LEASE AGREEMENT

EXHIBIT 10.1

LEASE AGREEMENT

          THIS LEASE, made this 23rd day of July, 2001, is by and between BIV Group, a California general partnership, hereinafter called “Landlord,” and Cholestech Corporation, a California corporation, hereinafter called “Tenant.”

WITNESSETH:

          Landlord hereby leases to Tenant and Tenant hereby hires and takes from Landlord those certain premises (the “Premises”) in bold outline on Exhibit “A” attached hereto and incorporated herein by this reference and more particularly described as that certain improved real property in Alameda County, California commonly known as 3233 Investment Blvd., Hayward CA 94545-3808, an industrial building containing approximately 68,816 sq. ft. (the “Building”); provided, however, during the period from April 1, 2002 to and including June 30, 2002 (i.e., the first three months of the Term of this Lease), the Premises shall include only that portion of the Building at 3233 Investment Blvd. which is outlined in bold black on Exhibit “A” attached hereto, said portion containing approximately 40,317 sq. ft. and identified thereon as “LEASED 40,317 S.F. CHOLESTECH CORP.” (the “Currently Occupied Premises”). The remaining portion of the Premises, being that portion outlined in bold black on Exhibit “A” attached hereto and identified thereon as “LEASED OZ TECHNOLOGIES” and “LEASED WAINGARTH CORP” shall be referred to as the “Additional Premises” herein. As used herein the “Complex” shall mean and include all of the land outlined in Exhibit “A” attached hereto, and all of the buildings, improvements, fixtures and equipment now or hereafter situated on said land as well as the land identified as Assessor’s Parcel Number 461-0001-037-02.

          Landlord and Tenant agree and acknowledge that for the purposes of this Lease the square footage of the Currently Occupied Premises is 40,317 square feet and that the square footage of the Premises is 68,816 square feet regardless of the actual square footage.

          Said letting and hiring is upon and subject to the terms, covenants and conditions hereinafter set forth and Tenant covenants as a material part of the consideration for this Lease to perform and observe each and all of said terms, covenants and conditions. This Lease is made upon the conditions of such performance and observance.

1. USE Tenant shall use the Premises only in conformance with applicable governmental laws, regulations, rules and ordinances for general office, manufacturing and laboratory purposes, and for other reasonably comparable uses, but for no other purpose. Tenant shall not do or permit to be done in or about the Premises or the Complex nor bring or keep or permit to be brought or kept in or about the Premises or the Complex anything which is prohibited by or will in any way increase the existing rate of (or otherwise affect) fire or any insurance covering the Complex or any part thereof, or any of its contents, or will cause a cancellation of any insurance covering the Complex or any part thereof, or any of its contents. Tenant shall not do or permit to be done anything in, on or about the Premises or the Complex which will in any way obstruct or interfere with the rights of other tenants or occupants of the Complex or injure or annoy them, or use or allow the Premises to be used for any improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises or the Complex. No sale by auction shall be permitted on the Premises. Tenant shall not place any loads upon the

floors, walls, or ceiling, which endanger the structure, or place any harmful fluids or other materials in the drainage system of the Building, or overload existing electrical or other mechanical systems. No waste materials or refuse shall be dumped upon or permitted to remain upon any part of the Premises or outside of the Building in which the Premises are a part, except in trash containers placed inside exterior enclosures designated by Landlord for that purpose or inside of the Building proper where designated by Landlord. No materials, supplies, equipment, finished products or semi-finished products, raw materials or articles of any nature shall be stored upon or permitted to remain outside the Premises or on any portion of common area of the Complex without prior written permission from Landlord. Tenant shall not commit or suffer to be committed any waste in or upon the Premises. Tenant shall indemnify, defend and hold Landlord harmless against any loss, expense, damage, attorneys’ fees, or liability arising out of failure of Tenant to comply with any applicable law.

Tenant shall comply with any covenant, condition, or restriction (“CC&R’s”) affecting the Premises. The provisions of this paragraph are for the benefit of Landlord only and shall not be construed to be for the benefit of any tenant or occupant of the Complex.

2. TERM The term of this Lease (the “Term”) shall be for a period of 60 months, or five (5) years (unless sooner terminated as hereinafter provided) and, subject to Paragraph 3 of this Lease, shall commence on the 1st day of April, 2002, and end on the 31st day of March, 2007. Landlord hereby grants Tenant one (1) Option to extend the Term of this Lease. The Option will be for a term of thirty six (36) months or three (3) years. Tenant may exercise such Option by giving Landlord written notice of its exercise of such Option not less than one hundred eighty (180) days prior to the expiration of the original Term of this Lease nor more than two hundred seventy (270) days prior to the expiration of the original Term of this Lease.

3. POSSESSION On the commencement date of this Lease Tenant shall be leasing and occupying the Currently Occupied Premises. The parties anticipate that on July 1, 2002, Tenant shall be leasing and occupying the Currently Occupied Premises and the Additional Premises. If Landlord for any reason whatsoever cannot deliver possession of the Additional Premises to Tenant by July 1, 2002, this Lease shall not be void or voidable, no obligation of Tenant shall be affected thereby; and neither Landlord nor Landlord’s agents shall be liable to Tenant for any loss or damage resulting therefrom; but in that event Tenant’s obligations hereunder regarding the Additional Premises and all dates affected thereby shall be made to conform to the date Landlord actually delivers possession of the Additional Premises to Tenant except that the termination date of the Lease shall remain the 31st day of March, 2007. Landlord shall make all reasonable efforts to deliver possession of the Additional Premises to Tenant on or before July 1, 2002.

          If Landlord has not delivered possession of the Additional Premises to Tenant by August 1, 2002, Landlord shall pay Tenant $250 per day beginning on August 1, 2002 and continuing until the earlier of the following two dates: (a) the day Landlord actually delivers possession of the Additional Premises to Tenant or (b) January 31, 2003. Any such payments shall be made at the end of any applicable month.

4. RENT

          A. Basic Rent. Tenant agrees to pay to Landlord at such place as Landlord may designate without deduction, offset, prior notice, or demand, and Landlord agrees to accept as Basic Rent for the leased Premises, the total sum of Five Million, Sixty-two Thousand, Eight Hundred Seventy-eight Dollars and Forty-five cents ($5,062,878.45) in lawful money of the United States of America, payable as follows:

		Monthly				Annual
		Rent				Rent
Year 1, from April 1, 2002 to June 30, 2002 40,317 sq. ft. @ $1.15 per sq. ft.		$	46,364.55			$	139,093.65
Year 1, from July 1, 2002 to March 31, 2003 68,816 sq. ft. @ $1.15		$	79,138.40			$	712,245.60
Year 2, from April 1, 2003 to March 31, 2004 68,816 sq. ft. @ $1.200 per sq. ft.		$	82,579.20			$	990,950.40
Year 3, from April 1, 2004 to March 31, 2005 68,816 sq. ft. @ $1.250 per sq. ft.		$	86,820.00			$	1,032,240.00
Year 4, from April 1 2005, to March 31, 2006 68,816 sq. ft. @ $1.300 per sq. ft.		$	89,460.80			$	1,073,529.60
Year 5, from April 1, 2006, to March 31, 2007 68,816 sq. ft. @ $1.350 per sq. ft.		$	92,901.60			$	1,114,819.20

          It is agreed that upon exercising the Option (see Paragraph 2 of this Lease), the Basic Rent provided for herein is adjusted for the term of the Option according to Paragraph 38 of this Lease, the total Basic Rent and schedule of payments described above shall be adjusted accordingly.

     B. Time for Payments. Rent shall be paid monthly in advance on the first day of the month commencing April 1, 2002. In the event that the Term of this Lease commences on a date other than the first day of a calendar month, on the date of commencement of the Term hereof Tenant shall pay to Landlord as rent for the period from such date of commencement to the first day of the next succeeding calendar month that proportion of the monthly rent hereunder which the number of days between such date of commencement and the first day of the next succeeding calendar month bears to thirty (30). In the event that the Term of this Lease for any reason ends on a date other than the last day of a calendar month, on the first day of the last calendar month of the Term hereof Tenant shall pay to Landlord as rent for the period from said first day of said last calendar month to and including the last day of the Term hereof that proportion of the monthly rent hereunder which the number of days between said first day of said last calendar month and the last day of the Term hereof bears to thirty (30).

     C. Late Charge. Notwithstanding any other provision of this Lease, if Tenant is in default in the payment of rent as set forth in this Paragraph 4 of this Lease when due, or any part thereof, Tenant agrees to pay Landlord, in addition to the delinquent rental due, a late charge for each rental payment in default fifteen (15) days. Said late charge shall equal three (3%) percent of each rental payment so in default.

     D. Additional Rent (also known as Triple NNN). “Tenant’s Proportional Share” is defined as follows:

          (i) At such time that the Premises include only the Currently Occupied Premises, the “Tenant’s Proportional Share” shall equal 58.597% (40,317/68,816); and,

          (ii) At such time that the Premises include all of the Building at 3233 Investment Blvd. that consists of the Currently Occupied Premises and the Additional Premises, the “Tenant’s Proportional Share” shall equal 100.00%

     Beginning with the commencement date of the Term of this Lease and the term of the Option, Tenant shall pay the following to Landlord as “Additional Rent” (i.e., in addition to the Basic Rent described in Paragraph 4 A of this Lease); provided, however, that notwithstanding any other provision of this Lease, Tenant’s liability for Additional Rent shall commence on April 1, 2002 and not exceed $0.20 per rented square foot per month for the duration of the Lease:

               (1) Tenant’s Proportionate Share of all utilities relating to the Complex as set forth in Paragraph 11 of this Lease, and

               (2) Tenant’s Proportionate Share of all Taxes relating to the Complex as set forth in Paragraph 12 of this Lease, and

               (3) Tenant’s Proportionate Share of all insurance premiums relating to the Complex, as set forth in Paragraph 15 of this Lease, and

               (4) Tenant’s Proportionate Share of expenses for the operation, management, maintenance and repair of the Building (including common areas of the Building) and Common Areas of the Complex in which the Premises are located as set forth in Paragraph 7 of this Lease, and

          In the event of nonpayment by Tenant of Additional Rent, Landlord shall have all the rights and remedies with respect thereto as Landlord has for nonpayment of rent.

          Tenant shall pay to Landlord monthly, in advance, Tenant’s prorata share of an amount estimated by Landlord to be Landlord’s approximate average monthly expenditure for such Additional Rent items, which estimated amount shall be reconciled at the end of each calendar year as compared to Landlord’s actual expenditure for said Additional Rent items, with Tenant paying to Landlord, upon demand, any amount of actual expenses expended by Landlord in excess of said estimated amount, or Landlord refunding to Tenant (providing Tenant is not in default in the performance of any of the terms, covenants and conditions of this Lease) any amount of estimated payments made by Tenant in excess of Landlord’s actual expenditures for

said Additional Rent items. Landlord shall provide Tenant with a schedule every year showing Landlord’s estimated and actual Additional Rent items.

          Tenant’s Additional Rent payment at the commencement of the Term of this Lease shall initiate at a rate of Six Thousand, Five Hundred Dollars ($6,500.00) per month (the approximate average monthly expenditure) and be increased per the rate calculation described in Paragraph 4 D of this Lease, not to exceed a maximum of Thirteen Thousand, Seven Hundred and Sixty Three Dollars, and Twenty Cents ($13,763.20) per month (i.e. 68,816 sq. ft. @ $0.20 = $13,763.20) over the Term of the Lease. Tenant’s Additional Rent payments in subsequent years shall not exceed $0.20 per rentable square foot per month, for Landlord’s costs and expenses of operating, managing, and maintaining the common areas as described in Paragraph 7 of this Lease, and shall reflect any changes in the size of the Premises leased and occupied by Tenant.

          The respective obligations of Landlord and Tenant under this paragraph shall survive the expiration or other termination of the Term of this Lease, and if the Term hereof shall expire or shall otherwise terminate on a day other than the last day of a calendar year, the actual Additional Rent incurred for the calendar year in which the Term hereof expires or otherwise terminates shall be determined and settled on the basis of the statement of actual Additional Rent for such calendar year and shall be prorated in the proportion which the number of days in such calendar year preceding such expiration or termination bears to 365.

     E. Place of payment of Rent and Additional Rent. All Basic Rent hereunder and all payments hereunder for Additional Rent shall be paid to Landlord at the office of Landlord at BIV Group, P.O. Box 1567, Danville, CA, 94526-6567, or to such other person or to such other place as Landlord may from time to time designate in writing.

     F. Security Deposit. Tenant shall deposit with Landlord upon execution hereof Seventy Five Thousand Dollars ($75,000) as security for Tenants faithful performance of Tenant’s obligation hereunder. If Tenant fails to pay rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, the Landlord may use, apply, or retain all or any portion of said deposit for the payment of any rent or other charge in default, or for the payment of any other sum to which the Tenant may become obligated by reasons of Tenant default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or a portion of said deposit, Tenant shall within thirty (30) days after written demand, heretofore, deposit cash with Landlord in an amount sufficient to restore said deposit to the full amount then required of Tenant. Landlord shall not be required to keep said security deposit separate from its general accounts. If Tenant performs all of Landlords obligation hereunder, said deposit, or so much thereof as has not theretofore been applied to by Landlord, shall be returned without payment of interest or other increment of it’s use, to Tenant (or at Landlord’s option, to the last assignee, if any, of Tenants interest hereunder) at the expiration of the Term hereof, and after Tenant has vacated the Premises. No “Trust” relationship is created herein between Landlord and Tenant with respect to said Security Deposit.

5. RULES AND REGULATIONS AND COMMON AREA Subject to the terms and conditions of this Lease and such Rules and Regulations as Landlord may from time to time prescribe, Tenant and Tenant’s employees, invitees and customers shall, in common with other occupants of the Complex in which the Premises are located, and their respective employees, invitees and

customers, and others entitled to the use thereof, have the non-exclusive right to use the access roads, parking areas, and facilities provided and designated by Landlord for the general use and convenience of the occupants of the Complex in which the Premises are located, which areas and facilities are referred to herein as “Common Area”. This right shall terminate upon the termination of this Lease. Landlord reserves the right from time to time to make changes in the shape, size, location, amount and extent of Common Area. Landlord farther reserves the right to promulgate such reasonable rules and regulations relating to the use of the Common Area, and any part or parts thereof, as Landlord may deem appropriate for the best interests of the occupants of the Complex. The Rules and Regulations shall be binding upon Tenant upon delivery of a copy of them to Tenant, and Tenant shall abide by them and cooperate in their observance. Such Rules and Regulations may be amended by Landlord from time to time, with or without advance notice, and all amendments shall be effective upon delivery of a copy to Tenant. Landlord shall not be responsible to Tenant for the non-performance by any other tenant or occupant of the Complex of any of said Rules and Regulations.

          Landlord shall operate, manage and maintain the Common Area. The manner in which the Common Area shall be maintained and the expenditures for such maintenance shall be at the discretion of the Landlord.

6. PARKING During any period while this Lease is in effect and while Tenant occupies less than 100% of the Building, Tenant shall be entitled to use the percentage of all parking spaces that is equal to the percentage of the Building occupied by Tenant which percentage is 58.57%. During such period Landlord shall have the right to enforce all parking disputes in accordance with Building occupancy percentages. For the remaining period of the Lease during which Tenant occupies the entire Building, Tenant will control the designated parking areas with accommodation made for Landlord service and maintenance activity for the Premises.

7. EXPENSES OF OPERATION, MANAGEMENT AND MAINTENANCE OF THE COMMON AREAS OF THE COMPLEX, PREMISES AND BUILDING IN WHICH THE PREMISES ARE LOCATED As Additional Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay to Landlord Tenant’s Proportionate Share (as defined in Paragraph 4 D of this Lease) of all expenses of operation, management, maintenance and repair of the Common Areas of the Complex including, but not limited to, license, permit and inspection fees; security; utility charges associated with exterior landscaping and lighting (including water and sewer charges); all charges incurred in the maintenance of landscaped areas, lakes, parking lots, sidewalks, driveways; maintenance, repair and replacement of all fixtures and electrical, mechanical and plumbing systems; supplies and materials. All capital repairs and improvements costs will be paid by the Landlord, but the cost thereof (together with interest at the rate of eight (8%) percent per annum) may be amortized as an operating expense. All operating expenses shall be determined in accordance with generally accepted accounting practices consistently applied.

     As Additional Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay Tenant’s Proportionate Share (as defined in Paragraph 4 D of this Lease) of the cost of operation (including common utilities), management, maintenance and repair of the Premises and the Building (including common areas such as lobbies, restrooms, janitor’s closets, hallways, elevators, mechanical and telephone rooms, stairwells, entrances, spaces above the ceilings) in

which the Premises are located. The non-Capital maintenance items herein referred to include, but are not limited to, janitorization, electrical systems (such as outlets, lighting fixtures, lamps, bulbs, tubes, ballasts), heating and air conditioning controls (such as mixing boxes, thermostats, time clocks, supply and return grills), all interior improvements within the Premises including but not limited to: wall coverings, window coverings, acoustical ceilings, vinyl tile, carpeting, partitioning, doors (both interior and exterior, including closing mechanisms, latches, locks), and all other interior improvements of any nature whatsoever, all windows, window frames, plate glass, glazing, truck doors, main plumbing systems of the Building (such as water and drain lines, sinks, toilets, faucets, drains, showers and water fountains), main electrical systems (such as panels and conduits), heating and air conditioning systems (with the exception of main control consoles, compressors, fans, air handlers, ducts, boilers, heaters), store fronts, roofs, downspouts, building common area interiors (such as wall coverings, window coverings, floor coverings and partitioning), ceilings, building exterior doors, skylights (if any), automatic fire extinguishing systems and elevators; license, permit, and inspection fees; security; salaries and employee benefits of personnel and payroll taxes applicable thereto; supplies, materials, equipment and tools. Tenant hereby waives all rights under, and benefits of, subsection I of Section 1932 and Sections 1941 and 1942 of the California Civil Code and under any similar law, statute or ordinance now or hereafter in effect. Tenant agrees to provide carpet shields under all rolling chairs or to otherwise be responsible for wear and tear of the carpet caused by such rolling chairs if such wear and tear exceeds that caused by normal foot traffic in surrounding areas. Areas of excessive wear shall be replaced at Tenant’s sole expense upon Lease termination.

     Additional Rent as used herein shall not include Landlord’s debt repayments; interest on charges; expenses directly or indirectly incurred by Landlord for the benefit of any other tenant; cost for the installation of partitioning or any other tenant improvements; cost of attracting tenants; depreciation; interest, or executive salaries.

          Tenant agrees to provide for appropriate janitorial service for the leased Premises and to maintain the Complex in good condition.

8. ACCEPTANCE AND SURRENDER OF PREMISES Tenant is currently in possession of the Currently Occupied Premises and Tenant accepts the Currently Occupied Premises “AS IS”. By entry into the Additional Premises, Tenant accepts the Additional Premises as being in good and sanitary order, condition and repair, Tenant accepts the Additional Premises in their present condition and without representation or warranty by Landlord as to the condition of the Additional Premises or as to the use or occupancy which may be made thereof, and Tenant accepts “AS IS” the Additional Premises. However, prior to entry into the Additional Premises, Landlord and Tenant shall perform a walk-through inspection and make a list of all items not in good and sanitary order, condition and repair. Tenant shall not be required to accept the Additional Premises if the Additional Premises are not in good and sanitary order, condition and repair. If the Additional Premises are not in good and sanitary order, condition and repair, Landlord agrees that Landlord (or the prior tenant of Additional Premises) shall immediately cause the Additional Premises to be in good and sanitary order, condition and repair except as follows: if it is determined during the walk-through that the Additional Premises may be affected by a “Hazardous Material” as defined in Section 43 of this Lease, then Tenant shall have 30 days to make a final determination that Hazardous Material(s) exists within the Additional Premises. If it is determined with reasonable certainty that a Hazardous Material(s) exists within the

Additional Premises, then Landlord shall be obligated to eliminate the Hazardous Material only if the Hazardous Material can reasonably be removed from the Additional Premises with 60 days thereafter. If Landlord is not required to remove the Hazardous Material(s) due to the 60-day limitation, then Tenant shall have no obligation to accept the Additional Premises. Also, if Landlord (or the prior tenant) is required to perform work to cause the Additional Premises to be in good and sanitary order, condition and repair, then Tenant is not required to accept the Additional Premises until the work has been completed. Tenant agrees that Landlord is not otherwise responsible for any tenant improvements. Any exceptions to the foregoing must be by written agreement executed by Landlord and Tenant. Tenant agrees on the last day of the Lease Term, or on the sooner termination of this Lease, to surrender the Premises promptly and peaceably to Landlord in good condition and repair (damage by Acts of God, fire or normal wear and tear excepted), with all interior walls cleaned and repaired, if damaged; all floors cleaned and waxed; all carpets cleaned and shampooed; the air conditioning and heating equipment serviced by a reputable and licensed service firm and in good operating condition (provided the maintenance of such equipment has been Tenant’s responsibility during the Term of this Lease) together with all alterations, additions and improvements which may have been made in, to, or on the Premises (except movable trade fixtures installed at the expense of Tenant) except that Tenant shall ascertain from Landlord within ninety (90) days before the end of the Term of this Lease whether Landlord desires to have the Premises or any part or parts thereof restored to their condition and configuration as when the Premises were delivered to Tenant and if Landlord shall so desire, then Tenant shall restore said Premises or such part or parts thereof before the end of this Lease at Tenant’s sole cost and expense. Tenant, on or before the end of the Term or sooner termination of this Lease, shall remove all of Tenant’s personal property and trade fixtures from the Premises and repair any and all damage to the Building that results from such removal. Tenant’s personal property and trade fixtures shall include, without limitation, the property described on Exhibit “B” attached hereto and by this reference incorporated herein. All of Tenant’s property not so removed from the Premises on or before the end of the Term or sooner termination of this Lease shall be deemed abandoned by Tenant and title to same shall thereupon pass to Landlord without compensation to Tenant. Landlord may, upon termination of this Lease, remove all moveable furniture and equipment so abandoned by Tenant, at Tenant’s sole cost, and repair any damage caused by such removal at Tenant’s sole cost. If the Premises be not surrendered at the end of the Term or sooner termination of this Lease, Tenant shall indemnify Landlord against loss or liability resulting from the delay by Tenant in so surrendering the Premises including, without limitation, any claims made by any succeeding tenant founded on such delay. Nothing contained herein shall be construed as an extension of the Term hereof or as a consent of Landlord to any holding over by Tenant. The voluntary or other surrender of this Lease or the Premises by Tenant or a mutual cancellation of this Lease shall not work as a merger and, at the option of Landlord, shall either terminate all or any existing subleases or subtenancies or operate as an assignment to Landlord of all or any such subleases or subtenancies.

9. ALTERATIONS AND ADDITIONS Tenant shall not make, or suffer to be made, any alteration or addition to the Premises, or any part thereof, without the written consent of Landlord first had and obtained by Tenant, but at the cost of Tenant, and any addition to, or alteration of, the Premises, except moveable furniture and trade fixtures shall at once become a part of the Premises and belong to Landlord. If Landlord consents to the making of any alteration, addition, or improvement to or of the Premises by Tenant, the same shall be made by

Landlord at Tenant’s sole cost and expense. Any modifications to the Building or building systems required by governmental code or otherwise as a result of Tenant’s alterations, additions or improvements shall be made at Tenant’s sole cost and expense. Tenant shall retain title to all moveable furniture and trade fixtures placed in the Premises. All heating, lighting, electrical, air conditioning, partitioning, drapery, carpeting and floor installations made by Tenant, together with all property that has become an integral part of the Premises, shall not be deemed trade fixtures unless otherwise noted in a written document signed by Landlord and Tenant. Tenant agrees that it will not proceed to make any alterations or additions, without having obtained consent from Landlord to do so, and until five (5) days from the receipt of such consent, in order that Landlord may post appropriate notices to avoid any liability to contractors or material suppliers for payment for Tenant’s improvements. Tenant will at all times permit such notices to be posted and to remain posted until the completion of work. Tenant shall, if required by Landlord, secure at Tenant’s own cost and expense, a completion and lien indemnity bond, satisfactory to Landlord, for such work. Tenant further covenants and agrees that any “mechanic’s lien”, filed against the Premises or against the Complex for work claimed to have been done for, or materials claimed to have been furnished to Tenant, will be discharged by Tenant, by bond or otherwise, within thirty (30) days after the filing thereof, at the cost and expense of Tenant. Any exceptions to the foregoing must be made in writing and executed by both Landlord and Tenant. Tenant shall obtain all required governmental permits and provide a copy to Landlord within five days of obtaining such permits.

10. BUILDING PLANNING [Omitted.]

11. UTILITIES OF THE BUILDING IN WHICH THE PREMISES ARE LOCATED As Additional Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay Tenant’s Proportionate Share (as defined in Paragraph 4 D of this Lease) of the cost of all utility charges such as water, gas, electricity, telephone, telex and other electronic communications service, sewer service, waste pick-up and any other utilities, materials or services furnished directly to the Building in which the Premises are located, including, without limitation, any temporary or permanent utility surcharge or other exactions whether or not hereinafter imposed.

          Landlord shall not be liable for and Tenant shall not be entitled to any abatement or reduction of rent by reason of any interruption or failure of utility services to the Premises when such interruption or failure is caused by accident, breakage, repair, “rolling blackouts”, strikes, lockouts, or other labor disputes of any nature, or by any other cause, similar or dissimilar, beyond the reasonable control of Landlord.

          Provided that Tenant is not in default in the performance or observance of any of the terms, covenants or conditions of this Lease to be performed or observed by it, Landlord shall furnish to the Premises reasonable quantities of water, gas and electricity suitable for the intended use of the Premises and heat and air conditioning required in Landlord’s judgment for the comfortable use and occupation of the Premises for such purposes. Tenant agrees that at all times it will cooperate fully with Landlord and abide by all regulations and requirements that Landlord may prescribe for the proper functioning and protection of the building heating, ventilating and air conditioning systems. Whenever heat generating machines, equipment, or any other devices (including exhaust fans) are used in the Premises by Tenant which affect the temperature or otherwise maintained by the air conditioning system, Landlord shall have the

right to install supplementary air conditioning units on the Premises and the costs thereof, including the cost of installation and the cost of operation and maintenance thereof, shall be paid by Tenant to Landlord upon demand by Landlord. If Tenant shall require water, gas or electric current in excess of that usually furnished or supplied to the Premises being used as general office space, Tenant shall first obtain the written consent of Landlord, which consent shall not be unreasonably withheld and Landlord may cause an electric current, gas, or water meter to be installed in the Premises in order to measure the amount of electric current, gas or water consumed for any such excess use. The cost of any such meter and of the installation, maintenance and repair thereof, all charges for such excess water, gas and electric current consumed (as shown by such meters and at the rates then charged by the furnishing public utility); and any additional expense incurred by Landlord in keeping account of electric current, gas, or water so consumed shall be paid by Tenant and Tenant agrees to pay Landlord therefore promptly upon demand by Landlord. However, any charges that are the result of such uses contained in the last three sentences above shall not be applied towards the calculation of the cap on Additional Rent.

          Landlord and Tenant agree that utility charges such as water, gas, electricity, telephone, telex and other electronic communication services that are used solely by Tenant within the Premises are the responsibility of Tenant, that such charges are not Additional Rent and Tenant agrees to pay such charges.

12. TAXES

     A. As Additional Rent and in accordance with Paragraph 4 D of this Lease, Tenant shall pay to Landlord Tenant’s Proportionate Share (as defined in Paragraph 4 D of this Lease) of all Real Property Taxes. The term “Real Property Taxes,” as used herein, shall mean (i) all taxes, assessments, levies and other charges of any kind or nature whatsoever, general and special, foreseen and unforeseen (including all installments of principal and interest required to pay any general or special assessments for public improvements and any increases resulting from reassessments caused by any change in ownership of the Complex) now or hereafter imposed by any governmental or quasi-governmental authority or special district having the direct or indirect power to tax or levy assessments, which are levied or assessed against, or with respect to the value, occupancy or use of, all or any portion of the Complex (as now constructed or as may at any time hereafter be constructed, altered, or otherwise changed) or Landlord’s interest therein: any improvements located within the Complex (regardless of ownership); the fixtures, equipment and other property of Landlord, real or personal, that are an integral part of and located in the Complex; or parking areas, public utilities, or energy within the Complex; (ii) all charges, levies or fees imposed by reason of environmental regulation or other governmental control of the Complex; and (iii) all costs and fees (including attorneys’ fees) incurred by Landlord in contesting any Real Property Tax and in negotiating with public authorities as to any Real Property Tax. If at any time during the Term of this Lease the taxation or assessment of the Complex prevailing as of the commencement date of this Lease shall be altered so that in lieu of or in addition to any Real Property Tax described above there shall be levied, assessed or imposed (whether by reason of a change in the method of taxation or assessment, creation of a new tax or charge, or any other cause) an alternate or additional tax or charge (i) on the value, use or occupancy of the Complex or Landlord’s interest therein or (ii) on or measured by the gross receipts, income or rentals from the Complex, on Landlord’s business of leasing the

Complex, or computed in any manner with respect to the operation of the Complex, then any such tax or charge, however designated, shall be included within the meaning of the term “Real Property Taxes” for purposes of this Lease. If any Real Property Tax is based upon property or rents unrelated to the Complex, then only that part of such Real Property Tax that is fairly allocable to the Complex shall be included within the meaning of the term “Real Property Taxes”.

          Notwithstanding the foregoing, the term “Real Property Taxes” shall not include estate, inheritance, gift or franchise taxes of Landlord or the federal or state net income tax imposed on Landlord’s income from all sources.

     B. Taxes on Tenant’s Property

                    (1) Tenant shall be liable for and shall pay before delinquency, taxes levied against any personal property or trade fixtures placed by Tenant in or about the Premises. If any such taxes on Tenant’s personal property or trade fixtures are levied against Landlord or Landlord’s property or if the assessed value of the Premises is increased by the inclusion therein of a value placed upon such personal property or trade fixtures of Tenant and if Landlord, after written notice to Tenant, pays the taxes based on 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, as the case may be, repay to Landlord the taxes so levied against Landlord, or the proportion of such taxes resulting from such increase in the assessment; provided that in any such event Tenant shall have the right, in the name of Landlord and with Landlord’s full cooperation, to bring suit in any court of competent jurisdiction to recover the amount of any such taxes so paid under protest, and any amount so recovered shall belong to Tenant.

                    (2) If the Tenant improvements in the Premises, whether installed, and/or paid for by Landlord or Tenant and whether or not affixed to the real property so as to become a part thereof, are assessed for Real Property Tax purposes at a valuation higher than the valuation at which standard office improvements in other space in the Complex are assessed, then the Real Property Taxes and assessments levied against Landlord or the Complex by reason of such excess assessed valuation shall be deemed to be taxes levied against personal property of Tenant and shall be governed by the provisions of 12A(i), above. If the records of the County Assessor are available and sufficiently detailed to serve as a basis for determining whether said Tenant improvements are assessed at a higher valuation than standard office improvements in other space in the Complex, such records shall be binding on both the Landlord and the Tenant. If the records of the County Assessor are not available or sufficiently detailed to serve as a basis for making said determination, the actual cost of construction shall be used.

13. LIABILITY INSURANCE Tenant, at Tenant’s expense, agrees to keep in force during the Term of this Lease a policy of comprehensive public liability insurance with limits in the amount of $1,000,000/$3,000,000 for injuries to or death of persons occurring in, on or about the Premises, and property damage insurance with limits of $1,000,000. The policy or policies affecting such insurance, certificates of which shall be furnished to Landlord, shall name Landlord as an additional insured, and shall provide that the insurance effected thereby shall not be canceled, except upon thirty (30) days’ prior written notice to Landlord. If, during the Term of

this Lease, in the considered opinion of Landlord’s Lender, insurance advisor or counsel, the amount of insurance described in this Paragraph 13 of this Lease is not adequate, Tenant agrees to increase said coverage to such reasonable amount as Landlord’s Lender, insurance advisor or counsel shall deem adequate.

14. TENANT’S PERSONAL PROPERTY INSURANCE AND WORKER’S COMPENSATION INSURANCE Tenant shall maintain a policy or policies of fire and property damage insurance in “all risk” form with a sprinkler leakage endorsement ensuring the personal property, inventory, trade fixtures and leasehold improvements within the leased Premises for the full replacement value thereof. The proceeds from any of such policies shall be used for the repair or replacement of such items so insured.

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