Exhibit 10.1

SUBLEASE

BETWEEN

ORACLE USA, INC.

AND

PAIN THERAPEUTICS, INC.

2211 Bridgepointe Parkway,

San Mateo, California

(“Bridgepointe Building 2”)

Fifth Floor

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SUBLEASE

THIS SUBLEASE (“Sublease”) is entered into as of July 7, 2007, by and between
ORACLE USA, INC., a Colorado corporation (“Sublandlord”), and PAIN THERAPEUTICS,
INC., a Delaware corporation (“Subtenant”), with reference to the following
facts:

A. Pursuant to that certain Lease dated as of March 11, 1999 (the “Original
Master Lease”), as the same has been amended by that certain First Amendment to
Lease dated as of June 11, 1999 (the “First Amendment”), by that certain Second
Amendment to Lease dated as of July 31, 2000 (the “Second Amendment”) and by
that certain Third Amendment to Lease dated as of August 11, 2006 (the “Third
Amendment”) (the Original Master Lease, as amended by the First Amendment, the
Second Amendment and the Third Amendment, being referred to herein as the
“Master Lease”), Sobrato Interests III (“Landlord”), as Landlord, leases to
Sublandlord (successor in interest to Siebel Systems, Inc.), as tenant, certain
space (the “Master Lease Premises”) consisting of the entire 141,496 rentable
square foot building located at 2211 Bridgepointe Parkway (“Building 2” or the
“Building”) in the City of San Mateo (“City”), State of California. The
Building, together with (i) the 141,496 rentable square foot building located at
2215 Bridgepointe Parkway (“Building 1”) and (ii) the 167,505 rentable square
foot building located at 2207 Bridgepointe Parkway (“Building 3”) comprise the
“Project,” as more particularly defined in the Master Lease. Pursuant to
separate leases, Sublandlord has leased all of Building 1 and all of Building 3.

B. Subtenant wishes to sublease from Sublandlord, and Sublandlord wishes to
sublease to Subtenant, a portion of the Master Lease Premises containing
approximately 30,718 rentable square feet located on the fifth (5th) floor of
the Building, said space being more particularly identified and described on the
floor plan attached hereto as Exhibit A and incorporated herein by reference
(the “Subleased Premises”).

NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged by the parties, Sublandlord and Subtenant hereby agree as follows:

1. Sublease. Sublandlord hereby subleases to Subtenant and Subtenant hereby
subleases from Sublandlord, for the term, at the rental, and upon all of the
conditions set forth herein, the Subleased Premises and grants Subtenant the
non-exclusive right to use the Common Areas of the Project in compliance with
the Master Lease and the provisions of this Sublease.

2. Term.

2.1 Generally. The term of this Sublease (“Term”) shall commence on the date
(the “Commencement Date”) that is the later to occur of (x) June 1, 2007,
(y) seven (7) days following the date that Sublandlord delivers possession of
the Subleased Premises to Subtenant in the condition required hereunder and
(z) seven (7) days following the date upon which Sublandlord procures Landlord’s
consent to this Sublease as described in Section 27 below (the “Consent”, and
the date upon which Sublandlord procures the Consent being the “Effective Date”)
and end on July 31, 2012 (the “Expiration Date”), unless sooner terminated

 

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pursuant to any provision hereof. Upon the determination of the Commencement
Date, Sublandlord and Subtenant will enter into a letter agreement in the form
of Exhibit B attached hereto.

2.2 Early Access. Subtenant and Subtenant’s representatives shall have the right
to enter the Subleased Premises during the period, if any, commencing on the
Effective Date and ending on the day immediately preceding the Commencement Date
(the date upon which Subtenant first has such access to the Subleased Premises
being referred to herein as the “Early Access Date”) for the sole purposes of
installation of the Initial Subtenant Improvements (defined in Section 15.2
below), Subtenant’s personal property and the testing and installation of
equipment, furniture, fixtures and voice and data cabling, all subject to the
terms, conditions and requirements of this Sublease. All of the rights and
obligations of the parties under this Sublease (other than Subtenant’s
obligation to pay Rent and utilities and Subtenant’s maintenance and repair
obligations, but expressly including without limitation, Subtenant’s obligation
to carry insurance, Subtenant’s indemnification obligations, and/or Subtenant’s
liability for damages, costs and expenses incurred by Sublandlord by reason of
any default by Subtenant or failure on Subtenant’s part to comply with the terms
of this Sublease) shall commence upon the Early Access Date, and Subtenant shall
be deemed to occupy the Subleased Premises from and after the Early Access Date.
Subtenant shall be liable for any damages to the Subleased Premises caused by
Subtenant’s activities at the Subleased Premises from and after the Early Access
Date and, prior to entering the Subleased Premises, Subtenant shall obtain all
insurance it is required to obtain hereunder and shall provide certificates of
such insurance to Sublandlord. Subtenant shall coordinate such entry with
Sublandlord, and such entry shall be made in compliance with all terms and
conditions of this Sublease, the Master Lease and the rules and regulations
attached to the Master Lease.

3. Rent.

3.1 Rent Payments.

(a) Generally. From and after the Commencement Date Subtenant shall pay to
Sublandlord as base rent for the Subleased Premises during the Term (“Base
Rent”) the following:

 

Months of Term

   Monthly Base Rent Per
Rentable Square Foot    Monthly
Base Rent

1 - 13

   $ 1.40    $ 43,005.20

14 - 25

   $ 1.44    $ 44,295.36

26 - 37

   $ 1.49    $ 45,624.22

38 - 49

   $ 1.53    $ 46,992.94

50 - 62

   $ 1.58    $ 48,402.73

Base Rent shall be paid on the first day of each month of the Term, except that
Subtenant shall pay one (1) month’s Base Rent to Sublandlord upon execution of
this Sublease and delivery of this Sublease to Sublandlord; said prepaid Base
Rent will be applied by Sublandlord to the first (1st) payment of Base Rent due
following the Base Rent Abatement Period (defined in Section 3.1(b) below). If
the Term does not begin on the first day of a calendar month or end on the last

 

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day of a month, the Base Rent and Additional Rent (hereinafter defined) for any
partial month shall be prorated by multiplying the monthly Base Rent and
Additional Rent by a fraction, the numerator of which is the number of days of
the partial month included in the Term and the denominator of which is the total
number of days in the full calendar month. All Rent (hereinafter defined) shall
be payable in lawful money of the United States, by regular bank check of
Subtenant, to Sublandlord at the following address:

1001 Sunset Boulevard

Rocklin, CA 95765

Attn: Lease Administration

or to such other persons or at such other places as Sublandlord may designate in
writing.

(b) Abatement. Notwithstanding anything in Section 3(a) above to the contrary,
so long as Subtenant is not in default (i.e., beyond the giving of applicable
notice and the passage of applicable grace periods) under this Sublease,
Subtenant shall be entitled to an abatement of Rent for the first four (4) weeks
of the Term (the “Rent Abatement Period”). The total amount of Rent abated
during the Rent Abatement Period is referred to herein as the “Abated Rent”. The
Rent Abatement Period shall be extended by one (1) day for each day Subtenant’s
completion of the Initial Subtenant Improvements is delayed due to delay in the
performance of such work caused directly by the act or omission of Sublandlord
(Subtenant agrees to provide Sublandlord with prompt written notice of any such
delay in order to allow Sublandlord to mitigate the effects of any such delay)
or a delay in obtaining required permits or approvals due to a strike by the
applicable governmental authorities. If Subtenant defaults hereunder at any time
during the Rent Abatement Period and fails to cure such default within any
applicable cure period, Rent will no longer abate in accordance with the
provisions of this Section 3.1(b).

3.2 Operating Costs. Except as expressly set forth herein, it is intended that
this Sublease be a “net” sublease, such that all Base Rent payable by Subtenant
to Sublandlord hereunder will be “net” of all costs to Sublandlord of operating
and maintaining the Subleased Premises, the Building and the Project.
Accordingly, Subtenant will be responsible for the payment of Subtenant’s
Percentage Share (defined below) of both those costs of operation and
maintenance of the Building and Project which are payable by Sublandlord to
Landlord under the Master Lease, as well as those costs of operation and
maintenance of the Subleased Premises, Building and Project which are
Sublandlord’s direct responsibility under the Master Lease. The definitions and
procedures set forth in this Section 3.2 will govern Subtenant’s payment to
Sublandlord of such costs.

(a) Definitions. The following terms shall have the meanings set forth below:

(1) “Additional Rent” shall mean the sums payable pursuant to Section 3.2(b)
below.

(2) “Operating Costs” shall mean the aggregate of (i) Landlord Operating Costs
and (ii) Sublandlord Operating Costs, each defined below.

 

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(A) “Landlord Operating Costs” shall mean (i) Reimbursable Operating Costs (as
such term is defined in the Master Lease) attributable to the Building, as
described in Sections 8.C and 8.E of the Original Master Lease;
(ii) Reimbursable Operating Costs attributable to the Project, as described in
Sections 8.C and 8.E of the Original Master Lease, (iii) taxes payable by
Sublandlord pursuant to Article 10 of the Original Master Lease, but excluding
any taxes on Sublandlord’s personal property unless the same are properly
included in Sublandlord Operating Costs, as well as (iv) costs payable by
Sublandlord pursuant to Section 21.W of the Original Master Lease; provided that
Landlord Operating Costs will not:

(i) include deductible payments under any of Landlord’s insurance policies
and/or any other uninsured costs occasioned by casualties, in each case to the
extent that the same, when aggregated with any costs of the same type included
in Sublandlord Operating Costs, exceed one (1) month’s Rent payable under this
Sublease at the time of such casualty; or

(ii) include the cost of capital improvements constructed by Landlord except to
the extent that the same are, for the purposes of this Sublease, amortized (as
described in Section 3.2(B)(i) below, provided that the limitation described in
clauses (x),(y) and (z) of Section 3.2(a)(2)(B)(ii) will not apply) by
Sublandlord prior to inclusion in Landlord Operating Costs, regardless of
whether or not such costs are similarly amortized by Landlord for the purpose of
charging the same to Sublandlord pursuant to the Master Lease; or

(iii) include costs arising from the presence, clean-up or remediation of any
Hazardous Materials, except to the extent caused by Subtenant, its employees,
agents or contractors; or

(iv) include the cost of bringing the Building and/or the Premises into
compliance with laws as existing and enforced against the Building as of the
Commencement Date.

(B) “Sublandlord Operating Costs” shall mean (i) costs incurred by Sublandlord
in complying with Sublandlord’s obligations as set forth in Section 8.B of the
Master Lease, (ii) costs of utilities paid by Sublandlord pursuant to Section 11
of the Master Lease, and (iii) all other costs of Sublandlord incurred in the
operation, maintenance, repair and replacement of any portion of the Building
and/or Project (including, without limitation, any commercially reasonable
out-of-pocket property management fee paid by Sublandlord to any entity
performing management services at the Property and the fair market rental value
of any reasonable-sized property management office serving the Project, as well
as the cost of providing the Project Amenities to the extent allowable pursuant
to Section 3.3 below). Notwithstanding the foregoing to the contrary,
Sublandlord Operating Costs will not include the following:

(i) the cost of capital improvements constructed by Sublandlord, except that
Sublandlord Operating Costs will include the amortized cost of capital
improvements constructed by Sublandlord (x) in order to comply with laws, rules
or regulations first enacted or enforced against the Building or Project after
the Commencement

 

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Date, or (y) to cause a reduction in one or more components in Sublandlord
Operating Costs if Sublandlord in good faith believes the amortized cost of such
improvements will approximate or be less than the cost savings over the useful
life of the item in question or (z) to replace items which Sublandlord is
obligated to maintain under the Master Lease or this Sublease. As used in this
Section 3.2(a)(2)(B), “amortization” shall mean allocation of the cost (together
with reasonable financing charges) of the item being amortized equally to each
year of the useful life of such item, as reasonably determined by Sublandlord.

(ii) any costs or expenses for which Sublandlord is reimbursed by insurance or
condemnation proceeds or by a third party (other than by subtenants as part of
Operating Costs);

(iii) costs in connection with subleasing space in the Building or Project,
including brokerage commissions and legal expenses;

(iv) lease concessions, including rental abatements and construction allowances,
granted to specific subtenants;

(v) any penalties or damages that Sublandlord pays to Subtenant under this
Sublease or to other occupants in the Project under their respective subleases;

(vi) costs incurred in connection with disputes between Sublandlord and its
employees or between Sublandlord and other subtenants or Project occupants;

(vii) the wages and benefits of any employee who does not devote substantially
all of his or her employed time to the Project unless such wages and benefits
are prorated to reflect time spent on operating and managing the Project
vis-á-vis time spent on matters unrelated to operating and managing the Project;

(viii) any amounts paid by Sublandlord to its parent organization or to a
subsidiary or affiliate of Sublandlord for supplies and/or services rendered in
connection with the Project to the extent the same materially exceed the costs
of such supplies and/or services rendered by qualified, first-class unaffiliated
third parties on a competitive basis;

(ix) any amount paid by Sublandlord for items and services for which Subtenant
or any other occupant in the Project directly reimburses Sublandlord pursuant to
their respective subleases (i.e., other than by payment of Operating Costs);

(x) acquisition costs (not including those incurred in ordinary maintenance and
repair) for sculpture, paintings or other objects of art;

(xi) costs arising from the presence, clean-up or remediation of any Hazardous
Materials, except to the extent caused by Subtenant, its employees, agents or
contractors;

 

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(xii) penalties, interest and fines incurred as a result of Sublandlord’s
failure to make payments and/or to file any tax or informational returns when
due;

(xiii) any personal property taxes of Sublandlord for equipment or items not
used in the operation or maintenance of the Building or Project;

(xiv) deductible payments under Sublandlord’s insurance policies and/or any
other uninsured costs occasioned by casualties, in each case to the extent that
the same, when aggregated with any costs of the same type included in Landlord
Operating Costs, exceeds one (1) month’s Base Rent payable under this Sublease
at the time of the applicable casualty occurred;

(xv) the cost of bringing the Building and/or the Premises into compliance with
laws as existing and enforced as of the Commencement Date;

(xvi) any costs (other than property management fees) of a type excluded from
Reimbursable Operating Costs pursuant to Section 8.F of the Original Master
Lease; or

(xvii) costs for renovating, reconfiguring or remodeling (as opposed to costs of
operation, maintenance and replacement) any other premises in the Project or of
the Common Areas of the Project, including the Project Amenities.

(C) If, for thirty (30) or more days during any calendar year, less than
ninety-five percent (95%) of the rentable area of the Building is occupied by
subtenants, then the Sublandlord Operating Costs for such calendar year shall be
deemed to be an amount equal to the Sublandlord Operating Costs which would
normally be expected to have been incurred had the Building been at least
ninety-five percent (95%) occupied throughout such year, as reasonably
determined by Sublandlord (i.e., taking into account that certain expenses
depend on occupancy (e.g., janitorial) and certain expenses do not (e.g.,
landscaping)). Furthermore, if Sublandlord shall not furnish any item or items
of service the cost of which is included in Sublandlord Operating Costs to any
portions of the Building because such portions are not occupied or because such
item is not required by the occupant of such portion of the Building or such
occupant is providing such service independently, then, for the purposes of
computing Sublandlord Operating Costs, an equitable adjustment shall be made so
that the cost of the item in question shall be shared only by occupants actually
receiving the benefits thereof.

(3) “Rent” shall mean, collectively, Base Rent, Additional Rent, and all other
sums payable by Subtenant to Sublandlord under this Sublease, whether or not
expressly designated as “rent”, all of which are deemed and designated as rent
pursuant to the terms of this Sublease. Base Rent and Additional Rent are
payable hereunder in advance without setoff, deduction, notice or demand. Unless
expressly set forth to the contrary in this Sublease, all other amounts payable
by Subtenant hereunder are payable within thirty (30) days following
Sublandlord’s delivery of an invoice therefor to Subtenant.

 

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(4) “Subtenant’s Percentage Share” shall mean, as applicable given the context,
Subtenant’s Building Percentage Share and/or Subtenant’s Project Percentage
Share, as follows:

(A) “Subtenant’s Building’s Percentage Share” shall mean 21.71%, which is
derived by dividing the rentable area of the Subleased Premises by the rentable
area of the Building and multiplying the quotient by 100. Subtenant’s Building
Percentage Share will be applicable to Landlord Operating Costs attributable to
the Building and Sublandlord Operating Costs attributable to the Building.

(B) “Subtenant’s Project Percentage Share” shall mean 6.82%, which is derived by
dividing the rentable area of the Subleased Premises by the rentable area of the
Project and multiplying the quotient by 100. Subtenant’s Project Percentage
Share will be applicable to Landlord Operating Costs attributable to the Project
and Sublandlord Operating Costs attributable to the Project.

(b) Payment of Operating Costs. In addition to the Base Rent payable hereunder,
from and after the Commencement Date, for each full or partial calendar year of
the Term, Subtenant, as Additional Rent, shall pay the applicable Subtenant’s
Percentage Share of Operating Costs for the then current calendar year. For the
calendar year 2007, Sublandlord’s initial estimate is that Operating Costs will
equal $.93 per rentable square foot per month.

(c) Procedure. The determination and adjustment of Additional Rent payable
hereunder shall be made in accordance with the following procedures:

(1) Landlord Operating Costs. Sublandlord shall give Subtenant written notice of
its estimate of the amount of Subtenant’s Percentage Share of Landlord Operating
Costs payable for each calendar year; such estimate may be aggregated with
Sublandlord’s estimate of Sublandlord Operating Costs payable for such year.
Subtenant may amend such estimate in good faith from time to time during any
calendar year. On or before the first day of each calendar month during each
full or partial calendar year throughout the Term, Subtenant shall pay to
Sublandlord as Additional Rent one-twelfth (1/12th) of such estimated amount. If
for any reason Sublandlord has not provided Subtenant with an estimate of the
amount of Subtenant’s Percentage Share of Landlord Operating Costs on or before
the first day of January of any calendar year during the Term, then (a) until
the first day of the calendar month following the month in which Sublandlord
delivers such estimate, Subtenant shall continue to pay to Sublandlord on the
first day of each calendar month the sum payable by Subtenant under this
Section 3.2(c)(1) for the month of December of the preceding year, and
(b) together with such estimate, Sublandlord shall give notice to Subtenant
stating whether the installments of Landlord Operating Costs payments previously
made for such year were greater or less than the installments of Landlord
Operating Costs payments to be made for such year, and (i) if there shall be a
deficiency, Subtenant shall pay the amount thereof to Sublandlord within thirty
(30) days after the delivery of Sublandlord’s estimate, or (ii) if there shall
have been an overpayment, Sublandlord shall apply such overpayment as a credit
against the next accruing monthly installment(s) of Rent due from Subtenant
until fully credited to Subtenant or, at Sublandlord’s discretion, Sublandlord
may pay the amount thereof to Subtenant by check, and

 

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(c) on the first (1st) day of the calendar month following the month in which
Sublandlord’s estimate is given to Subtenant and on the first day of each
calendar month throughout the remainder of such calendar year, Subtenant shall
pay to Sublandlord an amount equal to one-twelfth (1/12th) of the new Landlord
Operating Costs payment, as described above. Subtenant’s estimated payments of
Subtenant’s Percentage Share of Landlord Operating Costs shall be reconciled
from time to time with the actual amounts thereof due as and when Sublandlord is
notified by Landlord of the actual amounts of Landlord Operating Costs; and
Sublandlord will deliver to Subtenant a copy of any such notice(s) from Landlord
upon which such reconciliation may be based.

(2) Sublandlord Operating Costs.

(A) Sublandlord’s Estimate. On or about the Commencement Date, and on the first
day of January of each subsequent full or partial calendar year during the Term,
or as soon thereafter as is practicable, Sublandlord shall furnish Subtenant
with a statement setting forth in reasonable detail Sublandlord’s estimate of
Sublandlord Operating Costs for the calendar year in which the Commencement Date
occurs or the forthcoming calendar year, as applicable; such estimate may be
aggregated with Sublandlord’s estimate of Sublandlord Operating Costs payable
for such year. On or before the first day of each calendar month during such
year, Subtenant shall pay to Sublandlord as Additional Rent (i) one-twelfth
(1/12th) of Subtenant’s Building Percentage Share of the estimated Sublandlord
Operating Costs and (ii) one twelfth (1/12) of Subtenant’s Project Percentage
Share of the estimated Sublandlord Operating Costs (as such estimate may be
modified from time to time by Sublandlord). If for any reason Sublandlord has
not provided Subtenant with an estimate of Sublandlord Operating Costs on or
before the first day of January of any calendar year during the Term, then
(a) until the first day of the calendar month following the month in which
Subtenant is given Sublandlord’s estimate, Subtenant shall continue to pay to
Sublandlord on the first day of each calendar month the sum payable by Subtenant
under this Section 3.2(c)(2)(A) for the month of December of the preceding year,
and (b) promptly after Sublandlord’s estimate is furnished to Subtenant,
Sublandlord shall give notice to Subtenant stating whether the installments of
Sublandlord Operating Costs payments previously made for such year were greater
or less than the installments of Sublandlord Operating Costs payments to be made
for such year, and (i) if there shall be a deficiency, Subtenant shall pay the
amount thereof to Sublandlord within thirty (30) days after the delivery of
Sublandlord’s estimate, or (ii) if there shall have been an overpayment,
Sublandlord shall apply such overpayment as a credit against the next accruing
monthly installment(s) of Rent due from Subtenant until fully credited to
Subtenant or, at Sublandlord’s discretion, Sublandlord may pay the amount
thereof to Subtenant by check, and (c) on the first (1st) day of the calendar
month following the month in which Sublandlord’s estimate is given to Subtenant
and on the first day of each calendar month throughout the remainder of such
calendar year, Subtenant shall pay to Sublandlord an amount equal to one-twelfth
(1/12th) of the new Sublandlord Operating Costs payment, as described above.

(B) Reconciliation of Sublandlord Operating Costs. On or about the first day of
March of each calendar year during the Term, commencing with the calendar year
2008, or as soon thereafter as is reasonably practicable, Sublandlord will
furnish Subtenant with a statement of the actual Sublandlord Operating Costs for
the preceding year,

 

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reconciling the amounts paid pursuant to Sublandlord’s estimate and the actual
amounts payable hereunder. Within thirty (30) days after Sublandlord’s delivery
of such statement, Subtenant shall make a lump sum payment to Sublandlord in the
amount, if any, by which Subtenant’s Percentage Share of Sublandlord Operating
Costs for such preceding year, as shown on such statement, exceeds the aggregate
of the monthly installments of Subtenant’s Percentage Share of Sublandlord
Operating Costs paid during such preceding year. If Subtenant’s Percentage Share
of Sublandlord Operating Costs, as shown on such statement, is less than the
aggregate of the monthly installments of Subtenant’s Percentage Share of
Sublandlord Operating Costs actually paid by Subtenant during such preceding
year, then Sublandlord shall apply such amount to the next accruing monthly
installment(s) of Rent due from Subtenant until fully credited to Subtenant.
Sublandlord’s failure to deliver or delay in delivering a statement of actual
Sublandlord Operating Costs with respect to any calendar year shall in no event
be construed as Sublandlord’s waiver of the right to so deliver such statement
or collect Subtenant’s Percentage Share of Sublandlord Operating Costs as
described herein, nor shall it be construed as a waiver of Subtenant’s
obligation to pay such amounts.

(C) Subtenant’s Audit Right. Provided that Subtenant is not in default hereunder
and has paid all amounts due hereunder (including all Additional Rent),
Subtenant may, one hundred twenty (120) days after receiving Sublandlord’s
annual statement of Sublandlord Operating Costs, give Sublandlord written notice
(“Review Notice”) that Subtenant intends to cause an independent, nationally
recognized certified public accountant who charges for its services on an hourly
basis and is not compensated on a so-called “contingency” basis (a “Third Party
Auditor”) to inspect, during normal business hours, Sublandlord’s accounting
records with respect to Sublandlord Operating Costs for the calendar year
covered by such statement (the “Subtenant Review”); provided, however, that, as
a condition precedent to any such inspection, Subtenant shall deliver to
Sublandlord a copy of Subtenant’s written agreement with such Third Party
Auditor, which agreement shall include provisions which state that (i) such
Third Party Auditor will not in any manner solicit or agree to represent any
other occupant of the Project with respect to an audit or other review of
Sublandlord’s accounting records at the Project, (ii) Subtenant and such Third
Party Auditor shall maintain in strict confidence any and all information
obtained in connection with the Subtenant Review and shall not disclose such
information to any person or entity other than to the legal representatives and
management personnel of Subtenant or as required by law, and (iii) Sublandlord
is an intended third-party beneficiary of such agreement. Within a reasonable
time (not to exceed sixty (60) days) after receipt of the Review Notice,
Sublandlord shall make pertinent records available for inspection that are
reasonably necessary for Subtenant to conduct its review. If any such records
are maintained at a location other than the office of the Project, Subtenant may
either inspect the records at such other location or pay for the reasonable cost
of copying and shipping the records. Subtenant shall be solely responsible for
all costs, expenses and fees incurred for the Subtenant Review. Within sixty
(60) days after the records are made available to Subtenant, Subtenant shall
have the right to give Sublandlord written notice (an “Objection Notice”)
stating in reasonable detail any objection to Sublandlord’s statement of
Sublandlord Operating Costs for the applicable year. If Subtenant fails to give
Sublandlord an Objection Notice within such sixty (60) day period or fails to
provide Sublandlord with a Review Notice within the one hundred twenty (120) day
period described above, Subtenant shall be deemed to have approved Sublandlord’s
statement of Sublandlord Operating Costs and shall be barred from raising any
claims regarding Sublandlord Operating Costs for that calendar year. If
Subtenant provides

 

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Sublandlord with a timely Objection Notice, Sublandlord and Subtenant shall work
together in good faith to resolve any issues raised in Subtenant’s Objection
Notice. If Sublandlord and Subtenant determine that Subtenant’s Percentage Share
of Sublandlord Operating Costs for the calendar year was overstated by
Sublandlord, Sublandlord shall provide Subtenant with a credit against
Subtenant’s Percentage Share of Sublandlord Operating Costs next coming due in
the amount of the overpayment by Subtenant. If Sublandlord and Subtenant
determine that Subtenant’s Percentage Share of Sublandlord Operating Costs for
the calendar year was understated by Sublandlord, Subtenant shall pay
Sublandlord the amount of any underpayment within thirty (30) days thereafter.
The parties’ sole remedy for an error in the determination of Subtenant’s
Percentage Share of Sublandlord Operating Costs for any full or partial calendar
year shall be for the parties to make appropriate payments or credits, as the
case may be, to each other as set forth above. Subtenant shall be responsible
for all costs and expenses associated with Subtenant’s Review, and Subtenant
shall be responsible for all audit fees, attorneys’ fees and other costs of
Subtenant relating to the resolution of any dispute pursuant to this Section
(collectively, the “Costs”), provided that if the parties’ final resolution of
the dispute concludes that Sublandlord overstated Sublandlord Operating Costs
for such year by an amount in excess of five percent (5%) of actual Sublandlord
Operating Costs, then Sublandlord shall be responsible for the Costs.

(d) Survival. The expiration or earlier termination of this Sublease shall not
affect the rights and obligations of Sublandlord and Subtenant pursuant to this
Section 3.2, and such obligations shall survive any expiration or earlier
termination of this Sublease.

3.3 Project Amenities Costs. Sublandlord will provide certain Project amenities
(the “Project Amenities”) to occupants of the Project, including a fitness
center (located in the Building), conference room (anticipated to be located in
Building 3), cafeteria (located in Building 1) and, at Sublandlord’s discretion,
a day care center. It is anticipated that once occupancy in the Project equals
100,000 rentable square feet or more, Sublandlord will commence operations of
the proposed fitness center, conference room and limited cafeteria operations
(limited operations means that pre-cooked or pre-prepared food and beverages
will be available for sale, but full kitchen cooking operations will not yet
commence); at such point as occupancy levels meet or exceed 250,000 rentable
square feet, full cafeteria operations are anticipated to commence. The pro-rata
cost (on a rentable square foot basis) of providing the Project Amenities
(“Project Amenities Costs”) will be included within Sublandlord Operating Costs
but only when such services are provided to Subtenant, with the pro-rata
allocation to be determined by dividing the rentable area of the Subleased
Premises by the rentable area of the Project, net of the rentable area of the
Project Amenities; provided that in no event will Subtenant be required to pay
more for Project Amenities on a per rentable square foot basis than any other
Project occupant and all such costs shall be treated as costs attributable to
the Project (regardless of whether such amenity is located in the Building) such
that Subtenant shall only be responsible for Subtenant’s Project Percentage
Share of such costs. Notwithstanding the foregoing, each employee of any Project
occupant who desires to use the fitness center will be required to pay a monthly
fee (initially, $25.00 per month, but such fee may be adjusted from time to time
by Sublandlord to account for increases in costs of operation of the fitness
center) for the right to use the fitness center. Sublandlord will offset all
such fees collected against the portion of Project Amenities Costs attributable
to the fitness center and which would otherwise

 

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be included in Sublandlord Operating Costs. Any renovation, reconfiguration or
remodeling of the common areas of the Project, including the Project Amenities,
shall be performed in a manner so as not to unreasonably interfere with
Subtenant’s use of or access to the Subleased Premises or Subtenant’s parking
rights.

4. Security Deposit. Concurrently with Subtenant’s execution of this Sublease,
Subtenant shall deposit with Sublandlord the sum of $86,010.40 (the “Security
Deposit”). The Security Deposit shall be held by Sublandlord as security for the
faithful performance by Subtenant of all the provisions of this Sublease to be
performed or observed by Subtenant. If Subtenant fails to pay rent or other sums
due hereunder within applicable notice and cure periods, or otherwise defaults
beyond applicable notice and cure periods with respect to any provisions of this
Sublease, Sublandlord may use, apply or retain all or any portion of the
Security Deposit for the payment of any rent or other sum in default or for the
payment of any other sum to which Sublandlord may become obligated by reason of
Subtenant’s default, or to compensate Sublandlord for any loss or damage which
Sublandlord may suffer thereby. If Sublandlord so uses or applies all or any
portion of the Security Deposit, Subtenant shall within ten (10) days after
demand therefor deposit cash with Sublandlord in an amount sufficient to restore
the Security Deposit to the full amount thereof and Subtenant’s failure to do so
shall be a material breach of this Sublease. Sublandlord shall not be required
to keep the Security Deposit separate from its general accounts. If Subtenant
performs all of Subtenant’s obligations hereunder, the Security Deposit, or so
much thereof as has not theretofore been applied by Sublandlord, shall be
returned, without interest, to Subtenant (or, at Sublandlord’s option, to the
last assignee, if any, of Subtenant’s interest hereunder) following the
expiration of the Term, and after the later to occur of (x) Subtenant’s vacation
of the Subleased Premises and (y) Subtenant’s satisfactory completion of any
restoration work required of Subtenant hereunder. No trust relationship is
created herein between Sublandlord and Subtenant with respect to the Security
Deposit. Subtenant hereby waives any and all rights under and the benefits of
Section 1950.7 of the California Civil Code, and all other provisions of law now
in force or that become in force after the date of execution of this Sublease,
to the extent that such laws provide that Sublandlord may claim from a security
deposit only those sums reasonably necessary to remedy defaults in the payment
of rent, to repair damage caused by Subtenant, or to clean the Subleased
Premises.

5. Use and Occupancy.

5.1 Use. The Subleased Premises shall be used and occupied only for general
office use, and for no other use or purpose without Sublandlord’s prior written
consent which may be predicated upon receipt of Landlord’s prior written
consent.

5.2 Compliance with Master Lease.

(a) By Subtenant. Subtenant agrees that it will occupy the Subleased Premises in
accordance with the terms of the Master Lease and will not suffer to be done or
omit to do any act which may result in a violation of or a default under any of
the terms and conditions of the Master Lease, or render Sublandlord liable for
any damage, charge or expense thereunder as a result of any such violation or
default. Subtenant further covenants and agrees to indemnify Sublandlord against
and hold Sublandlord harmless from any claim, demand, action, proceeding, suit,
liability, loss, judgment, expense (including attorneys fees) and

 

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damages of any kind or nature whatsoever arising out of, by reason of, or
resulting from, Subtenant’s failure to perform or observe any of the terms and
conditions of the Master Lease or this Sublease. Any other provision in this
Sublease to the contrary notwithstanding, Subtenant shall pay to Sublandlord as
Rent hereunder any and all sums which Sublandlord may be required to pay
Landlord to the extent arising out of a request by Subtenant for, or use by
Subtenant of, additional or over-standard Building services (for example, but
not by way of limitation, charges associated with after-hours HVAC usage and
overstandard electrical charges) after the expiration of the Rent Abatement
Period.

(b) By Sublandlord. Sublandlord agrees that it will perform its obligations
under the Master Lease during the Term and will not amend or modify the Master
Lease in any way or take any action under the Master Lease which would increase
Subtenant’s obligations hereunder (other than in a de minimus way, such as
requiring Subtenant to send notices to an additional address, etc.) or
materially adversely affect Subtenant’s rights hereunder. Without limitation,
Sublandlord agrees that it will not terminate the Master Lease without the prior
written consent of Subtenant, except as Sublandlord may be entitled to terminate
the Master Lease in the event of casualty or condemnation. Subject to the
provisions of Section 9.D of the Original Master Lease as incorporated herein by
reference by Section 8.2 below and to the provisions of clause (b) of Section 13
below, Sublandlord shall indemnify, defend, protect and hold harmless Subtenant
harmless from, all damages, liabilities, losses, claims, attorneys’ fees, costs
and expenses arising from the negligence or willful misconduct of Sublandlord or
its agents or contractors or a breach of Sublandlord’s obligations under this
Sublease or the Master Lease.

(c) Master Lease Renewal. Sublandlord will not exercise its rights to renew the
Master Lease.

5.3 Rules and Regulations. Subtenant shall comply with the rules and regulations
for the Building attached hereto as Exhibit D and such amendments or supplements
thereto as Sublandlord may adopt from time to time with prior notice to
Subtenant (the “Rules and Regulations”), and with all recorded covenants,
conditions and restrictions now or hereafter affecting the Building or the
Project (collectively, “CC&Rs”) that do not prohibit Subtenant’s use of the
Subleased Premises for general office use and to the extent the same do not
materially adversely increase Subtenant’s obligations or materially adversely
decrease Subtenant’s rights under this Sublease. Subtenant shall also cause its
agents, contractors, subcontractors, employees, customers, and subtenants to
comply with all Rules and Regulations and CC&Rs. Notwithstanding the foregoing,
Sublandlord agrees that (i) any Rules and Regulations promulgated by Sublandlord
shall not be unreasonably modified or amended or enforced in a manner which will
unreasonably interfere with the normal and customary conduct of Subtenant’s
business and no Rule or Regulation shall unreasonably or materially interfere
with Subtenant’s permitted use, (ii) Sublandlord shall provide Subtenant with
reasonable advance notice of any CC&R’s and any modification or amendment of the
Rules and Regulations or CC&R’s, and (iii) in the event of a conflict between
the Rules and Regulations and the provisions of this Sublease, the provisions of
this Sublease will control; Subtenant acknowledges that it has received a copy
of the current (as of the date of this Sublease) CC&R’s. Without limitation on
the foregoing, Subtenant acknowledges that CC&R’s may provide for some or all of
the Project Common Areas to be transferred to a property owners’ association
which will assume the obligation to cause to be operated and maintained some or
all of the Project Common Areas (typically, through a

 

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property management/maintenance company retained by the property owners’
association in respect of such obligations); in such event, any costs incurred
by Sublandlord to pay such property owners’ association fee will be included in
Operating Costs subject to the terms of Section 3.2 above. Sublandlord shall not
be liable to Subtenant for or in connection with the failure of any other tenant
of the Building or Project to comply with any rules and regulations applicable
to such other occupant under its lease or sublease.

5.4 Landlord’s Obligations. Subtenant agrees that Sublandlord shall not be
required to perform any of the covenants, agreements and/or obligations of
Landlord under the Master Lease and, insofar as any of the covenants, agreements
and obligations of Sublandlord hereunder are required to be performed under the
Master Lease by Landlord thereunder, Subtenant acknowledges and agrees (without
otherwise limiting Sublandlord’s express obligations hereunder) that Sublandlord
shall be entitled to look to Landlord for such performance. In addition,
Sublandlord shall have no obligation to perform any repairs or any other
obligation of Landlord under the Master Lease. Except as otherwise expressly
provided herein, Sublandlord shall not be responsible for any failure or
interruption, for any reason whatsoever, of the services or facilities that may
be appurtenant to or supplied at the Building or Project by Landlord, and no
failure to furnish, or interruption of, any such services or facilities shall
give rise to any (i) abatement, diminution or reduction of Subtenant’s
obligations under this Sublease, or (ii) liability on the part of Sublandlord.
Notwithstanding the foregoing, Sublandlord shall promptly take such action as
may reasonably be indicated, under the circumstances, to secure such performance
upon Subtenant’s request to Sublandlord to do so and shall thereafter use
diligent efforts to secure timely completion of such performance by Landlord.

5.5 Maintenance.

(a) Sublandlord’s Maintenance. Sublandlord shall keep and maintain in good
repair and working order and make repairs to and perform maintenance upon:
(1) all structural elements and components of the Building, including the roof
and the roof membrane (except to the extent that the responsibility for such
work is Landlord’s pursuant to the Master Lease); (2) mechanical (including
HVAC), electrical, plumbing and fire/life safety systems serving the Building in
general and/or the Subleased Premises (but not any such systems which serve the
Subleased Premises exclusively); (3) the “Building Common Areas” (i.e., those
areas within the Building devoted to corridors, elevator lobbies, vending areas
and lobby areas (whether at ground level or otherwise), and other similar
facilities provided for the common use or benefit of tenants generally and/or
the public (Building Common Areas will not include, but Sublandlord will be
responsible for the maintenance of, those areas within the Building used for
elevator shafts, flues, vents, stacks, pipe shafts, risers and other vertical
penetrations, mechanical rooms, elevator mechanical rooms, janitorial closets,
electrical and telephone closets, mail rooms and similar areas in the Building
not designated for the exclusive use of a particular tenant or for the common
use of tenants in general (except to the extent that the responsibility for such
work is Landlord’s pursuant to the Master Lease)); (4) exterior windows of the
Building; (5) elevators serving the Building; and (6) Building standard lighting
fixtures (i.e., lamp and ballasts) within the Subleased Premises. Sublandlord
shall not be responsible for, and Subtenant shall reimburse Sublandlord within
ten (10) business days after demand from Sublandlord, for the cost of any
repairs of damage caused by any negligent or intentional act or omission of
Subtenant or any of Subtenant’s employees, contractors, invitees, sub-subtenants
or agents or because of use of the

 

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Subleased Premises for other than normal and customary office operations.
Sublandlord shall perform its obligations under this Section 5.4(a) within a
reasonable time (considering the nature and urgency of the repair) after
Sublandlord receives written notice of the need for such repairs or maintenance;
provided, however, that such notice shall not be required for repairs outside of
the Subleased Premises or regularly scheduled periodic maintenance and repairs.
Notwithstanding anything to the contrary contained in this Sublease, except as
provided in Section 6.2 below or as otherwise expressly provided in this
Sublease, Sublandlord shall not be liable for and there shall be no abatement of
rent with respect to, any injury to or interference with Subtenant’s business
arising from any performance or nonperformance of any repair, maintenance,
alteration or improvement in and to any portion of the Project, Building or the
Subleased Premises, no actual or constructive eviction of Subtenant shall result
from such performance or nonperformance, Subtenant shall not have the right to
terminate this Sublease, and Subtenant shall not be relieved from the
performance of any covenant or agreement in this Sublease by reason thereof.
Subtenant hereby waives and releases its right to make repairs at Sublandlord’s
expense under Sections 1932(1), 1933(4), 1941 and 1942 of the California Civil
Code or any similar or successor laws now or hereinafter in effect.

(b) Subtenant’s Maintenance. Subtenant shall, at its sole cost and expense, keep
the Subleased Premises in good condition and repair, reasonable wear and tear
and repairs that are the express responsibility of Sublandlord under this
Sublease or of Landlord under the Master Lease excepted. Subtenant’s repair
obligations include, without limitation, repairs to: (1) the interior side of
demising walls; (2) doors; (3) floor coverings; (4) interior partitions,
interior glass, interior window treatments, ceiling tiles, shelving, cabinets,
millwork and other tenant improvements; (5) electronic, phone and data cabling
and related switches and transmission lines (collectively, “Network Cabling”)
that is installed by or for the exclusive benefit of Subtenant and located in
the Subleased Premises or other portions of the Building; (6) supplemental air
conditioning units installed by or for the benefit of Subtenant, private showers
and kitchens, hot water heaters, and similar facilities installed by Subtenant
and serving Subtenant exclusively (Subtenant will provide Sublandlord with
written copies of all maintenance contracts for such work); and (7) alterations
or Subtenant Improvements approved by Sublandlord (and, if required, Landlord)
and performed by contractors retained by Subtenant, including related HVAC
balancing, but will not include the obligation to maintain Building systems or
to make capital expenditures. All work shall be performed in accordance with the
rules and procedures described in this Sublease, the Master Lease, or as may
otherwise be issued from time to time by Landlord or Sublandlord. If Subtenant
fails to make any repairs to the Subleased Premises within applicable notice and
cure periods (adjusted as described in Section 10 below), Sublandlord shall have
the rights and remedies set forth in Section 13.F of the Master Lease, as
incorporated herein. Notwithstanding anything to the contrary herein, Subtenant
shall have no responsibility to perform or construct, any repair, maintenance or
improvements (subject to Subtenant’s compliance obligation described in
Section 5.6 below) which would properly be treated as a “capital expenditure”
under generally accepted accounting principles.

5.6 Compliance with Laws. Subtenant shall comply with all laws, including,
without limitation, the Americans with Disabilities Act, regarding the operation
of Subtenant’s business and the use, condition, configuration and occupancy of
the Subleased Premises and any Subtenant Improvements (defined in
Section 15.2(a)) in the Subleased Premises; provided, however, that Subtenant
shall have no obligation to comply with laws

 

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requiring alterations to the Building or alterations or upgrades to the
Building’s systems, except to the extent the same are necessitated by
Subtenant’s particular use of the Subleased Premises or the performance of work
by or on behalf of Subtenant (subject to Sublandlord’s compliance obligation
described in the last sentence of this Section); in such event, however,
Sublandlord may elect to perform such work at Subtenant’s cost. Sublandlord
shall comply with all laws relating to the Common Areas and the base Building
(except to the extent that such compliance is the responsibility of Landlord
under the Master Lease), provided that compliance with such laws is not
necessitated by Subtenant Improvements or Subtenant’s particular use of the
Subleased Premises and is not otherwise the responsibility of Subtenant as
expressly provided in this Sublease. Notwithstanding the foregoing, Sublandlord
shall have the right to contest any alleged violation of applicable laws in good
faith, including, without limitation, the right to apply for and obtain a waiver
or deferment of compliance, the right to assert any and all defenses allowed by
law and the right to appeal any decisions, judgments or rulings to the fullest
extent permitted by law. Sublandlord, after the exhaustion of any and all rights
to appeal or contest, will make all repairs, additions, alterations or
improvements necessary to comply with the terms of any final order or judgment.
Notwithstanding the foregoing, Subtenant, not Sublandlord, shall be responsible
for the correction of any violations that arise out of or in connection with the
specific nature of Subtenant’s business in the Subleased Premises (other than
general office use), Subtenant’s arrangement of any furniture, equipment or
other property in the Subleased Premises, any repairs performed by Subtenant or
any Subtenant Improvements. Sublandlord shall be permitted to include in
Operating Costs any costs or expenses incurred by Sublandlord under this
Section 5.6 to the extent allowed pursuant to the terms of, and amortized to the
extent required by, the provisions of Section 3.2. Subtenant, within ten
(10) days after receipt, shall provide Sublandlord with copies of any written
notices it receives regarding a violation or alleged violation of any laws.
Notwithstanding anything to the contrary herein, including Section 15.2(b),
Sublandlord shall be solely responsible for all code-related upgrades or
improvements “triggered” by the Initial Subtenant Improvements (unless due to
Subtenant’s construction of improvements which are atypical for first class
office space or which reflect an anticipated occupancy density of all or any
portion of the Subleased Premises which is materially greater than the density
for which the Building was designed) or related to the presence of Hazardous
Materials on or about the Subleased Premises on or before the Early Access Date
or otherwise attributable to Sublandlord.

6. Services.

6.1 Generally. Sublandlord agrees to furnish Subtenant with the following
services on all days, 24-hours per day (except as otherwise stated), all of
which shall be included in Operating Costs except as otherwise provided in this
Sublease with respect to excess usage:

(a) Water. Running City water from the regular Building outlets for drinking,
lavatory and toilet purposes in the Building Common Areas on each floor on which
the Subleased Premises are located. If Subtenant desires water in the Subleased
Premises for any approved reason, including for kitchen areas in the Subleased
Premises, running City water shall be supplied, at Subtenant’s sole cost and
expense, from the Building water main through a line and fixtures installed at
Subtenant’s sole cost and expense with the prior reasonable consent of
Sublandlord. If Subtenant desires hot water in the Subleased Premises,
Subtenant, at its sole cost and expense and subject to the prior reasonable
consent of Sublandlord, may install a hot water heater in the Subleased
Premises;

 

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(b) HVAC. Heating, ventilation and air conditioning (“HVAC”) during Building
Hours (i.e., 8:00 a.m. to 6:00 p.m., Monday through Friday, holidays excepted),
at such temperatures and in such amounts as is required for the comfortable
occupancy and operation of the Subleased Premises, as reasonably determined by
Sublandlord. Subtenant shall have the right to receive HVAC service during hours
other than Building Hours using Sublandlord’s “after-hours” access card system.
Subtenant shall pay Sublandlord the standard charge established from time to
time by Sublandlord for the additional service, which charge Subtenant
acknowledges for after-hours HVAC service is currently $89.60 per floor (or
partial floor) per hour as of the date of this Sublease, and which cost may be
increased to the extent that Sublandlord’s actual cost (hereinafter defined) of
providing such “after hours” HVAC increases from time to time. The minimum time
period for after hours HVAC usage shall be one (1) hour. For purpose of this
Section 6.1(b), “actual cost” shall mean the actual cost incurred by
Sublandlord, as reasonably determined by Sublandlord, inclusive of a reasonable
allocation for wear and tear, depreciation, provided that, notwithstanding the
foregoing, any amount actually charged by any unrelated third party to
Sublandlord for the supply of HVAC shall be deemed Sublandlord’s “actual cost”.
When determining the actual cost of Subtenant’s utility usage pursuant to the
terms of this Section 6.1(b), Sublandlord agrees that it shall use the monthly
average rate paid by Sublandlord for a particular utility;

(c) Janitorial. Janitor service five (5) days per week (except on dates of the
observation of holidays); provided that if Subtenant’s use, floor covering or
other improvements require special services in excess of the standard services
for the Building, Subtenant shall pay the additional cost attributable to the
special services;

(d) Elevators and Access. Nonexclusive, non-attended automatic passenger
elevator service during Building Hours, and at least one elevator available at
all other times to provide service to the Subleased Premises. Freight elevator
access is available, but the vestibules for the freight elevator on each floor
will require card key access. Subtenant shall have access to the Subleased
Premises 24-hours per day, 7 days a week, subject to temporary closures due to
emergency, casualty, Sublandlord’s security requirements and maintenance, repair
or changes to the Building or Project;

(e) Electricity. Electricity to the Subleased Premises for general office use,
in accordance with and subject to the terms and conditions of Section 7 below;

(f) Security. On-site security equipment, personnel and procedures, if any, as
Sublandlord may elect in its sole discretion to establish from time to time;

(g) Fire Alarm. Fire detectors and alarm serving the Building in general; and

(h) Other. Such other services as Sublandlord reasonably determines are
necessary or appropriate for the Building or Project.

 

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6.2 Interruption of Service. Sublandlord’s failure to furnish, or any
interruption or termination of, services due to the application of laws, the
failure of any equipment, the performance of repairs, improvements or
alterations, or the occurrence of any event or cause beyond the reasonable
control of Sublandlord (a “Service Failure”), shall not render Sublandlord
liable to Subtenant, constitute a constructive eviction of Subtenant, give rise
to an abatement of rent (except as expressly set forth herein), nor relieve
Subtenant from the obligation to fulfill any covenant or agreement, provided
that if any interruption in services to the Subleased Premises (i) continues for
five (5) consecutive business days or more, (ii) is due to the act or omission
of Sublandlord or Sublandlord’s employees or agents, (iii) is not attributable
to the acts or omissions of Subtenant or Subtenant’s employees, invitees or
agents and (iv) prevents Subtenant from occupying any material portion of the
Subleased Premises, Base Rent shall abate from and after the fifth
(5th) consecutive business day of the interruption to the extent the Subleased
Premises are rendered unusable and are actually not used by Subtenant as a
result thereof. In no event, however, shall Sublandlord be liable to Subtenant
for any loss or damage, direct or indirect, special or consequential, including
loss of business or theft of Subtenant’s property, arising out of or in
connection with the failure of any security services, personnel or equipment.

7. Use of Electrical Services by Subtenant.

7.1 Normal Electrical Usage. The Building has been designed to accommodate
electrical receptacle (120/208v) loads of three and one half (3.5) watts per
usable square foot and an average lighting load of two (2) watts per usable
square foot during Building Hours, with such average determined on a monthly
basis (the “Standard Electrical Usage”), which electrical usage shall be subject
to applicable laws, including Title 24. Subtenant will design Subtenant’s
electrical system serving any equipment producing nonlinear electrical loads to
accommodate such nonlinear electrical loads, including, but not limited to,
oversizing neutral conductors, derating transformers and/or providing power-line
filters. Engineering plans shall include a calculation of Subtenant’s fully
connected electrical design load with and without demand factors and shall
indicate the number of watts of unmetered and submetered loads. Electrical
service to the Subleased Premises may be furnished by one or more companies
providing electrical generation, transmission and distribution services, and the
cost of electricity may consist of several different components or separate
charges for such services, such as generation, distribution and stranded cost
charges. Sublandlord shall have the exclusive right to select any company
providing electrical service to the Subleased Premises, to aggregate the
electrical service for the Project, Building or Subleased Premises with other
buildings, to purchase electricity through a broker and/or buyers group and to
change the providers and manner of purchasing electricity. Subtenant shall bear
the cost of replacement of lamps, starters and ballasts for non-Building
standard lighting fixtures within the Subleased Premises. Sublandlord, as part
of Operating Costs, shall bear the cost of lamps, starters and ballasts for
Building standard lighting fixtures within the Subleased Premises.

7.2 Excess Usage. Subtenant’s use of electrical service shall not exceed, either
in voltage, rated capacity or overall load, the Standard Electrical Usage. If
Subtenant requests permission to consume excess electrical service, Sublandlord
may refuse to consent or may condition consent upon conditions that Sublandlord
reasonably elects (including, without limitation, the installation of utility
service upgrades, meters, submeters, air handlers or

 

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cooling units), and the additional usage (to the extent permitted by law),
installation and maintenance costs shall be paid by Subtenant. Sublandlord shall
have the right to separately meter or submeter electrical usage for the
Subleased Premises and to measure electrical usage by survey or other commonly
accepted methods; if Subtenant is consuming in excess of Standard Electrical
Usage, such meter or submeter will be installed at Subtenant’s cost.

8. Master Lease and Sublease Terms.

8.1 Subject to Master Lease. This Sublease is and shall be at all times subject
and subordinate to the Master Lease. Subtenant acknowledges that Subtenant has
reviewed and is familiar with all of the terms, agreements, covenants and
conditions of the Master Lease. Additionally, Subtenant’s rights under this
Sublease shall be subject to the terms of the Consent. During the Term and for
all periods subsequent thereto with respect to obligations which have arisen
prior to the termination of this Sublease, Subtenant agrees to perform and
comply with, for the benefit of Sublandlord and Landlord, the obligations of
Sublandlord under the Master Lease, to the extent incorporated herein and which
pertain to the Subleased Premises and/or this Sublease, except for those
provisions of the Master Lease which are directly contradicted by this Sublease,
in which event the terms of this Sublease document shall control over the Master
Lease.

8.2 Incorporation of Terms of Master Lease. Subject to the provisions of this
Article 8, the terms, conditions and respective obligations of Sublandlord and
Subtenant to each other under this Sublease shall be the terms and conditions of
the Master Lease and such terms are incorporated into this Sublease as if fully
set forth herein, except for those provisions of the Master Lease which are
directly contradicted by this Sublease, in which event the terms of this
Sublease shall control over the Master Lease. Therefore, for the purposes of
this Sublease, wherever in the Master Lease the word “Landlord” is used it shall
be deemed to mean Sublandlord and wherever in the Master Lease the word “Tenant”
is used it shall be deemed to mean Subtenant and wherever in the Master Lease
the words “Lease” or “Premises” are used such terms shall be deemed to mean this
Sublease and the Subleased Premises. Any non-liability, release, indemnity or
hold harmless provision in the Master Lease for the benefit of Landlord that is
incorporated herein by reference, shall be deemed to inure to the benefit of
Sublandlord, Landlord, and any other person intended to be benefited by said
provision, for the purpose of incorporation by reference in this Sublease. Any
right of Landlord under the Master Lease (a) of access or inspection, (b) to do
work in the Master Lease Premises or in the Building, or (c) in respect of rules
and regulations, which is incorporated herein by reference, shall be deemed to
inure to the benefit of Sublandlord, Landlord, and any other person intended to
be benefited by said provision, for the purpose of incorporation by reference in
this Sublease.

8.3 Clarifications. For the purposes of incorporation herein, the terms of the
Master Lease are subject to the following additional modifications:

(a) Approvals. In all provisions of the Master Lease (under the terms thereof
and without regard to modifications thereof for purposes of incorporation into
this Sublease) requiring the approval or consent of Landlord, Subtenant shall be
required to obtain the approval or consent of both Sublandlord and Landlord.

 

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(b) Deliveries. In all provisions of the Master Lease requiring Tenant to
submit, exhibit to, supply or provide Landlord with evidence, certificates, or
any other matter or thing, Subtenant shall be required to submit, exhibit to,
supply or provide, as the case may be, the same to both Landlord and
Sublandlord.

(c) Damage; Condemnation. Sublandlord shall have no obligation to restore or
rebuild any portion of the Subleased Premises after any destruction or taking by
eminent domain; provided that if and to the extent the Subleased Premises
contain improvements which constitute “Alterations” or “Tenant Improvements”, as
said terms are described in the Master Lease, and neither Sublandlord nor
Landlord exercise their right to terminate the Master Lease as a result of such
casualty or taking, then Sublandlord will repair and restore such “Alterations”
or “Tenant Improvements” to the condition existing prior to such casualty or
taking. In addition, Sublandlord shall insure the Subtenant Improvements and
Furniture (the cost of which insurance will be included in Sublandlord Operating
Costs), and, in the event of any casualty and condemnation (provided neither
Sublandlord nor Landlord exercise their right to terminate the Master Lease as a
result thereof), Sublandlord shall repair and restore the Subtenant Improvements
and Furniture. Subtenant shall reimburse Sublandlord for any increased cost of
Sublandlord’s property insurance due to the coverage of the Subtenant
Improvements and Furniture required hereunder.

(d) Insurance. In all provisions of the Master Lease requiring Tenant to
designate Landlord as an additional or named insured on its insurance policy,
Subtenant shall be required to so designate Landlord and Sublandlord on its
insurance policy.

8.4 Exclusions. Notwithstanding the terms of Section 8.2 above, the following
parts, Sections and Exhibits of the Master Lease shall not be incorporated
herein:

(a) Original Master Lease: Article 1, Section 2.A.iv (second paragraph),
Section 2.A.vi. Section 2.C, Section 3.A (first, third and fourth sentences
only), Section 3.C, Sections 4.A, 4.B. and 4.D, Article 5, Sections 6.A, 6.B
(clauses vii, and viii and final sentence only), Sections 6.C, 7.A (third
sentence only, and provided that the reference to “Landlord” in the seventh
sentence will be deemed a reference to Landlord only, not Sublandlord), 7.C
(last two sentences only), 8.A, 8.B, 8.C, 8.D, 8.E, 8.G, 9.B, 9.C (references to
“Tenant Improvements” and “Alterations” in the first sentence thereof only),
Article 10 (except clause (i) of the first sentence, Tenant acknowledging that
the remainder of the items described in said Article 10 will constitute and be
included in Operating Costs), Article 11, Article 13 (clauses (viii) and (ix) of
the first sentence only), Sections 14.A (second (2nd), third (3rd) and fourth
(4th) sentences only), 14.B (final sentence only), 17.A (references to
termination rights only), 17.B (clause (ii) and references to “Monthly Amortized
Costs” only), 17.G, Article 18, Article 19, Article 20, Sections 21.C, 21.K,
21.M, 21.T, 21.W.

(b) First Amendment: All.

(c) Second Amendment: All.

(d) Third Amendment: All

 

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8.5 Modifications. Notwithstanding the terms of Section 8.2 above, the following
provisions of the Master Lease are modified as described below for the purpose
of their incorporation into this Sublease:

(a) With respect to the sixth (6th), seventh (7th) and eighth (8th) sentences of
Section 6.B of the Original Master Lease, Sublandlord cannot require Subtenant
to remove any Sublandlord’s Responsibility Items (defined in Section 15.2(c)
below).

(b) With respect to Article 15 of the Original Master Lease, if Landlord elects
to terminate the Master Lease pursuant to Section 15.B of the Original Master
Lease or if Sublandlord elects to terminate the Master Lease pursuant to
Section 15.C of the Original Master Lease, Sublandlord will promptly notify
Subtenant and this Sublease will terminate concurrently with the termination of
the Master Lease. If neither Landlord nor Sublandlord elects to terminate the
Master Lease, Sublandlord will nonetheless provide Subtenant with a copy of
Landlord’s notice of the time necessary to complete repairs as provided in
Section 15.C of the Original Master Lease, as well as an estimate of the
additional time necessary for Sublandlord to complete any repairs required of
Sublandlord pursuant to the provisions of Article 15 of the Original Master
Lease, and (x) Subtenant will have the same right to terminate the Sublease as
Sublandlord has to terminate the Master Lease as described in the second
(2nd) and fourth (4th) sentences of Section 15.C of the Original Master Lease as
incorporated herein; provided that for such purposes references in the second
(2nd) and fourth (4th) sentences of Section 15.C to “Landlord” or Landlord’s”
will be deemed to be references to “Sublandlord” or “Sublandlord’s” and
“Landlord” or “Landlord’s”.

(c) With respect to Section 17.A of the Original Master Lease, the second
(2nd) clause (i) is modified to provide that, except in the case of a Permitted
Transfer (as said term is defined in Section 17.E of the Original Master Lease,
as said Section has been revised for the purposes of incorporation herein by
Section 8.5(d) below), Sublandlord may terminate this Sublease with respect to
an assignment of this Sublease or a proposed sublease of any portion of the
Subleased Premises for substantially the remainder of the Term (but in the case
of a proposed sublease of a portion of the Subleased Premises, such termination
will only be with respect to the portion of the Subleased Premises which
Subtenant proposes to sublease, and effective as of the date of such
termination, the Base Rent payable hereunder, as well as Subtenant’s Building
Percentage Share and Subtenant’s Project Percentage Share, will be adjusted to
reflect the reduction in the size of the Subleased Premises).

(d) With respect to Section 17.E of the Original Master Lease, in clauses
(ii) and (iii), in each case the phrase “has a net worth at the time of and
thereafter sufficient to enable it to meet its obligations under this Lease” is
deleted and restated, for the purposes of incorporation herein, as follows: “has
a net worth which, in Sublandlord’s reasonable determination, is equal to or in
excess of the net worth of Subtenant as of the date immediately preceding the
proposed assignment.”

(e) Except as set forth in Section 8.5(b) above, references in the following
provisions of the Master Lease to “Landlord” shall mean “Landlord”: Articles 15
and 16.

 

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(f) All of Subtenant’s and Sublandlord’s maintenance and repair obligations
under this Sublease shall be subject to the provisions of Section 9.D of the
Master Lease, as incorporated herein, which provisions shall apply as between
Sublandlord and Subtenant notwithstanding anything to the contrary in this
Sublease and without regard to the negligence or willful misconduct of the
person or entity released thereunder.

(g) The reference in Section 15.C of the Original Master Lease to “three hundred
sixty five (365)” shall be deemed to be “two hundred seventy (270)”.

(h) Whenever there is an obligation to pay the costs and expenses of “Landlord”,
Subtenant shall only be obligated to pay Sublandlord’s costs and expenses to the
extent they exceed or are separate from Landlord’s costs and expenses; provided
that Sublandlord shall not be entitled to independently charge Subtenant any
review costs or construction supervision fees in connection with Subtenant’s
Initial Improvements.

(i) With respect to Section 21(g) of the Original Master Lease, Sublandlord will
be permitted to enter the Subleased Premises in order to perform any maintenance
and repair tasks applicable to the Subleased Premises or the Building or to
facilitate the construction of improvements within the Building (for example,
access may be necessary in order to install connections between rooftop
facilities and the premises of Building occupants on lower floors who are served
by such facilities) which work will not require Subtenant’s prior consent, to
access the Telecom Riser Room and Mechanical Room and other similar facilities
located on the floor(s) on which the Subleased Premises are located; Sublandlord
agrees to use reasonable efforts to minimize disturbance to Subtenant’s business
operations in the Subleased Premises as a result of any such entry and to
provide reasonable (i.e., at least twenty-four (24) hours) advance notice (which
may be telephonic) to Subtenant of any such entry, except in the case of
emergency.

9. Assignment and Subletting. Subtenant shall not assign this Sublease or
further sublet all or any part of the Subleased Premises except subject to and
in compliance with all of the terms and conditions of Article 17 of the Original
Master Lease, and Sublandlord (in addition to Landlord) shall have the same
rights with respect to assignment and subleasing as Landlord has under such
Article 17, as incorporated herein, provided, however, that:

(a) fifty percent (50%) of all excess rent (calculated as provided in
Section 17.C of the Original Master Lease, as incorporated herein) in connection
with any such assignment or sublease shall be payable to Sublandlord as and when
received by Subtenant; and

(b) Subtenant shall be entitled to retain all remaining excess rent.

Subtenant shall pay all fees and costs payable to Master Landlord pursuant to
the Master Lease in connection with any proposed assignment, sublease or
transfer of the Subleased Premises, together with all of Sublandlord’s
reasonable out-of-pocket costs relating to Subtenant’s request for such consent
(not to exceed $2,500.00), regardless of whether such consent is granted, and
the effectiveness of any such consent shall be conditioned upon Master
Landlord’s and Sublandlord’s receipt of all such fees and costs. The sale of
shares of Subtenant’s stock on a nationally recognized securities exchange in
the normal course of trading (as opposed to the transfer of shares in connection
with a merger or acquisition) will not constitute an assignment of Subtenant’s
interest in this Sublease.

 

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10. Default. Except as expressly set forth herein, Subtenant shall perform all
obligations in respect of the Subleased Premises that Sublandlord would be
required to perform pursuant to the Master Lease, to the extent incorporated
herein. It shall constitute an event of default hereunder if Subtenant fails to
perform any obligation hereunder (including, without limitation, the obligation
to pay Rent), or any obligation under the Master Lease which has been
incorporated herein by reference, and, in each instance, Subtenant has not
remedied such failure after delivery of any written notice required under this
Sublease and passage of the cure periods prescribed in Section 13 of the Master
Lease as incorporated herein, provided that with respect to non-monetary
defaults, Subtenant’s cure period shall be the longer of (A) one-half of, or
(B) five (5) calendar days less than, the actual cure period provided for such
non-monetary default under the Master Lease, as incorporated herein.

11. Remedies. In the event of any default hereunder by Subtenant, Sublandlord
shall have all remedies provided to the “Landlord” in the Master Lease, as
incorporated herein and all other rights and remedies otherwise available at law
and in equity. Without limiting the generality of the foregoing, Sublandlord may
continue this Sublease in effect after Subtenant’s breach and abandonment and
recover Rent as it becomes due. Sublandlord may resort to its remedies
cumulatively or in the alternative.

12. Right to Cure Defaults. If Subtenant fails to perform any of its obligations
under this Sublease after expiration of applicable grace or cure periods, then
Sublandlord shall have the rights and remedies specified in Section 13.F of the
Master Lease, as incorporated herein. If Sublandlord undertakes to perform any
of Subtenant’s obligations for the account of Subtenant pursuant hereto, the
taking of such action shall not constitute a waiver of any of Sublandlord’s
remedies. Subtenant hereby expressly waives its rights under any statute to make
repairs at the expense of Sublandlord.

13. Sublandlord’s Liability. Notwithstanding any other term or provision of this
Sublease, the liability of Sublandlord to Subtenant for any default in
Sublandlord’s obligations under this Sublease shall be limited to actual, direct
damages, and under no circumstances shall Subtenant, its partners, members,
shareholders, directors, agents, officers, employees, contractors, sublessees,
successors and/or assigns be entitled to recover from Sublandlord (or otherwise
be indemnified by Sublandlord) for (a) any losses, costs, claims, causes of
action, damages or other liability incurred in connection with a failure of
Landlord, its partners, members, shareholders, directors, agents, officers,
employees, contractors, successors and/or assigns to perform or cause to be
performed Landlord’s obligations under the Master Lease, except as otherwise
provided herein, (b) lost revenues, lost profit or other consequential, special
or punitive damages arising in connection with this Sublease for any reason, or
(c) any damages or other liability arising from or incurred in connection with
the suitability of the Subleased Premises for Subtenant’s intended uses.
Subtenant shall, however, have the right to seek any injunctive or other
equitable remedies as may be available to Subtenant under applicable law.
Notwithstanding any other term or provision of this Sublease, no personal
liability shall at any time be asserted or enforceable against Sublandlord’s
stockholders, directors, officers, or partners on account of any of
Sublandlord’s obligations or actions under

 

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this Sublease. As used in this Sublease, the term “Sublandlord” means the holder
of the tenant’s interest under the Master Lease and the holder of Sublandlord’s
interest under this Sublease. In the event of any assignment or transfer of the
Sublandlord’s interest under this Sublease, which assignment or transfer may
occur at any time during the Term in Sublandlord’s sole discretion, Sublandlord
shall be and hereby is entirely relieved of all covenants and obligations of
Sublandlord hereunder accruing subsequent to the date of the transfer and it
shall be deemed and construed, without further agreement between the parties
hereto, that any transferee has assumed and shall carry out all covenants and
obligations thereafter to be performed by Sublandlord hereunder. Sublandlord may
transfer and deliver any then existing Security Deposit to the transferee of
Sublandlord’s interest under this Sublease, and thereupon Sublandlord shall be
discharged from any further liability with respect thereto provided that such
transferee has assumed in writing all of Sublandlord’s obligations under this
Sublease.

14. Attorneys’ Fees. If Sublandlord or Subtenant brings an action to enforce the
terms hereof or to declare rights hereunder, then Section 21.A of the Master
Lease, as incorporated herein, shall govern the payment of attorneys’ fees in
connection therewith.

15. Delivery of Possession.

15.1 Generally. Except as expressly set forth herein, Sublandlord shall deliver,
and Subtenant shall accept, possession of the Subleased Premises in good
“broom-clean” condition, with all Building systems in good operating condition
and in material compliance with all applicable laws, and otherwise in their “AS
IS” condition as the Subleased Premises exists on the date of this Sublease.
Sublandlord shall have no obligation to furnish, render or supply any work,
labor, services, materials, furniture other than the Furniture (defined below),
fixtures, equipment, decorations or other items to make the Subleased Premises
ready or suitable for Subtenant’s occupancy. In making and executing this
Sublease, Subtenant has relied solely on such investigations, examinations and
inspections as Subtenant has chosen to make or has made and has not relied on
any representation or warranty concerning the Subleased Premises or the
Building, except as expressly set forth in this Sublease. Subtenant acknowledges
that Sublandlord has afforded Subtenant the opportunity for full and complete
investigations, examinations and inspections of the Subleased Premises and the
Building Common Areas. Subtenant acknowledges that it is not authorized to make
or perform any alterations or improvements in or to the Subleased Premises
except as permitted by the provisions of this Sublease and the Master Lease and
that upon termination of this Sublease, Subtenant shall deliver the Subleased
Premises to Sublandlord in the same condition as the Subleased Premises were at
the commencement of the Term, reasonable wear and tear, casualty, condemnation,
Hazardous Materials (other than those released by Subtenant or its agents,
invitees, employees and contractors) and those Subtenant Improvements the
removal of which is not required by the terms hereof excepted; in any event, at
Subtenant’s cost, Subtenant will remove all telecommunications and data cabling
(including Network Cabling) installed by or for the benefit of Subtenant.

15.2 Subtenant’s Improvements.

(a) Generally. If Subtenant intends to construct improvements within the
Subleased Premises (“Subtenant Improvements”), all Subtenant Improvements shall

 

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be carried out in accordance with the Master Lease, as incorporated herein, and
will be subject to Landlord’s prior written approval to the extent required
under the Master Lease. Sublandlord will have the right to reasonably approve
the plans and specifications for any proposed Subtenant Improvements, as well as
any contractors whom Subtenant proposes to retain to perform such work (provided
that Sublandlord may designate the contractors who will perform work on the
Building’s electrical, HVAC or life-safety systems). Sublandlord’s consent shall
not be unreasonably withheld with respect to proposed Subtenant Improvements
that (a) comply with all applicable laws; (b) are compatible with the Building,
its architecture and its mechanical, electrical, HVAC and life safety systems;
(c) do not interfere with the use and occupancy of any other portion of the
Building by any other occupant or their invitees; (d) do not affect the
structural portions of the Building; (e) do not and shall not, whether alone or
taken together with other improvements, require the construction of any other
improvements or alterations within the Building; and (f) do not affect the
exterior appearance of the Building. In determining whether to consent to
proposed Subtenant Improvements, Sublandlord shall have the right to review and
approve plans and specifications for proposed Subtenant Improvements,
construction means and methods, the identity of any contractor or subcontractor
to be employed on the work for Subtenant Improvements, and the time for
performance of such work. In connection with any proposed Subtenant
Improvements, Subtenant will be solely responsible for providing any reasonable
security required by Landlord pursuant to Section 7.A of the Original Master
Lease. Additionally, if Sublandlord in good faith determines that Subtenant
proposes to construct Subtenant Improvements which would be materially more
expensive to remove than the typical office improvements located in the
Building, Sublandlord, in Sublandlord’s discretion, may require as a condition
to granting its consent to such proposed Subtenant Improvements that Subtenant
increase the Security Deposit by an amount reasonably determined by Sublandlord
to be sufficient to secure the performance of Subtenant’s obligation to restore
or remove such Subtenant Improvements at the expiration or sooner termination of
the Sublease (whether such restoration is required by Landlord or Sublandlord).
Subtenant shall supply to Sublandlord any documents and information reasonably
requested by Sublandlord in connection with any Subtenant Improvements.
Sublandlord may hire outside consultants to review such documents and
information and Subtenant shall reimburse Sublandlord for the cost thereof as
well as Sublandlord’s internal costs; provided that Sublandlord will not have
the right to charge Subtenant for any such costs in connection with the Initial
Subtenant Improvements. All Subtenant Improvements permitted hereunder shall be
made and performed by Subtenant without cost or expense to Sublandlord. Upon
completion of any Subtenant Improvements, Subtenant shall provide Sublandlord,
at Subtenant’s expense, with a complete set of “as built” plans on Mylar and
specifications reflecting the actual conditions of the Subtenant Improvements as
constructed in the Subleased Premises, together with a copy of such plans on
diskette in AutoCAD format or such other format as may then be in common use for
computer assisted design purposes; additionally, Subtenant will provide
Sublandlord with the items required under clauses (i) through (iii) of
Section 7.A of the Original Master Lease for delivery to Landlord. Sublandlord
shall have the right to promulgate commercially reasonable rules and regulations
regarding the performance of Subtenant Improvements; Subtenant’s initial
guidelines for construction are attached hereto as Exhibit E. Sublandlord will
not charge any construction management fee, nor will Subtenant be charged for
utilities consumption, with respect to Subtenant’s initial Subtenant
Improvements described in Exhibit F hereto (the “Initial Subtenant
Improvements”) (as opposed to subsequent Subtenant Improvements); however, if
and to the

 

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extent that Landlord imposes a construction management fee with respect to any
Subtenant Improvements, or otherwise passes through review fees and costs,
Subtenant will be responsible for paying such sums. Subject to Sublandlord’s
review of more detailed plans, Sublandlord hereby consents to Subtenant’s
construction of the Initial Subtenant Improvements and agrees that Subtenant
shall not be required to provide any increase in the Security Deposit with
respect thereto.

(b) Code-Required Work. Subject to the provisions of Section 5.6 above, if the
performance of any Subtenant Improvements or other work by Subtenant within the
Subleased Premises “triggers” a requirement for code-related upgrades to or
improvements of any portion of the Building or Project, Subtenant shall be
responsible for the cost of such code-required upgrade or improvements.

(c) Allowance.

(1) Sublandlord hereby grants to Subtenant an allowance of One and No/100 Dollar
($1.00) per rentable square foot of the Subleased Premises (which, based upon
30,718 rentable square feet, equates to $30,718.00 (the “Allowance”). The
Allowance is to be used only for payment of the cost of preparing space plans
and construction drawings, including mechanical, electrical, plumbing and
structural drawings, for the payment of plan check, permit and license fees
relating to construction, and construction of Subtenant Improvements.

(2) Disbursement. The Allowance shall be paid to Subtenant, within thirty
(30) days following receipt by Sublandlord of (1) receipted bills covering all
labor and materials expended and used in the construction of the Initial
Subtenant Improvements; (2) a sworn contractor’s affidavit from the general
contractor and a request to disburse from Subtenant containing an approval by
Subtenant of the work done; (3) full and final waivers of lien; (4) as-built
plans (if applicable) of any initial Subtenant Improvements (as described in
Section 15.2(a) above); and (5) the certification of Subtenant and its architect
that the Initial Subtenant Improvements have been installed in a good and
workmanlike manner in accordance with the approved plans, and in accordance with
applicable laws, codes and ordinances. The Allowance shall be disbursed in the
amount reflected on the receipted bills meeting the requirements above.
Notwithstanding anything herein to the contrary, Sublandlord shall not be
obligated to disburse any portion of the Allowance during the continuance of an
uncured default under this Sublease, and Sublandlord’s obligation to disburse
shall only resume when and if such default is cured.

(d) End of Term. Subtenant expressly acknowledges that Landlord or Sublandlord
may require Subtenant to remove some or all Subtenant Improvements at the
expiration or sooner termination of the Term; however, if Landlord requires the
removal/restoration of Subtenant’s proposed reception area, conference room(s)
or any newly constructed offices and provided that Subtenant is not then in
default hereunder, Sublandlord will provide Subtenant with a credit against Base
Rent payable hereunder (or, if Base Rent is no longer payable hereunder, a
reimbursement of the cost of such removal/restoration) equal to the cost of such
removal/restoration up to a maximum credit or reimbursement of $50,000.00, in
order to assist in defraying the cost of such restoration. Subtenant will also
be responsible for the

 

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performance of the items of work required by clauses (i), (ii), (iii), (iv) and
(v) (to the extent Tenant installs cabling) of Section 6.B of the Original
Master Lease, to the extent applicable to the Subleased Premises. Subtenant
acknowledges that Landlord may notify Sublandlord following the scheduled
expiration of this Sublease of Landlord’s determination that certain alterations
performed by Subtenant must be removed. Sublandlord agrees to attempt to procure
Landlord’s determination in this regard at Subtenant’s request; however, the
parties acknowledge that Subtenant’s obligation to remove any Subtenant
Improvements which Landlord requires the removal of (and the removal of which is
not the express responsibility of Sublandlord pursuant to this Section 15.2(c)
will survive the expiration or sooner termination of this Sublease.

16. Holding Over. If Subtenant holds over after the expiration or earlier
termination of this Sublease with the express or implied consent of Sublandlord,
such tenancy shall be from month-to-month only and shall not constitute a
renewal hereof or an extension for any further term. Such month-to-month tenancy
shall be subject to all the terms and provisions of this Sublease, except that
Subtenant shall pay Base Rent and Additional Rent in an amount (on a per month
basis without reduction for partial months during the holdover) equal to 150% of
the greater of: (1) the sum of the Base Rent and Additional Rent due for the
period immediately preceding the holdover; or (2) the fair market gross rental
for the Subleased Premises as reasonably determined by Sublandlord. Nothing
contained in this Section 16 shall be construed as consent by Sublandlord to any
holding over by Subtenant, and Sublandlord expressly reserves the right to
recover immediate possession of the Subleased Premises by summary proceedings or
otherwise. In addition to the payment of the amounts provided above, if
Sublandlord is unable to deliver possession of the Subleased Premises to a new
subtenant or to Landlord, as the case may be, or to perform improvements for a
new subtenant, as a result of Subtenant’s holdover, Subtenant shall be liable to
Sublandlord for all damages, including, without limitation, consequential
damages, that Sublandlord suffers from the holdover; Subtenant expressly
acknowledges that such damages may include all of the holdover rent charged by
Landlord under the Master Lease as a result of Subtenant’s holdover, which
Master Lease holdover rent may apply to the entire Master Lease Premises.
Notwithstanding any other term or provision of this Sublease, if the Term
expires on the Expiration Date (as opposed to an early termination for any
reason), Subtenant shall be entitled to hold over, without any payment of Base
Rent and Additional Rent, solely for the purpose of performing any
repair/restoration obligations of Subtenant under this Sublease, so long as
(x) Subtenant’s work of repair/restoration does not interfere with Sublandlord’s
restoration work, if any, which is concurrently being performed in the Building
and (y) in no event will Subtenant have any right to remain in the Subleased
Premises for any reason whatsoever following the date which precedes the date of
expiration of the term of the Master Lease.

17. Parking. During the Term Subtenant shall be permitted to use one hundred
sixteen (116) (i.e., 3.78 spaces per 1,000 rentable square feet in the Subleased
Premises) of the parking spaces allocated to Sublandlord in the Master Lease at
no additional charge. Such parking shall be provided on an unreserved basis. One
(1) reserved parking space located in the underground parking lot directly
beneath the Subleased Premises for each full floor occupied by Subtenant shall
be allocated to Subtenant from the amount described above. Sublandlord reserves
the right in the future to designate reserved parking spaces at Sublandlord’s
sole discretion only if Subtenant is at such time equitably allocated comparable
reserved parking spaces.

 

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18. Notices: Any notice by either party to the other required, permitted or
provided for herein shall be valid only if in writing and shall be deemed to be
duly given only if (a) delivered personally, or (b) sent by means of Federal
Express, UPS Next Day Air or another reputable express mail delivery service
guaranteeing next business day delivery, or (c) sent by United States certified
or registered mail, return receipt requested, addressed: (i) if to Sublandlord,
at the following addresses:

 

   Oracle USA, Inc.      c/o Oracle Corporation      1001 Sunset Boulevard     
Rocklin, California 95765      Attn: Lease Administration     with a copy to:   
     Oracle USA, Inc.      c/o Oracle Corporation      500 Oracle Parkway     
Box 5OP7      Redwood Shores, California 94065      Attn: Legal Department    
and (ii) if to Subtenant, at the following address:  

 

   Before the Commencement Date:     

Pain Therapeutics, Inc.

    

415 Browning Way

    

South San Francisco, California 94080

    

Attn: Chief Financial Officer

      

After the Commencement Date:

    

Pain Therapeutics, Inc.

    

2211 Bridgepointe Parkway, 5th Floor

    

San Mateo, California 94404

    

Attn: Chief Financial Officer

    and to:        

Wilson Sonsini Goodrich & Rosati

    

650 Page Mill Road

    

Palo Alto, California 94304

    

Attn: Susan P. Reinstra

   

 

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or at such other address for either party as that party may designate by notice
to the other. A notice shall be deemed given and effective, if delivered
personally, upon hand delivery thereof (unless such delivery takes place after
hours or on a holiday or weekend, in which event the notice shall be deemed
given on the next succeeding business day), if sent via overnight courier, on
the business day next succeeding delivery to the courier, and if mailed by
United States certified or registered mail, three (3) business days following
such mailing in accordance with this Section.

19. Furniture. During the Term, at no charge to Subtenant, Subtenant shall be
permitted to use the existing modular and office furniture and cabling located
in the Subleased Premises and described in more particular detail in Exhibit C
attached hereto (the “Furniture”). Such Furniture shall be delivered in its
current “as-is” condition. Subtenant shall accept the Furniture in its current
condition without any warranty of fitness from Sublandlord (Subtenant expressly
acknowledges that no warranty is made by Sublandlord with respect to the
condition of any cabling currently located in or serving the Subleased
Premises); for purposes of documenting the current condition of the Furniture,
Subtenant and Sublandlord shall, prior to the Commencement Date, conduct a joint
walk-through of the Subleased Premises in order to inventory items of damage or
disrepair in the Furniture. Subtenant shall use the Furniture only for the
purposes for which such Furniture is intended and shall be responsible for the
proper maintenance, care and repair of the Furniture, at Subtenant’s sole cost
and expense. No item of Furniture shall be removed from the Subleased Premises
without Sublandlord’s prior written consent. On or about the date of expiration
of the Term, the parties shall once again conduct a walk-through of the
Subleased Premises to catalog any items of damage, disrepair, misuse or loss
among the Furniture (reasonable wear and tear, casualty and condemnation
excepted), and Subtenant shall be responsible, at Subtenant’s sole cost and
expense, for curing any such items (including, with respect to loss, replacing
any lost item with a substantially similar item reasonably acceptable to
Sublandlord). Subtenant shall not modify, reconfigure or relocate any furniture
except with the advance written permission of Sublandlord, and any work of
modifying any Furniture (including, without limitation, changing the
configuration of, “breaking down” or reassembly of cubicles or other modular
furniture) and any maintenance of the same shall be performed at Subtenant’s
sole cost using Sublandlord’s specified vendors or an alternate vendor approved
in writing by Sublandlord (such approval to be granted or withheld in
Sublandlord’s good faith discretion, based upon Sublandlord’s assessment of
factors which include, without limitation, whether the performance by such
vendor will void applicable warranties for such furniture and whether such
vendor is sufficiently experienced in the design of such furniture).
Notwithstanding anything to the contrary herein, Sublandlord will remove any
Furniture from the Subleased Premises requested by Subtenant prior to the
Commencement Date, provided that Subtenant delivers to Sublandlord notice
specifying the items to be removed at least ten (10) business days prior to the
Commencement Date. Following such removal, any such items so removed will no
longer be deemed to be included with the definition of “Furniture”.

20. Access System. Subtenant acknowledges that Sublandlord currently has an
access system monitoring access to the Project and the Building. Subtenant
acknowledges that there are card readers installed throughout the Building and
Project which are part of Sublandlord’s access system. Subtenant will not
interfere with, adjust or damage any such card readers. To the fullest extent
permitted under applicable law, Subtenant hereby acknowledges that, except for
making the card key reader system available for Subtenant’s use and except for

 

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servicing and maintaining the system, Sublandlord shall not be responsible for
providing access or security services to Subtenant, and that Subtenant shall be
solely responsible for providing its own security service, if any. Subject to
its review of plans therefore, Sublandlord consents to Subtenant’s installation
of its own security and card reader system at the Subleased Premises; provided
that at Sublandlord’s or Landlord’s option, Subtenant will remove such systems
at the end of the Term. Sublandlord shall also, at its sole cost, promptly upon
request by Subtenant, add the access keys of certain of Subtenant’s employees to
the database of Sublandlord’s security system to allow Subtenant to access the
freight elevator vestibule on the fifth (5th) floor. Sublandlord will provide
Subtenant with one (1) card key for each workstation located in the Subleased
Premises at no charge, and in the event Subtenant so requests, Sublandlord shall
provide Subtenant with replacement card keys at a price of $10.00 per card.

21. Signage.

21.1 Monument Sign. Subject to the prior written consent of Landlord (if
required under the Master Lease) and the procurement of any approvals or permits
required by City, Subtenant will be entitled to a pro-rata allocation of space
on any monument signage serving the Building (a “Monument Sign”) for the purpose
of displaying Subtenant’s name in “Project-Standard” lettering. Subtenant
acknowledges that no such Monument Sign exists as of the date of this Sublease
nor does this Section 21 obligate Sublandlord to install any Monument Sign.
Further, the location of Subtenant’s tradename on the Monument Sign shall be
subject to availability at the time Subtenant elects to install same on any such
monument and shall be entitled to signage identifying its name and/or logo in
the lobby directory of the Building (if any) and at the entrance to the
Subleased Premises. Sublandlord shall not be required to reserve any particular
location or band on the Monument Sign for Subtenant’s use. Any signage of
Subtenant installed on the Monument Sign is referred to herein as “Subtenant’s
Monument Signage”. Any such signage will be installed at Subtenant’s sole cost
and expense by contractors designated by Sublandlord. The graphics, materials,
color, design, lettering, lighting, size, specifications, location and manner of
affixing the Subtenant’s Monument Signage shall be subject to Sublandlord’s
prior approval, which shall not be unreasonably withheld, and will be further
subject to compliance with all laws, ordinances, restrictions of record and
easements affecting same (collectively, “Sign Laws”). Sublandlord’s approval of
Subtenant’s Monument Signage shall not constitute a representation by
Sublandlord that Subtenant’s Monument Signage complies with any applicable Sign
Laws. Any such signage will be removed by Subtenant at Subtenant’s expense at
the earlier to occur of (a) the Expiration Date and (b) the date upon which the
signage rights granted herein are terminated. The rights granted pursuant to
this Section 21 are personal to Pain Therapeutics, Inc., and may not be
transferred or assigned to any other individual or entity (other than an
assignee of Subtenant’s interest in this Sublease or a subtenant of fifty
percent (50%) of the Subleased Premises.

21.2 Termination of Signage Rights. Subtenant’s rights to Subtenant’s Monument
Signage shall expire and terminate upon the earlier to occur of the termination
of this Sublease or Subtenant’s right to possession of the Subleased Premises.
Upon termination of such rights (and in any event upon termination of this
Sublease), Subtenant shall immediately remove Subtenant’s Monument Signage (if
installed) and repair all damage caused thereby, at Subtenant’s sole cost and
expense. Subtenant’s obligations hereunder shall survive the termination of this
Sublease.

 

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22. Telecom Riser Rooms. Each floor of the Building has a separate room (each, a
“Telecom Riser Room”) which was used by the prior occupant of the Building to
connect with the main telecommunications distribution frame (“MDF”) serving the
Building and the Project; the Telecom Riser Rooms serve as the central point of
distribution for telecommunications fiber for all floors in the Building. As of
the date of this Sublease, the Telecom Riser Rooms serving the Subleased
Premises shall remain locked unless otherwise determined by Sublandlord, but
considered common space accessible to Sublandlord and; upon prior coordination
of such access with, and subject to supervision by, Sublandlord or the property
manager for the Project, other Building occupants (including Subtenant);
provided that the Telecom Riser Room on the fifth (5th) floor of the Building
will not be made accessible to other Building occupants. Other Building
occupants who wish to use the telecom riser fiber in the Building may require
access to all other Telecom Riser Rooms (including Telecom Riser rooms on floors
below the floors on which their separate subleased premises are located) through
which their fiber passes. Subtenant may elect to use the Telecom Riser Rooms
serving the Subleased Premises for connecting to the MDF, however, Subtenant may
not interfere with any pre-existing Building fiber installed in or connected to
any Telecom Riser Room nor may Subtenant prevent Sublandlord (or any other
Building occupants) from accessing the Telecom Riser Rooms serving the Subleased
Premises; however, Subtenant will have the right to supervise the performance of
any other occupants’ work in the Telecom Riser Rooms on the floor(s) where the
Subleased Premises are located (and, similarly, if Subtenant wishes to have
access to the Telecom Riser Rooms on any floor in the Building where the
Subleased Premises is not located, Subtenant may be subject to the supervision
of the occupant(s) of such floor during the performance of any such work).
Except in the case of an emergency, Sublandlord (and any other Building
occupants) shall provide Subtenant with one (1) business day’s notice (which may
be telephonic) of any such access and such access shall be during normal
business hours. Sublandlord (and any other Building occupants) shall comply with
Subtenant’s reasonable security measures and shall not unreasonably interfere
with Subtenant’s use of the Sublease Premises. All work performed by or on
behalf of Subtenant in any Telecom Riser Room will be performed in strict
compliance with such guidelines as Sublandlord may, from time to time,
promulgate. Alternatively, Subtenant may elect to relocate Subtenant’s voice and
data cabling to another location within the Subleased Premises at Subtenant’s
sole cost and expense. All vertical cabling to be installed by Subtenant shall
be in such room in a location designated and approved by Sublandlord and
Sublandlord may need future access to allow other Subtenants to core drill and
pull additional fiber. Notwithstanding the foregoing, Subtenant shall be
permitted to place its servers in the Telecom Riser Room located on the fifth
(5th) floor of the Building, subject to the access restrictions described above.

23. Mechanical Room. The parties acknowledge that there is a mechanical room
located on the fifth (5th) floor of the Building which serves all of the
Building (the “Mechanical Room”). Sublandlord will require periodic access to
the Mechanical Room for the purposes of performing maintenance work and routine
or other repairs; Sublandlord agrees to use reasonable efforts to coordinate and
calendar any such access to the Mechanical Room with Subtenant, so as to
minimize interference with Subtenant’s business operations within the Subleased
Premises. Except in the case of an emergency, Sublandlord shall use reasonable
efforts to provide Subtenant with one (1) business day’s notice (which may be
telephonic) of such access and such access shall be during normal business
hours. Sublandlord shall comply with Subtenant’s reasonable security measures
and shall not unreasonably interfere with

 

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Subtenant’s use of the Subleased Premises. Prior to the Commencement Date,
Sublandlord shall (a) relocate the desktop computer from the Telecom Riser Room
located on the fifth (5th) floor to a location outside the fifth (5th) floor and
(b) provide remote access for routine HVAC-related activities from a location
outside the fifth (5th) floor. Sublandlord and its agents, employees and
contractors shall not use the Mechanical Room or Telecom Riser Room located on
the fifth (5th) floor for an office or for any purpose other than making
adjustments to the equipment therein.

24. Brokers. Subtenant and Sublandlord each represent that it has dealt directly
with and only with Colliers International (“Broker”), as a broker in connection
with this Sublease. Sublandlord and Subtenant shall indemnify and hold each
other harmless from all claims of any brokers other than Broker claiming to have
represented Sublandlord or Subtenant in connection with this Sublease. Subtenant
and Sublandlord agree that Broker shall be paid a commission by Sublandlord in
connection with this Sublease pursuant to a separate agreement.

25. Complete Agreement. There are no representations, warranties, agreements,
arrangements or understandings, oral or written, between the parties or their
representatives relating to the subject matter of this Sublease which are not
fully expressed in this Sublease. This Sublease cannot be changed or terminated
nor may any of its provisions be waived orally or in any manner other than by a
written agreement executed by both parties.

26. USA Patriot Act Disclosures.

26.1 Pursuant to United States Presidential Executive Order 13224 signed on
September 24, 2001, and entitled “Blocking Property and Prohibiting Transactions
with Persons Who Commit, Threaten to Commit, or Support Terrorism” (“Executive
Order”), Sublandlord is required to ensure that it does not transact business
with persons or entities determined to have committed, or to pose a risk of
committing or supporting, terrorist acts and those identified on the list of
Specially Designated Nationals and Blocked Persons (“List”), generated by the
Office of Foreign Assets Control of the U.S. Department of the Treasury. The
names or aliases of these persons or entities (“Blocked Persons”) are updated
from time to time. In the event Sublandlord learns that Subtenant’s name or the
name of any of the Covered Parties appears on the List, Sublandlord reserves the
right to delay the agreements contemplated by this Sublease pending
Sublandlord’s investigation into the matter. If Sublandlord is advised and/or
determines that Subtenant or any Covered Person is a Blocked Person, Sublandlord
reserves the right to terminate this Sublease and/or take all other actions
necessary to comply with the requirements of the Executive Order. The provisions
of this paragraph will survive termination of this Sublease.

26.2 Subtenant represents to Sublandlord that (i) neither Subtenant nor any
person or entity that directly owns 10% or greater equity interest in Subtenant
not any of its officers, directors, or managing members (collectively the
“Covered Parties”) is a person or entity with whom U.S. persons or entities are
restricted from doing business under regulations of the Office of Foreign Asset
Control (“OFAC”) of the Department of the U.S. Treasury (including those named
on the List) or under the Executive Order or other governmental action, and
(ii) that throughout the term of this Sublease, Subtenant and each of the
Covered Parties shall comply with the Executive Order. Any breach of this
representation and warranty shall be a non-curable default under this Sublease.
At any time and from time-to-time during the Term, Subtenant shall

 

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deliver to Sublandlord, within ten (10) days after receipt of a written request
therefor, a written certification or such other evidence reasonably acceptable
to Sublandlord evidencing and confirming Subtenant’s compliance with this
provision.

27. Interpretation. Irrespective of the place of execution or performance, this
Sublease shall be governed by and construed in accordance with the laws of the
State of California. If any provision of this Sublease or the application
thereof to any person or circumstance shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Sublease and the application
of that provision to other persons or circumstances shall not be affected but
rather shall be enforced to the extent permitted by law. The table of contents,
captions, headings and titles, if any, in this Sublease are solely for
convenience of reference and shall not affect its interpretation. This Sublease
shall be construed without regard to any presumption or other rule requiring
construction against the party causing this Sublease or any part thereof to be
drafted. If any words or phrases in this Sublease shall have been stricken out
or otherwise eliminated, whether or not any other words or phrases have been
added, this Sublease shall be construed as if the words or phrases so stricken
out or otherwise eliminated were never included in this Sublease and no
implication or inference shall be drawn from the fact that said words or phrases
were so stricken out or otherwise eliminated. Each covenant, agreement,
obligation or other provision of this Sublease shall be deemed and construed as
a separate and independent covenant of the party bound by, undertaking or making
same, not dependent on any other provision of this Sublease unless otherwise
expressly provided. All terms and words used in this Sublease, regardless of the
number or gender in which they are used, shall be deemed to include any other
number and any other gender as the context may require. The word “person” as
used in this Sublease shall mean a natural person or persons, a partnership, a
corporation or any other form of business or legal association or entity.

28. Counterparts. This Sublease may be executed in separate counterparts, each
of which shall constitute an original and all of which together shall constitute
one and the same instrument. This Sublease shall be fully executed when each
party whose signature is required has signed and delivered to each of the
parties at least one counterpart, even though no single counterpart contains the
signatures of all parties hereto.

29. Landlord Consent. This Sublease and Sublandlord’s and Subtenant’s
obligations hereunder are conditioned upon receipt of the Consent. Sublandlord
agrees to request that such Consent contains Landlord’s agreement that the
waiver of subrogation set forth in Section 9.D of the Original Master Lease
apply as between Landlord and Subtenant. If Sublandlord fails to obtain the
Consent within thirty (30) days after execution of this Sublease by Sublandlord,
then either party may terminate this Sublease by giving the other written notice
thereof on or before the date of procurement of the Consent, in which event
Sublandlord shall return to Subtenant the Security Deposit.

30. Sublandlord’s Representations. As an inducement to Subtenant to enter into
this Sublease, Sublandlord represents that (a) the Master Lease is in full force
and effect, and there exists under the Master Lease no default or event of
default by either Landlord or Sublandlord and (b) the copy of the Master Lease
attached hereto as Exhibit G is a true, correct and complete copy of the Master
Lease.

 

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31. Approvals. Whenever this Sublease requires an approval, consent,
designation, determination or judgment by either Sublandlord or Subtenant,
except as where expressly set forth herein to the contrary, such approval,
consent, designation, determination or judgment and any conditions imposed
thereby shall be reasonable and shall not be unreasonably withheld or delayed.

IN WITNESS WHEREOF, the parties hereto hereby execute this Sublease as of the
day and year first above written.

 

SUBLANDLORD:  

ORACLE USA, INC.,

a Colorado corporation

By:  

/S/    RANDALL W. SMITH

Print Name:  

Randall W. Smith

Title:  

VP Real Estate & Facilities

SUBTENANT:   PAIN THERAPEUTICS, INC.,   a Delaware corporation

By:  

/S/    REMI BARBIER

Print Name:  

Remi Barbier

Title:  

President & CEO

 

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LOGO [g4838948389_img003.jpg]

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EXHIBIT B

Commencement Agreement

 

Date  

June 20, 2007

Subtenant  

Pain Therapeutics

Address  

415 Browning Way

 

South San Francisco

 

California 94080

 

Re: Commencement Letter with respect to that certain Sublease dated as of the
17th day of July, 2007, by and between ORACLE USA, INC., a Colorado corporation,
as Sublandlord, and PAIN THERAPEUTICS, INC., a Delaware corporation, as
Subtenant, for 30,718 rentable square feet on the fifth (5th) floor of the
Building located at 2211 Bridgepointe Parkway, San Mateo, California.

To Whom It May Concern:

In accordance with the terms and conditions of the above referenced Sublease,
Subtenant accepts possession of the Subleased Premises and agrees:

 

  1. The Commencement Date is June 25, 2007;

 

  2. The Rent Commencement Date is July 25, 2007;

 

  3. The Expiration Date is July 31, 2012.

Please acknowledge your acceptance of possession and agreement to the terms set
forth above by signing all 3 counterparts of this Commencement Letter in the
space provided and returning 2 fully executed counterparts to Phil Arnatau at
Colliers International, Two Palo Alto Square, Suite 200, Palo Alto, CA 94306.

 

Sincerely, ORACLE USA INC.

Cliff Berry

Director, Headquarters Real Estate

Agreed and Accepted:

Subtenant:

 

Pain Therapeutics, Inc.

By:

 

/S/    PETER S. RODDY

Name:

 

Peter S. Roddy

Title:

 

CFO

Date:

 

8/29/07

 

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EXHIBIT C

Furniture

2215 Bridgepoint, Bldg 2, 5th floor

Inventory & Definitions

26 Standard Private Offices – Kimball Cetra/Footprint Furniture will contain:

(1) P-top worksurface, corner worksurface and (2) straight worksurface;
(3) chairs and (1) short bookcase.

LOGO [g4838948389_img001.jpg]

116 Cubes – Standard Kimball Cetra/Footprint (8’ x 8’) Furniture will contain:

(2) 48” work surfaces – laminate; (1) Corner work surface – laminate; (2) wood
file pedestals; (2) chairs; (1) overhead storage with built in desk light.

LOGO [g4838948389_img002.jpg]

(4) Large Conference Rooms:

 

  q Each conference room has (1) oval table, (10) office task chairs

(3) Small Conference Rooms:

 

  q Each conference room has (1) round table, (6) office task chairs

(3) Lounge Areas

 

  q Each lounge area has (2) club chairs and (1) occasional table

 

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(2) Mail/Copy rooms

 

  q Large mail room has (2) blue Hamilton mail sorters and (4) blue Hamilton
tables w/ storage

 

  q Small mail room has (1) blue Hamilton table w/ storage and (1) blue Hamilton
mail sorter

Miscellaneous:

 

(32) lateral file cabinets

Furniture Notes:

1. Number of lateral filing cabinets is an estimated number only. The actual
number may be either higher or lower and neither party shall have any recourse
or liability for such variance.

2. All furniture is “as is”. Drawers may or may not include keys for all
drawers.

 

2

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EXHIBIT D

Rules and Regulations

1. Sidewalks, doorways, halls, stairways, vestibules and other similar areas
shall not be obstructed by any tenant or used by them for purpose other than
ingress to and egress from their respective Premises, and for going from one
part of the Building to another part.

2. Plumbing fixtures shall be used only for their designated purpose, and no
foreign substances of any kind shall be deposited therein. Damage to any such
fixture resulting from misuse by Subtenant or any employee or invitee of
Subtenant shall be repaired at the expense of Subtenant.

3. Nails, screws and other attachments to the Building require prior written
consent from Sublandlord.

4. All contractors and technicians rendering any installation service to
Subtenant shall be subject to Sublandlord’s approval and supervision prior to
performing services. This applies to all work performed in the Building,
including, but not limited to, installation of telecommunications equipment, and
electrical devices, as well as all installation affecting floors, walls,
woodwork, windows, ceilings, and any other physical portion of the Building.

5. Movement in or out of the Building of furniture, office equipment, or other
bulky material which requires the use of elevators, stairways, or Building
entrance and lobby shall be restricted to hours established by Sublandlord. All
such movement shall be under Sublandlord’s supervision, and the use of an
elevator for such movements shall be made restricted to the Building’s freight
elevators, or an elevator for such movements shall be made restricted to the
Building’s freight elevators. Prearrangements with Sublandlord shall be made
regarding the time, method, and routing of such movement, and Subtenant shall
assume all risks of damage and pay the cost of repairing or providing
compensation for damage to the Building, to articles moved and injury to persons
or public resulting from such moves. Sublandlord shall not be liable for any
acts or damages resulting from any such activity.

6. Corridor doors, when not is use, shall be kept closed.

7. Subtenant shall cooperate with Sublandlord in maintaining the Subleased
Premises. Except as expressly set forth in the Sublease, Subtenant shall not
employ any person for the purpose of cleaning the Subleased Premises other than
the Building’s cleaning and maintenance personnel.

8. Deliveries of water, soft drinks, newspapers, or other such items to any
Premises shall be restricted to hours established by Sublandlord.

9. Nothing shall be swept or thrown into the corridors, halls, elevator shafts,
or stairways. No birds, fish, or animals of any kind shall be brought into or
kept in, on or about the Subleased Premises.

 

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10. No cooking shall be done in the Subleased Premises except in connection with
convenience lunch room or beverage service for employees and guests (on a
noncommercial basis) in a manner which complies with all of the provisions of
the Sublease and which does not produce fumes or odors.

11. Food, soft drink or other vending machines shall not be placed within the
Subleased Premises without Sublandlord’s prior written consent.

12. Subtenant shall not use or keep on its Subleased Premises any kerosene,
gasoline, or inflammable or combustible fluid or material other than limited
quantities reasonably necessary for the operation and maintenance of office
equipment.

13. Subtenant shall not tamper with or attempt to adjust temperature control
thermostats in the Subleased Premises. Sublandlord shall make adjustments in
thermostats on call from Subtenant.

14. Subtenant shall comply with all requirements necessary for the security of
the Building, including the use of service passes issued by Sublandlord for
after hours movement of office equipment/packages, and signing security register
in Building lobby after hours.

15. Upon termination of this Lease, Subtenant shall surrender to Sublandlord all
keys and access cards to the Subleased Premises, and give to Sublandlord the
combination of all locks for safes and vault doors, if any, in the Subleased
Premises.

16. Sublandlord retains the right, without notice or liability to any occupant,
to change the name and street address of the Building.

17. Canvassing, peddling, soliciting, and distribution of handbills in the
Building are prohibited and each tenant shall cooperate to prevent these
activities.

18. Subtenant shall take reasonable steps to prevent the unnecessary generation
of refuse (e.g., choosing and using products, packaging, or other materials in
business that minimize solid waste or that are durable, reusable, or
recyclable). Subtenant shall provide or obtain recycling containers in its
business for use by employees and customers, shall recycle acceptable materials
in the recycling containers provided by Sublandlord, and shall otherwise
participate in the recycling program established by Sublandlord for the
Building. Acceptable recyclable materials may include, but are not limited to,
the following: newspaper, cardboard, paperboard, office paper and other mixed
paper, aluminum, tin and other metal, glass, and #1 (PETE) and #2 (HDPE)
plastics.

19. Subtenant shall not and shall cause its employees, agents, contractors,
invitees, customers and visitors not to smoke in the Subleased Premises or in
any portion of the Building, except those areas, if any, expressly designated as
smoking areas by Sublandlord. Persons may smoke cigarettes in designated areas
only if the smoker uses designated receptacles for ashes and cigarette butts and
does not annoy any nonsmoking persons using the area or interfere with access to
the Building.

 

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20. Sublandlord reserves the right to rescind or modify any of these rules and
regulations and to make future rules and regulations required for the safety,
protection, and maintenance of the Building, the operation and preservation of
good order thereof, and the protection and comfort of the tenants and their
employees and visitors. Such rules and regulations, when made and written notice
given the Subtenant, shall be binding as if originally included herein. In the
event of any inconsistency between the Sublease and these rules and regulations,
the terms and conditions of the Sublease shall prevail.

 

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EXHIBIT E

Construction Guidelines for Contracted Services

The following outlines the regulations and requirements, which will be required
of contracted service personnel working at or in the Building. No deviation or
exception will be permitted without the express written approval of Sublandlord
or its property manager.

1. All contractors to perform work at the Project must be reasonably approved by
Sublandlord prior to the commencement of any construction.

2. Prior to any entry onto the Building, Subtenant or any contractors, as
applicable, shall have provided to Sublandlord certificates of insurance, in
form and amount satisfactory to Sublandlord, evidencing the following insurance
coverages:

a. Worker’s compensation insurance covering all of their respective employees,
and shall also carry public liability insurance, including property damage, all
with limits, in form and with companies as are reasonably required by
Sublandlord.

b. Subtenant shall carry “Builder’s All Risk” insurance in an amount approved by
Sublandlord or Landlord covering the construction of the work in question, and
such other insurance as Sublandlord or Landlord may reasonably require. Such
insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Sublandlord or Landlord.

All such policies of insurance must contain a provision that the company writing
said policy will give Sublandlord thirty (30) days prior written notice of any
cancellation or lapse of the effective date or any reduction in the amounts of
such insurance. All policies shall insure Landlord, Sublandlord and Subtenant,
as their interests may appear, as well as Subtenant’s contractors, and shall
name as additional insureds Sublandlord’s property manager. All insurance,
except Workers’ Compensation, maintained by Subtenant’s contractors shall
preclude subrogation claims by the insurer against anyone insured thereunder.
Such insurance shall provide that it is primary insurance as respects the owner
and that any other insurance maintained by owner is excess and noncontributing
with the insurance required hereunder.

c. Sublandlord must be named on all warranties and guaranties for all products
being guarantied or warranted by any contractor, sub-contractor, and/or
manufacturing supplier.

3. All workers must be properly, permanently and visually identified. The
identification system must be approved prior to the start of any work and may
take the form of badges for attachment to clothing. All companies will maintain
an updated list of authorized workers with building management and notify
management of each change.

4. All workers shall maintain their actions while in the Building in a
professional manner to include but not limited to the following:

a. No abusive language.

 

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b. No smoking, eating or drinking except in areas designated by the Building
manager.

c. No use of radios.

5. Offenses that will result in immediate request for discharge include, but are
not limited to the following:

a. Drinking alcoholic beverages on the job, or coming to work in an intoxicated
condition.

b. Possession or consuming drugs or any other illegal substances while at the
property.

c. Using or removing Building manager’s, tenant’s or subcontractor’s possessions
from the property without prior authorization.

d. Violating any state or federal statutes while working at the Building.

e. Possessing firearms or explosives while working at the Building.

f. Using property facilities for jobs other than specific work assignments.

g. Accepting commissions, fees or kickbacks from any vendors, tenants or
contractors involved in providing a service or product to the Building.

h. Physically abusing or harming any individual who works at or visits the
Building.

i. Duplicating any keys used in the Building.

j. Providing Building access at anytime to anyone not authorized by Building
manager.

6. Contractor and contractor employee parking shall be only in areas reasonably
designated by Sublandlord. The loading dock will not be used for parking.
Oversized vehicles will use street parking as far as possible from public
entries and operating retail facilities.

7. All construction staging storage and temporary contractor facilities will be
located in specific areas assigned by the Building management. Contractors will
be responsible for the maintenance, housekeeping and demolition of all temporary
facilities.

8. The entrances lobbies passages corridors elevators stairways and other common
areas will not be obstructed by any of the contractors agents during
construction.

9. No storage of flammable substances will be allowed or stored in the Building
unless approved by Building management and in accordance with approved building
codes and regulations.

 

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10. Any work that would cause an inconvenience (in Sublandlord’s reasonable
discretion) to other occupants in the Building or any work in an occupied lease
space must be done after Building Hours or on the weekend. Any structural
modifications or floor penetrations created with the use of core drilling
machines pneumatic hammers etc. must be performed between the hours of 1 p.m. to
6:00 p.m. on Saturdays and 11:00 a.m. to 6:00 p.m. on Sundays or as otherwise
permitted by law and the Building rules and regulations. Likewise any
construction techniques causing excessive noise or vapors will be conducted only
during these hours.

11. Prior to starting the work the general mechanical and electrical contractors
will check in and go over the job with the chief Building engineer and will
furnish to such building engineer mechanical and electrical shop drawings. All
panels and transformers are to match the “Building Standard” systems and all
materials and methods used to connect panels and transformers must be approved
by Sublandlord. In connection therewith:

a. The Building is fed with Cutler Hammer Bus duct, any time a new 480 volt
panel is added, Contractor must add a Cutler Hammer Bus duct disconnect;

b. The existing transformers serving the Building are Cutler Hammer; all
transformers need to be copper and K13 rated;

c. The existing panels are Cutler Hammer. Any 120/208 and 277/480 volt panels
need to be copper bus, bolt on breakers and 65K A/C rated. It is critical that
any breakers installed in the panels at 65K rated; and

d. The fire alarm system is an Edwards addressable fire alarm panel; any
contractor who performs who affecting this system must e approved in advance by
Sublandlord. [SUBJECT TO FURTHER CONFIRMATION BY SUBTENANT’S PROJECT MANAGER]

12. Dust and air contamination are to be controlled with temporary partitions
which are sealed adequately to prevent dust from entering leased areas or
mechanical equipment. Floor sweep or a comparable material will be used when
sweeping concrete or tile floors. If air conditioning is provided to
construction space, air handler filters will be replaced at the completion of
work at contractors’ expense.

13. Contractors are prohibited from staining, painting (except wall painting),
or lacquering during the working hours of 8:00 a.m.—6:00 p.m. Monday—Friday and
8:00 a.m.—2:00 p.m. Saturday [(except wall painting)]. All such work must be
stopped by 5:00 a.m. on mornings of normal business days. Contractor shall
provide and maintain deodorizing and air purifier machines during all painting
applications and for a minimum of six (6) hours after all operations have
stopped.

14. There will be absolutely no use of Sublandlord’s property to include, but
not be limited to, telephones, dollies, vending machines, copiers, etc. unless
specifically approved in writing by the tenant in advance of their use. Any
unauthorized telephone charges will be billed back to the Contractor.

 

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15. No supplies, trash, or storage of these will be allowed in the dock area at
any time.

16. No doors will be propped open or held open to the degree that such will
cause an alarm or jeopardize security. Contractors shall be responsible for
charges resulting from such alarms and/or security violations.

17. The Building’s manager, at its sole discretion, may require General
Contractor to use masonite to cover the floors. All moving companies will be
required to cover the floors with masonite prior to any items entering or
exiting the Building.

18. All work areas are to be broom cleaned daily of trash, debris and non-useful
materials. Failure to do so will result in Building management providing this
service and charging the Subtenant or Subtenant’s general contractor
accordingly. The general contractor is responsible for providing trash
receptacles. The Building compactor will not be used unless prior approval has
been granted by Building management. Walk-off mats, plastic tarping and Masonite
will be used to avoid unnecessary debris and buildup. If cleanup does not meet
with Building management satisfaction, building personnel will clean the area
and back-charge the responsible contractor.

19. Fire alarm speakers must be installed and connected to the Building’s
existing system throughout the Premises in compliance with applicable Fire Code
requirements. Contractor shall coordinate all Fire Alarm and Fire Sprinkler
system related work with Building security and Building engineering. No Fire
Alarm or Fire Sprinkler system related work will be performed until proper steps
have been taken to assure that false alarms will not sound, that adequate
building protection will be maintained, and that the proper agencies have been
notified of Fire Safety system downtime. Contractor will also coordinate with
Building Security and Building Engineering for the proper restoration of Fire
Alarm and Fire Sprinkler systems to normal operation once work is complete.
Under no circumstances will Contractor leave the property until all Fire Alarm
and Fire Sprinkler systems, which they have affected, have been restored to
their normal operating conditions.

20. The General Contractor shall maintain all applicable federal, state and
local rules and regulations for each Building as required.

21. Since each job is different in scope, it may be necessary that the
contractors set up job meetings according to the job needs. Each contractor must
set their own time interval between meetings, notify Building management of
their scheduling, and once the intervals are set, maintain them on a regular
basis. This will help to coordinate and control attendance.

22. Any contractor who anticipates work on the Building’s life safety systems
(sprinklers, smoke detectors, fire command speakers, fire alarms, etc.) will
notify Building management 24 hours in advance prior to commencement of work.

23. All work to be performed after hours must be scheduled with Building
management at least 24 hours in advance and must be accompanied by a security
clearance request.

 

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24. Bobtails, semi-trailers, etc. are authorized to be parked in the loading
dock only for the time necessary to unload equipment and material. Unless prior
approval is obtained from Building management vehicles left at the loading dock
will be towed at owner’s expense. No contractors or their employees are
authorized to park in visitors parking or in any fire lanes at any time.

25. Material deliveries must be scheduled through Building management. Freight
elevators will be the only elevators used by contractor or agents. When the
freight elevator is used to move materials, contractors will required to release
the elevator immediately after unloading is complete. The elevator will not be
placed on independent service without prior approval of Building management.
Landlord will cooperate with contractor regarding contractor’s use of the
freight elevators and loading docks and in the placement of dumpsters to be
provided by contractor and Landlord will not charge a fee in connection with the
use or accommodation thereof.

26. Contractor personnel are not to use tenant occupied areas, including vending
machines and break-rooms, at any time. Restrooms on tenant occupied floors are
not to be used by contractor personnel. Contractor personnel are to use only the
restrooms specified by Building management. Unless on specific assignment which
has been pre-approved by Building management. No contractor personnel are to
enter tenant office areas.

27. Applicable keys and access cards are controlled and distributed by the
security department. If a contractor wishes to check out keys or access cards,
they must be prepared to surrender their driver’s license on request. The
driver’s license will be returned when the equipment is returned. contractors
will not issue keys or access cards for service areas, utility closets or other
Building areas to anyone including tenants, telephone and utility personnel or
other construction workers. Keys and access cards will not be taken off property
for any reason. If any keys are lost, contractor will be subject to a
replacement fee. This may also include the cost of re-keying the affected area
or possibly the entire Building.

28. Any damage to other tenant spaces, public areas or common facilities of the
building is to be reported immediately to Building management. Contractor is
expected to repair any damage made by their personnel. If corrections are not
made, Building personnel will make the necessary repairs and back-charge the
responsible contractor.

29. Contractors shall check in and out with Building security on a daily basis.

30. Contractor shall take appropriate action to prevent false fire alarm or
other unnecessary alarm, which may occur as a direct or indirect result of their
work. This shall include protection of smoke detection devices from smoke, dust
and debris during construction, use of sweeping compound when sweeping floors to
prevent dust, and proper precautionary measures taken when working around other
alarm initiating devices such as pull stations, water flow devices and Fire
Safety related power devices. All work that, for any reason, may activate the
Fire Alarm system must first be reported to Building security so that
appropriate measure may be taken to prevent a false alarm. Such work includes,
but is not limited to sweeping, painting, sanding, soldering, brazing, welding,
sawing, etc.

 

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31. Contractor is to provide, and pay all fees for, all permits, inspection,
certificates of occupancy, maintenance and operation manuals, equipment
warranties, etc.

32. Should the contractor perform any work that does not comply with the
requirements of applicable laws, Subtenant shall bear all costs that arise in
correcting such defects.

33. All contractors (including the general contractor) shall contact Sublandlord
and schedule time periods during which they may use Building and Building
facilities in connection with the Contractor of Subtenant Improvements (e.g.,
elevators, excess electricity, etc.).

34. Contractor shall maintain existing plumbing, HVAC, and fire alarm systems,
as well as other existing systems, and must retain all existing functions in
service except for scheduled interruptions approved by Building management
24-hours in advance.

35. Any Building-wide power shutdowns must be scheduled with Sublandlord and
Landlord at least thirty (30) days prior to the shutdown in question.

All penetrations of piping, duct work, etc. through walls partitions and floors
shall be sealed to Building management’s satisfaction to maintain the integrity
of the Building’s fire safety rating. Also, any openings in walls and partitions
made by the contractor for access to construction work shall be patched and/or
repaired to Building management’s satisfaction. All core drill pieces are to be
removed by the contractor.

 

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