Exhibit 10.29

Executed December 9, 2015

OFFICE LEASE

 

611 GATEWAY BOULEVARD

 

 

 

BP GATEWAY CENTER LLC,
a Delaware limited liability company

as Landlord,

and

ATARA BIOTHERAPEUTICS, INC.,
a Delaware corporation ,

as Tenant.

 

 

 

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]

 

 

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ARTICLE 1

PREMISES, BUILDING, PROJECT, AND COMMON AREAS

4

ARTICLE 2

LEASE TERM

5

ARTICLE 3

BASE RENT

5

ARTICLE 4

ADDITIONAL RENT

6

ARTICLE 5

USE OF PREMISES

13

ARTICLE 6

SERVICES AND UTILITIES

14

ARTICLE 7

REPAIRS

17

ARTICLE 8

ADDITIONS AND ALTERATIONS

17

ARTICLE 9

COVENANT AGAINST LIENS

20

ARTICLE 10

TENANT'S INDEMNITY AND INSURANCE

21

ARTICLE 11

DAMAGE AND DESTRUCTION

30

ARTICLE 12

NONWAIVER

32

ARTICLE 13

CONDEMNATION

32

ARTICLE 14

ASSIGNMENT AND SUBLETTING

33

ARTICLE 15

SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

38

ARTICLE 16

HOLDING OVER

39

ARTICLE 17

ESTOPPEL CERTIFICATES

39

ARTICLE 18

MORTGAGE OR GROUND LEASE

40

ARTICLE 19

DEFAULTS; REMEDIES

41

ARTICLE 20

COVENANT OF QUIET ENJOYMENT

44

ARTICLE 21

SECURITY DEPOSIT

44

ARTICLE 22

SUBSTITUTION OF OTHER PREMISES

45

ARTICLE 23

SIGNS

46

 

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ARTICLE 24

COMPLIANCE WITH LAW

46

ARTICLE 25

LATE CHARGES

47

ARTICLE 26

LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

47

ARTICLE 27

ENTRY BY LANDLORD

48

ARTICLE 28

NOTICES

48

ARTICLE 29

MISCELLANEOUS PROVISIONS

49

 

 

 

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EXHIBITS

AOUTLINE OF PREMISES

BTENANT WORK LETTER

CFORM OF NOTICE OF LEASE TERM DATES

DRULES AND REGULATIONS

EFORM OF TENANT'S ESTOPPEL CERTIFICATE

FSTANDARDS FOR UTILITIES AND SERVICES

GACCEPTABLE FORMS OF INSURANCE CERTIFICATE

HFORM OF LETTER OF CREDIT

 

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Additional Rent

12

Advocate Arbitrators

8

Alterations

27

Applicable Laws

58

Bank Prime Loan

59

Base Building

28

Base Rent

11

Base Year

13

Base Year Prop 13 Taxes

19

Brokers

66

Building

4

Building Common Areas

5

Building Common Areas.

5

Building Direct Expenses

13

Building Hours

24

Building Operating Expenses

13

Building Tax Expenses

13

Capital Expenses

19

Common Areas

5

Comparable Buildings

5

Cost Pools

20

Direct Expenses

13

Effective Date

10

Estimate

20

Estimate Statement

20

Estimated Excess

20

Excess

20

Expense Year

13

First Offer Commencement Date

9

First Offer Notice

6

First Offer Rent

6

First Offer Space

5

Force Majeure

64

Gateway Center

66

Hazardous Substance

23

Holidays

24

HVAC

24

Landlord

1

Landlord Repair Notice

37

Lease

1

Lease Term

9

Lease Year

9

Lines

68

Mail

61

Management Fee Cap

17

 

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Net Worth

45

Neutral Arbitrator

8

Notices

61

Operating Expenses

13

Original Improvements

33

Original Tenant

5

Other Improvements

67

Outside Agreement Date

7

Outside Date

10

Premises

4

Project

4

Project Common Areas

5

Project,

4

Projected Annual Savings

22

Proposition 13

18

Reassessment

19

REIT

25

Renovations

67

Rent

12

rentable square feet

5

Service Provider

25

Statement

20

Subject Space

40

Summary

1

Superior Right Holders

5

Tax Expenses

17

Tenant

1

Tenant Work Letter

4

Tenant's Share

19

Tenant's Sign

57

Tenant's Subleasing Costs

42

Termination Extension Notice

10

Termination Notice

10

Transfer

40

Transfer Agreement

44

Transfer Notice

40

Transfer Premium

42

Transferee

40

Transfers

40

 

 

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611 GATEWAY BOULEVARD

OFFICE LEASE

This Office Lease (the "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 BXP 611 GATEWAY CENTER LP, a Delaware limited partnership ("Landlord"),
and ATARA BIOTHERAPEUTICS, INC., a Delaware corporation ("Tenant").

SUMMARY OF BASIC LEASE INFORMATION

TERMS OF LEASE

DESCRIPTION

1.Date:

November 25, 2015

2.Premises
(Article 1).

 

2.1Building:

611 Gateway Boulevard, South San Francisco, California, containing 260,337
rentable square feet of space.  

2.2Premises:

13,670 rentable square feet of space located on the ninth (9th) floor of the
Building and commonly known as Suite 900, as further set forth in Exhibit A to
the Office Lease.

3.Lease Term
(Article 2).

 

3.1Lease Term:

Approximately five (5) years and one (1) month.

3.2Lease Commencement Date:

The earlier to occur of (i) the date upon which Tenant first commences to
conduct business in the Premises, and (ii) the date that occurs three (3) months
following the date upon which Landlord delivers possession of the Premises to
Tenant for the construction of the "Tenant Improvement pursuant to the terms of
the Tenant Work Letter attached hereto as Exhibit B (the "Delivery
Date").  Landlord anticipated that the Delivery Date shall occur on February 1,
2016.  

 

 

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3.3Lease Expiration Date:

If the Lease Commencement Date shall be the first day of a calendar month, then
the day

immediately preceding the sixty-first (61st) 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
sixty-first (61st) month anniversary of the Lease Commencement Date occurs.

4.Base Rent (Article 3):

 

Period During Lease Term

Annual
Base Rent

Monthly
Installment
of Base Rent

Approximate Monthly Base Rental Rate Per Rentable Square Foot

Lease Year 1*

$549,534.00

$45,794.50

$3.35

Lease Year 2

$566,020.08

$47,168.34

$3.45

Lease Year 3

$583,000.68

$48,583.39

$3.55

Lease Year 4

$600,490.68

$50,040.89

$3.66

Lease Year 5

$618,505.32

$51,542.11

$3.77

Lease Year 6 (one month)

$637,060.56

$53,088.38

$3.88

*  Tenant's obligation to pay Base Rent during the first (1st) full calendar
month of the Lease Term shall be subject to the Rent Abatement, as set forth in
Section 3.2 of the Lease.

**The Monthly Installment of Base Rent for Lease Year 1 was calculated by
multiplying $3.35 by the number of rentable square feet of space in the
Premises.  In all subsequent periods (i.e., commencing in Lease Year 2), the
calculation of Annual Base Rent reflects an annual increase of 3.0%.

5.Base Year
(Article 4):

Calendar year 2016.

6.Tenant's Share
(Article 4):

5.2509%.

7.Permitted Use
(Article 5):

General office use.

8.Letter of Credit
(Article 21):  

$194,333.56

 

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9.Address of Tenant
(Article 28): 

Atara Biotherapeutics, Inc.
701 Gateway Boulevard, Suite 200
South San Francisco, CA  94080
Attn: Office of General Counsel
(Prior to and after Lease Commencement Date)

10.Address of Landlord
(Article 28):

See Article 28 of the Lease.

11.Broker(s)
(Section 29.24):

Landlord:  Cushman & Wakefield

Tenant:  Newmark Cornish & Carey

12.Tenant Improvement Allowance (Exhibit B):

$341,750.00 (i.e., $25.00 per rentable square foot of the Premises multiplied by
13,670 rentable square feet).

 

ARTICLE 1

 

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PREMISES, BUILDING, PROJECT, AND COMMON AREAS

1.1Premises, Building, Project and Common Areas.

1.1.1The 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 and each floor or floors of 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 in the "Building," as that term is defined in Section 1.1.2, below,
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"), Tenant shall
accept the Premises in its presently existing "as-is" condition and 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.  Except as set forth in the Tenant Work Letter, 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.  For purposes of Section 1938 of the California Civil
Code, Landlord hereby discloses to Tenant, and Tenant hereby acknowledges, that
the Premises have not undergone inspection by a Certified Access Specialist
(CASp).

1.1.2The 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 project known as "Gateway Center."  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, subterranean parking facilities and other
improvements) upon which the Building and the Common Areas are located, (iii)
those certain other office buildings located in the vicinity of the Building and
known as 601 Gateway Boulevard and 651 Gateway Boulevard, respectively, and the
land upon which such office buildings are located, and (iv) at Landlord's
discretion, any additional real property, areas, land, buildings or other
improvements added thereto outside of the Project.

1.1.3Common 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

 

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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 designated
by Landlord, in its discretion, including certain areas designated for the
exclusive use of certain tenants, or to be shared by Landlord and certain
tenants, 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, which Project Common
Areas may include, from time to time, in Landlord's sole discretion, a
conference center and other amenities.  The term "Building Common Areas," as
used in this Lease, shall mean the portions of the Common Areas located within
the Building designated as such by Landlord.  The manner in which the Common
Areas are maintained and operated shall be at the reasonable discretion of
Landlord (but shall at least be consistent with the manner in which the common
areas of the "Comparable Buildings," as that term is defined below, are
maintained and operated) and the use thereof shall be subject to such rules,
regulations and restrictions as Landlord may make from time to time.  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.  As used in
this Lease, the term "Comparable Buildings," shall be the Building and the other
office buildings in the Project, and those other first class office buildings of
comparable height, age, size, location, quality of construction and appearance,
service and amenities, and with comparable covered or structure parking, which
are located in office projects of comparable size as the project, and are
located in the City of South San Francisco.   

1.2Rentable Square Feet of Premises and Building.  For purposes of this Lease,
Landlord and Tenant hereby stipulate and agree that the "rentable square feet"
in the Premises and the Building, as the case may be, is as set forth in
Sections 2.1 and 2.2, respectively, of the Summary, and shall not be subject to
remeasurement unless there is a physical changes in the size of the Premises or
the Building.  

1.3Right of First Offer.  Landlord hereby grants to the originally named Tenant
herein ("Original Tenant") a right of first offer with respect to the leasable
space located on the ninth (9th) floor of the Building which is not part of the
initial Premises, as more specifically set forth on Exhibit A-1, attached hereto
(the "First Offer Space").  Notwithstanding the foregoing, such first offer
right of Tenant shall commence only following the expiration or earlier
termination of the first lease or leases (including renewals and extensions,
whether pursuant to express rights or otherwise) executed by Landlord with
respect to the First Offer Space after the date of this Lease (the "Initial
First Offer Space Lease(s)"), and such right of first offer shall be subordinate
to all rights of tenants under leases of the First Offer Space existing as of
the date hereof, and all rights of other tenants of the Project, which rights
relate to the First Offer Space and which rights are set forth in leases of
space in the Project existing as of the date hereof, each including any
expansion, first offer, first negotiation and other similar rights, regardless
of whether such rights are executed strictly in accordance with their respective
terms or pursuant to lease amendments or new leases (all such tenants under
Initial First Offer Space Lease(s) and other tenants of the Project,
collectively, the "Superior Right Holders").  In addition, if Tenant, following
its receipt of a "First Offer Notice," as that term is defined in Section 1.3.1
of this Lease, below, fails to exercise its right to lease all or any portion of
the First Offer Space, then Landlord shall have a right to enter into an interim
lease (an "Interim Lease") with a third party

 

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with respect to such space (i.e., the space set forth in the First Offer
Notice), and Tenant's right of first offer as set forth in this Section 1.3
shall be subordinate the all rights of the tenant under the Interim Lease and
such tenant shall be deemed a Superior Right Holder.  Tenant's right of first
offer shall be on the terms and conditions set forth in this Section 1.3. 

1.3.1Procedure for Offer.  Landlord shall notify Tenant (a "First Offer Notice")
from time to time when the First Offer Space or any portion thereof becomes
available for lease to third parties, provided that no Superior Right Holder
wishes to lease such space.  Pursuant to such First Offer Notice, Landlord shall
offer to lease to Tenant the then available First Offer Space.  A First Offer
Notice shall describe the space so offered to Tenant and shall set forth the
"First Offer Rent," as that term is defined in Section 1.3.3, below, and the
other economic terms upon which Landlord is willing to lease such space to
Tenant.  The rentable square footage of the space so offered to Tenant shall be
as set forth in the First Offer Notice.  

1.3.2Procedure for Acceptance.  If Tenant wishes to exercise Tenant's right of
first offer with respect to the space described in a First Offer Notice, then
within five (5) business days of delivery of such First Offer Notice to Tenant,
Tenant shall deliver notice to Landlord of Tenant's intention to exercise its
right of first offer with respect to the entire space described in such First
Offer Notice on the terms contained therein; provided, however, Tenant may
irrevocably exercise Tenant's right of first offer with respect to the space
described in the First Offer Notice pursuant to the terms of this Section 1.3.2,
and, concurrently therewith, object to Landlord's determination of the First
Offer Rent, as set forth in the First Offer Notice, in which case the First
Offer Rent shall be determined pursuant to the terms of Section 1.3.3 of this
Lease, below.  If Tenant does not so notify Landlord within the five (5)
business day period, then Landlord shall be free to lease the space described in
such First Offer Notice to anyone to whom Landlord desires on any terms Landlord
desires.  Notwithstanding anything to the contrary contained herein, Tenant must
elect to exercise its right of first offer, 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.  If Tenant does not exercise its
right of first offer with respect to any space described in a First Offer Notice
or if Tenant fails to respond to a First Offer Notice within five (5) business
days of delivery thereof, then Tenant's right of first offer as set forth in
this Section 1.3 shall terminate as to all of the space described in such First
Offer Notice until such time as Landlord has entered into an Interim Lease with
respect to such space, at which time Tenant's right of first offer as set forth
in this Section 1.3 shall be effective following the expiration or earlier
termination of such Interim Lease.

1.3.3First Offer Space Rent.  The annual "Rent," as that term is defined in
Section 4.1 of this Lease, payable by Tenant for the First Offer Space (the
"First Offer Rent") shall be the "Fair Rental Value," as that term is defined
below, for the First Offer Space, pursuant to transactions consummated within
the nine (9)-month period preceding  the "First Offer Commencement Date," as
that term is defined in Section 1.3.5 of this Lease.  The "Fair Rental Value,"
as used in this Lease, shall be equal to the annual rent per rentable square
foot (including additional rent and considering any "base year" or "expense
stop" applicable thereto), including all escalations, at which tenants (pursuant
to leases consummated within the nine (9) month period preceding the First Offer
Commencement Date), are leasing non-sublease, non-encumbered, non-equity space
which is not significantly greater or smaller in size than the First Offer
Space, for a comparable lease term, in an arm's length transaction, which
comparable space

 

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is located in the Comparable Buildings (transactions satisfying the 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 First Offer 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 (i) the fact that Landlord is or is not required to pay a real estate
brokerage commission in connection with the First Offer Space, or the fact that
landlords are or are not paying real estate brokerage commissions in connection
with such comparable space, and (ii) 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
(provided that the foregoing shall in no way eliminate or alter Tenant’s right
to the concession set forth in item (a), above, to the extent applicable).  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 First Offer Space.  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).  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.   

1.3.3.1Determination of First Offer Rent.  In the event Tenant timely and
appropriately exercises its right of first offer, and rejects Landlord's First
Offer Rent, then Landlord and Tenant shall attempt to agree upon the First Offer
Rent using their good-faith efforts.  If Landlord and Tenant fail to reach
agreement on or before the later of (i) that date that occurs thirty (30) days
following Tenant's objection to the First Offer Rent, and (ii) the date that
occurs ninety (90) day prior to the estimated date of delivery of the First
Offer Space to Tenant (as applicable, the "Outside Agreement Date"), then each
party shall make a separate determination of the First Offer Rent within five
(5) days, and such determinations shall be submitted to arbitration in
accordance with Sections 1.3.3.2 through 1.3.3.9, below.

1.3.3.2Landlord 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 ten (10) year period ending on the date of
such appointment in the leasing or appraisal, as the case may be, of commercial
high-rise properties in the vicinity of the Building.  The determination of the
arbitrators shall be limited solely to the issue of whether Landlord's or
Tenant's submitted First Offer Rent is the closest to the actual First Offer
Rent, taking into account the requirements of this Section 1.3, as determined by
the arbitrators.  Each such

 

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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." 

1.3.3.3The 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.

1.3.3.4The 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 First Offer Rent, and shall notify Landlord and
Tenant thereof.

1.3.3.5The decision of the majority of the three arbitrators shall be binding
upon Landlord and Tenant.  

1.3.3.6If either Landlord or Tenant fails to appoint an Advocate Arbitrator
within fifteen (15) days after the Outside Agreement Date, then either party may
petition the presiding judge of the Superior Court of San Mateo County to
appoint such Advocate Arbitrator subject to the criteria in this Section 1.3, or
if he or she refuses to act, either party may petition any judge having
jurisdiction over the parties to appoint such Advocate Arbitrator.

1.3.3.7If 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 Mateo County to appoint the Neutral Arbitrator, subject to
criteria in Section 2.2.3.1 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.

1.3.3.8The cost of the arbitration and the fees of the Neutral Arbitrator shall
be paid by Landlord and Tenant equally.  Each party shall pay and bear the fees
and expenses of its Advocate Arbitrator.

1.3.3.9In the event that the First Offer Rent shall not have been determined
pursuant to the terms hereof prior to the First Offer Commencement Date, Tenant
shall be required to pay the First Offer Rent initially provided by Landlord to
Tenant, and upon the final determination of the First Offer Rent the payments
made by Tenant shall be reconciled with the actual amounts of First Offer Rent
due, and the appropriate party shall make any corresponding payment to the other
party.

1.3.4Construction In First Offer Space.  Tenant shall accept the First Offer
Space in its then existing "as is" condition.  The construction of improvements
in the First Offer Space shall comply with the terms of Article 8 of this Lease.

 

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1.3.5Amendment to Lease.  If Tenant timely exercises Tenant's right to lease
First Offer Space as set forth herein, then, within fifteen (15) days
thereafter, Landlord and Tenant shall execute an amendment to this Lease adding
such First Offer Space to the Premises upon the terms and conditions as set
forth in the First Offer Notice therefor and this Section 1.3.  Tenant shall
commence payment of Rent for such First Offer Space, and the term of such First
Offer Space shall commence, upon the date of delivery of such First Offer Space
to Tenant (the "First Offer Commencement Date") and terminate on the date set
forth in the First Offer Notice therefor. 

1.3.6Termination of Right of First Offer.  The rights contained in this
Section 1.3 shall be personal to Original Tenant, and may only be exercised by
Original Tenant (and not by any assignee, sublessee or other "Transferee," as
that term is defined in Section 14.1 of this Lease, of Tenant's interest in this
Lease) if Original Tenant occupies the entire Premises.  Tenant shall not have
the right to lease First Offer Space, as provided in this Section 1.3, if, as of
the date of the attempted exercise of any right of first offer by Tenant, or as
of the scheduled date of delivery of such First Offer Space to Tenant, Tenant is
in default under this Lease or Tenant has previously been in default under this
Lease more than once.

ARTICLE 2

LEASE TERM

2.1Lease 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
commence on the "Lease Commencement Date," as that term is set forth in Section
3.2 of the Summary, and shall terminate on the "Lease Expiration Date," as that
term is set forth in Section 3.3 of the Summary, unless this Lease is sooner
terminated as hereinafter provided.  If Landlord is unable for any reason to
deliver possession of the Premises to Tenant on any specific date, then Landlord
shall not be subject to any liability for its failure to do so, and such failure
shall not affect the validity of this Lease or the obligations of Tenant
hereunder; provided, however, if the existing tenant fails to surrender
possession of the Premises to Landlord on or before the scheduled expiration or
earlier termination of the existing tenant's lease, then Landlord shall use
commercially reasonable efforts to obtain possession of the Premises as soon as
reasonably practical thereafter.  For purposes of this Lease, the term "Lease
Year" shall mean each consecutive twelve (12) month period during the Lease
Term.  At any time during the Lease Term, Landlord may deliver to Tenant a
notice in 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 five (5) days of receipt thereof; provided, however, Tenant's
failure to execute and return such notice to Landlord within such time shall be
conclusive upon Tenant that the information set forth in such notice is as
specified therein.

2.2Occurrence of Delivery Date.  Landlord shall use its commercially reasonable,
good faith efforts to cause the Delivery Date to occur on or before February 1,
2016.

2.2.1Outside Date of Delivery Date.  If Landlord does not cause the Delivery
Date to occur by August 1, 2016 (the "Outside Date"), then the sole remedy of
Tenant for such failure shall be the right to deliver a notice to Landlord (a
"Termination Notice")

 

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electing to terminate this Lease effective upon the date occurring five (5)
business days following receipt by Landlord of the Termination Notice (the
"Effective Date").  The Termination Notice must be delivered by Tenant to
Landlord, if at all, not earlier than the Outside Date (as the same may be
extended pursuant to the terms of Section 2.2.3, below) nor later than five (5)
business days after the Outside Date.  The effectiveness of any such Termination
Notice delivered by Tenant to Landlord shall be governed by the terms of this
Section 2.2. 

2.2.2Extension of Outside Date After Delivery of the Termination Notice.  If
Tenant delivers a Termination Notice to Landlord, then Landlord shall have the
right to suspend the occurrence of the Effective Date for a period ending thirty
(30) days after the Effective Date by delivering written notice to Tenant, prior
to the Effective Date, that, in Landlord's reasonable, good faith judgment, the
Delivery Date will occur within thirty (30) days after the Effective Date (the
"Termination Extension Notice").  If the Delivery Date occurs within such thirty
(30) day suspension period, then the Termination Notice shall be of no force or
effect, but if the Delivery Date does not occur within such thirty (30) day
suspension period, then this Lease shall terminate upon the expiration of such
thirty (30) day suspension period.

2.2.3Extension of Outside Date Prior to the Delivery of Termination Notice.  If,
prior to the Outside Date, Landlord determines that the Delivery Date will not
occur by the Outside Date, then Landlord shall have the right to deliver a
written notice to Tenant stating Landlord's opinion as to the date by which the
Delivery Date will occur, and Tenant shall be required, within five (5) business
days after receipt of such notice, to deliver a notice to Landlord pursuant to
which Tenant shall elect either (i) to terminate this Lease, in which case this
Lease shall terminate and be of no further force or effect upon Landlord's
receipt of such notice, or (ii) to agree to extend the Outside Date to that date
set forth in Landlord's notice to Tenant.  Failure by Tenant to deliver such
notice or to make such election shall be deemed to be Tenant's agreement to
extend the Outside Date to that date set forth in Landlord's notice to
Tenant.  If Tenant agrees or is deemed to have agreed to extend the Outside
Date, then Landlord shall have a continuing right to deliver a notice to Tenant
which requests Tenant to elect either to terminate this Lease or to further
extend the Outside Date as set forth in this Section 2.2.3, above, until the
occurrence of the Delivery Date or until this Lease is terminated.  Upon the
delivery of a Termination Notice by Tenant pursuant to Section 2.2.1 above in
connection with an Outside Date extended pursuant to this Section 2.2.3,
Landlord shall also have the same right to deliver the Termination Extension
Notice as to the new Outside Date, as set forth in Section 2.2.2, above.

2.2.4Other Terms.  The Effective Date and the Outside Date shall be extended to
the extent of any delays beyond the reasonable control of Landlord, including
any delay or delays caused by "Force Majeure," as that term is defined in
Section 29.16 of this Lease.  Upon any termination as set forth in this
Section 2.2, Landlord and Tenant shall be relieved from any and all liability to
each other resulting hereunder except that Landlord shall return to Tenant the
Security Deposit and any prepaid rent.  Tenant's rights to terminate this Lease,
as set forth in this Section 2.2, shall be Tenant's sole and exclusive remedy at
law or in equity for the failure of the Delivery Date to occur as set forth
above.

 

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ARTICLE 3

BASE RENT

3.1Base Rent.  Commencing on the Lease Commencement Date, Tenant shall pay,
without prior notice or demand, 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 for the first full month of the Lease Term (following
the "Rent Abatement Period," as that term is defined in Section 3.2, below)
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.  Until notice of some other
designation is given to Tenant in accordance with the provisions of Article 28
of this Lease, Base Rent and all other charges shall be paid by remittance to or
for the order of BXP 611 Gateway Center LP by one of the following methods:  

(i)By ACH Transfer & Direct Deposit.

Bank of America
345 Montgomery Street, Concourse Level #1499
San Francisco, California 94101
ABA# 121-000-358
Account: Boston Properties L.P. Operating Account
Account Number: 14993-06215
Amount:  [fill in appropriate dollar amount]
Reference:  [fill in Tenant Name and Tenant Number]

or

(ii) By Mail.

Gateway Center LLC

C/O Boston Properties, LP

Property 5

P. O. Box 742841

Los Angeles, CA 90074-2841

or

(iii)By Overnight Delivery.  

Bank of America Lock Box Services
Lockbox LAC-742841

 

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2706 Media Center Drive
Los Angeles, California  90065.

3.2Abated Base Rent.  Provided that Tenant is not then in default of this Lease,
then during the first full calendar month of the Lease Term (the "Rent Abatement
Period"), Tenant shall not be obligated to pay any Base Rent otherwise
attributable to the Premises during such Rent Abatement Period (the "Rent
Abatement").  Landlord and Tenant acknowledge that the aggregate amount of the
Rent Abatement equals $45,794.50.  Tenant acknowledges and agrees that the
foregoing 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, and shall fail to cure such default within the
notice and cure period, if any, permitted for cure pursuant to terms and
conditions of the 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 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.

ARTICLE 4

ADDITIONAL RENT

4.1General Terms.  In addition to paying the Base Rent specified in Article 3 of
this Lease, Tenant shall pay (i) "Tenant's Share" of the annual "Building Direct
Expenses," as those terms are defined in Sections 4.2.10 and 4.2.2 of this
Lease, respectively, which are in excess of the amount of Building Direct
Expenses applicable to the "Base Year," as that term is defined in Section 4.2.1
of this Lease, and (ii) Tenant's Share of "Capital Expenses," as that term is
defined in Section 4.2.9, below, pursuant to Section 4.6 of this Lease;
provided, however, that in no event shall any decrease in Building Direct
Expenses for any "Expense Year," as that term is defined in Section 4.2.6 of
this Lease, below Building Direct Expenses for the Base Year entitle Tenant to
any decrease in Base Rent or any credit against sums due under this Lease.  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.  Landlord may upon expiration of the Lease Term deliver to
Tenant an estimate of any Base Rent, Additional Rent or other obligations
outstanding, and Landlord may either deduct such amount from any funds otherwise
payable to Tenant upon expiration or require Tenant to pay such funds
immediately.  Landlord shall make necessary adjustments for differences between
actual and estimated Additional Rent in accordance with Section 4.4, below.

4.2Definitions of Key Terms Relating to Additional Rent.  As used in this
Article 4, the following terms shall have the meanings hereinafter set forth:

 

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4.2.1"Base Year" shall mean the period set forth in Section 5 of the Summary. 

4.2.2"Building Direct Expenses" shall mean "Building Operating Expenses" and
"Building Tax Expenses", as those terms are defined in Sections 4.2.3 and 4.2.4,
below, respectively.

4.2.3"Building Operating Expenses" shall mean the portion of "Operating
Expenses," as that term is defined in Section 4.2.7 below, allocated to the
tenants of the Building pursuant to the terms of Section 4.3.1 below.

4.2.4"Building Tax Expenses" shall mean that portion of "Tax Expenses", as that
term is defined in Section 4.2.8 below, allocated to the tenants of the Building
pursuant to the terms of Section 4.3.1 below.

4.2.5"Direct Expenses" shall mean "Operating Expenses" and "Tax Expenses."

4.2.6"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 Building Direct
Expenses and Capital Expenses shall be equitably adjusted for any Expense Year
involved in any such change.

4.2.7"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, maintaining, repairing,
replacing, renovating and managing the utility systems, mechanical systems,
sanitary, storm drainage systems, communication systems and escalator and
elevator systems, and the cost of supplies, tools, and equipment and 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 transportation system management program or
similar program; (iii) the cost of all insurance carried by Landlord in
connection with the Project as reasonably determined by Landlord (including,
without limitation, commercial general liability insurance, physical damage
insurance covering damage or other loss caused by fire, earthquake, flood and
other water damage, explosion, vandalism and malicious mischief, theft or other
casualty, rental interruption insurance and such insurance as may be required by
any lessor under any present or future ground or underlying lease of the
Building or Project or any holder of a mortgage, trust deed or other encumbrance
now or hereafter in force against the Building or Project or any portion
thereof); (iv) the cost of landscaping, decorative lighting, and relamping, the
cost of maintaining fountains, sculptures, bridges 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 repair,
restoration, and maintenance, including, without limitation, resurfacing,
repainting, restriping and cleaning; (vi) fees, charges and other costs,
including management fees (or

 

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amounts in lieu thereof, but subject to exclusion (y), below), consulting fees
(including, without limitation, any consulting fees incurred in connection with
the procurement of insurance), legal fees and accounting fees, of all
contractors, engineers, consultants and all other persons engaged by Landlord or
otherwise incurred by or charged by Landlord in connection with the management,
operation, administration, maintenance and repair of the Building and the
Project; (vii) payments under any equipment rental agreements or management
agreements (including the cost of any actual or charged management fee and the
actual or charged rental of any management office space); (viii) 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 at an annual interest rate determined by
Landlord) 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) 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 4.2.8, below; (xiv) advertising, marketing and promotional expenditures
incurred in connection with the Project, including, without limitation, costs of
signs in, on or about the Project identifying or promoting the Project;
(xv) payments under any easement, license, operating agreement, declaration,
restrictive covenant, or instrument pertaining to the sharing of costs by the
Project or related to the use or operation of the Project; and (xvi) all costs
of applying and reporting for the Project or any part thereof to seek or
maintain certification under the U.S. EPA’s Energy Star® rating system, the U.S.
Green Building Council’s Leadership in Energy and Environmental Design (LEED)
rating system or a similar system or standard.  Notwithstanding anything to the
contrary in this Lease, the following items shall be excluded from Operating
Expenses: 

(a)any items included in Tax Expenses;

(b)except as permitted pursuant to items (xii) and (xiii), above, principal or
interest on indebtedness, debt amortization or ground rent paid by Landlord in
connection with any mortgages, deeds of trust or other financing encumbrances,
or ground leases of the Building or the Project;

(c)capital improvements to the Building or the Project (provided this exclusion
(c) shall not be deemed to limit Capital Expenses), and rental payments and
other related expenses incurred in leasing air conditioning systems, elevators
or other equipment ordinarily considered to be of a capital nature, except (i)
equipment which is used in providing janitorial or similar services and which is
not affixed to the Building, and (ii) equipment rented to remedy or ameliorate
an emergency condition;

(d)legal, auditing, consulting and professional fees and other costs paid or
incurred in connection with financings, refinancings or sales of any interest in
Landlord or of Landlord’s interest in the Building or the Project or in
connection with any ground lease

 

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(including, without limitation, recording costs, mortgage recording taxes, title
insurance premiums and other similar costs, but excluding those legal, auditing,
consulting and professional fees and other costs incurred in connection with the
normal and routine maintenance and operation of the Building and/or the
Project); 

(e)legal fees, space planner’s fees, architect’s fees, leasing and brokerage
commissions, advertising and promotional expenditures and any other marketing
expense incurred in connection with the leasing of space in the Building
(including new leases, lease amendments, lease terminations and lease renewals);

(f)the cost of any items to the extent to which such cost is reimbursed to
Landlord by tenants of the Project (other than as a reimbursement of operating
expenses), or other third parties, or is covered by a warranty to the extent of
reimbursement for such coverage;

(g)expenditures for any leasehold improvement which is made in connection with
the preparation of any portion of the Building for occupancy by any tenant of
the Building or the Project;

(h)the cost of performing work or furnishing service to or for any tenant other
than Tenant, at Landlord’s expense, to the extent such work or service is in
excess of any work or service Landlord is obligated to provide to Tenant or
generally to other tenants in the Building at Landlord’s expense;

(i)the cost of repairs or replacements incurred by reason of fire or other
casualty, or condemnation, to the extent Landlord actually receives proceeds of
property and casualty insurance policies or condemnation awards or would have
received such proceeds had Landlord maintained the insurance required to be
maintained by Landlord under this Lease;

(j)the cost of acquiring sculptures, paintings or other objects of fine art in
the Building or the Project in excess of amounts typically spent for such items
in Class A office buildings of comparable quality in the San Francisco financial
district area;

(k)bad debt loss, rent loss, or reserves for bad debt or rent loss;

(l) unfunded contributions to operating expense reserves by other tenants;

(m)contributions to charitable or political organizations in excess of the
greater of (1) the amounts typically spent for such contributions in Class A
office buildings of comparable quality in the South San Francisco area, and (2)
$50,000.00 in the aggregate in any single Expense Year;

(n)expenses related solely and exclusively to the operation of the retail space
in the Project;

(o)damage and repairs necessitated by the gross negligence or willful misconduct
of Landlord Parties;

 

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(p)fees, costs and expenses incurred by Landlord in connection with or relating
to claims against or disputes with tenants of the Building or the Project; 

(q)interest, fines or penalties for late payment or violations of Applicable
Laws by Landlord, except to the extent incurring such expense is either (1) a
reasonable business expense under the circumstances, or (2) caused by a
corresponding late payment or violation of an Applicable Law by Tenant, in which
event Tenant shall be responsible for the full amount of such expense;

(r)the cost of remediation and removal of “Hazardous Substance,” as that term is
defined in Section 5.2, below, in the Building or on the Project as required by
applicable laws, provided, however, that the provisions of this sub-item (r)
shall not preclude the inclusion of costs with respect to materials (whether
existing at the Project as of the date of this Lease or subsequently introduced
to the Project) which are not, as of the date of this Lease (or as of the date
of introduction), deemed to be Hazardous Substance under applicable laws but
which are subsequently deemed to be Hazardous Substance under applicable laws
(it being understood and agreed that Tenant shall nonetheless be responsible
under Section 5.2 of this Lease for all costs of remediation and removal of
Hazardous Substance to the extent caused by Tenant Parties);

(s)costs for the original construction and development of the Building and
nonrecurring costs for the repair or replacement of any structural portion of
the Building made necessary as a result of defects in the original design,
workmanship or materials;

(t)costs and expenses incurred for the administration of the entity which
constitutes Landlord, as the same are distinguished from the costs of operation,
management, maintenance and repair of the Building and/or the Project,
including, without limitation, entity accounting and legal matters;

(u)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 on a reasonable basis to reflect time spent on the operation and
management of the Project vis-à-vis time spent on matters unrelated to the
operation and management of the Project;

(v)except as may be otherwise expressly provided in this Lease with respect to
specific items, including, without limitation, any management fee paid by
Landlord, the cost of any services or materials provided by any party related to
Landlord, to the extent such cost exceeds, the reasonable cost for such services
or materials absent such relationship in Class A office buildings of comparable
quality in the San Francisco financial district area;

(w)depreciation for the Building, except as permitted pursuant to items (xii)
and (xiii), above;

(x)reserves for future improvements, repairs, additions, etc.; and

(y)fees payable by Landlord for management of the Project in excess of the
greater of (i) the management fee generally charged at the Comparable Buildings,
and (ii) three and one-half percent (3½%) (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

 

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all tenants paying full rent, as contrasted with free rent, half-rent and the
like, including base rent, pass-throughs, and parking fees (but excluding the
cost of after hours services or utilities), from the Project for any calendar
year or portion thereof. 

If Landlord is not furnishing any particular work or service (the cost of which,
if performed by Landlord, would be included in Operating Expenses and the cost
incurred by Landlord for such work or service would vary with the occupancy of
the Building) to a tenant who has undertaken to perform such work or service in
lieu of the performance thereof by Landlord, then in order to allow Landlord to
collect from Tenant and all other tenants in the Building an amount equal to
what Landlord actually incurs for such work or service with respect to the other
tenants (including Tenant) of the Building, Operating Expenses shall be deemed
to be increased by an amount equal to the additional Operating Expenses which
would reasonably have been incurred during such period by Landlord if it had at
its own expense furnished such work or service to such tenant.  If the Project
is not at least one hundred percent (100%) occupied during all or a portion of
the Base Year or any Expense Year, Landlord may elect to make an appropriate
adjustment to the components of Operating Expenses for such year to determine
the amount of Operating Expenses that would have been incurred had the Project
been one hundred percent (100%) occupied; and the amount so determined shall be
deemed to have been the amount of Operating Expenses for such year.  Operating
Expenses for the Base Year shall not include market-wide cost increases
(including utility rate increases) due to extraordinary circumstances,
including, but not limited to, Force Majeure, boycotts, strikes, conservation
surcharges, security concerns, embargoes or shortages.  In no event shall the
components of Direct Expenses for any Expense Year related to Tax Expenses,
Project utility, services, or insurance costs be less than the components of
Direct Expenses related to Tax Expenses, Project utility, services, or insurance
costs in the Base Year.

4.2.8Taxes.

4.2.8.1"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, business 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.

4.2.8.2Tax 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 (other than
any income taxes owed by Landlord); (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, it being acknowledged by Tenant and Landlord that
Proposition 13 was adopted by the voters of the State of California in the June
1978 election ("Proposition 13") and

 

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that assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such services as fire protection, street, sidewalk and road
maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants, and, in further
recognition of the decrease in the level and quality of governmental services
and amenities as a result of Proposition 13, Tax Expenses shall also include any
governmental or private assessments or the Project's contribution towards a
governmental or private cost-sharing agreement for the purpose of augmenting or
improving the quality of services and amenities normally provided by
governmental agencies; (iii) Any assessment, tax, fee, levy, or charge allocable
to or measured by the area of the Premises, the tenant improvements in 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; (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; and (v) All of the real estate taxes
and assessments imposed upon or with respect to the Building and all of the real
estate taxes and assessments imposed on the land and improvements comprising the
Project. 

4.2.8.3If 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 included by Landlord as Building Tax Expenses pursuant to
the terms of this Lease.  Notwithstanding anything to the contrary contained in
this Section 4.2.8 (except as set forth in Section 4.2.8.1, above), there shall
be excluded from Tax Expenses (i) all excess profits taxes, franchise 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.

4.2.8.4Notwithstanding anything to the contrary set forth in this Lease, the
amount of Tax Expenses for the Base Year and any Expense Year shall be
calculated without taking into account any decreases in real estate taxes
obtained in connection with Proposition 8, and, therefore, the Tax Expenses in
the Base Year and/or an Expense Year may be greater than those actually incurred
by Landlord, but shall, nonetheless, be the Tax Expenses due under this Lease;
provided that (i) any costs and expenses incurred by Landlord in securing any
Proposition 8 reduction shall not be deducted from Tax Expenses nor included in
Direct Expenses for purposes of this Lease, and (ii) tax refunds under
Proposition 8 shall not be deducted from Tax Expenses nor refunded to Tenant,
but rather shall be the sole property of Landlord.  Landlord and Tenant
acknowledge that the preceding sentence is not intended to in any way affect (A)
the inclusion in Tax Expenses of the statutory two percent (2.0%) annual
increase in Tax Expenses (as such statutory increase may be modified by
subsequent legislation), or (B) the inclusion or exclusion of Tax Expenses
pursuant to the terms of Proposition 13.  Notwithstanding anything to the
contrary set forth in this Lease, only Landlord may institute proceedings to
reduce Tax Expenses and the filing of any such proceeding by Tenant without
Landlord's consent shall constitute an event of default by Tenant under this
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Landlord shall not be obligated to file any application or institute any
proceeding seeking a reduction in Tax Expenses.  Notwithstanding the foregoing,
upon a reassessment of the Building and/or the Project pursuant to the terms of
Proposition 13 (a "Reassessment") occurring after the Base Year which results in
a decrease in Tax Expenses, the component of Tax Expenses for the Base Year
which is attributable to the assessed value of the Building and/or the Project
under Proposition 13 prior to the Reassessment (without taking into account any
Proposition 8 reductions) (the "Base Year Prop 13 Taxes") shall be reduced, if
at all, for the purposes of comparison to all subsequent Expense Years
(commencing with the Expense Year in which the Reassessment takes place) to an
amount equal to the real estate taxes based upon such Reassessment, and if
thereafter, in connection with a subsequent Reassessment, the assessed value of
the Building and/or the Project under Proposition 13 shall increase, the current
Base Year Prop 13 Taxes shall be increased for purposes of comparison to all
subsequent Expense Years (commencing with the Expense Year in which the
Reassessment takes place) to an amount equal to the lesser of the original Base
Year Prop 13 Taxes and an amount equal to the real estate taxes based upon such
Reassessment. 

4.2.9"Capital Expenses" shall mean all cost of capital repair, improvements or
expenditures incurred by Landlord in connection with the Project (A) which are
intended to effect economies in the operation, cleaning or maintenance of the
Project, or any portion thereof, (B) that are required to comply with present or
anticipated 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, or (D) that are required under any
governmental law or regulation.  In no event shall Capital Expenses include any
costs incurred by Landlord prior to or during the Base Year.

4.2.10"Tenant's Share" shall mean the percentage set forth in Section 6 of the
Summary.  Tenant's Share was calculated by multiplying the number of rentable
square feet of the Premises, as set forth in Section 2.2 of the Summary, by 100,
and dividing the product by the total number of rentable square feet in the
office area of the Building.  

4.3Allocation of Direct Expenses.

4.3.1Method 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 tenants of the Building and the tenants of the other buildings in the
Project.  Accordingly, as set forth in Section 4.2 above, Direct Expenses (which
consists 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 tenants
of the Building (as opposed to the tenants of any other buildings in the
Project) and such portion shall be the Building Direct Expenses for purposes of
this Lease.  Such portion of Direct Expenses allocated to the tenants of 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.

4.3.2Cost 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
discretion.  Such Cost Pools may include, but

 

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shall not be limited to, the office space tenants of a building of the Project
or of the Project, and the retail space tenants of a building of the Project or
of the Project.  The Direct Expenses allocable to each such Cost Pool shall be
allocated to such Cost Pool and charged to the tenants within such Cost Pool in
an equitable manner. 

4.4Calculation and Payment of Direct Expenses.  If for any Expense Year ending
or commencing within the Lease Term, Tenant's Share of Building Direct Expenses
for such Expense Year exceeds Tenant's Share of Building Direct Expenses
applicable to the Base Year, then Tenant shall pay to Landlord, in the manner
set forth in Section 4.4.1, below, and as Additional Rent, an amount equal to
the excess (the "Excess").

4.4.1Statement of Actual Building Direct Expenses and Payment by
Tenant.  Landlord shall endeavor to give to Tenant following the end of each
Expense Year, a statement (the "Statement") which shall state the Building
Direct Expenses incurred or accrued for such preceding Expense Year, and which
shall indicate the amount of the Excess.  Upon receipt of the Statement for each
Expense Year commencing or ending during the Lease Term, if an Excess is
present, Tenant shall pay, with its next installment of Base Rent due or within
thirty (30) days, whichever is earlier, the full amount of the Excess for such
Expense Year, less the amounts, if any, paid during such Expense Year as
"Estimated Excess," as that term is defined in Section 4.4.2, below.  If the
amounts paid by Tenant during an Expense Year as Estimated Excess exceed the
Excess for such Expense Year, then such difference shall be reimbursed by
Landlord to Tenant, provided that any such reimbursement, at Landlord's option,
may be credited against the Additional Rent next coming due under this Lease
unless the Lease Term has expired, in which event Landlord shall refund the
appropriate amount to Tenant.  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 Building Direct Expenses for the Expense Year in which
this Lease terminates, if an Excess is present, Tenant shall immediately pay to
Landlord such amount.  The provisions of this Section 4.4.1 shall survive the
expiration or earlier termination of the Lease Term.

4.4.2Statement of Estimated Building 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 Building Direct Expenses for the
then-current Expense Year shall be and the estimated excess (the "Estimated
Excess") as calculated by comparing the Building Direct Expenses for such
Expense Year, which shall be based upon the Estimate, to the amount of Building
Direct Expenses for the Base Year.  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 Excess under this Article 4, nor
shall Landlord be prohibited from revising any Estimate Statement or Estimated
Excess theretofore delivered to the extent necessary.  Thereafter, Tenant shall
pay, with its next installment of Base Rent due, a fraction of the Estimated
Excess 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), Tenant shall pay monthly, with

 

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the monthly Base Rent installments, an amount equal to one-twelfth (1/12) of the
total Estimated Excess set forth in the previous Estimate Statement delivered by
Landlord to Tenant. 

4.5Taxes and Other Charges for Which Tenant Is Directly Responsible.

4.5.1Tenant shall be liable for and shall pay thirty (30) 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.

4.5.2If 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 tenant improvements conforming to
Landlord's "building standard" in other space in the Building are assessed, then
the Tax Expenses levied against Landlord or the property 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 Section 4.5.1,
above.

4.5.3Notwithstanding any contrary provision herein, Tenant shall pay prior to
delinquency any (i) rent tax or sales tax, service tax, transfer tax or value
added tax, business tax or any other applicable tax on the rent or services
herein or otherwise respecting this Lease, (ii) taxes assessed upon or with
respect to the possession, leasing, operation, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises or any portion of
the Project, including the Project parking facility; or (iii) taxes assessed
upon this transaction or any document to which Tenant is a party creating or
transferring an interest or an estate in the Premises.

4.6Calculation and Payment of Capital Expenses.  Notwithstanding any provision
to the contrary contained in this Lease, Tenant shall pay to Landlord, on a
monthly basis. as Additional Rent and in addition to Tenant's Share of Building
Direct Expenses, an amount equal to Tenant's Share of all Capital Expenses
incurred by Landlord for any Expense Year following the Base Year; provided,
however, any such Capital Expenses shall be amortized (including interest on the
unamortized cost at an annual interest rate determined by Landlord) over its
useful life as Landlord shall reasonably determine in accordance with sound real
estate management and accounting principles and consistent with Landlord's past
practices, and Tenant shall only be obligated to pay Tenant's Share of such
amortized amount; provided further, however, if Landlord reasonably concludes on
the basis of engineering estimates that a particular capital expenditure will
effect savings in Operating Expenses, including, without limitation, energy
related costs, and that such projected savings will, on an annual basis
(“Projected Annual Savings”), exceed the annual amortization therefor, then and
in such event the amount of amortization for such capital expenditure shall be
increased to an amount equal to the Projected

 

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Annual Savings; and in such circumstance, the increased amortization (in the
amount of the Projected Annual Savings) shall be made for such period of time as
it would take to fully amortize the cost of the item in question, together with
interest thereon at the interest rate as aforesaid in equal monthly payments,
each in the amount of 1/12th of the Projected Annual Savings, with such payment
to be applied first to interest and the balance to principal.  The amount of
Capital Expenses incurred by Landlord, as well as Tenant's Share of such Capital
Expenses, shall be set forth on each Statement and each Estimate Statement
delivered by Landlord Tenant and Tenant shall pay Tenant's Share of such Capital
Expenses at the same time and in the same manner as Tenant shall pay Tenant's
Share of Building Direct Expenses. 

4.7Landlord's Books and Records.  Notwithstanding anything to the contrary
contained in this Lease, if, within ninety (90) days after receipt of a
Statement by Tenant, Tenant (i) reasonably disputes any amounts set forth in any
Statement described above in this Article 4, and (ii) is not then in default
under this Lease, then Tenant shall have the right to cause Landlord’s general
ledger of accounts with respect to such disputed Statement only to be audited by
a nationally recognized firm of certified public accountants reasonably approved
by Landlord, at no cost or expense to Landlord, which has prior experience in
the review of financial statements and which shall not have provided primary
accounting services to Tenant or any other tenant in the Project within the
immediately preceding five (5) year period and which shall not be retained by
Tenant on a contingency fee basis; provided, however, Tenant shall not have the
right to perform any such audit more than one (1) time for any Expense Year
during the Lease Term.  Any audit conducted by or on behalf of Tenant shall be
completed in a diligent manner and timely manner and shall be performed at
Landlord’s office during Landlord’s normal business hours and in a manner so as
to minimize interference with Landlord’s business operations.  Landlord shall
have no obligation and Tenant shall have no right to make photocopies of any of
Landlord’s ledgers, invoices or other items.  Tenant agrees to keep, and to
cause Tenant's accountant and its employees to keep, all information revealed by
any audit of Landlord’s books and records strictly confidential and not to
disclose any such information or permit any such information to be disclosed to
anyone other than Landlord, unless compelled to do so by a court of law, and
Tenant and its accountant shall sign a confidentiality agreement reflecting such
confidentiality.  Tenant’s audit shall be limited to an on-site review of
Landlord’s general ledger of accounts and supporting documentation.  If after
such audit, Landlord and Tenant dispute the results of such audit, at Tenant's
request, a certified public accounting firm selected by Landlord, and approved
by Tenant, shall, at Tenant's cost, conduct an audit of the relevant Direct
Expenses.  The amounts payable under this Section 4.7 by Landlord to Tenant or
by Tenant to Landlord, as the case may be, will be appropriately adjusted on the
basis of such audit.  If such audit discloses an overstatement of Direct
Expenses in excess of five percent (5%) for such Expense Year, Landlord shall
reimburse Tenant for the reasonable cost of both audits (not to exceed
$20,000.00); otherwise the cost of such audits shall be borne by Tenant.  Tenant
agrees that this Section 4.6 shall be the sole method to be used by Tenant to
dispute the amount of any Direct Expenses payable by Tenant pursuant to the
terms of this Lease, and Tenant hereby waives any other rights at law or in
equity relating thereto.

 

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ARTICLE 5

USE OF PREMISES

5.1Permitted 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.

5.2Prohibited 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 in violation of the laws
of the United States of America, the State of California, or 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.  In the event of a conflict of the
express terms and conditions of this Lease and the terms and conditions of any
Rules and Regulations, the terms and conditions of this Lease shall
prevail.  Tenant shall not do or permit anything to be done in or about the
Premises which will in any way damage the reputation of the Project or obstruct
or interfere with the rights of other tenants or occupants of the Building, or
injure or annoy them or use or allow the Premises to be used for any improper,
unlawful or objectionable purpose, nor shall Tenant cause, maintain or permit
any nuisance in, on or about the Premises.  Tenant shall comply with, and
Tenant's rights and obligations under the 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.  Tenant
shall not cause or permit any "Hazardous Substance," as that term is defined
below, to be kept, maintained, used, stored, produced, generated or disposed of
(into the sewage or waste disposal system or otherwise) on or in the Premises by
Tenant or Tenant's agents, employees, contractors, invitees, assignees or
sublessees, without first obtaining Landlord's written consent.  Tenant shall
immediately notify, and shall direct Tenant's agents, employees contractors,
invitees, assignees and sublessees to immediately notify, Landlord of any
incident in, on or about the Premises, the Building or the Project that would
require the filing of a notice under any federal, state, local or
quasi-governmental law (whether under common law, statute or otherwise),
ordinance, decree, code, ruling, award, rule, regulation or guidance document
now or hereafter enacted or promulgated, as amended from time to time, in any
way relating to or regulating any Hazardous Substance.  As used herein,
"Hazardous Substance" means any substance which is toxic, ignitable, reactive,
or corrosive and which is regulated by any local government, the State of
California, or the United States government.  "Hazardous Substance" includes any
and all material or substances which are defined as "hazardous waste,"
"extremely hazardous waste" or a "hazardous substance" pursuant to state,
federal or local governmental law.  "Hazardous Substance" also includes
asbestos, polychlorobiphenyls (i.e., PCB's) and petroleum.

ARTICLE 6

SERVICES AND UTILITIES

 

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6.1Standard Tenant Services.  Landlord shall provide the services specified
below and on Exhibit F attached hereto, on all days (unless otherwise stated
below or in Exhibit F) during the Lease Term. 

6.1.1Subject to limitations imposed by all governmental rules, regulations and
guidelines applicable thereto, Landlord shall provide heating, ventilation and
air conditioning ("HVAC") when necessary for normal comfort for normal office
use in the Premises from 7:00 A.M. to 6:00 P.M. Monday through Friday
(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 (collectively, the "Holidays").  Landlord shall provide HVAC
to the Premises outside of Building Hours at Tenant’s request as set forth in
Exhibit F.  Tenant shall cooperate fully with Landlord at all times and abide by
all reasonable regulations and requirements that Landlord may reasonably
prescribe for the proper functioning and protection of the HVAC, electrical,
mechanical and plumbing systems.

6.1.2Landlord shall provide electricity to the Premises (including adequate
electrical wiring and facilities for connection to Tenant's lighting fixtures
and incidental use equipment) for lighting and power suitable for the Permitted
Use as reasonably determined by Landlord, provided that Tenant's electrical
usage shall be subject to applicable laws and regulations.  Tenant shall bear
the cost of replacement of lamps, starters and ballasts for non-Building
standard lighting fixtures within the Premises.

6.1.3Landlord shall provide city water from the regular Building outlets for
drinking, lavatory and toilet purposes in the Building Common Areas.

6.1.4Landlord shall provide nonexclusive, non-attended automatic passenger
elevator service during the Building Hours, shall have one elevator available at
all other times, including on the Holidays, except in the event of emergency,
and shall provide nonexclusive, non-attended automatic passenger escalator
service during Building Hours only.

6.1.5Landlord shall provide nonexclusive freight elevator service subject to
scheduling by Landlord.

6.1.6Landlord shall provide customary weekday janitorial services to the
Premises, except the date of observation of the Holidays, in and about the
Premises and customary occasional window washing services, each in a manner
consistent with other Class "A" office buildings located in the vicinity of the
Project.

6.1.7Subject 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; provided, however, that Tenant shall
only be permitted to have access to and use of the parking garage, freight
elevator, loading dock, mailroom and other limited-access areas of the Building
during the normal operating hours of such portions of the Building.

 

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Notwithstanding anything in this Lease to the contrary, if Landlord or any
affiliate of Landlord has elected to qualify as a real estate investment trust
(“REIT”), any service required or permitted to be performed by Landlord pursuant
to this Lease, the charge or cost of which may be treated as impermissible
tenant service income under the laws governing a REIT, may be performed by a
taxable REIT subsidiary that is affiliated with either Landlord or Landlord’s
property manager, an independent contractor of Landlord or Landlord’s property
manager (the “Service Provider”).  If Tenant is subject to a charge under this
Lease for any such service, then, at Landlord’s direction, Tenant will pay such
charge either to Landlord for further payment to the Service Provider or
directly to the Service Provider, and, in either case, (i) Landlord will credit
such payment against Additional Rent due from Tenant under this Lease for such
service, and (ii) such payment to the Service Provider will not relieve Landlord
from any obligation under the Lease concerning the provisions of such service.

6.2Overstandard Tenant Use.  Tenant shall not, without Landlord's prior written
consent, 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 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, electricity, heat or air conditioning in
excess of that supplied by Landlord pursuant to Section 6.1 of this Lease (as
reasonably determined by Landlord employing industry standard methodology),
Tenant shall pay to Landlord, upon billing, the cost of such excess consumption,
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.  In addition, in the event that there is located in the
Premises a data center containing high density computing equipment, as defined
in the U.S. EPA’s Energy Star® rating system (“Energy Star”), Landlord may
require the installation in accordance with Energy Star of separate metering or
check metering equipment, in which event (i) Tenant shall pay the costs of any
such meter or check meter directly to Landlord, on demand, including the
installation and connectivity thereof, (ii) Tenant shall directly pay to the
utility provider all electric consumption on any meter, and (iii) Tenant shall
pay to Landlord, as Additional Rent, all electric consumption on any check meter
within thirty (30) days after being billed thereof by Landlord, in addition to
other electric charges payable by Tenant under the Lease.  In the event that
Tenant purchases any utility service directly from the provider, Tenant shall
promptly provide to Landlord either permission to access Tenant’s usage
information from the utility service provider or copies of the utility bills for
Tenant’s usage of such services in a format reasonably acceptable to
Landlord.  Tenant's use of electricity shall never exceed the capacity of the
feeders to the Project or the risers or wiring installation, and subject to the
terms of Section 29.32, below, Tenant shall not install or use or permit the
installation or use of any computer or electronic data processing equipment in
the Premises, without the prior written consent of Landlord.  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, of Tenant's
desired use in order to supply such utilities, and Landlord shall supply

 

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such utilities to Tenant at such hourly cost to Tenant (which shall be treated
as Additional Rent) as Landlord shall from time to time establish.  Landlord
shall have the exclusive right, but not the obligation, to provide any
additional services which may be required by Tenant, including, without
limitation, locksmithing, lamp replacement, additional janitorial service, and
additional repairs and maintenance.  If Tenant requests any such additional
services, then Tenant shall pay to Landlord the cost of such additional
services, including Landlord's standard fee for its involvement with such
additional services, promptly upon being billed for same. 

6.3Interruption 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 beyond Landlord's reasonable
control (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); 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.

ARTICLE 7

REPAIRS

Tenant shall, at Tenant's own expense, keep the Premises, including all
improvements, fixtures and furnishings therein, and the floor or floors of the
Building on which the Premises are located, in good order, repair and condition
at all times during the Lease Term.  In addition, Tenant shall, at Tenant's own
expense, but under the supervision and subject to the prior approval of
Landlord, 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, Landlord shall have the exclusive right, at Landlord's
option, but not the obligation, to make such repairs and replacements, and
Tenant shall pay to Landlord the actual and reasonable cost thereof, including
Landlord's standard fee generally applicable to the Building for its involvement
with such repairs and replacements, promptly upon being billed for
same.  Landlord may, but shall not be required to, enter the Premises pursuant
to Article 27 of this Lease, below, 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

 

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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.

ARTICLE 8

ADDITIONS AND ALTERATIONS

8.1Landlord's Consent to Alterations.  Other than Permitted Alterations (as
defined below), Tenant may not make or suffer to be made any improvements,
alterations, additions, changes, or repairs (pursuant to Article 7 or otherwise)
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 in accordance with the terms and conditions
of this Article 8, 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.  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 sole discretion may deem desirable.  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.  Notwithstanding the
foregoing, Tenant shall be permitted to make Alterations following ten (10)
business days' notice to Landlord, pursuant to the terms of this Article 8
except that Landlord's prior consent shall not be required, to the extent that
such Alterations purely cosmetic in nature (such as painting the interior of the
Premises and/or removal or installation of carpeting or other flooring within
the Premises), does not require a building permit, and does not exceed $50,000
per Alteration (the "Cosmetic Alterations"), and, except as expressly set forth
therein to the contrary, the terms of Section 8.2, below, shall not be
applicable to such Cosmetic Alterations.  

8.2Manner of Construction.  Landlord shall have the exclusive right, at
Landlord's option, but not the obligation, to make the Alterations at Tenant's
sole cost and expense.  If Landlord elects to make the Alterations pursuant to
the immediately preceding sentence, then Tenant shall retain Landlord to
construct such Alterations and Landlord shall hold all applicable construction
contracts.  Prior to the commencement of construction of any Alterations or
repairs, Tenant shall submit to Landlord, for Landlord's review and approval in
its reasonable discretion, four (4) copies signed by Tenant of all plans,
specifications and working drawings relating thereto.  Tenant, at its sole cost
and expense, shall retain an architect/space planner selected by Tenant, and
reasonably approved by Landlord, to prepare such plans, specifications and
working drawings; provided that, Tenant shall also retain the engineering
consultants from a list provided by Landlord to prepare all plans and
engineering working drawings, if any, relating to the structural, mechanical,
electrical, plumbing, HVAC, lifesafety and sprinkler work of the
Alterations.  Tenant shall be required to include in its contracts with the
architect and the engineers a provision which requires ownership of all
architectural and engineering drawings to be transferred to Tenant upon the
substantial completion of the Alteration and Tenant hereby grants to Landlord a
non-exclusive right to use such drawings, including, without limitation, a right
to make copies thereof.  Tenant shall cause each architect/space planner and
engineer

 

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retained by Tenant to follow Landlord's standard construction administration
procedures and to utilize the standard specifications and details for the
Building, all as promulgated by Landlord from time to time.  Tenant and Tenant's
architect/space planner shall verify, in the field, the dimensions and
conditions as shown on the relevant portions of the "Base Building" plans, and
Tenant and Tenant's architect/space planner shall be solely responsible for the
same, and Landlord shall have no responsibility in connection therewith.  In
addition, at Landlord's option, Landlord may submit Tenant's plans,
specifications and working drawings to a third-party architect and/or engineer,
selected by Landlord, for their review, at Tenant's sole cost and
expense.  Landlord's review of plans, specifications and working drawings as set
forth in this Section 8.2, shall be for its sole purpose and shall not imply
Landlord's review of the same, or obligate Landlord to review the same, for
quality, design, compliance with applicable building codes or other like
matters.  Accordingly, notwithstanding that any plans, specifications or working
drawings are reviewed by Landlord or its space planner, architect, engineers and
consultants, and notwithstanding any advice or assistance which may be rendered
to Tenant by Landlord or Landlord's space planner, architect, engineers, and
consultants, Landlord shall have no liability whatsoever in connection therewith
and shall not be responsible for any omissions or errors contained in the plans,
specifications and working drawings for the Alterations, and Tenant's waiver and
indemnity set forth in Section 10.1 of this Lease, below, shall specifically
apply to the plans, specifications and working drawings for the
Alterations.  Following Landlord's approval in its reasonable discretion of all
plans, specifications and working drawings for the Alterations, a contractor to
construct the Alterations shall be selected by Tenant from the list of
contractors approved by Landlord.  Landlord shall provide to Tenant an itemized
statement of costs, as set forth in the proposed contract with such
contractor.  Tenant shall approve and deliver to Landlord the itemized statement
of costs provided to Tenant in accordance with this Section 8.2, and upon
receipt of such itemized statement of costs by Landlord, Landlord shall be
released by Tenant (i) to retain the contractor who submitted such itemized
statement of costs, and (ii) to purchase the items set forth in such itemized
statement of costs and to commence the construction relating to such
items.  Landlord hereby assigns to Tenant all warranties and guaranties by the
contractor selected in accordance with this Section 8.2 to construct the
Alterations, and Tenant hereby waives all claims against Landlord relating to,
or arising out of the construction of, the Alterations.  In the event Tenant
requests any Alterations in the Premises which require or give rise to
governmentally required changes to the "Base Building," as that term is defined
below, then Landlord shall, at Tenant's expense, make such changes to the Base
Building.  As used in this Lease, the "Base Building" shall include the
structural portions of the Building, and the public restrooms, elevators, exit
stairwells and the systems and equipment located in the internal core of the
Building on the floor or floors on which the Premises are located.  The term
"Base Building," as used in this Lease, shall not be deemed to have the same
meaning as the term "Base, Shell and Core," as the same is defined in Section 1
of the Tenant Work Letter.  In performing the work of any Alterations (including
Cosmetic Alterations) for which Tenant is responsible, Tenant shall have the
work performed in such manner so as not to obstruct access to the Project or any
portion thereof, by any other tenant of the Project, and so as not to obstruct
the business of Landlord or other tenants in the  Project.  With respect to any
such Alterations (including Cosmetic Alterations), 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

 

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or the Common Areas.  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 in
which the Project is located in accordance with Section 3093 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 in CAD format as well as all permits, approvals and other
documents issued by any governmental agency in connection with the Alterations. 

8.3Payment for Improvements.  Tenant shall pay to Landlord, within ten (10) days
after being billed for the same, all costs related to the construction of the
Alterations, including, without limitation, the following items and
costs:  (i) all amounts actually paid by Landlord to any architect/space
planner, engineer, consultant, contractor, subcontractor, mechanic, materialman
or other person, whether retained by Landlord or Tenant, in connection with the
Alterations, and all fees incurred by, and the actual cost of documents and
materials supplied by, Landlord and Landlord's consultants in connection with
the preparation and review of all plans, specifications and working drawings for
the Alterations; (ii) all plan check, permit and license fees relating to
construction of the Alterations paid by Landlord; (iii) the cost of any changes
in the Base Building when such changes are required by any plans, specifications
or working drawings for the Alterations (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
by Landlord in connection therewith; (iv) the cost of any changes to the plans,
specifications and working drawings for the Alterations or to the Alterations
themselves required by all applicable zoning and building codes and other laws
and paid by Landlord; (v) sales and use taxes and Title 24 fees imposed on,
assessed against or paid by Landlord; (vi) Landlord's standard supervision fee
for its involvement with such Alterations, which supervision fee shall be equal
to five percent (5%) of the cost of each such Alteration; and (vii) all other
actual and reasonable out-of-pocket costs incurred by Landlord in connection
with the construction of the Alterations.  Landlord, at its option, may render
bills to Tenant in advance of, or during, construction of the Alterations so as
to enable Landlord to pay all costs and expenses incurred by Landlord in
connection with the Alterations (including, without limitation, costs of the
contractor retained to construct the Alterations) without advancing Landlord's
own funds.  At Landlord's election in its sole and absolute discretion, Tenant
shall deliver to Landlord prior to commencement of construction of the
Alterations cash in an amount equal to all estimated costs related to the
construction of such Alterations, or such lesser amount as Landlord shall
specify, to be held by Landlord and disbursed by Landlord for costs related to
the construction of the Alterations as such costs are incurred.  In the event
that, after Tenant's approval of a cost proposal for the Alterations in
accordance with Section 8.2, above, any revisions, changes or substitutions
shall be made to the plans, specifications and working drawings or the
Alterations, any additional costs which arise in connection with such revisions,
changes or substitutions or any other additional costs shall be paid by Tenant
to Landlord immediately upon Landlord's request.  Any surplus funds delivered by
Tenant and held by Landlord in connection with the Alterations shall be refunded
to Tenant when all costs related to the construction of the Alterations have
been paid in full.

8.4Construction Insurance.  In the event that any Alterations are made pursuant
to this Article 8, prior to the commencement of such Alterations, Tenant shall
provide Landlord with certificates of insurance evidencing compliance with the
requirements of Section 10.14 of

 

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this Lease, 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, Landlord may, in its discretion, 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. 

8.5Landlord'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; provided, however, 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 or improvements and to repair any damage to the Premises and
Building caused by such removal and return the affected portion of the Premises
to their condition existing prior to the installation of such Alterations or
improvements or, at Landlord's election, to a building standard tenant improved
condition as determined by Landlord.  If Tenant fails to complete such removal
and/or to repair any damage caused by the removal of any Alterations or
improvements in the Premises and return the affected portion of the Premises to
their condition existing prior to the installation of such Alterations or
improvements or, if elected by Landlord, to a building standard tenant improved
condition as determined by Landlord, prior to the expiration or earlier
termination of this Lease, then Rent shall continue to accrue under this Lease
in accordance with Article 16, below, after the end of the Lease Term until such
work shall be completed, and Landlord shall have the right, but not the
obligation, to perform such work and to 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,
including but not limited to, court costs and reasonable attorneys' fees, 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.

ARTICLE 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, 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 work on the Premises
which may give rise to a lien on the Premises or Building (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.  Tenant shall remove any such lien or encumbrance by bond or
otherwise within five (5) days after notice by Landlord, and if Tenant shall
fail to do so, Landlord may pay the amount necessary to remove such lien or
encumbrance, without being responsible for investigating the validity
thereof.  The amount so paid shall be deemed Additional Rent under this Lease
payable upon demand, without limitation as to other remedies available to
Landlord under this Lease.  Nothing contained in this Lease shall authorize
Tenant to do any act which

 

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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.

ARTICLE 10

TENANT'S INDEMNITY AND INSURANCE

10.1Tenant's Indemnity.  

10.1.1Indemnity.  To the maximum extent permitted by law, Tenant waives any
right to contribution against the "Landlord Parties," as that term is defined in
Section 10.13, below, and agrees to indemnify and save harmless the Landlord
Parties from and against all claims of whatever nature arising from or claimed
to have arisen from (i) any act, omission or negligence of the "Tenant Parties,"
as that term is defined in Section 10.13, below; (ii) any accident, injury or
damage whatsoever caused to any person, or to the property of any person,
occurring in or about the Premises from the earlier of (A) the date on which any
Tenant Party first enters the Premises for any reason or (B) the Lease
Commencement Date, and thereafter throughout and until the end of the Lease Term
and after the end of the Lease Term for as long as Tenant or anyone acting by,
through or under Tenant is in occupancy of the Premises or any portion thereof;
(iii) any accident, injury or damage whatsoever occurring outside the Premises
but within the Project, where such accident, injury or damage results, or is
claimed to have resulted, from any act, omission or negligence on the part of
any of the Tenant Parties; or (iv) any breach of this Lease by Tenant.  Tenant
shall pay such indemnified amounts as they are incurred by the Landlord Parties.
This indemnification shall not be construed to deny or reduce any other rights
or obligations of indemnity that a Landlord Party may have under this Lease or
the common law.  Notwithstanding anything contained herein to the contrary,
Tenant shall not be obligated to indemnify a Landlord Party for any claims to
the extent that such Landlord Party’s damages in fact result from such Landlord
Party’s gross negligence or willful misconduct.

10.1.2Breach.  In the event that Tenant breaches any of its indemnity
obligations hereunder or under any other contractual or common law indemnity:
(i) Tenant shall pay to the Landlord Parties all liabilities, loss, cost, or
expense (including attorney’s fees) incurred as a result of said breach, and the
reasonable value of time expended by the Landlord Parties as a result of said
breach; and (ii) the Landlord Parties may deduct and offset from any amounts due
to Tenant under this Lease any amounts owed by Tenant pursuant to this
section.  

10.1.3No limitation.  The indemnification obligations under this Section shall
not be limited in any way by any limitation on the amount or type of damages,
compensation or benefits payable by or for Tenant or any subtenant or other
occupant of the Premises under workers' compensation acts, disability benefit
acts, or other employee benefit acts. Tenant waives any immunity from or
limitation on its indemnity or contribution liability to the Landlord Parties
based upon such acts.

 

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10.1.4Subtenants and other occupants.  Tenant shall require its subtenants and
other occupants of the Premises to provide similar indemnities to the Landlord
Parties in a form acceptable to Landlord. 

10.1.5Survival.  The terms of this section shall survive any termination or
expiration of this Lease.

10.1.6Costs.  The foregoing indemnity and hold harmless agreement shall include
indemnity for all costs, expenses and liabilities (including, without
limitation, attorneys’ fees and disbursements) incurred by the Landlord Parties
in connection with any such claim or any action or proceeding brought thereon,
and the defense thereof.  In addition, in the event that any action or
proceeding shall be brought against one or more Landlord Parties by reason of
any such claim, Tenant, upon request from the Landlord Party, shall resist and
defend such action or proceeding on behalf of the Landlord Party by counsel
appointed by Tenant’s insurer (if such claim is covered by insurance without
reservation) or otherwise by counsel reasonably satisfactory to the Landlord
Party.  The Landlord Parties shall not be bound by any compromise or settlement
of any such claim, action or proceeding without the prior written consent of
such Landlord Parties.  

10.2Tenant's Risk.  Tenant agrees to use and occupy the Premises, and to use
such other portions of the Building and the Project as Tenant is given the right
to use by this Lease at Tenant’s own risk.  The Landlord Parties shall not be
liable to the Tenant Parties for any damage, injury, loss, compensation, or
claim (including, but not limited to, claims for the interruption of or loss to
a Tenant Party’s business) based on, arising out of or resulting from any cause
whatsoever, including, but not limited to, repairs to any portion of the
Premises or the Building or the Project, any fire, robbery, theft, mysterious
disappearance, or any other crime or casualty, the actions of any other tenants
of the Building or of any other person or persons, or any leakage in any part or
portion of the Premises or the Building or the Project, or from water, rain or
snow that may leak into, or flow from any part of the Premises or the Building
or the Project, or from drains, pipes or plumbing fixtures in the Building or
the Project. Any goods, property or personal effects stored or placed in or
about the Premises shall be at the sole risk of the Tenant Party, and neither
the Landlord Parties nor their insurers shall in any manner be held responsible
therefor.  The Landlord Parties shall not be responsible or liable to a Tenant
Party, or to those claiming by, through or under a Tenant Party, for any loss or
damage that may be occasioned by or through the acts or omissions of persons
occupying adjoining premises or any part of the premises adjacent to or
connecting with the Premises or any part of the Building or
otherwise.  Notwithstanding the foregoing, the Landlord Parties shall not be
released from liability for any injury, loss, damages or liability to the extent
arising from any gross negligence or willful misconduct of the Landlord Parties
on or about the Premises; provided, however, in no event shall the Landlord
Parties have any liability to a Tenant Party based on any loss with respect to
or interruption in the operation of Tenant’s business.  The provisions of this
section shall be applicable until the expiration or earlier termination of the
Lease Term, and during such further period as Tenant may use or be in occupancy
of any part of the Premises or of the Building.  

10.3Tenant's Commercial General Liability Insurance. Tenant agrees to maintain
in full force on or before the earlier of (i) the date on which any Tenant Party
first enters the Premises for any reason or (ii) the Lease Commencement Date
throughout the Lease Term of

 

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this Lease, and thereafter, so long as Tenant is in occupancy of any part of the
Premises, a policy of commercial general liability insurance, on an occurrence
basis, issued on a form at least as broad as Insurance Services Office ("ISO")
Commercial General Liability Coverage "occurrence" form CG 00 01 10 01 or
another ISO Commercial General Liability "occurrence" form providing equivalent
coverage. Such insurance shall include contractual liability coverage,
specifically covering but not limited to the indemnification obligations
undertaken by Tenant in this Lease. The minimum limits of liability of such
insurance shall be $5,000,000.00 per occurrence. In addition, in the event
Tenant hosts a function in the Premises, Tenant agrees to obtain, and cause any
persons or parties providing services for such function to obtain, the
appropriate insurance coverages as determined by Landlord (including liquor
liability coverage, if applicable) and provide Landlord with evidence of the
same. 

10.4Tenant's Property Insurance.  Tenant shall maintain at all times during the
Lease Term, and during such earlier time as Tenant may be performing work in or
to the Premises or have property, fixtures, furniture, equipment, machinery,
goods, supplies, wares or merchandise on the Premises, and continuing thereafter
so long as Tenant is in occupancy of any part of the Premises, business
interruption insurance and (insurance against loss or damage covered by the
so-called “Special Risk” type insurance coverage with respect to (i) Tenant’s
property, fixtures, furniture, equipment, machinery, goods, supplies, wares and
merchandise, and (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 all alterations, improvements and other modifications made
by or on behalf of the Tenant in the Premises, and (iii) other property of
Tenant located at the Premises (collectively “Tenant’s Property”).  The business
interruption insurance required by this section shall be in minimum amounts
typically carried by prudent tenants engaged in similar operations, but in no
event shall be in an amount less than the Base Rent then in effect during any
Lease Year, plus any Additional Rent due and payable for the immediately
preceding Lease Year.  The “Special Risk” insurance required by this section
shall be in an amount at least equal to the full replacement cost of Tenant’s
Property.  In addition, during such time as Tenant is performing work in or to
the Premises, Tenant, at Tenant’s expense, shall also maintain, or shall cause
its contractor(s) to maintain, builder’s risk insurance for the full insurable
value of such work.  Landlord and such additional persons or entities as
Landlord may reasonably request shall be named as loss payees on the policy or
policies required by this section.  In the event of loss or damage covered by
the “Special Risk” insurance required by this section, the responsibilities for
repairing or restoring the loss or damage shall be determined in accordance with
Article 11 of this Lease, below.  To the extent that Landlord is obligated to
pay for the repair or restoration of the loss or damage covered by the policy,
Landlord shall be paid the proceeds of the “Special Risk” insurance covering the
loss or damage.  To the extent Tenant is obligated to pay for the repair or
restoration of the loss or damage, covered by the policy, Tenant shall be paid
the proceeds of the “Special Risk” insurance covering the loss or damage.  If
both Landlord and Tenant are obligated to pay for the repair or restoration of
the loss or damage covered by the policy, the insurance proceeds shall be paid
to each of them in the pro rata proportion of their obligations to repair or
restore the loss or damage.  If the loss or damage is not repaired or restored
(for example, if the Lease is terminated pursuant to Section 11.2 of this Lease,
below), the insurance proceeds shall be paid to Landlord and Tenant in the pro
rata proportion of their relative contributions to the cost of the leasehold
improvements covered by the policy.  

 

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10.5Tenant's Other Insurance. Throughout the Lease Term, Tenant shall obtain and
maintain (1) comprehensive automobile liability insurance (covering any
automobiles owned or operated by Tenant at the Project) issued on a form at
least as broad as ISO Business Auto Coverage form CA 00 01 07 97 or other form
providing equivalent coverage; (2) worker's compensation insurance or
participation in a monopolistic state workers' compensation fund; and (3)
employer's liability insurance or (in a monopolistic state) Stop Gap Liability
insurance.  Such automobile liability insurance shall be in an amount not less
than One Million Dollars ($1,000,000) for each accident. Such worker's
compensation insurance shall carry minimum limits as defined by the law of the
jurisdiction in which the Premises are located (as the same may be amended from
time to time). Such employer's liability insurance shall be in an amount not
less than One Million Dollars ($1,000,000) for each accident, One Million
Dollars ($1,000,000) disease-policy limit, and One Million Dollars ($1,000,000)
disease-each employee. 

10.6Requirements For Insurance.  All insurance required to be maintained by
Tenant pursuant to this Lease shall be maintained with responsible companies
that are admitted to do business, and are in good standing, in the jurisdiction
in which the Premises are located and that have a rating of at least "A" and are
within a financial size category of not less than "Class X" in the most current
Best's Key Rating Guide or such similar rating as may be reasonably selected by
Landlord. All such insurance shall: (1) be acceptable in form and content to
Landlord; and (2) be primary and noncontributory.  In addition, Tenant shall
promptly notify Landlord in the event of any cancellation, failure to renew,
reduction of amount of insurance, or change in coverage of any such policy.  No
such policy shall contain any self-insured retention greater than $25,000.00.
Any deductibles and such self-insured retentions shall be deemed to be
"insurance" for purposes of the waiver in Section 10.13 of this Lease, below.
Landlord reserves the right from time to time to require Tenant to obtain higher
minimum amounts of insurance based on such limits as are customarily carried
with respect to the Comparable Buildings. The minimum amounts of insurance
required by this Lease shall not be reduced by the payment of claims or for any
other reason. In the event Tenant shall fail to obtain or maintain any insurance
meeting the requirements of this Article, or to deliver such policies or
certificates as required by this Article, Landlord may, at its option, on five
(5) days' notice to Tenant, 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.

10.7Additional Insureds. The commercial general liability and auto insurance
carried by Tenant pursuant to this Lease, and any additional liability insurance
carried by Tenant pursuant to Section 10.3 of this Lease, above, shall name
Landlord, Landlord's managing agent, and such other persons as Landlord may
reasonably request from time to time as additional insureds with respect to
liability arising out of or related to this Lease or the operations of Tenant
(collectively "Additional Insureds"). Such insurance shall provide primary
coverage without contribution from any other insurance carried by or for the
benefit of Landlord, Landlord's managing agent, or other Additional Insureds.
Such insurance shall also waive any right of subrogation against each Additional
Insured.

10.8Certificates Of Insurance. On or before the earlier of (i) the date on which
any Tenant Party first enters the Premises for any reason or (ii) the Lease
Commencement Date, Tenant shall furnish Landlord with certificates evidencing
the insurance coverage required by this Lease, and renewal certificates shall be
furnished to Landlord within five (5) days following

 

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the expiration date of each policy for which a certificate was furnished.
(Acceptable forms of such certificates for liability and property insurance,
respectively, are attached hereto as Exhibit G.) In jurisdictions requiring
mandatory participation in a monopolistic state workers' compensation fund, the
insurance certificate requirements for the coverage required for workers'
compensation will be satisfied by a letter from the appropriate state agency
confirming participation in accordance with statutory requirements. Such current
participation letters required by this Section shall be provided every six (6)
months for the duration of this Lease. Failure by the Tenant to provide the
certificates or letters required by this Section shall not be deemed to be a
waiver of the requirements in this Section. Upon request by Landlord, a true and
complete copy of any insurance policy required by this Lease shall be delivered
to Landlord within ten (10) days following Landlord's request. 

10.9Subtenants And Other Occupants.  Tenant shall require its subtenants and
other occupants of the Premises to provide written documentation evidencing the
obligation of such subtenant or other occupant to indemnify the Landlord Parties
to the same extent that Tenant is required to indemnify the Landlord Parties
pursuant to Section 10.1 of this Lease, above, and to maintain insurance that
meets the requirements of this Article, and otherwise to comply with the
requirements of this Article. Tenant shall require all such subtenants and
occupants to supply certificates of insurance evidencing that the insurance
requirements of this Article have been met and shall forward such certificates
to Landlord on or before the earlier of (i) the date on which the subtenant or
other occupant or any of their respective direct or indirect partners, officers,
shareholders, directors, members, trustees, beneficiaries, servants, employees,
principals, contractors, licensees, agents, invitees or representatives first
enters the Premises or (ii) the commencement of the sublease. Tenant shall be
responsible for identifying and remedying any deficiencies in such certificates
or policy provisions.

10.10No Violation Of Building Policies. Tenant shall not commit or permit any
violation of the policies of fire, boiler, sprinkler, water damage or other
insurance covering the Project and/or the fixtures, equipment and property
therein carried by Landlord, or do or permit anything to be done, or keep or
permit anything to be kept, in the Premises, which in case of any of the
foregoing (i) would result in termination of any such policies, (ii) would
adversely affect Landlord's right of recovery under any of such policies, or
(iii) would result in reputable and independent insurance companies refusing to
insure the Project or the property of Landlord in amounts reasonably
satisfactory to Landlord.

10.11Tenant To Pay Premium Increases. If, because of anything done, caused or
permitted to be done, or omitted by Tenant (or its subtenant or other occupants
of the Premises), the rates for liability, fire, boiler, sprinkler, water damage
or other insurance on the Project or on the property and equipment of Landlord
or any other tenant or subtenant in the Building shall be higher than they
otherwise would be, Tenant shall reimburse Landlord and/or the other tenants and
subtenants in the Building for the additional insurance premiums thereafter paid
by Landlord or by any of the other tenants and subtenants in the Building which
shall have been charged because of the aforesaid reasons, such reimbursement to
be made from time to time on Landlord's demand.

 

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10.12Landlord's Insurance. 

10.12.1Required insurance. Landlord shall maintain insurance against loss or
damage with respect to the Building on an "Special Risk" type insurance form,
with customary exceptions, subject to such deductibles and self-insured
retentions as Landlord may determine, in an amount equal to at least the
replacement value of the Building. The cost of such insurance shall be treated
as a part of Operating Expenses. Such insurance shall be maintained with an
insurance company selected by Landlord. Payment for losses thereunder shall be
made solely to Landlord.  

10.12.2Optional insurance. Landlord may maintain such additional insurance with
respect to the Building and the Project, including, without limitation,
earthquake insurance, terrorism insurance, flood insurance, liability insurance
and/or rent insurance, as Landlord may in its sole discretion elect. Landlord
may also maintain such other insurance as may from time to time be required by a
"Mortgagee," as that term is defined in Section 18.2 of this Lease, below. The
cost of all such additional insurance shall also be part of the Operating
Expenses.  

10.12.3Blanket and self-insurance. Any or all of Landlord's insurance may be
provided by blanket coverage maintained by Landlord or any affiliate of Landlord
under its insurance program for its portfolio of properties, or by Landlord or
any affiliate of Landlord under a program of self-insurance, and in such event
Operating Expenses shall include the portion of the reasonable cost of blanket
insurance or self-insurance that is allocated to the Building.

10.12.4No obligation. Landlord shall not be obligated to insure, and shall not
assume any liability of risk of loss for, Tenant's Property, including any such
property or work of tenant's subtenants or occupants. Landlord will also have no
obligation to carry insurance against, nor be responsible for, any loss suffered
by Tenant, subtenants or other occupants due to interruption of Tenant's or any
subtenant's or occupant's business.

10.13Waiver Of Subrogation. The parties hereto waive and release any and all
rights of recovery against the other, and agree not to seek to recover from the
other or to make any claim against the other, and in the case of Landlord,
against all Tenant Parties, and in the case of Tenant, against all Landlord
Parties, for any loss or damage incurred by the waiving/releasing party to the
extent such loss or damage is insured under any insurance policy required by
this Lease or which would have been so insured had the party carried the
insurance it was required to carry hereunder. Tenant shall obtain from its
subtenants and other occupants of the Premises a similar waiver and release of
claims against any or all of Tenant or Landlord. The insurance policies required
by this Lease shall contain no provision that would invalidate or restrict the
parties' waiver and release of the rights of recovery in this section. The
parties hereto covenant that no insurer shall hold any right of subrogation
against the parties hereto by virtue of such insurance policy.

The term "Landlord Party" or "Landlord Parties" shall mean Landlord, any
affiliate of Landlord, Landlord's managing agents for the Building, each
Mortgagee, each ground lessor, and each of their respective direct or indirect
partners, officers, shareholders, directors,

 

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members, trustees, beneficiaries, servants, employees, principals, contractors,
licensees, agents or representatives. For the purposes of this Lease, the term
"Tenant Party" or "Tenant Parties" shall mean Tenant, any affiliate of Tenant,
any permitted subtenant or any other permitted occupant of the Premises, and
each of their respective direct or indirect partners, officers, shareholders,
directors, members, trustees, beneficiaries, servants, employees, principals,
contractors, licensees, agents, invitees or representatives.

10.14Tenant's Work.  During such times as Tenant is performing work or having
work or services performed in or to the Premises, Tenant shall require its
contractors, and their subcontractors of all tiers, to obtain and maintain
commercial general liability, automobile, workers compensation, employer’s
liability, builder’s risk, and equipment/property insurance in such amounts and
on such terms as are customarily required of such contractors and subcontractors
on similar projects.  The amounts and terms of all such insurance are subject to
Landlord’s written approval, which approval shall not be unreasonably
withheld.  The commercial general liability and auto insurance carried by
Tenant’s contractors and their subcontractors of all tiers pursuant to this
section shall name Landlord, Landlord's managing agent, and such other Persons
as Landlord may reasonably request from time to time as additional insureds with
respect to liability arising out of or related to their work or services
(collectively, “Additional Insureds”).  Such insurance shall provide primary
coverage without contribution from any other insurance carried by or for the
benefit of Landlord, Landlord's managing agent, or other Additional
Insureds.  Such insurance shall also waive any right of subrogation against each
Additional Insured.  Tenant shall obtain and submit to Landlord, prior to the
earlier of (i) the entry onto the Premises by such contractors or subcontractors
or (ii) commencement of the work or services, certificates of insurance
evidencing compliance with the requirements of this section.  

ARTICLE 11

DAMAGE AND DESTRUCTION

11.1Repair 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 necessary to Tenant's use of or
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.  Such restoration shall be to substantially the same condition of the
Base Building and the Common Areas prior to the casualty, except for
modifications required by zoning and building codes and other laws or by the
holder of a mortgage on the Building or Project or any other modifications to
the Common Areas deemed desirable by Landlord, provided that access to the
Premises and any common restrooms serving the Premises shall not be materially
impaired.  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 item (ii) of Section 10.4 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
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from Tenant's insurance carrier, as assigned by Tenant, the cost of such repairs
shall be paid by Tenant to Landlord prior to Landlord's commencement of repair
of the damage.  In the event that Landlord does not deliver the Landlord Repair
Notice within sixty (60) days following the date the casualty becomes known to
Landlord, Tenant shall, at its sole cost and expense, 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.  Whether or not Landlord delivers a Landlord Repair
Notice, prior to the commencement of construction, Tenant shall submit to
Landlord, for Landlord's review and approval, all plans, specifications and
working drawings relating thereto, and Tenant shall select the contractors to
perform such improvement work subject to Landlord's reasonable
approval.  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, if such fire or other
casualty shall have damaged the Premises or a portion thereof or Common Areas
necessary to Tenant's occupancy, then Landlord shall allow Tenant a
proportionate abatement of Rent during the time and to the extent and in the
proportion that the Premises or such portion thereof are unfit for occupancy for
the purposes permitted under this Lease, and are not occupied by Tenant as a
result thereof, provided that such abatement of Rent shall be allowed only to
the extent Landlord is reimbursed from the proceeds of rental interruption
insurance purchased by Landlord as part of Operating Expenses; provided further,
however, if the damage or destruction is due to the negligence or willful
misconduct of Tenant or any of its agents, employees, contractors, invitees or
guests, then Tenant shall be responsible for any reasonable, applicable
insurance deductible (which shall be payable to Landlord upon demand, but which
may be paid under protest) and there shall be no rent abatement.  In the event
that Landlord shall not deliver the Landlord Repair Notice, Tenant's right to
rent abatement pursuant to the preceding sentence shall terminate as of the date
which is reasonably determined by Landlord to be the date Tenant should have
completed repairs to the Premises assuming Tenant used reasonable due diligence
in connection therewith. 

11.2Landlord'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 two hundred ten (210) 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) the damage is not fully
covered by Landlord's insurance policies or that portion of the proceeds from
Landlord's insurance policies allocable to the Building or the Project, as the
case may be; (iv) Landlord decides to rebuild the Building or Common Areas so
that they will be substantially different structurally or architecturally;
(v) the damage occurs during the last twelve (12) months of the Lease Term; or
(vi) any owner of any other portion of the Project, other than Landlord, does
not intend to repair the damage to such portion of the Project; provided,
however, that if such fire or other casualty shall have damaged the Premises or
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Common Areas necessary to Tenant's occupancy and as a result of such damage the
Premises are unfit for occupancy, and provided that Landlord does not elect to
terminate this Lease pursuant to Landlord's termination right as provided above,
and either (a) the repairs cannot, in the reasonable opinion of Landlord's
contractor, be completed within two hundred ten (210) days after being
commenced, or (b) the damage occurs during the last twelve months of the Lease
Term and will reasonably require in excess of ninety (90) days to repair, 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. 

11.3Waiver 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.

ARTICLE 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.  No payment of Rent by Tenant after a breach by Landlord shall be
deemed a waiver of any breach by Landlord.

 

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ARTICLE 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 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.  If more than
twenty-five percent (25%) of the rentable square feet of the Premises is taken,
or if all reasonable access to the Premises is substantially impaired, in each
case for a period in excess of one hundred twenty (120) days, Tenant 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 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 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.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

14.1Transfers.  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
individually as a "Transfer," and, 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)

 

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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, including all existing operative documents to be executed to evidence
such Transfer or the agreements incidental or related to such Transfer, provided
that Landlord shall have the right to require Tenant to utilize Landlord's
standard Transfer documents in connection with the documentation of such
Transfer, (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 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, and (v) an executed
estoppel certificate from Tenant in the form attached hereto as Exhibit E.  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 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. 

14.2Landlord's Consent.  Landlord shall not unreasonably withhold its consent to
any proposed Transfer of the Subject Space to the Transferee on the terms
specified in the Transfer Notice.  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:

14.2.1The 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, or
would be a significantly less prestigious occupant of the Building than Tenant;

14.2.2The Transferee intends to use the Subject Space for purposes which are not
permitted under this Lease;

14.2.3The Transferee is either a governmental agency or instrumentality thereof;

14.2.4The 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;

14.2.5The 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;

14.2.6Either the proposed Transferee, or any person or entity which directly or
indirectly, controls, is controlled by, or is under common control with, the
proposed Transferee,

 

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(i) occupies space in the Project at the time of the request for consent, or
(ii) is negotiating or has negotiated with Landlord to lease space in the
Project, or (iii) Landlord is currently meeting with (or has previously met
with) the proposed Transferee to tour space in the Project; 

14.2.7In Landlord's reasonable judgment, the use of the Premises by the proposed
Transferee would not be comparable to the types of office use by other tenants
in the Project, would entail any alterations which would lessen the value of the
tenant improvements in the Premises, would result in more than a reasonable
density of occupants per square foot of the Premises, would increase the burden
on elevators or other Building systems or equipment over the burden thereon
prior to the proposed Transfer, or would require increased services by Landlord;

14.2.8Intentionally Omitted;

14.2.9The proposed Transfer is of less than the entire Premises; or

14.2.10Any part of the rent payable under the proposed Transfer shall be based
in whole or in part on the income or profits derived from the Subject Space or
if any proposed Transfer shall potentially have any adverse effect on the real
estate investment trust qualification requirements applicable to Landlord and
its affiliates.

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 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
(i) such that Landlord would initially have been entitled to refuse its consent
to such Transfer under this Section 14.2, or (ii) which would cause the proposed
Transfer to be more favorable to the Transferee than the terms set forth in
Tenant's original Transfer Notice, 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 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 declaratory
judgment and an injunction for the relief sought, and Tenant hereby waives the
provisions of Section 1995.310 of the California Civil Code, or any successor
statute, and 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.  Tenant shall indemnify, defend and hold harmless Landlord from any
and all liability, losses, claims, damages, costs, expenses, causes of action
and proceedings involving any third party or parties (including without
limitation Tenant's proposed subtenant or assignee) who claim they were damaged
by Landlord's wrongful withholding or conditioning of Landlord's consent.

14.3Transfer Premium.  If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord seventy-five percent

 

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(75%) 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, after
deducting the reasonable expenses incurred by Tenant for (i) any changes,
alterations and improvements to the Premises in connection with the Transfer,
(ii) any free base rent reasonably provided to the Transferee in connection with
the Transfer (provided that such free rent shall be deducted only to the extent
the same is included in the calculation of total consideration payable by such
Transferee), and (iii) any brokerage commissions in connection with the Transfer
and (iv) legal fees reasonably incurred in connection with the Transfer
(collectively, "Tenant's Subleasing Costs").  "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.  Landlord
shall make a determination of the amount of Landlord's applicable share of the
Transfer Premium on a monthly basis as rent or other consideration is paid by
Transferee to Tenant under the Transfer.  For purposes of calculating the
Transfer Premium on a monthly basis, Tenant's Subleasing Costs shall be deemed
to be expended by Tenant in equal monthly amounts over the entire term of the
Transfer. 

14.4Landlord's Option as to Subject Space.  Notwithstanding anything to the
contrary contained in this Article 14, Landlord shall have the option, by giving
written notice to Tenant within thirty (30) days after receipt of any Transfer
Notice, to (i) recapture the Subject Space, or (ii) take an assignment or
sublease of the Subject Space from Tenant; provided, however, Landlord shall
have no right to recapture space with respect to (A) a sublease for less than
the remainder of the Lease Term (for purposes hereof, a sublease shall be deemed
to be for the remainder of the Lease Term if, assuming all sublease renewal or
extension rights are exercised, such sublease shall expire during the final
twelve (12) months of the Lease Term), or (B) an assignment or sublease pursuant
to the terms of Section 14.8, below.  Such recapture or sublease or assignment
notice, shall cancel and terminate this Lease, or create a sublease or
assignment, as the case may be, with respect to the Subject Space as of the date
stated in the Transfer Notice as the effective date of the proposed
Transfer.  In the event of a recapture by Landlord, if this Lease shall be
canceled with respect to less than the entire Premises, then (i) 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; (ii) 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; and (iii) Landlord shall
construct or cause to be constructed a demising wall separating that portion of
the Premises recaptured by Landlord from that portion of the Premises retained
by Tenant; provided that, Tenant hereby agrees that, notwithstanding Tenant's
occupancy of its retained portion of the Premises during the construction of
such demising wall by Landlord, Landlord shall be permitted to construct such
demising wall during normal business hours, without any obligation to pay
overtime or other premiums, and the construction of such demising wall by
Landlord shall in no way constitute a constructive eviction of Tenant nor
entitle Tenant to any abatement of Rent, and Landlord shall have no
responsibility or for any reason be liable to Tenant for any direct or indirect
injury to or interference with Tenant's business arising from the construction
of such

 

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demising wall, nor shall Tenant be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of its retained portion of
the Premises or of Tenant's personal property or improvements resulting from the
construction of such demising wall, or for any inconvenience or annoyance
occasioned by the construction of such demising wall; and provided further that,
Tenant shall be responsible for, and shall pay to Landlord promptly upon being
billed therefor, fifty percent (50%) of all costs related to the construction of
such demising wall, including Landlord's standard fee for its involvement with
such demising wall.  If Landlord declines, or fails to elect in a timely manner,
to recapture, sublease or take an assignment of the Subject Space under this
Section 14.4, then, provided Landlord has consented to the proposed Transfer,
Tenant shall be entitled to proceed to transfer the Subject Space to the
proposed Transferee, subject to provisions of this Article 14. 

14.5Effect of Transfer.  If Landlord consents to a Transfer, then (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 and content reasonably acceptable to
Landlord, including, without limitation, at Landlord's option, a "Transfer
Agreement," as that term is defined in this Section 14.5, below; (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 the Lease
from any liability under this Lease, including, without limitation, in
connection with the Subject Space, and, in the event of a Transfer of Tenant's
entire interest in this Lease, the liability of Tenant and such Transferee shall
be joint and several.  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 two percent (2%), Tenant shall pay Landlord's costs of
such audit.  Notwithstanding anything to the contrary contained in this
Article 14, Landlord, at its option in its sole and absolute discretion, may
require, as a condition to the validity of any Transfer, that both Tenant and
such Transferee enter into a separate written agreement directly with Landlord
(a "Transfer Agreement"), which Transfer Agreement, among other things, shall
create privity of contract between Landlord and such Transferee with respect to
the provisions of this Article 14, and shall contain such terms and provisions
as Landlord may reasonably require, including, without limitation, the
following:  (A) such Transferee's agreement to be bound by all the obligations
of Tenant under this Lease (including, but not limited to, Tenant's obligation
to pay Rent), provided that, in the event of a Transfer of less than the entire
Premises, the obligations to which such Transferee shall agree to be so bound
shall be prorated on a basis of the number of rentable square feet of the
Subject Space in proportion to the number of square feet in the Premises; (B)
such Transferee's acknowledgment of, and agreement that such Transfer shall be
subordinate and subject to, Landlord's rights under Section 19.3 of this Lease;
and (C) Tenant's and such Transferee's recognition of and agreement to be bound
by all the terms and provisions of this Article 14, including, but not limited
to, any such terms and provisions which Landlord, at its option, requires to be
expressly set forth in such Transfer Agreement.  Upon the occurrence of any

 

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default by Transferee under such Transfer, Landlord shall have the right, at its
option, but not the obligation, on behalf of Tenant, to pursue any or all of the
remedies available to Tenant under such Transfer or at law or in equity (all of
which remedies shall be distinct, separate and cumulative). 

14.6Occurrence of Default.  Any Transfer hereunder, whether or not such
Transferee shall have executed a Transfer Agreement, shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, then Landlord shall have all of the rights set
forth in Section 19.3 of this Lease with respect to such Transfer.  In addition,
if Tenant shall be in default under this Lease, then 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 a Transfer directly
to Landlord (which payments 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.

14.7Additional Transfers.  For purposes of this Lease, the term "Transfer" shall
also include (i) if Tenant is a partnership or a limited liability company, the
withdrawal or change, voluntary, involuntary or by operation of law, of fifty
percent (50%) or more of the partners, officers or members, as applicable, or
transfer of fifty percent (50%) or more of partnership, ownership or membership
interests (as applicable), within a twelve (12)-month period, or the dissolution
of the partnership or limited liability company without immediate reconstitution
thereof, and (ii) if Tenant is a closely held corporation (i.e., 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, or in connection with a bona fide transaction intended to finance
the continuing business and operations of the Tenant), 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.

14.8Deemed Consent Transfers.  Notwithstanding anything to the contrary
contained in this Lease, an assignment or subletting of all or a portion of the
Premises to (A) 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),
or (B) an assignment of the Lease to an entity which acquires all or
substantially all of the stock or assets of Tenant, shall not be deemed a
Transfer requiring Landlord's consent under this Article 14, provided that
(i) Tenant notifies Landlord 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,

 

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(ii) such assignment or sublease is not a subterfuge by Tenant to avoid its
obligations under this Lease, it being understood that such Transferee shall
thereafter become liable under this Lease, on a joint and several basis, with
Tenant, (iii) any transferee under this Section 14.8 shall be of a character and
reputation consistent with the quality of the Building, and (iv) with respect to
an assignment under sub-item (B), above, such assignee 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 greater of
(1) the Net Worth of Original Tenant on the date of this Lease, and (2) the Net
Worth of Tenant on the day immediately preceding the effective date of such
assignment or sublease.  "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. 

ARTICLE 15

SURRENDER OF PREMISES; OWNERSHIP AND
REMOVAL OF TRADE FIXTURES

15.1Surrender 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.

15.2Removal 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 and
repairs which are specifically made the responsibility of Landlord hereunder
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, such items of furniture, equipment, business and trade fixtures,
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.

ARTICLE 16

HOLDING OVER

 

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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, and in such case Rent shall be
payable at a monthly rate equal to (i) one hundred fifty percent (150%) of the
Rent applicable during the last rental period of the Lease Term under this Lease
for the first (1st) month of such holdover, and (ii) two hundred percent (200%)
thereafter.  Such month-to-month tenancy 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 upon the termination or expiration of this Lease, 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.

ARTICLE 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 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.  Tenant shall execute and deliver whatever other instruments may be
reasonably required for such purposes.  At any time during the Lease Term,
Landlord may require Tenant to provide Landlord with a current financial
statement and financial statements of the two (2) years prior to the current
financial statement year.  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
or other instruments 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.  Notwithstanding the foregoing, in the
event that (i) stock in the entity which constitutes Tenant under this Lease (as
opposed to an entity that "controls" Tenant or is otherwise an "affiliate" of
Tenant, as those terms are defined in Section 14.8 of this Lease) is publicly
traded on a national stock exchange, and (ii) Tenant has it own, separate and
distinct 10K and 10Q filing requirements (as opposed joint or cumulative filings
with an entity that controls Tenant or with entities which are otherwise
Affiliates of Tenant), then Tenant's obligation to provide Landlord with a copy
of its most recent current financial statement shall be deemed satisfied.  

 

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ARTICLE 18

MORTGAGE OR GROUND LEASE

18.1Subordination.  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.  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.  Landlord's interest herein may be assigned as
security at any time to any lienholder.  Tenant shall, within five (5) days of
request by Landlord, execute such further 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.

18.2Notice to Lienholder or Ground Lessor.  Notwithstanding anything to the
contrary contained in Article 28, below, or elsewhere in this Lease, upon
receipt by Tenant of notice from any holder of a mortgage, trust deed or other
encumbrance in force against the Building or the Project or any part thereof
which includes the Premises or any lessor under a ground lease or underlying
lease of the Building or the Project, or from Landlord, which notice sets forth
the address of such lienholder or ground lessor, no notice from Tenant to
Landlord shall be effective unless and until a copy of the same is given to such
lienholder or ground lessor at the appropriate address therefor (as specified in
the above-described notice or at such other places as may be designated from
time to time in a notice to Tenant in accordance with Article 28, below), and
the curing of any of Landlord's defaults by such lienholder or ground lessor
within a reasonable period of time after such notice from Tenant (including a
reasonable period of time to obtain possession of the Building or the Project,
as the case may be, if such lienholder or ground lessor elects to do so) shall
be treated as performance by Landlord.  For the purposes of this Article 18, the
term "mortgage" shall include a mortgage on a leasehold interest of Landlord
(but not a mortgage on Tenant's leasehold interest hereunder).

18.3Assignment of Rents.  With reference to any assignment by Landlord of
Landlord’s interest in this Lease, or the Rent payable to Landlord hereunder,
conditional in nature or otherwise, which assignment is made to any holder of a
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encumbrance in force against the Building or the Project or any part thereof
which includes the Premises or to any lessor under a ground lease or underlying
lease of the Building or the Project, Tenant agrees as follows: 

18.3.1The execution of any such assignment by Landlord, and the acceptance
thereof by such lienholder or ground lessor, shall never be treated as an
assumption by such lienholder or ground lessor of any of the obligations of
Landlord under this Lease, unless such lienholder or ground lessor shall, by
notice to Tenant, specifically otherwise elect.

18.3.2Notwithstanding delivery to Tenant of the notice required by
Section 18.3.1, above, such lienholder or ground lessor, respectively, shall be
treated as having assumed Landlord’s obligations under this Lease only upon such
lienholder's foreclosure of any such mortgage, trust deed or other encumbrance,
or acceptance of a deed in lieu thereof, and taking of possession of the
Building or the Project or applicable portion thereof, or such ground lessor's
termination of any such ground lease or underlying leases and assumption of
Landlord's position hereunder, as the case may be.  In no event shall such
lienholder, ground lessor or any other successor to Landlord's interest in this
Lease, as the case may be, be liable for any security deposit paid by Tenant to
Landlord, unless and until such lienholder, ground lessor or other such
successor, respectively, actually has been credited with or has received for its
own account as landlord the amount of such security deposit or any portion
thereof (in which event the liability of such lienholder, ground lessor or other
such successor, as the case may be, shall be limited to the amount actually
credited or received).

18.3.3In no event shall the acquisition of title to the Building and the land
upon which the Building is located or the Project or any part thereof which
includes the Premises by a purchaser which, simultaneously therewith, leases
back to the seller thereof the entire Building or the land upon which the
Building is located or the Project or the entirety of that part thereof acquired
by such purchaser, as the case may be, be treated as an assumption, by operation
of law or otherwise, of Landlord’s obligations under this Lease, but Tenant
shall look solely to such seller-lessee, or to the successors to or assigns of
such seller-lessee's estate, for performance of Landlord’s obligations under
this Lease.  In any such event, this Lease shall be subject and subordinate to
the lease to such seller-lessee, and Tenant covenants and agrees in the event
the lease to such seller-lessee is terminated to attorn, without any deductions
or set-offs whatsoever, to such purchaser-lessor, if so requested to do so by
such purchaser-lessor, and to recognize such purchaser-lessor as the lessor
under this Lease, provided such purchaser-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.  For all purposes, such seller-lessee, or
the successors to or assigns of such seller-lessee's estate, shall be the lessor
under this Lease unless and until such seller-lessee's position shall have been
assumed by such purchaser-lessor.

ARTICLE 19

DEFAULTS; REMEDIES

19.1Events of Default.  The occurrence of any of the following shall constitute
a default of this Lease by Tenant:

 

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19.1.1Any failure by Tenant to pay any Rent or any other charge required to be
paid under this Lease, or any part thereof, when due; or 

19.1.2Except where a specific time period is otherwise set forth for Tenant's
performance in this Lease, in which event the failure to perform by Tenant
within such time period shall be a default by Tenant under this Section 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

19.1.3Abandonment or vacation of all or a substantial portion of the Premises by
Tenant; or

19.1.4The failure by Tenant to observe or perform according to the provisions of
Articles 5, 10, 14, 17 or 18 of this Lease, or any breach by Tenant of the
representations and warranties set forth in Section 29.34 of this Lease, or the
failure by Tenant to observe or perform any other provision, covenant or
condition of this Lease which failure, because of the character of such
provision, covenant or condition, would immediately jeopardize Landlord's
interest, where such failure continues for more than two (2) business days after
notice from Landlord; or

19.1.5Tenant's failure to occupy the Premises within thirty (30) business days
after the Lease Commencement Date.

The notice periods provided in this Section 19.1 are in lieu of, and not in
addition to, any notice periods provided by law.

19.2Remedies Upon Default.  Upon the occurrence of any event of default by
Tenant, 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.

19.2.1Terminate 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 any 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
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(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
19.2.1(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%).

19.2.2Landlord 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.

19.2.3Landlord 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.

19.3Subleases of Tenant.  If Landlord elects to terminate this Lease on account
of any default by Tenant, as set forth in this Article 19, then Landlord shall
have the right, at Landlord's option in its sole discretion, (i) to terminate
any and all assignments, subleases, licenses, concessions or other consensual
arrangements for possession entered into by Tenant and affecting the Premises,
in which event Landlord shall have the right to repossess such affected portions
of the Premises by any lawful means, or (ii) to succeed to Tenant's interest in
any or all such assignments, subleases, licenses, concessions or arrangements,
in which event Landlord may require any assignees, sublessees, licensees or
other parties thereunder to attorn to and recognize Landlord as its assignor,
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thereunder.  In the event of Landlord's election to succeed to Tenant's interest
in any such assignments, 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. 

19.4Efforts 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.

ARTICLE 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.

ARTICLE 21

LETTER OF CREDIT

21.1Delivery of Letter of Credit.  Tenant shall deliver to Landlord concurrent
with Tenant's execution of this Lease, as protection for the full and faithful
performance by Tenant of all of its obligations under this Lease and for all
losses and damages Landlord may suffer (or which Landlord reasonably estimates
that it may suffer) as a result of any breach or default by Tenant under this
Lease, an unconditional, clean, irrevocable negotiable standby letter of credit
(the "L-C") in the amount set forth in Section 8 of the Summary (the "L-C
Amount"), in the form attached hereto as Exhibit H, payable in the City of San
Francisco, California, running in favor of Landlord, drawn on a bank (the
"Bank") reasonably approved by Landlord and at a minimum having a long term
issuer credit rating from Standard and Poor’s Professional Rating Service of A
or a comparable rating from Moody’s Professional Rating Service (the "Credit
Rating Threshold"), and otherwise conforming in all respects to the requirements
of this Article 21, including, without limitation, all of the requirements of
Section 21.2 below, all as set forth more particularly hereinbelow.  Tenant
shall pay all expenses, points and/or fees incurred by Tenant in obtaining and
maintaining the L/C.  In the event of an assignment by Tenant of its interest in
the Lease (and irrespective of whether Landlord's consent is required for such
assignment), the acceptance of any replacement or substitute letter of credit by
Landlord from the assignee shall be subject to Landlord's prior written
approval, in Landlord's reasonable

 

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discretion, and the attorney's fees incurred by Landlord in connection with such
determination shall be payable by Tenant to Landlord within ten (10) days of
billing. 

21.2In General.  The L-C shall be "callable" at sight, permit partial draws and
multiple presentations and drawings, and be otherwise subject to the Uniform
Customs and Practices for Documentary Credits (1993-Rev), International Chamber
of Commerce Publication #500, or the International Standby Practices-ISP 98,
International Chamber of Commerce Publication #590.  Tenant further covenants
and warrants as follows:

21.2.1Landlord Right to Transfer.  The L-C shall provide that Landlord, its
successors and assigns, may, at any time and without notice to Tenant and
without first obtaining Tenant's consent thereto, transfer (one or more times)
all or any portion of its interest in and to the L-C to another party, person or
entity, regardless of whether or not such transfer is separate from or as a part
of the assignment by Landlord of its rights and interests in and to this
Lease.  In the event of a transfer of Landlord's interest in the Building,
Landlord shall transfer the L-C, in whole or in part, to the transferee and
thereupon Landlord shall, without any further agreement between the parties, be
released by Tenant from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of the whole or
any portion of said L-C to a new landlord.  In connection with any such transfer
of the L-C by Landlord, Tenant shall, at Tenant's sole cost and expense, execute
and submit to the Bank such applications, documents and instruments as may be
necessary to effectuate such transfer, and Tenant shall be responsible for
paying the Bank's transfer and processing fees in connection therewith.

21.2.2No Assignment by Tenant.   Tenant shall neither assign nor encumber the
L-C or any part thereof.  Neither Landlord nor its successors or assigns will be
bound by any assignment, encumbrance, attempted assignment or attempted
encumbrance by Tenant in violation of this Section.

21.2.3Replenishment.  If, as a result of any drawing by Landlord on the L-C
pursuant to its rights set forth in Section 21.3 below, the amount of the L-C
shall be less than the L-C Amount, Tenant shall, within five (5) days
thereafter, provide Landlord with (i) an amendment to the L-C restoring such L-C
to the L-C Amount or (ii) additional L-Cs in an amount equal to the deficiency,
which additional L-Cs shall comply with all of the provisions of this
Article 21, and if Tenant fails to comply with the foregoing, notwithstanding
anything to the contrary contained in Section 19.1 above, the same shall
constitute an incurable default by Tenant under this Lease (without the need for
any additional notice and/or cure period).  

21.2.4Renewal; Replacement.  If the L-C expires earlier than the date (the "LC
Expiration Date") that is one hundred twenty (120) days after the expiration of
the Lease Term, Tenant shall deliver a new L-C or certificate of renewal or
extension to Landlord at least sixty (60) days prior to the expiration of the
L-C then held by Landlord, without any action whatsoever on the part of
Landlord, which new L-C shall be irrevocable and automatically renewable through
the LC Expiration Date upon the same terms as the expiring L-C or such other
terms as may be acceptable to Landlord in its sole discretion.  In furtherance
of the foregoing, Landlord and Tenant agree that the L-C shall contain a
so-called "evergreen provision," whereby the L-C will automatically be renewed
unless at least sixty (60) days’ prior written notice of non-renewal is provided
by the issuer to Landlord; provided, however, that the

 

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final expiration date identified in the L-C, beyond which the L-C shall not
automatically renew, shall not be earlier than the LC Expiration Date. 

21.2.5Bank’s Financial Condition.  If, at any time during the Lease Term, the
Bank’s long term credit rating is reduced below the Credit Rating Threshold, or
if the financial condition of the Bank changes in any other materially adverse
way (either, a "Bank Credit Threat"), then Landlord shall have the right to
require that Tenant obtain from a different issuer a substitute L-C that
complies in all respects with the requirements of this Article 21, and Tenant’s
failure to obtain such substitute L-C within ten (10) days following Landlord’s
written demand therefor (with no other notice or cure or grace period being
applicable thereto, notwithstanding anything in this Lease to the contrary)
shall entitle Landlord, or Landlord’s then managing agent, to immediately draw
upon the then existing L-C in whole or in part, without notice to Tenant, as
more specifically described in Section 21.3 below.  Tenant shall be responsible
for the payment of any and all costs incurred with the review of any replacement
L-C (including without limitation Landlord’s reasonable attorneys’ fees), which
replacement is required pursuant to this Section or is otherwise requested by
Tenant.  

21.3Application of Letter of Credit.  Tenant hereby acknowledges and agrees that
Landlord is entering into this Lease in material reliance upon the ability of
Landlord to draw upon the L-C as protection for the full and faithful
performance by Tenant of all of its obligations under this Lease and for all
losses and damages Landlord may suffer (or which Landlord reasonably estimates
that it may suffer) as a result of any breach or default by Tenant under this
Lease.  Landlord, or its then managing agent, shall have the right to draw down
an amount up to the face amount of the L-C if any of the following shall have
occurred or be applicable:  (A) such amount is due to Landlord under the terms
and conditions of this Lease, or (B) Tenant has filed a voluntary petition under
the U. S. Bankruptcy Code or any state bankruptcy code (collectively,
"Bankruptcy Code"), or (C) an involuntary petition has been filed against Tenant
under the Bankruptcy Code, or (D) the Bank has notified Landlord that the L-C
will not be renewed or extended through the LC Expiration Date, or (E) a Bank
Credit Threat or Receivership (as such term is defined in Section 21.6.1 below)
has occurred and Tenant has failed to comply with the requirements of either
Section 21.2.5 above or 21.6 below, as applicable.  If Tenant shall breach any
provision of this Lease or otherwise be in default hereunder, or if any of the
foregoing events identified in Sections 21.3(B) through (E) shall have occurred,
Landlord may, but without obligation to do so, and without notice to Tenant,
draw upon the L-C, in part or in whole, and the proceeds may be applied by
Landlord (i) to cure any breach or default of Tenant and/or to compensate
Landlord for any and all damages of any kind or nature sustained or which
Landlord reasonably estimates that it will sustain resulting from Tenant's
breach or default, (ii) against any Rent payable by Tenant under this Lease that
is not paid when due and/or (iii) to pay for all losses and damages that
Landlord has suffered or that Landlord reasonably estimates that it will suffer
as a result of any breach or default by Tenant under this Lease.  The use,
application or retention of the L-C, or any portion thereof, by Landlord shall
not prevent Landlord from exercising any other right or remedy provided by this
Lease or by any applicable law, it being intended that Landlord shall not first
be required to proceed against the L-C, and shall not operate as a limitation on
any recovery to which Landlord may otherwise be entitled.  Tenant agrees not to
interfere in any way with payment to Landlord of the proceeds of the L-C, either
prior to or following a "draw" by Landlord of any portion of the L-C, regardless
of whether any dispute exists between Tenant and Landlord as to Landlord's

 

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right to draw upon the L-C.  No condition or term of this Lease shall be deemed
to render the L-C conditional to justify the issuer of the L-C in failing to
honor a drawing upon such L-C in a timely manner.  Tenant agrees and
acknowledges that (i) the L-C constitutes a separate and independent contract
between Landlord and the Bank, (ii) Tenant is not a third party beneficiary of
such contract, (iii) Tenant has no property interest whatsoever in the L-C or
the proceeds thereof, and (iv) in the event Tenant becomes a debtor under any
chapter of the Bankruptcy Code, neither Tenant, any trustee, nor Tenant's
bankruptcy estate shall have any right to restrict or limit Landlord's claim
and/or rights to the L-C and/or the proceeds thereof by application of
Section 502(b)(6) of the U. S. Bankruptcy Code or otherwise. 

21.4Letter of Credit not a Security Deposit.  Landlord and Tenant acknowledge
and agree that in no event or circumstance shall the L-C or any renewal thereof
or any proceeds thereof be (i) deemed to be or treated as a "security deposit"
within the meaning of California Civil Code Section 1950.7, (ii) subject to the
terms of such Section 1950.7, or (iii) intended to serve as a "security deposit"
within the meaning of such Section 1950.7.  The parties hereto (A) recite that
the L-C is not intended to serve as a security deposit and such Section 1950.7
and any and all other laws, rules and regulations applicable to security
deposits in the commercial context ("Security Deposit Laws") shall have no
applicability or relevancy thereto and (B) waive any and all rights, duties and
obligations either party may now or, in the future, will have relating to or
arising from the Security Deposit Laws.

21.5Proceeds of Draw.  In the event Landlord draws down on the L-C pursuant to
Section 21.3(D) or (E) above, the proceeds of the L-C may be held by Landlord
and applied by Landlord against any Rent payable by Tenant under this Lease that
is not paid when due and/or to pay for all losses and damages that Landlord has
suffered or that Landlord reasonably estimates that it will suffer as a result
of any breach or default by Tenant under this Lease.  Any unused proceeds shall
constitute the property of Landlord and need not be segregated from Landlord's
other assets.  Tenant hereby (i) agrees that (A) Tenant has no property interest
whatsoever in the proceeds from any such draw, and (B) such proceeds shall not
be deemed to be or treated as a "security deposit" under the Security Deposit
Law, and (ii) waives all rights, duties and obligations either party may now or,
in the future, will have relating to or arising from the Security Deposit
Laws.  Landlord agrees that the amount of any proceeds of the L-C received by
Landlord, and not (a) applied against any Rent payable by Tenant under this
Lease that was not paid when due or (b) used to pay for any losses and/or
damages suffered by Landlord (or reasonably estimated by Landlord that it will
suffer) as a result of any breach or default by Tenant under this Lease (the
"Unused L-C Proceeds"), shall be paid by Landlord to Tenant (x) upon receipt by
Landlord of a replacement L-C in the full L-C Amount, which replacement L-C
shall comply in all respects with the requirements of this Article 21, or (y)
within thirty (30) days after the LC Expiration Date; provided, however, that if
prior to the LC Expiration Date a voluntary petition is filed by Tenant, or an
involuntary petition is filed against Tenant by any of Tenant's creditors, under
the Bankruptcy Code, then Landlord shall not be obligated to make such payment
in the amount of the Unused L-C Proceeds until either all preference issues
relating to payments under this Lease have been resolved in such bankruptcy or
reorganization case or such bankruptcy or reorganization case has been
dismissed.

 

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21.6Bank Placed Into Receivership.   

21.6.1Bank Placed Into Receivership.  In the event the Bank is placed into
receivership or conservatorship (any such event, a "Receivership") by the
Federal Deposit Insurance Corporation or any successor or similar entity (the
"FDIC"), then, effective as of the date such Receivership occurs, the L-C shall
be deemed to not meet the requirements of this Article 21, and, within ten (10)
days following Landlord's notice to Tenant of such Receivership (the "LC
Replacement Notice"), Tenant shall (i) replace the L-C with a substitute L-C
from a different issuer reasonably acceptable to Landlord and that complies in
all respects with the requirements of this Article 21 or (ii), in the event
Tenant demonstrates to Landlord that Tenant is reasonably unable to obtain a
substitute L-C from a different issuer reasonably acceptable to Landlord and
that complies in all respects with the requirements of this Article 21 within
the foregoing ten (10) day period, deposit with Landlord cash in the L-C Amount
(the "Interim Cash Deposit"); provided, however, that, in the case of the
foregoing sub-clause (ii), Tenant shall, within sixty (60) days after the LC
Replacement Notice, replace the L-C with a substitute L-C from a different
issuer reasonably acceptable to Landlord and that complies in all respects with
the requirements of this Article 21, and upon Landlord’s receipt and acceptance
of such replacement L-C, Landlord shall return to Tenant the Interim Cash
Deposit, with no obligation on the part of Landlord to pay any interest
thereon.  If Tenant fails to comply in any respect with the requirements of this
Section 21.6.1, then, notwithstanding anything in this Lease to the contrary,
Landlord shall have the right to (a) declare Tenant in default of this Lease for
which there shall be no notice or grace or cure periods being applicable thereto
other than the aforesaid ten (10) day and sixty (60) day periods, (b) if
applicable, retain such Interim Cash Deposit until such time as such default is
cured by Tenant, which retention shall not constitute a waiver of any right or
remedy available to Landlord under the terms of this Lease or at law, and (c)
pursue any and all remedies available to it under this Lease and at law,
including, without limitation, if Tenant has failed to provide the Interim Cash
Deposit, treating any Receivership as a Bank Credit Threat and exercising
Landlord’s remedies under Section 21.2.5 above, to the extent possible pursuant
to then existing FDIC policy.  Tenant shall be responsible for the payment of
any and all costs incurred with the review of any replacement L-C (including
without limitation Landlord’s reasonable attorneys’ fees), which replacement is
required pursuant to this Section or is otherwise requested by Tenant.  

21.6.2Interim Cash Deposit.  During any period that Landlord remains in
possession of the Interim Cash Deposit (any such period, a "Deposit Period"), it
is understood by the parties that such Interim Cash Deposit shall be held by
Landlord as security for the full and faithful performance of Tenant’s covenants
and obligations under this Lease.  The Interim Cash Deposit shall not constitute
an advance of any Rent, an advance payment of any other kind, nor a measure of
Landlord’s damages in case of Tenant’s default.  If, during any such Deposit
Period, Tenant defaults 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, then Landlord may but shall not
be required to, from time to time, without notice to Tenant and without waiving
any other remedy available to Landlord, use the Interim Cash Deposit, or any
portion of it, to the extent necessary to cure or remedy such default or failure
or to compensate Landlord for all damages sustained by Landlord or which
Landlord reasonably estimates that it will sustain resulting from Tenant’s
default or failure to comply fully and timely with its obligations pursuant to
this Lease.  Tenant shall immediately pay to Landlord on demand

 

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any amount so applied in order to restore the Interim Cash Deposit to its
original amount, and Tenant’s failure to immediately do so shall constitute a
default under this Lease.  In the event Landlord is in possession of the Interim
Cash Deposit at the expiration or earlier termination of this Lease, and Tenant
is in compliance with the covenants and obligations set forth in this Lease at
the time of such expiration or termination, then Landlord shall return to Tenant
the Interim Cash Deposit, less any amounts deducted by Landlord to reimburse
Landlord for any sums to which Landlord is entitled under the terms of this
Lease, within sixty (60) days following both such expiration or termination and
Tenant’s vacation and surrender of the Premises.  Landlord’s obligations with
respect to the Interim Cash Deposit are those of a debtor and not a
trustee.  Landlord shall not be required to maintain the Interim Cash Deposit
separate and apart from Landlord’s general or other funds, and Landlord may
commingle the Interim Cash Deposit with any of Landlord’s general or other
funds.  Tenant shall not at any time be entitled to interest on the Interim Cash
Deposit.  In the event of a transfer of Landlord's interest in the Building,
Landlord shall transfer the Interim Cash Deposit, in whole or in part, to the
transferee and thereupon Landlord shall, without any further agreement between
the parties, be released by Tenant from all liability therefor, and it is agreed
that the provisions hereof shall apply to every transfer or assignment of the
whole or any portion of said Interim Cash Deposit to a new landlord.  Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code, or
any successor statute. 

21.7Reduction of L‑C Amount.  Provided that, as of the last day of the thirtieth
(30th) full calendar month of the Lease Term (the "Reduction Date"), (i) Tenant
is not then in breach of or in default under this Lease, (ii) Tenant has not
previously been in breach of or in default under this Lease beyond any
applicable notice and cure period, and (iii) on or prior to the Reduction Date,
Tenant tenders to Landlord a replacement Letter of Credit or a certificate of
amendment to the existing Letter of Credit, conforming in all respects to the
requirements of this Article 21, then the L-C Amount shall be reduced to
$145,750.17.  In the event the L-C Amount is reduced pursuant to the foregoing,
and provided that Tenant timely tenders the replacement or amended Letter of
Credit to Landlord in the form required herein, Landlord shall exchange the
Letter of Credit then held by Landlord for the replacement or amended Letter of
Credit tendered by Tenant.

ARTICLE 22

INTENTIONALLY OMITTED

 

ARTICLE 23

SIGNS

23.1Full Floors.  Subject to Landlord's prior written approval, in its sole
discretion, and provided all signs are in keeping with the quality, design and
style of the Building and Project, Tenant, if the Premises comprise an entire
floor of the Building, at its sole cost and expense, may install identification
signage anywhere in the Premises including in the elevator

 

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lobby of the Premises, provided that such signs must not be visible from the
exterior of the Building. 

23.2Multi-Tenant Floors.  If other tenants occupy space on the floor on which
the Premises is located, Tenant's identifying signage (including lobby directory
signage on the floor of the Building upon which the Premises is located) shall
be provided by Landlord, at Tenant's cost, and such signage shall be comparable
to that used by Landlord for other similar floors in the Building and shall
comply with Landlord's then-current Building standard signage program.

23.3Prohibited Signage and Other Items.  Any signs, notices, logos, pictures,
names or advertisements which are installed outside of the Premises (or which
can be seen from the exterior of the Premises) and that have not been separately
approved by Landlord may be removed without notice by Landlord at the sole
expense of Tenant.  Tenant may not install any signs on the exterior or roof of
the Project or the Common Areas.  Any signs, window coverings, or blinds (even
if the same are located behind the Landlord-approved window coverings for the
Building), or other items visible from the exterior of the Premises or Building,
shall be subject to the prior approval of Landlord, in its sole discretion.

23.4Building Directory.  Tenant shall have the right, at Tenant cost, to have
Tenant's name entered into Landlord's directory in the lobby of the Building.

23.5Monument Signage.  Subject to the terms of this Section 23.5, Applicable
Laws and all applicable Building rules and regulations, the Original Tenant
shall have the non-exclusive right to have a sign ("Tenant's Sign") on one (1)
tenant strip of the monument sign located front of the Building (the
"Monument").  The location of Tenant's Sign on the Monument shall be designated
by Landlord.  Tenant's right to Tenant's Sign shall be subject to all applicable
governmental laws, rules, regulations, codes and approvals.  Further, Tenant
shall be responsible for obtaining any applicable permits or other governmental
approval(s) applicable to or required for Tenant’s Sign.  Subject to the terms
hereof, the content, size, design, location, graphics, materials, colors and
other specifications of the Tenant's Sign shall be subject to the approval of
Landlord, which approval shall not be unreasonably withheld.  Tenant shall be
responsible for all costs and expenses incurred in connection with the design,
construction, installation, repair, operation (including utilities costs, if
applicable), maintenance, compliance with laws, and removal of the Tenant's
Sign.  Tenant's signage rights set forth in this Section 23.5 shall be personal
to the Original Tenant, and may not be assigned to any assignee or to any
sublessee or any other person or entity.  Landlord shall have the right to
terminate Tenant's right to maintain Tenant's Sign in the event that Tenant
shall be in default of this Lease after the expiration of any applicable cure
period.  In addition, Tenant's signage rights set forth in this Section 23.5
shall terminate at any time during the Lease Term during which the Original
Tenant fails to physically occupy the entire Premises.  Upon the expiration of
the Lease Term or the earlier termination of Tenant's signage rights under this
Section 23.5, Tenant shall, at Tenant's sole cost and expense, remove the
Tenant's Sign and repair any and all damage caused by such removal and restore
all affected areas to their original condition.

 

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ARTICLE 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, including any such governmental
regulations related to disabled access (collectively, "Applicable Laws").  At
its sole cost and expense, Tenant shall promptly comply with any Applicable Laws
which relate to (i) Tenant's use of the Premises, (ii) any Alterations made by
Tenant to the Premises, and any Tenant Improvements in the Premises, or
(iii) the Base Building, but as to the Base Building, only 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 normal and customary business office improvements, or
triggered by Tenant's use of the Premises for non‑general office use.  Should
any standard or regulation now or hereafter be imposed on 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 and to
cooperate with Landlord, including, without limitation, by taking such actions
as Landlord may reasonably require, in Landlord's efforts to comply 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
the governmental rules, regulations, requirements or standards described in this
Article 24.  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.  Tenant shall
promptly pay all fines, penalties and damages that may arise out of or be
imposed because of its failure to comply with the provisions of this
Article 24.  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 and
materially affect the safety of Tenant's employees or create a significant
health hazard for Tenant's employees, or would otherwise materially and
adversely affect Tenant's use of or access to the Premises.  Landlord shall be
permitted to include in Operating Expenses any costs or expenses incurred by
Landlord under this Article 24 to the extent not prohibited by the terms of
Article 4 of this Lease, above.  Tenant hereby agrees to use reasonable efforts
to notify Landlord if Tenant makes any Alterations or improvements to the
Premises that might impact accessibility to the Premises or Building under any
disability access laws.  Landlord hereby agrees to use reasonable efforts to
notify Tenant if Landlord makes any alterations or improvements to the Premises
that might impact accessibility to the Premises or Building under any disability
access laws.  

ARTICLE 25

LATE CHARGES

 

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If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee upon the date said amount is due,
then Tenant shall pay to Landlord a late charge equal to six percent (6%) 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 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
upon 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 (x) the annual "Bank Prime Loan"
rate cited in the Federal Reserve Statistical Release Publication H.15(519),
published weekly (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 (v) the highest rate permitted by applicable law.

ARTICLE 26

LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

26.1Landlord'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, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
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.

26.2Tenant's Reimbursement.  Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord the following sums (which
sums shall bear interest from the date accrued by Landlord until paid by Tenant
at a rate per annum equal to 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), upon delivery by Landlord to Tenant of statements
therefor:  (i) 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; (ii) sums equal to all
losses, costs, liabilities, damages and expenses referred to in Article 10 of
this Lease; and (iii) sums equal to all reasonable expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent
or in enforcing or attempting to enforce any rights of Landlord under this Lease
or pursuant to law, including, without limitation, all legal fees and other
amounts so expended.  Tenant's obligations under this Section 26.2 shall survive
the expiration or sooner termination of the Lease Term.

ARTICLE 27

ENTRY BY LANDLORD

 

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Landlord reserves the right at all reasonable times and upon reasonable advance
notice to Tenant (which notice, notwithstanding anything to the contrary
contained in Article 28 of this Lease, may be oral, and which notice shall not
be required in the case of an emergency) to enter the Premises to (i) inspect
them; (ii) show the Premises to prospective purchasers or tenants, or to current
or prospective mortgagees, ground or underlying lessors or insurers; (iii) post
notices of nonresponsibility; or (iv) 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.  Notwithstanding anything to
the contrary contained in this Article 27, upon reasonable advance notice to
Tenant (except with regard to janitorial service and except for sub-item (B),
below, and which notice, notwithstanding anything to the contrary contained in
Article 28 of this Lease, may be oral, and which notice shall not be required in
the case of an emergency), Landlord may enter the Premises at any time to (A)
perform services required of Landlord, including janitorial service; (B) take
possession due to any breach of this Lease in the manner provided herein; and
(C) perform any covenants of Tenant which Tenant fails to perform.  Landlord
shall use commercially reasonable efforts to minimize interference with the
conduct of Tenant's business in connection with such entries into the
Premises.  Landlord may make any such entries without the abatement of Rent and
may take such reasonable steps as required to accomplish the stated
purposes.  Tenant hereby waives any claims for damages or for any injuries or
inconvenience to or interference with Tenant's business, lost profits, any loss
of occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby, 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.  For each of the above purposes, Landlord
shall at all times have a key with which to unlock all the doors in the
Premises, excluding Tenant's vaults, safes and special security areas designated
in advance by Tenant.  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.  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.

ARTICLE 28

NOTICES

All notices, demands, 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, 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 9 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 (i) three (3) days after the date it is
posted if sent by Mail, (ii) the date the overnight courier delivery is made, or
(iii) the date personal delivery is

 

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made.  Any Notice given by an attorney on behalf of Landlord or by Landlord’s
managing agent shall be considered as given by Landlord and shall be fully
effective as long as such notice otherwise meets the delivery requirements of
this Article 28.  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:

Boston Properties Limited Partnership
Four Embarcadero Center
Lobby Level, Suite One
San Francisco, California 94111
Attention:  Mr. Bob Pester

and

Boston Properties, Inc.

Prudential Center Tower

800 Boylston Street, Suite 1900

Boston, Massachusetts 02199

Attention:  General Counsel

Boston Properties Limited Partnership

Four Embarcadero Center

Lobby Level, Suite One

San Francisco, California  94111

Attention:  Regional Counsel

and

Allen Matkins Leck Gamble Mallory & Natsis LLP
1901 Avenue of the Stars, Suite 1800
Los Angeles, California 90067
Attention:  Anton N. Natsis, Esq.

ARTICLE 29

MISCELLANEOUS PROVISIONS

29.1Terms; 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.

29.2Binding 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

 

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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. 

29.3No Light, Air or View 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.  Under no circumstances whatsoever at any time during the
Lease Term shall any temporary darkening of any windows of the Premises or any
temporary obstruction of the light or view therefrom by reason of any repairs,
improvements, maintenance or cleaning in or about the Project, or any
diminution, impairment or obstruction (whether partial or total) of light, air
or view by any structure which may be erected on any land comprising a part of,
or located adjacent to or otherwise in the path of light, air or view to, the
Project, in any way impose any liability upon Landlord or in any way reduce or
diminish Tenant's obligations under this Lease.

29.4Modification 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 materially and 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) 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) days following the request therefor.

29.5Transfer 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 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.

29.6Prohibition 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.

29.7Landlord'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.

29.8Relationship 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.

29.9Application of Payments.  Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant's designation
of such

 

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payments, to satisfy any obligations of Tenant hereunder, in such order and
amounts as Landlord, in its sole discretion, may elect. 

29.10Time 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,
including, without limitation, the giving of any Notice required to be given
under this Lease or by law, the time periods for giving any such Notice and the
taking of any action with respect to any such Notice.

29.11Partial 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.

29.12No 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.

29.13Landlord 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 interest of
Landlord in the Building.  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, neither Landlord nor the
Landlord Parties shall be liable under any circumstances for any indirect or
consequential damages or any injury or damage to, or interference with, Tenant's
business, including but not limited 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.

29.14Entire 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,

 

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covenants, conditions or provisions of this Lease can be modified, deleted or
added to except in writing signed by the parties hereto. 

29.15Right 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.

29.16Force Majeure.  Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, 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 charges to be paid by Tenant 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.

29.17Waiver 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.

29.18Tenant Parking.  Tenant shall have the right to park up to forty-four (44)
automobiles (i.e., 3.3 automobiles for every 1,000 rentable square feet in the
Premises), free of charge, in the portions of the Common Areas designated by
Landlord for vehicular parking.  Such parking shall be on an as available
"first-come, first-served" basis which shall be in common with all other tenants
of the Project. Tenant's continued right to use the Common Areas designated by
Landlord for vehicular parking is conditioned upon Tenant abiding by all
reasonable rules and regulations which are prescribed from time to time for the
orderly operation and use of the parking facility, including any sticker or
other identification system established by Landlord, Tenant's cooperation in
seeing that Tenant's employees and visitors also comply with such rules and
regulations and Tenant not being in default under this Lease.  Landlord
specifically reserves the right to change the size, configuration, design,
layout and all other aspects of the Project parking facility at any time and
Tenant acknowledges and agrees that Landlord may, without incurring any
liability to Tenant and without any abatement of Rent under this Lease, from
time to time, close-off or restrict access to the Project parking facility for
purposes of permitting or facilitating any such construction, alteration or
improvements.  Landlord may delegate its responsibilities hereunder to a parking
operator in which case such parking operator shall have all the rights of
control attributed hereby to the Landlord.  The parking passes rented by Tenant
pursuant to this Section 29.18 are provided to Tenant solely for use by Tenant's
own personnel and such passes may not be transferred, assigned, subleased or
otherwise alienated by Tenant without Landlord's prior approval.  Tenant may
validate visitor parking by such method or methods as the Landlord may
establish, at the validation rate from time to time generally applicable to
visitor parking.

 

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29.19Joint and Several.  If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several. 

29.20Authority.  Tenant hereby represents and warrants that Tenant is a duly
formed and existing entity qualified to do business in 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.  

29.21Attorneys' 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.

29.22Governing 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 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.

29.23Submission 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.

29.24Brokers.  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 11 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

 

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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. 

29.25Independent 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.

29.26Project or Building Name and Signage.  Landlord shall have the right at any
time to change the name 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 or
Building as Landlord may, in Landlord's sole discretion, desire.  Tenant shall
not use the words "Gateway Center" or 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.

29.27Counterparts.  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.

29.28Confidentiality.  Tenant acknowledges that the content of this Lease and
any related documents are confidential information.  Tenant shall keep such
confidential information strictly confidential and shall not disclose such
confidential information to any person or entity other than Tenant's financial,
legal, and space planning consultants.  Notwithstanding the foregoing, Landlord
understands and acknowledges that Tenant is subject to the public reporting
requirements of the Securities Exchange Act of 1934, as amended, and, as such,
Tenant may be required to publicly disclose this Lease as a material agreement
of the Tenant.  Landlord hereby consents to Tenant’s disclosure of this
Agreement as required by law or the rules of any stock exchange that are
applicable to Tenant.

29.29Development of the Project.

29.29.1Subdivision.  Landlord reserves the right to further subdivide all or a
portion of the Project.  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 such subdivision.

29.29.2The Other Improvements.  If portions of the Project or property adjacent
to the Project (collectively, the "Other Improvements") are owned by an entity
other than Landlord, Landlord, at its option, may enter into an agreement with
the owner or owners of any or all of the Other Improvements to provide (i) for
reciprocal rights of access and/or use of the Project and the Other
Improvements, (ii) for the common management, operation, maintenance,
improvement and/or repair of all or any portion of the Project and the Other
Improvements, (iii) for the allocation of a portion of the Direct Expenses to
the Other Improvements and the operating expenses and taxes for the Other
Improvements to the Project,

 

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and (iv) for the use or improvement of the Other Improvements and/or the Project
in connection with the improvement, construction, and/or excavation of the Other
Improvements and/or the Project.  Nothing contained herein shall be deemed or
construed to limit or otherwise affect Landlord's right to convey all or any
portion of the Project or any other of Landlord's rights described in this
Lease. 

29.29.3Construction of Project and Other Improvements.  Tenant acknowledges that
portions of the Project and/or the Other Improvements may be under construction
following Tenant's occupancy of the Premises, and that such construction may
result in levels of noise, dust, odor, obstruction of access, etc. which are in
excess of that present in a fully constructed project.  Tenant hereby waives any
and all rent offsets or claims of constructive eviction which may arise in
connection with such construction.

29.30Building Renovations.  It is specifically understood and agreed that
Landlord has no obligation and has made no promises to alter, remodel, improve,
renovate, repair or decorate the Premises, Building, or any part thereof and
that no representations respecting the condition of the Premises or the Building
have been made by Landlord to Tenant except as specifically set forth herein or
in the Tenant Work Letter.  However, Tenant hereby acknowledges that Landlord is
currently renovating or may during the Lease Term renovate, improve, alter, or
modify (collectively, the "Renovations") the Project, the Building and/or the
Premises.  Tenant hereby agrees that such Renovations shall in no way constitute
a constructive eviction of Tenant nor entitle Tenant to any abatement of
Rent.  Landlord shall have no responsibility and shall not be liable to Tenant
for any injury to or interference with Tenant's business arising from the
Renovations, nor shall Tenant be entitled to any compensation or damages from
Landlord for loss of the use of the whole or any part of the Premises or of
Tenant's personal property or improvements resulting from the Renovations, or
for any inconvenience or annoyance occasioned by such Renovations.

29.31No 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.

29.32Communications and Computer Lines.  Tenant may install, maintain, replace,
remove or use any electrical, communications or computer wires and cables
(collectively, the "Lines") at the Project in or serving solely the Premises,
provided that (i) Tenant shall obtain Landlord's prior written consent, use an
experienced and qualified contractor approved in writing by Landlord, and comply
with all of the other provisions of Articles 7 and 8 of this Lease, (ii) an
acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord's reasonable opinion, (iii) the Lines therefor (including riser cables)
shall be appropriately insulated to prevent excessive electromagnetic fields or
radiation, and shall be surrounded by a protective conduit reasonably acceptable
to Landlord, (iv) any new or existing Lines servicing the Premises shall comply
with all applicable governmental laws and regulations, (v) as a condition to
permitting the installation of new Lines, Landlord may require that Tenant
remove existing Lines located in or serving the

 

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Premises and repair any damage in connection with such removal, and (vi) Tenant
shall pay all costs in connection therewith.  Landlord reserves the right to
require that Tenant remove any Lines located in or serving the Premises which
are installed in violation of these provisions, or which are at any time in
violation of any laws or represent a dangerous or potentially dangerous
condition.  Landlord further reserves the right to require that Tenant remove
any and all Lines located in or serving the Premises upon the expiration of the
Lease Term or upon any earlier termination of this Lease. 

29.33Intentionally Omitted.  

29.34No Discrimination.  There shall be no discrimination against, or
segregation of, any person or persons on account of sex, marital status, race,
color, religion, creed, national origin or ancestry in the Transfer of the
Premises, or any portion thereof, nor shall the Tenant itself, or any person
claiming under or through it, establish or permit any such practice or practices
of discrimination or segregation with reference to the selection, location,
number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees
of the Premises, or any portion thereof.

29.35Patriot Act and Executive Order 13224.  As an inducement to Landlord to
enter into this Lease, Tenant hereby represents and warrants that:  (i) Tenant
is not, nor is it owned or controlled directly or indirectly by, any person,
group, entity or nation named on any list issued by the Office of Foreign Assets
Control of the United States Department of the Treasury (“OFAC”) pursuant to
Executive Order 13224 or any similar list or any law, order, rule or regulation
or any Executive Order of the President of the United States as a terrorist,
“Specially Designated National and Blocked Person” or other banned or blocked
person (any such person, group, entity or nation being hereinafter referred to
as a “Prohibited Person”); (ii) Tenant is not (nor is it owned or controlled,
directly or indirectly, by any person, group, entity or nation which is) acting
directly or indirectly for or on behalf of any Prohibited Person; and (iii)
neither Tenant (nor any person, group, entity or nation which owns or controls
Tenant, directly or indirectly) has conducted or will conduct business or has
engaged or will engage in any transaction or dealing with any Prohibited Person,
including without limitation any assignment of this Lease or any subletting of
all or any portion of the Premises or the making or receiving of any
contribution of funds, goods or services to or for the benefit of a Prohibited
Person.  In connection with the foregoing, it is expressly understood and agreed
that (x) any breach by Tenant of the foregoing representations and warranties
shall be deemed a default by Tenant under Section 19.1.4 of this Lease and shall
be covered by the indemnity provisions of Section 10.1 above, and (y) the
representations and warranties contained in this subsection shall be continuing
in nature and shall survive the expiration or earlier termination of this Lease.

[signature page to follow]

 

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

"Landlord":

 

BXP 611 GATEWAY CENTER LP,

a Delaware limited partnership

 

BY: BXP CALIFORNIA GP LLC,

a Delaware limited liability company,

its general partner

 

BY:  BOSTON PROPERTIES LIMITED PARTNERSHIP,

a Delaware limited partnership,

its sole member

 

BY:  BOSTON PROPERTIES, INC.,

a Delaware corporation,

its general partner

 

BY:  __/s/ Rob C. Diehl______

Name:  Rob C. Diehl

Title: Senior Vice President, Leasing

"Tenant":

ATARA BIOTHERAPEUTICS, INC.,
a Delaware corporation

By:

/s/ John McGrath

Name:

John McGrath

Title:

CFO

By:

/s/ Isaac Ciechanover

Name:

Isaac Ciechanover

Title:

CEO

 

 

PLEASE NOTE:  THIS LEASE MUST BE EXECUTED BY EITHER (I) BOTH (A) THE CHAIRMAN OF
THE BOARD, THE PRESIDENT OR ANY VICE PRESIDENT OF TENANT, AND (B) THE SECRETARY,
ANY ASSISTANT SECRETARY, THE CHIEF FINANCIAL OFFICER, OR ANY ASSISTANT TREASURER
OF TENANT; OR (II) AN

 

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AUTHORIZED SIGNATORY OF TENANT PURSUANT TO A CERTIFIED CORPORATE RESOLUTION, A
COPY OF WHICH SHOULD BE DELIVERED WITH THE EXECUTED ORIGINALS.

 

 

 

 

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EXHIBIT A

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OUTLINE OF PREMISES

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EXHIBIT A-1

OUTLINE OF FIRST OFFER SPACE

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EXHIBIT B

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TENANT WORK LETTER

This Tenant Work Letter shall set forth the terms and conditions relating to the
construction of the Premises.  This Tenant Work Letter is essentially organized
chronologically and addresses the issues of the construction of the Premises, in
sequence, as such issues will arise during the actual construction of the
Premises.  All references in this Tenant Work Letter to Articles or Sections of
"this Lease" shall mean the relevant portions of Articles 1 through 29 of the
Office Lease to which this Tenant Work Letter is attached as Exhibit B, and all
references in this Tenant Work Letter to Sections of "this Tenant Work Letter"
shall mean the relevant portions of Sections 1 through 5 of this Tenant Work
Letter.

SECTION 1

BASE, SHELL AND CORE

1.1Base, Shell and Core.  Landlord has constructed, at its sole cost and
expense, the base, shell, and core (i) of the Premises and (ii) of the floor of
the Building on which the Premises is located (collectively, the "Base, Shell,
and Core").  The Base, Shell and Core shall consist of the following elements:
(A) base Building systems located in the vertical risers, raceways, and shafts
(including elevator shafts and equipment, the telecom riser exclusive of
equipment owned by third parties, electrical rooms, stair shafts and mechanical
shafts) up to but not including the point of demarcation of such systems with
the horizontal point of connection on a particular floor; (B) in the case of the
sprinkler system, it shall additionally include the valve at the riser and the
main sprinkler loop, but shall exclude branch pipes; (C) the concrete floor at
each floor level, and (D) the Building’s steel and concrete
superstructure.  Notwithstanding anything set forth in this Tenant Work Letter
to the contrary, Tenant shall accept the Base, Shell and Core from Landlord in
their presently existing, "as-is" condition.  

1.2Landlord Work.  Landlord shall, at Landlord’s sole cost and expense,
concurrently with Tenant's construction of the Tenant Improvements, cause the
construction or installation of the following items on the floor of the Building
containing the Premises (collectively, the "Landlord Work").  Tenant may not
change or alter the Landlord Work.

1.2.1Public Corridor.  A Building standard public corridor wall, the standard
tenant entries and exits including doors, frames, hardware, and sidelight (if
any), and standard tenant entry signage and exit lights (collectively, the
"Public Corridor"), which Public Corridor is adjacent to the Premises as set
forth on Exhibit A to the Lease.

1.2.2Demising Walls Between Tenants.  Building standard demising partitions
between tenants which shall include studs, acoustical insulation and dry wall
ready for finish on tenant side only and any necessary penetrations, fire
dampers and sound traps (collectively, the "Demising Walls"), which Demising
Walls are adjacent to the Premises as set forth on Exhibit A to the Lease.

 

EXHIBIT B
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Because Landlord shall be constructing the Landlord Work concurrently with
Tenant's construction of the Tenant Improvements, there will be a certain
“overlap” period pursuant to which both Landlord’s representatives, employees,
vendors and contractors and Tenant’s representatives, employees, vendors and
contractors may be present and performing work in a portion of the
Premises.  During any such “overlap” period(s) when both parties and/or their
respective employees, vendors, contractors or consultants are concurrently
performing work in, or accessing, any portion of the Premises, neither party
shall unreasonably interfere with or delay the work of the other party and/or
its contractors or consultants, and both parties shall mutually coordinate and
cooperate with each other, and shall cause their respective employees, vendors,
contractors, and consultants to work in harmony with and to mutually coordinate
and cooperate with the other’s employees, vendors, contractors and consultants,
respectively, to minimize any interference or delay by either party with respect
to the other party’s work.

SECTION 2

TENANT IMPROVEMENTS

2.1Tenant Improvement Allowance.  Tenant shall be entitled to a one-time tenant
improvement allowance (the "Tenant Improvement Allowance") in the amount set
forth in Section 12 of the Summary for the costs relating to the initial design
and construction of Tenant's improvements, which are permanently affixed to the
Premises (the "Tenant Improvements").  In no event shall Landlord be obligated
to make disbursements pursuant to this Tenant Work Letter in a total amount
which exceeds the Tenant Improvement Allowance.  In addition, Landlord shall
contribute an amount not to exceed $0.15 per rentable square foot of the
Premises ("Landlord's Drawing Contribution") toward the cost of one (1)
preliminary space plan to be prepared by "Architect/Space Planner," as that term
is defined in Section 3.1, below, and no portion of the Landlord's Drawing
Contribution, if any, remaining after the completion of the Tenant Improvements
shall be available for use by Tenant.  In the event that the Tenant Improvement
Allowance or Landlord's Drawing Contribution is not fully utilized by Tenant on
or before the first (1st) anniversary of the Lease Commencement Date, then such
unused amounts shall revert to Landlord, and Tenant shall have no further rights
with respect thereto.  Any Tenant Improvements that require the use of Building
risers, raceways, shafts and/or conduits, shall be subject to Landlord's
reasonable rules, regulations, and restrictions, including the requirement that
any cabling vendor must be selected from a list provided by Landlord, and that
the amount and location of any such cabling must be approved by Landlord.  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;
provided, however, 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 Tenant Improvements and to
repair any damage to the Premises and Building caused by such removal and return
the affected portion of the Premises to their condition existing prior to the
installment of such Tenant Improvements.

2.2Disbursement of the Tenant Improvement Allowance.

2.2.1Tenant Improvement Allowance Items.  Except as otherwise set forth in this
Tenant Work Letter, the Tenant Improvement Allowance shall be disbursed by
Landlord

 

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only for the following items and costs (collectively the "Tenant Improvement
Allowance Items"): 

2.2.1.1Payment of the fees of the "Architect" and the "Engineers," as those
terms are defined in Section 3.1 of this Tenant Work Letter, which fees shall,
notwithstanding anything to the contrary contained in this Tenant Work Letter,
not exceed an aggregate amount equal to $3.00 per rentable square foot of the
Premises, and payment of the fees incurred by, and the cost of documents and
materials supplied by, Landlord and Landlord's consultants in connection with
the preparation and review of the "Construction Drawings," as that term is
defined in Section 3.1 of this Tenant Work Letter;

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

2.2.1.3The cost of construction of the Tenant Improvements, including, without
limitation, testing and inspection costs, freight elevator usage, hoisting and
trash removal costs, and contractors' fees and general conditions;

2.2.1.4The 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;

2.2.1.5The cost of any changes to the Construction Drawings or Tenant
Improvements required by all applicable building codes (the "Code");

2.2.1.6The cost of connection of the Premises to the Building's energy
management systems;

2.2.1.7The cost of the "Coordination Fee," as that term is defined in
Section 4.2.2 of this Tenant Work Letter;

2.2.1.8Sales and use taxes and Title 24 fees; and

2.2.1.9All other actual and reasonable out-of-pocket costs expended by Landlord
in connection with the construction of the Tenant Improvements.

2.2.2Disbursement 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.

2.2.2.1Monthly Disbursements.  On or before the day of each calendar month, as
determined by Landlord, during the construction of the Tenant Improvements (or
such other date as Landlord may designate), Tenant shall deliver to
Landlord:  (i) a request for payment of the "Contractor," as that term is
defined in Section 4.1 of this Tenant Work Letter, approved by Tenant, in a form
to be provided by Landlord, showing the schedule, by trade, of percentage of
completion of the Tenant Improvements in the Premises, detailing the portion of

 

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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 delivered to the Premises;
(iii) executed mechanic's lien releases from all of Tenant's Agents which shall
comply with the appropriate provisions, as reasonably determined by Landlord, of
California Civil Code Section 3262(d); and (iv) all other information reasonably
requested by Landlord.  Tenant's request for payment shall be deemed Tenant's
acceptance and approval of the work furnished and/or the materials supplied as
set forth in Tenant's payment request.  Thereafter, Landlord shall deliver a
check to Tenant in payment of the lesser of:  (A) the amounts so requested by
Tenant, as set forth in this Section 2.2.2.1, above, less a ten percent
(10%) retention (the aggregate amount of such retentions to be known as the
"Final Retention"), and (B) the balance of any remaining available portion of
the Tenant Improvement Allowance (not including the Final Retention), provided
that Landlord does not dispute any request for payment based on non-compliance
of any work with the "Approved Working Drawings," as that term is defined in
Section 3.4 below, or due to any substandard work, or for any other
reason.  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. 

2.2.2.2Final Retention.  Subject to the provisions of this Tenant Work Letter, a
check for the Final Retention shall be delivered by Landlord to Tenant following
the completion of construction of the Premises, provided that (i) Tenant
delivers to Landlord properly executed mechanics lien releases in compliance
with both California Civil Code Section 3262(d)(2) and either Section 3262(d)(3)
or Section 3262(d)(4), (ii) Landlord has determined that no substandard work
exists which adversely affects the mechanical, electrical, plumbing, heating,
ventilating and air conditioning, life-safety or other systems of the Building,
the curtain wall of the Building, the structure or exterior appearance of the
Building, or any other tenant's use of such other tenant's leased premises in
the Building and (iii) Architect delivers to Landlord a certificate, in a form
reasonably acceptable to Landlord, certifying that the construction of the
Tenant Improvements in the Premises has been substantially completed.  

2.2.2.3Other 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 has been made available shall be deemed
Landlord's property under the terms of this Lease.

2.3Standard Tenant Improvement Package.  Landlord has established specifications
(the "Specifications") for the Building standard components to be used in the
construction of the Tenant Improvements in the Premises (collectively, the
"Standard Improvement Package"), which Specifications shall be supplied to
Tenant by Landlord.  The quality of Tenant Improvements shall be equal to or of
greater quality than the quality of the Specifications, provided that the Tenant
Improvements shall comply with certain Specifications as designated by
Landlord.  Landlord may make changes to the Specifications for the Standard
Improvement Package from time to time.

2.4Additional Allowance.  On or before the Delivery Date, Tenant shall be
entitled, pursuant to a written notice delivered to Landlord, to a one‑time
increase (the "Additional Allowance") of the Tenant Improvement Allowance in an
amount not to exceed $10.00 for each

 

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of the 13,670 rentable square feet of the Premises, for the costs relating to
the initial design and construction of the Tenant Improvements.  In the event
Tenant exercises its right to use all or any portion of the Additional
Allowance, the monthly Base Rent for the Premises shall be increased by an
amount equal to the "Additional Monthly Base Rent," as that term is defined
below, in order to repay the Additional Allowance to Landlord.  The "Additional
Monthly Base Rent" shall be determined as the missing component of an annuity,
which annuity shall have (i) the amount of the Additional Allowance which Tenant
elects to utilize as the present value amount, (ii) sixth (60) as the number of
payments, (iii) seventy‑one one‑hundredths (.71), which is equal to eight and
one-half percent (8.5%) divided by twelve (12) months per year, as the monthly
interest factor, and (iv) the Additional Monthly Base Rent as the missing
component of the annuity.  In the event Tenant elects to utilize all or a
portion of the Additional Allowance, then (a) all references in this Tenant Work
Letter to the "Tenant Improvement Allowance", shall be deemed to include the
Additional Allowance which Tenant elects to utilize, (b) the parties shall
promptly execute an amendment (the "Amendment") to this Lease setting forth the
new amount of the Base Rent and Tenant Improvement Allowance computed in
accordance with this Section 2.4, (c) Tenant shall deposit with Landlord,
concurrently with Tenant's execution and delivery of the Amendment to Landlord,
cash in an amount equal to the Additional Allowance, which amount shall be held
as part of the Security Deposit, and the Amendment shall contain the new amount
of the Security Deposit, and (d) the additional amount of monthly Base Rent
owing in accordance with this Section 2.1 for the first full month of the Lease
Term which occurs after the expiration of any free rent period shall be paid by
Tenant to Landlord at the time of Tenant's execution of the Amendment. 

SECTION 3

CONSTRUCTION DRAWINGS

3.1Selection of Architect/Construction Drawings.  Tenant shall retain the
architect/space planner designated by Landlord and reasonably acceptable to
Tenant (the "Architect") to prepare the "Construction Drawings," as that term is
defined in this Section 3.1.  Tenant shall retain the engineering consultants
designated by Landlord and reasonably acceptable to Tenant (the "Engineers") to
prepare all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, lifesafety, and sprinkler work in the
Premises, which work is not part of the Base Building.  The plans and drawings
to be prepared by Architect and the Engineers hereunder (including the "Final
Space Plans" and the "Final Working Drawings," as those terms are defined in
Section 3.2 and 3.3, below, respectively) shall be known collectively as the
"Construction Drawings."  All Construction Drawings shall comply with the
drawing format and specifications reasonably determined by Landlord and
consistent with industry standards, and shall be subject to Landlord's approval,
which approval shall not be unreasonably withheld.  Notwithstanding anything set
forth herein to the contrary, Landlord and Tenant hereby agree that it shall be
deemed reasonable for Landlord to withhold its approval of the Construction
Drawings if a "Design Problem" exists.  A "Design Problem" shall mean and refer
to any design criteria which would (a) affect the Building Structure or Building
Systems; (b) be in non-compliance with Codes or other Applicable Laws; (c) be
seen from the exterior of the Premises; (d) cause material interference with
Landlord or other tenants of the Building, (e) not comply with the Standard
Improvement Package; (f) affect the certificate of occupancy or its legal
equivalent for the Building or any portion thereof, or

 

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(g) not, in Landlord's reasonable opinion, be readily useable for typical
general office use by another tenant as a result of the unique configuration
contemplated by the Final Space Plan.  Tenant and Architect shall verify, in the
field, the dimensions and conditions as shown on the relevant portions of the
base building plans, and Tenant and Architect shall be solely responsible for
the same, and Landlord shall have no responsibility in connection
therewith.  Landlord's review of the Construction Drawings as set forth in this
Section 3, shall be for its sole purpose and shall not imply Landlord's review
of the same, or obligate Landlord to review the same, for quality, design, Code
compliance or other like matters.  Accordingly, notwithstanding that any
Construction Drawings are reviewed by Landlord or its space planner, architect,
engineers and consultants, and notwithstanding any advice or assistance which
may be rendered to Tenant by Landlord or Landlord's space planner, architect,
engineers, and consultants, Landlord shall have no liability whatsoever in
connection therewith and shall not be responsible for any omissions or errors
contained in the Construction Drawings, and Tenant's waiver and indemnity set
forth in this Lease shall specifically apply to the Construction Drawings. 

3.2Final Space Plan.  Tenant shall supply Landlord with four (4) copies signed
by Tenant of its final space plan for the 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, 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 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.

3.3Final 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,
B.T.U. calculations, electrical requirements and special electrical receptacle
requirements for the 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 Premises, and
Architect shall compile a fully coordinated set of architectural, structural,
mechanical, electrical and plumbing working drawings in a form which is complete
to allow subcontractors to bid on the work and to obtain all applicable permits
(collectively, the "Final Working Drawings") and shall submit the same to
Landlord for Landlord's approval.  Tenant shall supply Landlord with four (4)
copies signed by Tenant of such Final Working Drawings.  Landlord shall advise
Tenant within ten (10) business days after Landlord's receipt of the Final
Working Drawings for the Premises if the same is unsatisfactory or incomplete in
any respect.  If Tenant is so advised, Tenant shall immediately revise the Final
Working Drawings in accordance with such review and any disapproval of Landlord
in connection therewith.

3.4Approved Working Drawings.  The Final Working Drawings shall be approved by
Landlord (the "Approved Working Drawings") prior to the commencement of
construction of the Premises by Tenant.  After approval by Landlord of the Final
Working Drawings, Tenant

 

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may submit the same to the appropriate municipal authorities for all applicable
building permits (the "Permits").  Tenant hereby agrees that neither Landlord
nor Landlord's consultants shall be responsible for obtaining any building
permit or certificate of occupancy for the Premises and that obtaining the same
shall be Tenant's responsibility; provided, however, that Landlord shall
cooperate with Tenant in executing permit applications and performing other
ministerial acts reasonably necessary to enable Tenant to obtain any such permit
or certificate of occupancy.  No changes, modifications or alterations in the
Approved Working Drawings may be made without the prior written consent of
Landlord, which consent may not be unreasonably withheld. 

SECTION 4

CONSTRUCTION OF THE TENANT IMPROVEMENTS

4.1Tenant's Selection of Contractors.

4.1.1The Contractor.  A general contractor shall be retained by Tenant to
construct the Tenant Improvements.  Such general contractor ("Contractor") shall
be selected by Tenant and subject to Landlord's reasonable approval.

4.1.2Tenant'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") shall be
reasonably acceptable to Landlord.  

4.2Construction of Tenant Improvements by Tenant's Agents.

4.2.1Construction Contract; Cost Budget.  Prior to Tenant's execution of the
construction contract and general conditions with Contractor (the "Contract"),
Tenant shall submit the Contract to Landlord for its approval, which approval
shall not be unreasonably withheld, conditioned or delayed.  Prior to the
commencement of the construction of the Tenant Improvements, and after Tenant
has accepted all bids for the Tenant Improvements, Tenant shall provide Landlord
with a detailed breakdown, by trade, of the final costs to be incurred or which
have been incurred, as set forth more particularly in Sections 2.2.1.1 through
2.2.1.9, above, in connection with the design and construction of the Tenant
Improvements to be performed by or at the direction of Tenant or the Contractor,
which costs form a basis for the amount of the Contract (the "Final
Costs").  Prior to the commencement of construction of the Tenant Improvements,
if an Over-Allowance Amount is present, Tenant shall supply Landlord with cash
in an amount (the "Over-Allowance Amount") equal to the difference between the
amount of the Final Costs and the amount of the Tenant Improvement Allowance
(less any portion thereof already disbursed by Landlord, or in the process of
being disbursed by Landlord, on or before the commencement of construction of
the Tenant Improvements).  The Over-Allowance Amount shall be disbursed by
Landlord prior to the disbursement of any of the then remaining portion of the
Tenant Improvement Allowance, and such disbursement shall be pursuant to the
same procedure as the Tenant Improvement Allowance.  In the event that, after
the Final Costs have been delivered by Tenant to Landlord, the costs relating to
the design and construction of the Tenant Improvements shall change, any
additional costs necessary to such design and construction in excess of the
Final Costs, shall be paid by Tenant to Landlord immediately as an addition to
the Over-Allowance Amount or at Landlord's option, Tenant shall make payments
for

 

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such additional costs out of its own funds, 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 approval, prior to Tenant
paying such costs.  Notwithstanding anything set forth in this Tenant Work
Letter to the contrary, construction of the Tenant Improvements shall not
commence until (a) Landlord has approved the Contract, (b) Tenant has procured
and delivered to Landlord a copy of all Permits, and (c) Tenant has delivered to
Landlord the Over-Allowance Amount.   

4.2.2Tenant's Agents.

4.2.2.1Landlord's General Conditions for Tenant's Agents and Tenant Improvement
Work.  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 strict accordance with the Approved Working Drawings;
(ii) Landlord's reasonable rules and regulations for the construction of
improvements in the Building, (iii) Tenant's Agents shall submit schedules of
all work relating to the Tenant's Improvements to Contractor and Contractor
shall, within five (5) business days of receipt thereof, inform Tenant's Agents
of any changes which are necessary thereto, and Tenant's Agents shall adhere to
such corrected schedule; and (iv) Tenant shall abide by all reasonable rules
made by Landlord's Building manager with respect to the use of freight, loading
dock and service elevators, storage of materials, coordination of work with the
contractors of other tenants, and any other matter in connection with this
Tenant Work Letter, including, without limitation, the construction of the
Tenant Improvements.  Tenant shall pay a logistical coordination fee (the
"Coordination Fee") to Landlord in an amount equal to the three percent (3%) of
the so-call "hard" construction costs in connection with the construction of the
Tenant Improvements, which Coordination Fee shall be for services relating to
the coordination of the construction of the Tenant Improvements.  In the event
of a conflict between the Approved Working Drawings and Landlord's construction
rules and regulations, Landlord, in its sole and absolute discretion, shall
determine which shall prevail.  

4.2.2.2Indemnity.  Tenant's indemnity of Landlord as set forth in this Lease
shall also apply with respect to any and all costs, losses, damages, injuries
and liabilities related in any way to any act or omission of Tenant or Tenant's
Agents, or anyone directly or indirectly employed by any of them, or in
connection with Tenant's non-payment of any amount arising out of the Tenant
Improvements and/or Tenant's disapproval of all or any portion of any request
for payment.  Such indemnity by Tenant, as set forth in this Lease, 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 Premises.

4.2.2.3Requirements 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 completion thereof.  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 the later to occur of (i) completion of the work performed by
such contractor or subcontractors and

 

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(ii) the Lease Commencement Date.  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. 

4.2.2.4Insurance Requirements.  Tenant shall comply with the terms of Section
10.14 of the Lease with respect to the construction of the Tenant
Improvements.  

4.2.3Governmental Compliance.  The Tenant Improvements shall comply in all
respects with the following:  (i) the Code and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer's specifications.

4.2.4Inspection by Landlord.  Tenant shall provide Landlord with reasonable
prior notice of any inspection to be performed by a governmental entity in
connection with the construction of the Tenant Improvements in order to allow
Landlord to be present during such inspection; provided however, once such
notice is given, Tenant is under no obligation to coordinate such inspections
with Landlord.  Landlord shall have the right to inspect the Tenant Improvements
at all times, provided however, that Landlord's failure to inspect the Tenant
Improvements shall in no event constitute a waiver of any of Landlord's rights
hereunder nor shall Landlord's inspection of the Tenant Improvements constitute
Landlord's approval of the same.  Should Landlord disapprove any portion of the
Tenant Improvements, Landlord shall notify Tenant in writing of such disapproval
and shall specify the items disapproved.  Any defects or deviations in, and/or
disapproval by Landlord of, the Tenant Improvements shall be rectified by Tenant
at no expense to Landlord, provided however, that in the event Landlord
determines that a defect or deviation exists or disapproves of any matter in
connection with any portion of the Tenant Improvements and such defect,
deviation or matter 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 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 satisfaction.

4.2.5Meetings.  Commencing upon the execution of this Lease, Tenant shall hold
weekly meetings at a reasonable time, with the Architect and the Contractor
regarding the progress of the preparation of Construction Drawings and the
construction of the Tenant Improvements, which meetings shall be held at a
location designated by Landlord, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such

 

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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. 

4.3Notice of Completion; Copy of Record Set of Plans.  Within ten (10) days
after completion of construction of the Tenant Improvements, Tenant shall cause
a Notice of Completion to be recorded in the office of the Recorder of the
county in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation.  If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent
for such purpose, at Tenant's sole cost and expense.  At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (B) to certify to
the best of their knowledge that the "record-set" of as-built drawings are true
and correct, which certification shall survive the expiration or termination of
this Lease, and (C) to deliver to Landlord four (4) sets of copies of such
record set of drawings within ninety (90) days following issuance of a
certificate of occupancy for the 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
Premises.

SECTION 5

MISCELLANEOUS

5.1Tenant's Representative.  Tenant has designated Heather Turner as its sole
representative with respect to the matters set forth in this Tenant Work Letter,
who shall have full authority and responsibility to act on behalf of the Tenant
as required in this Tenant Work Letter.

5.2Landlord's Representative.  Landlord has designated Peter Back 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.

5.3Time 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.

5.4Tenant's Lease Default.  Notwithstanding any provision to the contrary
contained in this Lease, if an event of default as described in the Lease or
this Tenant Work Letter has occurred at any time on or before the Substantial
Completion of the Premises, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to withhold payment of all or any portion of the Tenant Improvement
Allowance and/or Landlord may cause Contractor to cease the construction of the
Premises (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Premises caused by such

 

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work stoppage), and (ii) all other obligations of Landlord under the terms of
this Tenant Work Letter shall be forgiven until such time as such default is
cured pursuant to the terms of this Lease (in which case, Tenant shall be
responsible for any delay in the substantial completion of the Premises caused
by such inaction by Landlord). 

 

 

 

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EXHIBIT C

611 GATEWAY BOULEVARD

NOTICE OF LEASE TERM DATES

Date:______

 

To:

______

______

______

______

Copy to:

______

______

______

______

Re:Office Lease

Dated: ______

Between: BP Gateway Center LLC, a Delaware limited liability company, Lessor or
Landlord, and ______, a ______, Lessee or Tenant

 

In accordance with the subject document we wish to advise you and/or confirm
your tenancy of Suite _____ on the ____ floor of [APPROPRIATE BUILDING] Gateway
Boulevard, South San Francisco, CA  94080, and that the following terms and
conditions are accurate and in full force and effect:

 

Net rentable square feet______

Lease term______

Lease commencement date______

Lease expiration date______

Base rent scheduleFromTo:

____________

Monthly Rent:

$________

 

Rent checks are

Payable to:

 

[APPROPRIATE ENTITY]

Mailed to:

 

[APPROPRIATE ADDRESS]

All other inquiries to:

Boston Properties

Lobby Level, Suite One

Four Embarcadero Center

San Francisco, CA 94111

Telephone:415-772-0700

Fax:415-982-1780

If the Lease Commencement Date is other than the first day of the month, the
first billing will contain a pro rata adjustment.  Each billing thereafter, with
the exception of the final billing, shall be for the full amount of the monthly
installment as provided for in the Lease.

We request that you sign this letter where indicated below, confirming the
information provided above, and return it to our representative below within
five days of receipt.  A return envelope is provided.  Our failure to receive
your executed Notice within such time period will

 

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indicate your acceptance that the information set forth is correct.  A second
letter is enclosed for your files.

 

Boston Properties, L.P.

 

 

  

By:Lease Administrator's nameDate

Lease Administration

____________________

Agreed to and Accepted:

 

 

By:___________________Date

Its:___________________

 

copy:

Property Manager, Property Accountant
via:Certified Mail

 

 

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EXHIBIT D

611 GATEWAY BOULEVARD

RULES AND REGULATIONS

1.Signs.  Except as specifically provided in this Lease to which these rules and
regulations are attached, no sign, placard, picture, advertisement, name or
notice shall be installed or displayed on any part of the outside or inside of
the Building or on the Common Areas or other areas of the Project without
Landlord’s prior written consent.  Landlord may remove, at Tenant’s expense and
without notice, any sign installed or displayed in violation of this rule.  All
signs or lettering on doors and walls must be approved by Landlord, and shall be
printed, painted, affixed or inscribed or modified at Tenant’s expense by a
person approved by Landlord.  Without Landlord’s written consent, Tenant shall
not use the name of the Building or the Project in connection with or in
promoting or advertising the business of Tenant except as Tenant’s
address.  Landlord hereby agrees to provide Tenant with the Building’s standard
graphics at the entrance to the Premises and in the elevator lobby.

2.Window Treatments.  Tenant shall not place anything against or near glass
partitions or doors or windows which may appear unsightly from outside the
Premises.  Tenant shall be held responsible for any damage to the glass coating
within the Premises.  If Landlord objects in writing to any curtains, blinds,
shades, screens or hanging plants or other similar objects attached to or used
in connection with any window or door of the Premises, or placed on any
windowsill, which are visible from the exterior of the Premises, Tenant shall
immediately discontinue such use.

3.Common Areas.  The sidewalks, entrances, halls, corridors, elevators and
stairways of the Building and the Project shall not be obstructed or used as a
waiting or lounging place by Tenant and the Tenant’s Parties.  All entrance
doors leading from the Premises to the hallways are to be kept closed at all
times.  The outside areas immediately adjoining the Premises shall be kept clear
at all times by Tenant, and Tenant shall not place or permit any obstructions,
garbage, refuse, merchandise or displays in such areas.  The halls, passages,
exits, entrances, elevators, escalators and stairways are not open to the
general public, but are open, subject to reasonable regulations, to Tenant’s
Parties.  Landlord shall, in all cases, retain the right to control and prevent
access thereto of all persons whose presence in the judgment of Landlord would
be prejudicial to the safety of the Project or any part thereof provided that
nothing herein contained shall be construed to prevent such access to persons
with whom any tenant normally deals in the ordinary course of its business,
unless such persons are engaged in illegal or unlawful activities.  Neither
Tenant nor any Tenant Parties shall go upon the roof of the Building.

4.Directory.  The directory of the Building will be provided for the display of
the name and location of tenants, and Landlord reserves the right to exclude any
other names therefrom.  Tenant shall be allocated its pro rata share of lines on
the Building directory board in the main lobby.  

 

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5.Cleanliness.  Tenant shall not exhibit carelessness or indifference to the
good order and cleanliness of the Premises. 

6.Keys.  Landlord will furnish Tenant, free of charge, with two keys to each
exterior door lock in the Premises.  All duplicate keys shall be purchased only
from Landlord.  Landlord may charge a reasonable fee for any additional
keys.  Tenant shall not make or have made additional keys, and Tenant shall not
alter any lock or install a new additional lock or bolt on any door of its
Premises.  Tenant, upon the termination of its tenancy, shall deliver to
Landlord the keys to all doors and pay Landlord for any lost keys.

7.Security Devices.  If Tenant requires telephonic, burglar alarm or similar
services, it shall first obtain and comply with Landlord’s instructions for
their installation.

8.Freight Elevators.  The Building service elevator shall be available for use
by all tenants in the Building, subject to such reasonable scheduling by
Landlord.  No equipment, materials, furniture, packages, supplies, merchandise
or other property will be received in the Building or carried in the elevators
except between such hours and in such elevators as may be designated by
Landlord.  Tenant’s initial move-in and subsequent deliveries of bulky items,
such as furniture, safes and similar items shall be made after obtaining
Landlord’s written consent and shall be made during the hours of 12:00 a.m. to
5:00 a.m. and 6:00 p.m. to 11:59 p.m., Monday through Friday, or at any time on
Saturday or Sunday, unless otherwise agreed in writing by Landlord.  Deliveries
during normal office hours shall be limited to normal office supplies and other
small items.  No deliveries shall be made which impede or interfere with other
tenants or the operation of the Building.

9.Floor Load.  Tenant shall not place a load upon any floor of the Premises
which exceeds the load per square foot which such floor was designed to carry
and which is allowed by law.  Prior to delivery of any heavy object to the
Building, Tenant shall notify Landlord of such object’s specifications and
contemplated location in order that Landlord may take action to prevent
structural load damage to the Building.  Landlord shall have the right to
prescribe the weight, size and position of all equipment, materials, furniture
or other property brought into the Building.  Heavy objects shall, if considered
necessary by Landlord, stand on such platforms as determined by Landlord to be
necessary to properly distribute the weight, which platforms shall be provided
at Tenant’s sole cost and expense.  Tenant shall be responsible for all
structural engineering required to determine structural load.  Business machines
and mechanical equipment belonging to Tenant which cause noise or vibration that
may be transmitted to the structure of the Building or to any space therein to
such degree as to be objectionable to Landlord or to any tenants in the
Building, shall be placed and maintained by Tenant, at Tenant’s sole cost and
expense, on vibration eliminators or other devices sufficient to eliminate noise
or vibration.  The persons employed to move such equipment in or out of the
Building must be acceptable to Landlord.  Landlord will not be responsible for
loss of, or damage to, any such equipment or other property from any cause, and
all damage done to the Building by maintaining or moving such equipment or other
property shall be repaired at the expense of Tenant.

10.No Waste.  Tenant shall not use any method of heating and air conditioning
other than that supplied by Landlord.  Further, Tenant shall not waste
electricity,

 

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water or air conditioning and agrees to cooperate fully with Landlord to assure
the most effective operation of the Building’s heating and air conditioning and
to comply with any governmental energy-saving rules, laws or regulations of
which Tenant has actual notice.  Tenant shall keep corridor doors closed, and
shall close window coverings at the end of each business day. 

11.Building Identification.  Landlord reserves the right, exercisable without
notice and without liability to Tenant, to change the name and address of the
Building and/or any other part of the Project.

12.Building Access.  Landlord reserves the right to exclude from the Building
between the hours of 12:00 a.m. to 7:00 a.m. and 6:00 p.m. to 11:59 p.m., Monday
through Friday, and on Saturday, Sunday and holidays, any person not having a
Building issue key and is not identified on the daily access list.  Tenant shall
be responsible for all persons for whom it requests passes and shall be liable
to Landlord for all acts of such persons.  Landlord may prevent access to the
Project or any part thereof in case of invasion, mob, riot, public excitement or
other commotion.  Landlord may exclude or expel from the Project or any part
thereof any person who, in Landlord’s judgment, is intoxicated or under the
influence of liquor or drugs or is in violation of any of the rules and
regulations of the Project.  Landlord shall not be liable for damages for any
error with regard to the admission to or exclusion from the Project or any part
thereof of any person.

13.Building Security.  Before Tenant and the Tenant Parties leave the Premises
each day, Tenant shall (a) close and lock the doors of its Premises, (b) shut
off all water faucets and other utilities, (c) draw or lower window coverings,
and (d) turn out all lights.  Tenant shall be responsible for any damage or
injuries sustained by other tenants or occupants of the Building or by Landlord
for noncompliance with this rule.

14.Outside Services.  Tenant shall not obtain for use on the Premises, drinking
water, food, beverage, towel or other similar services or accept barbering or
bootblacking service upon the Premises, except as such hours and under such
regulations as may be fixed by Landlord.  Canvassing, soliciting and
distribution of handbills or any other written material, and peddling in the
Building are prohibited, and Tenant shall cooperate to prevent such activities.

15.Lavatories.  The toilet rooms, toilets, urinals, wash bowls and other
apparatus shall not be used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be thrown
therein.  The expense of any breakage, stoppage or damage resulting from the
violation of this rule shall be borne by the tenant who, or whose Tenant
Parties, shall have caused it.

16.Solicitation.  Tenant shall not make any room-to-room solicitation of
business from other tenants in the Project or any part thereof.

17.Electronic Devices.  Tenant shall not install any radio or television
antenna, loudspeaker or other devices on the roof or exterior walls of the
Building.  Tenant shall not interfere with radio or television broadcasting or
reception from or in the Building or elsewhere.

 

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18.Trash Disposal.  Tenant shall store all its trash and garbage within the
Premises or in other facilities provided by Landlord.  Tenant shall not place in
any trash box or receptacle any material which cannot be disposed of in the
ordinary and customary manner of trash and garbage disposal.  All garbage and
refuse disposal shall be made in accordance with directions issued from time to
time by Landlord. 

19.Prohibited Uses.  The Premises shall not be used for (a) the keeping of any
bicycles, motorcycles or animals of any kind, or (b) lodging, or (c) for
manufacturing of any kind; nor shall the Premises be used for any illegal
purpose.  No cooking or heating of food is permitted on the Premises, excepting
therefrom microwave ovens and equipment for brewing coffee, tea, hot chocolate
and similar beverages.  Such cooking and heating devices and their use should be
approved by Underwriters Laboratories in accordance with all applicable
insurance regulations and federal, state, county and city laws, codes,
ordinances, rules and regulations.  Tenant shall not install, maintain or
operate upon the Premises any vending machines without the written consent of
Landlord, which consent shall not be unreasonably withheld.

20.Prohibited Equipment.  Tenant shall not use in any space or in the public
halls of the Project any hand truck except those equipped with rubber tires and
side guards or such other material- handling equipment as Landlord may
approve.  Tenant shall not bring any other vehicles of any kind into the
Building.

21.Safety Procedures.  Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency.

22.Premises Security.  Tenant assumes full responsibility for protecting its
space from theft, robbery and pilferage, which includes keeping doors locked and
other means of entry to the Premises closed and secure.  Landlord shall not in
any way be responsible to Tenants or any Tenant Party, for any loss of property
from the Premises or public areas or for any damage to any property thereon from
any cause whatsoever.

23.Building Management.  Tenant’s requirements will be attended to only upon
appropriate application to the Building management office by an authorized
individual.  Employees of Landlord shall not perform any work or do anything
outside of their regular duties unless under special instructions from Landlord,
and no employee of Landlord will admit any person (Tenant or otherwise) to any
office without specific instructions from Landlord.

24.Waiver.  Landlord may waive any one or more of these Rules and Regulations
for the benefit of Tenant or any other tenant, but no such waiver by Landlord
shall be construed as a waiver of such Rules and Regulations in favor of Tenant
or any other tenant, nor prevent Landlord from thereafter enforcing any such
Rules and Regulations against any or all of the tenants of the Building.

25.Integration.  These Rules and Regulations are in addition to, and shall not
be construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of the Lease.

26.Additional Regulations.  Landlord reserves the right to make such other and
reasonable rules and regulations as, in its judgment, may from time to time be
needed for

 

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safety and security, for care and cleanliness of the Project of any part thereof
and for the preservation of good order therein.  Tenant agrees to abide by all
such Rules and Regulations hereinabove stated and any additional rules and
regulations which are adopted and delivered to Tenant in writing. 

27.Observance of Rules.  Tenant shall be responsible for the observance of all
of the foregoing rules by Tenant’s employees, agents, clients, customers,
invitees, licensees and guests.

28.Parking Facilities.  The following rules and regulations shall govern use of
the parking facilities within the Common Areas appurtenant to the Project (such
parking facilities being collectively referred to hereinafter as the “Parking
Area”).

28.1Persons using the Parking Area shall obey all signs and shall park only in
areas designated for vehicle parking within painted stall lines.  Tenant’s
parking spaces shall be used only for parking vehicles no longer than full-sized
passenger automobiles.  Tenant shall not permit any vehicle that belongs to or
is controlled by Tenant, its agents, employees, invitees, licensees and
visitors, to be loaded, unloaded or parked in areas other than those designated
by Landlord or its parking operator for such activities.  No maintenance,
washing, waxing or cleaning of vehicles shall be permitted in the Parking
Area.  Unless otherwise instructed, each person using the Parking Area shall
park and lock his or her own vehicle.  Neither Landlord nor its parking operator
shall be liable for damage to any vehicle, injury to any person or loss of any
property, all of which risks are assumed by the person using the Parking
Area.  Parking pursuant to this Lease is intended as a license only, and no
bailment is intended or created hereby.  Tenant shall abide by those rules
promulgated by Landlord which provide for tandem parking.  No overnight or
extended term storage of any vehicles or other object shall be permitted.

28.2Persons using the Parking Area shall comply with any parking identification
system established by Landlord or its parking operator.  Such a system may
include the validation of visitor parking, at the validation rate applicable to
visitor parking from time to time as set by Landlord or its parking
operator.  Parking stickers or other identification devices supplied by Landlord
shall remain the property of Landlord.  Such devices shall not be transferable,
and any such device in the possession of an unauthorized holder may be retained
by Landlord and declared void.  Upon the loss or obliteration of a parking
identification device, Tenant shall pay such reasonable replacement charge as
may be established by Landlord or its parking operator.  Upon the termination of
parking privileges, all parking identification devices supplied by Landlord
shall be returned to Landlord.  Landlord may refuse the sale of monthly stickers
or other parking identification devices to any tenant or person and/or his
agents or representatives who willfully refuse to comply with these Rules and
Regulations and all unposted city, state or federal ordinances, laws, or
agreements.  Loss or theft of parking identification devices from automobiles
must be reported to the garage manager immediately, and a lost or stolen report
must be filed by the customer at that time.  Landlord may exclude any car from
the parking facilities that does not have a identification device.  Any parking
identification devices reported lost or stolen found on any unauthorized car
will be confiscated and the illegal holder will be subject to prosecution.  Lost
or stolen devices found by the purchaser must be reported to the parking
facility office immediately to avoid confusion.

 

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28.3The speed limit within all parking areas shall be five (5) miles per hour. 

28.4Landlord reserves the right to modify, redesign or redesignate uses
permitted in the Parking Area or any portion thereof, to relocate parking spaces
from floor to floor, from one portion of the Parking Area to another or to
reasonably adjacent offsite locations, and to allocate parking spaces between
compact and standard sizes from time to time, as long as the same comply with
applicable laws and ordinances.  Reserved parking spaces shall be clearly and
prominently marked as such by Landlord.  But neither Landlord nor its parking
operator shall be liable or responsible for the failure of persons to observe
such markings or to obey other rules and regulations, agreements, laws or
ordinances applicable to the Parking Area.  Without limiting the generality of
the foregoing, Landlord shall not be obligated to tow any violator’s vehicle, or
to declare a default under or terminate the lease of any other tenant of the
Building, on account of any such failure.  If for any reason Landlord is unable
to provide to Tenant all or any portion of its parking spaces or Tenant is
unreasonably denied access thereto during the initial term of this Lease or any
renewal or extension hereof, such fact shall not be a default by Landlord or
permit Tenant to terminate this Lease, either in whole or in part, but Tenant’s
obligation to pay rental for any parking space which is not provided by Landlord
shall be abated for so long as Tenant does not have the use of such parking
space, in full settlement of all claims that Tenant might otherwise have against
Landlord by reason of Landlord’s failure or inability to provide Tenant with
such parking space.

Tenant shall be responsible for the compliance with all of the foregoing rules
and regulations by Tenant and Tenant Parties.  Landlord may refuse to permit any
person who violates any such rules and regulations to have access to the Project
or any part thereof.  Landlord reserves the right from time to time to modify
the rules and regulations set forth herein, including, without limitation, to
adopt and modify such rules and regulations applicable to the Parking Area, as
it deems necessary for the proper operation.

 

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EXHIBIT E

611 GATEWAY BOULEVARD

FORM OF TENANT'S ESTOPPEL CERTIFICATE

The undersigned, as Tenant under that certain Office Lease (the "Lease") made
and entered into as of ___________, 20__ by and between _______________, as
Landlord, and the undersigned, as Tenant, for Premises on the ______________
floor(s) of the office building located at ______________, certifies as follows:

1.Attached hereto as Exhibit A is a true and correct copy of the Lease and all
amendments and modifications thereto.  The documents contained in Exhibit A
represent the entire agreement between the parties as to the Premises.

2.The undersigned currently occupies the Premises described in the Lease, the
Lease Term commenced on __________, and the Lease Term expires on ___________,
and the undersigned has no option to terminate or cancel the Lease or to
purchase all or any part of the Premises, the Building and/or the Project.

3.Base Rent became payable on ____________.

4.The Lease is in full force and effect and has not been modified, supplemented
or amended in any way except as provided in Exhibit A.

5.Tenant has not transferred, assigned, or sublet any portion of the Premises
nor entered into any license or concession agreements with respect thereto
except as follows:

 

 

 

6.Tenant shall not modify the documents contained in Exhibit A without the prior
written consent of Landlord's mortgagee.

7.All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
___________.  The current monthly installment of Base Rent is
$_____________________.

8.All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder.  In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.

 

EXHIBIT E
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[Atara Biotherapeutics, Inc.]

 

 

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9.No rental has been paid more than thirty (30) days in advance and no security
has been deposited with Landlord except the Security Deposit in the amount of
$_____________________ as provided in the Lease. 

10.As of the date hereof, there are no existing defenses or offsets, or, to the
undersigned's knowledge, claims or any basis for a claim, that the undersigned
has against Landlord.

11.If Tenant is a corporation, limited liability company, partnership or limited
liability partnership, each individual executing this Estoppel Certificate on
behalf of Tenant hereby represents and warrants that Tenant is a duly formed and
existing entity qualified to do business in California and that Tenant has full
right and authority to execute and deliver this Estoppel Certificate and that
each person signing on behalf of Tenant is authorized to do so.

12.There are no actions pending against the undersigned under the bankruptcy or
similar laws of the United States or any state.

13.Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.

14.All tenant improvement work to be performed by Landlord under the Lease has
been completed in accordance with the Lease and has been accepted by the
undersigned and all reimbursements and allowances due to the undersigned under
the Lease in connection with any tenant improvement work have been paid in full.

The undersigned acknowledges that this Estoppel Certificate may be delivered to
Landlord or to a prospective mortgagee or prospective purchaser, and
acknowledges that said prospective mortgagee or prospective purchaser will be
relying upon the statements contained herein in making the loan or acquiring the
property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.

Executed at ______________ on the ____ day of ___________, 20__.

"Tenant":

 

 

 

a

 

 

By:

 

 

 

Its:

 

By:

 

 

 

Its:

 

 

 

 

EXHIBIT A-1

-2-

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]

 

 

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EXHIBIT F

611 GATEWAY BOULEVARD

STANDARDS FOR UTILITIES AND SERVICES

1.Elevators.  Provide non-attended passenger elevators to and from the floor(s)
on which the Premises are located.  Landlord may limit the number of elevators
operating outside normal business hours.

2.HVAC.  On Monday through Friday, except holidays, from 7:00 a.m. to 6:00 p.m.,
ventilate the Premises and furnish air conditioning or heating on such days and
hours, in temperatures and amounts which in Landlord’s good faith judgment are
reasonably required for comfortable occupancy of the Premises under normal
business operations.  If Tenant requires air conditioning during other hours,
Landlord will furnish same through an access system provided to Tenant at the
Premises, if available, or otherwise as specified in a written request of Tenant
delivered to the Building management office before noon on the preceding
business day.  For this service Tenant will pay Landlord, upon receipt of
Landlord’s statement, the charge at an hourly rate determined by Landlord from
time to time, which is currently $192.37 for full HVAC and $85.82 for fans only
per hour.  Tenant agrees that neither Tenant nor any Tenant Party shall at any
time enter mechanical installations or facilities of the Building or adjust,
tamper with, touch or otherwise in any manner affect said installations or
facilities.  The cost of maintenance and service calls to adjust and regulate
the air conditioning system shall be charged to Tenant if the need for
maintenance work results from either Tenant’s adjustment of room thermostats or
Tenant’s failure to comply with Landlord’s rules governing the temperature
within the Premises.

3.Lighting.  Furnish electric lighting for all public areas and special service
areas of the Building as Landlord determines in good faith to be reasonable and
standard, including replacement of Building standard lights, bulbs and tubes.

4.Electrical Service.  Subject to the limitation of this Paragraph 4, furnish
electrical service to the Premises, including providing and installing all
Building standard replacement lighting tubes.  If Tenant uses more electrical
power than Landlord in good faith considers reasonable or normal for office use,
Tenant will pay Landlord on a monthly basis the cost of such excess power
consumed by Tenant.  Consumption will be determined, at Landlord’s election,
either (a) by a survey performed by a reputable consultant selected by Landlord,
or (b) through separate meters or submeters installed, maintained and read by
Landlord at Tenant’s cost.  For purposes of this Paragraph 4 only, “month” and
“monthly” shall mean any billing period used by the utility or other power
provider supplying electricity.  All installations of electrical fixtures,
appliances and equipment within the Premises shall be subject to Landlord’s
prior approval, and if they affect the temperature or humidity otherwise
maintained, Landlord may, at Tenant’s sole cost and expense (to be paid within
(30) days after delivery of written demand supported by invoices or other
reasonably satisfactory evidence), install supplemental air conditioning
units.  Tenant’s use of electricity shall never exceed Tenant’s share of the
capacity of existing feeders to the Building or of the risers, wiring
installations and transformers serving the floor(s) containing the
Premises.  Landlord shall provide up to 3.5 watts per usable square foot
(demand) of riser and floor panel electrical capacity averaged over the floor
being serviced.  Tenant shall be allocated an approximate 2.0 watts per usable
square foot for power and 1.5

 

EXHIBIT F

-1-

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]

 

 

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watts per usable square foot for lighting.  Any risers or wiring necessary to
meet Tenant’s excess electrical requirements will be installed by Landlord on
Tenant’s request, at Tenant’s sole cost and expense (to be paid in advance), but
only if in Landlord’s good faith belief they are necessary and will not cause
damage to the Building or a dangerous condition, entail excessive or
unreasonable alterations, repairs or expense, or disturb other occupants. 

5.Water.  Provide toilet facilities, water for lavatory and toilet purposes,
cold water for drinking and tepid water for lavatory purposes, all at points of
supply provided for general use of tenants in the Building through fixtures
installed by Landlord or by Tenant with Landlord’s consent.

6.Janitorial.  Provide janitorial service to the Premises on business days and
other cleaning services as Landlord determines to be reasonably required and all
of which are consistent with the services being provided in the Comparable
Buildings.  Tenant will pay Landlord the full cost attributable to any
extraordinary janitorial or cleaning services which the Premises may require.

7.Maintenance of Non-Building Standard Items.  Maintenance and service costs
necessary for non-building standard items in the Premises shall be the
responsibility of Tenant.  As used in this paragraph, non-building standard
items shall include, without limitation, heat pumps, condenser pumps, sinks and
associated drain pipes, faucets, hot water heaters, garbage disposals,
dishwashers, refrigerators, ice makers, air conditioning units, projection
screens and associated wiring and switching, incandescent downlight or wallwash
fixtures and lamps, floor electrical outlets and power poles.

8.Security Services.  Provide Building security personnel twenty-four (24) hours
per day, seven (7) days per week, fifty-two (52) weeks per year and a card
access system which allows access to individual office floors twenty-four (24)
hours per day, seven (7) days per week, fifty-two (52) weeks per year, all of
which shall be provided by Landlord in its sole and absolute
discretion.  Notwithstanding Landlord’s providing security, Tenant waives any
claim against Landlord with respect to any loss by theft or any other damage
suffered or incurred by Tenant in connection with any entry into the Premises or
any other breach of security with respect to the Premises or the Building,
except due to the gross negligence or willful misconduct of Landlord.

Landlord reserves the right to adopt reasonably, nondiscriminatory modifications
and additions to these standards, which Landlord shall promptly deliver to
Tenant in writing.

 

 

EXHIBIT F

-2-

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]

 

 

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EXHIBIT G

ACCEPTABLE FORMS OF INSURANCE CERTIFICATE

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EXHIBIT G

-1-

 

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]

 

 

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[g201603042151338921270.jpg]

 

 

EXHIBIT G

-2-

 

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]

 

 

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EXHIBIT H

FORM OF LETTER OF CREDIT

(Letterhead of a money center bank

acceptable to the Landlord)

______________, 200__

________________________

________________________

________________________

________________________

Gentlemen:

We hereby establish our Irrevocable Letter of Credit and authorize you to draw
on us at sight for the account of [INSERT TENANT NAME] ("Applicant"), a [PLEASE
PROVIDE], the aggregate amount of _______________ and ____ Dollars
($_______________).

Funds under this Letter of Credit are available to the beneficiary hereof as
follows:

Any or all of the sums hereunder may be drawn down at any time and from time to
time from and after the date hereof by BXP 611 GATEWAY CENTER LP, a Delaware
limited partnership ("Beneficiary") when accompanied by this Letter of Credit
and a written statement signed by a representative of Beneficiary,
(i) certifying that Beneficiary is otherwise allowed to draw down on the Letter
of Credit pursuant to the terms of that certain office lease by and between
Beneficiary and Applicant dated [insert lease date], as amended (collectively,
the "Lease"), (ii) certifying that Beneficiary is entitled to draw down the full
amount of letter of credit no. ___________ as the result of the filing of a
voluntary petition under the U.S. Bankruptcy Code or a State Bankruptcy Code by
the tenant under the Lease, which filing has not been dismissed at the time of
this drawing, or (iii) certifying that Beneficiary is entitled to draw down the
full amount of letter of credit no. ___________ as the result of an involuntary
petition having been filed under the U.S. Bankruptcy Code or a State Bankruptcy
Code against the tenant under the Lease, which filing has not been dismissed at
the time of this drawing.

This Letter of Credit is transferable in its entirety.  Should a transfer be
desired, such transfer will be subject to the return to us of this advice,
together with written instructions.

The amount of each draft must be endorsed on the reverse hereof by the
negotiating bank.  

We hereby agree with you that if drafts are presented to the [bank name] under
this Letter of Credit at or prior to 11:00 a.m. time, on a business day, and
provided that such drafts presented conform to the terms and conditions of this
Letter of Credit, payment shall be initiated by us in immediately available
funds by our close of business on the succeeding business day. If drafts are
presented to [bank name] under this Letter of Credit after 11:00 a.m. time, on a
business day, and provided that such drafts conform with the terms and
conditions of

 

EXHIBIT H

-1-

 

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]

 

 

 

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

 

this Letter of Credit, payment shall be initiated by us in immediately available
funds by our close of business on the second succeeding business day. As used in
this Letter of Credit, "business day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the state of California are
authorized or required by law to close. If the expiration date for this Letter
of Credit shall ever fall on a day which is not a business day then such
expiration date shall automatically be extended to the date which is the next
business day. 

We hereby engage with you that drafts drawn under and in compliance with the
terms and conditions of this Letter of Credit will be duly honored by us if
presented at our offices located at attention: (or at such other office of the
bank as to which you have received written notice from us by registered mail,
courier service or hand delivery, as being the applicable such address) on or
before the then current expiration date.  We agree to notify you in writing by
registered mail, courier service or hand delivery, of any change in such
address.

Presentation of a drawing under this Letter of Credit may be made on or prior to
the then current expiration date hereof by hand delivery, courier service,
overnight mail, or facsimile. Presentation by facsimile transmission shall be by
transmission of the above required sight draft drawn on us together with this
Letter of Credit to our facsimile number, (___) ________ attention: the manager,
standby letter of credit department, with telephonic confirmation of our receipt
of such facsimile transmission at our telephone number (___) ________ or to such
other facsimile or telephone numbers, as to which you have received written
notice from us as being the applicable such number). We agree to notify you in
writing, by registered mail, courier service or hand delivery, of any change in
such direction. Any facsimile presentation pursuant to this paragraph shall also
state thereon that the original of such sight draft and Letter of Credit are
being remitted, for delivery on the next business day, to [bank name] at the
applicable address for presentment pursuant to the paragraph preceding this one.

This Letter of Credit shall expire on ______________.

Notwithstanding the above expiration date of this Letter of Credit, the term of
this Letter of Credit shall be automatically renewed for successive, additional
one (1) year periods unless, at least sixty (60) days prior to any such date of
expiration, the undersigned shall give written notice to Beneficiary, by
certified mail, return receipt requested and at the address set forth above or
at such other address as may be given to the undersigned by Beneficiary, that
this Letter of Credit will not be renewed. (FINAL EXPIRATION DATE NOT LESS THAN
120 DAYS FOLLOWING LEASE EXPIRATION DATE)

This Letter of Credit is governed by the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication 500.

 

 

Very truly yours,

(Name of Issuing Bank)

 

By:__________________________________

 

 

 

EXHIBIT H

-2-

611 GATEWAY BOULEVARD

[Atara Biotherapeutics, Inc.]