consist of the installation of a raised flooring system, (iii) consist of the installation of a vault or other similar device or system intended to secure the Premises or a portion thereof in a manner that exceeds the level of security necessary for ordinary office space, (iv) involve material plumbing connections (such as, for example but not by way of limitation, kitchens (other than customary break-rooms with a refrigerator, sink and dishwasher), cafeteria, saunas, showers, and executive bathrooms outside of the Building core and/or special fire safety systems), (v) consist of the dedication of any material portion of the Premises to non-office usage (such as classrooms or

- 34 -

kitchens), or (vi) can be seen from outside the Premises. Landlord hereby acknowledges and agrees that the Tenant Improvements which (i) are a natural and logical extension of the improvement shown on the Space Plan (as that term is defined in of the Tenant Work Letter) and (ii) contain Building standard materials and finishes, shall not be deemed to be Specialty Alterations.

9.
COVENANT AGAINST LIENS. Tenant shall keep the Project and Premises free from any liens or encumbrances arising out of the work performed, materials furnished or obligations incurred by or on behalf of Tenant (which shall not include any work performed by Landlord whether on behalf of Landlord or otherwise), and shall protect, defend, indemnify and hold Landlord harmless from and against any claims, liabilities, judgments or costs (including, without limitation, reasonable attorneys’ fees and costs) arising out of same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days prior to the commencement of any such work on the Premises that is reasonably anticipated to costs in excess of $20,000.00 (or such additional time as may be necessary under applicable laws) to afford Landlord the opportunity of posting and recording appropriate notices of non-responsibility (to the extent applicable pursuant to then applicable laws). Tenant shall not cause or permit any lien of mechanics or materialmen or others to be placed against the Project, the Building or the Premises with respect to work or services claimed to have been performed for or materials claimed to have been furnished to Tenant, and, in case of any such lien attaching or notice of any lien, reserves the right to contest such lien, provided that Tenant shall, at its sole cost and expense, provide a bond in accordance with the California Civil Code Section 8424. If Tenant does not timely exercise its right to contest such lien, Tenant shall cause it to be immediately released and removed of record (by payment, statutory bond or other lawful means). If any such lien is not so released and removed (by payment, statutory bond or other lawful means) within ten (10) business days after notice of such lien is delivered by Landlord to Tenant, then Landlord may, at its option, take all action necessary to release and remove such lien, and all sums, costs and expenses, including reasonable attorneys’ fees and costs, incurred by Landlord in connection with such lien shall be deemed Additional Rent under this Lease and shall immediately be due and payable by Tenant. Nothing contained in this Lease shall authorize Tenant to do any act which shall subject Landlord’s title to the Building or Premises to any liens or encumbrances whether claimed by operation of law or express or implied contract. Any claim to a lien or encumbrance upon the Building or Premises arising in connection with any such work or respecting the Premises not performed by or at the request of Landlord shall be null and void, or at Landlord’s option shall attach only against Tenant’s interest in the Premises and shall in all respects be subordinate to Landlord’s title to the Project, Building and Premises.
10.
INSURANCE.
10.1
Indemnification and Waiver. Except to the extent arising from the negligence or willful misconduct of Landlord or the Landlord Parties, Tenant hereby assumes all risk of damage to property or injury to persons in, upon or about the Premises from any cause whatsoever and agrees that Landlord, its partners, subpartners and their respective officers, agents, servants, employees, lenders, any property manager and independent contractors (collectively, “Landlord Parties”) shall not be liable for, and are hereby released from any responsibility for, any damage either to person or property or resulting from the loss of use thereof, which damage is sustained by Tenant or by other persons claiming through Tenant. Tenant shall indemnify, defend, protect, and hold harmless the Landlord Parties from any and all claims, loss, cost, damage, injury, expense and liability (including without limitation court costs and reasonable attorneys’ fees) incurred in

- 35 -

connection with or arising from any cause in, on or about the Premises, any acts, omissions or negligence of Tenant or of any person claiming by, through or under Tenant, or of the contractors, agents, servants, employees, invitees, guests or licensees of Tenant or any such person, in, on or about the Project or any breach of the terms of this Lease, either prior to, during, or after the expiration of the Lease Term, provided that the terms of the foregoing indemnity shall not apply to the gross negligence or willful misconduct of Landlord or any Landlord Parties. Should Landlord be named as a defendant in any suit brought against Tenant in connection with or arising out of Tenant’s occupancy of the Premises, Tenant shall pay to Landlord its costs and expenses incurred in such suit, including without limitation, its actual professional fees such as reasonable appraisers’, accountants’ and attorneys’ fees. Landlord shall indemnify, defend, protect, and hold harmless Tenant, its partners, and their respective officers, agents, servants, employees, and independent contractors (collectively, “Tenant Parties”) from any and all loss, cost, damage, expense and liability (including without limitation reasonable attorneys’ fees) arising from the gross negligence or willful misconduct of Landlord in, on or about the Project, except to the extent caused by the negligence or willful misconduct of the Tenant Parties. Notwithstanding anything to the contrary set forth in this Lease, either party’s agreement to indemnify the other party as set forth in this Section 10.1 shall be ineffective to the extent the matters for which such party agreed to indemnify the other party are covered by insurance required to be carried by the non-indemnifying party pursuant to this Lease. Further, Tenant’s agreement to indemnify Landlord and Landlord’s agreement to indemnify Tenant pursuant to this Section 10.1 are not intended to and shall not relieve any insurance carrier of its obligations under policies required to be carried pursuant to the provisions of this Lease, to the extent such policies cover, or if carried, would have covered the matters, subject to the parties’ respective indemnification obligations; nor shall they supersede any inconsistent agreement of the parties set forth in any other provision of this Lease. The provisions of this Section 10.1 shall survive the expiration or sooner termination of this Lease with respect to any claims or liability arising in connection with any event occurring prior to such expiration or termination.

10.2
Tenant’s Compliance With Landlord’s Property Insurance. Landlord shall insure the Building during the Lease Term against loss or damage under an “all risk” property insurance policy. Such coverage shall be in such amounts, from such companies, and on such other terms and conditions, as Landlord may from time to time reasonably determine. Additionally, at the option of Landlord, such insurance coverage may include the risks of earthquakes and/or flood damage and additional hazards, a rental loss endorsement and one or more loss payee endorsements in favor of the holders of any mortgages or deeds of trust encumbering the interest of Landlord in the Building or the ground or underlying lessors of the Building, or any portion thereof. Tenant shall, at Tenant’s expense, comply with all insurance company requirements pertaining to the use of the Premises. If Tenant’s conduct or use of the Premises causes any increase in the premium for such insurance policies then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant’s expense, shall comply with all rules, orders, regulations or requirements of the American Insurance Association (formerly the National Board of Fire Underwriters) and with any similar body. Tenant shall also provide Landlord and Landlord’s insurer(s) with such information regarding the use of the Premises and any damage to the Premises as they may require in connection with the placement of insurance for the Premises or the adjusting of any losses to the Premises.

- 36 -

10.3
Tenant’s Insurance. Tenant shall maintain the following coverages in the following amounts.
10.3.1
Commercial General Liability Insurance on an occurrence form (provided that product liability insurance may be on a claims-made form) covering the insured against claims of bodily injury, personal injury and property damage (including loss of use thereof) arising out of Tenant’s operations, and contractual liabilities including a contractual coverage, and including products and completed operations coverage, for limits of liability of not less than:

Bodily Injury and Property Damage Liability | $5,000,000 each occurrence $5,000,000 annual aggregate
Personal Injury Liability | $3,000,000 each occurrence $3,000,000 annual aggregate

10.3.2
Property Insurance covering (i) all office furniture, business and trade fixtures, office equipment, free-standing cabinet work, movable partitions, merchandise and all other items of Tenant’s property on the Premises installed by, for, or at the expense of Tenant, (ii) the “Tenant Improvements,” as that term is defined in the Tenant Work Letter, and any other improvements which exist in the Premises as of the Lease Commencement Date (excluding the Base Building) (the “Original Improvements”), and (iii) all other improvements, alterations and additions to the Premises. Such insurance shall be written on an “all risks” of physical loss or damage basis, for the full replacement cost value (subject to reasonable deductible amounts) new without deduction for depreciation of the covered items and in amounts that meet any co-insurance clauses of the policies of insurance and shall include coverage for damage or other loss caused by fire or other peril including, but not limited to, vandalism and malicious mischief, theft, water damage of any type, including sprinkler leakage, bursting or stoppage of pipes, and explosion; provided that in no event shall such insurance be required to include coverage for damage or other loss caused by flood.
10.3.3
Business Income Interruption for one (1) year plus Extra Expense insurance in such amounts as will reimburse Tenant for actual direct or indirect loss of earnings attributable to the risks outlined in Section 10.3.2 above.
10.3.4
Worker’s Compensation and Employer’s Liability or other similar insurance pursuant to all applicable state and local statutes and regulations. The policy shall include a waiver of subrogation in favor of Landlord, its employees, Lenders and any property manager or partners.
10.4
Form of Policies. The minimum limits of policies of insurance required of Tenant under this Lease shall in no event limit the liability of Tenant under this Lease. Such insurance shall (i) name Landlord, its subsidiaries and affiliates, its property manager (if any) and any other party the Landlord so specifies, as an additional insured or loss payee, as applicable, including Landlord’s managing agent, if any; (ii) be issued by an insurance company having a rating of not less than A:IX in Best’s Insurance Guide or which is otherwise acceptable to Landlord and licensed to do business in the State of California; (iv) be primary insurance as to all claims thereunder and provide that any insurance carried by Landlord is excess and is non-contributing with any insurance required of Tenant; (v) be in form and content reasonably acceptable to Landlord;

- 37 -

and (vi) provide that said insurance shall not be canceled or coverage changed unless thirty (30) days’ prior written notice shall have been given to Landlord and any mortgagee of Landlord (unless such cancellation is the result of non-payment of premiums). Tenant shall deliver said policy or policies or certificates thereof to Landlord on or before the Lease Commencement Date and at least ten (10) days before the expiration dates thereof. In the event Tenant shall fail to procure such insurance, or to deliver such policies or certificate, Landlord may, at its option, procure such policies for the account of Tenant, and the cost thereof shall be paid to Landlord within five (5) days after delivery to Tenant of bills therefor.

10.5
Subrogation. Landlord and Tenant hereby agree to look solely to, and seek recovery only from, their respective insurance carriers in the event of a property or business interruption loss to the extent that such coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims against each other for such losses, and waive all rights of subrogation of their respective insurers, provided such waiver of subrogation shall not affect the right to the insured to recover thereunder. The parties agree that their respective insurance policies do now, or shall, contain the waiver of subrogation.
10.6
Additional Insurance Obligations. Tenant shall carry and maintain during the entire Lease Term, at Tenant’s sole cost and expense, increased amounts of the insurance required to be carried by Tenant pursuant to this Article 10 and such other reasonable types of insurance coverage and in such reasonable amounts covering the Premises and Tenant’s operations therein, as may be reasonably requested by Landlord or Landlord’s lender, but in no event in excess of the amounts and types of insurance then being required by landlords of buildings comparable to and in the vicinity of the Building.
11.
DAMAGE AND DESTRUCTION.
11.1
Repair of Damage to Premises by Landlord. Tenant shall promptly notify Landlord of any damage to the Premises resulting from fire or any other casualty. If the Premises or any Common Areas serving or providing access to the Premises shall be damaged by fire or other casualty, Landlord shall promptly and diligently, subject to reasonable delays for insurance adjustment or other matters beyond Landlord’s reasonable control, and subject to all other terms of this Article 11, restore the Base Building and such Common Areas, and the Tenant Improvements, Original Improvements and Alterations made to the Premises by Tenant. Such restoration shall be to substantially the same condition of the Base Building and the Common Areas, the Tenant Improvements, Original Improvements and Alterations made to the Premises by Tenant prior to the casualty, except for modifications required by zoning and building codes and other laws or any other commercially reasonable modifications to the Common Areas deemed desirable by Landlord, which are consistent with the character of the Project, provided that access to the Premises shall not be unreasonably impaired and provided that the number of and general location of parking for Tenant’s benefit is not altered. Upon the occurrence of any damage to the Premises, upon notice (the “Landlord Repair Notice”) to Tenant from Landlord, Tenant shall assign to Landlord (or to any party designated by Landlord) all insurance proceeds payable to Tenant under Tenant’s insurance required under Section 10.3 of this Lease, and Landlord shall repair any injury or damage to the Tenant Improvements and the Original Improvements installed in the Premises and shall return such Tenant Improvements and Original Improvements to their original condition; provided that if the cost of such repair by Landlord exceeds the amount of

- 38 -

insurance proceeds received by Landlord from Tenant’s insurance carrier (including by taking into account any deductible or self-insured retention), as assigned by Tenant, the cost of such repairs shall be paid by Tenant to Landlord prior to Landlord’s commencement of repair of the damage. Tenant shall in addition cooperate with requests for information regarding any repairs from Landlord’s insurer(s) by providing the requested information within ten (10) days after Tenant receives the request. Landlord shall not be liable for any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting in any way from such damage or the repair thereof; provided however, that if such fire or other casualty shall have damaged the Premises or Common Areas necessary to Tenant’s occupancy, and any portion of the Premises are not occupied by Tenant as a result thereof, then during the time and to the extent the Premises are unfit for occupancy and not occupied by Tenant, the Rent shall be abated in proportion to the ratio that the amount of rentable square feet of the Premises which is unfit for occupancy for the purposes permitted under this Lease bears to the total rentable square feet of the Premises.

11.2
Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1 of this Lease, Landlord may elect not to rebuild and/or restore the Premises, Building and/or Project, and instead terminate this Lease, by notifying Tenant in writing of such termination within sixty (60) days after the date of discovery of the damage, such notice to include a termination date giving Tenant sixty (60) days to vacate the Premises, but Landlord may so elect only if the Building or Project shall be damaged by fire or other casualty or cause, whether or not the Premises are affected, and one or more of the following conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot reasonably be completed within one hundred eighty (180) days after the date of discovery of the damage (when such repairs are made without the payment of overtime or other premiums); (ii) the holder of any mortgage on the Building or Project or ground lessor with respect to the Building or Project shall require that the insurance proceeds or any portion thereof be used to retire the mortgage debt, or shall terminate the ground lease, as the case may be; (iii) at least $500,000.00 of the cost to repair the damage is not covered by Landlord’s insurance policies (provided that any amounts payable as part of a deductible with respect to Landlord’s insurance policies shall be deemed to be not covered by Landlord’s insurance policies) (and would not have been covered had Landlord carried the policies that Landlord is required to carry pursuant to the terms of this Lease); or (iv) the damage occurs during the last twelve (12) months of the Lease Term; provided, however, that if Landlord does not elect to terminate this Lease pursuant to Landlord’s termination right as provided above, and the repairs cannot, in the reasonable opinion of Landlord, be completed within one hundred eighty (180) days after the date of discovery of the damage, then Tenant may elect, no earlier than sixty (60) days after the date of the damage and not later than ninety (90) days after the date of such damage, to terminate this Lease by written notice to Landlord effective as of the date specified in the notice, which date shall not be less than thirty (30) days nor more than sixty (60) days after the date such notice is given by Tenant. Furthermore, if neither Landlord nor Tenant has terminated this Lease, and the repairs are not actually completed within two hundred seventy (270) days after being commenced, Tenant shall have the right to terminate this Lease during the first five (5) business days of each calendar month following the end of such period until such time as the repairs are complete, by notice to Landlord (the “Damage Termination Notice”), effective as of a date set forth in the Damage Termination Notice (the “Damage Termination Date”), which Damage Termination Date shall not be less than five (5) business days following the end of each such month. Notwithstanding the foregoing, if Tenant delivers a Damage Termination Notice to Landlord, then Landlord shall have the right to suspend the occurrence of the Damage Termination Date for a period ending thirty (30) days after the Damage Termination Date set forth in the Damage Termination Notice by delivering to Tenant, within five (5) business days of Landlord’s receipt of the Damage Termination Notice, a certificate of Landlord’s contractor responsible for the repair of the damage certifying that it is such contractor’s good faith judgment that the repairs shall be substantially completed within thirty (30) days

- 39 -

after the Damage Termination Date. If repairs shall be substantially completed prior to the expiration of such thirty‑day period, then the Damage Termination Notice shall be of no force or effect, but if the repairs shall not be substantially completed within such thirty-day period, then this Lease shall terminate upon the expiration of such thirty-day period. Notwithstanding the provisions of this Section 11.2, Tenant shall have the right to terminate this Lease under this Section 11.2 only if each of the following conditions is satisfied: (a) the damage to the Project by fire or other casualty was not caused by the gross negligence or intentional act of Tenant or its partners or subpartners and their respective officers, agents, servants, employees, and independent contractors; (b) Tenant is not then in default under this Lease beyond the applicable notice and cure period provided in this Lease; (c) as a result of the damage, Tenant cannot reasonably conduct business from the Premises; and, (d) as a result of the damage to the Project, Tenant does not occupy or use the Premises at all.

11.3
Waiver of Statutory Provisions. The provisions of this Lease, including this Article 11, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or the Project, and any statute or regulation of the State of California, including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, and any other statute or regulation, now or hereafter in effect, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or the Project.
12.
NONWAIVER. No provision of this Lease shall be deemed waived by either party hereto unless expressly waived in a writing signed thereby. The waiver by either party hereto of any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of any subsequent breach of same or any other term, covenant or condition herein contained. The subsequent acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular Rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such Rent. No acceptance of a lesser amount than the Rent herein stipulated shall be deemed a waiver of Landlord’s right to receive the full amount due, nor shall any endorsement or statement on any check or payment or any letter accompanying such check or payment be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the full amount due. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Lease Term or of Tenant’s right of possession hereunder, or after the giving of any notice shall reinstate, continue or extend the Lease Term or affect any notice given Tenant prior to the receipt of such monies, it being agreed that after the service of notice or the commencement of a suit, or after final judgment for possession of the Premises, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment.
13.
CONDEMNATION. If the whole or any part of the Premises, Building or Project shall be taken by power of eminent domain or condemned by any competent authority for any public or

- 40 -

quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises, Building or Project, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to terminate this Lease effective as of the date possession is required to be surrendered to the authority. Tenant shall not because of such taking assert any claim against Landlord or the authority for any compensation because of such taking and Landlord shall be entitled to the entire award or payment in connection therewith, except that Tenant shall have the right to file any separate claim available to Tenant for any taking of Tenant’s personal property and fixtures belonging to Tenant and removable by Tenant upon expiration of the Lease Term pursuant to the terms of this Lease, and for moving expenses, so long as such claims do not diminish the award available to Landlord, its ground lessor with respect to the Building or Project or its mortgagee, and such claim is payable separately to Tenant. All Rent shall be apportioned as of the date of such termination. If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Rent shall be proportionately abated. Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of The California Code of Civil Procedure. Notwithstanding anything to the contrary contained in this Article 13, in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease shall not terminate but the Base Rent and the Additional Rent shall be abated for the period of such taking in proportion to the ratio that the amount of rentable square feet of the Premises taken bears to the total rentable square feet of the Premises. Landlord shall be entitled to receive the entire award made in connection with any such temporary taking.

14.
ASSIGNMENT AND SUBLETTING.
14.1
Transfers. Tenant shall not, without the prior written consent of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any interest hereunder, permit any assignment, or other transfer of this Lease or any interest hereunder by operation of law, sublet the Premises or any part thereof, or enter into any license or concession agreements or otherwise permit the occupancy or use of the Premises or any part thereof by any persons other than Tenant and its employees and contractors (all of the foregoing are hereinafter sometimes referred to collectively as “Transfers” and any person to whom any Transfer is made or sought to be made is hereinafter sometimes referred to as a “Transferee”). If Tenant desires Landlord’s consent to any Transfer, Tenant shall notify Landlord in writing, which notice (the “Transfer Notice”) shall include (i) the proposed effective date of the Transfer, which shall not be less than thirty (30) days nor more than one hundred eighty (180) days after the date of delivery of the Transfer Notice, (ii) a description of the portion of the Premises to be transferred (the “Subject Space”), (iii) all of the terms of the proposed Transfer and the consideration therefor, including calculation of the “Transfer Premium”, as that term is defined in Section 14.3 below, in connection with such Transfer, the name and address of the proposed Transferee, and a copy of all existing executed and/or proposed documentation pertaining to the proposed Transfer, and (iv) current financial statements of the proposed Transferee certified by an officer, partner or owner thereof, business credit and personal references and history of the proposed Transferee and any other information reasonably required by Landlord which will enable Landlord to determine the financial responsibility, character, and reputation of the proposed Transferee, nature of such Transferee’s business and proposed use of the Subject Space (provided that Landlord agrees to execute a commercially reasonable confidentiality

- 41 -

agreement cover the disclosure of such financial statements). Any Transfer made without Landlord’s prior written consent shall, at Landlord’s option, be null, void and of no effect, and shall, at Landlord’s option, constitute a default by Tenant under this Lease. Whether or not Landlord consents to any proposed Transfer, Tenant shall pay Landlord’s reasonable review and processing fees, as well as any reasonable professional fees (including, without limitation, attorneys’, accountants’, architects’, engineers’ and consultants’ fees) incurred by Landlord, within thirty (30) days after written request by Landlord, not to exceed Two Thousand Five Hundred and No/100 Dollars ($2,500.00) for a Transfer in the ordinary course of business.

14.2
Landlord’s Consent. Landlord shall not unreasonably withhold, condition or delay its consent to any proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice, and shall grant or withhold its consent within ten (10) business days following Landlord’s receipt of a complete Transfer Notice. If Landlord fails to respond within such ten (10) business day period, then Tenant may send Landlord a reminder notice setting forth such failure containing the following sentence at the top of such notice in bold, capitalized font at least twelve (12) points in size: “LANDLORD’S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN LANDLORD’S DEEMED APPROVAL OF TENANT’S REQUEST FOR TRANSFER” (the “Transfer Reminder Notice”). Any such Transfer Reminder Notice shall include a complete copy of Tenant’s Transfer Notice. If Landlord fails to respond within five (5) business days after receipt of a Transfer Reminder Notice, then Tenant’s Transfer for which Tenant requested Landlord’s approval shall be deemed approved by Landlord. Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply:
14.2.1
The Transferee is of a character or reputation or engaged in a business which is not consistent with the quality of the Building or the Project;
14.2.2
The Transferee is either a governmental agency or instrumentality thereof;
14.2.3
The Transferee is not a party of reasonable financial worth and/or financial stability in light of the responsibilities to be undertaken in connection with the Transfer on the date consent is requested, taking into account that Tenant shall remain fully liable under this Lease following such Transfer; or
14.2.4
The proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease (provided that Landlord shall inform Tenant if a proposed Transfer would cause a violation of another lease for space in the Project, or would give an occupant of the Project a right to cancel its lease, within five (5) business days of Landlord’s receipt of both (i) a written request therefor from Tenant and (ii) information regarding such proposed Transfer which is adequate for Landlord to make such a determination).

If Landlord consents to any Transfer pursuant to the terms of this Section 14.2 (and does not exercise any recapture rights Landlord may have under Section 14.4 of this Lease), Tenant may within six (6) months after Landlord’s consent, but not later than the expiration of said six-month

- 42 -

period, enter into such Transfer of the Premises or portion thereof, upon substantially the same terms and conditions as are set forth in the Transfer Notice furnished by Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that if there are any changes in the terms and conditions from those specified in the Transfer Notice such that Landlord would initially have been entitled to refuse its consent to such Transfer under this Section 14.2, Tenant shall again submit the Transfer to Landlord for its approval and other action under this Article 14 (including Landlord’s right of recapture, if any, under Section 14.4 of this Lease). Notwithstanding anything to the contrary in this Lease, if Tenant or any proposed Transferee claims that Landlord has unreasonably withheld, conditioned or delayed its consent under Section 14.2 or otherwise has breached or acted unreasonably under this Article 14, their sole remedies shall be a suit for contract damages (other than damages for injury to, or interference with, Tenant’s business including, without limitation, loss of profits, however occurring) or declaratory judgment and an injunction for the relief sought, and Tenant hereby waives all other remedies, including, without limitation, any right at law or equity to terminate this Lease, on its own behalf and, to the extent permitted under all applicable laws, on behalf of the proposed Transferee.

14.3
Transfer Premium. If Landlord consents to a Transfer, as a condition thereto which the parties hereby agree is reasonable, Tenant shall pay to Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined in this Section 14.3, received by Tenant from such Transferee. “Transfer Premium” shall mean all rent, additional rent or other consideration payable by such Transferee in connection with the Transfer in excess of the Rent and Additional Rent payable by Tenant under this Lease during the term of the Transfer on a per rentable square foot basis if less than all of the Premises is transferred, and after deduction of (i) any costs of improvements made to the Subject Space in connection with such Transfer, (ii) brokerage commissions paid in connection with such Transfer, and (iii) reasonable legal and marketing fees or costs incurred in connection with such Transfer. “Transfer Premium” shall also include, but not be limited to, key money, bonus money or other cash consideration paid by Transferee to Tenant in connection with such Transfer, and any payment in excess of fair market value for services rendered by Tenant to Transferee or for assets, fixtures, inventory, equipment, or furniture transferred by Tenant to Transferee in connection with such Transfer. The determination of the amount of Landlord’s applicable share of the Transfer Premium shall be made on a monthly basis as rent or other consideration is received by Tenant under the Transfer.
14.4
Landlord’s Option as to Subject Space. Notwithstanding anything to the contrary contained in this Article 14, in the event Tenant contemplates a Transfer which, together with all prior Transfers then remaining in effect, would cause fifty percent (50%) or more of the Premises to be Transferred for more than fifty percent (50%) of the then remaining Lease Term (taking into account any extension of the Lease Term which has irrevocably exercised by Tenant), Tenant shall give Landlord notice (the “Intention to Transfer Notice”) of such contemplated Transfer (whether or not the contemplated Transferee or the terms of such contemplated Transfer have been determined). The Intention to Transfer Notice shall specify the portion of and amount of rentable square feet of the Premises which Tenant intends to Transfer (the “Contemplated Transfer Space”), the contemplated date of commencement of the Contemplated Transfer (the “Contemplated Effective Date”), and the contemplated length of the term of such contemplated Transfer, and shall specify that such Intention to Transfer Notice is delivered to Landlord pursuant to this Section 14.4 in order to allow Landlord to elect to recapture the Contemplated Transfer Space. Thereafter, Landlord shall have the option, by giving written notice to Tenant within ten

- 43 -

(10) Business Days after receipt of any Intention to Transfer Notice, to recapture the Contemplated Transfer Space. Such recapture shall cancel and terminate this Lease with respect to such Contemplated Transfer Space as of the Contemplated Effective Date. In the event of a recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, the Rent reserved herein shall be prorated on the basis of the number of rentable square feet retained by Tenant in proportion to the number of rentable square feet contained in the Premises, and this Lease as so amended shall continue thereafter in full force and effect, and upon request of either party, the parties shall execute written confirmation of the same. If Landlord declines, or fails to elect in a timely manner, to recapture such Contemplated Transfer Space under this Section 14.4, then, subject to the other terms of this Article 14, for a period of nine (9) months (the “Nine Month Period”) commencing on the last day of such ten (10) Business Day period, Landlord shall not have any right to recapture the Contemplated Transfer Space with respect to any Transfer made during the Nine Month Period, provided that any such Transfer is substantially on the terms set forth in the Intention to Transfer Notice, and provided further that any such Transfer shall be subject to the remaining terms of this Article 14. If such a Transfer is not so consummated within the Nine Month Period (or if a Transfer is so consummated, then upon the expiration of the term of any Transfer of such Contemplated Transfer Space consummated within such Nine Month Period), Tenant shall again be required to submit a new Intention to Transfer Notice to Landlord with respect any contemplated Transfer, as provided above in this Section 14.4.

14.5
Effect of Transfer. If Landlord consents to a Transfer, (i) the terms and conditions of this Lease shall in no way be deemed to have been waived or modified, (ii) such consent shall not be deemed consent to any further Transfer by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after execution, an original executed copy of all documentation pertaining to the Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall furnish upon Landlord’s request a complete statement, certified by an independent certified public accountant, or Tenant’s chief financial officer, setting forth in detail the computation of any Transfer Premium Tenant has derived and shall derive from such Transfer, and (v) no Transfer relating to this Lease or agreement entered into with respect thereto, whether with or without Landlord’s consent, shall relieve Tenant or any guarantor of this Lease from any liability under this Lease, including, without limitation, in connection with the Subject Space. Landlord or its authorized representatives shall have the right at all reasonable times to audit the books, records and papers of Tenant relating to any Transfer, and shall have the right to make copies thereof. If the Transfer Premium respecting any Transfer shall be found understated, Tenant shall, within thirty (30) days after demand, pay the deficiency, and if understated by more than three percent (3%), Tenant shall pay Landlord’s costs of such audit.
14.6
Additional Transfers. Except in connection with a transfer to a Permitted Transferee under Section 14.8, below, for purposes of this Lease, the term “Transfer” shall also include (i) if Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by operation of law, of fifty percent (50%) or more of the partners, or transfer of fifty percent (50%) or more of partnership interests, within a twelve (12)-month period, or the dissolution of the partnership without immediate reconstitution thereof, and (ii) if Tenant is a closely held corporation (,.(., whose stock is not publicly held and not traded through an exchange or over the counter), (A) the dissolution, merger, consolidation or other reorganization of Tenant or (B) the sale or other transfer of an aggregate of fifty percent (50%) or more of the voting shares of Tenant (other than to immediate family members by reason of gift or death), within a twelve (12)-month period, or (C) the sale, mortgage, hypothecation or pledge of an aggregate of fifty percent (50%) or more of the value of the unencumbered assets of Tenant within a twelve (12)-month period.

- 44 -

14.7
Occurrence of Default. Any Transfer hereunder shall be subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated during the term of any Transfer, Landlord shall have the right to: (i) treat such Transfer as cancelled and repossess the Subject Space by any lawful means, or (ii) require that such Transferee attorn to and recognize Landlord as its landlord under any such Transfer. If Tenant shall be in default under this Lease (beyond any applicable notice and cure periods set forth in this Lease), Landlord is hereby irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any Transferee to make all payments under or in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant’s obligations under this Lease) until such default is cured. Such Transferee shall rely on any representation by Landlord that Tenant is in default hereunder, without any need for confirmation thereof by Tenant. Upon any assignment, the assignee shall assume in writing all obligations and covenants of Tenant thereafter to be performed or observed under this Lease. No collection or acceptance of rent by Landlord from any Transferee shall be deemed a waiver of any provision of this Article 14 or the approval of any Transferee or a release of Tenant from any obligation under this Lease, whether theretofore or thereafter accruing. In no event shall Landlord’s enforcement of any provision of this Lease against any Transferee be deemed a waiver of Landlord’s right to enforce any term of this Lease against Tenant or any other person. If Tenant’s obligations hereunder have been guaranteed, Landlord’s consent to any Transfer shall not be effective unless the guarantor also consents to such Transfer.
14.8
Deemed Consent Transfers. Notwithstanding anything to the contrary contained in this Lease, (A) an assignment or subletting of all or a portion of the Premises to an affiliate of Tenant (an entity which is controlled by, controls, or is under common control with, Tenant as of the date of this Lease), (B) a sale of corporate shares of capital stock in Tenant in connection with an initial public offering of Tenant’s stock on a nationally-recognized stock exchange, (C) a transfer of member interests or stock in Tenant in connection with any financing or any other member interest or stock transfer, (D) an assignment of this Lease to an entity which acquires all or substantially all of the stock or assets of Tenant, or (E) an assignment of this Lease to an entity which is the resulting entity of a merger or consolidation of Tenant during the Lease Term, shall not be deemed a Transfer requiring Landlord’s consent under this Article 14 and shall not be subject to the provisions of Sections 14.3 and 14.5 above (any such assignee or sublessee described in items (A) through (E) of this Section 14.8 hereinafter referred to as a “Permitted Transferee”), provided that (i) Tenant notifies Landlord promptly upon the effective date of any such assignment or sublease and promptly supplies Landlord with any documents or information reasonably requested by Landlord regarding such transfer or transferee as set forth above, (ii) Tenant is not in default, beyond any applicable notice and cure period, and such assignment or sublease is not a subterfuge by Tenant to avoid its obligations under this Lease, (iii) such Permitted Transferee (or the Tenant entity immediately preceding the Permitted Transfer (the “Prior Tenant”), if such Prior Tenant remains the Tenant under this Lease) shall have a tangible net worth (not including goodwill as an asset) computed in accordance with generally accepted accounting principles (“Net Worth”) at least equal to the Net Worth of Tenant on the day immediately preceding the effective date of such assignment or sublease; provided that if the Prior Tenant is a surviving entity of such Permitted Transfer but is no longer the Tenant under this Lease, and such Prior Tenant remains liable under this Lease, then Tenant may combine the Net Worth of the Prior Tenant and the

- 45 -

Permitted Transferee to satisfy the foregoing Net Worth requirement; provided further that, in the event of a subletting of all or a portion of the Premises to an affiliate of Tenant pursuant to item (A) above, Tenant may combine the Net Worth of Tenant and such affiliate of Tenant to satisfy the foregoing Net Worth requirement, and (iv) no assignment relating to this Lease, whether with or without Landlord’s consent, shall relieve Tenant from any liability under this Lease, and, in the event of an assignment of Tenant’s entire interest in this Lease, the liability of Tenant and such transferee (other than a transferee pursuant to a stock or member interest transfer whereby this Lease is not actually assigned to a new entity) shall be joint and several. An assignee of Tenant’s entire interest in this Lease who qualifies as a Permitted Transferee may also be referred to herein as a “Permitted Transferee Assignee.” “Control,” as used in this Section 14.8, shall mean the ownership, directly or indirectly, of at least fifty‑one percent (51%) of the voting securities of, or possession of the right to vote, in the ordinary direction of its affairs, of at least fifty-one percent (51%) of the voting interest in, any person or entity.

15.
SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES.
15.1
Surrender of Premises. No act or thing done by Landlord or any agent or employee of Landlord during the Lease Term shall be deemed to constitute an acceptance by Landlord of a surrender of the Premises unless such intent is specifically acknowledged in writing by Landlord. The delivery of keys to the Premises to Landlord or any agent or employee of Landlord shall not constitute a surrender of the Premises or effect a termination of this Lease, whether or not the keys are thereafter retained by Landlord, and notwithstanding such delivery Tenant shall be entitled to the return of such keys at any reasonable time upon request until this Lease shall have been properly terminated. The voluntary or other surrender of this Lease by Tenant, whether accepted by Landlord or not, or a mutual termination hereof, shall not work a merger, and at the option of Landlord shall operate as an assignment to Landlord of all subleases or subtenancies affecting the Premises or terminate any or all such sublessees or subtenancies.
15.2
Removal of Tenant Property by Tenant. Upon the expiration of the Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject to the provisions of this Article 15, quit and surrender possession of the Premises to Landlord in as good order and condition as when Tenant took possession and as thereafter improved by Landlord and/or Tenant, reasonable wear and tear, repairs which are specifically made the responsibility of Landlord hereunder, and/or damage due to casualty, excepted. Upon such expiration or termination, Tenant shall, without expense to Landlord, remove or cause to be removed from the Premises all debris and rubbish, and such items of furniture, equipment, free-standing cabinet work, movable partitions and other articles of personal property owned by Tenant or installed or placed by Tenant at its expense in the Premises, and such similar articles of any other persons claiming under Tenant, as Landlord may, in its sole discretion, require to be removed, and Tenant shall repair at its own expense all damage to the Premises and Building resulting from such removal; provided, however, in no event shall Tenant be obligated to (i) repair or replace any floor coverings or wall coverings, (ii) to repaint, or (iii) patch small holes in the walls and floors, provided in each case there has not been unreasonable wear and tear.
15.3
Environmental Assessment. In connection with its surrender of the Premises, Tenant shall submit to Landlord, at least one hundred twenty (120) days prior to the expiration

- 46 -

date of this Lease (or in the event of an earlier termination of this Lease, as soon as reasonably possible following such termination), an environmental Assessment of the Premises by a competent and experienced environmental engineer or engineering firm reasonably satisfactory to Landlord (pursuant to a contract approved by Landlord and providing that Landlord can rely on the Environmental Assessment), which (i) evidences that the Premises are in a clean and safe condition and free and clear of any Hazardous Materials; and (ii) includes a review of the Premises by an environmental consultant for asbestos, mold, fungus, spores, and other moisture conditions, on-site chemical use, and lead-based paint. If such Environmental Assessment reveals that remediation or Clean-up is required under any Environmental Laws, Tenant shall submit a remediation plan prepared by a recognized environmental consultant and shall be responsible for all costs of remediation and Clean-up, as more particularly provided in Section 5.3, above.

16.
HOLDING OVER. If Tenant holds over after the expiration of the Lease Term or earlier termination thereof, with the express or implied consent of Landlord, such tenancy shall be from month-to-month only, and shall not constitute a renewal hereof or an extension for any further term. If Tenant holds over after the expiration of the Lease Term of earlier termination thereof, without the express or implied consent of Landlord, such tenancy shall be deemed to be a tenancy by sufferance only, and shall not constitute a renewal hereof or an extension for any further term. In either case, Base Rent shall be payable at a monthly rate equal to the product of (i) the Base Rent applicable during the last rental period of the Lease Term under this Lease or for the first month immediately following the earlier termination of the Lease Term, as applicable, and (ii) a percentage equal to 125% during the first (1st) month immediately following the expiration or earlier termination of the Lease Term, 150% during the second (2nd) and third (3rd) months immediately following the expiration or earlier termination of the Lease Term, and 200% thereafter. Such month-to-month tenancy or tenancy by sufferance, as the case may be, shall be subject to every other applicable term, covenant and agreement contained herein. Nothing contained in this Article 16 shall be construed as consent by Landlord to any holding over by Tenant, and Landlord expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. The provisions of this Article 16 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law. If Tenant fails to surrender the Premises on or before the date that occurs thirty (30) days following the termination or expiration of this Lease, then, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such failure, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender and any lost profits to Landlord resulting therefrom.
17.
ESTOPPEL CERTIFICATES. Within ten (10) business days following a request in writing by Landlord, Tenant shall execute, acknowledge and deliver to Landlord an estoppel certificate, which, as submitted by Landlord, shall be substantially in the form of Exhibit E, attached hereto (or such other form as may be reasonably required by any prospective mortgagee or purchaser of the Project, or any portion thereof), indicating therein any exceptions thereto that may exist at that time, and shall also contain any other information reasonably requested by Landlord or Landlord’s mortgagee or prospective mortgagee. Any such certificate may be relied upon by any prospective mortgagee or purchaser of all or any portion of the Project. At any time during the Lease Term, Landlord may require Tenant to provide Landlord with a current financial

- 47 -

statement and financial statements of the two (2) years prior to the current financial statement year (provided that Landlord and any other recipient thereof shall execute a commercially reasonable non-disclosure agreement to protect the confidentiality of such statements). Such statements shall be prepared in accordance with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant. Failure of Tenant to timely execute, acknowledge and deliver such estoppel certificate, if not cured within an additional three (3) business days after notice from Landlord pursuant to Section 19.1.4, below, shall constitute an acceptance of the Premises and an acknowledgment by Tenant that statements included in the estoppel certificate are true and correct, without exception.

18.
SUBORDINATION. This Lease shall be subject and subordinate to all present and future ground or underlying leases of the Building or Project and to the lien of any mortgage, trust deed or other encumbrances now or hereafter in force against the Building or Project or any part thereof, if any, and to all renewals, extensions, modifications, consolidations and replacements thereof, and to all advances made or hereafter to be made upon the security of such mortgages or trust deeds, unless the holders of such mortgages, trust deeds or other encumbrances, or the lessors under such ground lease or underlying leases, require in writing that this Lease be superior thereto (collectively, the “Superior Holders”); provided, however, (a) Landlord represents that there are no Superior Holders as of the date of this Lease and (b) in connection with any future Superior Holders, Landlord shall deliver to Tenant a commercially reasonable subordination non-disturbance and attornment agreement executed by such Superior Holder (an “SNDA”) (which requires such Superior Holder to, among other things, accept this Lease, and not to disturb Tenant’s possession, so long as no default, beyond any applicable notice and cure period, is then in existence). Tenant covenants and agrees in the event any proceedings are brought for the foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease is terminated), to attorn, without any deductions or set-offs whatsoever, to the lienholder or purchaser or any successors thereto upon any such foreclosure sale or deed in lieu thereof (or to the ground lessor), if so requested to do so by such purchaser or lienholder or ground lessor, and to recognize such purchaser or lienholder or ground lessor as the lessor under this Lease, provided such lienholder or purchaser or ground lessor shall agree to accept this Lease and not disturb Tenant’s occupancy, so long as Tenant timely pays the rent and observes and performs the terms, covenants and conditions of this Lease to be observed and performed by Tenant (beyond any applicable notice and cure periods). Landlord’s interest herein may be assigned as security at any time to any lienholder. Tenant shall, within ten (10) days of request by Landlord, execute such further commercially reasonable instruments or assurances as Landlord may reasonably deem necessary to evidence or confirm the subordination or superiority of this Lease to any such mortgages, trust deeds, ground leases or underlying leases. Tenant waives the provisions of any current or future statute, rule or law which may give or purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale.
19.
DEFAULTS; REMEDIES.
19.1
Events of Default. The occurrence of any of the following shall constitute a default of this Lease by Tenant and Landlord shall not exercise any of the Landlord remedies set forth in Section 19.2, below (or any other remedy at law or equity except to the extent expressly set forth in this Lease), until one or more of the following has occurred:

- 48 -

19.1.1
Any failure by Tenant to pay any Rent or any other charge required to be paid under this Lease, or any part thereof, when due, which failure is not cured within five (5) business days after written notice from Landlord that said amount was not paid when due; or
19.1.2
Any failure by Tenant to observe or perform any other provision, covenant or condition of this Lease to be observed or performed by Tenant where such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant; provided that if the nature of such default is such that the same cannot reasonably be cured within a thirty (30) day period, Tenant shall not be deemed to be in default if it diligently commences such cure within such period and thereafter diligently proceeds to rectify and cure such default; or
19.1.3
Abandonment of the Premises by Tenant pursuant to Section 1915.3 of the California Civil Code; or
19.1.4
The failure by Tenant to observe or perform according to the provisions of Articles 17 or 18 of this Lease, or Tenant’s use of the Premises in violation of Section 5.1 and/or Section 5.2 (specifically excluding the first (1st) sentence of Section 5.2 of this Lease, as Section 19.1.2 above shall apply with respect to the failure by Tenant to observe or perform according to the provisions of the first (1st) sentence of Section 5.2 of this Lease) of this Lease, or if Tenant completes a Transfer in violation of Article 14 of this Lease, in any of such cases where such failure continues for more than five (5) business days after notice from Landlord; or

The notice periods provided herein are in lieu of, and not in addition to, any notice periods provided by law.

19.2
Remedies Upon Default. Upon the occurrence of any event of default by Tenant, beyond any applicable notice and cure period expressly set forth in this Lease, Landlord shall have, in addition to any other remedies available to Landlord at law or in equity (all of which remedies shall be distinct, separate and cumulative), the option to pursue any one or more of the following remedies, each and all of which shall be cumulative and nonexclusive, without any notice or demand whatsoever.
19.2.1
Terminate this Lease, in which event Tenant shall immediately surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any other remedy which it may have for possession or arrearages in rent, enter upon and take possession of the Premises and expel or remove Tenant and any other person who may be occupying the Premises or any part thereof, without being liable for prosecution or any claim or damages therefor; and Landlord may recover from Tenant the following:
(i)
The worth at the time of award of the unpaid rent which has been earned at the time of such termination; plus
(ii)
The worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

- 49 -

(iii)
The worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus
(iv)
Any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, specifically including but not limited to, brokerage commissions and advertising expenses incurred, expenses of remodeling the Premises or any portion thereof for a new tenant, whether for the same or a different use, and any special concessions made to obtain a new tenant; and
(v)
At Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable law.

The term “rent” as used in this Section 19.2 shall be deemed to be and to mean all sums of every nature required to be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or to others. As used in Sections 19.2.1(i) and (ii), above, the “worth at the time of award” shall be computed by allowing interest at the rate set forth in Article 25 of this Lease, but in no case greater than the maximum amount of such interest permitted by law. As used in Section 19.2.1(iii) above, the “worth at the time of award” shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

19.2.2
Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations). Accordingly, if Landlord does not elect to terminate this Lease on account of any default by Tenant, Landlord may, from time to time, without terminating this Lease, enforce all of its rights and remedies under this Lease, including the right to recover all rent as it becomes due.
19.2.3
Landlord shall at all times have the rights and remedies (which shall be cumulative with each other and cumulative and in addition to those rights and remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other provision of this Lease), without prior demand or notice except as required by applicable law, to seek any declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or restrain or enjoin a violation or breach of any provision hereof.
19.3
Subleases of Tenant. Whether or not Landlord elects to terminate this Lease on account of any default by Tenant, as set forth in this Article 19, Landlord shall have the right to terminate any and all subleases, licenses, concessions or other consensual arrangements for possession entered into by Tenant and affecting the Premises or may, in Landlord’s sole discretion, succeed to Tenant’s interest in such subleases, licenses, concessions or arrangements. In the event of Landlord’s election to succeed to Tenant’s interest in any such subleases, licenses, concessions or arrangements, Tenant shall, as of the date of notice by Landlord of such election, have no further right to or interest in the rent or other consideration receivable thereunder.

- 50 -

19.4
Efforts to Relet. No re-entry or repossession, repairs, maintenance, changes, alterations and additions, reletting, appointment of a receiver to protect Landlord’s interests hereunder, or any other action or omission by Landlord shall be construed as an election by Landlord to terminate this Lease or Tenant’s right to possession, or to accept a surrender of the Premises, nor shall same operate to release Tenant in whole or in part from any of Tenant’s obligations hereunder, unless express written notice of such intention is sent by Landlord to Tenant. Tenant hereby irrevocably waives any right otherwise available under any law to redeem or reinstate this Lease.
19.5
Landlord Default.
19.5.1
General. Notwithstanding anything to the contrary set forth in this Lease, Landlord shall not be in default in the performance of any obligation required to be performed by Landlord pursuant to this Lease unless Landlord fails to perform such obligation within thirty (30) days after the receipt of notice from Tenant specifying in detail Landlord’s failure to perform; provided, however, 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 in default under this Lease if it shall commence such performance within such thirty (30) day period and thereafter diligently pursue the same to completion. Upon any such default by Landlord under this Lease, Tenant may, except as otherwise specifically provided in this Lease to the contrary, exercise any of its rights provided at law or in equity.
19.5.2
Abatement of Rent. Notwithstanding anything to the contrary in this Lease, in the event that Tenant is prevented from using, and does not use, the Premises or any portion thereof, as a result of (i) any repair, maintenance or alteration performed by Landlord, or which Landlord failed to perform, after the Lease Commencement Date and required by this Lease, which substantially interferes with Tenant’s use of the Premises, or (ii) any failure to provide services, utilities or access to the Premises as required to be provided by Landlord under this Lease, but excluding any utility or service that Tenant contracts directly with such utility or service provider, or, (iii) the negligence or intentional acts of Landlord or any Landlord Party (including without limitation any breach of this Lease by Landlord), or (iv) material interference with Tenant’s parking rights hereunder caused by any negligent or intentional acts of Landlord or any Landlord Party (provided that the terms of this item (iv) shall not be applicable to the extent Landlord provides Tenant with Reasonable Alternate Parking) (any such set of circumstances as set forth in items (i), (ii), (iii) or (iv), above, to be known as an “Abatement Event”), then Tenant shall give Landlord notice of such Abatement Event, and if such Abatement Event continues for five (5) consecutive business days after Landlord’s receipt of any such notice (the “Eligibility Period”), then the Base Rent, Tenant’s Share of Direct Expenses, and Tenant’s obligation to pay for parking (to the extent not utilized by Tenant) shall be abated or reduced, as the case may be, after expiration of the Eligibility Period for such time that Tenant continues to be so prevented from using, and does not use for the normal conduct of Tenant’s business, the Premises or a portion thereof, in the proportion that the rentable area of the portion of the Premises that Tenant is prevented from using, and does not use, bears to the total rentable area of the Premises; provided, however, in the event that Tenant is prevented from using, and does not use, a portion of the Premises for a period of time in excess of the Eligibility Period and the remaining portion of the Premises is not sufficient to allow Tenant to effectively conduct its business therein, and if Tenant does not conduct its business from such remaining portion, then for such time after expiration of

- 51 -

the Eligibility Period during which Tenant is so prevented from effectively conducting its business therein, the Base Rent and Tenant’s Share of Direct Expenses for the entire Premises and Tenant’s obligation to pay for parking shall be abated for such time as Tenant continues to be so prevented from using, and does not use, the Premises. If, however, Tenant reoccupies any portion of the Premises during such period, the Rent allocable to such reoccupied portion, based on the proportion that the rentable area of such reoccupied portion of the Premises bears to the total rentable area of the Premises, shall be payable by Tenant from the date Tenant reoccupies such portion of the Premises. To the extent an Abatement Event is caused by an event covered by Articles 11 or 13 of this Lease, then Tenant’s right to abate rent shall be governed by the terms of such Article 11 or 13, as applicable, and the Eligibility Period shall not be applicable thereto. Such right to abate Base Rent and Tenant’s Share of Direct Expenses and parking charges (to the extent not utilized by Tenant) shall be Tenant’s sole and exclusive remedy for rent abatement at law or in equity for an Abatement Event. Except as provided in this Section 19.5.2, nothing contained herein shall be interpreted to mean that Tenant is excused from paying Rent due hereunder. As used herein, “Reasonable Alternate Parking” shall mean reasonable alternative parking that is either (a) within a reasonable walking distance to the Premises, or (b) if Landlord provides a reasonable shuttle service, at Landlord’s sole cost and expense and not as an Operating Expense, between the alternate parking location and the Building, a shuttle service that does not require more than a ten (10) minute ride from the alternate parking location to the Building (or vice versa) (the “Shuttle Service”) and the Shuttle Service lasts no more than 30 days.

20.
COVENANT OF QUIET ENJOYMENT. Landlord covenants that Tenant, on paying the Rent, charges for services and other payments herein reserved and on keeping, observing and performing all the other terms, covenants, conditions, provisions and agreements herein contained on the part of Tenant to be kept, observed and performed, shall, during the Lease Term, peaceably and quietly have, hold and enjoy the Premises subject to the terms, covenants, conditions, provisions and agreements hereof without interference by any persons lawfully claiming by or through Landlord. The foregoing covenant is in lieu of any other covenant express or implied.
21.
SECURITY DEPOSIT. Concurrently with Tenant’s execution of this Lease, Tenant shall deposit with Landlord a security deposit (the “Security Deposit”) in the amount set forth in Section 8 of the Summary, as security for the faithful performance by Tenant of all of its obligations under this Lease. If Tenant defaults (beyond any applicable notice and cure period expressly set forth in this Lease) with respect to any provisions of this Lease, including, but not limited to, the provisions relating to the payment of Rent, the removal of property and the repair of resultant damage, Landlord may, without notice to Tenant, but shall not be required to apply all or any part of the Security Deposit for the payment of any Rent or any other sum in default and Tenant shall, upon demand therefor, restore the Security Deposit to its original amount. Any unapplied portion of the Security Deposit shall be returned to Tenant, or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder, within thirty (30) days following the expiration of the Lease Term. Tenant shall not be entitled to any interest on the Security Deposit. Tenant hereby irrevocably waives and relinquishes any and all rights, benefits, or protections, if any, Tenant now has, or in the future may have, under Section 1950.7 of the California Civil Code, any successor statute, and all other provisions of law, now or hereafter in effect, including, but not limited to, any provision of law which (i) establishes the time frame by which a landlord must refund a security deposit under a lease, and/or (ii) provides that a landlord may claim from a security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to repair damage

- 52 -

caused by a tenant or to clean the subject premises. Tenant acknowledges and agrees that (a) any statutory time frames for the return of a security deposit are superseded by the express period identified in this Article 21, above, and (b) rather than be so limited, Landlord may claim from the Security Deposit (1) any and all sums expressly identified in this Article 21, above, and (2) any additional sums reasonably necessary to compensate Landlord for any and all losses or damages caused by Tenant’s default of this Lease, including, but not limited to, all damages or rent due upon termination of Lease pursuant to Section 1951.2 of the California Civil Code.

22.
COMMUNICATIONS AND COMPUTER LINE. Tenant may install, maintain, replace, remove or use any communications or computer wires and cables serving the Premises (collectively, the “Lines”), provided that Tenant shall obtain Landlord’s prior written consent (which shall not be unreasonably withheld, conditioned or delayed), use an experienced and qualified contractor reasonably approved in writing by Landlord, and comply with all of the other provisions of Articles 7 and 8 of this Lease. Tenant shall pay all costs in connection therewith. Landlord reserves the right, upon notice to Tenant prior to the expiration or earlier termination of this Lease, to require that Tenant, at Tenant’s sole cost and expense, remove any Lines located in or serving the Premises prior to the expiration or earlier termination of this Lease.
23.
SIGNS.
23.1
Exterior Signage. Subject to Applicable Laws, the terms and conditions of this Article 23 below and Landlord’s prior written approval, which shall not be unreasonably withheld, conditioned or delayed, and provided all signs are compatible with the Project’s sign criteria and are in keeping with the quality, design and style of the Building and Project, Tenant, at its sole cost and expense, may install (i) identification signage on one (1) slot on each of those certain two (2) existing monument signs (the “Monuments”) located adjacent to the Building, as set forth on Exhibit G attached hereto, (ii) one (1) identification sign located on the exterior of the Building in one (1) location to be mutually and reasonably determined by Landlord and Tenant (the “Building Exterior Signage”) and (iii) Building standard tenant directory signage at the entrance to the Building (collectively, “Tenant’s Signage”); provided, however, in no event shall Tenant’s Signage include an “Objectionable Name,” as that term is defined in Section 23.2, of this Lease. Notwithstanding the foregoing, in no event shall the Building Exterior Signage, at any time, prevent the other then tenant(s) of the Building (specifically excluding Tenant) from maintaining (i) at least one (1) identification sign, in the aggregate, located on the exterior of the Building, or (ii) exterior signage on at least fifty percent (50%) of the Permitted Signage Area (as that term is defined below) of the Building, in the aggregate. All such signage shall be subject to Tenant’s obtaining all required governmental approvals and shall conform to all Applicable Laws, including, without limitation, zoning laws) and then-existing Underlying Documents. The location of Tenant’s identification signage slot on each of the two (2) Monuments is set forth on Exhibit G attached hereto. All permitted signs shall be maintained by Tenant at its expense in a first‑class and safe condition and appearance. All costs associated with Tenant’s Signage, including, without limitation, the costs to purchase, install and maintain Tenant’s Signage, shall be borne exclusively by Tenant. Upon the expiration or earlier termination of this Lease, Tenant shall remove all of its signs at Tenant’s sole cost and expense. The graphics, materials, color, design, lettering, lighting, size, illumination, specifications and exact location of Tenant’s Signage (collectively, the “Sign Specifications”) shall be subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed, and shall be consistent and compatible with

- 53 -

the quality and nature of the Project. Tenant hereby acknowledges that, notwithstanding Landlord’s approval of Tenant’s Signage, Landlord has made no representation or warranty to Tenant with respect to the probability of obtaining all necessary governmental approvals and permits for Tenant’s Signage. In the event Tenant does not receive the necessary governmental approvals and permits for Tenant’s Signage, Tenant’s and Landlord’s rights and obligations under the remaining terms, covenants and conditions of this Lease shall be unaffected. For purposes hereof, “Permitted Signage Area” shall mean the square footage of the surface area of the exterior of the Building that would be available and permitted for exterior tenant signage in accordance with Applicable Laws (including, without limitation, zoning laws) based on the assumption that the Building Exterior Signage is not installed on the Building.

23.2
Objectionable Name. Tenant’s Signage shall not include a name or logo which relates to an entity which is of a character or reputation, or is associated with a political faction or orientation, which is inconsistent with the quality of the Project, or which would otherwise reasonably offend a landlord of the Comparable Buildings (an “Objectionable Name”). The parties hereby agree that the following name, or any reasonable derivation thereof, shall be deemed not to constitute an Objectionable Name: “BioAtla, LLC.”
23.3
Prohibited Signage and Other Items. Any signs, notices, logos, pictures, names or advertisements which are installed and that have not been separately approved by Landlord may be removed without notice by Landlord at the sole expense of Tenant. Any window coverings, or blinds shall be subject to the prior approval of Landlord, which shall not be unreasonably withheld, conditioned or delayed. Any signs or other items visible from the exterior of the Premises or Building (other than Tenant’s Signage or window coverings or blinds), shall be subject to the prior approval of Landlord, in its sole discretion.
23.4
Termination of Right to Tenant’s Signage. The rights contained in this Article 23 shall be personal to Original Tenant and its Permitted Transferee Assignee, and may only be exercised and maintained by such parties (and not any other assignee, sublessee or other transferee of the Original Tenant’s interest in this Lease) to the extent (:) they are not in default under this Lease (beyond any applicable notice and cure period) and (y) with respect to the monument signage and the Building Exterior Signage, if they occupy the entire Premises.
24.
COMPLIANCE WITH LAW. Tenant shall not do anything or suffer anything to be done in or about the Premises or the Project which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated (collectively, “Applicable Laws”). Except as otherwise specifically set forth in Section 1.2 of the Tenant Work Letter, at its sole cost and expense, Tenant shall promptly comply with any Applicable Laws which relate to the Building (including, without limitation, the Base Building), but not with respect to any Common Areas located outside the Building unless and to the extent such obligations are triggered by Alterations made by Tenant to the Premises to the extent such Alterations are not normal and customary business office improvements, or triggered by the Tenant Improvements to the extent such Tenant Improvements are not expressly depicted on the Space Plan or are not normal and customary business office improvements, or triggered by Tenant’s use of the Premises for non-general office use (“Tenant’s Compliance With Law Obligations”). Except as otherwise specifically set forth in Section 1.2 of the Tenant Work Letter, Should any standard or regulation now or hereafter be imposed on

- 54 -

Landlord or Tenant by a state, federal or local governmental body charged with the establishment, regulation and enforcement of occupational, health or safety standards for employers, employees, landlords or tenants, then Tenant agrees, at its sole cost and expense, to comply promptly with such standards or regulations. Tenant shall be responsible, at its sole cost and expense, to make all alterations to the Premises as are required to comply with Tenant’s Compliance With Law Obligations. Landlord shall comply with all Applicable Laws relating to the Base Building, provided that compliance with such Applicable Laws is not the responsibility of Tenant under this Lease, and provided further that Landlord’s failure to comply therewith would prohibit Tenant from obtaining or maintaining a certificate of occupancy for the Premises, or would unreasonably affect the safety of Tenant’s employees. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures, shall be conclusive of that fact as between Landlord and Tenant. For purposes of Section 1938 of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that the Project, Building and Premises have not undergone inspection by a Certified Access Specialist (CASp). As required by Section 1938(e) of the California Civil Code, Landlord hereby states as follows: “A Certified Access Specialist (CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the premises.” In furtherance of the foregoing, Landlord and Tenant hereby agree as follows: (a) any CASp inspection requested by Tenant shall be conducted, at Tenant’s sole cost and expense, by a CASp approved in advance by Landlord, while any CASp inspection initiated by Landlord shall be conducted, at Landlord’s sole cost and expense, by a CASp designated by Landlord; and (b) with respect to improvements or repairs required to correct violations discovered during a CASp inspection initiated by Tenant, pursuant to this Article 24 above, Tenant, at its cost, is responsible for making any repairs within the Premises to correct violations of construction-related accessibility standards (except as expressly set forth in the Tenant Work Letter); and, if anything done by or for Tenant in its use or occupancy of the Premises shall require repairs to the Building (outside the Premises) to correct violations of construction-related accessibility standards, then Tenant shall, at Landlord’s option, either perform such repairs at Tenant’s sole cost and expense or reimburse Landlord upon demand, as Additional Rent, for the cost to Landlord of performing such repairs, provided that Landlord shall be solely responsible for the costs of performing such improvements or repairs to correct such violations of construction-related accessibility standards if such violations were discovered during a CASp inspection initiated by Landlord.

25.
LATE CHARGES. If any installment of Rent or any other sum due from Tenant shall not be received by Landlord or Landlord’s designee within five (5) business days after Tenant’s receipt of written notice from Landlord that said amount is due, then Tenant shall pay to Landlord a late charge equal to five percent (5%) of the overdue amount plus any reasonable attorneys’ fees incurred by Landlord by reason of Tenant’s failure to pay Rent and/or other charges when due hereunder. The late charge shall be deemed Additional Rent and the right to require it shall be in

- 55 -

addition to all of Landlord’s other rights and remedies hereunder or at law and shall not be construed as liquidated damages or as limiting Landlord’s remedies in any manner. In addition to the late charge described above, any Rent or other amounts owing hereunder which are not paid within ten (10) days after the date they are due shall bear interest from the date when due until paid at a rate per annum equal to the lesser of (i) the annual “Bank Prime Loan” rate cited in the Federal Reserve Statistical Release Publication G.13(415), published on the first Tuesday of each calendar month (or such other comparable index as Landlord and Tenant shall reasonably agree upon if such rate ceases to be published) plus four (4) percentage points, and (ii) the highest rate permitted by applicable law.

26.
LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT.
26.1
Landlord’s Cure. All covenants and agreements to be kept or performed by Tenant under this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any reduction of Rent, except to the extent, if any, otherwise expressly provided herein. If Tenant shall fail to perform any obligation under this Lease, and such failure shall continue in excess of the time allowed under Section 19.1.2, above, Landlord may, but shall not be obligated to, after providing Tenant with at least five (5) business days’ notice that Landlord intends to so cure (except in the event of an emergency, where no prior notice shall be required, except that Landlord shall nonetheless use commercially reasonable efforts to notify Tenant), make any such payment or perform any such act on Tenant’s part without waiving its rights based upon any default of Tenant and without releasing Tenant from any obligations hereunder.
26.2
Tenant’s Reimbursement. Except as may be specifically provided to the contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord to Tenant of statements therefor, sums equal to expenditures reasonably made and obligations incurred by Landlord in connection with the remedying by Landlord of Tenant’s defaults pursuant to the provisions of Section 26.1. Tenant’s obligations under this Section 26.2 shall survive the expiration or sooner termination of the Lease Term.
27.
ENTRY BY LANDLORD. Landlord reserves the right at all reasonable times and upon not less than one (1) business days’ notice to Tenant (except in the case of an emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to prospective purchasers, or to current or prospective mortgagees, ground or underlying lessors or insurers or, during the last twelve (12) months of the Lease Term, to prospective tenants; (iii) post notices of nonresponsibility (to the extent applicable pursuant to then applicable law); (iv) to the extent permitted or required by express provisions of this Lease, to alter, improve or repair the Premises or the Building, or for structural alterations, repairs or improvements to the Building or the Building’s systems and equipment, or (v) exercise its rights under Article 26 of this Lease, above. Landlord may make any such entries without the abatement of Rent, except as otherwise provided in this Lease, and may take such reasonable steps as required to accomplish the stated purposes. Except in the event of an emergency, Landlord shall employ commercially reasonable efforts to minimize interference with the conduct of Tenant’s business in connection with entries into the Premises. In an emergency, Landlord shall have the right to use any means that Landlord may deem proper to open the doors in and to the Premises. Provided that Landlord employs commercially reasonable efforts to minimize interference with the conduct of Tenant’s business in connection with entries into the

- 56 -

Premises, Tenant hereby waives any claims for any loss of occupancy or quiet enjoyment of the Premises, and any other loss occasioned thereby. Any entry into the Premises by Landlord in the manner hereinbefore described shall not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion of the Premises. No provision of this Lease shall be construed as obligating Landlord to perform any repairs, alterations or decorations except as otherwise expressly agreed to be performed by Landlord herein.

28.
TENANT PARKING. Tenant shall have the right, but not the obligation, to use, the amount of unreserved parking spaces set forth in Section 9 of the Summary, in the on-site parking facility (or facilities) which serve the Project. Tenant shall abide by all reasonable non-discriminatory rules and regulations which are prescribed from time to time for the orderly operation and use of the Project parking facility where the parking spaces are located (including any sticker or other identification system established by Landlord and the prohibition of vehicle repair and maintenance activities in the Project parking facilities), and shall cooperate in seeing that Tenant’s employees and visitors also comply with such rules and regulations. Tenant’s use of the Project parking facility shall be at Tenant’s sole risk and Tenant acknowledges and agrees that Landlord shall have no liability whatsoever for damage to the vehicles of Tenant, its employees and/or visitors, or for other personal injury or property damage or theft relating to or connected with the parking rights granted herein or any of Tenant’s, its employees’ and/or visitors’ use of the parking facilities, provided that the foregoing shall not limit Landlord’s liability, if any, pursuant to applicable law for personal injury and property damage to the extent caused by the gross negligence or willful misconduct of Landlord, its agents, employees or contractors. Tenant shall pay to Landlord for its use of the unreserved parking spaces on a monthly basis at the prevailing rate charged from time to time for parking within the Project parking facility; provided that during the initial Lease Term, such unreserved parking spaces shall be provided at no additional charge to Tenant (other than Operating Expenses to the extent allowed by the terms of Section 4.2.4 of this Lease); provided further that Tenant shall also be responsible for the full amount of any taxes imposed by any governmental authority in connection with the renting of such unreserved parking spaces by Tenant or the use of the Project parking facility by Tenant.
29.
MISCELLANEOUS PROVISIONS.
29.1
Terms; Captions. The words “Landlord” and “Tenant” as used herein shall include the plural as well as the singular. The necessary grammatical changes required to make the provisions hereof apply either to corporations or partnerships or individuals, men or women, as the case may require, shall in all cases be assumed as though in each case fully expressed. The captions of Articles and Sections are for convenience only and shall not be deemed to limit, construe, affect or alter the meaning of such Articles and Sections.
29.2
Binding Effect. Subject to all other provisions of this Lease, each of the covenants, conditions and provisions of this Lease shall extend to and shall, as the case may require, bind or inure to the benefit not only of Landlord and of Tenant, but also of their respective heirs, personal representatives, successors or assigns, provided this clause shall not permit any assignment by Tenant contrary to the provisions of Article 14 of this Lease.
29.3
No Air Rights. No rights to any view or to light or air over any property, whether belonging to Landlord or any other person, are granted to Tenant by this Lease. If at any time any

- 57 -

windows of the Premises are temporarily (for no more than thirty (30) days) darkened or the light or view therefrom is obstructed by reason of any repairs, improvements, maintenance or cleaning in or about the Project, the same shall be without liability to Landlord and without any reduction or diminution of Tenant’s obligations under this Lease, provided that Landlord shall use its reasonable efforts to minimize any such obstructions.

29.4
Modification of Lease. Should any current or prospective mortgagee or ground lessor for the Building or Project require a modification of this Lease, which modification will not cause an increased cost or expense to Tenant or in any other way adversely change the rights and obligations of Tenant hereunder, then and in such event, Tenant agrees that this Lease may be so modified and agrees to execute whatever documents are reasonably required therefor and to deliver the same to Landlord within ten (10) business days following a request therefor. At the request of Landlord or any mortgagee or ground lessor, Tenant agrees to execute a short form of Lease and deliver the same to Landlord within ten (10) business days following the request therefor.
29.5
Transfer of Landlord’s Interest. Tenant acknowledges that Landlord has the right to transfer all or any portion of its interest in the Project or Building and in this Lease, and Tenant agrees that in the event of any such transfer, Landlord shall automatically be released from all liability under this Lease arising after the date of transfer and Tenant agrees to look solely to such transferee for the performance of Landlord’s obligations hereunder after the date of transfer and such transferee shall be deemed to have fully assumed and be liable for all obligations of this Lease to be performed by Landlord, including the return of any Security Deposit, and Tenant shall attorn to such transferee.
29.6
Prohibition Against Recording. Except as provided in Section 29.4 of this Lease, neither this Lease, nor any memorandum, affidavit or other writing with respect thereto, shall be recorded by Tenant or by anyone acting through, under or on behalf of Tenant.
29.7
Landlord’s Title. Landlord’s title is and always shall be paramount to the title of Tenant. Nothing herein contained shall empower Tenant to do any act which can, shall or may encumber the title of Landlord.
29.8
Relationship of Parties. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent, partnership, joint venturer or any association between Landlord and Tenant.
29.9
Application of Payments. Landlord shall have the right to apply payments received from Tenant pursuant to this Lease, regardless of Tenant’s designation of such payments, to satisfy any obligations of Tenant hereunder, in such order and amounts as Landlord, in its sole discretion, may elect.
29.10
Time of Essence. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor.
29.11
Partial Invalidity. If any term, provision or condition contained in this Lease shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term, provision or condition to persons or circumstances other than those with respect to which it is invalid or unenforceable, shall not be affected thereby, and each and every other term, provision and condition of this Lease shall be valid and enforceable to the fullest extent possible permitted by law.

- 58 -

29.12
No Warranty. In executing and delivering this Lease, Tenant has not relied on any representations, including, but not limited to, any representation as to the amount of any item comprising Additional Rent or the amount of the Additional Rent in the aggregate or that Landlord is furnishing the same services to other tenants, at all, on the same level or on the same basis, or any warranty or any statement of Landlord which is not set forth herein or in one or more of the exhibits attached hereto.
29.13
Landlord Exculpation. The liability of Landlord or the Landlord Parties to Tenant for any default by Landlord under this Lease or arising in connection herewith or with Landlord’s operation, management, leasing, repair, renovation, alteration or any other matter relating to the Project or the Premises shall be limited solely and exclusively to an amount which is equal to the lesser of (a) the interest of Landlord in the Building or (b) the equity interest Landlord would have in the Building if the Building were encumbered by third-party debt in an amount equal to sixty percent (60%) of the value of the Building (as such value is reasonably determined by Landlord), in either case including any sales or insurance proceeds received by Landlord or the Landlord Parties in connection with the Project, Building or Premises. Neither Landlord, nor any of the Landlord Parties shall have any personal liability therefor, and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. The limitations of liability contained in this Section 29.13 shall inure to the benefit of Landlord’s and the Landlord Parties’ present and future partners, beneficiaries, officers, directors, trustees, shareholders, agents and employees, and their respective partners, heirs, successors and assigns. Under no circumstances shall any present or future partner of Landlord (if Landlord is a partnership), or trustee or beneficiary (if Landlord or any partner of Landlord is a trust), have any liability for the performance of Landlord’s obligations under this Lease. Notwithstanding any contrary provision herein, nothing in this Lease shall impose any obligations on Tenant or Landlord to be responsible or liable for, and each hereby releases the other from all liability for, consequential, indirect, special or punitive damages (including but not limited to, damages with respect to loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring, or loss to inventory, scientific research, scientific experiments, laboratory animals, products, specimens, samples, and/or scientific, business, accounting and other records of every kind and description kept at the premises and any and all income derived or derivable therefrom, other than those consequential damages incurred by Landlord in connection with a holdover of the Premises by Tenant after the expiration or earlier termination of this Lease as set forth in Article 16, above.
29.14
Entire Agreement. It is understood and acknowledged that there are no oral agreements between the parties hereto affecting this Lease and this Lease constitutes the parties’ entire agreement with respect to the leasing of the Premises and supersedes and cancels any and all previous negotiations, arrangements, brochures, agreements and understandings, if any, between the parties hereto or displayed by Landlord to Tenant with respect to the subject matter thereof, and none thereof shall be used to interpret or construe this Lease. None of the terms, covenants, conditions or provisions of this Lease can be modified, deleted or added to except in writing signed by the parties hereto.

- 59 -

29.15
Right to Lease. Landlord reserves the absolute right to effect such other tenancies in the Project as Landlord in the exercise of its sole business judgment shall determine to best promote the interests of the Building or Project. Tenant does not rely on the fact, nor does Landlord represent, that any specific tenant or type or number of tenants shall, during the Lease Term, occupy any space in the Building or Project.
29.16
Force Majeure. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other monetary amounts to be paid by either party to the other pursuant to this Lease (collectively, a “Force Majeure”), notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party’s performance caused by a Force Majeure.
29.17
Waiver of Redemption by Tenant. Tenant hereby waives, for Tenant and for all those claiming under Tenant, any and all rights now or hereafter existing to redeem by order or judgment of any court or by any legal process or writ, Tenant’s right of occupancy of the Premises after any termination of this Lease.
29.18
Notices. All notices, demands, statements, designations, approvals or other communications (collectively, “Notices”) given or required to be given by either party to the other hereunder or by law shall be in writing, shall be (A) sent by United States certified or registered mail, postage prepaid, return receipt requested (“Mail”), (B) delivered by a nationally recognized overnight courier that provides proof of delivery, or (C) delivered personally. Any Notice shall be sent, transmitted, or delivered, as the case may be, to Tenant at the appropriate address set forth in Section 10 of the Summary, or to such other place as Tenant may from time to time designate in a Notice to Landlord, or to Landlord at the addresses set forth below, or to such other places as Landlord may from time to time designate in a Notice to Tenant. Any Notice will be deemed given upon actual (or attempted but refused) delivery. As of the date of this Lease, any Notices to Landlord must be sent, transmitted, or delivered, as the case may be, to the following addresses:

HCP Torreyana, LLC

c/o HCP, Inc.

420 Stevens Avenue, Suite 170

Solana Beach, California 92075

Attention: Mike Dorris

with a copy to:

HCP Torreyana, LLC

c/o HCP, Inc.

1920 Main Street, Suite 1200

Irvine, CA 92614

Attn: Legal Department

- 60 -

and

Allen Matkins Leck Gamble Mallory & Natsis LLP

1901 Avenue of the Stars, Suite 1800

Los Angeles, California 90067

Attention: Anton N. Natsis, Esq.

29.19
Joint and Several. If there is more than one tenant, the obligations imposed upon Tenant under this Lease shall be joint and several.
29.20
Authority. If Tenant is a corporation, trust or partnership, each individual executing this Lease on behalf of Tenant hereby represents and warrants that Tenant is a duly formed and existing entity qualified to do business in the State of California and that Tenant has full right and authority to execute and deliver this Lease and that each person signing on behalf of Tenant is authorized to do so. In such event, Tenant shall, within ten (10) days after execution of this Lease, deliver to Landlord satisfactory evidence of such authority and, if a corporation, upon demand by Landlord, also deliver to Landlord satisfactory evidence of (i) good standing in Tenant’s state of incorporation and (ii) qualification to do business in the State of California.
29.21
Attorneys’ Fees. In the event that either Landlord or Tenant should bring suit for the possession of the Premises, for the recovery of any sum due under this Lease, or because of the breach of any provision of this Lease or for any other relief against the other, then all costs and expenses, including reasonable attorneys’ fees, incurred by the prevailing party therein shall be paid by the other party, which obligation on the part of the other party shall be deemed to have accrued on the date of the commencement of such action and shall be enforceable whether or not the action is prosecuted to judgment.
29.22
Governing Law; WAIVER OF TRIAL BY JURY. This Lease shall be construed and enforced in accordance with the laws of the State of California. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF

- 61 -

LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.

29.23
Submission of Lease. Submission of this instrument for examination or signature by Tenant does not constitute a reservation of, option for or option to lease, and it is not effective as a lease or otherwise until execution and delivery by both Landlord and Tenant.
29.24
Brokers. Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Lease, excepting only the real estate brokers or agents specified in Section 12 of the Summary (the “Brokers”), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Lease. Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under the indemnifying party. The terms of this Section 29.24 shall survive the expiration or earlier termination of the Lease Term. Landlord shall pay the Brokers pursuant to the terms of separate commission agreements.
29.25
Independent Covenants. This Lease shall be construed as though the covenants herein between Landlord and Tenant are independent and not dependent and Tenant hereby expressly waives the benefit of any statute to the contrary and agrees that if Landlord fails to perform its obligations set forth herein, Tenant shall not be entitled to make any repairs or perform any acts hereunder at Landlord’s expense or to any setoff of the Rent or other amounts owing hereunder against Landlord.
29.26
Project or Building Name, Address and Signage. Landlord shall have the right, subject to the remaining terms of this Lease (including, without limitation, Article 23 above), at any time to change the name and/or address of the Project or Building and to install, affix and maintain any and all signs on the exterior and on the interior of the Project (other than the interior of the Premises) as Landlord may, in Landlord’s sole discretion, desire. Tenant shall not use the name of the Project or Building or use pictures or illustrations of the Project or Building in advertising or other publicity or for any purpose other than as the address of the business to be conducted by Tenant in the Premises, without the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed; provided, however, if Landlord approves of a picture or illustration of the Project or Building (which approval shall not be unreasonably withheld, conditioned or delayed), Tenant may use the same picture or illustration in other advertisements or other publicity provided such advertisements or other publicity does not identify or reference Landlord or any Landlord Party in any manner.
29.27
Counterparts. This Lease may be executed in counterparts with the same effect as if both parties hereto had executed the same document. Both counterparts shall be construed together and shall constitute a single lease.
29.28
Confidentiality. Landlord and Tenant acknowledge that the content of this Lease and any related documents are confidential information. Landlord and Tenant shall keep such confidential information strictly confidential and shall not disclose such confidential information to any person or entity other than Landlord’s and Tenant’s respective financial, legal, and space planning consultants. Notwithstanding the foregoing, Landlord or Tenant may disclose the terms

- 62 -

of this Lease and any of the other matters described in this Section as follows without violating the confidentiality provision contained in this Section: (i) such disclosures to existing or prospective lenders, purchasers, title companies, appraisers, and other third persons as may reasonably be necessary in order to conduct its business relating to the Project in a commercially reasonable manner; (ii) privileged communications including communications with counsel, accountants, and advisors; (iii) such disclosures as may be necessary or required by any governmental or regulatory authorities; (iv) such disclosures as may be required by law or by subpoena or any other similar court order or discovery request in any civil or criminal; (v) such disclosures as may be reasonably required to enforce the terms of this Lease or any rights and remedies under this Lease; (vi) such disclosures as are necessary in connection with any Transfers or any Permitted Transfers, and (vii) to the extent that disclosure is mandated by applicable law, the Securities Exchange Commission or the rules of any stock exchange upon which Landlord’s or Tenant’s (or Landlord or Tenant’s parent’s) shares are from time to time traded.

29.29
Development of the Project.
29.29.1
Subdivision. Landlord reserves the right to subdivide all or a portion of the buildings and Common Areas, provided that no such subdivision shall limit or adversely affect in any material or unreasonable manner any rights of Tenant hereunder and all provisions of this Lease with respect to percentages of parking or space shall be calculated as if the Project had not been subdivided. Tenant agrees to execute and deliver, upon demand by Landlord and in the form requested by Landlord, any additional documents needed to conform this Lease to the circumstances resulting from a subdivision and any all maps in connection therewith. Notwithstanding anything to the contrary set forth in this Lease, the separate ownership of any buildings and/or Common Areas by an entity other than Landlord shall not affect the calculation of Direct Expenses or Tenant’s payment of Tenant’s Share of Direct Expenses.
29.29.2
Construction of Property and Other Improvements. Tenant acknowledges that portions of the Project may be under construction following Tenant’s occupancy of the Premises, and that such construction may result in levels of noise, dust, obstruction of access, etc. which are in excess of that present in a fully constructed project, provided that any such noise, dust or obstruction shall not unreasonably interfere with Tenant’s use of the Premises for the Permitted Use, access to or from the Premises or Tenant’s parking rights hereunder (except to the extent that Landlord provides Tenant with Reasonable Alternate Parking) or Tenant’s signage rights under Article 23 above. Tenant hereby waives any and all rent offsets or claims of constructive eviction which may arise in connection with such demolition or construction to the extent consistent with the preceding proviso (except as otherwise expressly set forth in Section 19.5.2).
29.30
No Violation. Tenant hereby warrants and represents that neither its execution of nor performance under this Lease shall cause Tenant to be in violation of any agreement, instrument, contract, law, rule or regulation by which Tenant is bound, and Tenant shall protect, defend, indemnify and hold Landlord harmless against any claims, demands, losses, damages, liabilities, costs and expenses, including, without limitation, reasonable attorneys’ fees and costs, arising from Tenant’s breach of this warranty and representation.

- 63 -

29.31
Transportation Management. If and to the extent require by Applicable Laws, Tenant shall fully comply with all present or future programs intended to manage parking, transportation or traffic in and around the Project and/or the Building, and in connection therewith, Tenant shall take responsible action for the transportation planning and management of all employees located at the Premises by working directly with Landlord, any governmental transportation management organization or any other transportation-related committees or entities. Such programs may include, without limitation: (i) restrictions on the number of peak-hour vehicle trips generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of an in-house ridesharing program and an employee transportation coordinator; (iv) working with employees and any Project, Building or area-wide ridesharing program manager; (v) instituting employer-sponsored incentives (financial or in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work shifts for employees.
29.32
Rooftop Rights. Subject to, (i) reasonable construction rules and regulations promulgated by Landlord (Landlord shall deliver a written copy of same to Tenant, as well as written notice of any future modifications thereto), (ii) the Building standards therefor, and (iii) the terms and conditions set forth in Article 8 of this Lease and this Section 29.32, Tenant may install, repair, maintain and use, at Tenant’s sole cost and expense, but without the payment of any Base Rent, Additional Rent (except for electricity and other utility costs) or similar fee or charge, one (1) satellite dish or antenna, with the antenna not to exceed one (1) meter in diameter, on the roof of the Building for the sending and receiving of signals or broadcasts (provided that there shall be no generation or transmission of commercial signals or broadcasts) servicing the business conducted by Tenant from within the Premises (such satellite dishes are collectively defined as the “Rooftop Equipment”). Tenant shall be solely responsible for any and all costs incurred or arising in connection with the Rooftop Equipment, including, but not limited to, costs of electricity and insurance related to the Rooftop Equipment. Landlord makes no representations or warranties whatsoever with respect to the condition of the roof of the Building, or the fitness or suitability of the roof of the Building for the installation, maintenance and operation of the Rooftop Equipment, including, without limitation, with respect to the quality and clarity of any receptions and transmissions to or from the Rooftop Equipment and the presence of any interference with such signals whether emanating from the Building or otherwise. The physical appearance and the size of the Rooftop Equipment shall be subject to Landlord’s reasonable approval, the location of any such Rooftop Equipment shall be mutually agreed upon by Landlord and Tenant, and Landlord may require Tenant to install screening around such Rooftop Equipment, at Tenant’s sole cost and expense, as reasonably designated by Landlord. Tenant shall service, maintain and repair such Rooftop Equipment, at Tenant’s sole cost and expense. In the event Tenant elects to exercise its right to install the Rooftop Equipment, then Tenant shall give Landlord prior notice thereof. Tenant shall reimburse to Landlord the actual and documented out-of-pocket costs reasonably incurred by Landlord in approving such Rooftop Equipment. Tenant’s rights under this Section 29.32 shall terminate and shall be of no further force or effect upon the expiration or earlier termination of this Lease, or, in the event Tenant (or a Permitted Transferee ) no longer occupies the Premises. Prior to the expiration or earlier termination of this Lease, Tenant shall, as promptly as possible but in no event more than thirty (30) days thereafter, remove and restore the affected portion of the rooftop and the Building to the condition the rooftop and the Building would have been in had no such Rooftop Equipment been installed (reasonable wear and tear and damage from casualty excepted). Such Rooftop Equipment shall be installed pursuant to plans and specifications approved by Landlord (specifically including, without limitation, all mounting and waterproofing

- 64 -

details), which approval will not be unreasonably withheld, conditioned, or delayed. Notwithstanding any such review or approval by Landlord, Tenant shall remain solely liable for any damage arising in connection with Tenant’s installation, use, maintenance and/or repair of such Rooftop Equipment, including, without limitation, any damage to a portion of the roof or roof membrane and any penetrations to the roof. Landlord and Tenant hereby acknowledge and agree that Landlord shall have no liability in connection with Tenant’s use, maintenance and/or repair of such Rooftop Equipment. Tenant shall be responsible, at Tenant’s sole cost and expense, for (i) obtaining all permits or other governmental approvals required in connection with the Rooftop Equipment, and (ii) installing, repairing and maintaining and causing the Rooftop Equipment to comply with all Applicable Laws. Tenant shall not be entitled to license its Rooftop Equipment to any third party, nor shall Tenant be permitted to receive any revenues, fees or any other consideration for the use of such Rooftop Equipment by a third party. Tenant’s right to install such Rooftop Equipment shall be non-exclusive, and Tenant hereby expressly acknowledges Landlord’s continued right (A) to itself, or any other tenant of the Building, utilize any portion of the rooftop of the Building, and (B) to re-sell, license or lease any rooftop space to an unaffiliated third party; provided, however, such Landlord (or third-party) use shall not materially interfere with (or preclude the installation of) Tenant’s Rooftop Equipment. Notwithstanding any provision to the contrary contained in this Section 29.38, in no event shall Tenant access the roof of the Building without first notifying Landlord of Tenant’s intention to do so (except in the case of an emergency). The rights contained in this Section 29.38 shall be personal to the Original Tenant and any Permitted Transferee Assignee, and may only be exercised by the Original Tenant or any Permitted Transferee Assignee (and not by any other assignee, sublessee or other transferee of Tenant’s interest in this Lease).

29.33
Tenant’s Dog.
29.33.1
In General. Subject to the provisions of this Section 29.33, Tenant shall be permitted to bring one (1) dog into the Premises, which dog is owned by an officer of Tenant (“Tenant’s Dog”); provided that in no event shall Tenant’s Dog be a Pit Bull Terrier, Rottweiler, Boxer, Chow Chow, Presa Canario, German Shepherd, Alaskan Malamute, Husky and Doberman Pinscher, or a mixture thereof. Tenant’s Dog shall be non-aggressive, fully domesticated and fully-vaccinated. Tenant’s Dog must be on a leash while in any area of the Project outside of the Premises. Within three (3) business days following Tenant’s receipt of Landlord’s request, Tenant shall provide Landlord with reasonable satisfactory evidence showing that all current vaccinations have been received by Tenant’s Dog Tenant’s Dog shall not be brought to the Project if it is ill or contracts a disease that could potentially threaten the health or wellbeing of any tenant or occupant of the Building (which diseases may include, but shall not be limited to, rabies, leptospirosis and Lyme disease). While in the Building, Tenant’s Dog must be taken directly to/from the Premises. Tenant shall not permit any objectionable dog related odors to emanate from the Premises, and in no event shall Tenant’s Dog be at the Project overnight. All bodily waste generated by Tenant’s Dog in or about the Project shall be promptly removed and disposed of in trash receptacles designated by Landlord, and any areas of the Project affected by such waste shall be cleaned and otherwise sanitized. Tenant’s Dog shall not be permitted to enter the Project if it has previously exhibited dangerously aggressive behavior.
29.33.2
Costs and Expenses. Tenant shall pay to Landlord, within ten (10) business days after demand, all costs incurred by Landlord in connection with Tenant’s Dog

- 65 -

presence in the Building, Premises or Project, including, but not limited to, janitorial, waste disposal, landscaping, signage, repair, and legal costs and expenses. In the event Landlord receives any verbal or written complaints from any other tenant or occupant of the Project in connection with health-related issues (e.g., allergies) related to the presence of the Tenant’s Dog in the Premises, the Building or the Project, Landlord and Tenant shall promptly meet and mutually confer, in good faith, to determine appropriate mitigation measures to eliminate the causes of such complaints (which mitigation measures may include, without limitation, additional and/or different air filters to be installed in the Premises heating, air conditioning and ventilation system, or elsewhere in the Building), and Tenant shall cause such measures to be taken promptly at its sole cost or expense.

29.33.3
Indemnity. Tenant’s indemnification obligations under Article 10 of this Lease shall apply to any claims relating to Tenant’s Dog (including, without limitation, bodily injury to persons in the Premises or Building or on the Project or property damage to the property of Landlord or any other tenant, subtenant, occupant, licensee or invitee of the Building or Project). Further, Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that Tenant’s insurance provided pursuant to Article 10 of this Lease covers dog-related injuries and damage.
29.33.4
Rights Personal to Original Tenant. The right to bring Tenant’s Dog into the Premises pursuant to this Section 29.33 is personal to the Original Tenant and its Permitted Transferee Assignee. If Tenant assigns the Lease or sublets all or any portion of the Premises, then, as to the entire Premises, upon such assignment, or, as to the portion of the Premises sublet, upon such subletting and until the expiration of such sublease, the right to bring Tenant’s Dog into such portion the Premises shall simultaneously terminate and be of no further force or effect.

[END OF DOCUMENT; SIGNATURES CONTAINED ON FOLLOWING PAGE]

- 66 -

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written.

LANDLORD: | TENANT:
HCP TORREY ANA, LLC, a Delaware limited liability company | BIOATLA, LLC a Delaware limited liability company
By: /s/ Jonathan M. Bergschneider | By: /s/ Jay M. Short
Jonathan M. Bergschneider Print Name | Jay M. Short Print Name
Its: Senior Managing Director | Its: Chairman, CEO and President By: Print Name

- 67 -

FIRST AMENDMENT TO
11085 TORREYANA ROAD LEASE

This First Amendment to Lease (this “First Amendment”) is made and entered into as of October 23, 2017, by and between HCP TORREYANA, LLC, a Delaware limited liability company (“Landlord”) and BIOATLA, LLC, a Delaware limited liability company (“Tenant”).

R E C I T A L S

A. Landlord and Tenant are parties to that certain 11085 Torreyana Road Lease dated as of June 2, 2017 (the “Lease”), whereby Landlord leases to Tenant and Tenant leases from Landlord approximately 43,375 rentable square feet of space (the “Premises”) comprising the entire three-story building (the “Building”) located at 11085 Torreyana Road, San Diego, California.

B. Landlord and Tenant desire to amend the Lease on the terms and conditions set forth in this First Amendment.

A G R E E M E N T:

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

1.
Defined Terms. Except as explicitly set forth in this First Amendment, each initially capitalized term when used herein shall have the same respective meaning as is set forth in the Lease.
2.
Additional Allowance. Notwithstanding anything in the Lease to the contrary, the amount of the Additional Allowance, as defined in Section 2.2 of the Tenant Work Letter is Four Hundred Ninety-Nine Thousand, Eight Hundred and 00/100 Dollars ($499,800.00).
3.
Tenant Delays. As of the date of this First Amendment, Twenty-Eight (28) business days of delay have resulted from Tenant Delays per Section 4.2 of the Tenant Work Letter (Exhibit B) attached to the Lease.
4.
No Other Modifications. Except as otherwise provided herein, all other terms and provisions of the Lease shall remain in full force and effect, unmodified by this First Amendment.
5.
Counterparts. This First Amendment may be executed in any number of original counterparts. Any such counterpart, when executed, shall constitute an original of this First Amendment, and all such counterparts together shall constitute one and the same First Amendment.
6.
Conflict. In the event of any conflict between the Lease and this First Amendment, this First Amendment shall prevail.

IN WITNESS WHEREOF, the parties have entered into this First Amendment as of the date first set forth above.

“LANDLORD”

HCP TORREYANA, LLC,
a Delaware limited liability company

By: /s/ Michael Dorris

Name: Michael Dorris

Its: VP

“TENANT”

BIOATLA, LLC,
a Delaware limited liability company

By: /s/ Jay M. Short

Name: Jay M. Short

Its: CEO

SECOND AMENDMENT TO LEASE

This SECOND AMENDMENT TO LEASE (this “Second Amendment”) is made and entered into as of the 16th day of January, 2019, by and between HCP TORREYANA, LLC, a Delaware limited liability company (“Landlord”), and BIOATLA, LLC, a Delaware limited liability company (“Tenant”).

R E C I T A L S :

A. Landlord and Tenant entered into that certain Lease dated June 2, 2017 (the “Lease”), whereby Landlord leases to Tenant and Tenant leases from Landlord approximately 20,825 rentable square feet of space (the “Existing Premises”) consisting of the entire first (1st) floor of that certain building located at 11085 Torreyana Road, San Diego, California 92121 (the “Building”).

B. Tenant desires to expand the Existing Premises to include that certain space consisting of approximately 22,552 rentable square feet of space commonly known as Suite 200 and located on the top floor of the Building (the “Expansion Premises”), as delineated on Exhibit A attached hereto and made a part hereof, and to make other modifications to the Lease, and in connection therewith, Landlord and Tenant desire to amend the Lease as hereinafter provided.

A G R E E M E N T :

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

1.
Capitalized Terms. All capitalized terms when used herein shall have the same meaning as is given such terms in the Lease unless expressly superseded by the terms of this Second Amendment.
2.
Modification of Premises. Effective as of the date (the “Expansion Commencement Date”) which is the earlier to occur of (i) the date upon which Tenant first commences to conduct business in the Expansion Premises, (ii) the “Substantial Completion,” as that term is defined in Section 4.2.2.2 of the Tenant Work Letter attached hereto as Exhibit B (the “Tenant Work Letter”), and (iii) July 1, 2019, Tenant shall lease from Landlord and Landlord shall lease to Tenant the Expansion Premises. Landlord and Tenant hereby acknowledge that such addition of the Expansion Premises to the Existing Premises shall, effective as of the Expansion Commencement Date, increase the size of the Premises to approximately 43,377 rentable square feet, consisting of all of the rentable area of the Building. The Existing Premises and the Expansion Premises may hereinafter collectively be referred to as the “Premises.”
3.
Expansion Term. Landlord and Tenant acknowledge that Tenant’s lease of the Existing Premises is scheduled to expire on February 28, 2025 (the “Current Lease Expiration Date”), pursuant to the terms of the Lease. Notwithstanding anything to the contrary in the Lease, the term of Tenant’s lease of the Existing Premises shall expire coterminously with the term of

Tenant’s lease of the Expansion Premises on the date (the “New Expiration Date”) which is the later to occur of (i) the Current Lease Expiration Date, and (ii) the day immediately preceding the sixth (6th) anniversary of the Expansion Commencement Date if the Expansion Commencement Date shall be the first day of a calendar month; or, if the Expansion Commencement Date shall be other than the first day of a calendar month, then it shall mean the last day of the month in which the sixth (6th) anniversary of the Expansion Commencement Date occurs. The period of time commencing on the Expansion Commencement Date and terminating on the New Expiration Date, shall be referred to herein as the “Expansion Term.”

4.
Option Term. Tenant shall continue to have the right to extend the Lease Term pursuant to Section 2.2 of the Lease; provided, however, Landlord and Tenant hereby acknowledge and agree that, effective as of the date of this Second Amendment, the following shall apply: (i) all references to “this Lease” or “the Lease” in Section 2.2 of the Lease shall be deemed to be references to “the Lease, as amended”; and (ii) all references to the “Premises” in Section 2.2 of the Lease shall be deemed to be references to the Existing Premises and the Expansion Premises.
5.
Base Rent.
5.1.
Existing Premises. Tenant shall continue to pay Base Rent for the Existing Premises in accordance with the terms of the Lease. Following The Current Lease Expiration Date and continuing through the New Expiration Date, Tenant shall continue to pay the same Monthly Installment of Base Rent (prorated for any partial calendar month) for the Existing Premises attributable to the last calendar month of the otherwise scheduled Lease Term.
5.2.
Expansion Premises. Commencing on the Expansion Commencement Date, and continuing throughout the Expansion Term, Tenant shall pay to Landlord monthly installments of Base Rent for the Expansion Premises as follows:

Expansion Lease Year* | Annual Base Rent | Monthly Installment of Base Rent | Approximate Monthly Base Rent per Rentable Square Foot
1 | $240,855.36 | $20,071.28 | $0.89
2 | $335,573.76 | $27,964.48 | $1.24
3 | $552,072.96 | $46,006.08 | $2.04
4 | $646,791.36 | $53,899.28 | $2.39
5 | $660,322.56 | $55,026.88 | $2.44
6 | $687,384.96 | $57,282.08 | $2.54

* For purposes of this Second Amendment, the term “Expansion Lease Year” shall mean each consecutive twelve (12) month period during the Expansion Term; provided, however, that the first (1st) Expansion Lease Year shall commence on the Expansion Commencement Date and end on the

last day of the month in which the first anniversary of the Expansion Commencement Date occurs (or if the Expansion Commencement Date is the first (1st) day of a calendar month, then the first (1st) Expansion Lease Year shall commence on the Expansion Commencement Date and end on the day immediately preceding the first (1st) anniversary of the Expansion Commencement Date), and further provided that the last Expansion Lease Year shall end on the New Expiration Date.

6.
Tenant’s Share of Building Direct Expenses.
6.1.
Existing Premises. Tenant shall continue to pay Tenant’s Share of Direct Expenses arising or accruing prior the Expansion Commencement Date in connection with the Existing Premises in accordance with the terms of the Lease.
6.2.
Expansion Premises. Commencing on the Expansion Commencement Date, and continuing throughout the Expansion Term, Tenant shall pay Tenant’s Share of Direct Expenses in connection with the Expansion Premises in accordance with the terms of the Lease, provided that with respect to the calculation of Tenant’s Share of Direct Expenses in connection with the Expansion Premises, Tenant’s Share shall equal 51.99%.
7.
Expansion Improvements. Except as specifically set forth herein, Landlord shall not be obligated to provide or pay for any improvement work or services related to the improvement of the Existing Premises or the Expansion Premises, and Tenant shall continue to accept the Existing Premises, and accept the Expansion Premises in their presently existing, “as- is” condition. Notwithstanding the foregoing, Landlord shall provide Tenant with the Tenant Improvement Allowance and Tenant shall construct the improvements in the Expansion Premises pursuant to the terms of the Tenant Work Letter.
8.
Broker. Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Second Amendment other than Cresa and CBRE (the “Brokers”), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Second Amendment. Each party agrees to indemnify and defend the other party against and hold the other party harmless from and against any and all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses (including, without limitation, reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of the indemnifying party’s dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under the indemnifying party. The terms of this Section 8 shall survive the expiration or earlier termination of the term of the Lease, as hereby amended.

9.
Parking. In addition to Tenant’s parking rights set forth in the Lease, effective as of the Expansion Commencement Date and continuing throughout the entire Expansion Term, in connection with Tenant’s lease of the Expansion Premises, Tenant shall have the right, but not the obligation, to use up to twenty-nine (29) unreserved parking spaces at the parking facilities of Landlord’s neighboring office/laboratory project currently known as “Torrey Pines Science Park” and sixty-one (61) reserved parking spaces at the Building parking facilities, subject to the terms of Article 28 of the Lease.
10.
Security Deposit. Notwithstanding anything in the Lease to the contrary, the Security Deposit held by Landlord pursuant to the Lease, as amended hereby, shall equal One Hundred Fifty-Four Thousand Ninety-Five and 92/100 Dollars ($154,095.92). Landlord and Tenant acknowledge that, in accordance with Article 21 of the Lease, Tenant has previously delivered the sum of Ninety-Six Thousand Eight Hundred Thirteen and 84/100 Dollars ($96,813.84) (the “Existing Security Deposit”) to Landlord as security for the faithful performance by Tenant of the terms, covenants and conditions of the Lease. Concurrently with Tenant’s execution of this Second Amendment, Tenant shall deposit with Landlord an amount equal to Fifty-Seven Thousand Two Hundred Eighty-Two and 08/100 Dollars ($57,282.08) to be held by Landlord as a part of the Security Deposit. To the extent that the total amount held by Landlord at any time as security for the Lease, as hereby amended, is less than One Hundred Fifty-Four Thousand Ninety-Five and 92/100 Dollars ($154,095.92), Tenant shall pay the difference to Landlord within ten (10) days following Tenant’s receipt of notice thereof from Landlord.
11.
Statutory Disclosure and Related Terms. For purposes of Section 1938(a) of the California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that the Expansion Premises have not undergone inspection by a Certified Access Specialist (CASp). As required by Section 1938(e) of the California Civil Code, Landlord hereby states as follows: “A Certified Access Specialist (CASp) can inspect the subject Expansion Premises and determine whether the subject Expansion Premises comply with all of the applicable construction-related accessibility standards under state law. Although state law does not require a CASp inspection of the subject Expansion Premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject Expansion Premises for the occupancy or potential occupancy of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection, and the cost of making any repairs necessary to correct violations of construction-related accessibility standards within the Expansion Premises.” In furtherance of the foregoing, Landlord and Tenant hereby agree as follows: (a) any CASp inspection requested by Tenant shall be conducted, at Tenant’s sole cost and expense, by a CASp approved in advance by Landlord, while any CASp inspection initiated by Landlord shall be conducted, at Landlord’s sole cost and expense, by a CASp designated by Landlord; (b) with respect to improvements or repairs required to correct violations discovered during a CASp inspection initiated by Tenant, pursuant to Article 24 of the Lease, Tenant, at its sole cost and expense, shall be responsible for making any improvements or repairs within the Expansion Premises to correct violations of construction-related accessibility standards; and (c) if anything done by or for Tenant in its use or occupancy of the Expansion Premises shall require any improvements or repairs to the Building or Project (outside the Expansion Premises) to correct violations of construction-related accessibility standards, then Tenant shall, at Landlord’s option, either perform such repairs at Tenant’s sole cost and expense or

reimburse Landlord upon demand, as Additional Rent, for the cost to Landlord of performing such repairs, provided that Landlord shall be solely responsible for the costs of performing such improvements or repairs to correct such violations of construction-related accessibility standards if such violations were discovered during a CASp inspection initiated by Landlord. The terms of this Section 11 do not amend or reduce the obligations of Landlord and Tenant set forth in Article 24 of the Lease regarding compliance with Applicable Laws, but apply solely to the obligations of Landlord and Tenant in connection with Tenant’s election to conduct a CASp inspection hereunder.

12.
No Further Modification. Except as set forth in this Second Amendment, all of the terms and provisions of the Lease shall apply with respect to the Expansion Premises and shall remain unmodified and in full force and effect.

[signatures follow on next page]

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

“LANDLORD” | “TENANT”
HCP TORREYANA, LLC, | BIOATLA, LLC,
a Delaware limited liability company | a Delaware limited liability company
By: /s/ Michael Dorris | By: /s/ Jay Short
Name: Michael Dorris | Name: Jay Short
Its: Vice President | Its: Chairman & CEO

EXHIBIT A

OUTLINE OF EXPANSION PREMISES

EXHIBIT B

TENANT WORK LETTER

This Tenant Work Letter shall set forth the terms and conditions relating to the initial improvement of the Expansion Premises for Tenant following the date of this Second Amendment. This Tenant Work Letter is essentially organized chronologically and addresses the issues of construction, in sequence, as such issues will arise during construction in the Expansion Premises.

SECTION 1
CONDITION OF EXPANSION PREMISES

Tenant acknowledges that except as provided below, Tenant shall accept the Expansion Premises in their existing, “as-is” condition on the date of delivery thereof to Tenant. Except for the payment of the Tenant Improvement Allowance as provided in Section 2, below, Landlord shall have no obligation to make or pay for any improvements to the Expansion Premises. Notwithstanding anything set forth in this Second Amendment to the contrary (but without limiting any other repair and maintenance obligations of Landlord that are expressly set forth in the Lease, as amended), upon the Expansion Commencement Date, Landlord shall cause (i) the Base Building to be in good working condition and repair, (ii) the Base Building and the Common Area to be compliant with Applicable Laws which were enacted and enforced as of the Lease Commencement Date to the extent necessary to obtain or maintain a certificate of occupancy (or its legal equivalent) for the Expansion Premises for general office use (collectively, the “Delivery Conditions”). Further, Landlord shall, at Landlord’s sole cost and expense (which shall not be deemed an Operating Expense), make such repairs or replacements as necessary to satisfy the Delivery Conditions; provided that Tenant delivers written notice thereof to Landlord prior to the date that occurs thirty (30) days following Tenant’s occupancy of the Expansion Premises for the Permitted Use; and provided further that any such repair, replacement or work was not caused by the misuse, misconduct, damage, destruction, omissions, and/or negligence (collectively, “Tenant Damage”) of Tenant, its subtenants and/or assignees, if any, or any company which is acquired, sold or merged with Tenant, or by any modifications to the Tenant Improvements, Alterations, or other improvements constructed by or on behalf of Tenant. To the extent the Base Building is not in the Delivery Condition upon the Expansion Commencement Date as a result of Tenant Damage, then Tenant shall reimburse Landlord for an equitable proportion of the reasonable cost of such repair. If (1) it is determined that the Base Building was not in the Delivery Condition upon the Expansion Commencement Date, and (2) Tenant delivers written notice thereof to Landlord prior to the date that occurs thirty (30) days following Tenant’s occupancy of the Expansion Premises for the Permitted Use, then Landlord shall not be liable to Tenant for any damages, but as Tenant’s sole remedy (but without limiting Tenant’s right to abate Base Rent, Tenant’s Share of Direct Expenses and any parking charges in accordance with the terms and conditions of Section 19.5.2 of the Lease), Landlord shall, at no cost to Tenant (and which shall not be included in Operating Expenses), subject to the terms and conditions of this Section 1 above, promptly commence such work or take such other action as may be necessary to cause the Delivery Conditions to be satisfied, all to the extent not caused by Tenant Damage, and Landlord shall thereafter diligently pursue the same to completion.

SECTION 2
TENANT IMPROVEMENTS
2.1
Tenant Improvement Allowance. Tenant shall be entitled to a one-time tenant improvement allowance (the “Tenant Improvement Allowance”) in the amount of Three Hundred Thousand and No/100 Dollars ($300,000.00), for the costs relating to the initial design and construction of Tenant’s improvements, which are permanently affixed to the Expansion Premises or which are “Tenant Improvement Allowance Items,” as that term is defined in Section 2.2.1, below (collectively, the “Tenant Improvements”). In no event shall Landlord be obligated to make disbursements pursuant to this Tenant Work Letter or otherwise in connection with Tenant’s construction of the Tenant Improvements or any Tenant Improvement Allowance Items, as defined below, in a total amount which exceeds the sum of the Tenant Improvement Allowance. All Tenant Improvements for which the Tenant Improvement Allowance has been made available shall be deemed Landlord’s property under the terms of the Lease, as amended; provided, however, Landlord may, by written notice to Tenant given concurrently with Landlord’s approval of the “Final Working Drawings”, as that term is defined in Section 3.3, below, require Tenant, prior to the end of the Expansion Term, or given following any earlier termination of this Lease, as amended, at Tenant’s expense, to remove any Tenant Improvements which are reasonably be deemed to be Specialty Alterations (as that term is defined in Section 8.5 of the Lease) and to repair any damage to the Expansion Premises and Building caused by such removal and return the affected portion of the Expansion Premises to a Building standard general office condition. Any portion of the Tenant Improvement Allowance that is not disbursed or allocated for disbursement by the date which is twelve (12) months following the Expansion Commencement Date, shall revert to Landlord and Tenant shall have no further rights with respect thereto.
2.2
Disbursement of the Tenant Improvement Allowance.
2.2.1
Tenant Improvement Allowance Items. Except as otherwise set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by Landlord only for the following items and costs (collectively the “Tenant Improvement Allowance Items”):
2.2.1.1
Payment of all reasonable fees of the “Architect” and the “Engineers,” as those terms are defined in Section 3.1 of this Tenant Work Letter, project management fees, and payment of the fees incurred by, and the cost of documents and materials supplied by, Landlord and Landlord’s consultants in connection with the preparation and review of the “Construction Drawings,” as that term is defined in Section 3.2 of this Tenant Work Letter;
2.2.1.2
The payment of plan check, permit and license fees relating to construction of the Tenant Improvements;
2.2.1.3
The payment for all demolition and removal of existing improvements in the Expansion Premises;
2.2.1.4
The cost of construction of the Tenant Improvements, including, without limitation, testing and inspection costs, costs incurred for removal of existing furniture, fixtures or equipment in the Expansion Premises, hoisting and trash removal costs, costs to purchase and install in the Expansion Premises equipment customarily incorporated into laboratory improvements or laboratory utility systems, including, without limitation, UPS, DI

Systems, boilers, air compressors, glass/cage washers and autoclaves, painting, and contractors’ fees and general conditions;

2.2.1.5
The cost of any changes in the Base Building when such changes are required by the Construction Drawings (including if such changes are due to the fact that such work is prepared on an unoccupied basis), such cost to include all direct architectural and/or engineering fees and expenses incurred in connection therewith;
2.2.1.6
The cost of any changes to the Construction Drawings or Tenant Improvements required by all applicable building codes (the “Code”);
2.2.1.7
Sales and use taxes;
2.2.1.8
Subject to Section 2.2, above, all other actual out-of-pocket costs expended by Landlord in connection with the construction of the Tenant Improvements, including, without limitation, costs expended by Landlord pursuant to Section 4.1.1 of this Tenant Work Letter, below.
2.2.2
Disbursement of Tenant Improvement Allowance. During the construction of the Tenant Improvements, Landlord shall make monthly disbursements of the Tenant Improvement Allowance for Tenant Improvement Allowance Items for the benefit of Tenant and shall authorize the release of monies for the benefit of Tenant as follows.
2.2.2.1
Monthly Disbursements. On or before the fifth (5th) day of each calendar month, during the design and construction of the Tenant Improvements (or such other date as Landlord may designate), Tenant shall deliver to Landlord: (i) a request for reimbursement of amounts paid to the “Contractor,” as that term is defined in Section 4.1.1 of this Tenant Work Letter, approved by Tenant, in a commercially reasonable form to be provided by Landlord, showing the schedule, by trade, of percentage of completion of the Tenant Improvements in the Expansion Premises, detailing the portion of the work completed and the portion not completed; (ii) invoices from all of “Tenant’s Agents,” as that term is defined in Section 4.1.2 of this Tenant Work Letter, for labor rendered and materials for the Expansion Premises; (iii) executed mechanic’s lien releases, as applicable, from all of Tenant’s Agents which shall comply with the appropriate provisions, as reasonably determined by Landlord, of California Civil Code Sections 8132, 8134, 8136 and 8138 (provided that for sums that are the subject of the current disbursement request, conditional mechanic’s lien releases shall be acceptable, provided that Tenant also submits unconditional mechanic’s lien releases for all sums previously paid in connection with any and all prior disbursement requests); and (iv) all other information reasonably requested by Landlord. Tenant’s request for payment shall be deemed Tenant’s acceptance and approval of the work furnished and/or the materials supplied as set forth in Tenant’s payment request. Within forty-five (45) days thereafter, Landlord shall deliver a check to Tenant made payable to Tenant in payment of the lesser of: (A) the amounts so requested by Tenant as set forth in this Section 2.2.3.1, above (or, subject to the terms of Section 4.2.1, below, a percentage thereof), and (B) the balance of any remaining available portion of the Tenant Improvement Allowance, provided that Landlord does not dispute any request for payment based on non-compliance of any work with the “Approved Working Drawings,” as that term is defined in Section 3.5 below, or due to any substandard work. Landlord’s payment of such amounts shall not be deemed Landlord’s approval or acceptance of the work furnished or materials supplied as set forth in Tenant’s payment request.
2.2.2.2
Final Deliveries. Following the completion of construction of

the Tenant Improvements, Tenant shall deliver to Landlord properly executed final mechanic’s lien releases in compliance with both California Civil Code Section 8134 and either Section 8136 or Section 8138 from all of Tenant’s Agents, and a certificate certifying that the construction of the Tenant Improvements in the Expansion Premises has been substantially completed. Tenant shall record a valid Notice of Completion in accordance with the requirements of Section 4.3 of this Tenant Work Letter.

2.2.2.3
Other Terms. Landlord shall only be obligated to make disbursements from the Tenant Improvement Allowance to the extent costs are incurred by Tenant for Tenant Improvement Allowance Items. All Tenant Improvement Allowance Items for which the Tenant Improvement Allowance have been made available shall be deemed Landlord’s property under the terms of this Lease, as amended.
2.3
Building Standards. The quality of Tenant Improvements shall be in keeping with the existing improvements in the Premises.
SECTION 3
CONSTRUCTION DRAWINGS
3.1
Selection of Architect. Tenant shall retain an architect/space planner (the “Architect”) approved in advance by Landlord (which approval shall not be unreasonably withheld, conditioned or delayed) to prepare the Final Space Plan and Final Working Drawings as provided in Section 3.2 and 3.3, below. Tenant shall retain the engineering consultants or design/build subcontractors designated by Tenant and reasonably approved in advance by Landlord (the “Engineers”) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the Expansion Premises, which work is not part of the Base Building. All such plans and drawings shall comply with the drawing format and specifications reasonably determined by Landlord, and shall be subject to Landlord’s reasonable approval. Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the Base Building plans, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith. Landlord’s review of any plans or drawings as set forth in this Section 3, shall be for its sole purpose and shall not imply Landlord’s review of the same, or obligate Landlord to review the same, for quality, design, Code compliance or other like matters.
3.2
Final Space Plan. Tenant shall supply Landlord with four (4) copies signed by Tenant of its final space plan for the Expansion Premises before any architectural working drawings or engineering drawings have been commenced. The final space plan (the “Final Space Plan”) shall include a layout and designation of all offices, labs, rooms and other partitioning, their intended use, and equipment to be contained therein. Landlord may request clarification or more specific drawings for special use items not included in the Final Space Plan. Landlord shall advise Tenant within five (5) business days after Landlord’s receipt of the Final Space Plan for the Expansion Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall promptly cause the Final Space Plan to be revised to correct any deficiencies or other matters Landlord may reasonably require. If Landlord fails to approve or disapprove the Final Space Plan within such five (5) business day period, then Tenant may send Landlord a

reminder notice setting forth such failure (which reminder notice shall include a copy of such Final Space Plan) and containing the following sentence at the top of such notice in bold, capitalized font at least twelve (12) points in size: “LANDLORD’S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN LANDLORD’S DEEMED APPROVAL OF THE FINAL SPACE PLAN” (the “Final Space Plan Reminder Notice”). If Landlord fails to respond with its approval or disapproval within five (5) business days after its receipt of the Final Space Plan Reminder Notice, then the Final Space Plan shall be deemed approved by Landlord.

3.3
Final Working Drawings. After the Final Space Plan has been approved by Landlord, Tenant shall supply the Engineers with a complete listing of standard and non-standard equipment and specifications, including, without limitation, Title 24 calculations, electrical requirements and special electrical receptacle requirements for the Expansion Premises, to enable the Engineers and the Architect to complete the “Final Working Drawings” (as that term is defined below) in the manner as set forth below. Upon the approval of the Final Space Plan by Landlord and Tenant, Tenant shall promptly cause the Architect and the Engineers to complete the architectural and engineering drawings for the Expansion Premises, and Architect shall compile a fully coordinated set of architectural, structural, mechanical, electrical and plumbing working drawings in a form which is sufficiently complete to allow all of Tenant’s Agents to bid on the work and to obtain all applicable permits (collectively, the “Final Working Drawings”) and shall submit the same to Landlord for Landlord’s approval, which shall not be unreasonably withheld, conditioned, or delayed. Tenant shall supply Landlord with four (4) copies signed by Tenant of such Final Working Drawings. Landlord shall advise Tenant within ten (10) business days after Landlord’s receipt of the Final Working Drawings for the Expansion Premises if the same is unsatisfactory or incomplete in any respect. If Tenant is so advised, Tenant shall promptly cause the Final Working Drawings to be revised in accordance with such review and any disapproval of Landlord in connection therewith. If Landlord fails to approve or disapprove the Final Working Drawings within such ten (10) business day period, then Tenant may send Landlord a reminder notice setting forth such failure (which reminder notice shall include a copy of such Final Working Drawings) and containing the following sentence at the top of such notice in bold, capitalized font at least twelve (12) points in size: “LANDLORD’S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN LANDLORD’S DEEMED APPROVAL OF THE FINAL WORKING DRAWINGS” (the “Final Working Drawings Reminder Notice”). If Landlord fails to respond with its approval or disapproval within five (5) business days after its receipt of the Final Working Drawings Reminder Notice, then the Final Working Drawings shall be deemed approved by Landlord.
3.4
Approved Working Drawings. The Final Working Drawings shall be approved by Landlord (the “Approved Working Drawings”) prior to the commencement of construction of the Expansion Premises by Tenant. Concurrently with Tenant’s delivery of the Final Working Drawings to Landlord for Landlord’s approval, Tenant may submit the same to the appropriate municipal authorities for all applicable building permits. Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Expansion Premises and that obtaining the same shall be Tenant’s responsibility; provided, however, that Landlord shall cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy. No changes, modifications or alterations in the

Approved Working Drawings may be made without the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned, or delayed.

SECTION 4
CONSTRUCTION OF THE TENANT IMPROVEMENTS
4.1
Tenant’s Selection of Contractors.
4.1.1
The Contractor; Landlord’s Project Manager. Tenant shall retain a licensed general contractor, approved in advance by Landlord, to construct the Tenant Improvements (“Contractor”). Landlord’s approval of the Contractor shall not be unreasonably withheld, conditioned or delayed. Landlord shall retain Project Management Advisors, Inc. (“PMA”) as a third party project manager for construction oversight of the Tenant Improvements on behalf of Landlord, and Tenant shall pay a fee to Landlord with respect to the PMA services equal to 2.65% of the total project cost for the design, permitting and construction of the Tenant Improvements.
4.1.2
Tenant’s Agents. All subcontractors, laborers, materialmen, and suppliers used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and the Contractor to be known collectively as “Tenant’s Agents”) must be approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned, or delayed, and which shall be granted or denied within five (5) days of Landlord’s receipt of Tenant’s request for approval; provided, however, Landlord may nevertheless designate and require the use of particular mechanical, engineering, plumbing, fire life-safety and other Base Building subcontractors. If Landlord does not approve any of Tenant’s proposed subcontractors, laborers, materialmen, or suppliers, Tenant shall submit other proposed subcontractors, laborers, materialmen, and suppliers for Landlord’s written approval. If Landlord fails to approve or disapprove the Tenant’s Agents within such five (5) business day period, then Tenant may send Landlord a reminder notice setting forth such failure and containing the following sentence at the top of such notice in bold, capitalized font at least twelve (12) points in size: “LANDLORD’S FAILURE TO RESPOND TO THIS NOTICE WITHIN TWO (2) BUSINESS DAYS SHALL RESULT IN LANDLORD’S DEEMED APPROVAL OF THE TENANT’S AGENTS” (the “Tenant’s Agents Reminder Notice”). If Landlord fails to respond with its approval or disapproval within two (2) business days after its receipt of the Tenant’s Agents Reminder Notice, then the Tenant’s Agents selected by Tenant shall be deemed approved by Landlord.
4.2
Construction of Tenant Improvements by Tenant’s Agents.
4.2.1
Construction Contract; Cost Budget. Tenant shall engage the Contractor under a commercially reasonable and customary construction contract (collectively, the “Contract”). Prior to the commencement of the construction of any Phase of the Tenant Improvements, and after Tenant has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord with a detailed breakdown, by trade, of the final costs to be incurred or which have been incurred in connection with the design and construction of the relevant Phase of the Tenant Improvements to be performed by or at the direction of Tenant or the Contractor, which costs form a basis for the estimated total costs of the work of the relevant Phase of the Tenant Improvements (each, a “Final Budget”). Any costs of design and construction of the Tenant Improvements in excess of the Tenant Improvement Allowance shall be paid by Tenant out of its

own funds once the Tenant Improvement Allowance is exhausted, but Tenant shall continue to provide Landlord with the documents described in Sections 2.2.2.1(i), (ii), (iii) and (iv) of this Tenant Work Letter, above, for Landlord’s review, provided that the delivery of such documents to Landlord shall not be a condition precedent to Tenant paying such costs.

4.2.2
Tenant’s Agents.
4.2.2.1
Compliance with Drawings and Schedule. Tenant’s and Tenant’s Agent’s construction of the Tenant Improvements shall comply with the following: (i) the Tenant Improvements shall be constructed in substantial accordance with the Approved Working Drawings; and (ii) Tenant’s Agents shall submit schedules of all work relating to the Tenant’s Improvements to Contractor and Contractor shall, within five (5) business days of receipt thereof, inform Tenant’s Agents of any changes which are necessary thereto, and Tenant’s Agents shall adhere to such corrected schedule.
4.2.2.2
Indemnity. Tenant’s indemnity of Landlord as set forth in the Lease, as amended, shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or Tenant’s Agents, or anyone directly or indirectly employed by any of them, or in connection with Tenant’s non-payment of any amount arising out of the Tenant Improvements (except to the extent caused by Landlord’s failure to disburse the Tenant Improvement Allowance as provided for in this Tenant Work Letter) and/or Tenant’s disapproval of all or any portion of any request for payment. Such indemnity by Tenant, as set forth in the Lease, as amended, shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to Landlord’s performance of any ministerial acts reasonably necessary (i) to permit Tenant to complete the Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or certificate of occupancy for the Expansion Premises. The foregoing indemnity shall not apply to claims caused by the gross negligence or willful misconduct of Landlord, its member partners, shareholders, officers, directors, agents, employees, and/or contractors.
4.2.2.3
Requirements of Tenant’s Agents. Each of Tenant’s Agents shall guarantee to Tenant and for the benefit of Landlord that the portion of the Tenant Improvements for which it is responsible shall be free from any defects in workmanship and materials for a period of not less than one (1) year from the date of substantial completion of the work under the Contract (“Substantial Completion”). Each of Tenant’s Agents shall be responsible for the replacement or repair, without additional charge, of all work done or furnished in accordance with its contract that shall become defective within one (1) year after Substantial Completion. The correction of such work shall include, without additional charge, all additional expenses and damages incurred in connection with such removal or replacement of all or any part of the Tenant Improvements, and/or the Building and/or common areas that may be damaged or disturbed thereby. All such warranties or guarantees as to materials or workmanship of or with respect to the Tenant Improvements shall be contained in the Contract or subcontract and shall be written such that such guarantees or warranties shall inure to the benefit of both Landlord and Tenant, as their respective interests may appear, and can be directly enforced by either. Tenant covenants to give to Landlord any assignment or other assurances which may be necessary to effect such right of direct enforcement.
4.2.2.4
Insurance Requirements.
4.2.2.4.1
General Coverages. The Contractor and all

mechanical, engineering and plumbing subcontractors (“Major Subcontractors”) shall carry the following insurance with insurers having a minimum A.M. best rating of A- VIII or better (i) worker’s compensation insurance covering the Contractor’s or Major Subcontractor’s respective employees with a waiver of subrogation in favor of Landlord and the property manager, (ii) general liability insurance with a limit of not less than $1,000,000 per occurrence and $2,000,000 general aggregate, including products/completed operations and contractual coverage, and including Landlord and its property manager as additional insureds, and (ii) if the cost of such Tenant Improvements exceeds $100,000 in the aggregate, then Builders Risk insurance covering the construction of the Tenant Improvements, and such policy shall include Landlord as an additional insured. Other Tenant’s Agents shall carry commercially reasonable amounts of insurance as reasonably approved by Landlord.

4.2.2.4.2
Intentionally Omitted.
4.2.2.4.3
General Terms. Certificates for all insurance carried pursuant to this Section 4.2.2.4 shall be delivered to Landlord before the commencement of construction of the Expansion Tenant Improvements and before the Contractor’s equipment is moved onto the site. All such policies of insurance must contain a provision that the company writing said policy will endeavor to give Landlord thirty (30) days prior written notice of any cancellation or lapse of the effective date or any reduction in the amounts of such insurance. In the event that the Expansion Tenant Improvements are damaged by any cause during the course of the construction thereof, Tenant shall immediately repair the same at Tenant’s sole cost and expense. Tenant’s Agents shall maintain all of the foregoing insurance coverage in force until the Expansion Tenant Improvements are fully completed, except for any Products and Completed Operation Coverage insurance required by Landlord, which is to be maintained for ten (10) years following completion of the work. Such insurance shall provide that it is primary insurance as respects the owner and that any other insurance maintained by owner is excess and noncontributing with the insurance required hereunder. The requirements for the foregoing insurance shall not derogate from the provisions for indemnification of Landlord by Tenant under Section 4.2.2.2 of this Tenant Work Letter.
4.2.3
Governmental Compliance. The Tenant Improvements shall comply in all respects with the following: (i) all state, federal, city or quasi-governmental laws, codes, ordinances and regulations, as each may apply according to the rulings of the controlling public official, agent or other person; (ii) applicable standards of the American Insurance Association (formerly, the National Board of Fire Underwriters) and the National Electrical Code; and (iii) building material manufacturer’s specifications.
4.2.4
Inspection by Landlord. Landlord shall have the right to inspect the Tenant Improvements at all times, provided however, that Landlord’s failure to inspect the Tenant Improvements shall in no event constitute a waiver of any of Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant Improvements constitute Landlord’s approval of the same. Should Landlord reasonably disapprove any portion of the Tenant Improvements, on the grounds that the construction is defective or fails to substantially comply with the Approved Working Drawings, Landlord shall notify Tenant in writing of such disapproval and shall specify the items disapproved. Any such defects or deviations shall be rectified by Tenant at no expense to Landlord, provided however, that in the event Landlord determines that a defect or deviation exists that might adversely affect the mechanical, electrical, plumbing, heating, ventilating and air conditioning or

life-safety systems of the Building, the structure or exterior appearance of the Building or any other tenant’s use of such other tenant’s leased premises, Landlord may, take such action as Landlord reasonably deems necessary, at Tenant’s expense and without incurring any liability on Landlord’s part, to correct any such defect, deviation and/or matter, including, without limitation, causing the cessation of performance of the construction of the Tenant Improvements until such time as the defect, deviation and/or matter is corrected to Landlord’s reasonable satisfaction.

4.2.5
Meetings. Commencing upon the execution of this Second Amendment, Tenant shall hold weekly meetings at a reasonable time, with the Architect and the Contractor regarding the progress of the preparation of Construction Drawings and the construction of the Tenant Improvements, and Landlord and/or its agents shall receive prior notice of, and shall have the right to attend, all such meetings, and, upon Landlord’s request, certain of Tenant’s Agents shall attend such meetings. In addition, minutes shall be taken at all such meetings, a copy of which minutes shall be promptly delivered to Landlord. One such meeting each month shall include the review of Contractor’s current request for payment.
4.3
Notice of Completion; Copy of Record Set of Plans. Within ten (10) days after completion of construction of the Tenant Improvements, Tenant shall cause a valid Notice of Completion to be recorded in the office of the Recorder of the county in which the Building is located in accordance with Section 8182 of the Civil Code of the State of California or any successor statute, and shall furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do so, Landlord may execute and file the same on behalf of Tenant as Tenant’s agent for such purpose, at Tenant’s sole cost and expense. At the conclusion of construction, (i) Tenant shall cause the Architect and Contractor (x) to update the Approved Working Drawings as necessary to reflect all changes made to the Approved Working Drawings during the course of construction, (y) to certify to the best of their knowledge that the “record-set” of as-built drawings are true and correct, which certification shall survive the expiration or termination of the Lease, as amended, and (z) to deliver to Landlord two (2) sets of copies of such record set of drawings (hard copy and CAD files) within ninety (90) days following issuance of a certificate of occupancy for the Expansion Premises, and (ii) Tenant shall deliver to Landlord a copy of all warranties, guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the Expansion Premises. Within fifteen (15) days after request by Tenant following the Substantial Completion of the Tenant Improvements, Landlord will acknowledge its approval of the Tenant Improvements (provided that such approval has been granted) by placing its signature on a Contractor’s Certificate of Substantial Completion fully executed by the Architect, Contractor and Tenant. Landlord’s approval shall not create any contingent liabilities for Landlord with respect to any latent quality, design, Code compliance or other like matters that may arise subsequent to Landlord’s approval.
SECTION 5
MISCELLANEOUS
5.1
Intentionally Omitted.

5.2
Tenant’s Representative. Tenant has designated Monica Sullivan as its sole representatives with respect to the matters set forth in this Tenant Work Letter, who shall each have full authority and responsibility to act on behalf of the Tenant as required in this Tenant Work Letter.
5.3
Landlord’s Representative. Landlord has designated Crista Swan with PMA, as its sole representatives with respect to the matters set forth in this Tenant Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Tenant Work Letter.
5.4
Time is of the Essence in This Tenant Work Letter. Unless otherwise indicated, all references herein to a “number of days” shall mean and refer to calendar days. If any item requiring approval is timely disapproved by Landlord, the procedure for preparation of the document and approval thereof shall be repeated until the document is approved by Landlord.
5.5
Tenant’s Lease Default. Notwithstanding any provision to the contrary contained in the Lease, as amended, or this Tenant Work Letter, if any default by Tenant under the Lease, as amended, or this Tenant Work Letter occurs at any time on or before the substantial completion of the Tenant Improvements and such default remains uncured beyond the applicable notice and cure periods set forth in the Lease, then in addition to all other rights and remedies granted to Landlord pursuant to the Lease, as amended, Landlord shall have the right to withhold payment of all or any portion of the Tenant Improvement Allowance and/or Landlord may, without any liability whatsoever, cause the cessation of construction of the Tenant Improvements (in which case, Tenant shall be responsible for any delay in the substantial completion of the Tenant Improvements and any costs occasioned thereby).

THIRD AMENDMENT TO LEASE

This THIRD AMENDMENT TO LEASE (“Third Amendment”) is made and entered into as of June 3, 2025, (the “Third Amendment Effective Date”) by and between HCP TORREYANA, LLC, a Delaware limited liability company (“Landlord”), and BIOATLA, INC., a Delaware corporation (FKA BIOATLA, LLC, a Delaware limited liability company) (“Tenant”).

R E C I T A L S :

A.
Landlord and Tenant are parties to that certain Lease dated June 2, 2017 (the “Original Lease”), as amended by that certain First Amendment to 11085 Torreyana Road Lease dated October 23, 2017 (the “First Amendment”), and that certain Second Amendment to Lease dated January 16, 2019 (the “Second Amendment” and, together with the First Amendment and the Original Lease, the “Lease”).
B.
Pursuant to the Lease, Landlord currently leases to Tenant, and Tenant currently leases from Landlord, that certain space (collectively, the “Existing Premises”) containing approximately 43,377 rentable square feet comprised of the following: (i) the entire first (1st) floor (the “First Floor Premises”) of the that certain building located at 11085 Torreyana Road, (the “Building”) containing approximately 20,825 rentable square feet; and (ii) that certain space commonly known as Suite 200 (the “Suite 200 Premises”) containing approximately 22,552 rentable square feet and located on the second (2nd) floor of the Building. The Building, together with all common areas serving the same and the land (which is improved with landscaping, parking areas and other improvements) upon which the Building and all common areas serving the same are located, is collectively referred to herein as the “Property”.
C.
Landlord and Tenant now hereby desire to amend the Lease to: (i) reduce the size of the Existing Premises by deducting therefrom the Suite 200 Premises; (ii) extend the Lease Term for the First Floor Premises for the Extended Term (as defined below); (iii) provide Tenant with the Suite 200 Premises Option (as defined below) to potentially re-lease the Suite 200 Premises for the Suite 200 Premises New Term (as defined below); and (iv) make other modifications to the Lease, all upon the terms hereinafter provided.
D.
All capitalized terms when used herein shall have the same meanings given such terms in the Lease unless expressly superseded by the terms of this Third Amendment.

A G R E E M E N T :

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

1.
Termination of Suite 200 Premises.
1.1.
Termination of Suite 200 Premises. Provided that Tenant has not previously timely and properly exercised the Suite 200 Premises Option pursuant to Section 8 below such that the Suite 200 New Term Commencement Date (as defined below) would occur July 1, 2025, effective as of 12:00 midnight on June 30, 2025 (the “Suite 200 Premises Termination Date”), the total Premises leased by Tenant from Landlord under the Lease, as hereby amended (the “Amended Lease”), shall no longer include the Suite 200 Premises, and the Lease shall be deemed terminated with respect to the Suite 200 Premises. Accordingly, effective from and after July 1, 2025 (i.e., the date immediately after the Suite 200 Premises Termination Date), the Existing Premises leased by Tenant under the Amended Lease (and all references in the Amended Lease to the “Premises”) shall no longer include the Suite 200 Premises. Notwithstanding the termination of the Lease with respect to the Suite 200 Premises as provided hereinabove, Tenant shall remain liable for: (i) all of its obligations as Tenant under the Amended Lease, with respect to the Suite 200 Premises arising prior to and including the Suite 200 Premises Termination Date; (ii) all of the Tenant’s indemnification and other obligations with respect to the Suite 200 Premises that expressly survive the termination of the Amended Lease; and (iii) payment of Base Rent and all other amounts for the Suite 200 Premises through and including the Suite 200 Premises Termination Date, including, without limitation, the obligation under

1

the Amended Lease, to pay for any reconciliation of Tenant’s Share the Direct Expenses for the Suite 200 Premises for the period arising prior to the Suite 200 Premises Date (i.e., June 30, 2025) pursuant to the provisions of Section 4.4.1 of the Original Lease.
1.2.
Surrender of Suite 200 Premises. If as of the Suite 200 Premises Termination Date, Tenant has not properly exercised the Suite 200 Premises Option pursuant to Section 8 below, then: (i) Tenant shall vacate the Suite 200 Premises as of such 200 Suite Premises Termination Date and (ii) Tenant shall not enter, occupy, conduct business in or use the Suite 200 Premises. However, from the period commencing on the Suite 200 Premises Termination Date until the Suite 200 Premises Option Outside Date (the “Option Period”), Tenant shall be permitted to leave its personal property, furniture fixture and equipment in the Suite 200 Premises for the duration of the Option Period. If as of the Suite 200 Premises Option Outside Date, Tenant has not properly exercised the Suite 200 Premises Option pursuant to Section 8 below, then: (a) Tenant shall continue to remain vacated from the Suite 200 Premises, (b) Tenant shall continue to not enter, occupy, conduct business in or use the Suite 200 Premises, (c) Tenant shall surrender and deliver exclusive possession thereof to Landlord, in accordance with the applicable surrender provisions of the Lease, including, without limitation, Sections 8.5, 15.2 and 15.3 of the Original Lease, and (d) if Tenant does not surrender exclusive possession of the Suite 200 Premises to Landlord as of the Suite 200 Premises Outside Date (or, if during the Option Period, Tenant occupies and conducts business in the Suite 200 Premises), then Tenant shall be deemed to be in holdover of the Suite 200 Premises subject to and in accordance with Article 16 of the Original Lease.
1.3.
Interplay with Suite 200 Premises Option. For purposes of clarification, Tenant may exercise the Suite 200 Premises Option under Section 8 below with respect to re-leasing the Suite 200 Premises for the Suite 200 Premises New Term as more particularly set forth therein, and if Tenant timely and properly does so exercise the same such that the Suite 200 New Term Commencement Date would occur July 1, 2025, then the reduction and termination under this Section 1 shall be of no force or effect (but if Tenant delays such exercise and timely and properly exercises the Suite 200 Premises Option under Section 8 below such that the Suite 200 New Term Commencement Date would occur after July 1, 2025, then the reduction and termination under this Section 1 shall remain in force and effect, and the Suite 200 New Term Commencement Date would occur on such later date, separate and apart).
2.
CONDITION OF THE EXISTING PREMISES. LANDLORD AND TENANT ACKNOWLEDGE THAT TENANT HAS BEEN OCCUPYING THE EXISTING PREMISES PURSUANT TO THE LEASE, AND THEREFORE TENANT CONTINUES TO ACCEPT THE EXISTING PREMISES IN ITS PRESENTLY EXISTING, “AS IS” CONDITION (SUBJECT, HOWEVER, TO LANDLORD’S OBLIGATION TO PERFORM THE THIRD AMENDMENT LANDLORD WORK (AS DEFINED IN SECTION 7 BELOW) AND TO LANDLORD’S CONTINUING MAINTENANCE, REPAIR, AND REPLACEMENT OBLIGATIONS AS SET FORTH IN THE LEASE). LANDLORD SHALL NOT BE OBLIGATED TO PROVIDE OR PAY FOR ANY IMPROVEMENT WORK OR SERVICES RELATED TO THE IMPROVEMENT OF THE PREMISES, EXCEPT AS SET FORTH IN SECTION 7 BELOW WITH RESPECT TO THE THIRD AMENDMENT LANDLORD WORK (AS DEFINED THEREIN), AND EXCEPT FOR ANY CONTINUING OBLIGATIONS OF LANDLORD SET FORTH IN THE LEASE. FOR THE AVOIDANCE OF DOUBT, TENANT ACKNOWLEDGES AND AGREES THAT IT NO LONGER HAS ANY RIGHTS OR REPAYMENT OBLIGATIONS TO LANDLORD WITH RESPECT TO, AND LANDLORD HAS NO FURTHER OBLIGATIONS TO DISBURSE, THE TENANT IMPROVEMENT ALLOWANCE (AS THAT TERM IS DEFINED IN SECTION 2.1 OF EXHIBIT B TO THE SECOND AMENDMENT). TENANT ALSO ACKNOWLEDGES THAT NEITHER LANDLORD NOR ANY AGENT OF LANDLORD HAS MADE ANY REPRESENTATION OR WARRANTY REGARDING THE CONDITION OF THE EXISTING PREMISES, THE BUILDING, OR THE PROJECT OR WITH RESPECT TO THE SUITABILITY OF THE SAME FOR THE CONDUCT OF TENANT’S BUSINESS.
3.
Lease Term.
3.1.
Extended Lease Term. Pursuant to the Lease, the Lease Term for the Existing Premises is scheduled to expire on June 30, 2025. Landlord and Tenant hereby agree to extend the Lease Term, for the First Floor Premises only, for a period of sixty-five (65) months, from July 1, 2025 (the “Extended Term Commencement Date”), through November 30, 2030 (the “Extended Term”), on the terms and conditions set forth in the Amended Lease, unless sooner terminated as provided in the Lease.

2

3.2.
Option to Extend Lease Term. Tenant shall continue to have the right to extend the Lease Term (i.e., now the Extended Term) pursuant to Section 2.2 of the Original Lease; provided, however, that Landlord and Tenant acknowledge and agree that, effective as of the Third Amendment Effective Date: (i) Section 4 of the Second Amendment is deleted and of no further force or effect; (ii) Section 2.2 of the Original Lease is hereby revised such that Tenant’s option to extend is now for one (1) period of three (3) years (in lieu of five [5] years as previously provided); and (iii) such option to extend shall be with respect to the entire Premises then leased by Tenant under the Amended Lease, including the Suite 200 Premises if also then re-leased under Section 8 below.
4.
RENT.
4.1.
Base Rent. Prior to July 1, 2025, Tenant shall continue to pay monthly installments of Base Rent for the Existing Premises in accordance with the terms of the Lease. During the Extended Term, Tenant shall pay monthly installments of Base Rent for the First Floor Premises as follows, and otherwise shall pay Base Rent in accordance with the terms of the Lease:

Period During Extended Term | Annual Base Rent | Monthly Installment of Base Rent | Approximate Monthly Rental Rate per Square Foot 1
July 1, 2025 – June 30, 2026 | $1,461,915.00 | $121,826.25 | $5.85
July 1, 2026 – June 30, 2027 | $1,505,772.45 | $125,481.04 | $6.03
July 1, 2027 – June 30, 2028 | $1,550,945.62 | $129,245.47 | $6.21
July 1, 2028 – June 30, 2029 | $1,597,473.99 | $133,122.83 | $6.39
July 1, 2029 – June 30, 2030 | $1,645,398.21 | $137,116.52 | $6.58
July 1, 2030 – November 30, 2030 | $1,694,760.16 | $141,230.01 | $6.78

5.
Tenant’s Share of Direct Expenses.
5.1.
Tenant’s Share of Direct Expenses for the Existing Premises through the Suite 200 Premises Termination Date. Notwithstanding any in the Lease to the contrary, prior to and continuing through the Suite 200 Premises Termination Date, Tenant shall continue to be obligated to pay Additional Rent for the Existing Premises, including without limitation, Tenant’s Share of the annual Direct Expenses in accordance with the terms and conditions of the Lease.
5.2.
Tenant’s Share of Direct Expenses for the First Floor Premises. Commencing on the Extended Term Commencement Date, Tenant shall be obligated to pay Additional Rent for the First Floor Premises, including without limitation, Tenant’s share of annual Direct Expenses in accordance with the terms and conditions

1 Note: The 3.00% annual increases were calculated on the monthly installments of Base Rent and rounded up or down as appropriate (and not on the annual Base Rent or the approximate monthly rental rate per square foot). Accordingly, the monthly installment of Base Rent is the accurate number (and will govern) for purposes of this Lease; the annual Base Rent and approximate monthly rental rate per square foot are rounded approximations that vary slightly from the monthly installment of Base Rent calculations.

3

of the Lease; provided, however, Tenant’s Share of Direct Expenses shall be revised to equal 48.01% (i.e., 20,825 rentable square feet in the First Floor Premises/43,375 rentable square feet in the Building).
6.
Increase Security Deposit. Landlord hereby acknowledges it is currently holding a Security Deposit in the amount of One Hundred Fifty-Four Thousand Ninety-Five and 92/100 Dollars ($154,095.92). On or before such date that is ten (10) days prior to the Extended Term Commencement Date, Tenant shall deposit Eight Thousand Six Hundred Thirteen 09/100 Dollars ($8,613.09) to Landlord as increased security such that Tenant’s Security Deposit will increase to a total amount of One Hundred Sixty-Two Thousand Seven Hundred Nine and No/100 Dollars ($162,709.00) (which amount represents the final monthly installment of Base Rent for the First Floor Premises plus an estimate of the final month’s Direct Expenses for the First Floor Premises). All other terms of the Lease governing the Security Deposit shall remain unchanged and in full force and effect. Additionally, if Tenant exercises the Suite 200 Premises Option pursuant to Section 8 below, then Landlord shall have the right to increase the Security Deposit in connection therewith, as more particularly set forth therein.
7.
Base Rent Abatement.
7.1.
First Floor Premises Rent Abatement. Provided that Tenant is not then in default (beyond the expiration of all applicable notice and cure periods) under the Amended Lease, during that certain five (5) month period commencing on July 1, 2025 (collectively, the “First Floor Premises Rent Abatement Commencement Date”) and continuing through November 30, 2025 (the “First Floor Premises Rent Abatement Termination Date”), Tenant’s monthly installments of Base Rent for the First Floor Premises shall be abated by an aggregate amount equal to $609,131.30 (i.e., based on a monthly installment of Base Rent amount of $121,826.25 per month for the months of July 1, 2025 through November 30, 2025) (the “First Floor Premises Rent Abatement Amount”). The period commencing on the First Floor Premises Rent Abatement Commencement Date and ending on the First Floor Premises Rent Abatement Termination Date shall be referred to herein as the “First Floor Premises Rent Abatement Period”. Notwithstanding anything to the contrary, during such First Floor Premises Rent Abatement Period, Tenant shall remain obligated to pay all other expenses, including Additional Rent.
7.2.
Suite 200 Premises Rent Abatement. In the event Tenant timely and properly exercises the Suite 200 Premises Option and provided that Tenant is not then in default (beyond the expiration of all applicable notice and cure periods) under the Amended Lease, the Suite 200 Premises New Term Base Rent (as defined below) shall abate (the “Suite 200 Premises Rent Abatement”) for the period from the Suite 200 Premises New Term Commencement Date through and including November 30, 2025 (the “Suite 200 Premises Abatement Period”). Notwithstanding anything to the contrary, during such Suite 200 Premises Abatement Period, Tenant shall remain obligated to pay all other expenses, including, without limitation, Additional Rent.
7.3.
General Abatement Terms. Notwithstanding, the foregoing, Landlord shall have the option, at its sole discretion, to elect, at any time prior to the Extended Term Commencement Date, to reallocate any month and/or portion of the First Floor Premises Rent Abatement Period to any month of the Lease Term that occurs prior to the Extended Term Commencement Date (such month(s) and amounts to be specified at the time of Landlord’s election), in which case the abated month so reallocated (or any portion thereof) shall no longer be abated as scheduled above, but abated as provided in Landlord’s election. For avoidance of doubt, Tenant will still be entitled to five months of First Floor Premises Rent Abatement, Landlord is only reserving the right to reallocate when such abatement occurs. Tenant shall continue to be responsible for all Additional Rent payments during the First Floor Premises Rent Abatement Period. Tenant acknowledges and agrees that the foregoing abatement rights have been granted to Tenant as additional consideration for entering into this Third Amendment, and for agreeing to pay the rent and performing the terms and conditions otherwise required under the Amended Lease. If (i) Tenant shall at any time during the First Floor Premises Abatement Period and/or the Suite 200 Premises Abatement Period be in default under the Lease, as amended, and shall fail to cure such default within the notice and cure period, if any, permitted for cure pursuant to the Lease, as amended, or (ii) the Lease, as amended, is terminated for any reason other than Landlord’s breach of the Lease, as amended, then the dollar amount of the unapplied portion of the First Floor Premises Abatement Amount and/or the Suite 200 Premises Rent Abatement as of the date of such default or termination, as the case may be, shall be converted to a credit to be applied to the monthly installments of Base Rent applicable to the First Floor Premises and/or Suite 200 Premises (as the case may be) at the end of the Extended Term (or the Suite 200 Premises New Term, as the case may be), and Tenant shall immediately be obligated to begin paying Base Rent for the First Floor Premises and/or the Suite 200 Premises (as the case may be) in full.

4

8.
Third Amendment Landlord Work. Landlord, shall at Landlord’s sole cost and expense, using Building standard materials and in accordance with Building standards, complete the work more particularly described and/or depicted on Exhibit A attached hereto (collectively the “Third Amendment Landlord Work”). Such Landlord Work will be performed following the mutual execution of this Third Amendment. The parties hereby agree that the Third Amendment Landlord Work will be performed during Tenant’s occupancy of the Existing Premises, and in connection therewith, Tenant hereby acknowledges and agrees: (i) to accept any and all inconveniences associated with the performance of the Third Amendment Landlord Work which may occur during such occupancy including, without limitation, dust, noise, etc.; (ii) that the performance of the Third Amendment Landlord Work shall in no way constitute a constructive eviction of the Tenant under the Lease nor entitle Tenant to any abatement of rent payable pursuant to the Amended Lease; and (iii) Landlord shall not be liable to Tenant for, and Tenant shall not be entitled to any compensation or damages from Landlord for, loss of the use of all or any part of the Existing Premises or of any personal property or improvements therein resulting from the performance of the Third Amendment Landlord Work, or for any inconvenience or annoyance occasioned thereby or for any injury to or interference with Tenant’s business, except for any injury to persons or damage to property (but not loss of or interference with business or other consequential damages) to the extent caused by Landlord’s gross negligence or intentional misconduct and not insured or required to be insured by Tenant under the Amended Lease. Notwithstanding the foregoing, (a) Landlord will use commercially reasonable efforts to minimize interference with Tenant’s ongoing conduct of business in the Existing Premises during the performance of the Third Amendment Landlord Work, (b) if during the Extended Term, Tenant is completely prevented by Landlord from accessing the Existing Premises (excluding circumstances where such prevention is caused by Tenant’s own actions and/or Force Majeure), Base Rent shall abate on a day for day basis for the period commencing on the date which Tenant is prevented from accessing the Existing Premises and continuing until such date that Tenant is able to access the Existing Premises and such additional Base Rent abatement shall apply to the Base Rent first due after the application of the First Floor Premises Rent Abatement, and (c) Landlord shall use commercially reasonable efforts to timely complete the Third Amendment Landlord Work.
9.
Suite 200 Premises Option; Suite 200 Premises New Term.
9.1.
Suite 200 Premises Option. During the period from the Third Amendment Effective Date until [***] (the “Suite 200 Premises Option Outside Date”), Tenant shall have the one-time right (the “Suite 200 Premises Option”) to elect to lease all, but not less than all, of the Suite 200 Premises upon the terms and conditions of the Lease, as amended, modified and/or otherwise set forth in this Section 8.
9.2.
Method of Exercise. Tenant must exercise the Suite 200 Premises Option, if at all, by delivering an irrevocable written exercise notice (the “Suite 200 Premises Option Notice”) to Landlord on or before [***]; if Tenant does not timely and properly deliver the Suite 200 Premises Option Notice to Landlord, then [***]. Upon Landlord’s request, promptly after Landlord’s receipt of the Suite 200 Option Premises Notice, Landlord and Tenant shall execute an amendment (the “Suite 200 Premises Amendment”) to the Amended Lease, memorializing Tenant’s lease of the Suite 200 Premises upon the terms and conditions set forth in this Section 8 and the Amended Lease (as and to the extent reasonably necessary to document the intention of this Section 8 and any interplay with the terms and conditions of this Third Amendment with respect to the First Floor Premises).
9.3.
Suite 200 Premises New Term; Suite 200 Premises New Term Commencement Date. If Tenant timely and properly exercises the Suite 200 Premises Option, then: (i) the term for the Suite 200 Premises (the “Suite 200 Premises New Term”) shall commence on the Suite 200 Premises New Term Commencement Date (as defined below) and shall expire co-terminously with the Extended Term for the First Floor Premises (as the same may be extended pursuant Section 3.2 above); and (ii) effective from and after the Suite 200 Premises New Term Commencement Date, the “Premises” leased by Tenant under the Amended Lease, shall include the Suite 200 Premises. For purposes of this Third Amendment, the “Suite 200 Premises New Term Commencement Date” shall mean the date that is the later to occur of (A) July 1, 2025, and (B) the date that is one (1) day after Landlord’s receipt of the Suite 200 Premises Option Notice. For purposes of clarification, if Tenant timely delivers the Suite 200 Premises Option Notice to Landlord on or prior to June 30, 2025, then the Suite 200 Premises Option and Suite 200 Premises New Term is essentially an extension option as to the Expansion Space Term for the Suite 200 Premises, as amended by the terms and conditions of this Section 8; provided, that, if Tenant timely delivers the Suite 200 Premises Option Notice to Landlord after June 30, 2025, then the termination and reduction under Section 1 above remain in force and effect, and thereafter the Suite 200 Premises Option and Suite 200 Premises New Term are an expansion option under the terms and conditions of this Section 8.

5

9.4.
Suite 200 Premises New Term Base Rent; Tenant’s Share. If Tenant timely and properly exercises the Suite 200 Premises Option, then commencing on the Suite 200 Premises New Term Commencement Date, the Base Rent payable by Tenant for the Suite 200 Premises during the Suite 200 Premises New Term shall be at a rate of $4.02 rent per square foot NNN (the “Suite 200 Premises New Term Base Rent”) and such rate shall increase on each anniversary of the Suite 200 Premises New Term Commencement Date by three percent (3%) on a compounding and cumulative basis over the course of the Suite 200 Premises New Term. Additionally, commencing on the Suite 200 Premises New Term Commencement Date and continuing throughout the Suite 200 Premises New Term, Tenant shall be obligated to pay Additional Rent, including without limitation, Tenant’s Share of annual Direct Expenses in connection with the Suite 200 Premises in accordance with the terms and conditions of the Lease, which such share shall be equal to 51.99% (i.e., 22,552 rentable square feet in the Suite 200 Premises/43,375 rentable square feet in the Building) (the “Suite 200 Premises New Term Tenant Share”). For avoidance of doubt, all such Suite 200 Premises New Term Base Rent and Suite 200 Premises New Term Tenant’s Share shall be in addition to, in not in lieu of, the First Floor Premises Base Rent and Tenant’s Share for the First Floor Premises. In addition, if Tenant exercises the Suite 200 Premises Option, Landlord shall have the right to increase the Security Deposit required under the Amended Lease as of the Suite 200 Premises New Term Commencement Date to account for the Suite 200 Premises, which increase shall be in the amount of One Hundred Forty-Five Thousand Sixty-Two and No/100 Dollars ($145,062.00) and shall be in addition to and an increase to the Security Deposit that Landlord currently holds under Section 5, above.
10.
[***]. Commencing on and from and after [***] (i.e., following [***]), Landlord shall have [***], which [***]; provided, however, such [***] must be a date that is the later to occur of (i) [***], and (ii) [***]. By way of example only, if Landlord [***]. If Landlord properly and timely [**] in this Section 9, then [***], and Tenant shall [***]. Notwithstanding the foregoing to the contrary, if Tenant [***]. Notwithstanding the foregoing, from the [***], Tenant shall [***].
11.
Tenant’s Estoppel. Tenant hereby represents, warrants, certifies and acknowledges that, as of the date of the mutual execution of this Third Amendment, (i) Tenant has had the opportunity to be represented by independent counsel of its own choosing, (ii) the individual executing this Third Amendment on behalf of Tenant has been duly authorized to act on behalf of Tenant, (iii) to Tenant’s knowledge, Landlord is not in default in any respect under the Amended Lease, (iv) Tenant does not have any defenses to its obligations under the Amended Lease, except as set forth in the Lease, (v) there are no currently applicable offsets against Rent, and (vi) Landlord has completed all improvements and paid all allowances required to be constructed or paid by Landlord in accordance with the terms of the Lease, subject to Landlord’s obligations under this Third Amendment, including with respect to the Third Amendment Landlord Work. Tenant acknowledges and agrees that: (a) the representations herein set forth constitute a material consideration to Landlord in entering into this Third Amendment; (b) such representations are being made by Tenant for purposes of inducing Landlord to enter into this Third Amendment; and (c) Landlord is relying on such representations in entering into this Third Amendment.
12.
Utility Information. Tenant hereby acknowledges and agrees that (i) pursuant to certain applicable laws and/or sustainability reporting requirements (collectively the “Energy Disclosure Requirements”), Landlord may be required to disclose factual information concerning Tenant’s energy usage at the Project to certain third parties, including, without limitation, prospective purchasers, lenders and tenants of the Building and/or Landlord’s consultants and/or vendors (the “Tenant Energy Use Disclosure”), and (ii) in connection therewith, to the extent any utilities are separately metered and paid by Tenant, Tenant shall reasonably cooperate with Landlord, at no out of pocket cost to Tenant, as reasonably necessary to submit energy and water consumption data, including total usage and total charges as they appear on Tenant’s electric, gas, water, and other utility bills, in a format deemed reasonably acceptable by Landlord. Tenant hereby further (A) consents to all such Tenant Energy Use Disclosures made by Landlord, (B) acknowledges that Landlord shall not be required to notify Tenant of any Tenant Energy Use Disclosure, and (C) releases Landlord from any and all losses, costs, damages, expenses and liabilities relating to, arising out of and/or resulting from any Tenant Energy Use Disclosure made in accordance with the foregoing provisions. The terms of this Section 11 shall survive the expiration or earlier termination of the Amended Lease.
13.
Brokers. Landlord and Tenant hereby warrant to each other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Third Amendment other than Cresa, representing Tenant (the “Broker”), and that they know of no other real estate broker or agent who is entitled to a commission in connection with this Third Amendment. The fees of Broker shall be paid by Landlord pursuant to the

6

terms of a separate agreement between Landlord and Broker. Each party agrees to indemnify and defend the other party against and hold the other party harmless from any and all claims, demands, losses, liabilities, lawsuits, judgments, costs and expenses (including without limitation reasonable attorneys’ fees) with respect to any leasing commission or equivalent compensation alleged to be owing on account of any dealings with any real estate broker or agent, other than the Brokers, occurring by, through, or under the indemnifying party. The terms of this Section 12 shall survive the expiration or earlier termination of the term of the Amended Lease.
14.
Notices. Section 29.18 of the Original Lease is hereby revised such that all notices to Landlord under the Lease shall be sent to the following addresses:

HCP Torreyana, LLC

c/o Healthpeak Properties, Inc.

1900 Main Street, 5th Floor

Irvine, CA 92614

Attn: LS Asset Management

with a copy to:

HCP Torreyana, LLC

c/o of Healthpeak Properties, Inc.

1900 Main Street, 5th Floor

Irvine, CA 92614

Attn: Legal Department

and

Allen Matkins Leck Gamble Mallory & Natsis LLP

2010 Main Street, 8th Floor

Irvine, CA 92614

Attn: Brad H. Nielsen, Esq.

Section 10 of the Summary of Basic Lease Information of the Original Lease is hereby revised such that copies of all notices to Tenant shall also be sent to:

Cooley LLP

55 Hudson Yards

New York, NY 10001

Attn: Daniel A. Goldberger, Esq.

15.
Miscellaneous Modifications.
15.1.
Net Worth Update. Effective as of the Third Amendment Effective Date, the text “at least equal to the Net Worth of Tenant on the day immediately preceding the effective date of such assignment or sublease” in Section 14.8(iii) of the Original Lease shall be deleted and replaced with the text “and other financial indicators sufficient to meet Tenant’s obligations under the Transfer instrument in question and its obligations hereunder.
15.2.
REIT Provision. Notwithstanding anything contained in the Amended Lease, to the contrary, Tenant shall not: (i) make a Transfer to an entity in which, under the Internal Revenue Code of 1986, as amended (the “Code”), any entity that directly or indirectly owns Landlord and is qualified as a real estate investment trust (a “REIT Owner”) owns, directly, indirectly or by applying constructive ownership rules set forth in Section 856(d)(5) of the Code, a ten percent (10%) or greater interest; or (ii) make any Transfer or other action under Article 14 of the Original Lease, in a manner that would cause any portion of the amounts received by Landlord pursuant to the Amended Lease, to fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Code.

7

15.3.
Judicial Reference. Notwithstanding any provision to the contrary contained in the Lease, the parties hereby waive, to the fullest extent permitted by applicable laws, the right to trial by jury in any litigation arising out of or relating to the Lease. If the jury waiver provisions of the Lease are not enforceable under California law, then the following provisions shall apply. It is the desire and intention of the parties to agree upon a mechanism and procedure under which controversies and disputes arising out of the Lease or related to the Premises will be resolved in a prompt and expeditious manner. Accordingly, except with respect to actions for unlawful or forcible detainer or with respect to the prejudgment remedy of attachment, any action, proceeding or counterclaim brought by either party hereto against the other (and/or against its officers, directors, employees, agents or subsidiaries or affiliated entities) on any matters whatsoever arising out of or in any way connected with the Lease, Tenant’s use or occupancy of the Premises and/or any claim of injury or damage, whether sounding in contract, tort, or otherwise, shall be heard and resolved by a referee under the provisions of the California Code of Civil Procedure, Sections 638 — 645.1, inclusive (as same may be amended, or any successor statute(s) thereto) (the “Referee Sections”). Any fee to initiate the judicial reference proceedings and all fees charged and costs incurred by the referee shall be paid by the party initiating such procedure (except that if a reporter is requested by either party, then a reporter shall be present at all proceedings where requested and the fees of such reporter – except for copies ordered by the other parties – shall be borne by the party requesting the reporter); provided however, that allocation of the costs and fees, including any initiation fee, of such proceeding shall be ultimately determined in accordance with the lease. The venue of the proceedings shall be in the county in which the Premises are located. Within ten (10) days of receipt by any party of a written request to resolve any dispute or controversy pursuant to this Section 14.3, the parties shall agree upon a single referee who shall try all issues, whether of fact or law, and report a finding and judgment on such issues as required by the Referee Sections. If the parties are unable to agree upon a referee within such ten (10) day period, then any party may thereafter file a lawsuit in the county in which the Premises are located for the purpose of appointment of a referee under the Referee Sections. If the referee is appointed by the court, the referee shall be a neutral and impartial retired judge with substantial experience in the relevant matters to be determined, from JAMS, the American Arbitration Association or similar mediation/arbitration entity. The proposed referee may be challenged by any party for any of the grounds listed in the Referee Sections. The referee shall have the power to decide all issues of fact and law and report his or her decision on such issues, and to issue all recognized remedies available at law or in equity for any cause of action that is before the referee, including an award of attorneys’ fees and costs in accordance with the Lease. The referee shall not, however, have the power to award punitive damages, nor any other damages which are not permitted by the express provisions of the Lease, and the parties hereby waive any right to recover any such damages. The parties shall be entitled to conduct all discovery as provided in the California Code of Civil Procedure, and the referee shall oversee discovery and may enforce all discovery orders in the same manner as any trial court judge, with rights to regulate discovery and to issue and enforce subpoenas, protective orders and other limitations on discovery available under California law. The reference proceeding shall be conducted in accordance with California law (including the rules of evidence), and in all regards, the referee shall follow California law applicable at the time of the reference proceeding. The parties shall promptly and diligently cooperate with one another and the referee, and shall perform such acts as may be necessary to obtain a prompt and expeditious resolution of the dispute or controversy in accordance with the terms of this Section 13.3. In this regard, the parties agree that the parties and the referee shall use best efforts to ensure that (a) discovery be conducted for a period no longer than six (6) months from the date the referee is appointed, excluding motions regarding discovery, and (b) a trial date be set within nine (9) months of the date the referee is appointed. In accordance with Section 644 of the California Code of Civil Procedure, the decision of the referee upon the whole issue must stand as the decision of the court, and upon the filing of the statement of decision with the clerk of the court, or with the judge if there is no clerk, judgment may be entered thereon in the same manner as if the action had been tried by the court. Any decision of the referee and/or judgment or other order entered thereon shall be appealable to the same extent and in the same manner that such decision, judgment, or order would be appealable if rendered by a judge of the Superior Court in which venue is proper hereunder. The referee shall in his/her statement of decision set forth his/her findings of fact and conclusions of law. The parties intend this general reference agreement to be specifically enforceable in accordance with the Code of Civil Procedure. Nothing in this Section 14.3 shall prejudice the right of any party to obtain provisional relief or other equitable remedies from a court of competent jurisdiction as shall otherwise be available under the Code of Civil Procedure and/or applicable court rules.
15.4.
Desk Space Users. The following shall be added as Section 14.9 to the Original Lease:

“14.9 DESK SPACE USERS. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS ARTICLE 14, AND PROVIDED TENANT IS NOT IN DEFAULT UNDER THIS LEASE,

8

BEYOND ANY APPLICABLE NOTICE AND CURE PERIOD, TENANT SHALL HAVE THE RIGHT, WITHOUT A REQUIREMENT TO OBTAIN LANDLORD’S CONSENT (AND WITHOUT BEING DEEMED A TRANSFER UNDER THIS LEASE), BUT UPON REASONABLE PRIOR WRITTEN NOTICE TO LANDLORD IDENTIFYING EACH OCCUPANT AND SUCH OCCUPANT’S RELATIONSHIP TO OR AFFILIATION WITH TENANT, TO ALLOCATE NO MORE THAN FIFTEEN PERCENT (15%) OF THE FIRST FLOOR PREMISES, TO BE DESIGNATED BY TENANT FROM TIME TO TIME (THE “DESK SPACE”), FOR USE BY OCCUPANTS WHO ARE NOT EMPLOYEES OR AGENTS OF TENANT, BUT ARE PROVIDING LEGITIMATE BUSINESS SERVICES TO TENANT OR ARE WORKING WITH TENANT IN SOME WAY PURSUANT TO A BUSINESS ARRANGEMENT (EACH, “DESK SPACE USERS”) AND ARE NOT LICENSEES OR TENANTS PAYING RENT FOR THE USE OF THE DESK SPACE; PROVIDED, THAT (I) SUCH ARRANGEMENT IS FOR A VALID BUSINESS PURPOSE AND IS NOT A SUBTERFUGE BY TENANT TO AVOID ANY OBLIGATIONS UNDER THE AMENDED LEASE, (II) THE DESK SPACE USERS USE OF THE PREMISES IS CONSISTENT WITH THE USE AND THE TERMS AND CONDITIONS OF THE AMENDED LEASE, (III) TENANT SHALL HAVE NO RIGHT TO DELEGATE OR ASSIGN ANY OF ITS OBLIGATIONS UNDER THE AMENDED LEASE TO SUCH DESK SPACE USERS, (IV) SUCH ARRANGEMENT WILL TERMINATE AUTOMATICALLY UPON THE EXPIRATION OR SOONER TERMINATION OF THE AMENDED LEASE AND IS SUBJECT AND SUBORDINATE TO THE AMENDED LEASE AND ALL MATTERS TO WHICH THE AMENDED LEASE IS SUBJECT AND SUBORDINATE, (IV) SUCH ARRANGEMENT SHALL NOT BE CONSTRUED AS A SUBLETTING AND THE ARRANGEMENT DOES NOT CREATE (NOR SHALL BE DEEMED TO CREATE) ANY RIGHT, TITLE OR INTEREST IN OR TO THE FIRST FLOOR PREMISES, AND LANDLORD SHALL HAVE NO LIABILITY OR OBLIGATION TO THE DESK SPACE USERS UNDER THIS LEASE FOR ANY REASON WHATSOEVER IN CONNECTION WITH SUCH USE OR OCCUPANCY, (V) SUCH ARRANGEMENT SHALL NOT RELIEVE TENANT FROM ANY LIABILITY UNDER THE LEASE, (VI) TENANT SHALL BE LIABLE FOR THE ACTS OF SUCH DESK SPACE USERS IN THE FIRST FLOOR PREMISES AND SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD FROM ALL CLAIMS, DEMANDS, ACTIONS, LIABILITIES, COSTS, EXPENSES, ATTORNEYS’ FEES, DAMAGES AND OBLIGATIONS OF ANY NATURE ARISING FROM, IN CONNECTION TO OR AS A RESULT THEREOF, AND (VI) NO DESK SPACE USERS SHALL BE PERMITTED TO INSTALL ANY EXTERIOR IDENTIFICATION SIGNAGE.”

16.
ELECTRONIC SIGNATURES. THE PARTIES AGREE THAT THIS THIRD AMENDMENT MAY BE SIGNED AND/OR TRANSMITTED BY ELECTRONIC MAIL OF A .PDF DOCUMENT OR ELECTRONIC SIGNATURE (E.G., DOCUSIGN OR SIMILAR ELECTRONIC SIGNATURE TECHNOLOGY) AND THEREAFTER MAINTAINED IN ELECTRONIC FORM, AND THAT SUCH ELECTRONIC RECORD SHALL BE VALID AND EFFECTIVE TO BIND THE PARTY SO SIGNING AS A PAPER COPY BEARING SUCH PARTY’S HAND-WRITTEN SIGNATURE. THE PARTIES FURTHER CONSENT AND AGREE THAT THE ELECTRONIC SIGNATURES APPEARING ON THIS THIRD AMENDMENT SHALL BE TREATED, FOR PURPOSE OF VALIDITY, ENFORCEABILITY AND ADMISSIBILITY, THE SAME AS HAND-WRITTEN SIGNATURES.
17.
NO FURTHER MODIFICATION; CONFLICT. EXCEPT AS SPECIFICALLY SET FORTH IN THIS THIRD AMENDMENT, ALL OF THE TERMS AND PROVISIONS OF THE LEASE SHALL REMAIN UNMODIFIED AND IN FULL FORCE AND EFFECT. IN THE EVENT OF A CONFLICT BETWEEN THE TERMS OF THE LEASE AND THIS THIRD AMENDMENT, THE TERMS OF THIS THIRD AMENDMENT SHALL PREVAIL.

[SIGNATURES FOLLOW ON NEXT PAGE]

9

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

“LANDLORD” | HCP TORREYANA, LLC, a Delaware limited liability company By: /s/ Scott Bohn Name: Scott Bohn Its: Chief Development Officer
“TENANT” | BIOATLA, INC., a Delaware corporation By: /s/ Jay Short Name: Jay Short Its: Chairman & CEO By: Name: Its:

10

EXHIBIT A

11085 TORREYANA ROAD

THIRD AMENDMENT LANDLORD WORK

•
Replace the side entry doors to the Building
•
Add Elkay ezH20 filtered water bottle filler station on the 1st floor; provided, however, that if despite Landlord’s commercially reasonable efforts, Landlord is unable for any reason to obtain Elkay ezH20 filtered water bottle filler station, during the Extended Term and any Option Term, as applicable, in no event shall such failure be deemed a default hereunder, nor shall such failure impact the validity of the Lease, as amended, and Landlord shall not be subject to any liability for such failure, provided that in such event Landlord shall utilize commercially reasonable efforts to provide a reasonable equivalent to such Elkay ezH20 filtered water bottle filler station.
•
Upgrade the current landscaping by providing the following, replant planter beds in the entry area, front patio, and outside the boardroom, replace wall planters and plants at entry to the Building, replace missing trees in parking lot planters, and clean up area and add plants to the Torreyana frontage.

Exhibit A