Exhibit 10.1(d)

 

THIRD AMENDMENT TO LEASE

 

THIS THIRD AMENDMENT TO LEASE AGREEMENT (this “Third Amendment”) is made as of
June 27, 2016, by and between ARE-819/863 MITTEN ROAD, LLC, a Delaware limited
liability company (“Landlord”), and CORVUS PHARMACEUTICALS, INC., a Delaware
corporation (“Tenant”).

 

RECITALS

 

A.            Landlord and Tenant are parties to that certain Lease Agreement
dated as of January 27, 2015, as amended by that certain First Amendment to
Lease dated as of March 19, 2015, and as further amended by that certain Second
Amendment to Lease dated as of August 20, 2015 (the “Second Amendment”) (as
amended, the “Lease”).  Pursuant to the Lease, Tenant leases from Landlord
certain premises consisting of approximately 22,135 rentable square feet (the
“Existing Premises”) in a building located at 863 Mitten Road and 866 Malcolm
Road, Burlingame, California (collectively, the “Building”).  The Existing
Premises are more particularly described in the Lease.  Capitalized terms used
herein without definition shall have the meanings defined for such terms in the
Lease.

 

B.            Landlord and Tenant desire, subject to the terms and conditions
set forth below, to amend the Lease to, among other things, (i) expand the size
of the Existing Premises by adding approximately 5,246 rentable square feet in
the Building, as shown on Exhibit A attached to this Third Amendment (the “Third
Expansion Premises”), and (ii) provide for the surrender, on the day immediately
preceding the Third Expansion Premises Commencement Date (as defined below) (the
“Surrender Date”), of a portion of the Existing Premises, consisting of
approximately 721 rentable square feet, as shown on Exhibit B attached hereto
(the “Surrender Premises”).

 

NOW, THEREFORE, in consideration of the foregoing Recitals, which are
incorporated herein by this reference, the mutual promises and conditions
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:

 

1.                                      Third Expansion Premises.  In addition
to the Existing Premises, commencing on the Third Expansion Premises
Commencement Date (as defined in Section 2 below), Landlord leases to Tenant,
and Tenant leases from Landlord, the Third Expansion Premises.

 

2.                                      Delivery.  Landlord shall use reasonable
efforts to deliver (“Deliver” or “Delivery”) the Third Expansion Premises to
Tenant on or before the Third Expansion Premises Target Commencement Date for
Tenant’s performance of the Tenant Improvements (as defined in the Work Letter)
under the work letter attached to this Third Amendment as Exhibit B (the “Work
Letter”).  The “Third Expansion Premises Target Commencement Date” shall be
August 24, 2016.

 

The “Third Expansion Premises Commencement Date” shall be the date that Landlord
Delivers the Third Expansion Premises to Tenant.  The “Expansion Premises Rent
Commencement Date” shall be the earlier to occur of (i) the date that Tenant
Substantially Completes (as such term is defined in the Work Letter) the Tenant
Improvements in the Third Expansion Premises, or (ii) November 14, 2016.  Upon
the request of Landlord, Tenant shall execute and deliver a written
acknowledgment of the Third Expansion Premises Commencement Date and the Third
Expansion Premises Rent Commencement Date in substantially the form of the
“Acknowledgement of Commencement Date” attached to the Lease as Exhibit D;
provided, however, Tenant’s failure to execute and deliver such acknowledgment
shall not affect Landlord’s rights hereunder.

 

Except as otherwise set forth in this Third Amendment: (i) Tenant shall accept
the Third Expansion Premises in their condition as of the Third Expansion
Premises Commencement Date,

 

 

GRAPHIC [g114891kg01i001.jpg]

 

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subject to all applicable Legal Requirements; (ii) Landlord shall have no
obligation for any defects in the Third Expansion Premises; and (iii) Tenant’s
taking possession of the Third Expansion Premises shall be conclusive evidence
that Tenant accepts the Third Expansion Premises.

 

Notwithstanding anything to the contrary contained in this Third Amendment,
Tenant and Landlord acknowledge and agree that the effectiveness of this Third
Amendment shall be subject to the following condition precedent (“Condition
Precedent”) having been satisfied:  Landlord shall have entered into a lease
termination agreement (“Termination Agreement”) on or before July 1, 2016, with
the existing tenant of the Third Expansion Premises pursuant to which such
existing tenant agrees to terminate its Lease with respect to the Third
Expansion Premises, which Termination Agreement shall be on terms and conditions
acceptable to Landlord, in Landlord’s sole and absolute discretion.  In the
event that the Condition Precedent is not satisfied, Landlord shall have the
right to terminate this Third Amendment upon delivery of written notice to
Tenant.  Landlord shall have no liability whatsoever to Tenant relating to or
arising from Landlord’s inability or failure to cause the Condition Precedent to
be satisfied.

 

Except as otherwise provided in this Third Amendment, Tenant agrees and
acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the condition of all or any portion
of the Third Expansion Premises, and/or the suitability of the Third Expansion
Premises for the conduct of Tenant’s business, and Tenant waives any implied
warranty that the Third Expansion Premises are suitable for the Permitted Use.

 

3.                                      Definitions.  Commencing on the Third
Expansion Premises Commencement Date, the definitions of “Premises,” “Rentable
Area of Premises,” and “Tenant’s Share of Operating Expenses of Project” are
hereby deleted and replaced with the following”

 

“Premises:  That portion of (a) the 863 Building containing approximately 26,660
rentable square feet, consisting of (i) approximately 8,138 rentable square feet
(the “Original Premises”) in the west wing of the 863 Building (“West
Building”), (ii) approximately 2,442 rentable square feet (the “Expansion
Premises”) in the east wing of the 863 Building (“East Building”),
(iii) approximately 5,246 rentable square feet in the East Building (the “Third
Expansion Premises”), and (iv) approximately 10,834 rentable square feet 
(“Second Expansion Premises”) in the east wing of the 866 Building (“866 East
Building”), all as determined by Landlord, as shown on Exhibit A.”

 

“Rentable Area of Premises:  26,660 sq. ft.”

 

“Tenant’s Share of Operating Expenses of Project:  27.35%”

 

As of the Third Expansion Premises Commencement Date, Exhibit A to the Lease
shall be amended to include the Third Expansion Premises as shown on Exhibit A
attached to this Third Amendment as part of the Premises.

 

4.                                      Base Term.  Commencing on the Third
Expansion Premises Commencement Date, the defined term “Base Term” on page 1 of
the Lease is deleted in its entirety and replaced with the following:

 

“Base Term:  Commencing (i) with respect to the Original Premises on the
Commencement Date, (ii) with respect to the Expansion Premises on the Expansion
Premises Commencement Date, (iii) with respect to the Second Expansion Premises
on the Second Expansion Premises Commencement Date, and (iv) with respect to the
Third Expansion Premises on the Third Expansion Premises Commencement Date, and
ending with respect to the entire Premises on January 31, 2021 (“Expiration
Date”).”

 

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5.                                      Base Rent.

 

a.             Existing Premises.  Tenant shall continue paying Base Rent with
respect to the Existing Premises as provided in the Lease through Expiration
Date.

 

b.             Third Expansion Premises.  Commencing on the Third Expansion
Premises Rent Commencement Date, Tenant shall pay Base Rent with respect to the
Third Expansion Premises at the same per square foot rate of Base Rent that
Tenant is then currently paying with respect to the Existing Premises as
adjusted pursuant to Section 5(a) of the Second Amendment.

 

c.             Additional TI Allowance.  In addition to the Tenant Improvement
Allowance (as defined in the Work Letter), Landlord shall, subject to the terms
of the Work Letter, make available to Tenant the Additional Tenant Improvement
Allowance (as defined in the Work Letter). Commencing on the Third Expansion
Premises Rent Commencement Date and continuing thereafter on the first day of
each month during the Base Term, Tenant shall pay the amount necessary to fully
amortize the portion of the Additional Tenant Improvement Allowance actually
funded by Landlord, if any, in equal monthly payments with interest at a rate of
8% per annum over the Base Term (“TI Rent”), which interest shall begin to
accrue on the date that Landlord first disburses such Additional Tenant
Improvement Allowance or any portion(s) thereof. Any of the Additional Tenant
Improvement Allowance and applicable interest remaining unpaid as of the
expiration or earlier termination of the Lease shall be paid to Landlord in a
lump sum at the expiration or earlier termination of the Lease.

 

6.                                      Expansion Right.  As of the date of this
Third Amendment, Section 8(a) of the Second Amendment is hereby deleted in its
entirety and replaced with the following:

 

“a.           Right of First Refusal.  Each time prior to January 31, 2017
(“ROFR Expiration Date”), that Landlord intends to accept a written proposal or
deliver a counter proposal which Landlord would be willing to accept (the
“Pending Deal”) to lease all or a portion of the ROFR Space (as hereinafter
defined) to a third party, Landlord shall deliver to Tenant written notice (the
“Pending Deal Notice”) of the existence of such Pending Deal.  For purposes of
this Section 8(a), “ROFR Space” shall mean that certain space identified on
Exhibit D attached to this Second Amendment, which is not occupied by a tenant
or which is occupied by a then existing tenant whose lease is expiring within 9
months or less and such tenant does not wish to renew (whether or not such
tenant has a right to renew) its occupancy of such space.  Tenant shall be
entitled to exercise its right under this Section 8(a) only with respect to the
entire ROFR Space described in such Pending Deal Notice (“Identified Space”). 
Within 10 business days after Tenant’s receipt of the Pending Deal Notice,
Tenant shall deliver to Landlord written notice (the “Space Acceptance Notice”)
if Tenant elects to lease the Identified Space.  Tenant’s right to receive the
Pending Deal Notice and election to lease or not lease the Identified Space
pursuant to this Section 8(a) is hereinafter referred to as the “Right of First
Refusal.”  If Tenant elects to lease the Identified Space by delivering the
Space Acceptance Notice within the required 10 business day period, Tenant shall
be deemed to agree to lease the Identified Space on the same general terms and
conditions as the Lease except that the terms of the Lease shall be modified to
reflect the terms of the Pending Deal Notice for the rental of the Identified
Space.  Tenant acknowledges that the term of the Lease with respect to the
Identified Space and the Term of the Lease with respect to the then-existing
Premises may not be co-terminous.  Notwithstanding anything to the contrary
contained herein, in no event shall the Work Letter apply to the Identified
Space.  If Tenant fails to deliver a Space Acceptance Notice to Landlord within
the required 10 business day period, Tenant shall be deemed to have waived its
rights under this Section 8(a) to lease the Identified Space and Landlord shall
have the right to lease the Identified Space to the third party subject to the
Pending Deal (or an affiliate thereof) (“Pending Deal Party”) on substantially
the same business terms and conditions set forth in the Pending Deal Notice.  If
Tenant’s Right of First

 

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Refusal has not otherwise been waived pursuant to this Section 8(a), Tenant’s
Right of First Refusal shall expire and be of no further force or effect as of
the ROFR Expiration Date.”

 

7.                                      Surrender of the Surrender Premises. 
The Lease with respect to the Surrender Premises shall terminate as provided for
in the Lease on the Surrender Date.  Tenant shall voluntarily surrender the
Surrender Premises to Landlord on such date in the condition in which Tenant is
required to surrender the Premises as of the expiration of the Lease.  Tenant
agrees to reasonably cooperate with Landlord in all matters, as applicable,
relating to (i) surrender the Surrender Premises in accordance with the
surrender requirements and in the condition required pursuant to the Lease, and
(ii) all other matters related to restoring the Premises to the condition
required under the Lease.  From and after the Surrender Date, Tenant shall have
no further rights of any kind with respect to the Surrender Premises. 
Notwithstanding the foregoing, those provisions of the Lease which, by their
terms, survive the termination of the Lease shall survive the surrender of the
Surrender Premises and termination of the Lease with respect to the Surrender
Premises as provided herein.  Nothing herein shall excuse Tenant from its
obligations under the Lease with respect to the Surrender Premises prior to the
Surrender Date.

 

8.                                      Restoration.  Notwithstanding anything
to the contrary contained in the Lease, if Tenant converts that certain biology
lab described on Exhibit D attached hereto to office space (“Conversion Space”),
then Tenant shall be required to deliver to Landlord the sum of $125,000 (the
“Restoration Amount”) prior to the expiration or earlier termination of the
Lease, to cover the cost of restoring the Conversion Space to laboratory space.

 

9.                                      Disclosure.  For purposes of
Section 1938 of the California Civil Code, as of the date of this Third
Amendment, Tenant acknowledges having been advised by Landlord that the Project
has not been inspected by a certified access specialist.

 

10.                               OFAC.  Tenant and all beneficial owners of
Tenant are currently (a) in compliance with and shall at all times during the
Term of the Lease remain in compliance with the regulations of the Office of
Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any
statute, executive order, or regulation relating thereto (collectively, the
“OFAC Rules”), (b) not listed on, and shall not during the term of the Lease be
listed on, the Specially Designated Nationals and Blocked Persons List, Foreign
Sanctions Evaders List or the Sectoral Sanctions Identifications List, which are
all maintained by OFAC and/or on any other similar list maintained by OFAC or
other governmental authority pursuant to any authorizing statute, executive
order, or regulation, and (c) not a person or entity with whom a U.S. person is
prohibited from conducting business under the OFAC Rules.

 

11.                               Brokers.  Landlord and Tenant each represents
and warrants that it has not dealt with any broker, agent or other person
(collectively, “Broker”) in connection with the transaction reflected in this
Third Amendment and that no Broker brought about this transaction. Landlord and
Tenant each hereby agree to indemnify and hold the other harmless from and
against any claims by any Broker claiming a commission or other form of
compensation by virtue of having dealt with Tenant or Landlord, as applicable,
with regard to this Third Amendment.

 

12.                               Miscellaneous.

 

a.             This Third Amendment is the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior and
contemporaneous oral and written agreements and discussions.  This Third
Amendment may be amended only by an agreement in writing, signed by the parties
hereto.

 

b.             This Third Amendment is binding upon and shall inure to the
benefit of the parties hereto, and their respective successors and assigns.

 

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c.             This Third Amendment may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.  The signature
page of any counterpart may be detached therefrom without impairing the legal
effect of the signature(s) thereon provided such signature page is attached to
any other counterpart identical thereto except having additional signature
pages executed by other parties to this Third Amendment attached thereto.

 

d.             Except as amended and/or modified by this Third Amendment, the
Lease is hereby ratified and confirmed and all other terms of the Lease shall
remain in full force and effect, unaltered and unchanged by this Third
Amendment.  In the event of any conflict between the provisions of this Third
Amendment and the provisions of the Lease, the provisions of this Third
Amendment shall prevail.  Whether or not specifically amended by this Third
Amendment, all of the terms and provisions of the Lease are hereby amended to
the extent necessary to give effect to the purpose and intent of this Third
Amendment.

 

[Signatures on next page.]

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed the Third Amendment as of
the day and year first above written.

 

 

TENANT:

 

 

 

CORVUS PHARMACEUTICALS, INC.,

 

a Delaware corporation

 

 

 

By:

/s/ Leiv Lea

 

Its:

CFO

 

 

 

 

 

LANDLORD:

 

 

 

ARE-819/863 MITTEN ROAD, LLC,

 

a Delaware limited liability company

 

 

 

By:

ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

 

 

a Delaware limited partnership,

 

 

managing member

 

 

 

 

 

By:

ARE-QRS CORP.,

 

 

 

a Maryland corporation,

 

 

 

general partner

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Eric S. Johnson

 

 

 

Its:

Senior Vice President

 

 

 

 

RE Legal Affairs

 

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Exhibit A

 

Third Expansion Premises

 

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Exhibit B

 

Surrender Premises

 

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Exhibit C

 

Work Letter

 

THIS WORK LETTER (this “Work Letter”) by and between ARE-819/863 MITTEN ROAD,
LLC, a Delaware limited liability company (“Landlord”), and CORVUS
PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”), is incorporated into
that certain Lease Agreement dated as of January 27, 2015, as amended by that
certain First Amendment to Lease dated as of March 19, 2015, as further amended
by that certain Second Amendment to Lease dated as of August 20, 2015, and as
further amended by that certain Third Amendment to Lease of even date herewith
(the “Third Amendment”) (the “Lease”).  Any initially capitalized terms used but
not defined herein shall have the meanings given them in the Lease.

 

1.             General Requirements.

 

(a)           Tenant’s Authorized Representative.  Tenant designates Leiv Lea
(“Tenant’s Representative”) as the only person authorized to act for Tenant
pursuant to this Work Letter.  Landlord shall not be obligated to respond to or
act upon any request, approval, inquiry or other communication (“Communication”)
from or on behalf of Tenant in connection with this Work Letter unless such
Communication is in writing from Tenant’s Representative.  Tenant may change
Tenant’s Representative at any time upon not less than 5 business days advance
written notice to Landlord.

 

(b)           Landlord’s Authorized Representative.  Landlord designates Todd
Miller and Hong Leahey (either such individual acting alone, “Landlord’s
Representative”) as the only persons authorized to act for Landlord pursuant to
this Work Letter.  Tenant shall not be obligated to respond to or act upon any
request, approval, inquiry or other Communication from or on behalf of Landlord
in connection with this Work Letter unless such Communication is in writing from
Landlord’s Representative.  Landlord may change either Landlord’s Representative
at any time upon not less than 5 business days advance written notice to Tenant.

 

(c)           Architects, Consultants and Contractors.  Landlord and Tenant
hereby acknowledge and agree that (i) the architect (the “TI Architect”) for the
Tenant Improvements (as defined in Section 2(a) below) shall be DGA, (ii) the
general contractor for the Tenant Improvements shall be Landmark Builders, and
(iii) any subcontractors for the Tenant Improvements shall be selected by
Tenant, subject to Landlord’s approval, which approval shall not be unreasonably
withheld, conditioned or delayed.  Landlord shall be named a third party
beneficiary of any contract entered into by Tenant with the TI Architect, any
consultant, any contractor or any subcontractor, and of any warranty made by any
contractor or any subcontractor in connection with the Tenant Improvements.

 

2.             Tenant Improvements.

 

(a)           Tenant Improvements Defined.  As used herein, “Tenant
Improvements” shall mean all improvements to the Existing Premises and the Third
Expansion Premises desired by Tenant of a fixed and permanent nature and
reflected on the TI Construction Drawings (as defined in Section 2(c) below). 
Other than funding the TI Allowance (as defined below) as provided herein,
Landlord shall not have any obligation whatsoever with respect to the finishing
of the Third Expansion Premises for Tenant’s use and occupancy.

 

(b)           Tenant’s Space Plans.  Tenant shall deliver to Landlord schematic
drawings and outline specifications (the “TI Design Drawings”) detailing
Tenant’s requirements for the Tenant Improvements within 10 days of the date
hereof.  Not more than 10 days thereafter, Landlord shall deliver to Tenant the
written objections, questions or comments of Landlord and the TI Architect with
regard to the TI Design Drawings.  Tenant shall cause the TI Design Drawings to
be revised to address such written comments

 

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and shall resubmit said drawings to Landlord for approval within 10 days
thereafter.  Such process shall continue until Landlord has approved the TI
Design Drawings.

 

(c)           Working Drawings.  Not later than 15 business days following the
approval of the TI Design Drawings by Landlord, Tenant shall cause the TI
Architect to prepare and deliver to Landlord for review and comment construction
plans, specifications and drawings for the Tenant Improvements (“TI Construction
Drawings”), which TI Construction Drawings shall be prepared substantially in
accordance with the TI Design Drawings.  Tenant shall be solely responsible for
ensuring that the TI Construction Drawings reflect Tenant’s requirements for the
Tenant Improvements.  Landlord shall deliver its written comments on the TI
Construction Drawings to Tenant not later than 10 business days after Landlord’s
receipt of the same; provided, however, that Landlord may not disapprove any
matter that is consistent with the TI Design Drawings.  Tenant and the TI
Architect shall consider all such comments in good faith and shall, within 10
business days after receipt, notify Landlord how Tenant proposes to respond to
such comments.  Any disputes in connection with such comments shall be resolved
in accordance with Section 2(d) hereof.  Provided that the design reflected in
the TI Construction Drawings is consistent with the TI Design Drawings, Landlord
shall approve the TI Construction Drawings submitted by Tenant.  Once approved
by Landlord, subject to the provisions of Section 4 below, Tenant shall not
materially modify the TI Construction Drawings except as may be reasonably
required in connection with the issuance of the TI Permit (as defined in
Section 3(a) below).

 

(d)           Approval and Completion.  If any dispute regarding the design of
the Tenant Improvements is not settled within 10 business days after notice of
such dispute is delivered by one party to the other, Tenant may make the final
decision regarding the design of the Tenant Improvements, provided (i) Tenant
acts reasonably and such final decision is either consistent with or a
compromise between Landlord’s and Tenant’s positions with respect to such
dispute, (ii) that all costs and expenses resulting from any such decision by
Tenant shall be payable out of the TI Fund (as defined in Section 5(d) below),
and (iii) Tenant’s decision will not affect the base Building, structural
components of the Building or any Building systems (in which case Landlord shall
make the final decision).  Any changes to the TI Construction Drawings following
Landlord’s and Tenant’s approval of same requested by Tenant shall be processed
as provided in Section 4 hereof.

 

3.             Performance of the Tenant Improvements.

 

(a)           Commencement and Permitting of the Tenant Improvements.  Tenant
shall commence construction of the Tenant Improvements upon obtaining and
delivering to Landlord a building permit (the “TI Permit”) authorizing the
construction of the Tenant Improvements consistent with the TI Construction
Drawings approved by Landlord.  The cost of obtaining the TI Permit shall be
payable from the TI Fund.  Landlord shall assist Tenant in obtaining the TI
Permit.  Prior to the commencement of the Tenant Improvements, Tenant shall
deliver to Landlord a copy of any contract with Tenant’s contractors (including
the TI Architect), and certificates of insurance from any contractor performing
any part of the Tenant Improvement evidencing industry standard commercial
general liability, automotive liability, “builder’s risk”, and workers’
compensation insurance.  Tenant shall cause the general contractor to provide a
certificate of insurance naming Landlord, Alexandria Real Estate Equities, Inc.,
and Landlord’s lender (if any) as additional insureds for the general
contractor’s liability coverages required above.

 

(b)           Selection of Materials, Etc.  Where more than one type of material
or structure is indicated on the TI Construction Drawings approved by Tenant and
Landlord, the option will be within Tenant’s reasonable discretion if the matter
concerns the Tenant Improvements, and within Landlord’s sole and absolute
subjective discretion if the matter concerns the structural components of the
Building or any Building system.

 

(c)           Tenant Liability.  Tenant shall be responsible for correcting any
deficiencies or defects in the Tenant Improvements.

 

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(d)           Substantial Completion.  Tenant shall substantially complete or
cause to be substantially completed the Tenant Improvements in a good and
workmanlike manner, in accordance with the TI Permit subject, in each case, to
Minor Variations and normal “punch list” items of a non-material nature which do
not interfere with the use of the Premises (“Substantial Completion” or
“Substantially Complete”).  Upon Substantial Completion of the Tenant
Improvements, Tenant shall require the TI Architect and the general contractor
to execute and deliver, for the benefit of Tenant and Landlord, a Certificate of
Substantial Completion in the form of the American Institute of Architects
(“AIA”) document G704.  For purposes of this Work Letter, “Minor Variations”
shall mean any modifications reasonably required:  (i) to comply with all
applicable Legal Requirements and/or to obtain or to comply with any required
permit (including the TI Permit); (ii) to comport with good design, engineering,
and construction practices which are not material; or (iii) to make reasonable
adjustments for field deviations or conditions encountered during the
construction of the Tenant Improvements.

 

4.             Changes.  Any changes requested by Tenant to the Tenant
Improvements after the delivery and approval by Landlord of the TI Design
Drawings, shall be requested and instituted in accordance with the provisions of
this Section 4 and shall be subject to the written approval of Landlord, which
approval shall not be unreasonably withheld, conditioned or delayed.

 

(a)           Tenant’s Right to Request Changes.  If Tenant shall request
changes (“Changes”), Tenant shall request such Changes by notifying Landlord in
writing in substantially the same form as the AIA standard change order form (a
“Change Request”), which Change Request shall detail the nature and extent of
any such Change.  Such Change Request must be signed by Tenant’s
Representative.  Landlord shall review and approve or disapprove such Change
Request within 10 business days thereafter, provided that Landlord’s approval
shall not be unreasonably withheld, conditioned or delayed.

 

(b)           Implementation of Changes.  If Landlord approves such Change and
Tenant deposits with Landlord any Excess TI Costs (as defined in
Section 5(d) below) required in connection with such Change, Tenant may cause
the approved Change to be instituted.  If any TI Permit modification or change
is required as a result of such Change, Tenant shall promptly provide Landlord
with a copy of such TI Permit modification or change.

 

5.             Costs.

 

(a)           Budget For Tenant Improvements.  Before the commencement of
construction of the Tenant Improvements, Tenant shall obtain a detailed
breakdown, by trade, of the costs incurred or that will be incurred, in
connection with the design and construction of the Tenant Improvements (the
“Budget”), and deliver a copy of the Budget to Landlord for Landlord’s approval,
which shall not be unreasonably withheld or delayed.  The Budget shall be based
upon the TI Construction Drawings approved by Landlord.  If the Budget is
greater than the TI Allowance, Tenant shall deposit with Landlord the
difference, in cash, prior to the commencement of construction of the Tenant
Improvements, for disbursement by Landlord as described in Section 5(d).

 

(b)           TI Allowance.  Landlord shall provide to Tenant a tenant
improvement allowance (collectively, the “TI Allowance”) as follows:

 

1.             a “Tenant Improvement Allowance” in the maximum amount of $90,500
in the aggregate, which is included in the Base Rent set forth in
Section 5(a) or 5(b) of the Third Amendment; and

 

2.             an “Additional Tenant Improvement Allowance” in the maximum
amount of $250,000 in the aggregate, which shall, to the extent used, result in
TI Rent as set forth in Section 5(c) of the Third Amendment.

 

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Before commencing the Tenant Improvements, Tenant shall notify Landlord how much
Additional Tenant Improvement Allowance Tenant has elected to receive from
Landlord.  Such election shall be final and binding on Tenant, and may not
thereafter be modified without Landlord’s consent, which may be granted or
withheld in Landlord’s sole and absolute subjective discretion The TI Allowance
shall be disbursed in accordance with this Work Letter.

 

Tenant shall have no right to the use or benefit (including any reduction to
Base Rent) of any portion of the TI Allowance not required for the construction
of (i) the Tenant Improvements described in the TI Construction Drawings
approved pursuant to Section 2(d) or (ii) any Changes pursuant to Section 4. 
Tenant shall have no right to any portion of the TI Allowance that is not
disbursed before the last day of the month that is 12 months after the Third
Expansion Premises Commencement Date.

 

(c)           Costs Includable in TI Fund.  The TI Fund shall be used solely for
the payment of design, permits and construction costs in connection with the
construction of the Tenant Improvements, including, without limitation, the cost
of electrical power and other utilities used in connection with the construction
of the Tenant Improvements, the cost of preparing the TI Design Drawings and the
TI Construction Drawings, all costs set forth in the Budget, and the cost of
Changes (collectively, “TI Costs”).  Notwithstanding anything to the contrary
contained herein, the TI Fund shall not be used to purchase any furniture,
personal property or other non-Building system materials or equipment,
including, but not be limited to, Tenant’s voice or data cabling, non-ducted
biological safety cabinets and other scientific equipment not incorporated into
the Tenant Improvements.  Landlord shall not be entitled to any construction or
supervision fee in connection with the Tenant Improvements.

 

(d)           Excess TI Costs.  Landlord shall have no obligation to bear any
portion of the cost of any of the Tenant Improvements except to the extent of
the TI Allowance.  If at any time and from time-to-time, the remaining TI Costs
under the Budget exceed the remaining unexpended TI Allowance, Tenant shall
deposit with Landlord, as a condition precedent to Landlord’s obligation to fund
the TI Allowance, 100% of the then current TI Cost in excess of the remaining TI
Allowance (“Excess TI Costs”).  If Tenant fails to deposit, or is late in
depositing any Excess TI Costs with Landlord, Landlord shall have all of the
rights and remedies set forth in the Lease for nonpayment of Rent (including,
but not limited to, the right to interest at the Default Rate and the right to
assess a late charge).  For purposes of any litigation instituted with regard to
such amounts, those amounts will be deemed Rent under the Lease.  The TI
Allowance and Excess TI Costs is herein referred to as the “TI Fund.”  Funds
deposited by Tenant shall be the first thereafter disbursed to pay TI Costs. 
Notwithstanding anything to the contrary set forth in this Section 5(d), Tenant
shall be fully and solely liable for TI Costs and the cost of Minor Variations
in excess of the TI Allowance.  If upon Substantial Completion of the Tenant
Improvements and the payment of all sums due in connection therewith there
remains any undisbursed portion of the TI Fund, Tenant shall be entitled to such
undisbursed TI Fund solely to the extent of any Excess TI Costs deposit Tenant
has actually made with Landlord.

 

(e)           Payment for TI Costs.  During the course of design and
construction of the Tenant Improvements, Landlord shall reimburse Tenant for TI
Costs once a month against a draw request in Landlord’s standard form,
containing evidence of payment of such TI Costs by Tenant and such
certifications, lien waivers (including a conditional lien release for each
progress payment and unconditional lien releases for the prior month’s progress
payments), inspection reports and other matters as Landlord customarily obtains,
to the extent of Landlord’s approval thereof for payment, no later than 30 days
following receipt of such draw request.  Upon completion of the Tenant
Improvements (and prior to any final disbursement of the TI Fund), Tenant shall
deliver to Landlord:  (i) sworn statements setting forth the names of all
contractors and first tier subcontractors who did the work and final,
unconditional lien waivers from all such contractors and first tier
subcontractors; (ii) as-built plans (one copy in print format and two copies in
electronic CAD format) for such Tenant Improvements; (iii) a certification of
substantial completion in Form AIA G704, (iv) a certificate of occupancy for the
Third Expansion Premises; and (v) copies of all operation and maintenance
manuals and warranties affecting the Premises.

 

C-4

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6.             Miscellaneous.

 

(a)           Consents.  Whenever consent or approval of either party is
required under this Work Letter, that party shall not unreasonably withhold,
condition or delay such consent or approval, except as may be expressly set
forth herein to the contrary.

 

(b)           Modification.  No modification, waiver or amendment of this Work
Letter or of any of its conditions or provisions shall be binding upon Landlord
or Tenant unless in writing signed by Landlord and Tenant.

 

(c)           Removal. Notwithstanding anything to the contrary contained in the
Lease or this Work Letter, Tenant shall not be required to remove or restore the
Tenant Improvements constructed by Tenant pursuant to this Work Letter at the
expiration or earlier termination of the Term, nor shall Tenant have any right
to remove or restore any such Tenant Improvements at any time.

 

(d)           Default.  Notwithstanding anything to the contrary contained in
the Lease or this Work Letter, Landlord shall not have any obligation to fund
any portion of the TI Allowance during any period that Tenant is in Default
under the Lease.

 

C-5

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Exhibit D

 

Conversion Space

 

[g114891kg09i001.gif]

 

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