THREE SISTERS RANCH E N T E R P R I S E S LLC

174 Warren Road

San Mateo, California 94401

P. O. Box 1444

San Carlos, CA 94070

Rent - August 15-31, 2000:

Rent - September 2000:

Last Month’s Rent:

Security Deposit:

$11,332.25 (includes CAM)

$22,664.52 (includes CAM)

$23,434.44 (CAM not included)

$23,500.00 (CAM not included)

$80,931.22

Months 1   - 12:          $4.50/sq.ft/mo. NNN    =    $21,654.00/mo.

Months 13 - 24:          $4.68/sq.ft/mo. NNN    =    $22,520.16/mo.

Months 25 - - 36:          $4.87/sq.ft/mo. NNN    =    $23,434.44/mo.

Estimated First Year Basic

Operating Cost:

Craig McGahey of Staubach Company for Tenant

Robert L. McSweeney of CB Richard Ellis for Landlord

BASIC LEASE INFORMATION

PREMISES

POSSESSION AND LEASE COMMENCEMENT

TERM

USE

RULES AND REGULATIONS

RENT

BASIC OPERATING COST

INSURANCE AND INDEMNIFICATION

WAIVER OF SUBROGATION

LANDLORD’S REPAIRS AND SERVICES

TENANT’S REPAIRS

ALTERATIONS

SIGNS

INSPECTION/POSTING NOTICES

UTILITIES

SUBORDINATION

FINANCIAL STATEMENTS

ESTOPPEL CERTIFICATE

SECURITY DEPOSIT

TENANT’S REMEDIES

ASSIGNMENT AND SUBLETTING

AUTHORITY OF PARTIES

CONDEMNATION

CASUALTY DAMAGE

HOLDING OVER

DEFAULT

LIENS

TRANSFERS BY LANDLORD

RIGHT OF LANDLORD TO PERFORM TENANT’S COVENANTS

WAIVER

NOTICES

ATTORNEYS’ FEES

SUCCESSORS AND ASSIGNS

FORCE MAJEURE

BROKERAGE COMMISSION

MISCELLANEOUS

CONDITION OF PREMISES/TENANT IMPROVEMENTS

EARLY OCCUPANCY

NO LIABILITY

RENEWAL OPTION CONDITIONS

EXHIBITS A, B, C AND D

POSSESSION AND LEASE

COMMENCEMENT

B. Construction of Improvements. In the event this Lease pertains to a Building to be constructed or improvements to be construed within a Building, the provisions of this Paragraph 2.B. shall apply in lieu of the provisions of Paragraph 2.A. above and the term commencement date (“Term Commencement Date”) shall be the earlier of the date on which: (1) Tenant takes possession of some or all of the Premises, or (2) the improvements constructed or to be constructed in the Premises shall have been substantially completed in accordance with this Lease. If for any reason Landlord cannot deliver possession of the Premises to Tenant on the Estimated Term Commencement Date, Landlord shall not be subject to any liability therefore, nor shall Landlord be in default hereunder. In the event of any dispute as to substantial completion of work performed or required to be performed by Landlord, the certificate of Landlord’s architect, general contractor, or contractor shall be conclusive. Substantial completion shall have occurred notwithstanding Tenant’s submission of a punch list to landlord, which Tenant shall submit, if at all, within thirty (30) days after the Term Commencement Date. Tenant shall, upon demand, execute and deliver to Landlord a letter of acceptance of delivery of the Premises.

USE

B. Limitations.

(1) Tenant shall not permit any odors, smoke, dust, gas, substances, noise or vibrations to emanate from the Premises, nor take any action which could reasonably and potentially constitute a nuisance or could disturb, obstruct or endanger any other tenants of the Building or Project in which the Premises are situated, or interfere with their use of their respective premises. Storage outside the Premises of materials, vehicles or any other items is prohibited. Tenant shall not use or allow the Premises to be used for any improper, immoral or unlawful purpose, nor shall Tenant cause or maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or suffer the commission of any waste in, on or about the Premises. Tenant shall not allow any sale by auction upon the Premises, or place any loads upon the floors, walls or ceilings which endanger the structure, or place any harmful liquids or chemicals in the drainage system of the Building or Project. No waste, materials or refuse shall be dumped upon or permitted to remain outside the Premises except in trash containers placed inside exterior enclosures designated for that purpose by Landlord and except in strict compliance with any laws or regulations attendant to disposal of such waste, materials or refuse. Landlord shall not be responsible to Tenant for the non-compliance by any other tenant or occupant of the Building or Project with any of the above-referenced rules or any other terms or provisions of such tenant’s or occupant’s lease or other contract. Tenant shall in all respects comply with and abide by the Sign Criteria for San Carlos Park attached hereto as Exhibit “C” and incorporated herein by reference.

(2) Provided Tenant delivers to Landlord prior to Lease Commencement or occupation of animal facility and thereafter, whenever renewed and/or re-issued by the applicable governmental, “quasi”-governmental, or other authoritative agency or body [health, R&D, animal testing or otherwise], whose regulation, practice or licensing Tenant is subject, any and all permits, certificates or other approvals which evidence Tenant’s ability to operate its animal testing facility and which evidence compliance with all applicable regulations and/or laws, Tenant shall be permitted to construct and operate small animal testing facility within the Premises. Notwithstanding the above, the following uses of the Premises shall be a Default by Tenant and shall be prohibited within the Premises (collectively, “Prohibited Uses”): i) the housing of laboratory animals other than common rodents, ii) the housing of animals in a space larger than one thousand (1,000) square feet, iii) the utilization of any form of experimental procedure which uses harmful radioactive materials, viruses or bacteria, iv) the material violation of generally accepted industry standards for animal testing facility compliance or certification; and v) any use of the Premises that is not a Permitted Use. Tenant hereby agrees to defend, indemnify and hold Landlord harmless from and against any loss, damages, liability, fees or costs incurred, of whatever kind or nature (including reasonable attorney’s fees and costs), as a direct or indirect consequence of Tenant’s breach or violation of any obligation under this Section.

C. Compliance with Regulations. By entering the Premises, Tenant accepts the Premises in the condition existing as of the date of such entry, subject to all existing or future applicable municipal, state and federal and other governmental statutes,

D. Hazardous Wastes Materials. Tenant shall not cause, or allow any of Tenant’s Parties to cause, any Hazardous Materials to be used, generated, stored or disposed of on or about the Premises, the Building or the Project except for normal quantities of standard office supplies (e.g., copier toner). As used in this Lease, “Hazardous Materials” shall include, but not be limited to, “hazardous materials,” “hazardous wastes,” “toxic substances,” “dangerous and/or harmful chemicals” or other similar designations in any federal, state or local law, regulation, or ordinance. Landlord shall have the right but not the obligation at all reasonable times, upon not less than forty-eight (48) hours notice to Tenant (except in the case of emergency) and subject to all reasonable security measures of Tenant, to inspect the Premises and to conduct tests and investigations to determine whether Tenant is in compliance with the foregoing provisions, the costs of all such inspections, tests and investigations to be borne by Landlord unless Landlord can establish that any such inspection, test or investigation, or the cost of same, was reasonable under the circumstances. Notwithstanding the above, should Landlord uncover a violation by Tenant of any environmental law reasonably likely to result in contamination of any part of the Premises, Building or Project, any use by Tenant of any Hazardous Materials not otherwise permitted elsewhere in this Lease, or a Default by Tenant under Section 4 of this Lease, the costs of all such inspections, tests and investigations shall be borne by Tenant. Tenant shall indemnify, defend, protect and hold Landlord harmless from and against all liabilities, losses, costs and expenses, (including without limitation attorneys’ and experts’ fees and expenses) demands, causes of action, claims or judgments directly or indirectly arising out of the use, generation, storage or disposal of Hazardous Materials, of whatever kind or nature in, on or under the Premises, Building or Project by Tenant or any of Tenant’s Parties, which indemnity shall include,

RULES AND REGULATIONS

RENT

B. Additional Rent. All monies other than Base Rent required to be paid by Tenant hereunder, including, but not limited to, the interest and late charge described in Paragraph 26.D., any monies spent by Landlord pursuant to Paragraph 29, Tenant’s Proportionate Share of Basic Operating Cost, as specified in Paragraph 7 of this Lease, attorneys fees, as specified in Paragraph 32A and 32B, and any applicable amortized Tenant Improvement Allowance Repayment, as specified in Paragraph 37, shall be considered additional rent (“Additional Rent”). “Rent” shall mean Base Rent and Additional Rent. Rent due for any partial month at the commencement or expiration (but not for termination due to the default or Tenant) of the Lease Term shall be prorated based on the actual number of days in the applicable month.

BASIC OPERATING COST

(1) Taxes. All real property taxes, possessory interest taxes, business or license taxes or fees, service payments in lieu of such taxes or fees, annual or periodic license or use fees, excises, transit charges, housing fund assessments, open space charges, assessments, levies, fees or charges general and special, ordinary and extraordinary, unforeseen as well as foreseen, of any kind (including fees “in-lieu” of any such tax or assessment) which are assessed, levied, charged, confirmed, or imposed by any public authority upon the Project, its operations or the Rent (or any portion or component thereof) (all of the foregoing being hereinafter collectively referred to as “real property taxes”), or any tax imposed in substitution, partially or totally, of any tax previously included within the definition of real property taxes, or any additional tax the nature of which was previously included within the definition of real property taxes, except (a) inheritance or estate taxes imposed upon or assessed against the Project, or any part thereof or interest therein, (b) taxes computed upon the basis of net income of Landlord or the owner of any interest therein, including capital gains tax, (c) additional taxes resulting from the improvement of any portion of the Project other than the Premises or the Building for the sole use of other tenants, or (d) tax penalties as a result of Landlord’s failure to make payments or file informational returns unless such failure was caused in part by a default of Tenant, except as otherwise provided in the following sentence. Basic Operating Cost shall also include any taxes, assessments, or any other fees imposed by any public authority upon or measured by the monthly rental or other charges payable hereunder, including, without limitation, any gross income tax or excise tax levied by the local governmental body with respect to receipt of such rental, or upon, with respect to or by reason of the development, possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof, or upon this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises. In the event that it shall not be lawful for Tenant to reimburse Landlord for all or any part of such taxes, the monthly rental payable to Landlord under this Lease shall be revised to net to Landlord the same total net rental after imposition of any such taxes by Landlord as would have been payable to Landlord prior to the payment of any such taxes.

(2) Insurance. All insurance premiums and costs, including but not limited to, any deductible amounts, premiums and cost of insurance incurred by Landlord, as more fully set forth in Paragraph 8.A. herein.

(3) Repairs and Improvements. Repairs, replacements and general maintenance for the Premises, Building and Project (except for those repairs expressly made the financial responsibility of Landlord pursuant to the terms of this Lease, repairs to the extent paid for by proceeds of insurance or by Tenant or other third parties, and alterations attributable solely to tenants of the Project other than Tenant). Such repairs, replacements, and general maintenance shall include the cost of any capital improvements made to or capital assets acquired for the Project, Building, or Premises after the Term Commencement Date that reduce any other Basic Operating Cost, are reasonably necessary for the health and safety of the occupants of the Project, or are made to the Building by Landlord after the date of this Lease and are required under any governmental law or regulation, such costs or allocable portions thereof to be amortized over the estimated useful life of such improvement or asset as Landlord shall reasonably determine, together with interest on the unamortized balance at the “prime rate” charged at the time such improvements or capital assets are constructed or acquired by Bank of America, N. T. S. A. (San Francisco), plus two (2) percentage points, but in no event more than the maximum rate permitted by law.

(4) Services. All expenses relating to maintenance, janitorial and service agreements and services, and costs of supplies and equipment used in maintaining the Premises, Building and Project and the equipment therein and the adjacent sidewalks, driveways, parking and service areas, including, without limitation, alarm service, window cleaning, elevator maintenance, Building exterior maintenance and landscaping.

(5) Utilities. Utilities which benefit all or a portion of the Premises, Building or Project.

(6) Management Fee. A management and accounting cost recovery fee equal to five percent (5%) of the sum of Base Rent and Basic Operating Cost.

(7) Legal and Accounting. Legal and accounting expenses relating to the Project, including the cost of audits by certified public accountants, excluding therefrom all such expenses directly resulting from Landlord’s breach of any other lease or agreement, unless such breach was caused in whole or part by the default of Tenant.

B. Payment of Estimated Basic Operating Cost. “Estimated Basic Operating Cost” for any particular year shall mean Landlord’s estimate of the Basic Operating Cost for such fiscal year made prior to commencement of such fiscal year as hereinafter provided. Landlord shall have the right from time to time to revise its fiscal year and interim accounting periods so long as the periods as so revised are reconciled with prior periods in accordance with generally accepted accounting principles applied in a consistent manner. During the last month of each fiscal year during the Term, or as soon thereafter as practicable, Landlord shall give Tenant written notice of the Estimated Basic Operating Cost for the ensuing fiscal year. Tenant shall pay Tenant’s Proportionate Share of the Estimated Operating Cost with installments of Base Rent for the fiscal year to which the Estimated Basic Operating Cost applies in monthly installments on the first day of each calendar month during such year, in advance. If at any time during the course of the fiscal year, Landlord determines that Basic Operating Cost is projected to vary from the then Estimated Basic Operating Cost by more than ten percent (10%), Landlord may, by written notice to Tenant, revise the Estimated Basic Operating Cost for the balance of such fiscal year, and Tenant’s monthly installments for the remainder of such year shall be adjusted so that by the end of such fiscal year Tenant has paid to Landlord Tenant’s Proportionate Share of the revised Estimated Basic Operating Cost for such year.

C. Computation of Basic Operating Cost Adjustment. “Basic Operating Cost Adjustment” shall mean the difference between Estimated Basic Operating Cost and Basic Operating Cost for any fiscal year determined as hereinafter provided. Within one hundred twenty (120) days after the end of each fiscal year, as determined by Landlord, or as soon thereafter as practicable, Landlord shall deliver to Tenant a statement of Basic Operating Cost for the fiscal year just ended, accompanied by a computation of Basic Operating Cost Adjustment. If such statement shows that Tenant’s payment based upon Estimated Basic Operating Cost is less than Tenant’s Proportionate Share of Basic Operating Cost, then Tenant shall pay to Landlord the difference within twenty (20) days after receipt of such statement. If such statement shows that Tenant’s payments of Estimated Basic Operating Cost exceed Tenant’s Proportionate Share of Basic Operating Cost, then (provided that Tenant is not in default under this Lease) Landlord shall pay to Tenant the difference within twenty (20) days after delivery of such statement to Tenant. If this Lease has been terminated or the Term hereof has expired prior to the date of such statement, then the Basic Operating Cost Adjustment shall be paid by the appropriate party within twenty (20) days after the date of delivery of the statement. Should this Lease commence or terminate at any time other than the first day of the fiscal year, Tenant’s Proportionate Share of the Basic Operating Cost adjustment shall be prorated by reference to the exact number of calendar days during such fiscal year that this Lease is in effect.

D. Net Lease. This shall be a net Lease and Base Rent shall be paid to Landlord absolutely net of all costs and expenses, except as specifically provided to the contrary in this Lease. The provisions for payment of Basic Operating Cost and the Basic Operating Cost Adjustment are intended to pass on to Tenant and reimburse Landlord for all costs and expense of the nature described in Paragraph 7.A. incurred in connection with the ownership, maintenance and operation of the Building or Project and such additional facilities now and in subsequent years as may be determined by Landlord to the be necessary to the Building or Project.

E. Tenant Audit. In the event that Tenant shall dispute the amount set forth in any statement provided by Landlord under Paragraph 7.B or 7.C. above, Tenant shall have the right, not later than thirty (30) days following the receipt of such statement and upon the condition that Tenant shall first deposit with Landlord the full amount in dispute, to cause Landlord’s books and records with respect to Basic Operating Cost for such fiscal year to be audited by certified public accountants selected by Tenant and subject to Landlord’s reasonable right of approval. The Basic Operating Cost Adjustment shall be appropriately adjusted on the basis of such audit. If such audit discloses a liability for a refund in excess of ten percent (10%) of Tenant’s Proportionate Share of the Basic Operating Cost Adjustment previously reported, the cost of such audit shall be borne by Landlord; otherwise the cost of such audit shall be paid by Tenant. If Tenant shall not request an audit in accordance with the provisions of this Paragraph 7.E. within thirty (30) days after receipt of Landlord’s statement provided pursuant to Paragraph 7.B. or 7.C., such statement shall be final and binding for all purposes hereof.

F. Three Day Notice. In the event Tenant fails to pay Basic Operating Costs when due as Additional Rent, such failure shall constitute a default in the payment of Rent under Paragraph 26A(2) and Tenant shall be subject to the default provision of Article 26, which shall include Landlord’s right to serve a three (3) day notice to pay rent or quit on Tenant.

INSURANCE AND

INDEMNIFICATION

B. Tenant’s Insurance.

(1) Property Insurance. Tenant shall procure at Tenant’s sole cost and expense and keep in effect from the date of this Lease and at all times until the end of the Term, insurance on all personal property and fixtures of Tenant and improvements made by or for Tenant to the Premises, insuring such property for the full replacement value of such property.

(2) Liability Insurance. Tenant shall procure at Tenant’s sole cost and expense and keep in effect from the date of this Lease and at all times until the end of the Term either Comprehensive General Liability Insurance or Commercial General Liability insurance applying to the use and occupancy of the Premises and the Building, and any part of either, and any areas adjacent thereto, and the business operated by Tenant, or by

(3) General Insurance Requirements. All coverages described in this Paragraph 8.B. shall be endorsed to provide Landlord with thirty (30) days’ notice of cancellation or change in terms. If at any time during the Term the amount or coverage of insurance which Tenant is required to carry under this Paragraph 8.B. is, in Landlord’s reasonable judgment, materially less than the amount or type of insurance coverage typically carried by owners or tenants of properties located in the general area in which the Premises are located which are similar to and operated for similar purposes as the Premises, Landlord shall have the right to require Tenant to increase the amount or change the types of insurance coverage required under this Paragraph 8.B. All insurance policies required to be carried under this Lease shall be written by companies rated A+XII or better in “Best’s Insurance Guide” and authorized to do business in California. Deductible amounts under any insurance policies required hereunder shall not exceed Five Thousand Dollars ($5,000.00). Tenant shall deliver to Landlord on or before the Term Commencement Date, and thereafter at least thirty (30) days before the expiration dates of the expiring policies, certified copies of Tenant’s insurance policies, or a certificate evidencing the same issued by the insurer thereunder, showing that all premiums have been paid for the full policy period; and, in the event Tenant shall fail to procure such insurance, or to deliver such policies or certificates, Landlord may, at Landlord’s option and in addition to Landlord’s other remedies in the event of a default by Tenant hereunder, procure the same for the account of Tenant, and the cost thereof shall be paid to Landlord as Additional Rent.

C. Indemnification. Landlord shall not be liable to Tenant for any loss or damage to person or property caused by theft, fire, acts of God, acts of a public enemy, riot, strike, insurrection, war, court order, requisition or order of governmental body or authority or for any damage or inconvenience which may arise through repair or alteration of any part of the Building or Project or failure to make any such repair, except as expressly otherwise provided in Paragraph 10. Tenant shall indemnify, defend by counsel acceptable to Landlord, protect and hold Landlord, its members, managers, directors, officers, employees, attorneys, agents, successors, assigns and lenders harmless from and against any and all liabilities, losses, costs, damages, injuries or expenses, including reasonable attorneys’ fees, experts’ fees and court costs, arising out of or related to: (1) claims of injury to or death of persons or damage to property, including the person and property of Landlord, its members, managers, directors, officers, employees, agents,

WAIVER OF SUBROGATION

LANDLORD’S REPAIRS AND

SERVICES

TENANT’S REPAIRS

ALTERATIONS

B. Bonus Rent. Any Rent or other consideration realized by Tenant under any such sublease or assignment in excess of the Rent payable hereunder, after amortization of a reasonable brokerage commission shall be divided and paid, ten percent (10%) to Tenant, ninety percent (90%) to Landlord, after deducing Tenant’s costs. Such deducted costs shall be limited to brokerage commissions paid by Tenant and the costs paid by

C. Corporation. If Tenant is a corporation, a transfer of corporation shares by sale, assignment, bequest, inheritance, operation of law or other disposition (including such a transfer to or by a receiver or trustee in federal or state bankruptcy, insolvency or other proceedings), so as to result in a change in the present management control of such corporation or any of its parent corporations by the person or persons owning a majority of said corporate shares, shall constitute an assignment for purposes of this Lease.

D. Partnership. If Tenant is a partnership, joint venture or other incorporated business form, a transfer of the interest or persons, firms or entities responsible for managerial control of Tenant by sale, assignment, bequest, inheritance, operation of law or other disposition, so as to result in a change in the present control of said entity and/or a change in the identity of the persons responsible for the general credit obligations of said entity shall constitute as assignment for all purposes of this Lease.

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

B. Condemnation Not Resulting in Termination. If a portion of the Project of which the Premises are a part should be taken or condemned for any public use under any governmental law, ordinance, or regulation, or by right of eminent domain, or by private purchase in lieu thereof, and this Lease is not terminated as provided in Paragraph 23.A., above, this Lease shall not terminate, but the Rent payable hereunder during the unexpired portion of the Lease shall be reduced, beginning on the date when the physical taking shall have occurred, to such amount as may be fair and reasonable under all of the circumstances.

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

B. Less Than 90 Days. If the Premises or Building should be damaged by fire, tornado or other casualty but only to such extent that rebuilding or repairs can in Landlord’s estimation be reasonably completed within ninety (90) days after the date of

C. Greater than 90 Days. If the Premises or Building should be damaged by fire, tornado or other casualty but only to such extent that rebuilding or repairs can in Landlord’s estimation be reasonably completed in more then ninety (90) days but in less than one hundred eighty (180) days, then Landlord shall have the option of either: (1) terminating the Lease effective upon the date of the occurrence of such damage, in which event the Rent shall be abated during the unexpired portion of the Lease; or (2) electing to rebuild or repair the Premises to substantially the condition in which they existed prior to such damage, provided that insurance proceeds are available, to fully repair the damage, except that Landlord shall not be required to rebuild, repair or replace any part of the partitions, fixtures, additions and other improvements which may have been placed in, on or about the Premises by Tenant. If the Premises are untenantable in whole or in part following such damage, the Rent payable hereunder during the period in which they are untenantable shall be abated proportionately, but only to the extent of rental abatement insurance proceeds received by Landlord during the time and to the extent the Premises are unfit for occupancy. In the event that Landlord should fail to complete such repairs and rebuilding within one hundred eighty (180) days after the date upon which Landlord is notified by Tenant of such damage, such period of time to be extended for delays caused by the fault or neglect of Tenant or because of acts of God, acts of public agencies, labor disputes, strikes, fires, freight embargoes, rainy or stormy weather, inability to obtain materials, supplies or fuels, or delays of the contractors or subcontractors or any other causes or contingencies beyond the reasonable control of Landlord, provided however that in no event shall any such delay exceed more than one (1) year from the date of such damage. Tenant may at Tenant’s option within ten (10) days after the expiration of such one hundred eighty (180) day period (as such may be extended), terminate this Lease by delivering written notice of termination to Landlord as Tenant’s exclusive remedy, whereupon all rights hereunder shall cease mid terminate thirty (30) days after Landlord’s receipt of such termination notice.

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

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

F. Uninsured Casualty. Notwithstanding anything herein to the contrary, in the event that the Premises or Building are damaged or destroyed and are not fully covered by the Insurance proceeds received by Landlord or in the event that the holder of any indebtedness secured by mortgage or deed of trust covering the Premises requires that the

G. Waiver. Except as otherwise provided in this Paragraph 24, Tenant hereby waives the provisions of Sections 1932(a), 1933(4), 1941 and 1942 of the Civil Code of California.

(1) Abandonment. Abandonment of the Premises for a continuous period in excess of five (5) days. Tenant waives any right to notice Tenant may have under Section 1951.3 of the Civil Code of the State of California, the terms of this Paragraph 26.A being deemed such notice to Tenant as required by said Section 1951.3.

(2) Nonpayment of Rent. Failure to pay any installment of Rent or any other amount due and payable hereunder within ten (10) days of the date when said payment is due.

(3) Prohibited Use. Use of the Premises for any Prohibited Use as defined in Section 4.B. or other breach by Tenant of any Section 4 obligation.

(4) Other Obligations. Failure to perform any obligation, agreement or covenant under this Lease other than those matters specified in subParagraphs (1) and (2) of this Paragraph 26.A., such failure continuing for thirty (30) days after written notice of such failure.

(5) General Assignment. A general assignment by Tenant for the benefit of creditors.

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

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

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

(9) Other Acts or Omissions. Any other acts or omissions by Tenant as described in this Lease.

B. Remedies Upon Default.

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

(2) Termination for Prohibited Use. The foregoing notwithstanding, if Tenant defaults by engaging in activities which constitute a Prohibited Use under Section 4B, Landlord shall have the right to terminate this Lease upon written notice and Tenant shall have thirty (30) days to vacate the Premises after receipt of such termination notice.

(3) Continuation After Default. Even though an event of default may have occurred, this Lease shall continue in effect for so long as Landlord does not terminate Tenant’s right to possession under Paragraph 26.B hereof, and Landlord may enforce all of Landlord’s rights and remedies under this Lease, including without limitation, the right to recover Rent as it becomes due, and Landlord, without terminating this Lease may exercise all of the rights and remedies of a Landlord under Section 1951.4 of the Civil Code of the State of California or any successor code section. Acts of maintenance, preservation or efforts for lease the Premises or the appointment of a receiver upon application of Landlord to protect Landlord’s interest under this Lease shall not constitute an election to terminate Tenant’s right to possession.

C. Damages After Default. Should Landlord terminate this Lease pursuant to the provisions of Paragraph 26.B hereof, Landlord shall have the rights and remedies of a Landlord provided by Section 1951.2 of the Civil Code of the State of California, or successor code sections. Upon such termination, in addition to any other rights and remedies to which Landlord may be entitled under applicable law, Landlord shall be entitled to recover from Tenant: (1) the worth at the time of award of the unpaid Rent and other amounts which had been earned at the time of termination, (2) the worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that Tenant proves could have been reasonably avoided; (3) the worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant proves could be reasonably avoided; and (4) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease or which, in the ordinary course of things, would be likely to result thereform. The “worth at the time of award” of the amounts referred to in (1) and (2) above shall be computed by allowing interest at the Applicable Interest Rate (as set forth in the Basic Lease Information). The “worth at the time of award” of the amount referred to in (3) above shall be computed by discounting such amount at the Federal Discount Rate of the Federal Reserve Bank of San Francisco at the time of the award plus one percent (1%). If this Lease provides for any periods during the Term during which Tenant is not required to pay Base Rent or if Tenant otherwise receives a Rent concession, then upon the occurrence of an event of default, Tenant shall owe to Landlord the full amount of such Base Rent or value of such Rent concession, plus interest at the Applicable Interest Rate, calculated from the date that such Base Rent or Rent concession would have been payable.

D. Late Charge. If any installment of Rent is not paid within five (5) working days of the date when due, such amount shall bear interest at the Applicable Interest Rate from the date on which said payment shall be due until the date on which Landlord shall receive said payment. In addition, Tenant shall pay Landlord a late charge equal to five percent (5%) of the delinquency, to compensate Landlord for the loss of the use of the amount not paid and the administrative costs caused by the delinquency, the parties agreeing that Landlord’s damage by virtue of such delinquencies would be difficult to compute and the amount stated herein represents a reasonable estimate thereof. This provision shall not relieve Tenant of Tenant’s obligation to pay Rest at the time and in the manner herein specified.

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

A. Rent. All Rent and other payments required to be made by Tenant to Landlord hereunder shall be payable to Landlord at the address act forth in the Basic Lease Information, or at such other address as Landlord may specify from time to time by written notice delivered in accordance herewith. Tenant’s obligation to pay Rent and any other amounts to Landlord under the terms of this Lease shall not be deemed satisfied until such Rent and other amounts have been actually received by Landlord.

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

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

C. Litigation. In any action which Landlord or Tenant brings to enforce its respective rights hereunder, the unsuccessful party shall pay all costs incurred by the prevailing party including reasonable attorneys’ fees, to be fixed by the court, and said costs and attorneys’ fees shall be a part of the judgment in said action.

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

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

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

E. Modification. This Lease may not be modified except by a written instrument by the parties.

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

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

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

I. Accord and Satisfaction. No payment by Tenant of a lesser amount than the Rent nor any endorsement on any check or letter accompanying any check or payment of Rent shall be deemed an accord and satisfaction of full payment of Rent, and Landlord may accept such payment without prejudice to Landlord’s right to recover the balance of such Rent or to pursue other remedies.

J. Easements. Landlord may grant easements on the Project and dedicate for public use portions of the Project without Tenant’s consent, provided that no such grant or dedication shall materially interfere with Tenant’s access to or use of the Premises or Tenant’s parking rights. Upon Landlord’s demand, Tenant shall execute, acknowledge and deliver to Landlord documents, instruments, maps and plats necessary to effectuate Tenant’s covenants hereunder.

K. Drafting and Determination. The parties acknowledge that this Lease has been agreed to by both parties, that both Landlord and Tenant have consulted with attorneys with respect to the terms of this Lease and that no presumption shall be created against Landlord because Landlord drafted this Lease. Except as otherwise specifically set forth in this Lease, with respect to any consent, determination or estimation of Landlord required in this Lease or requested of Landlord, Landlord’s consent, determination or estimation shall be made in Landlord’s good faith opinion, whether objectively reasonable or unreasonable.

L. Exhibits. Exhibits A, B, C and D attached hereto are hereby incorporated herein by this reference.

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

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

O. Security, Release and Indemnity. Tenant acknowledges and agrees that, while Landlord may elect to patrol the Project, Landlord is not providing any security services with respect to the Premises and that Landlord shall not be liable to Tenant for, and Tenant waives any claim against Landlord with respect to, any loss by theft or any other damage to person or property suffered or incurred by Tenant, Tenant’s employees and invitees, including but not limited to, in connection with any unauthorized entry into the Premises or any other breach of security with respect to the Premises.

EXHIBIT D

All compounds are anticipated to be used in minute quantities within contained, enclosed systems.

1.      Volatile anesthetics (ie, halothane)

2.      Acids (ie, hydrochloric acid, sulfuric acid)

3.      Bases (ie, sodium hydroxide, potassium hydroxide)