Exhibit 10.66
Confidential
 
SUB-SUBLEASE
THIS SUB-SUBLEASE (herein referred to as this “Sub-Sublease”) dated for
reference purposes only as of August 4, 2006, is made between CYTOKINETICS,
INC., a Delaware corporation (“Sublessor”), and PORTOLA PHARMACEUTICALS, INC., a
Delaware corporation (“Sublessee”).
RECITALS

  A.   Sublessor is the subtenant under a Sublease dated, for reference
purposes, November 23, 2005, as to which Millennium Pharmaceuticals, Inc., a
Delaware corporation (“Master Tenant”) is the sub-landlord (the “Sublease”),
with respect to certain premises (the “Subleased Premises”) consisting of the
entire building located at 256 E. Grand Avenue in the City of South San
Francisco as more particularly described in the Sublease, a true and correct
copy of which is attached hereto as Exhibit A.     B.   Master Tenant, as
successor in interest to COR Therapeutics, Inc., is the tenant under that
certain lease dated as of July 1, 2001 (hereinafter, the “Master Lease”),
pursuant to which Britannia Pointe Grand Limited Partnership (“Master Landlord”)
leased to Master Tenant certain real property located at 256, 260, and 270 East
Grand Avenue in South San Francisco, California (the “Master Premises”), as more
particularly described in the Master Lease, a true and correct copy of which is
attached as Exhibit A to the Sublease.     C.   Sublessor desires to
sub-sublease to Sublessee, and Sublessee desires to sub-sublease from Sublessor,
a portion of the Subleased Premises consisting of approximately 2,500 rentable
square feet of office space, as more particularly set forth on the floor plan
attached hereto as Exhibit B.

    NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sublessor and Sublessee agree as
follows:

Section 1. Sub-Sublease
1.1 Premises
Sublessor subleases to Sublessee on the terms and conditions in this
Sub-Sublease the following portion of the Subleased Premises (“Sub-Subleased
Premises”): Approximately 2,500 rentable square feet, as depicted on Exhibit C
attached hereto.
In addition, Sublessee shall have a revocable license to use all existing office
/ cubicle furniture in the Sub-Subleased Premises, at no additional cost.
Sublessor makes no representation or warranty as to the condition of any
office/cubicle furniture.
Subject to the prior approval of and coordination with Sublessor’s Information
Technology Department, Sublessee shall have a revocable license for the purpose
of access to the 2nd floor Information Technology (“IT”) room for the purposes
of connecting its data / telephony communications cables, at Sublessee’s sole
expense, provided that all Sublessee personnel and contractors must be
accompanied by Sublessor’s IT personnel at all times while exercising such
access. Sublessee shall use Sublessor’s cabling contractor, TMS, to complete any
cabling work necessary for Sublessee’s use at Sublessee’s cost; no other
Sublessee contractors shall be provided access to the IT room unless otherwise
agreed by Sublessee. Sublessee shall provide Sublessor with its requirements for
any such work reasonably in advance.
Sublessee shall have the right to use, in common with others, the available
on-site surface parking, at the ration of 2.8 per 1,000 rentable square feet, at
no additional cost.

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1.2 Condition.
Sublessor shall deliver the Sub-Subleased Premises in good working order and
repair, but otherwise in strictly “AS IS” condition without warranty,
representation, or obligation for alterations or improvements whatsoever.
Section 2. Term
The term of this Sub-Sublease (the “Term”) will commence on (a) August 1, 2006,
or (b) the date that Master Tenant and Master Landlord consent to this
Sub-Sublease, whichever occurs later (“Commencement Date”); and will end on
October 31, 2006 (“Termination Date”), unless earlier terminated pursuant to the
terms hereof, of the Sublease, or of the Master Lease. Possession of the
Premises (“Possession”) will be delivered to Sublessee upon mutual execution of
this Sub-Sublease and approval of Sublessor’s Board of Directors. If for any
reason Sublessor does not deliver Possession to Sublessee on the Commencement
Date, Sublessor will not be subject to any liability for this failure, the
Termination Date will not be extended by the delay, and the validity of this
Sub-Sublease will not be impaired. Rent will be abated until delivery of
Possession. If Sublessee takes Possession prior to the Commencement Date, such
early Possession will be subject to all of the provisions of this Sub-Sublease,
including, without limitation, the payment of Rent. In the event that Sublessee
remains in possession of the Sub-Subleased Premises after the Termination Date,
this Sub-Sublease shall continue as a tenancy from month to month, and either
party may terminate the same upon sixty (60) days advance written notice to the
other. Furthermore, if this Sub-Sublease does convert to a month-to-month
tenancy, then on the first (and each subsequent) anniversary of the Commencement
Date, the Rent payable hereunder shall increase by three (3%) percent.
Section 3. Rent
Sublessee will pay to Sublessor as monthly Base Rent, without deduction, setoff,
notice, or demand, at 256 Grand Avenue, South San Francisco, CA, or at any other
place Sublessor designates by notice to Sublessee, the sum of Four Thousand
Three Hundred Seventy-Five ($4,375.00) Dollars per month, on a “full service”
basis. Sublessee shall not be responsible for any operating expenses or
pass-through expenses of any kind.
Section 4. Security Deposit
Sublessee shall deposit with Sublessor upon Sublessor’s delivery of Possession a
cash Security Deposit in the amount of $4,375.00 as security for Sublessee’s
faithful performance of Sublessee’s obligations under this Sub-Sublease. If
Sublessee fails to pay Rent or other charges due hereunder, or otherwise
defaults under this Sub-Sublease, Sublessor may use, apply or retain all or any
portion of said Security Deposit for the payment of any amount due Sublessor or
to reimburse or compensate Sublessor for any liability, cost, expense, loss or
damage (including attorneys’ fees) which Sublessor may suffer or incur by reason
thereof, including payment of Rent following Sublessee’s default and vacating of
the Premises, and Sublessee hereby waives the provisions of Cal. Civil Code
§1950.7. If Sublessor uses or applies all or any portion of said Security
Deposit, Sublessee shall within ten (10) days after written request therefor
deposit monies with Sublessor sufficient to restore said Security Deposit to the
full amount required by this Sub-Sublease.
Section 5. Use of Premises
The Premises will be used and occupied only for office use; and for no other use
or purpose.
Section 6. Assignment and Subletting.
Sublessee will not assign this Sub-Sublease or further sublet all or any part of
the Sub-Subleased Premises.

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Section 7. Other Provisions of Sub-Sublease.
7.1 Incorporation.
All applicable terms and conditions of the Sublease are incorporated into and
made a part of this Sub-Sublease, including but not limited to those portions of
the Master Lease as are incorporated therein, except to the extent inconsistent
with the business terms hereof. For purposes hereof, with respect to the
Sublease, the term “Sublessee” shall be substituted for the term “Subtenant,”
“Sublessor” shall be substituted for the term “Sublandlord,” and the
“Sub-Subleased Premises” shall be substituted for the term “Subleased Premises.”
Notwithstanding the foregoing: (a) to the extent that any obligation rests upon
the Master Landlord pursuant to the Master Lease, such obligation shall remain
that of Master Landlord and not Sublessor; and (b) to the extent that any
obligation rests upon Master Tenant pursuant to the Sublease, such obligation
shall remain that of Master Tenant and not Sublessor.
Sublessee assumes and agrees to perform the Sublessor’s obligations under the
Sublease during the Term to the extent that these obligations are applicable to
the Sub-Subleased Premises. However, the obligation to pay Rent will be
considered performed by Sublessee to the extent and in the amount rent is paid
to Sublessor in accordance with Section 3 of this Sub-Sublease.
7.2 Performance.
Sublessee will not commit or suffer any act or omission that will violate any of
the provisions of the Master Lease or the Sublease.
Section 8. Hazardous Substances
8.1 Use of Hazardous Substances.
Sublessor has no knowledge of the presence of any Hazardous Substances (as used
in Section 11.6(a) of the Master Lease) in, on or about the Sub-Subleased
Premises. Sublessee shall not cause or permit any Hazardous Substance to be
generated, brought onto, used, stored, or disposed of in or about the
Sub-Subleased Premises by Sublessee or its agents, employees, contractors,
subtenants, or invitees except in strict compliance with all Environmental Laws,
the terms of the Master Lease and the terms of the Sublease. As used herein,
“Environmental Laws” shall mean and include all applicable statutes, ordinances,
and regulations in effect during the Sub-Sublease Term that relate to public
health and safety and protection of the environment.
8.2 Indemnification.
Sublessee shall, at Sublessee’s sole expense and with counsel reasonably
acceptable to Sublessor, indemnify, defend, and hold harmless Master Landlord,
Master Tenant, Sublessor and Sublessor’s shareholders, directors, officers,
employees, partners, affiliates, and agents with respect to all losses arising
out of or resulting from the release of any Hazardous Substance in or about the
Sub-Subleased Premises or the Building, or the violation of any Environmental
Law, by Sublessee or Sublessee’s agents, contractors, or invitees.
Section 9. Insurance
Sublessee shall provide the insurance required of Master Tenant under the Master
Lease and that required of Sublessor under the Sublease, and shall name each of
Master Landlord, Master Tenant, and Sublessor as additional insureds.
Section 10. Attorney Fees.
If either party commences an action against the other in connection with this
Sub-Sublease, the prevailing party will be entitled to recover costs of suit and
reasonable attorney fees.
Section 11. Brokers.
Sublessor and Sublessee each warrant that they have not dealt with any real
estate broker in connection with this transaction except for NAI BT COMMERCIAL,
representing Sublessor, and CB RICHARD ELLIS, representing Sublessee. Sublessor
and Sublessee each agree to indemnify, defend,

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Confidential
 
and hold the other harmless against any damages incurred as a result of the
breach of the warranty contained in this Sub-Sublease.
Section 12. Notices.
All notices and demands that may be required or permitted by either party to the
other will be in writing and personally delivered at the Subleased (or
Sub-Subleased, as applicable) Premises.
Section 13. Successors and Assigns.
This Sub-Sublease will be binding on and inure to the benefit of the parties to
it, their heirs, executors, administrators, successors in interest, and assigns.
Section 14. Consent
Sublessor and Sublessee recognize that certain actions Sublessee may wish to
undertake pursuant to this Sub-Sublease Agreement will require, in addition to
or in lieu of the consent of Sublessor, the consent of the Master Tenant and
that of the Master Landlord.
Section 15. Entire Agreement
This Sub-Sublease sets forth all the agreements between Sublessor and Sublessee
concerning the Subleased Premises, and there are no other agreements either oral
or written other than as set forth in this Sub-Sublease.
Section 16. Time of Essence
Time is of the essence in this Sub-Sublease.
Section 17. Consent by Master Landlord and Master Tenant
THIS SUB-SUBLEASE WILL HAVE NO EFFECT UNLESS CONSENTED TO BY MASTER LANDLORD AND
MASTER TENANT.
Section 18. Governing Law
This Sub-Sublease will be governed by and construed in accordance with
California law.
Section 19. Counterparts
This Sub-Sublease may be signed in two or more counterparts, each of which shall
be deemed an original and all of which shall constitute one agreement.

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Confidential
 
IN WITNESS WHEREOF, the parties have executed this Sub-Sublease:

SUBLESSEE:
PORTOLA PHARMACEUTICALS, INC.

By      /s/ Carol Olson
 

Name Printed:    Carol Olson
 

Its:    EVP
 

Date:    August 4, 2006
 

SUBLESSOR:
CYTOKINETICS, INC.

By      /s/ Robert I. Blum
 

Name Printed:    Robert I. Blum
 

Its:    President
 

Date:    August 4, 2006
 

 

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Confidential
 
EXHIBIT A
Sublease
[Attached]

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SUBLEASE
     This Sublease (“Sublease”), dated November 23rd, 2005 for reference
purposes only, is entered into by and between Millennium Pharmaceuticals, Inc. a
Delaware corporation (“Sublandlord”), and Cytokinetics, Incorporated, a Delaware
corporation (“Subtenant”).
Recitals
     A. Sublandlord, as successor in interest to COR Therapeutics, Inc., leases
certain premises (the “Master Premises”) consisting of approximately 136,242
rentable square feet in four buildings in South San Francisco, California more
particularly described as (i) the one-story building commonly known as 256 East
Grand Avenue, (ii) the two-story building commonly know as 260 East Grand
Avenue, (iii) Suites 20, 26, 35, 45, 50 and 70 in the one-story building
commonly known as 250 East Grand Avenue, and (iv) the westerly portion of the
two-story building commonly known as 270 East Grand Avenue, all in the project
known as Britannia Pointe Grand (and described in the Master Lease as the
“Center”), pursuant to a certain Lease, dated as of July 1, 2001 between
Britannia Pointe Grand Limited Partnership, as Landlord (the “Master Landlord”),
and Sublandlord’s predecessor in interest, COR Therapeutics, Inc., as tenant, a
copy of which is attached hereto as Exhibit A (the “Master Lease”). Capitalized
terms herein not otherwise defined herein shall have the same meanings as
provided in the Master Lease.
     Sublandlord desires to sublease to Subtenant, and Subtenant desires to
sublease from Sublandlord a portion of the Master Premises consisting of the
entire building located at 256 E. Grand Avenue (the “Building”) containing
approximately 31,392 rentable square feet of office and laboratory as shown on
the layout attached at Exhibit B hereto (the “Sublease Premises”) upon the terms
and conditions provided for herein.
     Now, Therefore, in consideration of the mutual covenants and conditions
contained herein, Sublandlord and Subtenant covenant and agree as follows:
Agreement
     1. Sublease Premises; Service Yard; FF&E License And Deemed Transfer. On
and subject to the terms and conditions below, Sublandlord hereby leases to
Subtenant, and Subtenant hereby leases from Sublandlord, the Sublease Premises.
If Master Landlord grants its consent thereto, Subtenant may, at its sole cost
and expense, construct barriers, in a location to be agreed upon by both Master
Landlord and Sublandlord, to create an exterior service yard (the “Service
Yard”). Subtenant shall comply with all the terms of this Sublease and Master
Lease relevant to the construction of such Service Yard. In addition to
subleasing the Sublease Premises to Subtenant, Sublandlord also grants to
Subtenant a license to use Sublandlord’s furniture, fixtures and equipment
located within the Sublease Premises (“FF&E”), a list of which is attached
hereto as Exhibit C. Subtenant shall accept the FF&E in their current condition
AS IS and WITH ALL FAULTS without any representation or warranty by Sublandlord.
The license to use the FF&E shall run concurrently with and be irrevocable until
termination of this Sublease. Subtenant’s insurance as required under the
Sublease shall

 

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cover the FF&E for its full replacement value, and Subtenant shall maintain the
FF&E in good condition during the term hereof. Upon expiration of the Term of
this Sublease, title to that portion of the FF&E listed in Section II of
Exhibit C (the “Furniture”) that is not purchased by Landlord pursuant to
Section 9.2(g) of the Master Lease shall be deemed transferred to Subtenant and
Subtenant shall be solely responsible for removing it from the Sublease
Premises.
     2. Term. The term of this Sublease (the “Term”) shall commence on the later
of: (a) November 15, 2005, or (b) the date Sublandlord obtains the consent of
Master Landlord (the “Commencement Date”), and shall expire, unless sooner
terminated pursuant to any provision hereof, on June 30, 2011 (the “Expiration
Date”).
     3. Possession. If for any reason Sublandlord cannot deliver possession of
the Sublease Premises to Subtenant on the Commencement Date, Sublandlord shall
not be subject to any liability therefor, nor shall such failure affect the
validity of this Sublease or the obligations of Subtenant hereunder or extend
the term hereof, provided that no rent shall be due hereunder until possession
of the Sublease Premises has been delivered to Subtenant.
     4. Rent. Commencing on March 1, 2006 (the “Rent Commencement Date”) and
continuing throughout the term of this Sublease, Subtenant shall pay monthly
rent consisting of Base Rent and Additional Rent (as defined below)
(collectively, “Rent”) to Sublandlord in the following amounts:
     4.1 Base Rent. Beginning on the Rent Commencement Date, Subtenant shall pay
to Sublandlord monthly base rent (“Base Rent”) as follows:

     
Commencement Date – 2/28/06:
  $0.00 NNN
3/1/06– 2/28/07:
  $47,250.00 NNN per month
3/1/07 – 2/29/08:
  $72,829.44 NNN per month
3/1/08 – 2/28/09:
  $75,014.32 NNN per month
3/1/09 – 2/2810:
  $77,264.75 NNN per month
3/1/10 – 2/2811:
  $79,582.70 NNN per month
3/1/11 – 6/30/11:
  $81,970.18 NNN per month

     4.2 N/A
     4.3 Additional Rent; Subtenant’s Proportionate Share. Subtenant’s
Proportionate Share shall be calculated by dividing the square footage of the
Sublease Premises by the square footage of the Master Premises, and as of the
Commencement Date, Subtenant’s Proportionate Share shall be 23%. In addition to
Base Rent, commencing on February 1, 2006 Subtenant shall also pay to
Sublandlord its Proportionate Share of all Operating Expenses (as the term
“Operating Expenses” is defined in the Master Lease) and all other costs payable
by Sublandlord under the Master Lease (“Additional Rent”). Additional Rent shall
be payable to Sublandlord as and when payments are due from Sublandlord pursuant
to the Master Lease, but at least five (5) business days prior to the date
Sublandlord must pay such amounts to Master Landlord. This Section 4.3 sets
forth the full extent of Subtenant’s responsibility with respect to any
Operating Expenses.

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     4.4 Direct Costs. Subtenant shall further pay to Sublandlord as Additional
Rent any costs and expenses applicable to the Sublease Premises which are paid
directly by Sublandlord, including, but not limited to, utilities, personal
property taxes and real property taxes.
     4.5 Exclusions. Notwithstanding the foregoing, in the event any amounts
payable by Sublandlord to Master Landlord are (A) due to Subtenant’s breach of
any provision of the Master Lease, (B) due to Subtenant’s negligence or willful
misconduct, or (C) are for the sole benefit of Subtenant, then such amounts
shall not be prorated between Sublandlord and Subtenant and shall be the sole
responsibility of Subtenant.
     4.6 Payment of Rent. If the Rent Commencement Date does not fall on the
first day of a calendar month, Base Rent for the first month for which Base Rent
is due shall be prorated on a daily basis based upon a calendar month. Rent
shall be payable to Sublandlord in lawful money of the United States, in
advance, without prior notice, demand, or offset, on or before the first day of
each calendar month during the term hereof. All Rent shall be paid to
Sublandlord at the address specified for notices to Sublandlord in Section 14
below.
     4.7 Late Charge. If Subtenant fails to pay any rental or other amounts due
to Sublandlord hereunder before the fifth (5th) day after such amounts are due,
such unpaid amount shall bear interest for the benefit of Sublandlord at a rate
equal to the lesser of fifteen percent (15%) per annum or the maximum permitted
by law, from the date due until the date of payment. In addition to such
interest, Subtenant shall pay to Sublandlord a late charge in an amount equal to
six (6%) percent of the delinquent amount not paid to Sublandlord within five
days of the date such amounts are due. Subtenant acknowledges that the late
payments of rental or other amounts due from Subtenant to Sublandlord will cause
Sublandlord to incur costs not contemplated by this Sublease, including, without
limitation, late fees, interest, processing and accounting charges which may be
imposed on Sublandlord by the terms of the Master Lease. Subtenant further
acknowledges that is it extremely difficult and impractical to fix the exact
amount of such costs and that the late charge set forth in this Section
represents a fair and reasonable estimate thereof. Acceptance of any late charge
by Sublandlord shall not constitute a waiver of Subtenant’s default with respect
to overdue Rent or other amounts, nor shall such acceptance prevent Sublandlord
from exercising any other rights and remedies available to it. Acceptance of
Rent or other payments by Sublandlord shall not constitute a waiver of late
charge or interest accrued with respect to such Rent or other payments or any
prior installments thereof, nor of any other default by Subtenant, whether
monetary or non-monetary in nature, remaining uncured at the time of such
acceptance of Rent or other payments. The foregoing late charge and interest
shall be in lieu of and not in addition to any late charge and interest payable
pursuant to the terms of the Master Lease.
     4.8 Payment of First Month’s Rent Upon Execution. Upon execution of this
Sublease, Subtenant shall deliver to Sublandlord the sum of Forty Seven Thousand
Two Hundred Fifty Dollars ($47,250.00), representing the Base Rent for the first
month following the Rent Commencement Date. In the event that Sublandlord has
not secured the consent of Master Landlord to this Sublease within thirty
(30) days following mutual execution hereof, then Subtenant shall have the right
to terminate this Sublease by delivery of written notice thereof to Sublandlord,
in which event Sublandlord shall restore all such sums to Subtenant within ten
(10) days following delivery of such notice of termination.

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     5. Security Deposit. Upon execution of this Sublease, Subtenant shall
deposit with Sublandlord the sum of Ninety Five Thousand Dollars ($95,000,00) as
a security deposit (“Security Deposit”), in cash or, at Subtenant’s option, in
the form of a letter of credit as more specifically described in Section 5.1
below. Subtenant hereby grants to Sublandlord a security interest in the
Security Deposit, including but not limited to replenishments thereof. If
Subtenant fails to pay Rent or other charges when due under this Sublease, or
fails to perform any of its other obligations hereunder, Sublandlord may use or
apply all or any portion of the Security Deposit for the payment of any Rent or
other amount then due hereunder and unpaid, for the payment of any other sum for
which Sublandlord may become obligated by reason of Subtenant’s default or
breach, or for any loss or damage sustained by Sublandlord as a result of
Subtenant’s default or breach. If Sublandlord so uses any portion of the
Security Deposit, Subtenant shall restore the Security Deposit to the full
amount originally deposited within ten (10) days after Sublandlord’s written
demand. Sublandlord shall not be required to keep the Security Deposit separate
from its general accounts, and shall have no obligation or liability for payment
of interest on the Security Deposit. The Security Deposit, or so much thereof as
had not theretofore been applied by Sublandlord, shall be returned to Subtenant
within thirty (30) days of the expiration or earlier termination of this
Sublease, provided Subtenant has vacated the Sublease Premises.
     5.1 Letter of Credit. At Subtenant’s option, upon execution of this
Sublease, it may post the Security Deposit in the form of an unconditional,
clean, irrevocable, standby letter of credit (the "Letter of Credit”), payable
on sight with the bearer’s draft in the initial amount of Ninety Five Thousand
Dollars ($95,000,00) (the “Initial Amount”) issued by and drawn on an
institution acceptable to Sublandlord (the “Issuing Bank”). The Letter of Credit
shall permit partial drawings and shall state that it shall be payable against
sight drafts presented by Sublandlord, accompanied by Sublandlord’s sworn
statement that a default by Subtenant under this Sublease exists and is
continuing beyond the applicable cure period under this Sublease (including,
without limitation, the Subtenant becoming insolvent as set forth in
Section 16.1(h) of the Master Lease), and that said drawing is in accordance
with the terms and conditions of this Sublease. No other document or
certification from Sublandlord shall be required to negotiate the Letter of
Credit. Sublandlord may designate any bank as Sublandlord’s advising bank for
collection purposes and any sight drafts for the collection of the Letter of
Credit may be presented by the advising bank on Sublandlord’s behalf.
The Letter of Credit shall be for an initial term of at least one (1) year and
shall be acceptable to Sublandlord, in its reasonable discretion, in both form
and substance. The Letter of Credit shall be automatically renewed, without
amendment (except as hereinafter provided), for continuing consecutive one
(1) year (or longer) periods unless, at least thirty (30) days prior to any such
date of expiration, the issuer gives written notice to Sublandlord that the
Letter of Credit will not be renewed, in which case Sublandlord shall be
entitled to draw the full amount of the Letter of Credit. The Letter of Credit
shall not expire until at least the date which is thirty (30) days after the
scheduled expiration date or earlier termination of this Sublease.
Upon a default by Subtenant beyond the applicable cure period under this
Sublease, Sublandlord shall be entitled to draw against the Letter of Credit in
the amount of the delinquent Rent or delinquent amount, expense, loss or damage
that Sublandlord may suffer because of Subtenant’s default. Upon Subtenant’s
insolvency (as defined in Section 16.1(h) of the Master Lease),

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Sublandlord shall be entitled to draw against the entire amount of the Letter of
Credit and any excess amounts shall be held by Sublandlord as collateral for
Sublease obligations. Sublandlord shall not be required to exhaust its remedies
against Subtenant before having recourse to the Letter of Credit or to any other
form of collateral held by Sublandlord or to any other remedy available to
Sublandlord at law or in equity.
The beneficiary designation in the Letter of Credit shall include Sublandlord
and Sublandlord’s “successors and/or assigns as their interests may appear” and
the Letter of Credit shall be assignable and shall include the Issuing Bank’s
acknowledgment and agreement that the Letter of Credit is assignable.
     6. Assignment And Subletting. Subtenant may not assign, sublet, transfer,
pledge, hypothecate or otherwise encumber the Sublease Premises, in whole or in
part, or permit the use or occupancy of the Sublease Premises by anyone other
than Subtenant, unless Subtenant has obtained Sublandlord’s consent thereto
(which shall not be unreasonably withheld) and the consent of Master Landlord
under the terms of the Master Lease. Regardless of Sublandlord’s consent, no
subletting or assignment shall release Subtenant of its obligations hereunder.
Any rent or other consideration payable to Subtenant pursuant to any sublease or
assignment permitted by this paragraph which is in excess of the Rent payable to
Sublandlord pursuant hereto (“Sublease Bonus Rent”) shall be paid divided
equally between Sublandlord and Master Landlord, after payment to Master
Landlord of any amount required to be paid under the Master Lease and payment of
the expenses of subletting, including but not limited to real estate
commissions, attorneys fees, and costs incurred in connection with tenant
improvements required to effectuate the sublease. Notwithstanding anything to
the contrary contained in this Sublease, so long as the net worth of the
Subtenant following the transfer is no less than that of the Subtenant
immediately prior to the transaction or on the date of this Sublease, whichever
is greater, Subtenant may assign this Sublease or sublet the Sublease Premises
without Sublandlord’s consent (but with the consent of the Master Landlord), to
any entity which controls, is controlled by, or is under common control with
Subtenant; to any entity which results from a merger of, reorganization of, or
consolidation with Subtenant; or to any entity which acquires substantially all
of the stock or assets of Subtenant, as a going concern, with respect to the
business that is being conducted in the Premises (hereinafter each a “Permitted
Transfer”).
     7. Condition Of Sublease Premises. Subtenant agrees that (i) Sublandlord
has made no representations or warranties of any kind or nature whatsoever
respecting the Sublease Premises, their condition or suitability for Subtenant’s
use; and (ii) Subtenant agrees to accept the Sublease Premises “as is, where
is,” with all faults, without any obligation on the part of Sublandlord to
modify, improve or otherwise prepare the Sublease Premises for Subtenant’s
occupancy.
     8. Use. Subtenant may use the Sublease Premises only for the purposes as
allowed in the Master Lease, and for no other purpose. Subtenant shall promptly
comply with all applicable statutes, ordinances, rules, regulations, orders,
restrictions of record, and requirements in effect during the term of this
Sublease governing, affecting and regulating the Sublease Premises, including
but not limited to the use thereof. Subtenant shall not use or permit the use of
the Sublease Premises in a manner that will create waste or a nuisance,
interfere with or disturb other tenants in the Center or violate the provisions
of the Master Lease. Subtenant

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acknowledges and agrees that the operation and use of the Sublease Premises may
require that Subtenant apply for and receive licenses and/or permits from
various federal, state and local governments, and Subtenant covenants and agrees
to apply for and receive such licenses and/or permits as are required. Subtenant
shall provide to Sublandlord copies of any such licenses and/or permits to the
extent applicable to the Sublease Premises. Subtenant acknowledges, agrees and
covenants that its occupancy, operation and use of such Sublease Premises and/or
its use and handling of animals shall be in accordance with: (a) all applicable
state and federal regulations; (b) all licenses and permits that either
Subtenant or Sublandlord has received or receives in the future respecting such
Sublease Premises; and (c) all policies and procedures Sublandlord has
reasonably promulgated respecting such Sublease Premises. In the event of any
disagreement concerning the interpretation of such licenses, permits, policies
and/or procedures, the determination of the employee of Sublandlord charged with
ensuring compliance with such licenses, permits, policies and/or procedures
shall be controlling.
     9. Parking; Signage. Subtenant shall have Subtenant’s Proportionate Share
of such parking rights as Sublandlord may have in connection with the Sublease
Premises pursuant to the Master Lease. Subtenant shall have signage rights
pursuant to Section 9.5 of the Master Lease, which is incorporated by reference
by Section 11 below.
     10. Subtenant’s Property. The term “Subtenant’s Property” shall mean all of
the following items, to the extent brought onto the Sublease Premises on or
after the Commencement Date by Subtenant: (i) movable personal property, office
furniture and/or modular office furniture systems, movable equipment and trade
fixtures; (ii) lab benches, built-in fume hoods, plumbing fixtures and other
laboratory casework, but excluding air lines, plumbing, electrical wiring and
other similar systems associated with any of such laboratory casework and/or
built-in fume hoods; (iii) compressors, excluding air lines, plumbing,
electrical wiring and other similar systems associated with any of such
compressors; (iv) vacuum pumps, excluding plumbing, electrical wiring, and other
similar systems associated with any of such vacuum pumps; (v) water purification
systems and/or deionized water systems, excluding plumbing, electrical wiring
and other similar systems associated with any of such water purification or
deionized water systems; (vi) auxiliary generators and transfer switches;
(vii) telephone systems and desk sets, excluding wiring and jacks; (viii)(
computer network systems, excluding wiring and jacks; (ix) security systems,
excluding wiring and jacks; (x) cage and rack washers; (xi) glassware washers;
(xiii) autoclaves; (xiii) animal water systems, excluding plumbing, electrical
wiring and other similar systems associated with such animal water system;
(xiv) freestanding coldrooms; and (xv) movable fume hoods. Under no
circumstances shall anything in this Sublease be construed to mean that any
items which either belong to the Master Landlord pursuant to the terms of the
Master Lease or are subject to the Master Landlord’s right to purchase pursuant
to Section 9.2(b) of the Master Lease be deemed to be included in the definition
of “Subtenant’s Property” unless and until Master Landlord either waives its
purchase option pursuant to Section 9.2(g) of the Master Lease or directs the
Subtenant to remove such items. Subtenant shall have the right to remove at the
termination or expiration of this Sublease any or all of Subtenant’s Property,
provided that Subtenant promptly repairs any damage caused by its removal.
Further, subject to the express written consent of the Master Landlord (which
consent shall be adequately reflected by Master Landlord’s consent to this
Sublease), Subtenant shall also have the right to use Subtenant’s Property as
security for third-party financing during the term of this Sublease, and
Sublandlord agrees to cooperate in all reasonable respects with any

6

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such third-party financing sought by Subtenant against the security of
Subtenant’s Property, including recognition by Sublandlord of the lender’s
rights, subject to reasonable conditions, to foreclose upon and remove
Subtenant’s Property upon a default by Subtenant under such financing.
     11. Incorporation Of Master Lease.
     11.1 Incorporated Provisions. As between Sublandlord and Subtenant, except
as provided in Sections 11.2 and 11.3 below, all of the terms and provisions of
the Master Lease are incorporated into and made a part of this Sublease, and the
rights and obligations of the parties under the Master Lease are hereby imposed
upon the parties hereto with respect to the Sublease Premises, the Sublandlord
being substituted for the term “Landlord” in the Master Lease, the Subtenant
being substituted for the term “Tenant” in the Master Lease, provided, however,
that the term “Landlord” in the following sections of the Master Lease shall
mean (i) Master Landlord, not Sublandlord: Section 1.2, 9.2 (first full
paragraph), 9.2(a), 10, 12.1(d), 17.1, 17.4 and 17.5 and (ii) both Master
Landlord and Sublandlord: Section 9.3. It is further understood that where
reference is made in the Master Lease to the “Premises,” the same shall mean the
Sublease Premises as defined herein; where reference is made to the
“Commencement Date,” the same shall mean the Commencement Date as defined
herein; and where reference is made to the “Lease,” the same shall mean this
Sublease. The parties specifically agree that any provisions relating to any
construction obligations of “Landlord” under the Master Lease with respect to
construction that occurred or was to have occurred prior to the Commencement
Date hereof, are hereby deleted. Anything in the Master Lease to the contrary
notwithstanding, the liability of Sublandlord for its obligations under this
Sublease is limited solely to Sublandlord’s interest in the Master Lease, and no
personal liability shall at any time be asserted or enforceable against any
other assets of Sublandlord or against Sublandlord’s stockholders, directors,
officers or partners on account of any of Sublandlord’s obligations or actions
under this Sublease.
     11.2 Excluded Provisions. As between Sublandlord and Subtenant, the
following Paragraphs of the Master Lease are not incorporated herein:
Sections 1.1(a), 1.3, 2.1, 2.3, 2.6, Article 3, 9.2(b), 9.2(c), 9.2(d), 9.2(e),
9.2(f), 9.2 (g), 13, 15.1, 15.2, 18.1, 19.11, 19.15 and 19.16, and Exhibit C.
     11.3 Compliance With Master Lease. Subtenant hereby assumes and agrees to
perform for Sublandlord’s benefit, during the term of this Sublease, all of
Sublandlord’s obligations with respect to the Sublease Premises under the Master
Lease, except as otherwise provided herein. However, the obligation to pay Rent
and Additional Rent to Master Landlord under the Master Lease shall be
considered performed by Subtenant to the extent and in the amount Rent and
Additional Rent are paid to Sublandlord in accordance with Section 4 of this
Sublease. Subtenant shall not commit or permit to be committed any act or
omission which violates any term or condition of the Master Lease.
Notwithstanding anything to the contrary contained herein, this Sublease shall
be subject and subordinate to all of the terms of the Master Lease and Master
Landlord shall have all rights in respect of the Master Lease and the Master
Premises as set forth therein.
     11.4 Status of Master Lease. As of the date hereof, Sublandlord represents
and warrants to Subtenant that, to the best of Sublandlord’s knowledge, the
Master Lease is in full

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force and effect and Sublandlord has neither given nor received a currently
effective notice of default under the Master Lease.
     11.5 Termination. If the Master Lease terminates pursuant to any unilateral
right granted to the Master Landlord or as a result of Sublandlord exercising
any right to terminate the Master Lease in the event of the partial or total
damage, destruction, or condemnation of the Master Premises or the Building or
Center of which the Master Premises are a part, this Sublease will terminate and
the parties will be relieved of any further liability or obligation under this
Sublease. However, if the Master Lease terminates as a result of a default or
breach by Sublandlord or Subtenant under this Sublease or the Master Lease, the
defaulting party will be liable to the nondefaulting party for the damage
suffered as a result of the termination.
     11.6 Sublandlord’s Failure to Cure. Except in circumstances where a
termination of the Master Lease is permitted under Section 11.5 above,
Sublandlord shall take all actions necessary to maintain the Master Lease in
good standing and effect, and shall promptly cure any default thereunder. If
Sublandlord fails to cure any default by Sublandlord in the performance of its
obligations, covenants and agreements under this Sublease Agreement, including
without limitation Sublandlord’s obligation to perform its obligations under the
Master Lease, either within five (5) days in the case of a Rent payment default
under the Master Lease, or within thirty (30) days after written notice of such
default from Subtenant or Master Landlord in the case of other defaults (unless
in the case of a default the cure for which reasonably takes more than 30 days,
Sublandlord commences the cure within such 30 day period and diligently
prosecutes such cure to completion), Subtenant shall have the right, but not the
obligation, to cure any such default and to thereafter be reimbursed by
Sublandlord for the reasonable costs incurred in effecting such cure and by
reason of such default by Sublandlord.
     12. Insurance. Subtenant shall be responsible for compliance with the
insurance provisions of the Master Lease as they relate to the Sublease
Premises. Such insurance shall insure the performance by Subtenant of its
indemnification obligations hereunder and shall name Master Landlord and
Sublandlord as additional insureds. All insurance required under this Sublease
shall contain an endorsement requiring thirty (30) days written notice from the
insurance company to Subtenant and Sublandlord before cancellation or change in
the coverage, insureds or amount of any policy. Subtenant shall provide
Sublandlord with certificates of insurance evidencing such coverage prior to the
commencement of this Sublease.
     13. Default. In addition to defaults described in the Master Lease (which
provisions are incorporated by reference in Section 11 above), failure of
Subtenant to make any payment of Rent when due hereunder shall constitute an
event of default hereunder. If Subtenant’s default causes Sublandlord to default
under the Master Lease, Subtenant shall defend, indemnify and hold Sublandlord
harmless from all damages, costs (including reasonable attorneys’ fees),
liability, expenses or claims to the extent relating to such default.
     14. Notices. As between Sublandlord and Subtenant, the addresses specified
in the Master Lease for receipt of notices to Sublandlord is deleted and for the
purposes of this Sublease, notices to the parties shall be delivered at the
following addresses and in accordance with the provisions of Section 19.1 of the
Master Lease:

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To Sublandlord at:   Millennium Pharmaceuticals, Inc.
40 Landsdowne
Cambridge, Massachusetts 02139
Attn: Kenneth Doyle       To Subtenant at:   Cytokinetics, Inc.
280 East Grand Avenue
South San Francisco, CA 94080
Attn: Sharon Surrey-Barbari             After Commencement
Date:  
Same as above

     15. Sublandlord’s Obligations. To the extent that the provision of any
services or the performance of any maintenance or any other act respecting the
Sublease Premises, the Master Premises or Building is the responsibility of
Master Landlord (collectively “Master Landlord Obligations”), upon Subtenant’s
request, Sublandlord shall make reasonable efforts to cause Master Landlord to
perform such Master Landlord Obligations, provided, however, that in no event
shall Sublandlord be liable to Subtenant for any liability, loss or damage
whatsoever in the event that Master Landlord should fail to perform the same,
nor shall Subtenant be entitled to withhold the payment of Rent or terminate
this Sublease. As between Sublandlord and Subtenant, it is expressly understood
that the services and repairs which are incorporated herein by reference, will
in fact be furnished by Master Landlord and not by Sublandlord. In addition,
Sublandlord shall not be liable for any maintenance, restoration (following
casualty or destruction) or repairs in or to the Building or the Sublease
Premises, other than its obligation hereunder to use reasonable efforts to cause
Master Landlord to perform its obligations under the Master Lease. Except as
otherwise provided herein, Sublandlord shall have no other obligations to
Subtenant with respect to the Sublease Premises or the performance of the Master
Landlord Obligations.
     16. Early Termination Of Master Lease. Sublandlord shall not amend or
otherwise modify the Master Lease in a manner that would adversely affect the
Sublease Premises, Subtenant’s use or occupancy thereof (or its use of the
Common Areas), or Sublandlord’s or Subtenant’s rights or obligations under this
Sublease Agreement, except that to the extent that the Master Lease grants
Sublandlord any discretionary right to terminate the Master Lease due to
casualty or condemnation, Sublandlord may exercise such rights during the Term
of this Sublease in its sole discretion. Notwithstanding the foregoing,
Sublandlord may terminate the Master Lease for reasons other than casualty or
condemnation provided that Sublandlord delivers to Subtenant a nondisturbance
agreement in form reasonably acceptable to Subtenant and executed by Master
Landlord or an assignment of Sublandlord’s interest as Sublandlord under this
Sublease pursuant to which Master Landlord assumes all obligations of
Sublandlord hereunder. If the Master Lease should terminate prior to the
expiration of this Sublease for any reason, Sublandlord shall have no liability
to Subtenant on account of such termination, except as expressly set forth in
Section 11.5 above.

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     17. Consent Of Master Landlord And Sublandlord. If Subtenant desires to
take any action which requires the consent or approval of Sublandlord pursuant
to the terms of this Sublease, prior to taking such action, including, without
limitation, making any alterations, then, notwithstanding anything to the
contrary herein, (a) Sublandlord shall have the same rights of approval or
disapproval as Master Landlord has under the Master Lease, and (b) Subtenant
shall not take any such action until it obtains the consent of Sublandlord and
Master Landlord, as may be required under this Sublease or the Master Lease.
This Sublease shall not be effective unless and until any required written
consent of the Master Landlord shall have been obtained.
     18. Indemnity. Subtenant shall indemnify, defend, protect, and hold
Sublandlord and Master Landlord harmless from and against all actions, claims,
demands, costs, liabilities, losses, reasonable attorneys’ fees, damages,
penalties, and expenses (collectively “Claims”) which may be brought or made
against Sublandlord or Master Landlord or which Sublandlord or Master Landlord
may pay or incur to the extent caused by (i) a breach of this Sublease by
Subtenant, (ii) any violation of law by Subtenant or its employees, agents,
contractors or invitees (collectively, “Agents”) relating to the use or
occupancy of the Sublease Premises, (iii) any act or omission by Subtenant or
its Agents resulting in contamination of any part or all of the Master Premises
by Hazardous Materials, or (iv) the negligence or willful misconduct of
Subtenant or its Agents.
     19. Brokers . Each party hereto represents and warrants that it has dealt
with no broker in connection with this Sublease and the transactions
contemplated herein, except BT Commercial, representing Subtenant, and CB
Richard Ellis, representing Sublandlord (the “Brokers”). Pursuant to a separate
agreement, Sublandlord shall pay the brokerage commission due to the Brokers in
connection with this Sublease. Each party shall indemnify, protect, defend and
hold the other party harmless from all costs and expenses (including reasonable
attorneys’ fees) arising from or relating to a breach of the foregoing covenant,
representation and warranty.
     20. Surrender Of Sublease Premises. As between Sublandlord and Subtenant,
in lieu of any obligation or liability set forth in the Master Lease, upon the
termination of the Sublease, Subtenant shall surrender the Sublease Premises to
Sublandlord broom-clean and in as good a condition as on the Commencement Date,
ordinary wear and tear excepted. In addition, Subtenant shall remove any
alterations, additions and improvements constructed by Subtenant which Master
Landlord has indicated, pursuant to Section 9.1 of the Master Lease, are
required to be removed, prior to the termination of the Sublease and restore the
Sublease Premises to its prior condition, ordinary wear and tear excepted,
repairing all damage caused by or related to any such removal, all at
Subtenant’s expense. Subtenant shall have no obligation to remove any
alterations, additions and improvements constructed prior to the date of this
Sublease.
     21. No Third Party Rights. The benefit of the provisions of this Sublease
is expressly limited to Sublandlord and Subtenant and their respective permitted
successors and assigns. Under no circumstances will any third party be construed
to have any rights as a third party beneficiary with respect to any of said
provisions.
     22. Counterparts. This Sublease may be signed in two or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
agreement.

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     23. Damage And Destruction.
          23.1 Termination of Master Lease. If the Sublease Premises is damaged
or destroyed and Master Landlord or Sublandlord exercises any option either may
have to terminate the Master Lease, if any, this Sublease shall terminate as of
the date of the casualty. If as a result of damage or destruction of the
Sublease Premises, the time estimated to restore the Sublease Premises exceeds
one year, Subtenant and Sublandlord shall each have the right to terminate this
Sublease on written notice to the other given within thirty (30) days after
determination of the amount of time to restore the Sublease Premises, which
termination shall be effective as of the date of the casualty.
          23.2 Continuation of Sublease. If the Master Lease or this Sublease is
not terminated following any damage or destruction as provided in Section 23.1
above, this Sublease shall remain in full force and effect, and Rent shall be
abated in proportion to the extent to which such damage or destruction impairs
Subtenant’s use of or access to the Sublease Premises.
     24. Eminent Domain. If all or any part of the Sublease Premises is
condemned by eminent domain, inversely condemned or sold in lieu of
condemnation, for any public or a quasi-public use or purpose, this Sublease may
be terminated as of the date of title vesting in such proceeding by either
party, and Base Monthly Rent shall be adjusted to the date of termination.
     In Witness Whereof, the parties have executed this Sublease as of the date
first written above.

Sublandlord:
Millennium Pharmaceuticals, Inc. a Delaware corporation
By: /s/ Marsha H. Fanucci
 
Name: Marsha H. Fanucci
 
Title: Chief Financial Officer
 
And By: /s/ Mark Hernon
 
Name: Mark Hernon
 
Title: VP-IT and Operations
 
Subtenant:
Cytokinetics, Incorporated, a Delaware corporation
By: /s/ James H. Sabry
 
Name: James H. Sabry, M.D., Ph.D.
Title: President and Chief Executive Officer
And By: /s/ Sharon Surrey-Barbari
 
Name: Sharon Surrey-Barbari
Title: Senior Vice President, Finance and
Chief Financial Officer                       

11

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CONSENT OF MASTER LANDLORD
     BRITANNIA POINTE GRAND LIMITED PARTNERSHIP, a Delaware limited partnership
(“Master Landlord”), as landlord under the Lease dated as of July 1, 2001 (the
“Master Lease”) with COR THERAPEUTICS, INC., a Delaware corporation (“Tenant”)
as tenant, covering premises which include the building commonly known as 256
East Grand Avenue, South San Francisco, California (the “Building”), consents to
the proposed Sublease dated November 23rd, 2005 (the “Sublease”) between
MILLENNIUM PHARMACEUTICALS, INC., a Delaware corporation and the successor in
interest to Tenant under the Master Lease (“Sublandlord”) as sublandlord and
CYTOKINETICS, INCORPORATED, a Delaware corporation (“Subtenant”) as subtenant,
covering the entire Building as more particularly set forth in the Sublease (the
“Sublease Premises”), and to all of the terms and conditions contained therein
(except as otherwise expressly noted herein), subject to the following:
     1. Nothing contained in the Sublease (including, but not limited to, the
incorporation into the Sublease, pursuant to Section 11.1 of the Sublease, of
certain provisions of the Master Lease and the substitution of the words “Master
Landlord” or “Master Landlord and Sublandlord” for the term “Landlord” with
respect to some of those incorporated provisions) shall be construed to amend
the Master Lease, nor to limit or impair in any way Master Landlord’s rights and
remedies thereunder, nor to impose any obligations or liabilities on Master
Landlord, nor to create any direct contractual or other relationship between
Master Landlord and Subtenant, any direct obligation or liability of Master
Landlord to Subtenant or any direct right or remedy of Subtenant against Master
Landlord, in each instance except to the extent (if any) expressly set forth in
this Consent. Without limiting the generality of the foregoing, (a) this consent
shall not constitute an approval or acceptance of any term or provision of the
Sublease that conflicts with or is inconsistent with any provision of the Master
Lease, except to the extent (if any) expressly set forth in this Consent; and
(b) Master Landlord expressly consents to Subtenant’s right to use Subtenant’s
Property (as defined in the Sublease) as security for third-party financing
during the term of the Sublease, as set forth in the final sentence of
Section 10 of the Sublease.
     2. To the extent Master Landlord’s consent or approval is required under
the Master Lease or otherwise, Master Landlord is not hereby consenting to or
approving, or waiving its right of consent or approval with respect to, (i) any
alternations or repairs to be undertaken by either Tenant or Subtenant in the
Building pursuant to or in connection with the Sublease (any required approval
of any such alterations or repairs, including (but not limited to) the
construction of a Service Yard as contemplated in the second sentence of
Section 1 of the Sublease, will be considered only upon receipt of a formal
request accompanied by appropriate drawings, a detailed work specification and
such other information as Master Landlord may reasonably request under the terms
of the Master Lease); (ii) any further subleasing by Subtenant of space in the
Building, or any other further subleasing by Tenant of any portion of the
premises covered by the Master lease; (iii) any use of hazardous, radioactive or
toxic materials in the Building, except in compliance with all applicable
provisions of the Master Lease and with Master Landlord’s express written
consent (in response to a specific request) to the extent required under the
Master Lease; or (iv) any signage on or about the Building that may be requested
by or on behalf of Subtenant (in which regard, Master Landlord expressly does
not consent to or approve the second sentence of Section 9 of the Sublease, and
hereby advises

 

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Sublandlord and Subtenant that any required approval of any signage requested by
or on behalf of Subtenant, including but not limited to any replacement of
existing signage, will be considered only upon receipt of a formal request
accompanied by appropriate drawings and specifications and such other
information as Master Landlord may reasonably request under the terms of the
Master Lease).
     3. Without limiting the generality of the foregoing, (a) the third sentence
of Section 15 of the Sublease shall not be construed as creating any direct
obligation or liability of Master Landlord to Subtenant or any direct right or
remedy of Subtenant against Master Landlord; and (b) the second sentence of
Section 16 of the Sublease shall not be construed as imposing any obligation on
Master Landlord to execute and deliver any nondisturbance agreement or any
assumption of Sublandlord’s obligations as described in such sentence, and
Master Landlord may exercise its sole and absolute discretion in responding to
any request by the parties for any such execution and delivery.
     4. All use of parking space by Subtenant pursuant to the Sublease shall be
on a nonexclusive basis and shall be subject to all parking-related provisions
in the Master Lease, and Master Landlord is not hereby consenting to any
designation or reservation of specific parking spaces on the subject property
for use by Subtenant.
     5. Master Landlord acknowledges and agrees that the waiver of subrogation
contained in Section 12.4 of the Master Lease shall apply as between Master
Landlord and Subtenant, and Subtenant by its signature below likewise agrees
that the waiver of subrogation contained in Section 12.4 of the Master Lease
shall apply as between Master Landlord and Subtenant. In addition, Subtenant by
its signature below agrees that the terms of the last sentence of
Section 10.2(c) of the Master Lease shall apply as between Master Landlord and
Subtenant, as well as between Sublandlord and Subtenant.
     6. Master Landlord shall not incur or be subject to any liability for any
brokerage commissions in connection with the Sublease.
     7. This Consent is conditional upon, and shall become effective only upon,
Master Landlord’s receipt of (a) copy of this Consent signed by Subtenant and
Tenant, and (b) a copy of the complete executed Sublease, including all exhibits
referenced therein, in the form approved by Master Landlord.
[rest of page intentionally left blank]

-2- 

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     IN WITNESS WHEREOF, Master Landlord has executed this Consent as of the
date set forth below (subject to the conditions set forth in such Consent), and
Subtenant and Tenant have executed this Consent to evidence their acceptance of
and agreement to the conditions set forth in this Consent.
Master Landlord:
BRITANNIA POINTE GRAND LIMITED
PARTNERSHIP, a Delaware limited
partnership

     
By:
  Slough Pointe Grand Incorporated, a
 
  Delaware corporation, General Partner

             
 
  By:   /s/ Jonathan M. Bergschneider    
 
           
 
      Jonathan M. Bergschneider
Vice President    

Date: November 28, 2005

Subtenant:
CYTOKINETICS, INCORPORATED, a
Delaware corporation

By: /s/ Sharon Surry Barbari                                        
Its:  Senior Vice President,
       Finance and Chief Financial Officer
Date: November 23, 2005

Tenant:
MILLENIUM PHARMAEUTICALS,Tenant
INC., a Delaware corporation and successor-
in-interest to COR THERAPEUTICS, INC., a
Delaware corporation, under the Master Lease

By: /s/ Marsha H. Fanucci                                        
Its:  CFO

Date: November 29, 2005

 

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EXHIBIT A
Master Lease

13

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LEASE

     
Landlord:
  Britannia Pointe Grand Limited Partnership
 
   
Tenant:
  COR Therapeutics, Inc.
 
   
Date:
  July 1, 2001

TABLE OF CONTENTS

         
1. PROPERTY
    1  
1.1 Lease of Premises and Phase I Property; Existing Lease
    1  
1.2 Landlord’s Reserved Rights
    1  
1.3 First Refusal Right
    2  
 
       
2. TERM
    3  
2.1 Term
    3  
2.2 [Omitted.]
    3  
2.3 Condition of Premises; Tenant Improvements
    3  
(a) “As Is” Condition
    3  
(b) New Mezzanine Area
    4  
(c) New Lobby Area
    4  
2.4 [Omitted.]
    5  
2.5 Holding Over
    5  
2.6 Option To Extend Term
    5  
 
       
3. RENTAL
    6  
3.1 Minimum Rental
    6  
(a) Rental Amounts
    6  
(b) Rental Adjustment Due to Change in Square Footage
    6  
(c) Rental Amounts During First Extended Term
    7  
(d) Rental Amounts During Second Extended Term
    7  
3.2 Late Charge
    8  
 
       
4. [Omitted.]
    8  
 
       
5. [Omitted.]
    8  
 
       
6. TAXES
    8  
6.1 Personal Property
    8  
6.2 Real Property
    8  
 
       
7. OPERATING EXPENSES
    9  
7.1 Payment of Operating Expenses
    9  
7.2 Definition Of Operating Expenses
    10  
7.3 Determination Of Operating Expenses
    12  
7.4 Final Accounting For Lease Year
    12  
7.5 Proration
    13  
 
       
8. UTILITIES
    13  
8.1 Payment
    13  
8.2 Interruption
    13  

 

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9. ALTERATIONS; SIGNS
    13  
9.1 Right To Make Alterations
    13  
9.2 Title To Alterations
    14  
(a) Landlord’s Property
    14  
(b) Tenant’s Property
    14  
(c) Removal of Tenant’s Property at End of Term
    14  
(d) Items Located in Premises Outside the Phase I Property
    15  
(e) Tenant’s Rights to Modify, Etc. and Remove Tenant’s Property
    15  
(f) Tenant’s Right to Encumber Tenant’s Property
    15  
(g) Landlord’s Purchase Option
    15  
9.3 Tenant Fixtures
    15  
9.4 No Liens
    16  
9.5 Signs
    16  
 
       
10. MAINTENANCE AND REPAIRS
    16  
10.1 Landlord’s Work
    16  
10.2 Tenant’s Obligation For Maintenance
    17  
(a) Good Order, Condition And Repair
    17  
(b) Landlord’s Remedy
    17  
(c) Condition Upon Surrender
    17  
 
       
11. USE OF PREMISES
    18  
11.1 Permitted Use
    18  
11.2 [Omitted.]
    18  
11.3 No Nuisance
    18  
11.4 Compliance With Laws
    18  
11.5 Liquidation Sales
    18  
11.6 Environmental Matters
    19  
 
       
12. INSURANCE AND INDEMNITY
    22  
12.1 Insurance
    22  
12.2 Quality Of Policies And Certificates
    23  
12.3 Workers’ Compensation
    24  
12.4 Waiver Of Subrogation
    24  
12.5 Increase In Premiums
    24  
12.6 Indemnification
    24  
12.7 Blanket Policy
    25  
 
       
13. SUBLEASE AND ASSIGNMENT
    25  
13.1 Assignment of Lease and Sublease of Premises
    25  
13.2 Rights Of Landlord
    26  
 
       
14. RIGHT OF ENTRY AND QUIET ENJOYMENT
    26  
14.1 Right Of Entry
    26  
14.2 Quiet Enjoyment
    27  
 
       
15. CASUALTY AND TAKING
    27  
15.1 Damage or Destruction
    27  
15.2 Condemnation
    28  
15.3 Reservation Of Compensation
    29  
15.4 Restoration Of Improvements
    30  
 
       
16. DEFAULT
    30  
16.1 Events Of Default
    30  
(a) [Omitted.]
    30  
(b) Nonpayment
    30  
(c) Other Obligations
    30  
(d) General Assignment
    30  

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(e) Bankruptcy
    30  
(f) Receivership
    31  
(g) Attachment
    31  
(h) Insolvency
    31  
16.2 Remedies Upon Tenant’s Default
    31  
16.3 Remedies Cumulative
    32  
 
       
17. SUBORDINATION, ATTORNMENT AND SALE
    32  
17.1 Subordination To Mortgage
    32  
17.2 Sale Of Landlord’s Interest
    33  
17.3 Estoppel Certificates
    33  
17.4 Subordination to CC&R’s
    33  
17.5 Mortgagee Protection
    33  
 
       
18. SECURITY
    34  
18.1 Deposit
    34  
 
       
19. MISCELLANEOUS
    34  
19.1 Notices
    34  
19.2 Successors And Assigns
    35  
19.3 No Waiver
    35  
19.4 Severability
    35  
19.5 Litigation Between Parties
    35  
19.6 Surrender
    35  
19.7 Interpretation
    36  
19.8 Entire Agreement
    36  
19.9 Governing Law
    36  
19.10 No Partnership
    36  
19.11 Financial Information
    36  
19.12 Costs
    37  
19.13 Time
    37  
19.14 Rules And Regulations
    37  
19.15 Brokers
    37  
19.16 Memorandum Of Lease
    37  
19.17 Corporate Authority
    37  
19.18 Execution and Delivery
    37  
19.19 Survival
    37  
19.20 Parking
    37  

EXHIBITS

     
EXHIBIT A
  Real Property Description
 
   
EXHIBIT A-1
  Phase I Property (Plan)
 
   
EXHIBIT B
  Site Plan
 
   
EXHIBIT C
  Future Entrance Lobby

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LEASE
     THIS LEASE (“Lease”) is made and entered into as of July 1, 2001, by and
between BRITANNIA POINTE GRAND LIMITED PARTNERSHIP, a Delaware limited
partnership (“Landlord”), and COR THERAPEUTICS, INC., a Delaware corporation
(“Tenant”).
THE PARTIES AGREE AS FOLLOWS:
1. PROPERTY
1.1 Lease of Premises and Phase I Property; Existing Lease.
          (a) Landlord leases to Tenant and Tenant hires and leases from
Landlord, on the terms, covenants and conditions hereinafter set forth, the
following office and laboratory premises (hereinafter collectively called the
“Premises”) which consist of approximately 136,242 square feet and are located
on the real property described as the “Phase I Property” in Exhibit A attached
hereto and depicted as such in Exhibit A-1 attached hereto (the “Phase I
Property”) in South San Francisco, California: (i) the one-story building
commonly known as 256 East Grand Avenue; (ii) the two-story building commonly
known as 260 East Grand Avenue; (iii) Suites 20, 26, 35, 45, 50 and 70 in the
one-story building commonly known as 250 East Grand Avenue; and (iv) the
westerly portion of the two-story building commonly known as 270 East Grand
Avenue. The Phase I Property is part of the office and research and development
center commonly known as Britannia Pointe Grand Business Park located at East
Grand Avenue and Harbor Way in the City of South San Francisco, County of San
Mateo, State of California on the real property which is more particularly
described as the “Center” in Exhibit A attached hereto (the “Center”). The
location of the Premises in the Center is depicted on the site plan attached
hereto as Exhibit B (the “Site Plan”). The Premises and other improvements
presently existing on the Phase I Property are sometimes referred to
collectively herein as the “Phase I Improvements.” The parking areas, driveways,
sidewalks, landscaped areas and other portions of the Center that lie outside
the exterior walls of the buildings now or hereafter existing from time to time
in the Center, as depicted in Exhibit A-1 and in the Site Plan and as hereafter
modified by Landlord from time to time in accordance with the provisions of this
Lease, are sometimes referred to herein as the “Common Areas.” Tenant already
occupies the entire Premises pursuant to a Standard Form Industrial Net Lease
dated as of September 23, 1988 between NC Land Associates Limited Partnership, a
Delaware limited partnership, and COR Therapeutics, Inc., a California
corporation, as amended from time to time (the “Existing Lease”). Effective
July 1, 2001, this Lease supersedes the Existing Lease for all purposes,
Tenant’s continuing occupancy of the Premises shall be governed solely by the
provisions of this Lease, and the Existing Lease shall be of no further force or
effect, except that the rights and obligations of Landlord and Tenant with
respect to the Premises for periods prior to July 1, 2001 shall continue to be
governed by the Existing Lease.
          (b) As an appurtenance to Tenant’s leasing of the Premises pursuant to
Section 1.l(a), Landlord hereby grants to Tenant, for the benefit of Tenant and
its employees, suppliers, shippers, customers and invitees, during the term of
this Lease, the non-exclusive right to use, in common with others entitled to
such use, (i) those portions of the Common Areas improved from time to time for
use as parking areas, driveways, sidewalks, landscaped areas, or for other
common purposes, and (ii) all access easements and similar rights and privileges
relating to or appurtenant to the Center and created or existing from time to
time under any access easement agreements, declarations of covenants, conditions
and restrictions, or other written agreements now or hereafter of record with
respect to the Center, subject however to any limitations applicable to such
rights and privileges under applicable law, under this Lease and/or under the
written agreements creating such rights and privileges.
     1.2 Landlord’s Reserved Rights. To the extent reasonably necessary to
permit Landlord to exercise any rights of Landlord and discharge any obligations
of Landlord under this Lease, Landlord shall have, in addition to the right of
entry set forth in Section 16.1 hereof, the

 

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following rights: (i) to make changes to the Common Areas, including, without
limitation, changes in the location, size or shape of any portion of the Common
Areas, and to relocate parking spaces in the Center and in the Common Areas,
provided that except on a temporary basis to the extent permitted under clause
(ii) of this sentence, (A) Landlord shall not materially decrease the number of
such parking spaces in areas of the Phase I Property generally adjacent to the
Premises as shown on Exhibit A-1 and on the Site Plan, and (B) Landlord shall
not permit the ratio of parking spaces in the Center to fall below 3.0 spaces
for each 1,000 square feet of space in the various buildings existing from time
to time in the Center (except to the extent, if any, that such ratio may fall
below 3.0 spaces per 1,000 square feet by an amount solely reflecting the
creation of additional square footage in the Center, without additional parking
and subject to receipt of any required governmental variances or approvals, by
reason of the construction of the mezzanine area contemplated in Section 2.3(b)
and/or the new lobby area contemplated in Section 2.3(c)); (ii) to close
temporarily any of the Common Areas for maintenance or other reasonable
purposes, provided that reasonable parking and reasonable access to the Premises
remain available; (iii) to construct, alter or add to other buildings and Common
Area improvements in the Center (including, but not limited to, construction of
site improvements, buildings and Common Area improvements on portions of the
Center and/or on adjacent properties owned by Landlord from time to time);
(iv) to build in areas adjacent to the Center and to add such areas to the
Center or operate such areas, for maintenance, access, parking and other
purposes, on an integrated basis with the Phase I Property and/or the Center;
(v) to use the Common Areas while engaged in making additional improvements,
repairs or alterations to the Center or any portion thereof or to any adjacent
properties owned by Landlord from time to time; and (vi) to do and perform such
other acts with respect to the Common Areas and the Center as may be necessary
or appropriate; provided, however, that notwithstanding anything to the contrary
in this Section 1.2, Landlord’s exercise of its rights hereunder shall not cause
any material diminution of Tenant’s rights, nor any material increase of
Tenant’s obligations, under this Lease or with respect to the Phase I
Improvements.
     1.3 First Refusal Right.
          (a) For purposes of this Section 1.3, the term “First Refusal Space”
shall mean, as the context may require, any one or more of the following four
spaces individually or all four of such spaces collectively: (i) the space of
approximately 10,462 square feet commonly known as 250 East Grand Avenue,
Suite 65 and presently occupied by Farmers Insurance; (ii) the space of
approximately 6,489 square feet commonly known as 250 East Grand Avenue,
Suite 90 and presently occupied by Gryphon Sciences; (iii) the space of
approximately 24,725 presently occupied by ViroLogic, Inc. on the easterly end
of the building commonly known as 270 East Grand Avenue; and (iv) the building
commonly known as 280 East Grand Avenue, presently occupied by Cytokinetics,
Inc., and containing approximately 50,195 square feet (the “280 East Grand
Building”). The four spaces constituting the First Refusal Space are designated
as such on the Site Plan.
          (b) Landlord shall not lease all or any portion of the First Refusal
Space at any time during the term of this Lease (including any duly elected
extension terms) except in compliance with the procedure set forth in
Section 1.3(c) hereof; provided, however, that the foregoing restriction shall
not apply during any period in which Tenant is in default (beyond any applicable
cure periods) under this Lease; provided further, that the foregoing restriction
shall not apply to any renewal or extension options duly elected by the
applicable tenant or any successor tenant pursuant to a contractual renewal or
extension option set forth in the lease documents governing the respective
portions of the First Refusal Space on the date of this Lease, but such
restriction shall apply to any future lease amendments or grants of renewal or
extension rights with respect to any portion of the First Refusal Space that
would have the effect of either extending the term of any existing occupancy of
any portion of the First Refusal Space beyond the term presently specified in
the lease documents governing such portion, or granting renewal or extension
rights beyond those presently set forth in the applicable lease documents with
respect to any portion of the First Refusal Space; and provided further, that
the foregoing restriction shall not apply to any leasing, subleasing or other
occupancy by Raven Pharmaceuticals, Inc. of all or any portion of the space
described in clause (iii) of Section 1.3(a),

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whether pursuant to the sublease presently in effect between ViroLogic, Inc. and
Raven Pharmaceuticals, Inc. or otherwise, provided that such leasing, subleasing
or other occupancy by Raven Pharmaceuticals, Inc. shall not in any event be
authorized to extend beyond June 30, 2003.
          (c) If Landlord intends during the term of this Lease (including any
duly elected extension terms) to lease all or any portion of the First Refusal
Space, and if Tenant is not then in default (beyond any applicable cure periods)
under this Lease, then Landlord shall give to Tenant written notice of such
intention (the “Offer Notice”), specifying the material terms on which Landlord
proposes to lease the First Refusal Space or applicable portion thereof (the
“Offered Space”) and offering to Tenant the opportunity to lease the Offered
Space on the terms specified in the Offer Notice. The time period within which
Tenant is entitled to accept such offer by written notice to Landlord (the
“Offer Period”), measured from the date of Tenant’s receipt of the Offer Notice,
shall be ten (10) business days, except that if the Offered Space is all or
substantially all of the 280 East Grand Building, then the Offer Period shall be
thirty (30) days unless Tenant has previously received and failed to accept an
Offer Notice with respect to such Offered Space in the 280 East Grand Building
and Landlord is thereafter, within one hundred eighty (180) days after
expiration of the Offer Period for such prior Offer Notice, coming back to
Tenant with a further Offer Notice reflecting terms more favorable to the lessee
than the terms offered in the prior Offer Notice, in which event the Offer
Period for such further Offer Notice shall be ten (10) business days. Upon
timely acceptance of an Offer Notice by Tenant, the Offered Space shall be
leased to Tenant on the terms set forth in the Offer Notice and on the
additional terms and provisions set forth herein (except to the extent
inconsistent with the terms set forth in the Offer Notice) and the parties shall
promptly execute an amendment to this Lease adding the Offered Space to the
Premises and making any appropriate amendments to provisions of this Lease to
reflect different rent and other obligations applicable to the Offered Space
under the terms of the Offer Notice. If Tenant does not accept Landlord’s offer
within the allotted time, Landlord shall thereafter have the right to lease the
Offered Space to a third party at any time within one hundred eighty (180) days
after the expiration of the Offer Period, at a minimum rental and on other terms
and conditions not more favorable to the lessee than the minimum rental and
other terms offered to Tenant in the Offer Notice. If Landlord does not
thereafter lease the Offered Space to a third party within one hundred eighty
(180) days as contemplated in the preceding sentence, or if Landlord does lease
the Offered Space to a third party within such 180-day period but the Offered
Space thereafter again becomes available during the term of this Lease
(including any duly elected extension terms), then in either such event Landlord
shall be required to comply again with the provisions of this Section 1.3 prior
to any further leasing of the Offered Space.
2. TERM
     2.1 Term. The term of this Lease shall commence on July 1, 2001 (the
“Commencement Date”) and shall end, unless sooner terminated or extended as
hereinafter provided, on June 30, 2011 (the “Termination Date”).
     2.2 [Omitted.]
     2.3 Condition of Premises: Tenant Improvements.
          (a) “As Is” Condition. Tenant, being the present occupant of the
Premises pursuant to the Existing Lease, acknowledges that it is familiar with
the physical condition of the Premises, that it will accept and occupy the
Premises under this Lease in “AS IS” condition as the Premises exist on the date
of this Lease, and that Landlord shall have no obligation to improve, repair or
prepare the Premises, prior to the Commencement Date or, except as otherwise
expressly set forth in this Lease, after the Commencement Date, for occupancy by
Tenant under this Lease. TENANT ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH
IN THIS LEASE, NEITHER LANDLORD NOR ANY AGENT OF LANDLORD HAS MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO

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THE PRESENT OR FUTURE SUITABILITY OF THE PREMISES OR THE PHASE I IMPROVEMENTS
FOR THE CONDUCT OF TENANT’S BUSINESS OR PROPOSED BUSINESS THEREON.
          (b) New Mezzanine Area. Tenant has requested Landlord’s permission to
construct, in Tenant’s discretion, a mezzanine area of approximately 8,000
square feet in the portion of the Premises commonly known as 260 East Grand
Avenue, approximately in the location designated as “Future Mezzanine Premises”
on the Site Plan.
                (i) Landlord hereby approves and consents to such construction,
in concept, subject to (A) completion of such improvements by Tenant at Tenant’s
sole expense (except as otherwise provided in subparagraph (b)(ii) hereof) and
in compliance with all the requirements of Article 9 hereof, including (but not
limited to) submission of all plans and specifications for Landlord’s review and
approval, which approval shall not be unreasonably withheld or delayed, and
(B) Landlord’s receipt of a variance from the City of South San Francisco or
other applicable governmental authorities with respect to the Center’s
compliance with applicable parking requirements following construction of such
mezzanine area. Landlord hereby agrees to use, at Tenant’s request, reasonable
efforts to obtain such a variance if and when Tenant advises Landlord that
Tenant wishes to proceed with construction of such mezzanine area, and Landlord
shall bear the expense of all fees and costs incurred by Landlord in connection
with Landlord’s application for such a variance.
                (ii) Landlord agrees to pay to Tenant, within thirty (30) days
after issuance to Tenant of a certificate of occupancy (or its equivalent) for
such mezzanine area and delivery by Tenant to Landlord of lien waivers
reasonably satisfactory to Landlord from the contractor(s) performing such
construction, the sum of Two Hundred Thousand Dollars ($200,000) as a
construction allowance towards Tenant’s costs for construction of the shell and
structural components of such mezzanine area.
                (iii) From and after the date Tenant first occupies the
substantially completed mezzanine area, the mezzanine area shall be deemed to be
part of the Premises and the square footage of the mezzanine area (as determined
by Landlord’s architect, measuring to the exterior faces of the walls defining
or enclosing such mezzanine area) shall be added to the square footage of the
Premises for purposes of adjusting Tenant’s minimum rent obligation under
Section 3.1(b) and Tenant’s Operating Expense Share under Section 7.1(b).
          (c) New Lobby Area. Tenant has requested Landlord’s consent to and/or
participation in the construction, in Tenant’s discretion, of a new, enclosed
lobby area of approximately 2,500 square feet on the northerly side of the
building commonly known as 250 East Grand Avenue, approximately in the location
designated as “Future Entrance Lobby — Premises” on Exhibit C attached hereto
and incorporated herein by this reference.
                (i) Landlord hereby approves and consents to such construction,
in concept, subject to Landlord’s receipt of a variance from the City of South
San Francisco or other applicable governmental authorities with respect to the
Center’s compliance with applicable parking requirements following construction
of such lobby area. Landlord hereby agrees to use, at Tenant’s request and at
Landlord’s expense, reasonable efforts to obtain such a variance if and when
Tenant notifies Landlord that Tenant wishes to proceed with construction of such
lobby area.
                (ii) If and when Tenant notifies Landlord of Tenant’s desire to
proceed with the construction of the enclosed lobby area and Landlord obtains
the necessary parking variance as described above, (A) Landlord (or, if Landlord
and Tenant mutually agree, Tenant) shall diligently construct, at Landlord’s
sole expense, in accordance with plans and specifications prepared by Landlord’s
architect and approved by Landlord and Tenant (which approval shall not be
unreasonably withheld or delayed by either party), the cold shell enclosing the
new lobby area (i.e., exterior walls, slab, roof, windows and entrance doors),
any necessary site preparation work and any exterior paving, landscaping or
other sitework, and (B) Tenant shall construct, at

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Tenant’s sole expense, in compliance with all the requirements of Article 9
hereof, including (but not limited to) submission of all plans and
specifications for Landlord’s review and approval, all interior finishes and
nonstructural portions of such lobby area, other than the portion of the work
for which Landlord is responsible under clause (A) of this sentence. If Landlord
and Tenant mutually agree that Tenant shall construct some or all of the shell
work described in clause (A) of the preceding sentence at Landlord’s expense,
then Landlord shall prepare the applicable plans and specifications as described
in such clause (A), the contractor selected by Tenant shall be subject to
Landlord’s prior written approval (not to be unreasonably withheld), the
construction budget and economic terms of Tenant’s contract with such approved
contractor shall be subject to Landlord’s prior written approval (not to be
unreasonably withheld), and during the course of construction Landlord shall pay
to Tenant or to Tenant’s contractor, as Tenant may direct, within twenty (20)
days after receipt of a written payment request and reasonable supporting
documentation (including, but not limited to, lien waivers reasonably
satisfactory to Landlord from the contractor(s) performing the applicable work)
from Tenant from time to time at reasonable intervals as mutually agreed by
Landlord and Tenant, the amount of all costs and expenses reasonably incurred by
Tenant in connection with the construction of such shell work.
                (iii) From and after the date the enclosed lobby area is
substantially completed and is first placed in use, the lobby area shall be
deemed to be part of the Premises and the square footage of the lobby area (as
determined by Landlord’s architect, measuring to the exterior faces of exterior
walls and to the dripline of any exterior overhangs) shall be added to the
square footage of the Premises for purposes of adjusting Tenant’s minimum rent
obligation under Section 3.1(b) and Tenant’s Operating Expense Share under
Section 7.1(b).
     2.4 [Omitted.]
     2.5 Holding Over. If Tenant holds possession of the Premises or any portion
thereof after the term of this Lease with Landlord’s written consent, then
except as otherwise specified in such consent, Tenant shall become a tenant from
month to month at one hundred ten percent (110%) of the rental and otherwise
upon the terms herein specified for the period immediately prior to such holding
over and shall continue in such status until the tenancy is terminated by either
party upon not less than thirty (30) days prior written notice. If Tenant holds
possession of the Premises or any portion thereof after the term of this Lease
without Landlord’s written consent, then Landlord in its sole discretion may
elect (by written notice to Tenant) to have Tenant become a tenant either from
month to month or at will, at one hundred fifty percent (150%) of the rental
(prorated on a daily basis for an at-will tenancy, if applicable) and otherwise
upon the terms herein specified for the period immediately prior to such holding
over, or may elect to pursue any and all legal remedies available to Landlord
under applicable law with respect to such unconsented holding over by Tenant.
Tenant shall indemnify and hold Landlord harmless from any loss, damage, claim,
liability, cost or expense (including reasonable attorneys’ fees) resulting from
any delay by Tenant in surrendering the Premises or any portion thereof (except
to the extent such delay is with Landlord’s prior written consent), including
but not limited to any claims made by a succeeding tenant by reason of such
delay. Acceptance of rent by Landlord following expiration or termination of
this Lease shall not constitute a renewal of this Lease.
     2.6 Option To Extend Term. Tenant shall have the option to extend the term
of this Lease, at the minimum rental set forth in Section 3.1(c) and (d) and
otherwise upon all the terms and provisions set forth herein with respect to the
initial term of this Lease, for up to two (2) additional periods of five
(5) years each, the first commencing upon the expiration of the initial term
hereof and the second commencing upon the expiration of the first extended term,
if any. Exercise of such option with respect to the first such extended term
shall be by written notice to Landlord at least nine (9) months and not more
than twelve (12) months prior to the expiration of the initial term hereof;
exercise of such option with respect to the second extended term, if the first
extension option has been duly exercised, shall be by like written notice to
Landlord at least nine (9) months and not more than twelve (12) months prior to
the expiration of the first extended term hereof. If Tenant is in default
hereunder, beyond any applicable notice and cure periods, on the date of such
notice or on the date any extended term is to commence, then the

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exercise of the option shall be of no force or effect, the extended term shall
not commence and this Lease shall expire at the end of the then current term
hereof (or at such earlier time as Landlord may elect pursuant to the default
provisions of this Lease). If Tenant properly exercises one or more extension
options under this Section, then all references in this Lease (other than in
this Section 2.6) to the “term” of this Lease shall be construed to include the
extension term(s) thus elected by Tenant. Except as expressly set forth in this
Section 2.6, Tenant shall have no right to extend the term of this Lease beyond
its prescribed term.
3. RENTAL
     3.1 Minimum Rental.
          (a) Rental Amounts. Tenant shall pay to Landlord as minimum rental for
the Premises, in advance, without deduction, offset, notice or demand, on or
before the Commencement Date and on or before the first day of each subsequent
calendar month of the initial term of this Lease, the following amounts per
month:

          Months   Monthly Minimum Rental
7/01 - 12/01
  $212,537.52 ($1.560/sq ft)
1/02 - 12/02
    261,584.64 ($1.920/sq ft)
1/03 - 12/03
    271,121.58 ($1.990/sq ft)
1/04 - 12/04
    283,383.36 ($2.080/sq ft)
1/05 - 12/05
    479,571.84 ($3.520/sq ft)
1/06 - 12/06
    498,781.96 ($3.661/sq ft)
1/07 - 12/07
    518,673.29 ($3.807/sq ft)
1/08 - 12/08
    539,518.32 ($3.960/sq ft)
1/09 - 12/09
    561,044.56 ($4.118/sq ft)
1/10 - 12/10
    583,524.49 ($4.283/sq ft)
1/11 - 6/11
    606,821.87 ($4.454/sq ft)

If the obligation to pay minimum rental hereunder commences on other than the
first day of a calendar month or if the term of this Lease terminates on other
than the last day of a calendar month, the minimum rental for such first or last
month of the term of this Lease, as the case may be, shall be prorated based on
the number of days the term of this Lease is in effect during such month. If an
increase in minimum rental becomes effective on a day other than the first day
of a calendar month, the minimum rental for that month shall be the sum of the
two applicable rates, each prorated for the portion of the month during which
such rate is in effect.
          (b) Rental Adjustment Due to Change in Square Footage. The minimum
rental amounts specified in this Section 3.1 are based upon an agreed area of
136,242 square feet for the Premises as they exist on the Commencement Date. If
the area of the Premises increases during the initial term of this Lease as a
result of the construction of the new mezzanine area as contemplated in
Section 2.3(b) and/or the construction of the new lobby area as contemplated in
Section 2.3(c), then beginning on the date the applicable construction is
substantially completed and the applicable new area becomes available for use or
is actually used by Tenant in the ordinary course of its business, the minimum
monthly rent for the remainder of the initial term of this Lease shall be
increased, for each month, by an amount equal to the square footage of the newly
constructed area (measured in accordance with Section 2.3(b)(iii) or
2.3(c)(iii), as applicable) multiplied by the applicable rental rate per square
foot as set forth in Section 3. l(a) above. In the event of any such increase in
the area of the Premises during any extended term of this Lease, the minimum
monthly rent during such extended term (as otherwise determined pursuant to
Section 3.1(c) or 3.1(d), as applicable) shall be increased on a similar basis
in strict proportion to the increase in the size of the Premises as a result of
the newly constructed area being added to the Premises. Any rental increases due
to a change in the square footage of the Premises as a result of Tenant’s
exercise of a first refusal right under Section 1.3 hereof with

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respect to any of the First Refusal Space shall be determined and implemented in
accordance with the provisions of Section 1.3 and the applicable Offer Notice
thereunder.
          (c) Rental Amounts During First Extended Term. If Tenant properly
exercises its right to extend the term of this Lease pursuant to Section 2.6
hereof, the minimum rental during the first year of the first extended term
shall be equal to the fair market rental value of the Premises (as defined
below), including any cost-of-living adjustments or other rental increase
provisions then customary in the City of South San Francisco for comparable
commercial leases, determined as of the commencement of such extended term in
accordance with this paragraph. Upon Landlord’s receipt of a proper notice of
Tenant’s exercise of its option to extend the term of this Lease, the parties
shall have sixty (60) days in which to agree on the initial fair market rental
(including any applicable rental increase provisions) for the Premises at the
commencement of the first extended term for the uses permitted hereunder. If the
parties agree on such initial fair market rental and rental increase provisions
(if any), they shall execute an amendment to this Lease stating the amount of
the applicable minimum monthly rental and any applicable rental increase
provisions. If the parties are unable to agree on such rental (including any
applicable rental increase provisions) within such sixty (60) day period, then
within fifteen (15) days after the expiration of such period each party, at its
cost and by giving notice to the other party, shall appoint a real estate
appraiser with at least five (5) years experience appraising similar commercial
properties in northeastern San Mateo County to appraise and set the initial fair
market rental and any applicable rental increase provisions for the Premises at
the commencement of the first extended term in accordance with the provisions of
this Section 3.1 (c). If either party fails to appoint an appraiser within the
allotted time, the single appraiser appointed by the other party shall be the
sole appraiser. If an appraiser is appointed by each party and the two
appraisers so appointed are unable to agree upon an initial fair market rental
(and any appropriate rental increase provisions) within thirty (30) days after
the appointment of the second, the two appraisers shall appoint a third
similarly qualified appraiser within ten (10) days after expiration of such
30-day period; if they are unable to agree upon a third appraiser, then either
party may, upon not less than five (5) days notice to the other party, apply to
the Presiding Judge of the San Mateo County Superior Court for the appointment
of a third qualified appraiser. Each party shall bear its own legal fees in
connection with appointment of the third appraiser and shall bear one-half of
any other costs of appointment of the third appraiser and of such third
appraiser’s fee. The third appraiser, however selected, shall be a person who
has not previously acted for either party in any capacity. Within thirty
(30) days after the appointment of the third appraiser, a majority of the three
appraisers shall set the initial fair market rental and any applicable rental
increase provisions for the first extended term and shall so notify the parties.
If a majority are unable to agree within the allotted time, then (i) the three
appraised initial fair market rentals shall be added together and divided by
three and the resulting quotient shall be the initial fair market rental for the
first extended term, and (ii) the applicable rental increase provision shall be
equal to the mathematical average (or the nearest reasonable approximation
thereto) of the two rental increase provisions that are most closely comparable,
which determinations shall be binding on the parties and shall be enforceable in
any further proceedings relating to this Lease. For purposes of this
Section 3.1(c), the “fair market rental” of the Premises shall be determined
with reference to the then prevailing market rental rates for properties in the
City of South San Francisco with shell and office, laboratory and research and
development improvements and site (common area) improvements comparable to those
then existing in the Premises and in the Center, taking into account for such
determination all tenant improvements then existing in the Premises (including,
but not limited to, all fixtures, equipment and laboratory improvements in place
in the Premises on the Commencement Date) other than alterations, improvements
or equipment which were constructed or installed by Tenant at its sole expense
and which Tenant has a right or obligation to remove from the Premises at the
expiration of this Lease pursuant to the provisions of Article 9 hereof.
          (d) Rental Amounts During Second Extended Term. If Tenant properly
exercises its right to a second extended term of this Lease pursuant to
Section 2.6 hereof, the minimum rental and any applicable rental increase
provisions during such second extended term shall be determined in the same
manner provided in the preceding paragraph for the first

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extended term, except that the determination shall be made as of the
commencement of the second extended term.
     3.2 Late Charge. If Tenant fails to pay rental or other amounts due
Landlord hereunder on or before the fifth (5th) day after such rental or other
amount is due, such unpaid amounts shall bear interest for the benefit of
Landlord at a rate equal to the lesser of fifteen percent (15%) per annum or the
maximum rate permitted by law, from the date due to the date of payment. In
addition to such interest, Tenant shall pay to Landlord a late charge in an
amount equal to six percent (6%) of any installment of minimum rental and any
other amounts due Landlord if not paid in full on or before the fifth (5th) day
after such rental or other amount is due. Tenant acknowledges that late payment
by Tenant to Landlord of rental or other amounts due hereunder will cause
Landlord to incur costs not contemplated by this Lease, including, without
limitation, processing and accounting charges and late charges which may be
imposed on Landlord by the terms of any loan relating to the Center or any
portion thereof. Tenant further acknowledges that it is extremely difficult and
impractical to fix the exact amount of such costs and that the late charge set
forth in this Section 3.2 represents a fair and reasonable estimate thereof.
Acceptance of any late charge by Landlord shall not constitute a waiver of
Tenant’s default with respect to overdue rental or other amounts, nor shall such
acceptance prevent Landlord from exercising any other rights and remedies
available to it. Acceptance of rent or other payments by Landlord shall not
constitute a waiver of late charges or interest accrued with respect to such
rent or other payments or any prior installments thereof, nor of any other
defaults by Tenant, whether monetary or non-monetary in nature, remaining
uncured at the time of such acceptance of rent or other payments.
4. [Omitted.]
5. [Omitted.]
6. TAXES
     6.1 Personal Property. Tenant shall be responsible for and shall pay prior
to delinquency all taxes and assessments levied against or by reason of (a) any
and all alterations, additions and items installed or placed on or in the
Premises and taxed as personal property rather than as real property, and/or
(b) all personal property, trade fixtures and other property placed by Tenant on
or about the Premises. Upon request by Landlord, Tenant shall furnish Landlord
with satisfactory evidence of Tenant’s payment thereof. If at any time during
the term of this Lease any of said alterations, additions or personal property,
whether or not belonging to Tenant, shall be taxed or assessed as pan of the
Center, then such tax or assessment shall be paid by Tenant to Landlord within
fifteen (15) days after presentation by Landlord of copies of the tax bills in
which such taxes and assessments are included and shall, for the purposes of
this Lease, be deemed to be personal property taxes or assessments under this
Section 6.1.
     6.2 Real Property. To the extent any real property taxes and assessments on
any portions of the Center (including, but not limited to, the Improvements or
any portion thereof) leased or occupied solely by Tenant are assessed directly
to Tenant, Tenant shall be responsible for and shall pay prior to delinquency
all such taxes and assessments levied against the applicable portions of the
Center. Upon request by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of Tenant’s payment thereof. To the extent the Center
and/or Improvements are taxed or assessed to Landlord following the Commencement
Date, such real property taxes and assessments shall constitute Operating
Expenses (as that term is defined in Section 7.2 of this Lease) and shall be
paid in accordance with the provisions of Article 7 of this Lease.

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7. OPERATING EXPENSES
     7.1 Payment of Operating Expenses.
          (a) Tenant shall pay to Landlord, at the time and in the manner
hereinafter set forth, as additional rental, an amount equal to twenty-four and
twenty-one hundredths percent (24.21%) (“Tenant’s Operating Cost Share”) of the
Operating Expenses defined in Section 7.2; provided, however, that the Tenant’s
Operating Cost Share set forth in the preceding portion of this sentence shall
apply only to expenses that are determined and allocated by Landlord on a
Center-wide basis, subject to any adjustments required under any other
applicable provisions of this Section 7.1, and that Tenant’s Operating Cost
Share shall be seventy-six and fifty-seven hundredths percent (76.57%) with
respect to any Operating Expenses defined in Section 7.2 that are reasonably
allocable solely to the Phase I Property. As of the date of this Lease, Landlord
represents that the four buildings in which the Premises are located are the
only buildings located on the Phase I Property and that Landlord’s current
practice is to determine and allocate all Operating Expenses (including, but not
limited to, real and personal property taxes and assessments, insurance,
building maintenance, property management, landscape maintenance and irrigation,
and parking area maintenance and lighting) on a stand-alone basis to the Phase 1
Property.
          (b) Tenant’s Operating Cost Share as specified in paragraph (a) of
this Section with respect to Operating Expenses which are determined and
allocated on a Center-wide basis is based upon an area of 136,242 square feet
for the Premises and upon an aggregate area of 562,859 square feet for the
existing buildings owned by Landlord in the Center as depicted in the Site Plan.
Tenant’s Operating Cost Share as specified in paragraph (a) of this Section with
respect to Operating Expenses which are determined and allocated solely to the
Phase I Property is based upon an area of 136,242 square feet for the Premises
and upon an aggregate area of 177,938 square feet for the existing buildings on
the Phase I Property. If the actual area of the buildings on the Phase I
Property from time to time or of the buildings owned from time to time by
Landlord in the Center and consolidated with the buildings in which the Premises
are located for operation, maintenance, common area and Operating Expense
purposes, as applicable, as such area is determined in good faith by Landlord’s
architect on the same basis of measurement under which the Premises have been
determined to contain 136,242 square feet (from the exterior faces of exterior
walls and from the dripline of any overhangs, except that in the case of any
two- story recesses or overhangs, the area to the dripline of the overhang is
counted as part of the area of the first story but not as part of the area of
the second story), differs from the assumed figures set forth above (including,
but not limited to, any such difference arising from the construction of
additional buildings in the Center as contemplated in Section 7.1(c) hereof), or
if the area of the Premises changes from time to time pursuant to the
construction of additional areas of the Premises pursuant to Section 2.3(b)
and/or 2.3(c) and/or pursuant to Tenant’s exercise of a first refusal right
pursuant to Section 1.3 hereof, then Tenant’s Operating Cost Share as it applies
to Operating Expenses that are determined and allocated on a Center-wide basis
or that are determined and allocated solely with respect to the Phase I
Property, as applicable, shall be adjusted to reflect the actual areas so
determined as they exist from time to time; provided. however, that in the event
Tenant exercises a first refusal right with respect to the 280 East Grand
Building, Landlord hereby advises Tenant that it is presently Landlord’s
practice to account for all Operating Expenses attributable or allocable to the
separate legal parcel on which the 280 East Grand Building is located on a
stand-alone basis and to allocate such Operating Expenses one hundred percent
(100%) to the tenant(s) of the 280 East Grand Building.
          (c) If Landlord at any time constructs additional buildings in the
Center or on any adjacent property owned by Landlord and operated, for common
area purposes, on an integrated basis with the Center, then Tenant’s Operating
Cost Share as it applies to Operating Expenses that are determined and allocated
on a Center-wide basis shall be adjusted to be equal to the percentage
determined by dividing the gross square footage of the Premises as they exist
from time to time by the gross square footage of all buildings located in the
Center or on any applicable adjacent property owned by Landlord as described
above. In determining such percentage, a building shall be taken into account
from and after the date on which a tenant first

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enters into possession of the building or a portion thereof, and the good faith
determination of the gross square footage of any such building by Landlord’s
architects shall be final and binding upon the parties.
     7.2 Definition Of Operating Expenses.
          (a) Subject to the exclusions and provisions hereinafter contained,
the term “Operating Expenses” shall mean the total costs and expenses incurred
by or allocable to Landlord for management, operation and maintenance of the
Improvements, the Center, the buildings in the Center, and the real property on
which the Center is located (or, in the case of items that are determined and
allocated on a stand-alone basis as described in Section 7.1, that portion of
the Center that consists of the separate legal parcel or parcels containing the
buildings in which the Premises are located), including, without limitation,
costs and expenses of (i) insurance (including earthquake and environmental
insurance), property management, landscaping, and the operation, repair and
maintenance of buildings and Common Areas; (ii) all utilities and services;
(iii) real and personal property taxes and assessments or substitutes therefor
levied or assessed against the Center or any part thereof, including (but not
limited to) any possessory interest, use, business, license or other taxes or
fees, any taxes imposed directly on rents or services, any assessments or
charges for police or fire protection, housing, transit, open space, street or
sidewalk construction or maintenance or other similar services from time to time
by any governmental or quasi-governmental entity, and any other new taxes on
landlords in addition to taxes now in effect; (iv) supplies, equipment,
utilities and tools used in management, operation and maintenance of the Center;
(v) expenditures for capital improvements to the Center, the Improvements or the
buildings in the Center, amortized over a reasonable period determined in
accordance with generally accepted accounting principles applied on a consistent
basis, (aa) which reduce or will cause future reduction of other items of
Operating Expenses for which Tenant is otherwise required to contribute or
(bb) which are required by law, ordinance, regulation or order of any
governmental authority or (cc) of which Tenant has use or which benefit Tenant;
and (vi) any other costs (including, but not limited to, any parking or
utilities fees or surcharges) allocable to or paid by Landlord, as owner of the
Center, the buildings therein or the Improvements, pursuant to any applicable
laws, ordinances, regulations or orders of any governmental or
quasi-governmental authority or pursuant to the terms of any declarations of
covenants, conditions and restrictions now or hereafter affecting the Center or
any other property over which Tenant has non-exclusive use rights as
contemplated in Section 1.1(b) hereof. Operating Expenses shall not include any
costs attributable to Landlord’s Work, nor any costs attributable to the initial
construction of the buildings in the Center or of Common Area improvements in
the Center. The distinction between items of ordinary operating maintenance and
repair and items of a capital nature shall be made in accordance with generally
accepted accounting principles applied on a consistent basis or in accordance
with tax accounting principles, as determined in good faith by Landlord’s
accountants.
          (b) Notwithstanding anything to the contrary contained in this Lease,
the following shall not be included within Operating Expenses:
                (i) Costs of maintenance or repair of the roof membrane for any
building, except during periods (if any) in which costs of maintenance or repair
of the roof membrane for the buildings in which the Premises are located are
likewise included as an Operating Expense (rather than being incurred directly
by Tenant or passed through directly to Tenant);
                (ii) Leasing commissions, attorneys’ fees, costs, disbursements,
and other expenses incurred in connection with negotiations or disputes with
tenants, or in connection with leasing, renovating or improving space for
tenants or other occupants or prospective tenants or other occupants of the
Center or of any other property owned by Landlord;
                (iii) The cost of any service sold to any tenant (including
Tenant) or other occupant for which Landlord is entitled to be reimbursed as an
additional charge or rental over and above the basic rent and operating expenses
payable under the lease with that tenant;

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                (iv) Any depreciation on the buildings in which the Premises are
located or on any other improvements in the Center or on any other property
owned by Landlord;
                (v) Expenses in connection with services or other benefits of a
type that are not offered or made available to Tenant but that are provided to
another tenant of the Center or of any other property owned by Landlord;
                (vi) Costs incurred due to Landlord’s violation of any terms or
conditions of this Lease or of any other lease relating to the buildings in
which the Premises are located or to any other portion of the Center or of any
other property owned by Landlord;
                (vii) Overhead profit increments paid to any subsidiary or
affiliate of Landlord for management or other services on or to the Center or
any portion thereof or any other property owned by Landlord, or for supplies or
other materials to the extent that the cost of the services, supplies or
materials exceeds the cost that would have been paid had the services, supplies
or materials been provided by unaffiliated parties on a competitive basis;
                (viii) All interest, loan fees and other carrying costs related
to any mortgage or deed of trust or related to any capital item, and all rental
and other amounts payable under any ground or underlying lease, or under any
lease for any equipment ordinarily considered to be of a capital nature (except
(A) janitorial equipment which is not affixed to the applicable buildings and/or
(B) equipment the cost of which, if purchased, would be considered an
amortizable Operating Expense under the provisions of this Section 7.2,
notwithstanding the capital nature of such equipment);
                (ix) Any compensation paid to clerks, attendants or other
persons in commercial concessions operated by Landlord;
                (x) Advertising and promotional expenditures;
                (xi) Costs of repairs and other work occasioned by fire,
windstorm or other casualty of an insurable nature, except to the extent of any
applicable deductible amounts under insurance actually carried by Landlord;
                (xii) Any costs, fines or penalties incurred due to violations
by Landlord of any governmental rule or authority or of this Lease or any other
lease of any portion of the Center or any other property owned by Landlord, or
due to Landlord’s negligence or willful misconduct;
                (xiii) Management fees allocable to the Phase I Property to the
extent they exceed the following percentages of the gross income (rent and
Operating Expenses) received by Landlord with respect to the Phase I Property
during the applicable period: (A) from the Commencement Date through
December 31, 2004, two and one half percent (2.5%); and (B) from January 1, 2005
through the remaining term of this Lease (including any extension term(s)), one
and one half percent (1.5%);
                (xiv) Costs for sculpture, paintings or other objects of art,
and for any insurance thereon or extraordinary security in connection therewith;
                (xv) Wages, salaries or other compensation paid to any executive
employees above the grade of building manager;
                (xvi) The cost of correcting any building code or other
violations which were violations prior to the Commencement Date;
               (xvii) The cost of containing, removing or otherwise remediating
any contamination of the Center (including the underlying land and groundwater)
by any toxic or hazardous materials (including, without limitation, asbestos and
PCBs); and

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               (xviii) During any period when the Center is owned by a person or
entity which is not a person or entity controlling, controlled by or under
common control with either Landlord or Slough Estates USA Inc., earthquake
and/or environmental insurance premiums in excess of rates that are commercially
reasonable under then existing market conditions.
     7.3 Determination Of Operating Expenses. Tenant is already paying estimated
Operating Expenses, pursuant to the Existing Lease, for calendar year 2001 based
on estimates previously furnished by Landlord to Tenant. During the last month
of each calendar year of the term of this Lease (“Lease Year”), or as soon
thereafter as practical, Landlord shall provide Tenant notice of Landlord’s
estimate of the Operating Expenses for the ensuing Lease Year or applicable
portion thereof. On or before the first day of each month during each Lease Year
or applicable portion thereof, beginning on the Commencement Date, Tenant shall
pay to Landlord Tenant’s Operating Cost Share of the portion of such estimated
Operating Expenses allocable (on a prorata basis) to such month; provided,
however, that if such notice is not given in the last month of a Lease Year,
Tenant shall continue to pay on the basis of the prior year’s estimate, if any,
until the month after such notice is given. If at any time or times it appears
to Landlord that the actual Operating Expenses will vary from Landlord’s
estimate by more than five percent (5%), Landlord may, by notice to Tenant,
revise its estimate for such year and subsequent payments by Tenant for such
year shall be based upon such revised estimate.
7.4 Final Accounting For Lease Year.
          (a) Within ninety (90) days after the close of each Lease Year, or as
soon after such 90-day period as practicable, Landlord shall deliver to Tenant a
statement of Tenant’s Operating Cost Share of the Operating Expenses for such
Lease Year prepared by Landlord from Landlord’s books and records, which
statement shall be final and binding on Landlord and Tenant (except as provided
in Section 7.4(b)). If on the basis of such statement Tenant owes an amount that
is more or less than the estimated payments for such Lease Year previously made
by Tenant, Tenant or Landlord, as the case may be, shall pay the deficiency to
the other party within thirty (30) days after delivery of the statement. Failure
or inability of Landlord to deliver the annual statement within such ninety
(90) day period shall not impair or constitute a waiver of Tenant’s obligation
to pay Operating Expenses, or cause Landlord to incur any liability for damages.
          (b) At any time within three (3) months after receipt of Landlord’s
annual statement of Operating Expenses as contemplated in Section 7.4(a), Tenant
shall be entitled, upon reasonable written notice to Landlord and during normal
business hours at Landlord’s office or such other places as Landlord shall
designate, to inspect and examine those books and records of Landlord relating
to the determination of Operating Expenses for the immediately preceding Lease
Year covered by such annual statement or, if Tenant so elects by written notice
to Landlord, to request an independent audit of such books and records. The
independent audit of the books and records shall be conducted by a certified
public accountant acceptable to both Landlord and Tenant or, if the parties are
unable to agree, by a certified public accountant appointed by the Presiding
Judge of the San Mateo County Superior Court upon the application of either
Landlord or Tenant (with notice to the other party). In either event, such
certified public accountant shall be one who is not then employed in any
capacity by Landlord or Tenant or by any of their respective affiliates. The
audit shall be limited to the determination of the amount of Operating Expenses
for the subject Lease Year, and shall be based on generally accepted accounting
principles and tax accounting principles, consistently applied. If it is
determined, by mutual agreement of Landlord and Tenant or by independent audit,
that the amount of Operating Expenses billed to or paid by Tenant for the
applicable Lease Year was incorrect, then the appropriate party shall pay to the
other party the deficiency or overpayment, as applicable, within thirty
(30) days after the final determination of such deficiency or overpayment. All
costs and expenses of the audit shall be paid by Tenant unless the audit shows
that Landlord overstated Operating Expenses for the subject Lease Year by more
than five percent (5%), in which case Landlord shall pay all costs and expenses
of the audit. Each party agrees to maintain the confidentiality of the findings
of any audit in accordance with the provisions of this Section 7.4.

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     7.5 Proration. If the Commencement Date falls on a day other than the first
day of a Lease Year or if this Lease terminates on a day other than the last day
of a Lease Year, then the amount of Operating Expenses payable by Tenant with
respect to such first or last partial Lease Year shall be prorated on the basis
which the number of days during such Lease Year in which this Lease is in effect
bears to 365. The termination of this Lease shall not affect the obligations of
Landlord and Tenant pursuant to Section 7.4 to be performed after such
termination.
8. UTILITIES
     8.1 Payment. Commencing with the Commencement Date and thereafter
throughout the term of this Lease, Tenant shall pay, before delinquency, all
charges for water, gas, heat, light, electricity, power, sewer, telephone, alarm
system, janitorial and other services or utilities supplied to or consumed in or
with respect to the Premises (other than any separately metered costs for water,
electricity or other services or utilities furnished with respect to the Common
Areas, which costs, to the extent paid by Landlord, shall constitute Operating
Expenses under Section 7.2 hereof), including any taxes on such services and
utilities. It is the intention of the parties that all such services shall be
separately metered to the Premises. In the event that any of such services
supplied to the Premises are not separately metered, then the amount thereof
shall be an item of Operating Expenses and shall be paid as provided in
Article 7.
     8.2 Interruption. There shall be no abatement of rent or other charges
required to be paid hereunder and Landlord shall not be liable in damages or
otherwise for interruption or failure of any service or utility furnished to or
used with respect to the Premises or the Center because of accident, making of
repairs, alterations or improvements, severe weather, difficulty or inability in
obtaining services or supplies, labor difficulties or any other cause.
Notwithstanding the foregoing provisions of this Section 8.2, however, in the
event of any interruption or failure of any service or utility to the Premises
that (i) is caused in whole or in material part by the active negligence or
willful misconduct of Landlord or its agents or employees and (ii) continues for
more than three (3) business days and (iii) materially impairs Tenant’s ability
to use the Premises for their intended purposes hereunder, then following such
three (3) business day period, Tenant’s obligations for payment of rent and
other charges under this Lease shall be abated in proportion to the degree of
impairment of Tenant’s use of the Premises or applicable portion thereof, and
such abatement shall continue until Tenant’s use of the Premises is no longer
materially impaired thereby.
9. ALTERATIONS: SIGNS
     9.1 Right To Make Alterations. Tenant shall make no alterations, additions
or improvements to the Premises, the buildings in which the Premises are located
or the Center, other than (i) alterations, additions or improvements to Tenant’s
Property (as defined in, and subject to the provisions of, Section 9.2 below),
and/or (ii) other interior non-structural alterations costing less than Fifty
Thousand Dollars ($50,000.00) in the aggregate during any twelve (12) month
period, without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed. All such alterations, additions and
improvements shall be completed with due diligence in a first-class workmanlike
manner, in compliance with plans and specifications approved in writing by
Landlord and in compliance with all applicable laws, ordinances, rules and
regulations, and to the extent Landlord’s consent is not otherwise required
hereunder for such alterations, additions or improvements, Tenant shall give
prompt written notice thereof to Landlord. Tenant shall cause any contractors
engaged by Tenant for work in the Premises or on the Property to maintain public
liability and property damage insurance, and other customary insurance, with
such terms and in such amounts as Landlord may reasonably require, naming as
additional insureds Landlord and any of its partners, shareholders, property
managers and lenders designated by Landlord for this purpose, and shall furnish
Landlord with certificates of insurance or other evidence that such coverage is
in effect. Notwithstanding any other provisions of this Section 9.1, under no
circumstances shall Tenant make any structural alterations or improvements, or
any substantial changes to the roof or substantial equipment

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installations on the roof, or any substantial changes or alterations to the
building systems, without Landlord’s prior written consent (which consent shall
not be unreasonably withheld or delayed). If Tenant so requests in seeking
Landlord’s consent to any alterations, additions or improvements, Landlord shall
specify in granting such consent whether Landlord intends to require that Tenant
remove such alterations, additions or improvements (or any specified portions
thereof) upon expiration or termination of this Lease. Landlord shall receive no
fee for supervision, profit, overhead or general conditions in connection with
any alterations, additions or improvements constructed or installed by Tenant
under this Lease.
     9.2 Title To Alterations. All alterations, additions and improvements
existing in the Premises on the Commencement Date or thereafter installed in, on
or about the Premises or the Center (except as otherwise expressly provided in
this Section 9.2) shall become part of the Center and the real property on which
it is located and shall become the property of Landlord, unless Landlord elects,
in the case of any alterations, additions or improvements installed after the
Commencement Date, to require Tenant to remove the same upon the termination of
this Lease (subject to the provisions of Section 9.2(c) below).
          (a) Landlord’s Property. The parties specifically agree that the
alterations, additions and improvements which are or shall be part of the Center
and are or shall be the property of Landlord shall include (but not be limited
to) (i) built-in coldrooms, (ii) air lines, plumbing, electrical wiring and
other similar systems associated with any of Tenant’s (A) built-in coldrooms,
(B) laboratory casework, (C) vacuum pumps, (D) compressors, and/or (E) water
purification and deionized water systems, (iii) plumbing, electrical wiring and
other similar systems associated with Tenant’s animal water system and located
within walls, ceilings or floors, and (iv) wiring and jacks associated with
Tenant’s telephone systems, computer network systems and security systems, but
shall not include Tenant’s Property (as defined in Section 9.2(b) below) except
to the extent purchased by Landlord pursuant to Section 9.2(g), if applicable.
          (b) Tenant’s Property. With respect to any portions of the Premises as
they exist from time to time that are located on the Phase I Property, the term
“Tenant’s Property” shall mean all of the following items: (i) movable personal
property, office furniture and/or modular office furniture systems, movable
equipment and trade fixtures; (ii) lab benches, built-in fume hoods, plumbing
fixtures and other laboratory casework (collectively, the “Option Property”),
but excluding air lines, plumbing, electrical wiring and other similar systems
associated with any of such laboratory casework and/or built-in fume hoods;
(iii) compressors, excluding air lines, plumbing, electrical wiring and other
similar systems associated with any of such compressors; (iv) vacuum pumps,
excluding plumbing, electrical wiring and other similar systems associated with
any of such vacuum pumps; (v) water purification systems and/or deionized water
systems, excluding plumbing, electrical wiring and other similar systems
associated with any of such water purification or deionized water systems;
(vi) auxiliary generators and transfer switches; (vii) telephone systems and
desk sets, excluding wiring and jacks; (viii) computer network systems,
excluding wiring and jacks; (ix) security system, excluding wiring and jacks;
(x) cage and rack washers; (xi) glassware washers; (xii) autoclaves;
(xiii) Edstram animal water system, excluding plumbing, electrical wiring and
other similar systems associated with such animal water system;
(xiv) freestanding coldrooms; and (xv) movable fume hoods.
          (c) Removal of Tenant’s Property at End of Term. Notwithstanding
anything to the contrary contained in the foregoing provisions, the parties
specifically agree that the Option Property shall not become the property of
Landlord unless, and then only to the extent that, Landlord exercises its
purchase option in accordance with Section 9.2(g) below. Tenant shall have the
right to remove at the termination or expiration of this Lease, subject to any
specific limitations set forth in this Article 9, any or all of Tenant’s
Property. Tenant shall promptly repair any damage caused by its removal of any
of Tenant’s Property during or at the expiration of the term of this Lease.
Notwithstanding any other provisions of this Article 9, however, if Tenant
requests Landlord’s written consent to any alterations, additions or
improvements under Section 9.1 hereof after the Commencement Date and, in
requesting such

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consent, asks that Landlord specify whether Landlord will require removal of
such alterations, additions or improvements upon termination or expiration of
this Lease, then Landlord shall not be entitled to require such removal unless
Landlord specified its intention to do so at the time of granting of Landlord’s
consent to the requested alterations, additions or improvements.
          (d) Items Located in Premises Outside the Phase 1 Property. With
respect to any portions of the Premises as they exist from time to time that are
located outside the Phase I Property (such as, for example, the 280 East Grand
Building if hereafter added to the Premises pursuant to Section 1.3 hereof), the
term “Tenant’s Property” shall not include any lab benches, built-in fume hoods,
plumbing fixtures and other laboratory casework (which items shall instead be
deemed upon installation, or upon commencement of Tenant’s leasing of such
additional Premises to the extent such items were installed by Landlord or a
predecessor tenant prior to such commencement, to be Landlord’s property and to
be part of the Center and of the real property on which it is located) and shall
include items described in any of the other clauses of Section 9.2(b) only to
the extent such items are installed by Tenant in such additional Premises at
Tenant’s sole expense.
          (e) Tenant’s Rights to Modify. Etc. and Remove Tenant’s Property. As
provided in Sections 9.1 and 9.2, but subject to any limitations expressly set
forth in this Article 9, Tenant shall generally have the right throughout the
term of this Lease to install, alter, modify, improve, replace and remove
Tenant’s Property without Landlord’s consent and shall generally have the right
at the termination or expiration of this Lease to remove Tenant’s Property,
provided that Tenant shall, at all times prior to the lapse (if any),
unexercised, of Landlord’s purchase option under Section 9.2(g) with respect to
the Option Property, maintain in the Premises a quality and quantity of
laboratory casework, lab benches and built-in fume hoods that is not materially
less than the quality and quantity of such items located in the Premises on the
Commencement Date (subject to the effects of ordinary wear and tear and to the
effects of damage, destruction or other casualty, the latter of which shall be
governed by the provisions of Article 15 hereof).
          (f) Tenant’s Right to Encumber Tenant’s Property. Tenant shall also
have the right, notwithstanding any other provisions of this Article 9
(including, but not limited to, Landlord’s purchase option for the Option
Property pursuant to Section 9.2(g) below), to use Tenant’s Property as security
for third-party financing during the term of this Lease, and Landlord agrees to
cooperate in all reasonable respects with any such third-party financing sought
by Tenant against the security of Tenant’s Property, including recognition by
Landlord of the lender’s right, subject to reasonable conditions, to foreclose
upon and remove Tenant’s Property upon a default by Tenant under such financing.
          (g) Landlord’s Purchase Option. Landlord shall have the option,
exercisable by written notice to Tenant no less than ninety (90) days before the
expiration of the term of this Lease (or concurrently with any earlier
termination of this Lease by Landlord pursuant to a default by Tenant, if
applicable), to purchase from Tenant (and thereby require Tenant to leave behind
in the Premises upon such expiration or termination, notwithstanding any other
provisions of this Section 9.2) all then existing Option Property for a purchase
price of Six Hundred Fifty Thousand Dollars ($650,000.00) payable to Tenant in
cash concurrently with and in exchange for Tenant’s delivery to Landlord of a
bill of sale, in form and substance reasonably satisfactory to Landlord,
conveying to Landlord all such Option Property in its then existing condition,
as is, but free and clear of any liens or encumbrances created by or through
Tenant. If Landlord does not timely exercise such purchase option, then Tenant
shall have the same right to remove the Option Property from the Premises prior
to or upon termination or expiration of this Lease as Tenant has with respect to
the rest of Tenant’s Property, subject to any express conditions or restrictions
set forth in this Article 9 with respect to such removal.
     9.3 Tenant Fixtures. Subject to Sections 9.2 and 9.5, Tenant may install,
remove and reinstall Tenant’s Property and other trade fixtures without
Landlord’s prior written consent, except that installation and removal of any
fixtures which affect the exterior or structural portions of the buildings in
which the Premises are located or the building systems therein shall require

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Landlord’s written approval, which approval shall not be unreasonably withheld
or delayed. Subject to the provisions of Section 9.5, the foregoing shall apply
to Tenant’s signs, logos and insignia, all of which Tenant shall have the right
to place and remove and replace (a) only with Landlord’s prior written consent
as to location, size and composition, which consent shall not be unreasonably
withheld or delayed, and (b) only in compliance with all restrictions and
requirements of applicable law and of any covenants, conditions and restrictions
or other written agreements now or hereafter applicable to the Center. Tenant
shall immediately repair any damage caused by installation and removal of
fixtures under this Section 9.3.
     9.4 No Liens. Tenant shall at all times keep the Premises, the buildings in
which the Premises are located and the Center free from all liens and claims of
any contractors, subcontractors, materialmen, suppliers or any other parties
employed either directly or indirectly by Tenant in construction work on the
Premises or in the Center. Notwithstanding the preceding sentence, Tenant may
contest any claim of lien, but only if, prior to such contest, Tenant either
(i) posts security in the amount of the claim, plus estimated costs and
interest, or (ii) records a bond of a responsible corporate surety in such
amount as may be required to release the lien from the applicable buildings or
improvements and the Center. Tenant shall indemnify, defend and hold Landlord
harmless against any and all liability, loss, damage, cost and other expenses,
including, without limitation, reasonable attorneys’ fees, arising out of claims
of any lien for work performed or materials or supplies furnished at the request
of Tenant or persons claiming under Tenant.
     9.5 Signs. Without limiting the generality of the provisions of Section 9.3
hereof, Tenant shall have the right to display its corporate name and logo on
the buildings in which the Premises are located and in front of the principal
entrances to the Premises, subject to Landlord’s prior approval as to location,
size, design and composition (which approval shall not be unreasonably withheld
or delayed), subject to the established sign criteria for the Britannia Pointe
Grand Business Park and subject to all restrictions and requirements of
applicable law and of any covenants, conditions and restrictions or other
written agreements now or hereafter applicable to the Center. Landlord hereby
expressly confirms that it has already approved all of Tenant’s signage existing
on and about the Premises as of the Commencement Date, and that in the event a
new lobby is constructed as contemplated in Section 2.3(c) above, Landlord will
approve, at Tenant’s request, any new exterior signage that is substantially
similar to or reasonably comparable to the signage then maintained, with
Landlord’s consent, by other major tenants in the Center.
10. MAINTENANCE AND REPAIRS
     10.1 Landlord’s Work.
          (a) Landlord shall repair and maintain or cause to be repaired and
maintained the driveways, parking areas, landscaping and other Common Areas of
the Center and the structural roof, roof membrane, exterior walls, foundation
and other structural portions of the buildings in which the Premises are
located. The cost of all work performed by Landlord under this Section 10.1
shall be an Operating Expense hereunder, except to the extent such work (i) is
required due to the negligence of Landlord, (ii) is a capital expenditure not
includible as an Operating Expense under Section 7.2 hereof, (iii) is required
due to the negligence or willful misconduct of Tenant or its agents, employees
or invitees (in which event Tenant shall bear the full cost of such work
pursuant to the indemnification provided in Section 12.6 hereof, subject to the
release set forth in Section 12.4 hereof), or (iv) involves repair or
maintenance of the roof membrane on any of the applicable buildings (in which
event there shall be charged back directly to Tenant, as additional rent and not
as an Operating Expense, but subject to the same limitations set forth for
Operating Expenses in Section 7.2 for purposes of determining what are capital
items and what portion, if any, of capital items can properly be allocated to a
particular year or other applicable period, a prorata share of the cost of such
repair or maintenance calculated on the basis of the percentage of the
applicable building that is occupied by Tenant). Tenant knowingly and
voluntarily waives the right to make repairs at Landlord’s expense, except to
the

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extent permitted by Section 10.1(b) below, or to offset the cost thereof against
rent, under any law, statute, regulation or ordinance now or hereafter in
effect.
          (b) If Landlord fails to perform any repairs or maintenance required
to be performed by Landlord on the buildings in which the Premises are located
under Section 10.1(a) and such failure continues for thirty (30) days or more
after Tenant gives Landlord written notice of such failure (or, if such repairs
or maintenance cannot reasonably be performed within such 30-day period, then if
Landlord fails to commence performance within such 30-day period and thereafter
to pursue such performance diligently to completion), then Tenant shall have the
right to perform such repairs or maintenance and Landlord shall reimburse Tenant
for the reasonable cost thereof within fifteen (15) days after written notice
from Tenant of the completion and cost of such work, accompanied by copies of
invoices or other reasonable supporting documentation. Under no circumstances,
however, shall Tenant have any right to offset the cost of any such work against
rent or other charges falling due from time to time under this Lease.
     10.2 Tenant’s Obligation For Maintenance.
          (a) Good Order. Condition And Repair. Except as provided in
Section 10.1 hereof, and except for damage caused by Landlord or its agents,
employees or contractors (which shall be the sole responsibility of Landlord,
subject to the release set forth in Section 12.4 hereof) or by an event of
casualty or condemnation (which shall be governed by Article 15 hereof), Tenant
at its sole cost and expense shall keep and maintain in good and sanitary order,
condition and repair the Premises and every part thereof, wherever located,
including but not limited to the signs, interior, ceiling, electrical system,
plumbing system, telephone and communications systems of the buildings in which
the Premises are located, the HVAC equipment and related mechanical systems
serving the Premises (for which equipment and systems Tenant shall enter into a
service contract with a person or entity designated or approved by Landlord),
all doors, door checks, windows, plate glass, door fronts, exposed plumbing and
sewage and other utility facilities, fixtures, lighting, wall surfaces, floor
surfaces and ceiling surfaces of the Premises and all other interior repairs,
foreseen and unforeseen, with respect to the Premises, as required.
          (b) Landlord’s Remedy. If Tenant, after notice from Landlord, fails to
make or perform promptly any repairs or maintenance which are the obligation of
Tenant hereunder, Landlord shall have the right, but shall not be required, to
enter the Premises and make the repairs or perform the maintenance necessary to
restore the Premises to good and sanitary order, condition and repair.
Immediately on demand from Landlord, the cost of such repairs shall be due and
payable by Tenant to Landlord.
          (c) Condition Upon Surrender. At the expiration or sooner termination
of this Lease, Tenant shall surrender the Premises and the Improvements,
including any additions, alterations and improvements thereto, broom clean, in
good and sanitary order, condition and repair, ordinary wear and tear excepted,
first, however, removing all goods and effects of Tenant and all and fixtures
and items required to be removed or specified to be removed at Landlord’s
election pursuant to this Lease (including, but not limited to, any such removal
required as a result of an election duly made by Landlord to require such
removal as contemplated in Section 9.2), and repairing any damage caused by such
removal. Tenant shall not have the right to remove fixtures or equipment if
Tenant is in default hereunder, beyond any applicable cure period, unless
Landlord specifically waives this provision in writing. Tenant expressly waives
any and all interest in any personal property and trade fixtures not removed
from the Premises by Tenant at the expiration or termination of this Lease,
agrees that any such personal property and trade fixtures may, at Landlord’s
election, be deemed to have been abandoned by Tenant, and authorizes Landlord
(at its election and without prejudice to any other remedies under this Lease or
under applicable law) to remove and either retain, store or dispose of such
property at Tenant’s cost and expense, and Tenant waives all claims against
Landlord for any damages resulting from any such removal, storage, retention or
disposal.

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11. USE OF PREMISES
     11.1 Permitted Use. Subject to Sections 11.3, 11.4 and 11.6 hereof, Tenant
shall use the Premises solely for a laboratory research and development
facility, including (but not limited to) wet chemistry and biology labs, clean
rooms, light manufacturing, storage and use of toxic and radioactive materials
(subject to the provisions of Section 11.6 hereof), storage and use of
laboratory animals, administrative offices, and other lawful purposes reasonably
related to or incidental to such specified uses (subject in each case to receipt
of all necessary approvals from the City of South San Francisco and other
governmental agencies having jurisdiction over the Premises), and for no other
purpose.
     11.2 [Omitted.]
     11.3 No Nuisance. Tenant shall not use the Premises or the Center for or
carry on or permit within the Center or any part thereof any offensive, noisy or
dangerous trade, business, manufacture, occupation, odor or fumes, or any
nuisance or anything against public policy, nor interfere with the rights or
business of Landlord in the Premises or the Center, nor commit or allow to be
committed any waste in, on or about the Center. Tenant shall not do or permit
anything to be done in or about the Center, nor bring nor keep anything therein,
which will in any way cause the Center to be uninsurable with respect to the
insurance required by this Lease or with respect to standard fire and extended
coverage insurance with vandalism, malicious mischief and riot endorsements.
     11.4 Compliance With Laws. Tenant shall not use the Premises or the Center
or permit the Premises or the Center to be used in whole or in part for any
purpose or use that is in violation of any applicable laws, ordinances,
regulations or rules of any governmental agency or public authority. Tenant
shall keep the Premises and Improvements therein equipped with all safety
appliances required by law, ordinance or insurance on the Center, or any order
or regulation of any public authority, because of Tenant’s particular use of the
Premises and the Center. Tenant shall procure all licenses and permits required
for Tenant’s use of the Premises and the Center. Tenant shall use the Premises
and the Center in strict accordance with all applicable ordinances, rules, laws
and regulations and shall comply with all requirements of all governmental
authorities now in force or which may hereafter be in force pertaining to the
use of the Premises and the Center by Tenant, including, without limitation,
regulations applicable to noise, water, soil and air pollution, and making such
nonstructural alterations and additions thereto in the Premises or the Center as
may be required from time to time by such laws, ordinances, rules, regulations
and requirements of governmental authorities or insurers of the Center
(collectively, “Requirements”) because of Tenant’s construction of improvements
in or other particular use of the Premises or the Center. Any structural
alterations or additions required from time to time by applicable Requirements
because of Tenant’s construction of improvements in the Premises or other
particular use of the Premises or the Center shall, at Landlord’s election,
either (i) be made by Tenant, at Tenant’s sole cost and expense, in accordance
with the procedures and standards set forth in Section 9.1 for alterations by
Tenant, or (ii) be made by Landlord at Tenant’s sole cost and expense, in which
event Tenant shall pay to Landlord as additional rent, within ten (10) days
after demand by Landlord, an amount equal to all reasonable costs incurred by
Landlord in connection with such alterations or additions. The judgment of any
court, or the admission by Tenant in any proceeding against Tenant, that Tenant
has violated any law, statute, ordinance or governmental rule, regulation or
requirement shall be conclusive of such violation as between Landlord and
Tenant.
     11.5 Liquidation Sales. Tenant shall not conduct or permit to be conducted
any auction, bankruptcy sale, liquidation sale, or going out of business sale,
in, upon or about the Premises or the Center, whether said auction or sale be
voluntary, involuntary or pursuant to any assignment for the benefit of
creditors, or pursuant to any bankruptcy or other insolvency proceeding.

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     11.6 Environmental Matters.
          (a) For purposes of this Section, “hazardous substance” shall mean the
substances included within the definitions of the term “hazardous substance”
under (i) the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C. §§ 9601 et seq., and the regulations
promulgated thereunder, as amended, (ii) the California Carpenter-Presley-Tanner
Hazardous Substance Account Act, California Health & Safety Code §§ 25300 et
seq., and regulations promulgated thereunder, as amended, (iii) the Hazardous
Materials Release Response Plans and Inventory Act, California Heath & Safety
Code §§ 25500 et seq., and regulations promulgated thereunder, as amended, and
(iv) petroleum; “hazardous waste” shall mean (i) any waste listed as or meeting
the identified characteristics of a “hazardous waste” under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C. §§ 6901 et seq., and
regulations promulgated pursuant thereto, as amended (collectively, “RCRA”).
(ii) any waste meeting the identified characteristics of “hazardous waste,”
“extremely hazardous waste” or “restricted hazardous waste” under the California
Hazardous Waste Control Law, California Health & Safety Code §§ 25100 et seq.,
and regulations promulgated pursuant thereto, as amended (collectively, the
“CHWCL”). and/or (iii) any waste meeting the identified characteristics of
“medical waste” under California Health & Safety Code §§ 25015-25027.8, and
regulations promulgated thereunder, as amended; and “hazardous waste facility”
shall mean a hazardous waste facility as defined under the CHWCL.
          (b) Without limiting the generality of the obligations set forth in
Section 1.1 4 of this Lease:
               (i) Tenant shall not cause or permit any hazardous substance or
hazardous waste to be brought upon, kept, stored or used in or about the
Premises or the Center without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, except that Tenant, in connection
with its permitted use of the Premises as provided in Section 11.1, may keep,
store and use materials that constitute hazardous substances which are customary
for such permitted use, provided such hazardous substances are kept, stored and
used in quantities which are customary for such permitted use and are kept,
stored and used in full compliance with clauses (ii) and (iii) immediately
below.
               (ii) Tenant shall comply with all applicable laws, rules,
regulations, orders, permits, licenses and operating plans of any governmental
authority with respect to the receipt, use, handling, generation,
transportation, storage, treatment and/or disposal of hazardous substances or
wastes by Tenant or its agents or employees, and Tenant will provide Landlord
with copies of all permits, licenses, registrations and other similar documents
that authorize Tenant to conduct any such activities in connection with its
authorized use of the Premises and the Center from time to time.
               (iii) Tenant shall not (A) operate on or about the Premises or
the Center any facility required to be permitted or licensed as a hazardous
waste facility or for which interim status as such is required, nor (B) store
any hazardous wastes on or about the Premises or the Center for ninety (90) days
or more, nor (C) conduct any other activities on or about the Premises or the
Center that could result in the Premises or the Center being deemed to be a
“hazardous waste facility” (including, but not limited to, any storage or
treatment of hazardous substances or hazardous wastes which could have such a
result).
               (iv) Tenant shall comply with all applicable laws, rules,
regulations, orders and permits relating to underground storage tanks installed
by Tenant or its agents or employees or at the request of Tenant (including any
installation, monitoring, maintenance, closure and/or removal of such tanks) as
such tanks are defined in California Health & Safety Code § 2528l(x), including,
without limitation, complying with California Health & Safety Code §§
25280-25299.7 and the regulations promulgated thereunder, as amended. Tenant
shall furnish to Landlord copies of all registrations and permits issued to or
held by Tenant from time to time for any and all underground storage tanks
located on or under the Premises or the Center.

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               (v) If applicable, Tenant shall provide Landlord in writing the
following information and/or documentation within thirty (30) days after the
Commencement Date, and shall update such information at least annually, on or
before each anniversary of the Commencement Date, to reflect any change in or
addition to the required information and/or documentation (provided, however,
that in the case of the materials described in subparagraphs (B), (C) and
(E) below, Tenant shall not be required to deliver copies of such materials to
Landlord but shall maintain copies of such materials to such extent and for such
periods as may be required by applicable law and shall permit Landlord or its
representatives to inspect and copy such materials during normal business hours
at any time and from time to time upon reasonable notice to Tenant):
                    (A) A list of all hazardous substances and/or wastes that
Tenant receives, uses, handles, generates, transports, stores, treats or
disposes of from time to time in connection with its operations on the Premises
and in the Center.
                    (B) All Material Safety Data Sheets (“MSDS’s”), if any,
required to be completed with respect to operations of Tenant at the Premises
and in the Center from time to time in accordance with Title 26, California Code
of Regulations § 8-5194 or 42 U.S.C. § 11021, or any amendments thereto, and any
Hazardous Materials Inventory Sheets that detail the MSDS’s.
                    (C) All hazardous waste manifests (as defined in Title 26,
California Code of Regulations § 22-66481), if any, that Tenant is required to
complete from time to time in connection with its operations at the Premises and
in the Center.
                    (D) A copy of any Hazardous Materials Management Plan
required from time to time with respect to Tenant’s operations at the Premises
and in the Center, pursuant to California Health & Safety Code §§ 25500 et seq.,
and any regulations promulgated thereunder, as amended.
                    (E) Any Contingency Plans and Emergency Procedures required
of Tenant from time to time due to its operations in accordance with Title 26,
California Code of Regulations §§ 22-67140 et seq., and any amendments thereto,
and any Training Programs and Records required under Title 26, California Code
of Regulations, § 22-67105, and any amendments thereto.
                    (F) Copies of any biennial reports to be furnished to the
California Department of Health Services from time to time relating to hazardous
substances or wastes, pursuant to Title 26, California Code of Regulations, §
22-66493, and any amendments thereto.
                    (G) Copies of all industrial wastewater discharge permits
issued to or held by Tenant from time to time in connection with its operations
on the Premises and in the Center.
                    (H) Copies of any other lists or inventories of hazardous
substances and/or wastes on or about the Premises and/or the Center that Tenant
is otherwise required to prepare and file from time to time with any
governmental or regulatory authority.
               (vi) Tenant shall secure Landlord’s prior written approval for
any proposed receipt, storage, possession, use, transfer or disposal of
“radioactive materials” or “radiation,” as such materials are defined in Title
26, California Code of Regulations § 17-30100, and/or any other materials
possessing the characteristics of the materials so defined, which approval
Landlord may withhold in its sole and absolute discretion; provided, that such
approval shall not be required for any radioactive materials for which Tenant
has secured prior written approval of the Nuclear Regulatory Commission and
delivered to Landlord a copy of such approval. Tenant, in connection with any
such authorized receipt, storage, possession, use, transfer or disposal of
radioactive materials or radiation, shall:

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                    (A) Comply with all federal, state and local laws, rules,
regulations, orders, licenses and permits issued to or applicable to Tenant with
respect to its business operations on the Premises and in the Center;
                    (B) Maintain, to such extent and for such periods as may be
required by applicable law, and permit Landlord and its representatives to
inspect during normal business hours at any time and from time to time upon
reasonable notice to Tenant, a list of all radioactive materials or radiation
received, stored, possessed, used, transferred or disposed of by Tenant or in
connection with the operation of Tenant’s business on the Premises and in the
Center from time to time, to the extent not already disclosed through delivery
of a copy of a Nuclear Regulatory Commission approval with respect thereto as
contemplated above; and
                    (C) Maintain, to such extent and for such periods as may be
required by applicable law, and permit Landlord or its representatives to
inspect during normal business hours at any time and from time to time upon
reasonable notice to Tenant, all licenses, registration materials, inspection
reports, governmental orders and permits in connection with the receipt,
storage, possession, use, transfer or disposal of radioactive materials or
radiation by Tenant or in connection with the operation of Tenant’s business on
the Premises and in the Center from time to time.
               (vii) Tenant shall comply with any and all applicable laws,
rules, regulations and orders of any governmental authority with respect to the
release into the environment of any hazardous wastes or substances or radiation
or radioactive materials by Tenant or its agents or employees. Tenant shall give
Landlord immediate verbal notice of any unauthorized release of any such
hazardous wastes or substances or radiation or radioactive materials into the
environment, and shall follow such verbal notice with written notice to Landlord
of such release within ten (10) business days after the date Tenant became aware
of such release.
               (viii) Tenant shall indemnify, defend and hold Landlord harmless
from and against any and all claims, losses (including, but not limited to, loss
of rental income), damages, liabilities, costs, legal fees and expenses of any
sort arising out of or relating to (A) any failure by Tenant to comply with any
provisions of this paragraph 11.6(b), or (B) any receipt, use handling,
generation, transportation, storage, treatment, release and/or disposal of any
hazardous substance or waste or any radioactive material or radiation on or
about the Premises or the Center as a proximate result of Tenant’s use of the
Premises or the Center or as a result of any intentional or negligent acts or
omissions of Tenant or of any agent, employee or invitee of Tenant.
               (ix) Tenant shall cooperate with Landlord in furnishing Landlord
with complete information regarding Tenant’s receipt, handling, use, storage,
transportation, generation, treatment and/or disposal of any hazardous
substances or wastes or radiation or radioactive materials. Upon request, Tenant
shall grant Landlord reasonable access at reasonable times to the Premises to
inspect Tenant’s receipt, handling, use, storage, transportation, generation,
treatment and/or disposal of hazardous substances or wastes or radiation or
radioactive materials, provided that Landlord uses reasonable efforts to avoid
any unreasonable interference with Tenant’s business operations in exercising
such access and inspection rights, without thereby being deemed guilty of any
disturbance of Tenant’s use or possession and without being liable to Tenant in
any manner.
               (x) Notwithstanding Landlord’s rights of inspection and review
under this paragraph 11.6(b), Landlord shall have no obligation or duty to so
inspect or review, and no third party shall be entitled to rely on Landlord to
conduct any sort of inspection or review by reason of the provisions of this
paragraph 11.6(b).
               (xi) If Tenant receives, handles, uses, stores, transports,
generates, treats and/or disposes of any hazardous substances or wastes or
radiation or radioactive materials on or about the Premises or the Center at any
time during the term of this Lease, then within

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thirty (30) days after the termination or expiration of this Lease, Tenant at
its sole cost and expense shall obtain and deliver to Landlord an environmental
study, performed by an expert reasonably satisfactory to Landlord, evaluating
the presence or absence of hazardous substances and wastes, radiation and
radioactive materials on and about the Premises and the Center. Such study shall
be based on a reasonable and prudent level of tests and investigations of the
Premises and surrounding areas (if appropriate), which tests shall be conducted
no earlier than the date of termination or expiration of this Lease. Liability
for any remedial actions required or recommended on the basis of such study
shall be allocated in accordance with Sections 11.4, 11.6,12.6 and other
applicable provisions of this Lease.
          (c) Landlord shall indemnify, defend and hold Tenant harmless from and
against any and all claims, losses, damages, liabilities, costs, legal fees and
expenses of any sort arising out of or relating to (i) the presence on the
Premises or in the Center of any hazardous substances or wastes or radiation or
radioactive materials as of the Commencement Date (other than as a result of any
intentional or negligent acts or omissions of Tenant or of any agent, employee
or invitee of Tenant, or as a result of or in connection with Tenant’s prior
business operations on the Premises and in the Center), and/or (ii) any
unauthorized release into the environment (including, but not limited to, the
Premises and/or the Center) of any hazardous substances or wastes or radiation
or radioactive materials to the extent such release results from the negligence
of or willful misconduct or omission by Landlord or its agents or employees.
          (d) The provisions of this Section 11.6 shall survive the termination
of this Lease.
12. INSURANCE AND INDEMNITY
     12.1 Insurance.
          (a) Tenant shall procure and maintain in full force and effect at all
times during the term of this Lease, at Tenant’s cost and expense, commercial
general liability insurance to protect against liability to the public, or to
any invitee of Tenant or Landlord, arising out of or related to the use of or
resulting from any accident occurring in, upon or about the Premises, with
limits of liability of not less than (i) Two Million Dollars ($2,000,000.00) for
injury to or death of one person, (ii) Five Million Dollars ($5,000,000.00) for
personal injury or death, per occurrence, and (iii) One Million Dollars
($1,000,000.00) for property damage, or combined single limit of liability of
not less than Five Million Dollars ($5,000,000.00). Such insurance shall name
Landlord, its general partners, its Managing Agent and any lender holding a deed
of trust on the Center or any portion thereof from time to time (as designated
in writing by Landlord to Tenant from time to time) as additional insureds
thereunder. The amount of such insurance shall not be construed to limit any
liability or obligation of Tenant under this Lease. Tenant shall also procure
and maintain in full force and effect at all times during the term of this
Lease, at Tenant’s cost and expense, products/completed operations coverage in
an amount of not less than Five Million Dollars ($5,000.000.00) and on other
terms customary in Tenant’s industry for companies engaged in the marketing of
products on a scale comparable to that in which Tenant is engaged from time to
time.
          (b) Landlord shall procure and maintain in full force and effect at
all times during the term of this Lease, at Landlord’s cost and expense (but
reimbursable as an Operating Expense under Section 7.2 hereof), commercial
general liability insurance to protect against liability arising out of or
related to the use of or resulting from any accident occurring in, upon or about
the Center, with combined single limit of liability of not less than Five
Million Dollars ($5,000,000.00) per occurrence for bodily injury and property
damage.
          (c) Landlord shall procure and maintain in full force and effect at
all times during the term of this Lease, at Landlord’s cost and expense (but
reimbursable as an Operating Expense under Section 7.2 hereof), policies of
property insurance providing protection against “all risk of direct physical
loss” (as defined by and detailed in the Insurance Service Office’s

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Commercial Property Program “Cause of Loss-Special Form [CP1030]” or its
equivalent) for the shell of the buildings in which the Premises are located and
for the improvements in the Common Areas of the Center, on a full replacement
cost basis (with no co-insurance or, if coverage without co-insurance is not
reasonably available, then on an “agreed amount” basis). Such insurance shall
include earthquake and environmental coverage and shall have such commercially
reasonable deductibles and other terms as Landlord in its reasonable discretion
determines to be appropriate. Landlord shall have no obligation to carry
property damage insurance for Tenant’s Property, for Tenant’s personal property
or, except as expressly set forth in paragraph (d) below, for any alterations,
additions or improvements installed by Tenant or by any predecessor tenant in
the buildings in which the Premises are located or on or about the Center.
          (d) Landlord shall procure and maintain in full force and effect at
all times during the term of this Lease, at Tenant’s cost and expense
(chargeable, in Landlord’s discretion, either as an Operating Expense allocable
100% to Tenant or as a direct pass-through to Tenant), policies of property
insurance providing protection against “all risk of direct physical loss” (as
defined by and detailed in the Insurance Service Office’s Commercial Property
Program “Cause of Loss-Special Form [CP1030]” or its equivalent) for the tenant
improvements existing in the Premises on the Commencement Date (other than
Tenant’s Property, which it shall be Tenant’s responsibility to insure pursuant
to paragraph (e) below), on a full replacement cost basis (with no co-insurance
or, if coverage without co-insurance is not reasonably available, then on an
“agreed amount” basis). Such insurance may have such commercially reasonable
deductibles and other terms as Landlord in its reasonable discretion determines
to be appropriate, and shall name both Tenant and Landlord as insureds as their
interests may appear. The coverage required to be maintained under this
paragraph (d) may, in Landlord’s discretion, be added to or combined with
Landlord’s master policy carried under paragraph (c) above (but, if not actually
carried as part of Landlord’s master policy under paragraph (c) above, shall not
carry a premium materially higher than would apply if such coverage were being
carried as part of Landlord’s master policy under paragraph (c) above), in which
event Tenant shall be named as an insured only with respect to the portion of
the policy that covers tenant improvements as described in this paragraph (d).
Tenant shall provide to Landlord from time to time, upon request by Landlord
annually or at other reasonable intervals, an updated schedule of values for
such existing tenant improvements, and Landlord shall have no obligation or
liability with respect to any underinsurance of tenant improvements that results
from Tenant’s failure to keep Landlord informed from time to time, on a current
basis, of the insurable value of such tenant improvements.
          (e) Tenant shall procure and maintain in full force and effect at all
times during the term of this Lease, at Tenant’s cost and expense, policies of
property insurance providing protection against “all risk of direct physical
loss” (as defined by and detailed in the Insurance Service Office’s Commercial
Property Program “Cause of Loss-Special Form [CP1030]” or its equivalent) for
Tenant’s Property as it exists in the Premises on the Commencement Date and for
all other alterations, additions and improvements installed by Tenant from time
to time in or about the Premises after the Commencement Date (except as Landlord
and Tenant may otherwise mutually agree in writing from time to time), on a full
replacement cost basis (with no co-insurance or, if coverage without
co-insurance is not reasonably available, then on an “agreed amount” basis).
Such insurance may have such commercially reasonable deductibles and other terms
as Tenant in its reasonable discretion determines to be appropriate, and shall
name both Tenant and Landlord as insureds as their interests may appear.
     12.2 Quality Of Policies And Certificates. All policies of insurance
required hereunder shall be issued by responsible insurers and, in the case of
policies carried or required to be carried by Tenant, shall be written as
primary policies not contributing with and not in excess of any coverage that
Landlord may carry. Tenant shall deliver to Landlord copies of policies or
certificates of insurance showing that said policies are in effect. The coverage
provided by such policies shall include the clause or endorsement referred to in
Section 12.4. If Tenant fails to acquire, maintain or renew any insurance
required to be maintained by it under this Article 12 or

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to pay the premium therefor, then Landlord, at its option and in addition to its
other remedies, but without obligation so to do, may procure such insurance, and
any sums expended by it to procure any such insurance on behalf of or in place
of Tenant shall be repaid upon demand, with interest as provided in Section 3.2
hereof. Tenant shall obtain written undertakings from each insurer under
policies required to be maintained by it to notify all insureds thereunder at
least thirty (30) days prior to cancellation of coverage.
     12.3 Workers’ Compensation. Tenant shall maintain in full force and effect
during the term of this Lease workers’ compensation insurance in at least the
minimum amounts required by law, covering all of Tenant’s employees working on
the Premises or in the Center.
     12.4 Waiver Of Subrogation. To the extent permitted by law and without
affecting the coverage provided by insurance required to be maintained
hereunder, Landlord and Tenant each waive any right to recover against the other
with respect to (i) damage to property, (ii) damage to the Premises or the
Center or any part thereof, or (iii) claims arising by reason of any of the
foregoing, but only to the extent that any of the foregoing damages and claims
under clauses (i)-(iii) hereof are covered, and only to the extent of such
coverage, by casualty insurance actually carried or required to be carried
hereunder by either Landlord or Tenant. This provision is intended to waive
fully, and for the benefit of each party, any rights and claims which might give
rise to a right of subrogation in any insurance carrier. Each party shall
procure a clause or endorsement on any casualty insurance policy denying to the
insurer rights of subrogation against the other party to the extent rights have
been waived by the insured prior to the occurrence of injury or loss. Coverage
provided by insurance maintained by Tenant shall not be limited, reduced or
diminished by virtue of the subrogation waiver herein contained.
     12.5 Increase In Premiums. Tenant shall do all acts and pay all expenses
necessary to insure that the Premises are not used for purposes prohibited by
any applicable fire insurance, and that Tenant’s use of the Premises and the
Center complies with all requirements necessary to obtain any such insurance. If
Tenant uses or permits the Premises to be used in a manner which increases the
existing rate of any insurance carried by Landlord on the Center and such use
continues for longer than a reasonable period specified in any written notice
from Landlord to Tenant identifying the rate increase and the factors causing
the same, then Tenant shall pay the amount of the increase in premium caused
thereby, and Landlord’s costs of obtaining other replacement insurance policies,
including any increase in premium, within ten (10) days after demand therefor by
Landlord.
     12.6 Indemnification.
          (a) Tenant shall indemnify, defend and hold Landlord and its partners,
shareholders, officers, directors, agents and employees harmless from any and
all liability for injury to or death of any person, or loss of or damage to the
property of any person, and all actions, claims, demands, costs (including,
without limitation, reasonable attorneys’ fees), damages or expenses of any kind
arising therefrom which may be brought or made against Landlord or which
Landlord may pay or incur by reason of the use, occupancy and enjoyment of the
Premises and the Center by Tenant or any invitees, sublessees, licensees,
assignees, employees, agents or contractors of Tenant or holding under Tenant
from any cause whatsoever other than negligence or willful misconduct or
omission by Landlord, its agents or employees. Landlord and its partners,
shareholders, officers, directors, agents and employees shall not be liable for,
and Tenant hereby waives all claims against such persons for, damages to goods,
wares and merchandise in or upon the Premises or the Center, or for injuries to
Tenant, its agents or third persons in or upon the Premises or the Center, from
any cause whatsoever other than negligence or willful misconduct or omission by
Landlord, its agents or employees. Tenant shall give prompt notice to Landlord
of any casualty or accident in, on or about the Premises or the Center.
          (b) Landlord shall indemnify, defend and hold Tenant and its partners,
shareholders, officers, directors, agents and employees harmless from any and
all liability for injury to or death of any person, or loss of or damage to the
property of any person, and all

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actions, claims, demands, costs (including, without limitation, reasonable
attorneys’ fees), damages or expenses of any kind arising therefrom which may be
brought or made against Tenant or which Tenant may pay or incur, to the extent
such liabilities or other matters arise in, on or about the Premises or the
Center by reason of any negligence or willful misconduct or omission by
Landlord, its agents or employees.
     12.7 Blanket Policy. Any policy required to be maintained hereunder may be
maintained under a so-called “blanket policy” insuring other parties and other
locations so long as the amount of insurance required to be provided hereunder
is not thereby diminished.
13. SUBLEASE AND ASSIGNMENT
     13.1 Assignment of Lease and Sublease of Premises. Except in the case of a
Permitted Transfer, Tenant shall not have the right or power to assign its
interest in this Lease, or make any sublease of the Premises or any portion
thereof, nor shall any interest of Tenant under this Lease be assignable
involuntarily or by operation of law, without on each occasion obtaining the
prior written consent of Landlord, which consent shall not be unreasonably
withheld or delayed. Any purported sublease or assignment of Tenant’s interest
in this Lease requiring but not having received Landlord’s consent thereto (to
the extent such consent is required hereunder) shall be void. Without limiting
the generality of the foregoing, Landlord may withhold consent to any proposed
subletting or assignment for which consent is requested solely on the ground, if
applicable, that the use by the proposed subtenant or assignee is reasonably
likely to be incompatible with Landlord’s use of any adjacent property owned or
operated by Landlord, unless the proposed use is within the permitted uses
specified in Section 11.1, in which event it shall not be reasonable for
Landlord to object to the proposed use. Except in the case of a Permitted
Transfer, any dissolution, consolidation, merger or other reorganization of
Tenant, or any sale or transfer of substantially all of the stock or assets of
Tenant in a single transaction or series of related transactions, shall be
deemed to be an assignment hereunder and shall be void without the prior written
consent of Landlord as required above. Notwithstanding the foregoing, (i) any
public offering of the common stock of Tenant shall not be deemed to be an
assignment hereunder; (ii) any transfer of Tenant’s stock during any period in
which Tenant has a class of stock listed on any recognized securities exchange
or traded in the NASDAQ over-the-counter market shall not be deemed to be an
assignment hereunder; (iii) any transfer of Tenant’s stock in connection with a
bona fide financing, capitalization or recapitalization of Tenant shall not be
deemed to be an assignment hereunder, provided that such financing,
capitalization or recapitalization does not result in a material reduction in
Tenant’s net worth or materially change the nature of Tenant’s ongoing business
as a going concern; and (iv) Tenant shall have the right to assign this Lease or
sublet the Premises or any portion thereof, without Landlord’s consent (but with
prior or concurrent written notice by Tenant to Landlord, except to the extent
Tenant is advised by its counsel that such prior or concurrent notice would be
in violation of applicable law, in which event Tenant shall give such written
notice as soon as reasonably possible after the giving of such notice is no
longer in violation of applicable law), to any Affiliate of Tenant, or to any
entity which results from a merger or consolidation with Tenant, or to any
entity which acquires substantially all of the stock or assets of Tenant as a
going concern (hereinafter each a “Permitted Transfer”). For purposes of the
preceding sentence, an “Affiliate” of Tenant shall mean any entity in which
Tenant owns at least a fifty percent (50%) equity interest, any entity which
owns at least a fifty percent (50%) equity interest in Tenant, and/or any entity
which is related to Tenant by a chain of ownership interests involving at least
a fifty percent (50%) equity interest at each level in the chain. Landlord shall
have no right to terminate this Lease in connection with, and shall have no
right to any sums or other economic consideration resulting from, any Permitted
Transfer. Except as expressly set forth in this Section 13.1, however, the
provisions of Section 13.2 shall remain applicable to any Permitted Transfer and
the transferee under such Permitted Transfer shall be and remain subject to all
of the terms and provisions of this Lease.

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     13.2 Rights Of Landlord.
          (a) Consent by Landlord to one or more assignments of this Lease, or
to one or more sublettings of the Premises or any portion thereof, or collection
of rent by Landlord from any assignee or sublessee, shall not operate to exhaust
Landlord’s rights under this Article 13, nor constitute consent to any
subsequent assignment or subletting. No assignment of Tenant’s interest in this
Lease and no sublease shall relieve Tenant of its obligations hereunder,
notwithstanding any waiver or extension of time granted by Landlord to any
assignee or sublessee, or the failure of Landlord to assert its rights against
any assignee or sublessee, and regardless of whether Landlord’s consent thereto
is given or required to be given hereunder. In the event of a default by any
assignee, sublessee or other successor of Tenant in the performance of any of
the terms or obligations of Tenant under this Lease, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against any
such assignee, sublessee or other successor. In addition, Tenant immediately and
irrevocably assigns to Landlord, as security for Tenant’s obligations under this
Lease, all rent from any subletting of all or a part of the Premises as
permitted under this Lease, and Landlord, as Tenant’s assignee and as
attorney-in-fact for Tenant, or any receiver for Tenant appointed on Landlord’s
application, may collect such rent and apply it toward Tenant’s obligations
under this Lease; except that, until the occurrence of an act of default by
Tenant, Tenant shall have the right to collect such rent and to retain all
sublease profits (subject to the provisions of Section 13.2(c), below).
          (b) Upon any assignment of Tenant’s interest in this Lease for which
Landlord’s consent is required under Section 13.1 hereof, Tenant shall pay to
Landlord, within ten (10) days after receipt thereof by Tenant from time to
time, one-half (1/2) of all cash sums and other economic considerations received
by Tenant in connection with or as a result of such assignment, after first
deducting therefrom (i) any costs incurred by Tenant for leasehold improvements
(including, but not limited to, third-party architectural and space planning
costs) in the Premises in connection with such assignment, (ii) any real estate
commissions and/or reasonable attorneys’ fees incurred by Tenant in connection
with such assignment, and (iii) any economic consideration received by Tenant as
bona fide, reasonable compensation for personal property sold or leased by
Tenant to the assignee.
          (c) Upon any sublease of all or any portion of the Premises for which
Landlord’s consent is required under Section 13.1 hereof, Tenant shall pay to
Landlord, within ten (10) days after receipt thereof by Tenant from time to
time, one-half (1/2) of all cash sums and other economic considerations received
by Tenant in connection with or as a result of such sublease, after first
deducting therefrom (i) the rental due hereunder for the corresponding period,
prorated (on the basis of the per-square-foot cost paid by Tenant for the entire
Premises for the applicable period under this Lease) to reflect the size of the
subleased portion of the Premises, (ii) any costs incurred by Tenant for
leasehold improvements in the subleased portion of the Premises (including, but
not limited to, third-party architectural and space planning costs) for the
specific benefit of the sublessee in connection with such sublease, amortized
over the term of the sublease, (iii) any real estate commissions and/or
reasonable attorneys’ fees incurred by Tenant in connection with such sublease,
amortized over the term of such sublease, and (iv) any economic consideration
received by Tenant as bona fide, reasonable compensation for personal property
sold or leased by Tenant to the sublessee.
14. RIGHT OF ENTRY AND QUIET ENJOYMENT
     14.1 Right Of Entry. Landlord and its authorized representatives shall have
the right to enter the Premises at any time during the term of this Lease-during
normal business hours and upon not less than twenty-four (24) hours prior
notice, except in the case of emergency (in which event no notice shall be
required and entry may be made at any time), for the purpose of inspecting and
determining the condition of the Premises or for any other proper purpose
including, without limitation, to make repairs, replacements or improvements
which Landlord may deem necessary, to show the Premises to prospective
purchasers, to show the Premises to prospective tenants (but only during the
final year of the term of this Lease), and to post notices

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of nonresponsibility. Landlord shall not be liable for inconvenience, annoyance,
disturbance, loss of business, quiet enjoyment or other damage or loss to Tenant
by reason of making any repairs or performing any work upon the Premises or the
Center or by reason of erecting or maintaining any protective barricades in
connection with any such work, and the obligations of Tenant under this Lease
shall not thereby be affected in any manner whatsoever, provided. however,
Landlord shall use reasonable efforts to minimize the inconvenience to Tenant’s
normal business operations caused thereby.
     14.2 Quiet Enjoyment. Landlord covenants that Tenant, upon paying the rent
and performing its obligations hereunder and subject to all the terms and
conditions of this Lease, shall peacefully and quietly have, hold and enjoy the
Premises and the Common Areas of the Center throughout the term of this Lease,
or until this Lease is terminated as provided by this Lease.
15. CASUALTY AND TAKING
     15.1 Damage or Destruction.
          (a) If the Premises, or the Common Areas of the Center necessary for
Tenant’s use and occupancy of the Premises, are damaged or destroyed in whole or
in part under circumstances in which (i) repair and restoration is permitted
under applicable governmental laws, regulations and building codes then in
effect and (ii) repair and restoration reasonably can be completed within a
period of one (1) year (or, in the case of an occurrence during the last year of
the term of this Lease, within a period of sixty (60) days) following the date
of the occurrence, then Landlord, as to the Common Areas of the Center and the
cold shell of the buildings in which the Premises are located, and Tenant, as to
all other improvements existing in or about the Prmeises immediately prior to
such occurrence, shall commence and complete, with all due diligence and as
promptly as is reasonably practicable under the conditions then existing, all
such repair and restoration as may be required to return the affected portions
of the Premises and the Center to a condition comparable to that existing
immediately prior to the occurrence. In the event of damage or destruction the
repair of which is not permitted under applicable governmental laws, regulations
and building codes then in effect, if such damage or destruction (despite being
corrected to the extent then permitted under applicable governmental laws,
regulations and building codes) would still materially impair Tenant’s ability
to conduct its business in the Premises, then either party may terminate this
Lease as of the date of the occurrence by giving written notice to the other
within thirty (30) days after the date of the occurrence; if neither party
timely elects such termination, or if such damage or destruction does not
materially impair Tenant’s ability to conduct its business in the Premises, then
this Lease shall continue in full force and effect, except that there shall be
an equitable adjustment in monthly minimum rental and of Tenant’s Operating Cost
Share of Operating Expenses, based upon the extent to which Tenant’s ability to
conduct its business in the Premises is impaired, and Landlord and Tenant
respectively shall restore the Common Areas and the cold shell of the applicable
buildings and the other improvements in and about such buildings to a complete
architectural whole and to a functional condition. In the event of damage or
destruction which cannot reasonably be repaired within one (1) year (or, in the
case of an occurrence during the last year of the term of this Lease, within a
period of sixty (60) days) following the date of the occurrence, then either
Landlord or Tenant, at its election, may terminate this Lease as of the date of
the occurrence by giving written notice to the other within thirty (30) days
after the date of the occurrence; if neither party timely elects such
termination, then this Lease shall continue in full force and effect and
Landlord and Tenant shall each repair and restore applicable portions of the
Premises and the Center in accordance with the first sentence of this
Section 15.1.
          (b) The respective obligations of Landlord and Tenant pursuant to
Section 15.1 (a) are subject to the following limitations:
               (i) If the occurrence results from a peril which is required to
be insured pursuant to Sections 12.1(c), (d) and (e) above, then Landlord and
Tenant shall use their

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respective best efforts and cooperate diligently, reasonably and in good faith
to recover any available proceeds from the respective insurance which they are
required to maintain pursuant to Sections 12.1(c), (d) and/or (e), as
applicable, and to divide or allocate such proceeds between themselves in
accordance with their respective rebuilding obligations under Section 15.l(a),
and the obligations of each party shall not exceed its respective share of the
amount of insurance proceeds received from insurers (or, in the case of any
failure to maintain required insurance, proceeds that reasonably would have been
available if the required insurance had been maintained) by reason of such
occurrence, plus the amount of any deductible under the applicable insurance,
and, if such proceeds (including, in the case of a failure to maintain required
insurance, any proceeds that reasonably would have been available) are
insufficient, either party may terminate the Lease unless the other party
promptly elects and agrees, in writing, to contribute the amount of the
shortfall; and
               (ii) If the occurrence results from a peril which is not required
to be insured pursuant to Sections 12.1(c), (d) and (e) above and is not
actually insured, Landlord shall be required to repair and restore the cold
shells of the applicable buildings and the Common Areas to the extent necessary
for Tenant’s continued use and occupancy of the Premises, and Tenant shall be
required to repair and restore the other improvements in and about the Premises
to the extent necessary for Tenant’s continued use and occupancy of the
Premises, provided that each party’s obligation to repair and restore shall not
exceed an amount equal to five percent (5%) of the replacement cost of the cold
shells of the applicable buildings and the Common Area improvements, as to
Landlord, or five percent (5%) of the replacement cost of the other improvements
in and about the Premises, as to Tenant; if the replacement cost as to either
party exceeds such amount, then the party whose limit has been exceeded may
terminate this Lease unless the other party promptly elects and agrees, in
writing, to contribute the amount of the shortfall.
          (c) If this Lease is terminated pursuant to the foregoing provisions
of this Section 15.1 following an occurrence which is a peril actually insured
or required to be insured against pursuant to Sections 12.1(c), (d) and (e),
Landlord and Tenant agree (and any Lender shall be asked to agree) that such
insurance proceeds shall be allocated between Landlord and Tenant in a manner
which fairly and reasonably reflects their respective ownership rights under
this Lease, as of the termination or expiration of the term of this Lease, with
respect to the improvements, fixtures, equipment and other items to which such
insurance proceeds are attributable.
          (d) From and after the date of an occurrence resulting in damage to or
destruction of the Premises or of the Common Areas necessary for Tenant’s use
and occupancy of the Premises, and continuing until repair and restoration
thereof are completed, there shall be an equitable abatement of minimum rental
and of Tenant’s Operating Cost Share of Operating Expenses based upon the degree
to which Tenant’s ability to conduct its business in the Premises is impaired.
     15.2 Condemnation.
          (a) If during the term of this Lease the Premises or the Common Areas
of the Center, or any substantial part of either, is taken by eminent domain or
by reason of any public improvement or condemnation proceeding, or in any manner
by exercise of the right of eminent domain (including any transfer in avoidance
of an exercise of the power of eminent domain), or receives irreparable damage
by reason of anything lawfully done under color of public or other authority,
then (i) this Lease shall terminate as to the entire Premises at Landlord’s
election by written notice given to Tenant within sixty (60) days after the
taking has occurred, and (ii) this Lease shall terminate as to the entire
Premises at Tenant’s election, by written notice given to Landlord within thirty
(30) days after the nature and extent of the taking have been finally
determined, if the portion of the Premises taken is of such extent and nature as
substantially to handicap, impede or permanently impair Tenant’s use of the
balance of the Premises. If Tenant elects to terminate this Lease, Tenant shall
also notify Landlord of the date of termination, which date shall not be earlier
than thirty (30) days nor later than ninety (90) days after Tenant has

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notified Landlord of Tenant’s election to terminate, except that this Lease
shall terminate on the date of taking if such date falls on any date before the
date of termination designated by Tenant. If neither party elects to terminate
this Lease as hereinabove provided, this Lease shall continue in full force and
effect (except that there shall be an equitable abatement of minimum rental and
of Tenant’s Operating Cost Share of Operating Expenses based upon the degree to
which Tenant’s ability to conduct its business in the Premises is impaired),
Landlord shall restore the shell of the buildings in which the Premises are
located and Common Area improvements to a complete architectural whole and a
functional condition and as nearly as reasonably possible to the condition
existing before the taking, and Tenant shall restore the other improvements in
the Premises and Tenant’s other alterations, additions and improvements to a
complete architectural whole and a functional condition and as nearly as
reasonably possible to the condition existing before the taking. In connection
with any such restoration, each party shall use its respective best efforts
(including, without limitation, any necessary negotiation or intercession with
its respective lender, if any) to ensure that any severance damages or other
condemnation awards intended to provide compensation for rebuilding or
restoration costs are promptly collected and made available to Landlord and
Tenant in portions reasonably corresponding to the cost and scope of their
respective restoration obligations, subject only to such payment controls as
either party or its lender may reasonably require in order to ensure the proper
application of such proceeds toward the restoration of the Improvements. Each
party waives the provisions of Code of Civil Procedure Section 1265.130,
allowing either party to petition the Superior Court to terminate this Lease in
the event of a partial condemnation of the Premises or the Center.
          (b) The respective obligations of Landlord and Tenant pursuant to
Section 15.2(a) are subject to the following limitations:
               (i) Each party’s obligation to repair and restore shall not
exceed, net of any condemnation awards or other proceeds available for and
allocable to such restoration as contemplated in Section 15.2(a), an amount
equal to five percent (5%) of the replacement cost of the shell of the buildings
in which the Premises are located and the Common Area improvements, as to
Landlord, or five percent (5%) of the replacement cost of the other improvements
in the Premises as to Tenant; if the replacement cost as to either party exceeds
such amount, then the party whose limit has been exceeded may terminate this
Lease unless the other party promptly elects and agrees, in writing, to
contribute the amount of the shortfall; and
               (ii) If this Lease is terminated pursuant to the foregoing
provisions of this Section 15.2, or if this Lease remains in effect but any
condemnation awards or other proceeds become available as compensation for the
loss or destruction of any of the Improvements, then Landlord and Tenant agree
(and any Lender shall be asked to agree) that such proceeds shall be allocated
between Landlord and Tenant, respectively, in the respective proportions in
which Landlord and Tenant would have shared, under Section 15.1 (c), the
proceeds of any insurance proceeds following loss or destruction of the
applicable Improvements by an insured casualty.
     15.3 Reservation Of Compensation. Landlord reserves, and Tenant waives and
assigns to Landlord, all rights to any award or compensation for damage to the
Premises, the Improvements, the Center and the leasehold estate created hereby,
accruing by reason of any taking in any public improvement, condemnation or
eminent domain proceeding or in any other manner by exercise of the right of
eminent domain or of anything lawfully done by public authority, except that
(a) Tenant shall be entitled to any and all compensation or damages paid for or
on account of Tenant’s moving expenses, trade fixtures and equipment and any
leasehold improvements installed by Tenant in the Premises at its own sole
expense, but only to the extent Tenant would have been entitled to remove such
items at the expiration of the term of this Lease and then only to the extent
such compensation or damages are expressly and specifically allocated by the
condemning authority, in response to a direct claim by Tenant, to Tenant’s
moving expenses, trade fixtures, equipment and/or removable leasehold
improvements as set forth in this clause (a), and (b) any condemnation awards or
proceeds described in Section 15.2(b)(ii) shall be allocated and disbursed in
accordance with the provisions of Section 15.2(b)(ii), notwithstanding any
contrary provisions of this Section 15.3.

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     15.4 Restoration Of Improvements. In connection with any repair or
restoration of the Premises or other Improvements by either party following a
casualty or taking as hereinabove set forth, the party responsible for such
repair or restoration shall, to the extent possible, return such Improvements to
a condition substantially equal to that which existed immediately prior to the
casualty or taking. To the extent such party wishes to make material
modifications to the Premises or to such Improvements, such modifications shall
be subject to the prior written approval of the other party (not to be
unreasonably withheld or delayed), except that no such approval shall be
required for modifications that are required by applicable governmental
authorities as a condition of the repair or restoration, unless such required
modifications would impair or impede Tenant’s conduct of its business in the
Premises (in which case any such modifications in Landlord’s work shall require
Tenant’s consent, not unreasonably withheld or delayed) or would materially and
adversely affect the exterior appearance, the structural integrity or the
mechanical or other operating systems of the buildings in which the Premises are
located (in which case any such modifications in Tenant’s work shall require
Landlord’s consent, not unreasonably withheld or delayed).
16. DEFAULT
     16.1 Events Of Default. The occurrence of any of the following shall
constitute an event of default on the part of Tenant:
          (a) [Omitted.]
          (b) Nonpayment. Failure to pay, when due, any amount payable to
Landlord hereunder, such failure continuing for a period of five (5) business
days after written notice of such failure; provided, however, that any such
notice shall be in lieu of, and not in addition to, any notice required under
California Code of Civil Procedure Section 1161 et seq., as amended from time to
time;
          (c) Other Obligations. Failure to perform any obligation, agreement or
covenant under this Lease other than those matters specified in subsection
(b) hereof, such failure continuing for thirty (30) days after written notice of
such failure; provided, however, that if such failure is curable in nature but
cannot reasonably be cured within such 30-day period, then Tenant shall not be
in default if, and so long as, Tenant promptly (and in all events within such
30-day period) commences such cure and thereafter diligently pursues such cure
to completion; and provided further, however, that any such notice shall be in
lieu of, and not in addition to, any notice required under California Code of
Civil Procedure Section 1161 et scq., as amended from time to time;
          (d) General Assignment. A general assignment by Tenant for the benefit
of creditors;
          (e) Bankruptcy. The filing of any voluntary petition in bankruptcy by
Tenant, or the filing of an involuntary petition by Tenant’s creditors, which
involuntary petition remains undischarged for a period of thirty (30) days. In
the event that under applicable law the trustee in bankruptcy or Tenant has the
right to affirm this Lease and continue to perform the obligations of Tenant
hereunder, such trustee or Tenant shall, in such time period as may be permitted
by the bankruptcy court having jurisdiction, cure all defaults of Tenant
hereunder outstanding as of the date of the affirmance of this Lease and provide
to Landlord such adequate assurances as may be necessary to ensure Landlord of
the continued performance of Tenant’s obligations under this Lease.
Specifically, but without limiting the generality of the foregoing, such
adequate assurances must include assurances that the Premises continue to be
operated only for the use permitted hereunder. The provisions hereof are to
assure that the basic understandings between Landlord and Tenant with respect to
Tenant’s use of the Premises and the Common Areas and the benefits to Landlord
therefrom are preserved, consistent with the purpose and intent of applicable
bankruptcy laws;

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          (f) Receivership. The employment of a receiver appointed by court
order to take possession of substantially all of Tenant’s assets or the
Premises, if such receivership remains undissolved for a period of thirty
(30) days;
          (g) Attachment. The attachment, execution or other judicial seizure of
all or substantially all of Tenant’s assets or the Premises, if such attachment
or other seizure remains undismissed or undischarged for a period of thirty
(30) days after the levy thereof; or
          (h) Insolvency. The admission by Tenant in writing of its inability to
pay its debts as they become due, the filing by Tenant of a petition seeking any
reorganization or arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, the filing by Tenant of an answer admitting or failing timely to
contest a material allegation of a petition filed against Tenant in any such
proceeding or, if within thirty (30) days after the commencement of any
proceeding against Tenant seeking any reorganization or arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
present or future statute, law or regulation, such proceeding shall not have
been dismissed.
     16.2 Remedies Upon Tenant’s Default.
          (a) Upon the occurrence of any event of default described in
Section 16.1 hereof, Landlord, in addition to and without prejudice to any other
rights or remedies it may have, shall have the immediate right to re-enter the
Premises or any part thereof and repossess the same, expelling and removing
therefrom all persons and property (which property may be stored in a public
warehouse or elsewhere at the cost and risk of and for the account of Tenant),
using such force as may be necessary to do so (as to which Tenant hereby waives
any claim for loss or damage that may thereby occur). In addition to or in lieu
of such re-entry, and without prejudice to any other rights or remedies it may
have, Landlord shall have the right either (i) to terminate this Lease and
recover from Tenant all damages incurred by Landlord as a result of Tenant’s
default, as hereinafter provided, or (ii) to continue this Lease in effect and
recover rent and other charges and amounts as they become due.
          (b) Even if Tenant has breached this Lease and abandoned the Premises,
this Lease shall continue in effect for so long as Landlord does not terminate
Tenant’s right to possession under subsection (a) hereof and Landlord may
enforce all of its rights and remedies under this Lease, including the right to
recover rent as it becomes due, and Landlord, without terminating this Lease,
may exercise all of the rights and remedies of a lessor under 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 right to
sublet or assign, subject only to reasonable limitations), or any successor Code
section. Acts of maintenance, preservation or efforts to relet the Premises or
the appointment of a receiver upon application of Landlord to protect Landlord’s
interests under this Lease shall not constitute a termination of Tenant’s right
to possession.
          (c) If Landlord terminates this Lease pursuant to this Section 16.2,
Landlord shall have all of the rights and remedies of a landlord provided by
Section 1951.2 of the Civil Code of the State of California, or any successor
Code section, which remedies include Landlord’s right to recover from Tenant
(i) the worth at the time of award of the unpaid rent and additional rent which
had been earned at the time of termination, (ii) the worth at the time of award
of the amount by which the unpaid rent and additional rent which would have been
earned after termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided, (iii) the
worth at the time of award of the amount by which the unpaid rent and additional
rent for the balance of the term after the time of award exceeds the amount of
such rental loss that Tenant proves could be reasonably avoided, and (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, including,
but not limited to, the cost of recovering possession of the Premises, expenses
of reletting, including necessary repair, renovation and

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alteration of the Premises, reasonable attorneys’ fees, and other reasonable
costs. The “worth at the time of award” of the amounts referred to in clauses
(i) and (ii) above shall be computed by allowing interest at ten percent (10%)
per annum from the date such amounts accrued to Landlord. The “worth at the time
of award” of the amounts referred to in clause (iii) above shall be computed by
discounting such amount at one percentage point above the discount rate of the
Federal Reserve Bank of San Francisco at the time of award.
     16.3 Remedies Cumulative. All rights, privileges and elections or remedies
of Landlord contained in this Article 16 are cumulative and not alternative to
the extent permitted by law and except as otherwise provided herein.
17. SUBORDINATION. ATTORNMENT AND SALE
     17.1 Subordination To Mortgage. This Lease, and any sublease entered into
by Tenant under the provisions of this Lease, shall be subject and subordinate
to any ground lease, mortgage, deed of trust, sale/leaseback transaction or any
other hypothecation for security now or hereafter placed upon any portion(s) of
the Center on which the Premise are located, and to the rights of any assignee
of Landlord or of any ground lessor, mortgagee, trustee, beneficiary or
leaseback lessor under any of the foregoing, and to any and all advances made on
the security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof; provided, however, that such subordination
in the case of any future ground lease, mortgage, deed of trust, sale/leaseback
transaction or any other hypothecation for security placed upon any portion(s)
of the Center on which the Premises are located shall be conditioned on Tenant’s
receipt from the ground lessor, mortgagee, trustee, beneficiary or leaseback
lessor of a Non-Disturbance Agreement in a form reasonably acceptable to Tenant
(i) confirming that so long as Tenant is not in material default hereunder
beyond any applicable cure period (for which purpose the occurrence of any event
of default under Section 16.1 hereof shall be deemed to be “material”), Tenant’s
rights hereunder shall not be disturbed by such person or entity and
(ii) agreeing that the benefit of such Non-Disturbance Agreement shall be
transferable to any transferee under a Permitted Transfer and to any other
assignee or subtenant that is acceptable to the ground lessor, mortgagee,
trustee, beneficiary or leaseback lessor at the time of transfer. Moreover,
Tenant’s obligations under this Lease shall be conditioned on Tenant’s receipt,
within sixty (60) days after the date hereof (provided that Landlord shall have
the right to extend such period for up to an additional thirty (30) days in
order to continue pursuing receipt of the agreement required hereunder if not
received within such initial 60-day period), from The Northwestern Mutual Life
Insurance Company, the beneficiary under an existing deed of trust on the Phase
I Property, of a Non-Disturbance Agreement in a form reasonably acceptable to
Tenant acknowledging and approving this Lease and confirming (i) that so long as
Tenant is not in material default hereunder beyond any applicable cure period
(for which purpose the occurrence of any event of default under Section 16.1
hereof shall be deemed to be “material”), Tenant’s rights hereunder shall not be
disturbed by such person or entity and (ii) agreeing that the benefit of such
Non-Disturbance Agreement shall be transferable to any transferee under a
Permitted Transfer and to any other assignee or subtenant that is acceptable to
the ground lessor, mortgagee, trustee, beneficiary or leaseback lessor at the
time of transfer. If any mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback lessor or assignee elects to have this Lease be an encumbrance
prior to the lien of its mortgage, deed of trust, ground lease or leaseback
lease or other security arrangement upon any portion(s) of the Center on which
the Premises are located and gives notice thereof to Tenant, this Lease shall be
deemed prior thereto, whether this Lease is dated prior or subsequent to the
date thereof or the date of recording thereof. Tenant, and any sublessee, shall
execute such documents as may reasonably be requested by any mortgagee, trustee,
beneficiary, ground lessor, sale/leaseback lessor or assignee to evidence the
subordination herein set forth, subject to the conditions set forth above, or to
make this Lease prior to the lien of any mortgage, deed of trust, ground lease,
leaseback lease or other security arrangement, as the case may be. Upon any
default by Landlord in the performance of its obligations under any mortgage,
deed of trust, ground lease, leaseback lease or assignment, Tenant (and any
sublessee) shall, notwithstanding any subordination hereunder, attorn to the
mortgagee, trustee, beneficiary, ground lessor, leaseback lessor or assignee
thereunder upon

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demand and become the tenant of the successor in interest to Landlord, at the
option of such successor in interest, and shall execute and deliver any
instrument or instruments confirming the attornment herein provided for.
     17.2 Sale Of Landlord’s Interest. Upon sale, transfer or assignment of
Landlord’s entire interest in the portion(s) of the Center on which the Premises
are located, Landlord shall be relieved of its obligations hereunder with
respect to liabilities accruing from and after the date of such sale, transfer
or assignment.
     17.3 Estoppel Certificates. Tenant or Landlord (the “responding party”), as
applicable, shall at any time and from time to time, within ten (10) days after
written request by the other party (the “requesting party”), execute,
acknowledge and deliver to the requesting party a certificate in writing
stating: (i) that this Lease is unmodified and in full force and effect, or if
there have been any modifications, that this Lease is in full force and effect
as modified and stating the date and the nature of each modification; (ii) the
date to which rental and all other sums payable hereunder have been paid;
(iii) that the requesting party is not in default in the performance of any of
its obligations under this Lease, that the certifying party has given no notice
of default to the requesting party and that no event has occurred which, but for
the expiration of the applicable time period, would constitute an event of
default hereunder, or if the responding party alleges that any such default,
notice or event has occurred, specifying the same in reasonable detail; and
(iv) such other matters as may reasonably be requested by the requesting party
or by any institutional lender, mortgagee, trustee, beneficiary, ground lessor,
sale/leaseback. lessor or prospective purchaser of any portion(s) of the Center
on which the Premises are located, or any prospective sublessee or assignee of
this Lease. Any such certificate provided under this Section 17.3 may be relied
upon by any lender, mortgagee, trustee, beneficiary, assignee or successor in
interest to the requesting party, by any prospective purchaser, by any purchaser
on foreclosure or sale, by any grantee under a deed in lieu of foreclosure of
any mortgage or deed of trust on the Center (or any portion thereof), by any
subtenant or assignee, or by any other third party. Failure to execute and
return within the required time any estoppel certificate requested hereunder, if
such failure continues for five (5) days after a second written request by the
requesting party for such estoppel certificate, shall be deemed to be an
admission of the truth of the matters set forth in the form of certificate
submitted to the responding party for execution.
     17.4 Subordination to CC&R’s. This Lease, and any permitted sublease
entered into by Tenant under the provisions of this Lease, and the interests in
real property conveyed hereby and thereby shall be subject and subordinate to
any declarations of covenants, conditions and restrictions affecting the Center
(or any portion thereof) from time to time, provided that the terms of such
declarations are reasonable, do not materially impair Tenant’s ability to
conduct the uses permitted hereunder on the Premises and in the Center, and do
not discriminate against Tenant relative to other similarly situated tenants
occupying the portion(s) of the Center covered by such declaration(s). Moreover,
this Lease, and any permitted sublease entered into by Tenant under the
provisions of this Lease, and the interests in real property conveyed hereby and
thereby shall also be subject and subordinate (a) to the Declaration of
Covenants, Conditions and Restrictions for Pointe Grand Business Park dated
November 4,1991 and recorded on February 25,1992 as Instrument No. 92025214,
Official Records of San Mateo County, as amended from time to time (the “Master
Declaration”), the provisions of which Master Declaration are an integral part
of this Lease to the extent this sentence is applicable, (b) to the Declaration
of Covenants, Conditions and Restrictions dated November 23, 1987 and recorded
on November 24,1987 as Instrument No. 87177987, Official Records of San Mateo
County, which declaration imposes certain covenants, conditions and restrictions
on the Pointe Grand Business Park, and (c) to the Environmental Restriction and
Covenant (Pointe Grand) dated as of April 16,1997 and recorded on April 16,1997
as Instrument No. 97-043682, Official Records of San Mateo County, which
declaration imposes certain covenants, conditions and restrictions on the Pointe
Grand Business Park. Tenant agrees to execute, upon request by Landlord, any
documents reasonably required from time to time to evidence such subordination.
     17.5 Mortgagee Protection. If, following a default by Landlord under any
mortgage, deed of trust, ground lease, leaseback lease or other security
arrangement covering any portion(s)

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of the Center on which the Premises are located, any such portion(s) of the
Center are acquired by the mortgagee, beneficiary, master lessor or other
secured party, or by any other successor owner, pursuant to a foreclosure,
trustee’s sale, sheriff‘s sale, lease termination or other similar procedure (or
deed in lieu thereof), then any such person or entity so acquiring any
portion(s) of the Center on which the Premises are located shall not be:
          (a) liable for any act or omission of a prior landlord or owner of
such portion(s) of the Center (including, but not limited to, Landlord);
          (b) subject to any offsets or defenses that Tenant may have against
any prior landlord or owner of such portion(s) of the Center (including, but not
limited to, Landlord);
          (c) bound by any rent or additional rent that Tenant may have paid in
advance to any prior landlord or owner of such portion(s) of the Center
(including, but not limited to, Landlord) for a period in excess of one month,
or by any security deposit, cleaning deposit or other prepaid charge that Tenant
may have paid in advance to any prior landlord or owner (including, but not
limited to, Landlord), except to the extent such deposit or prepaid amount has
been expressly turned over to or credited to the successor owner this acquiring
such portion(s) of the Center;
          (d) liable for any warranties or representations of any nature
whatsoever, whether pursuant to this Lease or otherwise, by any prior landlord
or owner of such portion(s) of the Center (including, but not limited to,
Landlord) with respect to the use, construction, zoning, . compliance with laws,
title, habitability, fitness for purpose or possession, or physical condition
(including, without limitation, environmental matters) of the Center or any
portion thereof; or
          (e) liable to Tenant in any amount beyond the interest of such
mortgagee, beneficiary, master lessor or other secured party or successor owner
in such portion(s) of the Center, it being the intent of this provision that
Tenant shall look solely to the interest of any such mortgagee, beneficiary,
master lessor or other secured party or successor owner in such portion(s) of
the Center for the payment and discharge of the landlord’s obligations under
this Lease and that such mortgagee, beneficiary, master lessor or other secured
party or successor owner shall have no separate personal liability for any such
obligations.
18. SECURITY
     18.1 Deposit. Tenant is not required to provide any security deposit to
Landlord pursuant to this Lease.
19. MISCELLANEOUS
     19.1 Notices. All notices, consents, waivers and other communications which
this Lease requires or permits either party to give to the other shall be in
writing and shall be deemed given when delivered personally (including delivery
by private courier or express delivery service) or four (4) days after deposit
in the United States mail, registered or certified mail, postage prepaid,
addressed to the parties at their respective addresses as follows:

         
 
  To Tenant:   COR Therapeutics, Inc.
 
      256 East Grand Avenue
 
      South San Francisco, CA 94080
 
      Attn: Charles A. Alaimo
 
       
 
  with copy to:   Cooley Godward llp
 
      One Maritime Plaza, 20th Floor
 
      San Francisco, CA 94111-3580
 
      Attn: Anna B. Pope, Esq.

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  To Landlord:   Britannia Pointe Grand Limited Partnership
 
      1939 Harrison Street, Suite 715
 
      Park Plaza Building
 
      Oakland, CA 94612
 
      Attn: T. J. Bristow
 
       
 
  with copy to:   Folger Levin & Kahn llp
 
      Embarcadero Center West
 
      275 Battery Street, 23rd Floor
 
      San Francisco, CA 94111
 
      Attn: Donald E. Kelley, Jr.
 
       
 
  and copy to:   Slough Estates USA Inc.
 
      33 West Monroe Street, Suite 2000
 
      Chicago, IL 60603
 
      Attn: Randy Rohner

or to such other address as may be contained in a notice at least fifteen
(15) days prior to the address change from either party to the other given
pursuant to this Section. Rental payments and other sums required by this Lease
to be paid by Tenant shall be delivered to Landlord at Landlord’s address
provided in this Section, or to such other address as Landlord may from time to
time specify in writing to Tenant, and shall be deemed to be paid only upon
actual receipt.
     19.2 Successors And Assigns. The obligations of this Lease shall run with
the land, and this Lease shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except that the
original Landlord named herein and each successive Landlord under this Lease
shall be liable only for obligations accruing during the period of its ownership
of the portion(s) of the Center on which the Premises are located, and any
liability for obligations accruing after termination of such ownership shall
terminate as of the date of such termination of ownership and shall pass to the
successor lessor.
     19.3 No Waiver. The failure of Landlord to seek redress for violation, or
to insist upon the strict performance, of any covenant or condition of this
Lease shall not be deemed a waiver of such violation, or prevent a subsequent
act which would originally have constituted a violation from having all the
force and effect of an original violation.
     19.4 Severability. If any provision of this Lease or the application
thereof is held to be invalid or unenforceable, the remainder of this Lease or
the application of such provision to persons or circumstances other than those
as to which it is invalid or unenforceable shall not be affected thereby, and
each of the provisions of this Lease shall be valid and enforceable, unless
enforcement of this Lease as so invalidated would be unreasonable or grossly
inequitable under all the circumstances or would materially frustrate the
purposes of this Lease.
     19.5 Litigation Between Parties. In the event of any litigation or other
dispute resolution proceedings between the parties hereto arising out of or in
connection with this Lease, the prevailing party shall be reimbursed for all
reasonable costs, including, but not limited to, reasonable accountants’ fees
and attorneys’ fees, incurred in connection with such proceedings (including,
but not limited to, any appellate proceedings relating thereto) or in connection
with the enforcement of any judgment or award rendered in such proceedings.
“Prevailing party” within the meaning of this Section shall include, without
limitation, a party who dismisses an action for recovery hereunder in exchange
for payment of the sums allegedly due, performance of covenants allegedly
breached or consideration substantially equal to the relief sought in the
action.
     19.6 Surrender. A voluntary or other surrender of this Lease by Tenant, or
a mutual termination thereof between Landlord and Tenant, shall not result in a
merger but shall, at the option of Landlord, operate either as an assignment to
Landlord of any and all existing subleases

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and subtenancies, or a termination of all or any existing subleases and
subtenancies. This provision shall be contained in any and all assignments or
subleases made pursuant to this Lease.
     19.7 Interpretation. The provisions of this Lease shall be construed as a
whole, according to their common meaning, and not strictly for or against
Landlord or Tenant. The captions preceding the text of each Section and
subsection hereof are included only for convenience of reference and shall be
disregarded in the construction or interpretation of this Lease.
     19.8 Entire Agreement. This written Lease, together with the exhibits
hereto, contains all the representations and the entire understanding between
the parties hereto with respect to the subject matter hereof. Any prior
correspondence, memoranda or agreements are replaced in total by this Lease and
the exhibits hereto. This Lease may be modified only by an agreement in writing
signed by each of the parties.
     19.9 Governing Law. This Lease and all exhibits hereto shall be construed
and interpreted in accordance with and be governed by all the provisions of the
laws of the State of California.
     19.10 No Partnership. The relationship between Landlord and Tenant is
solely that of a lessor and lessee. Nothing contained in this Lease shall be
construed as creating any type or manner of partnership, joint venture or joint
enterprise with or between Landlord and Tenant.
     19.11 Financial Information. From time to time Tenant shall promptly
provide directly to prospective lenders and purchasers of the portion(s) of the
Center on which the Premises are located, as designated by Landlord from time to
time, such financial information pertaining to the financial status of Tenant as
Landlord may reasonably request; provided, Tenant shall be permitted to provide
such financial information in a manner which Tenant deems reasonably necessary
to protect the confidentiality of such information. In addition, from time to
time, Tenant shall provide Landlord with such financial information pertaining
to the financial status of Tenant as Landlord may reasonably request. Landlord
agrees that all financial information supplied to Landlord by Tenant shall be
treated as confidential material, and shall not be disseminated to any party or
entity (including any entity affiliated with Landlord) without Tenant’s prior
written consent, except that Landlord shall be entitled to provide such
information, subject to reasonable precautions to protect the confidential
nature thereof, (i) to Landlord’s partners and professional advisors, solely to
use in connection with Landlord’s execution and enforcement of this Lease, and
(ii) to prospective lenders and/or purchasers of the portion(s) of the Center on
which the Premises are located, solely for use in connection with their bona
fide consideration of a proposed financing or purchase of the portion(s) of the
Center on which the Premises are located, provided that such prospective lenders
and/or purchasers are not then engaged in businesses directly competitive with
the business then being conducted by Tenant. For purposes of this Section,
without limiting the generality of the obligations provided herein, it shall be
deemed reasonable for Landlord to request copies of Tenant’s most recent audited
annual financial statements, or, if audited statements have not been prepared,
unaudited financial statements for Tenant’s most recent fiscal year, accompanied
by a certificate of Tenant’s chief financial officer that such financial
statements fairly present Tenant’s financial condition as of the date(s)
indicated. Notwithstanding any other provisions of this Section 19.11, during
any period in which Tenant has outstanding a class of publicly traded securities
and is filing with the Securities and Exchange Commission, on a regular basis,
Forms 10Q and 10K and any other periodic filings required under the Securities
Exchange Act of 1934, as amended, it shall constitute sufficient compliance
under this Section 19.11 for Tenant to furnish Landlord with copies of such
periodic filings upon Landlord’s written request.
          Landlord and Tenant recognize the need of Tenant to maintain the
confidentiality of information regarding its financial status and the need of
Landlord to be informed of, and to provide to prospective lenders and purchasers
of the portion(s) of the Center on which the Premises are located, financial
information pertaining to, Tenant’s financial status. Landlord and

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Tenant agree to cooperate with each other in achieving these needs within the
context of the obligations set forth in this Section.
     19.12 Costs. If Tenant requests the consent of Landlord under any provision
of this Lease for any act that Tenant proposes to do hereunder, including,
without limitation, assignment of this Lease or subletting of the Premises or
any portion thereof. Tenant shall, as a condition to doing any such act and the
receipt of such consent, reimburse Landlord promptly for any and all reasonable
costs and expenses incurred by Landlord in connection therewith, including,
without limitation, reasonable attorneys’ fees, up to a maximum of $2,500.00 per
request.
     19.13 Time. Time is of the essence of this Lease, and of every term and
condition hereof.
     19.14 Rules And Regulations. Tenant shall observe, comply with and obey,
and shall cause its employees, agents and, to the best of Tenant’s ability,
invitees to observe, comply with and obey such rules and regulations as Landlord
may reasonably promulgate from time to time for the safety, care, cleanliness,
order and use of the Improvements, the Premises and the Center.
     19.15 Brokers. Landlord agrees to pay a fee of $300,000 to Tenant’s
consultant, CB Richard Ellis (attn: Chris Jacobs), in connection with the
consummation of this Lease in accordance with a separate agreement. Such fee
shall be due and payable in full on or before September 15,2001. Each party
represents and warrants that no other broker participated in the consummation of
this Lease and agrees to indemnify, defend and hold the other party harmless
against any liability, cost or expense, including, without limitation,
reasonable attorneys’ fees, arising out of any claims for brokerage commissions
or other similar compensation in connection with any conversations, prior
negotiations or other dealings by the indemnifying party with any other broker.
     19.16 Memorandum Of Lease. At any time during the term of this Lease,
either party, at its sole expense, shall be entitled to record a memorandum of
this Lease and, if either party so elects, both parties agree to cooperate in
the preparation, execution, acknowledgement and recordation of such document in
reasonable form.
     19.17 Corporate Authority. Each of the persons signing this Lease on behalf
of Tenant warrants that he or she is fully authorized to do so and, by jointly
so signing, to bind Tenant.
     19.18 Execution and Delivery. This Lease may be executed in one or more
counterparts and by separate parties on separate counterparts, but each such
counterpart shall constitute an original and all such counterparts together
shall constitute one and the same instrument.
     19.19 Survival. Without limiting survival provisions which would otherwise
be implied or construed under applicable law, the provisions of Sections 2.5,
7.4, 9.2, 9.3, 9.4, 11.6, 12.6 and 19.5 hereof shall survive the termination of
this Lease with respect to matters occurring prior to the expiration of this
Lease.
     19.20 Parking. Landlord and Tenant agree that the Common Areas, taken as a
whole, shall include parking in amounts sufficient to satisfy the minimum
parking requirements of the City of South San Francisco applicable to the Center
from time to time.
[rest of page intentionally left blank]

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     IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first set forth above.

                          “Landlord”       “Tenant”       BRITANNIA POINTE GRAND
LIMITED       COR THERAPEUTICS, INC., a Delaware     PARTNERSHIP, a Delaware
limited       corporation     partnership                
 
                        By:   BRITANNIA POINTE GRAND,       By:   /s/ Peter S.
Roddy    
 
                            LLC, a California limited liability
company, General Partner       Its:   Senior Vice President, Finance and
Chief Financial Officer    
 
                       
 
                       
 
  By:   /s/ T. J. Bristow       By:   /s/ Vaughn M. Kailian    
 
                       
 
      T. J. Bristow       Its:   President and Chief Executive Officer    
 
                       
 
  Its:   Manager, President and                
 
      Chief Financial Officer                

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EXHIBITS

     
EXHIBIT A
  Real Property Description
 
   
EXHIBIT A-l
  Phase I Property (Plan)
 
   
EXHIBIT B
  Site Plan
 
   
EXHIBIT C
  Future Entrance Lobby

 

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EXHIBIT A
REAL PROPERTY DESCRIPTION
The Phase I Property:
All that certain real property in the City of South San Francisco, County of San
Mateo, State of California, more particularly described as follows:
Lot 3 as shown on Parcel Map No. 91-284, “Being a resubdivision of the parcels
described in the deeds to Metal and Thermit Corporation, recorded in Book 293,
at Page 394 of Deeds; in Book 49, at Page 490, Official Records; in Book 77, at
Page 415, Official Records; and, except that parcel described in Book 1352, at
Page 373, Official Records,” filed on February 25,1992, in Book 65 of Parcel
Maps, in the Office of the Recorder of the County of San Mateo, California.

The Center:
All that certain real property in the City of South San Francisco, County of San
Mateo, State of California, more particularly described as follows:
Lots 1, 2, 3 and 4, inclusive, as shown on Parcel Map No. 91-284, “Being a
resubdivision of the parcels described in the deeds to Metal and Thermit
Corporation, recorded in Book 293, at Page 394 of Deeds; in Book 49, at Page
490, Official Records; in Book 77, at Page 415, Official Records; and, except
that parcel described in Book 1352, at Page 373, Official Records,” filed on
February 25,1992, in Book 65 of Parcel Maps, in the Office of the Recorder of
the County of San Mateo, California.
Together with all adjacent or substantially adjacent areas owned by Landlord and
depicted on the Site Plan (Exhibit B to this Lease) as being part of the Center.
EXHIBIT A

 

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EXHIBIT A-1
PHASE I PROPERTY (PLAN)
(PHASE I PROPERTY PLAN) [f22180f2218001.gif]

 

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EXHIBIT B
SITE PLAN
(SITE PLAN) [f22180f2218002.gif]

 

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EXHIBIT C
FUTURE ENTRANCE LOBBY PLAN
(FUTURE ENTRANCE LOBBY PLAN) [f22180f2218003.gif]

 

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EXHIBIT B
Sublease Premises

14

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Exhibit B
Britannia Pointe Grande
(BRITANNIA POINTE GRANDE) [f22180f2218004.gif]

 

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256 East Grand
Britannia Pointe Grande
(BRITANNIA POINTE GRANDE) [f22180f2218005.gif]

 

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EXHIBIT B
Sublease Premises

14

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EXHIBIT C
FF&E INVENTORY
Section I – List of FF&E

•   45 Offices with file cabinets drawers and work surfaces.   •   46 Cubicle’s
with drawer’s shelves and work surfaces.   •   Approximately 45 break room and
conference tables.   •   Approximately 100 miscellaneous bookcases, files, and
storage cabinets.   •   Approximately 330 desk chairs, side chairs, conference
room chairs, and lab stools.   •   Miscellaneous white boards.   •   2
Autoclaves   •   1 Glassware Washer   •   1 Glassware Dryer   •   1 House
De-ionized Water Purification System   •   2 Modulab Water Polishing Systems   •
  8 Class 2 Bio-safety Cabinets   •   1 300KW Auxiliary Generator & Automatic
Transfer Switch   •   1 45KVA UPS.   •   1 25KVA UPS   •   1 CDA Air Compressor
  •   1 Liquid Ring House Vacuum Pump   •   Assorted Lab Benches & Built-In Fume
Hoods

Section II – List of FF&E
Upon expiration of the Term of this Sublease, title to that portion of the FF&E
owned by Sublandlord on the date of this Sublease (the “Furniture”) that is not
purchased by Landlord pursuant to Section 9.2(g) of the Master Lease shall be
deemed transferred to Subtenant and Subtenant shall be solely responsible for
removing it from the Sublease Premises.\

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Confidential
 
EXHIBIT B
Floor Plan
[Attached]

vii

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(FLOOR PLAN) [f22180f2218000.gif]