Exhibit 10.1

BRITANNIA GATEWAY BUSINESS PARK

LEASE

This Lease (the "Lease"), dated as of the date set forth in Section 1 of the
Summary of Basic Lease Information (the "Summary"), below, is made by and
between BRITANNIA GATEWAY II LIMITED PARTNERSHIP, a Delaware limited partnership
("Landlord"), and AUDENTES THERAPEUTICS, INC., a Delaware corporation
("Tenant").

SUMMARY OF BASIC LEASE INFORMATION

 

TERMS OF LEASE

DESCRIPTION

1.Date:

July 7, 2017

2.Premises
(Article 1).

 

2.1Building:

The building located at 201 Gateway Boulevard (the "Building") in South San
Francisco, California 94063.

2.2Premises:

26,553 rentable square feet of space on the second (2nd) floor of the Building,
as further set forth in Exhibit A to the Lease.

3.Lease Term
(Article 2).

 

3.1Length of Term:

Eight (8) years.

3.2Lease Commencement
Date:

February 1, 2018

3.3Lease Expiration Date:

January 31, 2026.

 

 

 

 

[Audentes Therapeutics, Inc.]

 

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4.Base Rent (Article 3):

 

Lease Year

Annual
Base Rent

Monthly
Installment
of Base Rent

Approximate
Monthly Base
Rent per Rentable
Square Foot

1*

$1,529,452.80*

$127,454.40*

$4.80

2

$1,582,983.65

$131,915.30

$4.97

3

$1,638,388.08

$136,532.34

$5.14

4

$1,695,731.66

$141,310.97

$5.32

5

$1,755,082.27

$146,256.86

$5.51

6

$1,816,510.15

$151,375.85

$5.70

7

$1,880,088.00

$156,674.00

$5.90

8

$1,945,891.08

$162,157.59

$6.11

*Note:  Tenant shall have no obligation to pay any Base Rent for the Premises
attributable to the first three (3) full calendar months of the Lease Term (the
"Base Rent Abatement Period"); provided, however, Tenant shall be required to
pay Tenant's Share of Direct Expenses attributable to such period, as well as
for all utilities and other services.

5.Tenant Improvement Allowance (Exhibit B):

An amount equal to $20.00 per rentable square foot of the Premises (i.e.,
$531,060.00 based upon 26,553 rentable square feet in the Premises).  Tenant may
elect to use an additional amount equal to $35.00 per rentable square foot of
the Premises (i.e., up to $929,355.00 based upon 26,553 rentable square feet in
the Premises) (the “Additional TI Allowance”) in accordance with the terms of
Section 2.5 of the Tenant Work Letter attached hereto as Exhibit B.

6.Tenant's Share
(Article 4):

58.00%.  

7.Permitted Use
(Article 5):

The Premises shall be used only for general office, research and development,
engineering, laboratory, vivarium, storage and/or warehouse uses, including, but
not limited to, administrative offices and any other lawful uses reasonably
related to or incidental to such specified uses, all (i) consistent with first
class life sciences projects in South San Francisco, California ("First Class
Life Sciences Projects"), and (ii) in compliance with, and subject to,
applicable laws and the terms of this Lease.  

8.Letter of Credit
(Article 21):

$324,315.18.

 

 

[Britannia Gateway Business Park]

[Audentes Therapeutics, Inc.

 

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9.Parking
(Article 28):

2.8 unreserved parking spaces for every 1,000 rentable square feet of the
Premises, subject to the terms of Article 28 of the Lease.

10.Address of Tenant
(Section 29.18):

Audentes Therapeutics, Inc.

600 California Street, 17th Floor

San Francisco, CA 94108

Attention: David Nagler

Tel –

Email –

and

 

Audentes Therapeutics, Inc.

600 California Street, 17th Floor

San Francisco, CA 94108

Attention: Katrina Doughtery

Tel –

Email –

 

With a copy to:

 

Jeffrey D. Diener

c/o Paul Hastings LLP

101 California Street, 48th Fl.

San Francisco, CA 94111

11.Address of Landlord
(Section 29.18):

See Section 29.18 of the Lease.

12.Brokers
(Section 29.24):

Faller Real Estate

and

CBRE, Inc.

 

 

 

 

 

[Britannia Gateway Business Park]

[Audentes Therapeutics, Inc.

 

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1.PREMISES, BUILDING, PROJECT, AND COMMON AREAS

1.1Premises, Building, Project and Common Areas.

1.1.1The Premises.  Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises set forth in Section 2.2 of the Summary (the
"Premises").  The outline of the Premises is set forth in Exhibit A attached
hereto.  The outline of the "Building" and the "Project," as those terms are
defined in Section 1.1.2 below, are further depicted on the Site Plan attached
hereto as Exhibit A-1.  The parties hereto agree that the lease of the Premises
is upon and subject to the terms, covenants and conditions herein set forth, and
Tenant covenants as a material part of the consideration for this Lease to keep
and perform each and all of such terms, covenants and conditions by it to be
kept and performed and that this Lease is made upon the condition of such
performance.  The parties hereto hereby acknowledge that the purpose of
Exhibit A is to show the approximate location of the Premises only, and such
Exhibit is not meant to constitute an agreement, representation or warranty as
to the construction of the Premises, the precise area thereof or the specific
location of the "Common Areas," as that term is defined in Section 1.1.3, below,
or the elements thereof or of the accessways to the Premises or the "Project,"
as that term is defined in Section 1.1.2, below.  Except as specifically set
forth in this Lease and in the Tenant Work Letter attached hereto as Exhibit B
(the "Tenant Work Letter"), Landlord shall not be obligated to provide or pay
for any improvement work or services related to the improvement of the
Premises.  Tenant also acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty regarding the condition of the
Premises, the Building or the Project or with respect to the suitability of any
of the foregoing for the conduct of Tenant's business, except as specifically
set forth in this Lease and the Tenant Work Letter.  Tenant hereby acknowledges
that Tenant has been in possession of a portion of the Premises consisting of
approximately 8,983 rentable square feet of space (the “Sublease Premises”) in
accordance with that certain Sublease dated as of April 21, 2016 (the
“Sublease”) by and between Tenant and Solazyme, Inc. (“Sublessor”) prior to the
Lease Commencement Date and accordingly Landlord shall have no obligation to
deliver, and Tenant shall continue to occupy, such portion of the Premises to
Tenant.  The taking of possession of the remainder of the Premises by Tenant
shall conclusively establish that the Premises and the Building were at such
time in good and sanitary order, condition and repair.  Except when and where
Tenant's right of access is specifically excluded in this Lease, Tenant shall
have the right of access to the Premises, the Building, and the Project parking
facility twenty-four (24) hours per day, seven (7) days per week during the
"Lease Term," as that term is defined in Section 2.1, below.

1.1.2The Building and The Project.  The Premises constitutes a portion of the
building set forth in Section 2.1 of the Summary (the "Building").  The Building
is part of an office/laboratory project currently known as "Britannia Gateway
Business Park."  The term "Project," as used in this Lease, shall mean (i) the
Building and the Common Areas, (ii) the land (which is improved with
landscaping, parking facilities and other improvements) upon which the Building
and the Common Areas are located, and (iii) the other office/laboratory
buildings located at Britannia Gateway Business Park, and the land upon which
such adjacent office/laboratory buildings are located, and (iv) at Landlord's
discretion, any additional real property, areas, land, buildings or other
improvements added thereto outside of the Project (provided that any such
additions do not increase Tenant's obligations under this Lease).  

1.1.3Common Areas.  Tenant shall have the non-exclusive right to use in common
with other tenants in the Project, and subject to the rules and regulations
referred to in Article 5 of this Lease, those portions of the Project which are
provided, from time to time, for use in common by Landlord, Tenant and any other
tenants of the Project such as entrances, lobbies, fire vestibules, restrooms,
mechanical areas, ground floor corridors, elevators and elevator foyers,
electrical and janitorial closets, telephone and equipment rooms, loading and
unloading areas, the Project’s plaza areas, if any, ramps, drives, stairs and
similar access ways and service ways and other common areas and facilities in
and adjacent to the Building and the Project (such areas, together with such
other portions of the Project designated by Landlord, in its reasonable
discretion, are collectively referred to herein as the "Common Areas").  The
manner in which the Common Areas are maintained and operated shall be at the
sole discretion of Landlord (provided that Landlord shall maintain the Common
Areas in a manner consistent with landlords of First Class Life Sciences
Projects) and the use thereof shall be subject to such reasonable rules,
regulations and restrictions as Landlord may make from time to time, not to be
discriminatorily applied vis-à-vis Tenant.  Landlord reserves the right to close
temporarily, make alterations or additions to, or change the location of
elements of the Project and the Common Areas, provided that in connection
therewith Landlord will use commercially reasonable efforts to minimize any
interference with Tenant's use of and access to the Premises and parking areas.

 

 

 

[Audentes Therapeutics, Inc.]

 

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1.2Rentable Square Feet of Premises.  The rentable square footage of the
Premises is hereby deemed to be as set forth in Section 2.2 of the Summary, and
shall not be subject to measurement or adjustment during the Lease Term.  

2.LEASE TERM; OPTION TERM

2.1Lease Term.  The terms and provisions of this Lease shall be effective as of
the date of this Lease.  The term of this Lease (the "Lease Term") shall be as
set forth in Section 3.1 of the Summary (as such date may be extended by Tenant
in accordance with the terms of Section 2.2 below), shall commence on the date
set forth in Section 3.2 of the Summary (the "Lease Commencement Date"), and
shall terminate on the date set forth in Section 3.3 of the Summary (the "Lease
Expiration Date") unless this Lease is sooner terminated as hereinafter
provided.  For purposes of this Lease, the term "Lease Year" shall mean each
consecutive twelve (12) month period during the Lease Term.  At any time during
the Lease Term, Landlord may deliver to Tenant a notice in the form as set forth
in Exhibit C, attached hereto, as a confirmation only of the information set
forth therein, which Tenant shall execute (if it agrees with the information set
forth therein) and return to Landlord within five (5) days of receipt
thereof.  Notwithstanding the foregoing, if Landlord has not delivered
possession of the Premises, (1) on or before July 1, 2018, then, as Tenant’s
sole remedy for such delay, the date Tenant is otherwise obligated to commence
payment of rent shall be delayed by one day for each day that the delivery date
is delayed beyond such date, or (2) September 1, 2018, then, Tenant shall also
have the right to terminate this Lease by written notice thereof to Landlord,
whereupon any monies previously paid by Tenant to Landlord shall be reimbursed
to Tenant.  The foregoing dates shall be extended to the extent of any delays in
delivery of possession caused by Tenant Delay, as provided in Section 1(j) of
the Tenant Work Letter, war, terrorism, acts of God, natural disaster, civil
unrest, governmental strike or area-wide of industry-wide labor disputes,
inability to obtain services, labor, or materials or reasonable substitutes
therefor, or delays due to utility companies that are not the result of any
action or inaction of Landlord.

2.2Option Term.  

2.2.1Option Right.  Landlord hereby grants the Tenant originally named in this
Lease (the “Original Tenant”), and any assignee of Original Tenant's entire
interest in the Lease that has been approved in accordance with the terms of
Article 14, below (a “Permitted Assignee”), one (1) option to extend the Lease
Term for a period of eight (8) years (the “Option Term”).  Such option to extend
shall be exercisable only by written notice delivered by Tenant to Landlord not
more than twelve (12) months nor less than nine (9) months prior to the
expiration of the initial Lease Term, stating that Tenant is thereby irrevocably
exercising its option to lease the Premises during the Option Term.  Upon the
proper exercise of the option to extend, and provided that, at Landlord’s
option, as of the date of delivery of such notice, Tenant is not in default
under this Lease (beyond all applicable notice and cure periods) and has not
previously been in economic or material non-economic default under this Lease
(beyond the applicable notice and cure periods) more than twice during the prior
twenty-four (24) month period, and as of the end of the initial Lease Term,
Tenant is not in default under this Lease (beyond the applicable notice and cure
periods), the Lease Term shall be extended for a period of eight (8) years.  The
rights contained in this Section 2.2 shall be personal to Original Tenant and
any Permitted Assignee (and not any other assignee, sublessee or “Transferee,”
as that term is defined in Section 14.1, below, of Tenant’s interest in this
Lease).  In the event that Tenant fails to timely and appropriately exercise its
initial option to extend the Lease Term in accordance with the terms of this
Section 2.2, then such option shall automatically terminate and shall be of no
further force or effect.  

2.2.2Option Rent.  The annual Base Rent payable by Tenant during the Option Term
(the "Option Rent") shall be equal to the "Fair Rental Value," as that term is
defined below, for the Premises as of the commencement date of the Option
Term.  During the Option Term, the Option Rent shall increase by three (3%)
annually, starting with the first (1st) anniversary of the commencement date of
the Option Term.  The "Fair Rental Value," as used in this Lease, shall be equal
to the annual rent per rentable square foot (including additional rent and
considering any "base year" or "expense stop" applicable thereto), including all
escalations, at which tenants (pursuant to leases consummated within the twelve
(12) month period preceding the first day of the Option Term), are leasing
non-sublease, non-encumbered, non-equity space which is not significantly
greater or smaller in size than the subject space, for a comparable lease term,
in an arm's length transaction, which comparable space is located in the
Building or in "Comparable Buildings," as that term is defined in this
Section 2.2.2, below (transactions satisfying the foregoing criteria shall be
known as the "Comparable Transactions"), taking into consideration the following
concessions (the "Concessions"):  (a) rental abatement concessions, if any,
being granted such tenants in connection with such

 

 

[Britannia Gateway Business Park]

[Audentes Therapeutics, Inc.

 

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comparable space; (b) tenant improvements or allowances provided or to be
provided for such comparable space, and taking into account the value, if any,
of the existing improvements in the subject space, such value to be based upon
the age, condition, design, quality of finishes and layout of the improvements;
and (c) other reasonable monetary concessions being granted such tenants in
connection with such comparable space; provided, however, that in calculating
the Fair Rental Value, no consideration shall be given to (i) the fact that
Landlord is or is not required to pay a real estate brokerage commission in
connection with Tenant's exercise of its right to extend the Lease Term, or the
fact that landlords are or are not paying real estate brokerage commissions in
connection with such comparable space, and (ii) any construction period, if any,
granted to tenants in Comparable Transactions in connection with the design,
permitting and construction of tenant improvements in such comparable
spaces.  The Fair Rental Value shall additionally include a determination as to
whether, and if so to what extent, Tenant must provide Landlord with financial
security, such as a letter of credit or guaranty, for Tenant's Rent obligations
in connection with Tenant's lease of the Premises during the Option Term.  Such
determination shall be made by reviewing the extent of financial security then
generally being imposed in Comparable Transactions from tenants of comparable
financial condition and credit history to the then existing financial condition
and credit history of Tenant (with appropriate adjustments to account for
differences in the then-existing financial condition of Tenant and such other
tenants).  The Fair Rental Value shall not reflect the value of any improvements
in the Premises made by Tenant following the Effective Date.  The Concessions
(A) shall be reflected in the effective rental rate (which effective rental rate
shall take into consideration the total dollar value of such Concessions as
amortized on a straight-line basis over the applicable term of the Comparable
Transaction (in which case such Concessions evidenced in the effective rental
rate shall not be granted to Tenant)) payable by Tenant, or (B) at Landlord’s
election, all such Concessions shall be granted to Tenant in kind.  The term
“Comparable Buildings” shall mean the Building and those other buildings which
are comparable to the Building in terms of age (based upon the date of
completion of construction or major renovation of the building), quality of
construction, level of services and amenities, size and appearance, and located
in First Class Life Sciences Project in South San Francisco, California and the
surrounding commercial area.  

2.2.3Determination of Option Rent.  In the event Tenant timely and appropriately
exercises its option to extend the Lease Term, Landlord shall notify Tenant of
Landlord's determination of the Option Rent on or before the date that is thirty
(30) days following Landlord's receipt of the Option Exercise Notice.  If
Tenant, on or before the date which is thirty (30) days following the date upon
which Tenant receives Landlord's determination of the Option Rent, in good faith
objects to Landlord's determination of the Option Rent, then Landlord and Tenant
shall attempt to agree upon the Option Rent using their good-faith efforts.  If
Landlord and Tenant fail to reach agreement within thirty (30) days following
Tenant's objection to the Option Rent (the "Outside Agreement Date"), then each
party shall thereafter make a separate determination of the Option Rent, within
five (5) business days of the Outside Agreement Date, and such determinations
shall be submitted to arbitration in accordance with Sections 2.2.3.1 through
2.2.3.8, below.  If Tenant fails to object to Landlord's determination of the
Option Rent within the time period set forth herein, then Tenant shall be deemed
to have rejected Landlord's determination of the Option Rent, and the matter
shall be submitted to arbitration in accordance with the terms hereof.  

2.2.3.1Landlord and Tenant shall each appoint one arbitrator who shall be, at
the option of the appointing party, a MAI appraiser, a real estate broker, or
real estate attorney, who shall have been active over the five (5) year period
ending on the date of such appointment in the leasing or appraisal, as the case
may be, of life science properties in South San Francisco, California.  Each
such arbitrator shall be appointed within twenty (20) days after the Outside
Agreement Date.  Landlord and Tenant may consult with their selected arbitrators
prior to appointment and may select an arbitrator who is favorable to their
respective positions.  The arbitrators so selected by Landlord and Tenant shall
be deemed "Advocate Arbitrators."

2.2.3.2The two (2) Advocate Arbitrators so appointed shall be specifically
required pursuant to an engagement letter within ten (10) days of the date of
the appointment of the last appointed Advocate Arbitrator to agree upon and
appoint a third arbitrator ("Neutral Arbitrator") who shall be qualified under
the same criteria set forth hereinabove for qualification of the two Advocate
Arbitrators, except that neither the Landlord or Tenant or either parties'
Advocate Arbitrator may, directly or indirectly, consult with the Neutral
Arbitrator prior or subsequent to his or her appointment.  The Neutral
Arbitrator shall be retained via an engagement letter jointly prepared by
Landlord's counsel and Tenant’s counsel.  The Neutral Arbitrator cannot be
someone who has represented Landlord and/or Tenant during the five (5) year
period prior to such appointment

 

 

[Britannia Gateway Business Park]

[Audentes Therapeutics, Inc.

 

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2.2.3.3The three arbitrators shall, within thirty (30) days of the appointment
of the Neutral Arbitrator, reach a decision as to whether the parties shall use
Landlord's or Tenant's submitted Option Rent, and shall notify Landlord and
Tenant thereof.  The determination of the arbitrators shall be limited solely to
the issue of whether Landlord's or Tenant's submitted Option Rent is the closest
to the actual Option Rent, taking into account the requirements of Section 2.2.2
of this Lease, as determined by the arbitrators.

2.2.3.4The decision of the majority of the three arbitrators shall be binding
upon Landlord and Tenant.  

2.2.3.5If either Landlord or Tenant fails to appoint an Advocate Arbitrator
within twenty (20) days after the Outside Agreement Date, then either party may
petition the presiding judge of the Superior Court of San Mateo County to
appoint such Advocate Arbitrator subject to the criteria in Section 2.2.3.1 of
this Lease, or if he or she refuses to act, either party may petition any judge
having jurisdiction over the parties to appoint such Advocate Arbitrator.

2.2.3.6If the two (2) Advocate Arbitrators fail to agree upon and appoint the
Neutral Arbitrator within ten (10) business days after the appointment of the
last appointed Advocate Arbitrator, then either party may petition the presiding
judge of the Superior Court of San Mateo County to appoint the Neutral
Arbitrator, subject to criteria in Section 2.2.3.2 of this Lease, or if he or
she refuses to act, either party may petition any judge having jurisdiction over
the parties to appoint such arbitrator.

2.2.3.7The cost of the arbitration shall be paid by Landlord and Tenant equally,
except for costs related to the failure of either party to act within the time
periods set forth above, which costs shall be borne solely by the non-acting
party.

2.2.3.8In the event that the Option Rent shall not have been determined pursuant
to the terms hereof prior to the commencement of the Option Term, Tenant shall
be required to pay as Option Rent, an amount equal to 103% of the Base Rent
payable by Tenant as of the expiration of the initial Lease Term, and upon the
final determination of the Option Rent, the payments made by Tenant shall be
reconciled with the actual amounts of Option Rent due, and the appropriate party
shall make any corresponding payment to the other party.

3.BASE RENTTenant shall pay, without prior notice or demand, to Landlord or
Landlord's agent at the management office of the Project, or, at Landlord's
option, at such other place as Landlord may from time to time designate in
writing, by a check or wire transfer or other electronic transaction for
currency which, at the time of payment, is legal tender for private or public
debts in the United States of America, base rent ("Base Rent") as set forth in
Section 4 of the Summary, payable in equal monthly installments as set forth in
Section 4 of the Summary  in advance on or before the first day of each and
every calendar month during the Lease Term, without any setoff or deduction
whatsoever.  The Base Rent for the first full month of the Lease Term shall be
paid at the time of Tenant's execution of this Lease.  If any Rent payment date
(including the Lease Commencement Date) falls on a day of the month other than
the first day of such month or if any payment of Rent is for a period which is
shorter than one month, the Rent for any fractional month shall accrue on a
daily basis for the period from the date such payment is due to the end of such
calendar month or to the end of the Lease Term at a rate per day which is equal
to 1/365 of the applicable annual Rent.  All other payments or adjustments
required to be made under the terms of this Lease that require proration on a
time basis shall be prorated on the same basis.

4.ADDITIONAL RENT

4.1General Terms.  

4.1.1Direct Expenses; Additional Rent.  In addition to paying the Base Rent
specified in Article 3 of this Lease, Tenant shall pay "Tenant's Share" of the
annual "Direct Expenses," as those terms are defined in Sections 4.2.6 and 4.2.2
of this Lease, respectively.  Such payments by Tenant, together with any and all
other amounts payable by Tenant to Landlord pursuant to the terms of this Lease,
are hereinafter collectively referred to as the "Additional Rent", and the Base
Rent and the Additional Rent are herein collectively referred to as "Rent."  All
amounts due under this Article 4 as Additional Rent shall be payable for the
same periods and in the same manner as

 

 

[Britannia Gateway Business Park]

[Audentes Therapeutics, Inc.

 

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the Base Rent.  Without limitation on other obligations of Tenant which survive
the expiration of the Lease Term, the obligations of Tenant to pay the
Additional Rent provided for in this Article 4 shall survive the expiration of
the Lease Term.

4.1.2Triple Net Lease.  Landlord and Tenant acknowledge that, except as
otherwise provided to the contrary in this Lease, it is their intent and
agreement that this Lease be a "TRIPLE net" lease and that as such, the
provisions contained in this Lease are intended to pass on to Tenant or
reimburse Landlord for the costs and expenses reasonably associated with this
Lease, the Building and the Project, and Tenant's operation therefrom.  To the
extent such costs and expenses payable by Tenant cannot be charged directly to,
and paid by, Tenant, such costs and expenses shall be paid by Landlord but
reimbursed by Tenant as Additional Rent.

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

4.2.1Intentionally Deleted.

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

4.2.3"Expense Year" shall mean each calendar year (or applicable portion
thereof) in which any portion of the Lease Term falls, through and including the
calendar year in which the Lease Term expires.

4.2.4"Operating Expenses" shall mean all expenses, costs and amounts of every
kind and nature which Landlord pays or accrues during any Expense Year because
of or in connection with the ownership, management, maintenance, security,
repair, replacement, restoration or operation of the Project, or any portion
thereof.  Without limiting the generality of the foregoing, Operating Expenses
shall specifically include any and all of the following:  (i) the cost of
supplying all utilities, the cost of operating, repairing, maintaining, and
renovating the utility, telephone, mechanical, sanitary, storm drainage, and
elevator systems, and the cost of maintenance and service contracts in
connection therewith, to the extent the same are not paid directly by Tenant;
(ii) the cost of licenses, certificates, permits and inspections and the cost of
contesting any governmental enactments which may affect Operating Expenses, and
the costs incurred in connection with a governmentally mandated transportation
system management program or similar program; (iii) the cost of all insurance
carried by Landlord in connection with the Project and Premises as reasonably
determined by Landlord; (iv) the cost of landscaping, relamping, and all
supplies, tools, equipment and materials used in the operation, repair and
maintenance of the Project, or any portion thereof; (v) the cost of parking area
operation, repair, restoration, and maintenance; (vi) fees and other costs,
including management and/or incentive fees, consulting fees, legal fees and
accounting fees, of all contractors and consultants in connection with the
management, operation, maintenance and repair of the Project; (vii) payments
under any equipment rental agreements and the fair rental value of any
management office space actually incurred; (viii) subject to item (f), below,
wages, salaries and other compensation and benefits, including taxes levied
thereon, of all persons engaged in the operation, maintenance and security of
the Project; (ix) costs under any instrument pertaining to the sharing of costs
by the Project; (x) operation, repair, maintenance and replacement of all
systems and equipment and components thereof of the Project; (xi) the cost of
janitorial, alarm, security and other services, replacement of wall and floor
coverings, ceiling tiles and fixtures in common areas, maintenance and
replacement of curbs and walkways, repair to roofs and re-roofing; (xii)
amortization (including interest on the unamortized cost) over the useful life
of such improvements, of the cost of acquiring or the rental expense of personal
property used in the maintenance, operation and repair of the Project, or any
portion thereof; (xiii) the cost of capital improvements or other costs incurred
in connection with the Project (A) which are intended to effect economies in the
operation or maintenance of the Project, or any portion thereof, or to reduce
current or future Operating Expenses (but only to the extent of such actual cost
savings) or to enhance the safety or security of the Project or its occupants,
(B) that are required to comply with present or mandatory conservation programs,
(C) which are replacements or modifications of nonstructural items located in
the Common Areas required to keep the Common Areas in good order or condition,
or (D) that are required under any governmental law or regulation ((the
permitted capital expenditures pursuant to the foregoing items (A) through (D)
being, collectively, the "Permitted Capital Expenditures"); provided, however,
that any capital expenditure shall be amortized (including interest on the
amortized cost) over the useful life of such improvements; and (xiv) costs,
fees, charges or assessments imposed by, or resulting from any mandate imposed
on Landlord by, any federal, state or local government for fire and police
protection, trash removal, community services, or other services which do not
constitute "Tax Expenses" as that term is defined in Section 4.2.5, below,
(xv) cost of tenant relation

 

 

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programs reasonably established by Landlord, and (xvi) payments under any
easement, license, operating agreement, declaration, restrictive covenant, or
instrument pertaining to the sharing of costs by the Building, including,
without limitation, any covenants, conditions and restrictions affecting the
property, and reciprocal easement agreements affecting the property, any parking
licenses, and any agreements with transit agencies affecting the Property
(collectively, "Underlying Documents").  Notwithstanding the foregoing, for
purposes of this Lease, Operating Expenses shall not, however, include:

(a)costs, including legal fees, space planners' fees, advertising and
promotional expenses (except as otherwise set forth above), and brokerage fees
incurred in connection with the original construction or development, or
original or future leasing of the Project, and costs, including permit, license
and inspection costs, incurred with respect to the installation of tenant
improvements made for new tenants initially occupying space in the Project after
the Lease Commencement Date or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant space for tenants or other occupants
of the Project (excluding, however, such costs relating to any Common Areas of
the Project or parking facilities);

(b)except as set forth in items (xii), (xiii), and (xiv) above, depreciation,
amortization, interest and principal payments on mortgages and other debt costs,
if any, penalties and interest;

(c)costs for which the Landlord is reimbursed or is entitled to be reimbursed by
any tenant or occupant of the Project or by insurance by its carrier or any
tenant's carrier or by anyone else, and electric power costs for which any
tenant directly contracts with the local public service company;

(d)any bad debt loss, rent loss, or reserves for bad debts or rent loss;

(e)costs associated with the operation of the business of the partnership or
entity which constitutes the Landlord, as the same are distinguished from the
costs of operation of the Project (which shall specifically include, but not be
limited to, accounting costs associated with the operation of the
Project).  Costs associated with the operation of the business of the
partnership or entity which constitutes the Landlord include costs of
partnership accounting and legal matters, costs of defending any lawsuits with
any mortgagee (except as the actions of the Tenant may be in issue), costs of
selling, syndicating, financing, mortgaging or hypothecating any of the
Landlord's interest in the Project, and costs incurred in connection with any
disputes between Landlord and its employees, between Landlord and Project
management, or between Landlord and other tenants or occupants;

(f)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-a-vis
time spent on matters unrelated to operating and managing the Project; provided,
that in no event shall Operating Expenses for purposes of this Lease include
wages and/or benefits attributable to personnel above the level of Project
manager;

(g)amount paid as ground rental for the Project by the Landlord;

(h)overhead and profit increment paid to the Landlord or to subsidiaries or
affiliates of the Landlord for services in the Project to the extent the same
exceeds the costs of such services rendered by qualified, first-class
unaffiliated third parties on a competitive basis;

(i)any compensation paid to clerks, attendants or other persons in commercial
concessions operated by the Landlord, provided that any compensation paid to any
concierge at the Project shall be includable as an Operating Expense;

(j)rentals and other related expenses incurred in leasing air conditioning
systems, elevators or other equipment which if purchased the cost of which would
be excluded from Operating Expenses as a capital cost, except equipment not
affixed to the Project which is used in providing engineering, janitorial or
similar services and, further excepting from this exclusion such equipment
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(k)all items and services for which Tenant or any other tenant in the Project
reimburses Landlord or which Landlord provides selectively to one or more
tenants (other than Tenant) without reimbursement;

(l)any costs expressly excluded from Operating Expenses elsewhere in this Lease;

(m)rent for any office space occupied by Project management personnel to the
extent the size or rental rate of such office space exceeds the size or fair
market rental value of office space occupied by management personnel of the
comparable buildings in the vicinity of the Building, with adjustment where
appropriate for the size of the applicable project;

(n)costs arising from the gross negligence or willful misconduct of Landlord in
connection with this Lease;

(o)costs incurred to comply with laws relating to the removal or remediation of
hazardous material (as defined under Applicable Law) from the Building or
Project, and any costs of fines or penalties relating to the presence of
hazardous material in, on, under or about the Building or Project, in each case
to the extent not brought into the Building or Premises by Tenant or any Tenant
Parties;

(p)excepting any Permitted Capital Expenditures, any costs of other capital
improvements or expenditures;

(q)Landlord’s political or charitable contributions;

(r)capital costs occasioned by casualties or condemnation;

(s)legal fees, accountants’ fees (other than normal bookkeeping expenses) and
other expenses incurred in connection with disputes of tenants or other
occupants of the Project or associated with the enforcement of the terms of any
leases with tenants or the defense of Landlord’s title to or interest in the
Project or any part thereof;

(t)Costs to repair or replace the Project, including, costs incurred due to a
violation by Landlord or any other tenant of the Project of the terms and
conditions of a lease;

(u)costs to correct any construction defect in the Project or to remedy any
violation of a covenant, condition, restriction, underwriter's requirement or
law that exists as of the Lease Commencement Date;

(v)tax penalties as a result of Landlord's refusal or inability to pay taxes;

(w)costs relating to the repair of structural portions of the roof, foundations,
floors and exterior walls and all structural seismic upgrading costs;

(x)fees payable by Landlord for management of the Project in excess of percent
(3%) (the “ Management Fee Cap” ) of Landlord’ s actual rental revenues.

4.2.5Taxes.

4.2.5.1"Tax Expenses" shall mean all federal, state, county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real estate taxes, general and special assessments, transit
taxes, leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with the Project, or any portion thereof),
which shall be paid or accrued during any Expense Year (without regard to any

 

 

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different fiscal year used by such governmental or municipal authority) because
of or in connection with the ownership, leasing and operation of the Project, or
any portion thereof.

4.2.5.2Tax Expenses shall include, without limitation:  (i) Any tax on the rent,
right to rent or other income from the Project, or any portion thereof, or as
against the business of leasing the Project, or any portion thereof; (ii) Any
assessment, tax, fee, levy or charge in addition to, or in substitution,
partially or totally, of any assessment, tax, fee, levy or charge previously
included within the definition of real property tax; (iii) Any assessment, tax,
fee, levy, or charge allocable to or measured by the area of the Premises or the
Rent payable hereunder, including, without limitation, any business or gross
income tax or excise tax with respect to the receipt of such rent, or upon or
with respect to the possession, leasing, operating, management, maintenance,
alteration, repair, use or occupancy by Tenant of the Premises, or any portion
thereof; and (iv) Any assessment, tax, fee, levy or charge, upon this
transaction or any document to which Tenant is a party, creating or transferring
an interest or an estate in the Premises or the improvements thereon.

4.2.5.3Any costs and expenses (including, without limitation, reasonable
attorneys' and consultants' fees) incurred in attempting to protest, reduce or
minimize Tax Expenses shall be included in Tax Expenses in the Expense Year such
expenses are incurred.  Tax refunds shall be credited against Tax Expenses and
refunded to Tenant regardless of when received, based on the Expense Year to
which the refund is applicable, provided that in no event shall the amount to be
refunded to Tenant for any such Expense Year exceed the total amount paid by
Tenant as Additional Rent under this Article 4 for such Expense Year.  If Tax
Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof for any reason, including, without limitation,
error or reassessment by applicable governmental or municipal authorities,
Tenant shall pay Landlord upon demand Tenant's Share of any such increased Tax
Expenses.  Notwithstanding anything to the contrary contained in this
Section 4.2.5, there shall be excluded from Tax Expenses (i) all excess profits
taxes, franchise taxes, gift taxes, capital stock taxes, inheritance and
succession taxes, estate taxes, federal and state income taxes, and other taxes
to the extent applicable to Landlord's net income (as opposed to rents, receipts
or income attributable to operations at the Project), (ii) any items included as
Operating Expenses, (iii) any items paid by Tenant under Section 4.5 of this
Lease, and (iv) tax penalties incurred as a result of Landlord’s failure to make
payments and/or to file any tax or informational returns when due.

4.2.6"Tenant's Share" shall mean the percentage set forth in Section 6 of the
Summary.  

4.3Allocation of Direct Expenses.The parties acknowledge that the Building is a
part of a multi-building project and that the costs and expenses incurred in
connection with the Project (i.e., the Direct Expenses) should be shared between
the Building and the other buildings in the Project.  Accordingly, as set forth
in Section 4.2 above, Direct Expenses (which consist of Operating Expenses and
Tax Expenses) are determined annually for the Project as a whole, and a portion
of the Direct Expenses, which portion shall be determined by Landlord on an
equitable basis, shall be allocated to the Building (as opposed to other
buildings in the Project) and only on the basis of the portion of any calendar
year during which any portion of the Lease Term falls.  Such portion of Direct
Expenses allocated to the Building shall include all Direct Expenses
attributable solely to the Building and an equitable portion of the Direct
Expenses attributable to the Project as a whole, and shall not include Direct
Expenses attributable solely to other buildings in the Project.

4.4Calculation and Payment of Additional Rent.  Tenant shall pay to Landlord, in
the manner set forth in Section 4.4.1, below, and as Additional Rent, Tenant's
Share of Direct Expenses for each Expense Year.

4.4.1Statement of Actual Direct Expenses and Payment by Tenant.  Landlord shall
endeavor to give to Tenant following the end of each Expense Year, a statement
(the "Statement") which shall state the Direct Expenses incurred or accrued for
such preceding Expense Year, and which shall indicate the amount of Tenant's
Share of Direct Expenses.  Upon receipt of the Statement for each Expense Year
commencing or ending during the Lease Term, Tenant shall pay, with its next
installment of Base Rent due, the full amount of Tenant's Share of Direct
Expenses for such Expense Year, less the amounts, if any, paid during such
Expense Year as "Estimated Direct Expenses," as that term is defined in
Section 4.4.2, below, and if Tenant paid more as Estimated Direct Expenses than
the actual Tenant's Share of Direct Expenses, Tenant shall receive a credit in
the amount of Tenant's overpayment against Rent next due under this Lease.  The
failure of Landlord to timely furnish the Statement for any Expense Year shall
not prejudice Landlord or Tenant from enforcing its rights under this Article
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expired and Tenant has vacated the Premises, when the final determination is
made of Tenant's Share of Direct Expenses for the Expense Year in which this
Lease terminates, Tenant shall promptly (and in any event, within ten (10)
Business Days of such determination) pay to Landlord such amount, and if Tenant
paid more as Estimated Direct Expenses than the actual Tenant's Share of Direct
Expenses, Landlord shall, within thirty (30) days, deliver a check payable to
Tenant in the amount of the overpayment.  The provisions of this Section 4.4.1
shall survive the expiration or earlier termination of the Lease Term.

4.4.2Statement of Estimated Direct Expenses.  In addition, Landlord shall
endeavor to give Tenant a yearly expense estimate statement (the "Estimate
Statement") which shall set forth Landlord's reasonable estimate (the
"Estimate") of what the total amount of Direct Expenses for the then-current
Expense Year shall be and the estimated Tenant's Share of Direct Expenses (the
"Estimated Direct Expenses").  The failure of Landlord to timely furnish the
Estimate Statement for any Expense Year shall not preclude Landlord from
enforcing its rights to collect any Estimated Direct Expenses under this Article
4, nor shall Landlord be prohibited from revising any Estimate Statement or
Estimated Direct Expenses theretofore delivered to the extent
necessary.  Thereafter, Tenant shall pay, with its next installment of Base Rent
due, a fraction of the Estimated Direct Expenses for the then-current Expense
Year (reduced by any amounts paid pursuant to the last sentence of this
Section 4.4.2).  Such fraction shall have as its numerator the number of months
which have elapsed in such current Expense Year, including the month of such
payment, and twelve (12) as its denominator.  Until a new Estimate Statement is
furnished (which Landlord shall have the right to deliver to Tenant at any
time), Tenant shall pay monthly, with the monthly Base Rent installments, an
amount equal to one-twelfth (1/12) of the total Estimated Direct Expenses set
forth in the previous Estimate Statement delivered by Landlord to Tenant.  

4.5Taxes and Other Charges for Which Tenant Is Directly Responsible.Tenant shall
be liable for and shall pay ten (10) days before delinquency, taxes levied
against Tenant's equipment, furniture, fixtures and any other personal property
located in or about the Premises.  If any such taxes on Tenant's equipment,
furniture, fixtures and any other personal property are levied against Landlord
or Landlord's property or if the assessed value of Landlord's property is
increased by the inclusion therein of a value placed upon such equipment,
furniture, fixtures or any other personal property and if Landlord pays the
taxes based upon such increased assessment, which Landlord shall have the right
to do regardless of the validity thereof but only under proper protest if
requested by Tenant, Tenant shall upon demand repay to Landlord the taxes so
levied against Landlord or the proportion of such taxes resulting from such
increase in the assessment, as the case may be.

4.6Landlord's Books and Records.  Within one hundred twenty (120) days after
receipt by Tenant of a Statement, if Tenant disputes the amount of Additional
Rent set forth in the Statement, a member of Tenant's finance department, or an
independent certified public accountant (which accountant is a member of a
nationally recognized accounting firm and is not working on a contingency fee
basis) ("Tenant's Accountant"), designated and paid for by Tenant, may, after
reasonable notice to Landlord and at reasonable times, inspect Landlord's
records with respect to the Statement at Landlord's offices, provided that there
is no existing Event of Default and Tenant has paid all amounts required to be
paid under the applicable Estimate Statement and Statement, as the case may
be.  In connection with such inspection, Tenant and Tenant's agents must agree
in advance to follow Landlord's reasonable rules and procedures regarding
inspections of Landlord's records, and shall execute a commercially reasonable
confidentiality agreement regarding such inspection.  Tenant's failure to
dispute the amount of Additional Rent set forth in any Statement within one
hundred twenty (120) days of Tenant's receipt of such Statement shall be deemed
to be Tenant's approval of such Statement and Tenant, thereafter, waives the
right or ability to dispute the amounts set forth in such Statement.  If after
such inspection, Tenant still disputes such Additional Rent, a determination as
to the proper amount shall be made, at Tenant's expense, by an independent
certified public accountant (the "Accountant") selected by Landlord and subject
to Tenant's reasonable approval; provided that if such Accountant determines
that Direct Expenses or other component of Additional Rent were overstated by
more than four percent (4%), then the cost of the Accountant and the cost of
such determination shall be paid for by Landlord, and Landlord shall reimburse
to Tenant the cost of the Tenant's Accountant (provided that such cost shall be
a reasonable market cost for such services) and the full amount of Tenant's
overpayment of Additional Rent. Tenant hereby acknowledges that Tenant's sole
right to inspect Landlord's books and records and to contest the amount of
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forth in this Section 4.6, and Tenant hereby waives any and all other rights
pursuant to applicable law to inspect such books and records and/or to contest
the amount of Direct Expenses payable by Tenant.

5.USE OF PREMISES

5.1Permitted Use.  Tenant shall use the Premises solely for the Permitted Use
set forth in Section 7 of the Summary and Tenant shall not use or permit the
Premises or the Project to be used for any other purpose or purposes whatsoever
without the prior written consent of Landlord, which may be withheld in
Landlord's sole discretion.  

5.2Prohibited Uses.  Tenant further covenants and agrees that Tenant shall not
use, or suffer or permit any person or persons to use, the Premises or any part
thereof for any use or purpose in violation of the laws of the United States of
America, the State of California, or the ordinances, regulations or requirements
of the local municipal or county governing body or other lawful authorities
having jurisdiction over the Project) including, without limitation, any such
laws, ordinances, regulations or requirements relating to hazardous materials or
substances, as those terms are defined by applicable laws now or hereafter in
effect, or any Underlying Documents.  Landlord shall have the right to impose
reasonable and customary rule and regulations regarding the use of the Project,
as reasonably deemed necessary by Landlord with respect to the orderly operation
of the Project, and Tenant shall comply with such reasonable rules and
regulations, provided the same are not applied in a discriminatory
manner.  Tenant shall not do or permit anything to be done in or about the
Premises which will in any way obstruct or interfere with the rights of other
tenants or occupants of the Building, or injure or annoy them or use or allow
the Premises to be used for any improper, unlawful or objectionable purpose, nor
shall Tenant cause, maintain or permit any nuisance in, on or about the
Premises.  Tenant shall comply with, and Tenant's rights and obligations under
the Lease and Tenant's use of the Premises shall be subject and subordinate to,
all recorded easements, covenants, conditions, and restrictions now or hereafter
affecting the Project, so long as the same do not unreasonably interfere with
Tenant’s use of the Premises for the Permitted Use or parking rights or
materially increase Tenant’s obligations or decrease Tenant’s rights under this
Lease.    

5.3Hazardous Materials.  

5.3.1Tenant's Obligations.

5.3.1.1Prohibitions.  As a material inducement to Landlord to enter into this
Lease with Tenant, Tenant has fully and accurately completed Landlord’s
Pre-Leasing Environmental Exposure Questionnaire (the “Environmental
Questionnaire”), which is attached as Exhibit E.  Tenant agrees that except for
those chemicals or materials, and their respective quantities, specifically
listed on the Environmental Questionnaire, neither Tenant nor Tenant’s
employees, contractors and subcontractors of any tier, entities with a
contractual relationship with Tenant (other than Landlord), or any entity acting
as an agent or sub-agent of Tenant (collectively, "Tenant's Agents") will
produce, use, store or generate any "Hazardous Materials," as that term is
defined below, on, under or about the Premises, nor cause or permit any
Hazardous Material to be brought upon, placed, stored, manufactured, generated,
blended, handled, recycled, used or "Released," as that term is defined below,
on, in, under or about the Premises.  If any information provided to Landlord by
Tenant on the Environmental Questionnaire, or otherwise relating to information
concerning Hazardous Materials is knowingly false, incomplete, or misleading in
any material respect, the same shall be deemed a default by Tenant under this
Lease.  Tenant shall deliver to Landlord an updated Environmental Questionnaire
at least once a year.  Landlord’s prior written consent shall be required to any
Hazardous Materials use for the Premises not described on the initial
Environmental Questionnaire, and, to the extent such use would, in Landlord's
reasonable judgment, cause a material increase in the risk of liability compared
to the uses previously allowed in the Premises, such additional use shall be
subject to Landlord's prior consent, which may be withheld in Landlord’s
reasonable discretion.  Tenant shall not install or permit any underground
storage tank on the Premises.  For purposes of this Lease, "Hazardous Materials"
means all flammable explosives, petroleum and petroleum products, waste oil,
radon, radioactive materials, toxic pollutants, asbestos, polychlorinated
biphenyls (“PCBs”), medical waste, chemicals known to cause cancer or
reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic
substances or related materials, including without limitation any chemical,
element, compound, mixture, solution, substance, object, waste or any
combination thereof, which is or may be hazardous to human health, safety or to
the environment due to its radioactivity, ignitability, corrosiveness,
reactivity, explosiveness, toxicity, carcinogenicity, infectiousness or other
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or defined as, regulated as or included in, the definition of “hazardous
substances,” “hazardous wastes,” “hazardous materials,” or “toxic substances”
under any Environmental Laws.  The term “Hazardous Materials” for purposes of
this Lease shall also include any mold, fungus or spores, whether or not the
same is defined, listed, or otherwise classified as a “hazardous material” under
any Environmental Laws, if such mold, fungus or spores may pose a risk to human
health or the environment or negatively impact the value of the Premises.  For
purposes of this Lease, "Release" or "Released" or "Releases" shall mean any
release, deposit, discharge, emission, leaking, spilling, seeping, migrating,
injecting, pumping, pouring, emptying, escaping, dumping, disposing, or other
movement of Hazardous Materials from the Premises into the environment.

5.3.1.2Notices to Landlord.  Tenant shall notify Landlord in writing as soon as
possible but in no event later than five (5) days after becoming aware of
(i) the occurrence of any actual, alleged or threatened Release of any Hazardous
Material in, on, under, from, about or in the vicinity of the Premises (whether
past or present), regardless of the source or quantity of any such Release, or
(ii) any regulatory actions, inquiries, inspections, investigations, directives,
or any cleanup, compliance, enforcement or abatement proceedings (including any
threatened or contemplated investigations or proceedings) relating to or
potentially affecting the Premises, or (iii) any claims by any person or entity
relating to any Hazardous Materials in, on, under, from, about or in the
vicinity of the Premises, whether relating to damage, contribution, cost
recovery, compensation, loss or injury.  Collectively, the matters set forth in
clauses (i), (ii) and (iii) above are hereinafter referred to as “Hazardous
Materials Claims”.  Tenant shall promptly forward to Landlord copies of all
orders, notices, permits, applications and other communications and reports in
connection with any Hazardous Materials Claims.  Additionally, Tenant shall
promptly advise Landlord in writing of Tenant’s discovery of any occurrence or
condition on, in, under or about the Premises that could subject Tenant or
Landlord to any liability, or restrictions on ownership, occupancy,
transferability or use of the Premises under any "Environmental Laws," as that
term is defined below.  Tenant shall not enter into any legal proceeding or
other action, settlement, consent decree or other compromise with respect to any
Hazardous Materials Claims without first notifying Landlord of Tenant’s
intention to do so and affording Landlord the opportunity to join and
participate, as a party if Landlord so elects, in such proceedings and in no
event shall Tenant enter into any agreements which are binding on Landlord or
the Premises without Landlord’s prior written consent.  Landlord shall have the
right to appear at and participate in, any and all legal or other administrative
proceedings concerning any Hazardous Materials Claim.  For purposes of this
Lease, “Environmental Laws” means all applicable present and future laws
relating to the protection of human health, safety, wildlife or the environment,
including, without limitation, (i) all requirements pertaining to reporting,
licensing, permitting, investigation and/or remediation of emissions,
discharges, Releases, or threatened Releases of Hazardous Materials, whether
solid, liquid, or gaseous in nature, into the air, surface water, groundwater,
or land, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, or handling of Hazardous Materials; and
(ii) all requirements pertaining to the health and safety of employees or the
public.  Environmental Laws include, but are not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 USC § 9601,
et seq., the Hazardous Materials Transportation Authorization Act of 1994,
49 USC § 5101, et seq., the Solid Waste Disposal Act, as amended by the Resource
Conservation and Recovery Act of 1976, and Hazardous and Solid Waste Amendments
of 1984, 42 USC § 6901, et seq., the Federal Water Pollution Control Act, as
amended by the Clean Water Act of 1977, 33 USC § 1251, et seq., the Clean Air
Act of 1966, 42 USC § 7401, et seq., the Toxic Substances Control Act of 1976,
15 USC § 2601, et seq., the Safe Drinking Water Act of 1974, 42 USC §§ 300f
through 300j, the Occupational Safety and Health Act of 1970, as amended, 29 USC
§ 651 et seq., the Oil Pollution Act of 1990, 33 USC § 2701 et seq., the
Emergency Planning and Community Right-To-Know Act of 1986, 42 USC § 11001 et
seq., the National Environmental Policy Act of 1969, 42 USC § 4321 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act of 1947, 7 USC § 136 et seq.,
California Carpenter-Presley-Tanner Hazardous Substance Account Act, California
Health & Safety Code §§ 25300 et seq., Hazardous Materials Release Response
Plans and Inventory Act, California Health & Safety Code, §§ 25500 et seq.,
Underground Storage of Hazardous Substances provisions, California Health &
Safety Code, §§ 25280 et seq., California Hazardous Waste Control Law,
California Health & Safety Code, §§ 25100 et seq., and any other state or local
law counterparts, as amended, as such applicable laws, are in effect as of the
Lease Commencement Date, or thereafter adopted, published, or promulgated.

5.3.1.3Releases of Hazardous Materials.  If any Release of any of Tenant's
Hazardous Material in, on, under, from or about the Premises shall occur at any
time during the Lease and/or if any other Hazardous Material condition exists at
the Premises that requires response actions of any kind, in addition to
notifying Landlord as specified above, Tenant, at its own sole cost and expense,
shall (i) promptly comply with any and all reporting requirements imposed
pursuant to any and all Environmental Laws, (ii) provide a written certification
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Landlord indicating that Tenant has complied with all applicable reporting
requirements, (iii) take any and all necessary investigation, corrective and
remedial action in accordance with any and all applicable Environmental Laws,
utilizing an environmental consultant approved by Landlord, all in accordance
with the provisions and requirements of this Section 5.3, including, without
limitation, Section 5.3.4, and (iv) take any such additional investigative,
remedial and corrective actions as Landlord shall in its reasonable discretion
deem necessary such that the Premises are remediated to the condition existing
prior to such Release.  

5.3.1.4Indemnification.  

5.3.1.4.1In General.  Without limiting in any way Tenant’s obligations under any
other provision of this Lease, Tenant shall be solely responsible for and shall
protect, defend, indemnify and hold the Landlord Parties harmless from and
against any and all claims, judgments, losses, damages, costs, expenses,
penalties, enforcement actions, taxes, fines, remedial actions, liabilities
(including, without limitation, actual attorneys’ fees, litigation, arbitration
and administrative proceeding costs, expert and consultant fees and laboratory
costs) and sums paid in settlement of claims, which arise during or after the
Lease Term, whether foreseeable or unforeseeable, that arise during or after the
Lease Term in whole or in part, foreseeable or unforeseeable, directly or
indirectly to the extent arising out of or attributable to the presence, use,
generation, manufacture, treatment, handling, refining, production, processing,
storage, Release or presence of Hazardous Materials in, on, under or about the
Premises by Tenant or Tenant's Agents.

5.3.1.4.2Limitations.  Notwithstanding anything in Section 5.3.1.4, above, to
the contrary, Tenant's indemnity of Landlord as set forth in Section 5.3.1.4,
above, shall not be applicable to claims based upon Hazardous Materials which
may exist in, on or about the Premises as of the date of this Lease ("Existing
Hazardous Materials"), except to the extent that Tenant's construction
activities and/or Tenant's other acts or omissions (including Tenant's failure
to remove, remediate or otherwise treat or “Clean-up,” as that term is defined
in Section 5.3.4, below, the subject Existing Hazardous Materials during the
tenancy of the Premises) caused or exacerbated the subject claim.  

5.3.1.4.3Landlord Indemnity.  Under no circumstance shall Tenant be liable for,
and Landlord shall indemnify, defend, protect, and hold harmless Tenant and
Tenant’s Agents from and against any and all claims, judgments, losses, damages,
costs, expenses, penalties, enforcement actions, taxes, fines, remedial actions,
liabilities (including, without limitation, actual attorneys’ fees, litigation,
arbitration and administrative proceeding costs, expert and consultant fees and
laboratory costs) and sums paid in settlement of claims, arising out of any
Hazardous Materials that exist in, on or about the Project as of the date Tenant
takes possession of the Premises, or Hazardous Material Released by Landlord or
any Landlord Parties.  Landlord will provide Tenant with any Hazardous Material
reports relating to the Building or Project that Landlord has in its possession,
or control.  The provision of such reports shall be for informational purposes
only, and Landlord does not make any representation or warranty as to the
correctness or completeness of any such reports.  Landlord represents and
warrants that, to its actual knowledge, it has not received any notice of
violation of Environmental Laws from the applicable governmental authority
regarding any use, storage, treatment or transportation of Hazardous Materials
in, on or about the Project, Building or Premises prior to the date of this
Lease.  No duty of inquiry or investigation on the part of Landlord will be
required or implied by the making of any representation or warranty which is so
limited to matters within Landlord's actual knowledge.  

5.3.1.5Compliance with Environmental Laws.  Without limiting the generality of
Tenant’s obligation to comply with applicable laws as otherwise provided in this
Lease, Tenant shall, at its sole cost and expense, comply with all Environmental
Laws related to the use of Hazardous Materials by Tenant and Tenant’s
Agents.  Tenant shall obtain and maintain any and all necessary permits,
licenses, certifications and approvals appropriate or required for the use,
handling, storage, and disposal of any Hazardous Materials used, stored,
generated, transported, handled, blended, or recycled by Tenant on the
Premises.  Landlord shall have a continuing right, without obligation, to
require Tenant to obtain, and to review and inspect any and all such permits,
licenses, certifications and approvals.  Upon request of Landlord, but not more
than once per year, Tenant shall deliver to Landlord a narrative description
explaining the nature and scope of Tenant’s activities involving Hazardous
Materials and providing reasonable documentation to Landlord demonstrating
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5.3.2Assurance of Performance.

5.3.2.1Environmental Assessments In General.  Landlord may, but shall not be
required to, engage from time to time such contractors as Landlord determines to
be appropriate to perform environmental assessments of a scope reasonably
determined by Landlord (an "Environmental Assessment") to ensure Tenant’s
compliance with the requirements of this Lease with respect to Hazardous
Materials.

5.3.2.2Costs of Environmental Assessments.  All costs and expenses incurred by
Landlord in connection with any such Environmental Assessment initially shall be
paid by Landlord; provided that if any such Environmental Assessment shows that
Tenant has failed to comply with the provisions of this Section 5.3, then all of
the costs and expenses of such Environmental Assessment shall be reimbursed by
Tenant as Additional Rent within ten (10) days after receipt of written demand
therefor.

5.3.3Tenant’s Obligations upon Surrender.  At the expiration or earlier
termination of the Lease Term, Tenant, at Tenant’s sole cost and expense,
shall:  (i) cause an Environmental Assessment of the Premises to be conducted in
accordance with Section 15.3; (ii) cause all Hazardous Materials Released onto
the Premises by Tenant to be removed from the Premises and disposed of in
accordance with all Environmental Laws; and (iii) cause to be removed all
containers installed or used by Tenant or Tenant’s Agents to store any Hazardous
Materials on the Premises, and cause to be repaired any damage to the Premises
caused by such removal.

5.3.4Clean-up.

5.3.4.1Environmental Reports; Clean-Up.  If any written report, including any
report containing results of any Environmental Assessment (an “Environmental
Report”) shall indicate (i) the presence of any Hazardous Materials at the
Premises as to which Tenant has a removal or remediation obligation under this
Section 5.3, and (ii) that as a result of same, the investigation,
characterization, monitoring, assessment, repair, closure, remediation, removal,
or other clean-up (the “Clean-up”) of any Hazardous Materials is required by any
state or local governmental authority, Tenant shall promptly prepare and submit
to Landlord within thirty (30) days after receipt of the Environmental Report a
comprehensive plan, subject to Landlord’s written approval, specifying the
actions to be taken by Tenant to perform the Clean-up so that the Premises are
restored to the conditions required by this Lease.  Upon Landlord’s approval of
the Clean-up plan, Tenant shall, at Tenant’s sole cost and expense, without
limitation on any rights and remedies of Landlord under this Lease, promptly
implement such plan with a consultant reasonably acceptable to Landlord and
proceed to Clean-Up Hazardous Materials in accordance with all applicable laws
and as required by such plan and this Lease.  If, within thirty (30) days after
receiving a copy of such Environmental Report, Tenant fails either (a) to
complete such Clean-up, or (b) with respect to any Clean-up that cannot be
completed within such thirty-day period, fails to proceed with diligence to
prepare the Clean-up plan and complete the Clean-up as promptly as practicable,
then Landlord shall have the right, but not the obligation, and without waiving
any other rights under this Lease, to carry out any Clean-up recommended by the
Environmental Report or required by any governmental authority having
jurisdiction over the Premises, and recover all of the reasonable costs and
expenses thereof from Tenant as Additional Rent, payable within ten (10) days
after receipt of written demand therefor.

5.3.4.2No Rent Abatement.  Tenant shall continue to pay all Rent due or accruing
under this Lease during any Clean-up, and shall not be entitled to any
reduction, offset or deferral of any Base Rent or Additional Rent due or
accruing under this Lease during any such Clean-up.  

5.3.4.3Surrender of Premises.  Tenant shall complete any Clean-up prior to
surrender of the Premises upon the expiration or earlier termination of this
Lease.  Tenant shall obtain and deliver to Landlord a letter or other written
determination from the overseeing governmental authority confirming that the
Clean-up has been completed in accordance with all requirements of such
governmental authority and that no further response action of any kind is
required for the unrestricted use of the Premises (“Closure Letter”).  Upon the
expiration or earlier termination of this Lease, Tenant shall also be obligated
to close all permits obtained in connection with Hazardous Materials in
accordance with applicable laws.

5.3.4.4Failure to Timely Clean-Up.  Should any Clean-up for which Tenant is
responsible not be completed, or should Tenant not receive the Closure Letter
and any governmental approvals required under Environmental Laws in conjunction
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of this Lease, then Tenant shall be liable to Landlord as a holdover tenant (as
more particularly provided in Article 16) until Tenant has fully complied with
its obligations under this Section 5.3.

5.3.5Confidentiality.  Unless compelled to do so by applicable law, Tenant
agrees that Tenant shall not disclose, discuss, disseminate or copy any
information, data, findings, communications, conclusions and reports regarding
the environmental condition of the Premises to any Person (other than Tenant’s
consultants, attorneys, property managers and employees that have a need to know
such information), including any governmental authority, without the prior
written consent of Landlord.  In the event Tenant reasonably believes that
disclosure is compelled by applicable law, it shall provide Landlord ten
(10) days’ advance notice of disclosure of confidential information so that
Landlord may attempt to obtain a protective order.  Tenant may additionally
release such information to bona fide prospective purchasers or lenders, subject
to any such parties’ written agreement to be bound by the terms of this Section
5.3.

5.3.6Copies of Environmental Reports.  Within thirty (30) days of receipt
thereof, Tenant shall provide Landlord with a copy of any and all environmental
assessments, audits, studies and reports regarding Tenant’s activities with
respect to the Premises, or ground water beneath the Land, or the environmental
condition or Clean-up thereof.  Tenant shall be obligated to provide Landlord
with a copy of such materials without regard to whether such materials are
generated by Tenant or prepared for Tenant, or how Tenant comes into possession
of such materials; provided that nothing herein shall be construed as obligating
Tenant to provide to Landlord documents or communications protected by the
attorney-client privilege, or the attorney-work product doctrine.

5.3.7Intentionally Omitted.  

5.3.8Signs, Response Plans, Etc.  Tenant shall be responsible for posting on the
Premises any signs required under applicable Environmental Laws.  Tenant shall
also complete and file any business response plans or inventories required by
any applicable laws.  Tenant shall concurrently file a copy of any such business
response plan or inventory with Landlord.

5.3.9Survival.  Each covenant, agreement, representation, warranty and
indemnification made by Tenant set forth in this Section 5.3 shall survive the
expiration or earlier termination of this Lease and shall remain effective until
all of Tenant’s obligations under this Section 5.3 have been completely
performed and satisfied.

6.SERVICES AND UTILITIES

6.1In General.  Tenant will be responsible, at its sole cost and expense, for
the furnishing of all services and utilities to the Premises, including, but not
limited to heating, ventilation and air‑conditioning, electricity, water,
telephone, janitorial and interior Building security services.  To the extent
that any utilities (including without limitation, electricity, gas, sewer and
water) to the Building are not separately metered to the Premises, then Tenant
shall pay to Landlord, within thirty (30) days after billing, an equitable
portion of the Building utility costs, based on Tenant's proportionate use
thereof.  

6.1.1All utilities (including without limitation, electricity, gas, sewer and
water) to the Building which are separately metered at the Premises and shall be
paid directly by Tenant to the applicable utility provider, and the same shall
not be included as Operating Expenses.  

6.1.2Landlord shall not provide janitorial services for the Premises.  Tenant
shall be solely responsible for performing all janitorial services and other
cleaning of the Premises, all in compliance with applicable laws.  The
janitorial and cleaning of the Premises shall be adequate to maintain the
Premises in a manner consistent with First Class Life Sciences Projects.  

Tenant shall cooperate fully with Landlord at all times and abide by all
regulations and requirements that Landlord may reasonably prescribe for the
proper functioning and protection of the HVAC, electrical, mechanical and
plumbing systems.  Provided that Landlord agrees to provide and maintain and
keep in continuous service utility connections to the Premises, including
electricity, water and sewage connections, Landlord shall have no obligation

 

 

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to provide any services or utilities to the Building, including, but not limited
to heating, ventilation and air‑conditioning, electricity, water, telephone,
janitorial and interior Building security services.  

6.2Interruption of Use.  Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent or otherwise, for failure to furnish or delay in
furnishing any service (including telephone and telecommunication services), or
for any diminution in the quality or quantity thereof, when such failure or
delay or diminution is occasioned, in whole or in part, by breakage, repairs,
replacements, or improvements, by any strike, lockout or other labor trouble, by
inability to secure electricity, gas, water, or other fuel at the Building or
Project after reasonable effort to do so, by any riot or other dangerous
condition, emergency, accident or casualty, by act or default of Tenant or other
parties, or by any other cause; and such failures or delays or diminution shall
never be deemed to constitute an eviction or disturbance of Tenant's use and
possession of the Premises or relieve Tenant from paying Rent or performing any
of its obligations under this Lease, except as expressly set forth in Section
6.3 below.  Furthermore, Landlord shall not be liable under any circumstances
for a loss of, or injury to, property or for injury to, or interference with,
Tenant's business, including, without limitation, loss of profits, however
occurring, through or in connection with or incidental to a failure to furnish
any of the services or utilities as set forth in this Article 6.

6.3Emergency Generator.  Landlord and Tenant hereby acknowledge that there is an
existing generator currently serving the Premises ("Emergency Generator"), and
Tenant shall have the right to connect to the Emergency Generator for up to
Tenant's Share of the electrical capacity provided by such Emergency
Generator.  Tenant's use of the Emergency Generator shall be at Tenant's sole
risk, and Tenant acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty regarding the Emergency
Generator.  Except to the extent caused by the gross negligence or willful
misconduct of Landlord, or any Landlord Parties, Tenant hereby waives any claims
against Landlord or any Landlord Parties resulting from Tenant's use of the
Emergency Generator, or any failure of the Emergency Generator to operate as
designed, and agrees that Landlord shall not be liable for any damages resulting
from any failure in operation of the Emergency Generator, including, without
limitation any injury or damage to, or interference with, Tenant's business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, or loss to
equipment, inventory, scientific research, scientific experiments, laboratory
animals, products, specimens, samples, and/or scientific, business, accounting
and other records of every kind and description kept at the Premises and any and
all income derived or derivable therefrom.  Tenant acknowledges that Operating
Expenses shall include Landlord's costs incurred in maintaining and operating
the Emergency Generator (including all permit costs and fees), but shall not
include any Hazardous Materials remediation costs incurred in connection with
the Generator.

7.REPAIRS

7.1Tenant Repair Obligations.  Tenant shall, throughout the Term, at its sole
cost and expense, maintain, repair, replace and improve as required, the
Premises , including all improvements, fixtures, furnishings and finishes
therein, in a good standard of maintenance, repair and replacement as required,
and in good and sanitary condition, all in accordance with the standards of
First Class Life Sciences Projects, whether or not such maintenance, repair,
replacement or improvement is required in order to comply with applicable Laws
("Tenant's Repair Obligations"), including, without limitation (i) any specialty
or supplemental Building Systems installed by or for Tenant and (ii) all
electrical facilities and equipment, including lighting fixtures, lamps, fans
and any exhaust equipment and systems, electrical motors and all other
appliances and equipment of every kind and nature located in, upon or about the
Premises; (iii) all communications systems serving the Premises; (iv) all of
Tenant's security systems in or about or serving the Premises; (v) Tenant's
signage; and (vi) interior demising walls and partitions (including painting and
wall coverings), and interior doors and door fixtures.  Tenant shall
additionally be responsible, at Tenant’s sole cost and expense, to furnish all
expendables, including light bulbs, paper goods and soaps, used in the
Premises.  

7.2Landlord's Right to Perform Tenant's Repair Obligations.  Tenant shall notify
Landlord in writing at least thirty (30) days prior to performing any material
Tenant's Repair Obligations, including without limitation, any Tenant's Repair
Obligation which affect the Building Systems or which is reasonably anticipated
to cost more than $100,000.00.  Upon receipt of such notice from Tenant,
Landlord shall have the right to either (i) perform such material Tenant's
Repair Obligation by delivering notice of such election to Tenant within thirty
(30) days following receipt of Tenant's notice, and Tenant shall pay Landlord
the cost thereof (including Landlord's reasonable supervision fee) within thirty
(30) days after receipt of an invoice therefor, or (ii) require Tenant to
perform such Tenant's Repair Obligation at Tenant's sole cost and expense.  If
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Obligation within a reasonable time period, as reasonably determined by
Landlord, then Landlord may, but need not, following delivery of notice to
Tenant of such election, make such Tenant Repair Obligation, and Tenant shall
pay Landlord the cost thereof, (including Landlord's reasonable supervision fee)
within thirty (30) days after receipt of an invoice therefor.

7.3Landlord Repair Obligations.  Landlord shall be responsible, as a part of
Operating Expenses,  for (i) repairs to the exterior walls, foundation and roof
of the Building, the structural portions of the floors of the Building in a
manner commensurate with practices of other institutional owners of First-Class
Life Sciences Projects, except to the extent that such repairs are required due
to the negligence or willful misconduct of Tenant (the "Landlord Repair
Obligation"), and (ii) for the repair and maintenance of the Building systems in
a manner commensurate with practices of other institutional owners of
First-Class Life Sciences Projects, including, without limitation, the
following: (1) glass, windows, window frames, window casements (including the
repairing, resealing, cleaning and replacing of exterior windows) and skylights;
(2) exterior doors, door frames and door closers; (3) sewer lines exterior to
the Premises and exterior Building drainage, (4) electrical service to the
Building (but not within the Premises), Building fire protection systems (but
not interior Premises systems), elevator, Building life safety and security
systems and equipment, existing Building heating, ventilation and
air-conditioning ("HVAC") systems, and all other Building mechanical, electrical
and communications systems and equipment (collectively, the "Building Systems"),
including the non-structural portions of the roof of the Building, including the
roof membrane and coverings; provided, however, that if such repairs are due to
the negligence or willful misconduct of Tenant, Landlord shall nevertheless make
such repairs at Tenant's expense, or, if covered by Landlord's insurance, Tenant
shall only be obligated to pay any deductible in connection therewith.  Tenant
hereby waives any and all rights under and benefits of subsection 1 of Section
1932 and Sections 1941 and 1942 of the California Civil Code or under any
similar law, statute, or ordinance now or hereafter in effect.

8.ADDITIONS AND ALTERATIONS

8.1Landlord's Consent to Alterations.  Tenant may not make any improvements,
alterations, additions or changes to the Premises or any mechanical, plumbing or
HVAC facilities or systems pertaining to the Premises (collectively, the
"Alterations") without first procuring the prior written consent of Landlord to
such Alterations, which consent shall be requested by Tenant not less than
fifteen (15) days prior to the commencement thereof, and which consent shall not
be unreasonably withheld, conditioned or delayed by Landlord, provided it shall
be deemed reasonable for Landlord to withhold its consent to any Alteration
which adversely affects the structural portions or the systems or equipment of
the Building or is visible from the exterior of the Building.  If Landlord
reasonably disapproves of any Alterations, Landlord shall advise Tenant of any
additional changes which may be required to obtain Landlord’s approval. If
Landlord disapproves of any proposed Alterations, Landlord shall respond, in
writing, stating the grounds for such disapproval, within ten (10) business days
after receipt of Tenant’s request for approval of the proposed
Alterations.  Landlord's failure to provide approval or disapproval within said
ten (10) business day period shall not be deemed approval or disapproval.  In
such event, Tenant may deliver a second request for approval at the expiration
of said ten (10) business day period setting forth such failure containing the
following sentence at the top of such notice in bold, capitalized font at least
twelve (12) points in size:  "LANDLORD'S FAILURE TO RESPOND TO THIS NOTICE
WITHIN FIVE (5) BUSINESS DAYS SHALL RESULT IN LANDLORD'S DEEMED APPROVAL OF
TENANT'S ALTERATION" (the "Reminder Notice").  Any such Reminder Notice shall
include a complete copy of Tenant's plans and specifications for such
Alteration.  Landlord’s failure to provide approval or disapproval within five
(5) business days following Landlord's receipt of a Reminder Notice shall
conclusively be deemed approval of Tenant’s Alterations as
presented.  Notwithstanding the foregoing, Tenant shall be permitted to make
Alterations following ten (10) business days' notice to Landlord, but without
Landlord's prior consent, to the extent that such Alterations (i) do not affect
the building systems or equipment, (ii) are not visible from the exterior of the
Building, and (iii) cost less than $100,000.00 for a particular job of
work.  The construction of the initial improvements to the Premises shall be
governed by the terms of the Tenant Work Letter and not the terms of this
Article 8.

8.2Manner of Construction.  Landlord may impose, as a condition of its consent
to any and all Alterations or repairs of the Premises or about the Premises,
such requirements as Landlord in its reasonable discretion may deem desirable,
including, but not limited to, the requirement that upon Landlord's request,
Tenant shall, at Tenant's expense, remove such Alterations upon the expiration
or any early termination of the Lease Term.  Tenant shall construct such
Alterations and perform such repairs in a good and workmanlike manner, in
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any and all applicable federal, state, county or municipal laws, rules and
regulations and pursuant to a valid building permit, issued by the city in which
the Building is located (or other applicable governmental authority).    Tenant
shall not use (and upon notice from Landlord shall cease using) contractors,
services, workmen, labor, materials or equipment that, in Landlord's reasonable
judgment, would disturb labor harmony with the workforce or trades engaged in
performing other work, labor or services in or about the Building or the Common
Areas.  Upon completion of any Alterations (or repairs), Tenant shall deliver to
Landlord final lien waivers from all contractors, subcontractors and materialmen
who performed such work.  In addition to Tenant's obligations under Article 9 of
this Lease, upon completion of any Alterations, Tenant agrees to cause a Notice
of Completion to be recorded in the office of the Recorder of the County of San
Mateo in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute, and Tenant shall deliver to the Project
construction manager a reproducible copy of the "as built" drawings of the
Alterations as well as all permits, approvals and other documents issued by any
governmental agency in connection with the Alterations.

8.3Payment for Improvements.  If Tenant orders any work directly from Landlord
other than the initial Tenant Improvements, Tenant shall pay to Landlord an
amount equal to three percent (3%) of the hard costs of such work to compensate
Landlord for all overhead, general conditions, fees and other costs and expenses
arising from Landlord's involvement with such work.  If Tenant does not order
any work directly from Landlord, Tenant shall reimburse Landlord for Landlord's
reasonable, actual, out-of-pocket costs and expenses actually incurred in
connection with Landlord's review of such work.

8.4Construction Insurance.  In addition to the requirements of Article 10 of
this Lease, in the event that Tenant makes any Alterations, prior to the
commencement of such Alterations, Tenant shall provide Landlord with evidence
that Tenant carries "Builder's All Risk" insurance in an amount reasonably
approved by Landlord covering the construction of such Alterations, and such
other insurance as Landlord may reasonably require, it being understood and
agreed that all of such Alterations shall be insured by Tenant pursuant to
Article 10 of this Lease promptly upon completion thereof.  In addition,
Tenant's contractors and subcontractors shall be required to carry
(i) Commercial General Liability Insurance in an amount reasonably approved by
Landlord, with Landlord, and, at Landlord's option, Landlord's property manager
and project manager, as additional insureds in an amount approved by Landlord,
and otherwise in accordance with the requirements of Article 10 of this Lease,
and (ii) workers compensation insurance with a waiver of subrogation in favor of
Landlord.  In connection with Alterations with a cost in excess of $250,000,
Landlord may, in its discretion, require Tenant to obtain a lien and completion
bond or some alternate form of security satisfactory to Landlord in an amount
sufficient to ensure the lien-free completion of such Alterations and naming
Landlord as a co-obligee.

8.5Landlord's Property.  All Alterations, improvements, fixtures, and/or
appurtenances which may permanently affixed to the Premises, from time to time,
shall be at the sole cost of Tenant and shall be and become the property of
Landlord and remain in place at the Premises following the expiration or earlier
termination of this Lease.  Notwithstanding the foregoing, Landlord may, by
written notice to Tenant given at the time it consents to an Alteration, require
Tenant, at Tenant's expense, to remove any Alterations, improvements, fixtures
and/or appurtenances within the Premises and to repair any damage to the
Premises and Building caused by such removal and return the affected portion of
the Premises to the condition existing prior to the construction of such
Alteration and/or improvement, as reasonably determined by Landlord.  If Tenant
fails to complete such removal and/or to repair any damage caused by the removal
of any Alterations, improvements, fixtures and/or appurtenances in the Premises
and return the affected portion of the Premises to the condition existing prior
to the construction of such Alteration and/or improvement, as reasonably
determined by Landlord, Landlord may do so and may charge the cost thereof to
Tenant.  Tenant hereby protects, defends, indemnifies and holds Landlord
harmless from any liability, cost, obligation, expense or claim of lien in any
manner relating to the installation, placement, removal or financing of any such
Alterations, improvements, fixtures and/or equipment in, on or about the
Premises, except to the extent arising from the negligence or willful misconduct
of Landlord or the Landlord Parties, which obligations of Tenant shall survive
the expiration or earlier termination of this Lease.

9.COVENANT AGAINST LIENSTenant shall keep the Project and Premises free from any
liens or encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys' fees
and costs) arising out of same or in connection therewith.  Tenant shall give
Landlord notice at least twenty (20) days prior to the commencement of any such
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on the Premises (or such additional time as may be necessary under applicable
laws) to afford Landlord the opportunity of posting and recording appropriate
notices of non-responsibility (to the extent applicable pursuant to then
applicable laws).  Tenant shall remove any such lien or encumbrance by bond or
otherwise within twenty (20) business days after notice by Landlord, and if
Tenant shall fail to do so, Landlord may pay the amount necessary to remove such
lien or encumbrance, without being responsible for investigating the validity
thereof.  

10.INSURANCE

10.1Indemnification and Waiver.  Except to the extent arising from the
negligence, willful misconduct or violation of this Lease by Landlord or the
“Landlord Parties” (as that term is defined below), Tenant hereby assumes all
risk of damage to property or injury to persons in, upon or about the Premises
from any cause whatsoever and agrees that Landlord, its partners, subpartners
and their respective officers, agents, servants, employees, lenders, any
property manager and independent contractors (collectively, "Landlord Parties")
shall not be liable for, and are hereby released from any responsibility for,
any damage either to person or property or resulting from the loss of use
thereof, which damage is sustained by Tenant or by other persons claiming
through Tenant.  Tenant shall indemnify, defend, protect, and hold harmless the
Landlord Parties from any and all claims, loss, cost, damage, injury, expense
and liability (including without limitation court costs and reasonable
attorneys' fees) incurred in connection with or arising from any cause in, on or
about the Premises, any acts, omissions or negligence of Tenant or of any person
claiming by, through or under Tenant, or of the contractors, agents, servants,
employees, invitees, guests or licensees of Tenant (the “Tenant Parties”) or any
such person, in, on or about the Project or any breach of the terms of this
Lease, either prior to, during, or after the expiration of the Lease Term,
provided that the terms of the foregoing indemnity shall not apply if and from
the time that a final adjudication has resulted in a finding of negligence or
willful misconduct of Landlord or any Landlord Party.  Should Landlord be named
as a defendant in any suit brought against Tenant in connection with or arising
out of Tenant's occupancy of the Premises, Tenant shall pay to Landlord its
costs and expenses incurred in such suit, including without limitation, its
actual professional fees such as reasonable appraisers', accountants' and
attorneys' fees.  Subject to Tenant's indemnification obligations set forth
above and the waiver of subrogation provided below, Landlord shall indemnify,
defend, protect, and hold harmless Tenant from any and all claims, loss, cost,
damage, injury, expense, and liability (including, without limitation, court
costs and reasonable attorneys' fees) to the extent arising from the gross
negligence or willful misconduct of Landlord or the Landlord Parties in, on or
about the Project either prior to or during the Lease Term, provided that the
terms of the foregoing indemnity shall not apply to the negligence or willful
misconduct of Tenant.  Notwithstanding anything to the contrary set forth in
this Lease, either party's agreement to defend and indemnify the other party as
set forth in this Section 10.1 shall be ineffective to the extent the matters
for which such party agreed to defend and indemnify the other party are covered
by insurance required to be carried by the non-indemnifying party pursuant to
this Lease.  Further, Tenant's agreement to indemnify Landlord and Landlord's
agreement to indemnify Tenant, each pursuant to this Section 10.1 is not
intended and shall not relieve any insurance carrier of its obligations under
policies required to be carried pursuant to the provisions of this Lease, to the
extent such policies cover the matters subject to the parties' respective
indemnification obligations; nor shall they supersede any inconsistent agreement
of the parties set forth in any other provision of this Lease.  The provisions
of this Section 10.1 shall survive the expiration or sooner termination of this
Lease with respect to any claims or liability arising in connection with any
event occurring prior to such expiration or termination.  

10.2Tenant's Compliance With Landlord's Property Insurance.  Landlord shall
insure the Building during the Lease Term against loss or damage under an "all
risk" property insurance policy.  Such coverage shall be in such amounts, from
such companies, and on such other terms and conditions, as Landlord may from
time to time reasonably determine, but commensurate with the practices of other
institutional owners of Comparable Life Science Projects.  Additionally, at the
option of Landlord, such insurance coverage may include the risks of earthquakes
and/or flood damage and additional hazards, a rental loss endorsement and one or
more loss payee endorsements in favor of the holders of any mortgages or deeds
of trust encumbering the interest of Landlord in the Building or the ground or
underlying lessors of the Building, or any portion thereof.  Tenant shall, at
Tenant's expense, comply with all insurance company requirements pertaining to
the use of the Premises.  If Tenant's conduct or use of the Premises causes any
increase in the premium for such insurance policies then Tenant shall reimburse
Landlord for any such increase. Tenant shall also provide Landlord and
Landlord’s insurer(s) with such information regarding the use of the Premises
and any damage to the Premises as they may require in connection with the
placement of insurance for the Premises or the adjusting of any losses to the
Premises.

 

 

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10.3Tenant's Insurance.  Tenant shall maintain the following coverages in the
following amounts.

10.3.1Commercial General Liability Insurance on an occurrence form covering the
insured against claims of bodily injury, personal injury and property damage
(including loss of use thereof) arising out of Tenant's operations, and
contractual liabilities including a contractual coverage, and including products
and completed operations coverage, for limits of liability on a per location
basis of not less than:

Bodily Injury and
Property Damage Liability

$5,000,000 each occurrence

$5,000,000 annual aggregate

Personal Injury Liability

$3,000,000 each occurrence
$3,000,000 annual aggregate

 

10.3.2Property Insurance covering (i) all office furniture, business and trade
fixtures, office equipment, free-standing cabinet work, movable partitions,
merchandise and all other items of Tenant's property on the Premises installed
by, for, or at the expense of Tenant, (ii) the "Tenant Improvements," as that
term is defined in the Tenant Work Letter, and any other improvements which
exist in the Premises as of the Lease Commencement Date (excluding the Base
Building) (the "Original Improvements"), and (iii) all other improvements,
alterations and additions to the Premises.  Such insurance shall be written on
an "all risks" of physical loss or damage basis, for the full replacement cost
value (subject to reasonable deductible amounts) new without deduction for
depreciation of the covered items and in amounts that meet any co-insurance
clauses of the policies of insurance and shall include coverage for damage or
other loss caused by fire or other peril including, but not limited to,
vandalism and malicious mischief, theft, water damage of any type, including
sprinkler leakage, bursting or stoppage of pipes, and explosion.

10.3.3Business Income Interruption for one (1) year plus Extra Expense insurance
in such amounts as will reimburse Tenant for actual direct or indirect loss of
earnings attributable to the risks outlined in Section 10.3.2 above.

10.3.4Worker's Compensation and Employer's Liability or other similar insurance
pursuant to all applicable state and local statutes and regulations.  The policy
shall include a waiver of subrogation in favor of Landlord, its employees,
Lenders and any property manager or partners.

10.4Form of Policies.  The minimum limits of policies of insurance required of
Tenant under this Lease shall in no event limit the liability of Tenant under
this Lease.  Such insurance shall (i) name Landlord, its subsidiaries and
affiliates, its property manager (if any) and any other party the Landlord so
specifies, as an additional insured or loss payee, as applicable, including
Landlord's managing agent, if any; (ii) be issued by an insurance company having
a rating of not less than A:IX in Best's Insurance Guide or which is otherwise
acceptable to Landlord and licensed to do business in the State of California;
(iv) be primary insurance as to all claims thereunder and provide that any
insurance carried by Landlord is excess and is non-contributing with any
insurance required of Tenant; (v) be in form and content reasonably acceptable
to Landlord; and (vi) provide that said insurance shall not be canceled or
coverage changed unless thirty (30) days' prior written notice shall have been
given to Landlord and any mortgagee of Landlord (unless such cancellation is the
result of non-payment of premiums).  Tenant shall deliver said policy or
policies or certificates thereof to Landlord on or before the Lease Commencement
Date and at least ten (10) days before the expiration dates thereof.  In the
event Tenant shall fail to procure such insurance, or to deliver such policies
or certificate, Landlord may, at its option, procure such policies for the
account of Tenant, and the cost thereof shall be paid to Landlord within five
(5) days after delivery to Tenant of bills therefor.

10.5Subrogation.  Landlord and Tenant hereby agree to look solely to, and seek
recovery only from, their respective insurance carriers in the event of a
property or business interruption loss to the extent that such coverage is
agreed to be provided hereunder.  The parties each hereby waive all rights and
claims against each other for such losses, and waive all rights of subrogation
of their respective insurers, provided such waiver of subrogation shall not
affect the right to the insured to recover thereunder.  The parties agree that
their respective insurance policies do now, or shall, contain the waiver of
subrogation.

 

 

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10.6Additional Insurance Obligations.  Tenant shall carry and maintain during
the entire Lease Term, at Tenant's sole cost and expense, increased amounts of
the insurance required to be carried by Tenant pursuant to this Article 10 and
such other reasonable types of insurance coverage and in such reasonable amounts
covering the Premises and Tenant's operations therein, as may be reasonably
requested by Landlord or Landlord's lender, but in no event in excess of the
amounts and types of insurance then being required by landlords of buildings
comparable to and in the vicinity of the Building.

11.DAMAGE AND DESTRUCTION

11.1Repair of Damage to Premises by Landlord.  Tenant shall promptly notify
Landlord of any damage to the Premises resulting from fire or any other
casualty.  If the Premises or any Common Areas serving or providing access to
the Premises shall be damaged by fire or other casualty, Landlord shall promptly
and diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base Building and such Common Areas.  Such
restoration shall be to substantially the same condition of the Base Building
and the Common Areas prior to the casualty, except for modifications required by
zoning and building codes and other laws or by the holder of a mortgage on the
Building or Project or any other modifications to the Common Areas deemed
desirable by Landlord, which are consistent with the character of the Project,
provided that access to the Premises, parking and any common restrooms serving
the Premises shall not be materially impaired.  Upon the occurrence of any
damage to the Premises, upon notice (the "Landlord Repair Notice") to Tenant
from Landlord, Tenant shall assign to Landlord (or to any party designated by
Landlord) all insurance proceeds payable to Tenant under Tenant's insurance
required under Section 10.3.2(ii) and (iii) of this Lease, and Landlord shall
repair any injury or damage to the Tenant Improvements and the Original
Improvements installed in the Premises and shall return such Tenant Improvements
and Original Improvements to their original condition; provided that if the cost
of such repair by Landlord exceeds the amount of insurance proceeds received by
Landlord from Tenant's insurance carrier (including by taking into account any
deductible or self-insured retention), as assigned by Tenant, the cost of such
repairs shall be paid by Tenant to Landlord prior to Landlord's commencement of
repair of the damage.  In the event that Landlord does not deliver the Landlord
Repair Notice within sixty (60) days following the date the casualty becomes
known to Landlord, Tenant shall, at its sole cost and expense (subject to
Tenant's right to terminate pursuant to Section 11.2 below), repair any injury
or damage to the Tenant Improvements and the Original Improvements installed in
the Premises and shall return such Tenant Improvements and Original Improvements
to their original condition.  Whether or not Landlord delivers a Landlord Repair
Notice, prior to the commencement of construction, Tenant shall submit to
Landlord, for Landlord's review and approval (such approval not to be
unreasonably withheld, conditioned or delayed), all plans, specifications and
working drawings relating thereto, and Landlord shall approve (such approval not
to be unreasonably withheld, conditioned or delayed) the contractors to perform
such improvement work.  Tenant shall in addition cooperate with reasonable
requests for information regarding any repairs from Landlord’s insurer(s) by
providing the requested information within ten (10) days after Tenant receives
the request.  Landlord shall not be liable for any inconvenience or annoyance to
Tenant or its visitors, or injury to Tenant's business resulting in any way from
such damage or the repair thereof; provided however, that if such fire or other
casualty shall have damaged the Premises or Common Areas necessary to Tenant's
occupancy, and the Premises are not occupied by Tenant as a result thereof, then
during the time and to the extent the Premises are unfit for occupancy, the Rent
shall be abated in proportion to the ratio that the amount of rentable square
feet of the Premises which is unfit for occupancy for the purposes permitted
under this Lease bears to the total rentable square feet of the Premises.  In
the event that Landlord shall not deliver the Landlord Repair Notice, Tenant's
right to rent abatement pursuant to the preceding sentence shall terminate as of
the date which is reasonably determined by Landlord to be the date Tenant should
have completed repairs to the Premises assuming Tenant used reasonable due
diligence in connection therewith.

11.2Landlord's Option to Repair.  Notwithstanding the terms of Section 11.1 of
this Lease, Landlord may elect not to rebuild and/or restore the Premises,
Building and/or Project, and instead terminate this Lease, by notifying Tenant
in writing of such termination within sixty (60) days after the date of
discovery of the damage, such notice to include a termination date giving Tenant
one hundred twenty (120) days to vacate the Premises, but Landlord may so elect
only if the Building or Project shall be damaged by fire or other casualty or
cause, whether or not the Premises are affected, and one or more of the
following conditions is present: (i) in Landlord's reasonable judgment, repairs
cannot reasonably be completed within one hundred eighty (180) days after the
date of discovery of the damage (when such repairs are made without the payment
of overtime or other premiums); (ii) the damage is not fully covered by
Landlord's insurance policies (or would have been covered if Landlord's
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Lease), other than deductibles; (iii) the damage occurs during the last twelve
(12) months of the Lease Term and will take more than sixty (60) days to
restore; or (iv) any owner of any other portion of the Project, other than
Landlord, does not intend to repair the damage to such portion of the Project;
provided, however, that if Landlord does not elect to terminate this Lease
pursuant to Landlord's termination right as provided above, and the repairs
cannot, in the reasonable opinion of Landlord, be completed within one hundred
eighty (180) days after being commenced, Tenant may elect not later than ninety
(90) days after the date of such damage, to terminate this Lease by written
notice to Landlord effective as of the date specified in the notice, which date
shall not be less than thirty (30) days nor more than sixty (60) days after the
date such notice is given by Tenant.  

11.3Waiver of Statutory Provisions.  The provisions of this Lease, including
this Article 11, constitute an express agreement between Landlord and Tenant
with respect to any and all damage to, or destruction of, all or any part of the
Premises, the Building or the Project, and any statute or regulation of the
State of California, including, without limitation, Sections 1932(2) and 1933(4)
of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.

12.NONWAIVERNo provision of this Lease shall be deemed waived by either party
hereto unless expressly waived in a writing signed thereby.  The waiver by
either party hereto of any breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of any subsequent breach of same or
any other term, covenant or condition herein contained.  The subsequent
acceptance of Rent hereunder by Landlord shall not be deemed to be a waiver of
any preceding breach by Tenant of any term, covenant or condition of this Lease,
other than the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding breach at the time of
acceptance of such Rent.  No acceptance of a lesser amount than the Rent herein
stipulated shall be deemed a waiver of Landlord's right to receive the full
amount due, nor shall any endorsement or statement on any check or payment or
any letter accompanying such check or payment be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord's right to recover the full amount due.  No receipt of monies by
Landlord from Tenant after the termination of this Lease shall in any way alter
the length of the Lease Term or of Tenant's right of possession hereunder, or
after the giving of any notice shall reinstate, continue or extend the Lease
Term or affect any notice given Tenant prior to the receipt of such monies, it
being agreed that after the service of notice or the commencement of a suit, or
after final judgment for possession of the Premises, Landlord may receive and
collect any Rent due, and the payment of said Rent shall not waive or affect
said notice, suit or judgment.

13.CONDEMNATIONIf the whole or any material part of the Premises, Building or
Project shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if any adjacent
property or street shall be so taken or condemned, or reconfigured or vacated by
such authority in such manner as to require the use, reconstruction or
remodeling of any material part of the Premises, Building or Project, or if
Landlord shall grant a deed or other instrument in lieu of such taking by
eminent domain or condemnation, Landlord shall have the option to terminate this
Lease effective as of the date possession is required to be surrendered to the
authority.  If more than twenty-five percent (25%) of the rentable square feet
of the Premises is taken, or if access to the Premises is substantially
impaired, in each case for a period in excess of one hundred twenty (120) days,
Tenant shall have the option to terminate this Lease effective on not less than
ninety (90) days prior written notice or, if sooner as of the date possession is
required to be surrendered to the authority.  Tenant shall not because of such
taking assert any claim against Landlord or the authority for any compensation
because of such taking and Landlord shall be entitled to the entire award or
payment in connection therewith, except that Tenant shall have the right to file
any separate claim available to Tenant, so long as such claims do not diminish
the award available to Landlord, its ground lessor with respect to the Building
or Project or its mortgagee, and such claim is payable separately to
Tenant.  All Rent shall be apportioned as of the date of such termination.  If
any part of the Premises shall be taken, and this Lease shall  not be so
terminated, the Rent shall be proportionately abated.  Tenant hereby waives any
and all rights it might otherwise have pursuant to Section 1265.130 of The
California Code of Civil Procedure.  Notwithstanding anything to the contrary
contained in this Article 13, in the event of a temporary taking of all or any
portion of the Premises for a period of ninety (90) days or less, then this
Lease shall not terminate but the Base Rent and the Additional Rent shall be
abated for the period of such taking in proportion to the ratio that the amount
of rentable square feet of the Premises taken bears to the total rentable square
feet of the Premises.  Landlord shall be entitled to receive the entire award
made in connection with any such temporary taking.

 

 

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14.ASSIGNMENT AND SUBLETTING

14.1Transfers.  Subject to the terms of this Article 14, Tenant shall not,
without the prior written consent of Landlord, assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer,
this Lease or any interest hereunder, permit any assignment, or other transfer
of this Lease or any interest hereunder by operation of law, sublet the Premises
or any part thereof, or enter into any license or concession agreements or
otherwise permit the occupancy or use of the Premises or any part thereof by any
persons other than Tenant and its employees and contractors (all of the
foregoing are hereinafter sometimes referred to collectively as "Transfers" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "Transferee").  If Tenant desires Landlord's consent
to any Transfer, Tenant shall notify Landlord in writing, which notice (the
"Transfer Notice") shall include (i) the proposed effective date of the
Transfer, which shall not be less than fifteen (15) business days nor more than
eight (8) months after the date of delivery of the Transfer Notice, (ii) a
description of the portion of the Premises to be transferred (the "Subject
Space"), (iii) all of the terms of the proposed Transfer and the consideration
therefor, including calculation of the "Transfer Premium", as that term is
defined in Section 14.3 below, in connection with such Transfer, the name and
address of the proposed Transferee, and a copy of all existing executed and/or
proposed documentation pertaining to the proposed Transfer, including all
existing operative documents to be executed to evidence such Transfer or the
agreements incidental or related to such Transfer, and (iv) unless the proposed
Transferee is a publicly traded company with publicly available financials,
current financial statements of the proposed Transferee certified by an officer,
partner or owner thereof and any other information reasonably required by
Landlord which will enable Landlord to determine the financial responsibility,
character, and reputation of the proposed Transferee, nature of such
Transferee's business and proposed use of the Subject Space.  Any Transfer made
without Landlord's prior written consent shall, at Landlord's option, be null,
void and of no effect, and shall, at Landlord's option, constitute a default by
Tenant under this Lease.  Whether or not Landlord consents to any proposed
Transfer, Tenant shall pay Landlord's reasonable review and processing fees, as
well as any reasonable professional fees (including, without limitation,
attorneys', accountants', architects', engineers' and consultants' fees)
incurred by Landlord, within thirty (30) days after written request by Landlord,
provided that such fees shall not exceed Two Thousand and 00/100 Dollars
($2,000.00) for any such Transfer in the ordinary course of business.  For
purposes of this Lease, "in the ordinary course of business" shall include,
without limitation, the review of documents on no more than three (3) occasions
in connection with any particular Transfer.

14.2Landlord's Consent.  Landlord shall not unreasonably withhold, condition or
delay its consent to any proposed Transfer of the Subject Space to the
Transferee on the terms specified in the Transfer Notice.  Landlord shall
provide notice of approval or disapproval of a Transfer request within ten (10)
business days following the receipt of all information required by Section 14.1
above with respect to such Transfer request.  Landlord's failure to provide
approval or disapproval within said ten (10) business day period shall not be
deemed approval or disapproval.  In such event, Tenant may deliver a second
request for approval at the expiration of said ten (10) business day period
setting forth such failure containing the following sentence at the top of such
notice in bold, capitalized font at least twelve (12) points in
size:  "LANDLORD'S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIVE (5) BUSINESS
DAYS SHALL RESULT IN LANDLORD'S DEEMED APPROVAL OF TENANT'S TRANSFER REQUEST"
(the "Transfer Reminder Notice").  Landlord’s failure to provide approval or
disapproval within five (5) business days following Landlord's receipt of a
Transfer Reminder Notice shall conclusively be deemed approval of Tenant’s
Transfer as presented.  If Landlord disapproves any proposed Transfer, it shall
provide Tenant with a reasonably detailed explanation of the reasons for such
disapproval. Without limitation as to other reasonable grounds for withholding
consent, the parties hereby agree that it shall be reasonable under this Lease
and under any applicable law for Landlord to withhold consent to any proposed
Transfer where one or more of the following apply:

14.2.1The Transferee is of a character or reputation or engaged in a business
which is not consistent with the quality of the Building or the Project;

14.2.2The Transferee is either a governmental agency or instrumentality thereof;

14.2.3The Transferee is not a party of reasonable financial worth and/or
financial stability in light of the responsibilities to be undertaken in
connection with the Transfer on the date consent is requested; or

14.2.4The proposed Transfer would cause a violation of another lease for space
in the Project, or would give an occupant of the Project a right to cancel its
lease.

 

 

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If Landlord consents to any Transfer pursuant to the terms of this Section 14.2
(and does not exercise any recapture rights Landlord may have under Section 14.4
of this Lease), Tenant may within eight (8) months after Landlord's consent, but
not later than the expiration of said eight-month period, enter into such
Transfer of the Premises or portion thereof, upon substantially the same terms
and conditions as are set forth in the Transfer Notice furnished by Tenant to
Landlord pursuant to Section 14.1 of this Lease, provided that if there are any
material changes in the terms and conditions from those specified in the
Transfer Notice such that Landlord would initially have been entitled to refuse
its consent to such Transfer under this Section 14.2, Tenant shall again submit
the Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease).  Notwithstanding anything to the contrary in this Lease, if Tenant or
any proposed Transferee claims that Landlord has unreasonably withheld or
delayed its consent under Section 14.2 or otherwise has breached or acted
unreasonably under this Article 14, their sole remedies shall be a suit for
contract damages (other than damages for injury to, or interference with,
Tenant's business including, without limitation, loss of profits, however
occurring) or declaratory judgment and an injunction for the relief sought, and
Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee.

14.3Transfer Premium.  If Landlord consents to a Transfer, as a condition
thereto which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any "Transfer Premium," as that term is defined
in this Section 14.3, received by Tenant from such Transferee.  "Transfer
Premium" shall mean all rent, additional rent or other consideration payable by
such Transferee in connection with the Transfer in excess of the Rent and
Additional Rent payable by Tenant under this Lease during the term of the
Transfer on a per rentable square foot basis if less than all of the Premises is
transferred, after first deducting the reasonable expenses incurred by Tenant
for (i) any changes, alterations and improvements to the Subject Space in
connection with the Transfer (including architectural fees), (ii) brokerage
commissions paid in connection with such Transfer, (iii) any reasonable legal
fees incurred in connection with the Transfer, (iv) any fee paid to Landlord in
connection with Landlord's review and consent to the Transfer; and (v) any free
rent, tenant improvement allowance or other inducements provided by Tenant in
connection with the Transfer.  "Transfer Premium" shall also include, but not be
limited to, key money, bonus money or other cash consideration paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for services rendered by Tenant to Transferee or for
assets, fixtures, inventory, equipment, or furniture transferred by Tenant to
Transferee in connection with such Transfer.  The determination of the amount of
Landlord's applicable share of the Transfer Premium shall be made on a monthly
basis as rent or other consideration is received by Tenant under the
Transfer.  No Transfer Premium shall be due in connection with any transfer of
this Lease to a Permitted Transferee (as that term is defined below).  

14.4Landlord's Option as to Subject Space.  Notwithstanding anything to the
contrary contained in this Article 14, in the event Tenant contemplates a
Transfer which, together with all prior Transfers then remaining in effect,
would cause fifty percent (50%) or more of the Premises to be Transferred for
more than fifty percent (50%) of the then remaining Lease Term (taking into
account any extension of the Lease Term which has irrevocably exercised by
Tenant), Tenant shall give Landlord notice (the "Intention to Transfer Notice")
of such contemplated Transfer (whether or not the contemplated Transferee or the
terms of such contemplated Transfer have been determined).  The Intention to
Transfer Notice shall specify the portion of and amount of rentable square feet
of the Premises which Tenant intends to Transfer (the "Contemplated Transfer
Space"), the contemplated date of commencement of the Contemplated Transfer (the
"Contemplated Effective Date"), and the contemplated length of the term of such
contemplated Transfer, and shall specify that such Intention to Transfer Notice
is delivered to Landlord pursuant to this Section 14.4 in order to allow
Landlord to elect to recapture the Contemplated Transfer Space.  Thereafter,
Landlord shall have the option, by giving written notice to Tenant within ten
(10) business days after receipt of any Intention to Transfer Notice, to
recapture the Contemplated Transfer Space.  Such recapture shall cancel and
terminate this Lease with respect to such Contemplated Transfer Space as of the
Contemplated Effective Date.  In the event of a recapture by Landlord, if this
Lease shall be canceled with respect to less than the entire Premises, the Rent
reserved herein shall be prorated on the basis of the number of rentable square
feet retained by Tenant in proportion to the number of rentable square feet
contained in the Premises, and this Lease as so amended shall continue
thereafter in full force and effect, and upon request of either party, the
parties shall execute written confirmation of the same.  If Landlord declines,
or fails to elect in a timely manner, to recapture such Contemplated Transfer
Space under this Section 14.4, then, subject to the other terms of this Article
14, for a period of nine (9) months (the "Nine Month Period") commencing on the
last day of such ten (10) business day period, Landlord shall not have any right
to recapture the Contemplated Transfer Space with respect to any Transfer made
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Month Period, provided that any such Transfer is substantially on the terms set
forth in the Intention to Transfer Notice, and provided further that any such
Transfer shall be subject to the remaining terms of this Article 14.  If such a
Transfer is not so consummated within the Nine Month Period (or if a Transfer is
so consummated, then upon the expiration of the term of any Transfer of such
Contemplated Transfer Space consummated within such Nine Month Period), Tenant
shall again be required to submit a new Intention to Transfer Notice to Landlord
with respect any contemplated Transfer, as provided above in this
Section 14.4.  The recapture right set forth in this Section 14.4 shall not
apply in connection with any transfer of this Lease to a Permitted Transferee.

14.5Effect of Transfer.  If Landlord consents to a Transfer, (i) the terms and
conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an appropriate officer of Tenant, setting forth in detail the computation of any
Transfer Premium Tenant has derived and shall derive from such Transfer, and (v)
no Transfer relating to this Lease or agreement entered into with respect
thereto, whether with or without Landlord's consent, shall relieve Tenant or any
guarantor of the Lease from any liability under this Lease, including, without
limitation, in connection with the Subject Space.  Landlord or its authorized
representatives shall have the right at all reasonable times (but no more than
once per year) to audit the books, records and papers of Tenant relating to any
Transfer.  If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency, and if understated by more than four percent (4%), Tenant shall pay
Landlord's reasonable costs of such audit.

14.6Additional Transfers.  For purposes of this Lease, the term "Transfer" shall
also include if Tenant is a partnership, the withdrawal or change, voluntary,
involuntary or by operation of law, of more than fifty percent (50%) of the
partners, or transfer of more than fifty percent (50%) of partnership interests,
within a twelve (12)-month period, or the dissolution of the partnership without
immediate reconstitution thereof.

14.7Occurrence of Default.  Any Transfer hereunder shall be subordinate and
subject to the provisions of this Lease, and if this Lease shall be terminated
during the term of any Transfer, Landlord shall have the right to:  (i) treat
such Transfer as cancelled and repossess the Subject Space by any lawful means,
or (ii) require that such Transferee attorn to and recognize Landlord as its
landlord under any such Transfer.  If Tenant shall be in economic or material
non-economic default under this Lease (beyond the applicable notice and cure
periods), Landlord is hereby irrevocably authorized, as Tenant's agent and
attorney-in-fact, to direct any Transferee to make all payments under or in
connection with the Transfer directly to Landlord (which Landlord shall apply
towards Tenant's obligations under this Lease) until such default is
cured.  Such Transferee shall rely on any representation by Landlord that Tenant
is in default hereunder, without any need for confirmation thereof by
Tenant.  Upon any assignment, the assignee shall assume in writing all
obligations and covenants of Tenant thereafter to be performed or observed under
this Lease.  No collection or acceptance of rent by Landlord from any Transferee
shall be deemed a waiver of any provision of this Article 14 or the approval of
any Transferee or a release of Tenant from any obligation under this Lease,
whether theretofore or thereafter accruing.  In no event shall Landlord's
enforcement of any provision of this Lease against any Transferee be deemed a
waiver of Landlord's right to enforce any term of this Lease against Tenant or
any other person.  If Tenant's obligations hereunder have been guaranteed,
Landlord's consent to any Transfer shall not be effective unless the guarantor
also consents to such Transfer.

14.8Non-Transfers; Permitted Transferees.  Notwithstanding anything to the
contrary contained in this Article 14, (i) an assignment or subletting of all or
a portion of the Premises to an affiliate of Tenant (an entity that is
controlled by, controls, or is under common control with, Tenant), (ii) an
assignment of the Lease to an entity that acquires all or substantially all of
the assets or interests (partnership, stock or other) of Tenant, or (iii) an
assignment of the Lease to an entity that is the resulting entity of a merger or
consolidation of Tenant with another entity (collectively, a "Permitted
Transferee"), shall not be deemed a Transfer under this Article 14 (and for the
avoidance of doubt, Sections 14.2, 14.3 and 14.4. shall not apply to such
Transfer), provided that (A) Tenant notifies Landlord of any such assignment or
sublease and promptly supplies Landlord with any documents or information
requested by Landlord regarding such assignment or sublease or such affiliate,
(B) such assignment or sublease is not a subterfuge by Tenant to avoid its
obligations under this Lease, (C) such Permitted Transferee shall be of a
character and reputation consistent with the quality of the Building, and
(D) such Permitted Transferee described in subpart (ii) or (iii) above shall
have a tangible net worth (not including goodwill as an asset) computed in
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generally accepted accounting principles ("Net Worth") at least equal to the Net
Worth of Tenant on the day immediately preceding the effective date of such
assignment or sublease.  An assignee of Tenant's entire interest that is also a
Permitted Transferee may also be known as a "Permitted Assignee".  "Control," as
used in this Section 14.8, shall mean the ownership, directly or indirectly, of
more than fifty percent (50%) of the voting securities of, or possession of the
right to vote, in the ordinary direction of its affairs, of more than fifty
percent (50%) of the voting interest in, any person or entity.  No such
permitted assignment or subletting shall serve to release Tenant from any of its
obligations under this Lease.

15.SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES

15.1Surrender of Premises.  No act or thing done by Landlord or any agent or
employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord.  The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated.  The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises or terminate any or all such sublessees or
subtenancies.

15.2Removal of Tenant Property by Tenant.  Upon the expiration of the Lease
Term, or upon any earlier termination of this Lease, Tenant shall, subject to
the provisions of this Article 15, quit and surrender possession of the Premises
to Landlord in as good order and condition as when Tenant took possession,
reasonable wear and tear and repairs which are specifically made the
responsibility of Landlord hereunder excepted.  Upon such expiration or
termination, Tenant shall, without expense to Landlord, remove or cause to be
removed from the Premises all debris and rubbish, and such items of furniture,
equipment, free-standing cabinet work, movable partitions and other articles of
personal property owned by Tenant or installed or placed by Tenant at its
expense in the Premises, and such similar articles of any other persons claiming
under Tenant, as Landlord may, in its sole discretion, require to be removed,
and Tenant shall repair at its own expense all damage to the Premises and
Building resulting from such removal.

15.3Environmental Assessment.  In connection with its surrender of the Premises,
Tenant shall submit to Landlord, at least one hundred twenty (120) days prior to
the expiration date of this Lease (or in the event of an earlier termination of
this Lease, as soon as reasonably possible following such termination), an
environmental Assessment of the Premises by a competent and experienced
environmental engineer or engineering firm reasonably satisfactory to Landlord
(pursuant to a contract approved by Landlord and providing that Landlord can
rely on the Environmental Assessment), which (i) evidences that the Premises are
in a clean and safe condition and free and clear of any Hazardous Materials; and
(ii) includes a review of the Premises by an environmental consultant for
asbestos, mold, fungus, spores, and other moisture conditions, on-site chemical
use, and lead-based paint.  If such Environmental Assessment reveals that
remediation or Clean-up is required under any Environmental Laws, Tenant shall
submit a remediation plan prepared by a recognized environmental consultant and
shall be responsible for all costs of remediation and Clean-up, as more
particularly provided in Section 5.3, above.

15.4Condition of the Building and Premises Upon Surrender.  In addition to the
above requirements of this Article 15, upon the expiration of the Lease Term, or
upon any earlier termination of this Lease, Tenant shall, surrender the Premises
and Building such that the same are in compliance with all Applicable Laws
(including, without limitation, by application of “grandfathering” or variances)
and with Tenant having complied with all of Tenant’s obligations under this
Lease, including those relating to improvement, repair, maintenance, compliance
with law, testing and other related obligations of Tenant set forth in Article 7
of this Lease.  In the event that the Building and Premises shall be surrendered
in a condition which does not comply with the terms of this Section 15.4,
because Tenant failed to comply with its obligations set forth in this Lease,
then following thirty (30) days' notice to Tenant, during which thirty (30) day
period Tenant shall have the right to cure such noncompliance, Landlord shall be
entitled to expend all reasonable costs in order to cause the same to comply
with the required condition upon surrender and Tenant shall promptly reimburse
Landlord for all such reasonable costs upon notice and Tenant shall be deemed
during the period that Tenant or Landlord, as the case may be, perform
obligations relating to the surrender of the Premises to be in holdover under
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16.HOLDING OVERIf Tenant holds over after the expiration of the Lease Term or
earlier termination thereof, with the express or implied consent of Landlord,
such tenancy shall be from month-to-month only, and shall not constitute a
renewal hereof or an extension for any further term.  If Tenant holds over after
the expiration of the Lease Term of earlier termination thereof, without the
express or implied consent of Landlord, such tenancy shall be deemed to be a
tenancy by sufferance only, and shall not constitute a renewal hereof or an
extension for any further term.  In either case, Rent shall be payable at a
monthly rate equal to one hundred fifty percent (150%) of the Rent applicable
during the last rental period of the Lease Term under this Lease.  Such
month-to-month tenancy or tenancy by sufferance, as the case may be, shall be
subject to every other applicable term, covenant and agreement contained
herein.  Nothing contained in this Article 16 shall be construed as consent by
Landlord to any holding over by Tenant, and Landlord expressly reserves the
right to require Tenant to surrender possession of the Premises to Landlord as
provided in this Lease upon the expiration or other termination of this
Lease.  The provisions of this Article 16 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law.  If Tenant fails to surrender the Premises upon the termination or
expiration of this Lease, in addition to any other liabilities to Landlord
accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord
harmless from all loss, costs (including reasonable attorneys' fees) and
liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender and any lost profits to Landlord resulting
therefrom; provided, however, that in no event shall Tenant be liable for
consequential damages attributable to the first sixty (60) days of any holding
over by Tenant (or thereafter to the extent that Landlord has not entered into a
third-party lease for such Premises).  In the event of any potential or actual
holding over of the Premises by Tenant, Tenant may elect to send one or more
written notices to Landlord (specifically referencing this Article 16)
requesting an update as to whether Landlord has entered into a third-party lease
for the Premises following the expiration or earlier termination of this Lease,
and Landlord shall, within ten (10) business days of its receipt of such notice
from Tenant, notify Tenant (i) whether or not Landlord has entered into a
third-party lease as of the date of such notice for the Premises following the
expiration or earlier termination of this Lease, and (ii) the date upon which
Landlord requires Tenant to surrender the Premises in order for Landlord to
timely deliver the Premises to the tenant under such third-party lease and avoid
any claims by such tenant founded upon such failure by Tenant to timely
surrender the Premises and any lost profits to Landlord resulting therefrom;
provided, however, in no event shall any such notice by Tenant to Landlord, or
any subsequent notice from Landlord to Tenant (or any failure by Landlord to
provide such notice) be deemed a waiver of any of Tenant's obligations or
liabilities under this Article 16.

17.ESTOPPEL CERTIFICATESWithin ten (10) business days following a request in
writing by Landlord, Tenant shall execute, acknowledge and deliver to Landlord
an estoppel certificate, which, as submitted by Landlord, shall be substantially
in the form of Exhibit D, attached hereto (or such other form as may be
reasonably required by any prospective mortgagee or purchaser of the Project, or
any portion thereof), indicating therein any exceptions thereto that may exist
at that time, and shall also contain any other information reasonably requested
by Landlord or Landlord's mortgagee or prospective mortgagee.  Any such
certificate may be relied upon by any prospective mortgagee or purchaser of all
or any portion of the Project.  Tenant shall execute and deliver whatever other
instruments may be reasonably required for such purposes.  At any time during
the Lease Term (but not more than once in any calendar year unless in connection
with the sale or proposed sale, or the financing/refinancing, of the Project or
any portion thereof), Landlord may require Tenant to provide Landlord with its
most current financial statement and financial statements of the two (2) years
prior to the current financial statement year.  Such statements shall be
prepared in accordance with generally accepted accounting principles and, if
such is the normal practice of Tenant, shall be audited by an independent
certified public accountant.  In the event financial statements are provided to
Landlord by Tenant, Landlord agrees to execute a commercially reasonable
confidentiality agreement regarding the same.  Notwithstanding the foregoing, in
the event that (i) stock in the entity which constitutes Tenant under this Lease
(as opposed to an entity that controls Tenant or is otherwise an affiliate of
Tenant) is publicly traded on NASDAQ or a national stock exchange, and (ii)
Tenant has its own, separate and distinct 10K and 10Q filing requirements (as
opposed to joint or cumulative filings with an entity that controls Tenant or
with entities which are otherwise affiliates of Tenant), then Tenant's
obligation to provide Landlord with a copy of financial statements shall be
deemed satisfied.  In the event Tenant fails to execute, acknowledge and deliver
an estoppel certificate within such ten (10) business day period, Landlord may
send a second notice to Tenant providing that if Tenant does not execute,
acknowledge and deliver such estoppel certificate within five (5) business days
after the second notice, such failure of Tenant to timely execute, acknowledge
and deliver such estoppel certificate or other instruments shall constitute an
acknowledgment by Tenant that statements included in the estoppel certificate
are true and correct, without exception.  Failure of Tenant to timely execute,
acknowledge and deliver such estoppel certificate or other instruments within
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day period shall constitute an acknowledgment by Tenant that statements included
in the estoppel certificate are true and correct, without exception.  

18.SUBORDINATIONLandlord hereby represents and warrants to Tenant that the
Project is not currently subject to any ground lease, or to the lien of any
mortgage or deed of trust.  This Lease shall be subject and subordinate to all
present and future ground or underlying leases of the Building or Project and to
the lien of any mortgage, trust deed or other encumbrances now or hereafter in
force against the Building or Project or any part thereof, if any, and to all
renewals, extensions, modifications, consolidations and replacements thereof,
and to all advances made or hereafter to be made upon the security of such
mortgages or trust deeds, unless the holders of such mortgages, trust deeds or
other encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto.  The subordination of
this Lease to any such future ground or underlying leases of the Building or
Project or to the lien of any mortgage, trust deed or other encumbrances, shall
be subject to Tenant's receipt of a commercially reasonable subordination,
non-disturbance, and attornment agreement in favor of Tenant executed by the
holder of the applicable mortgage, trust deed or other encumbrance.  Tenant
covenants and agrees in the event any proceedings are brought for the
foreclosure of any such mortgage or deed in lieu thereof (or if any ground lease
is terminated), to attorn, without any deductions or set-offs whatsoever, to the
lienholder or purchaser or any successors thereto upon any such foreclosure sale
or deed in lieu thereof (or to the ground lessor), if so requested to do so by
such purchaser or lienholder or ground lessor, and to recognize such purchaser
or lienholder or ground lessor as the lessor under this Lease, provided such
lienholder or purchaser or ground lessor shall agree to accept this Lease and
not disturb Tenant's occupancy, so long as Tenant timely pays the rent and
observes and performs the terms, covenants and conditions of this Lease to be
observed and performed by Tenant.  Landlord’s use of commercially reasonable
efforts to deliver to Tenant a commercially reasonable non-disturbance
agreement(s) in favor of Tenant from any ground lessors, mortgage holders or
lien holders of Landlord who come into existence following the date hereof but
prior to the expiration of the Lease Term shall be in consideration of, and a
condition precedent to, Tenant’s agreement to subordinate this Lease to any such
ground lease, mortgage or lien.  Landlord's interest herein may be assigned as
security at any time to any lienholder.  Tenant shall, within ten (10) days of
request by Landlord, execute such further instruments or assurances as Landlord
may reasonably deem necessary to evidence or confirm the subordination or
superiority of this Lease to any such mortgages, trust deeds, ground leases or
underlying leases.  Tenant waives the provisions of any current or future
statute, rule or law which may give or purport to give Tenant any right or
election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.

19.DEFAULTS; REMEDIES

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

19.1.1Any failure by Tenant to pay any Rent or any other charge required to be
paid under this Lease, or any part thereof, when due unless such failure is
cured within five (5) business days after written notice to Tenant; or

19.1.2Except where a specific time period is otherwise set forth for Tenant's
performance in this Lease, in which event the failure to perform by Tenant
within such time period shall be a default by Tenant under this Section 19.1.2,
any failure by Tenant to observe or perform any other provision, covenant or
condition of this Lease to be observed or performed by Tenant where such failure
continues for thirty (30) days after written notice thereof from Landlord to
Tenant; provided that if the nature of such default is such that the same cannot
reasonably be cured within a thirty (30) day period, Tenant shall not be deemed
to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure such default; or

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

19.1.4The failure by Tenant to observe or perform according to the provisions of
Articles 5, 14, 17 or 18 of this Lease where such failure continues for more
than two (2) business days after notice from Landlord.

The notice periods provided herein are in lieu of, and not in addition to, any
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19.2Remedies Upon Default.  Upon the occurrence and during the continuance of
any event of default by Tenant (beyond the applicable notice and cure periods),
Landlord shall have, in addition to any other remedies available to Landlord at
law or in equity (all of which remedies shall be distinct, separate and
cumulative), the option to pursue any one or more of the following remedies,
each and all of which shall be cumulative and nonexclusive, without any notice
or demand whatsoever.

19.2.1Terminate this Lease, in which event Tenant shall immediately surrender
the Premises to Landlord, and if Tenant fails to do so, Landlord may, without
prejudice to any other remedy which it may have for possession or arrearages in
rent, enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying the Premises or any part thereof,
without being liable for prosecution or any claim or damages therefor; and
Landlord may recover from Tenant the following:

(i)The worth at the time of award of the unpaid rent which has been earned at
the time of such termination; plus

(ii)The worth at the time of award of the amount by which the unpaid rent which
would have been earned after termination until the time of award exceeds the
amount of such rental loss that Tenant proves could have been reasonably
avoided; plus

(iii)The worth at the time of award of the amount by which the unpaid rent for
the balance of the Lease Term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; plus

(iv)Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, specifically including but not limited to, brokerage commissions and
advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant, whether for the same or a different use, and
any special concessions made to obtain a new tenant; and

(v)At Landlord's election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.

The term "rent" as used in this Section 19.2 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others.  As used in Sections 19.2.1(i) and
(ii), above, the "worth at the time of award" shall be computed by allowing
interest at the rate set forth in Article 25 of this Lease, but in no case
greater than the maximum amount of such interest permitted by law.  As used in
Section 19.2.1(iii) above, the "worth at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).  

19.2.2Landlord shall have the remedy described in California Civil Code
Section 1951.4 (lessor may continue lease in effect after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations).  Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all rent as it becomes due.

19.2.3Landlord shall at all times have the rights and remedies (which shall be
cumulative with each other and cumulative and in addition to those rights and
remedies available under Sections 19.2.1 and 19.2.2, above, or any law or other
provision of this Lease), without prior demand or notice except as required by
applicable law, to seek any declaratory, injunctive or other equitable relief,
and specifically enforce this Lease, or restrain or enjoin a violation or breach
of any provision hereof.  

19.3Subleases of Tenant.  Whether or not Landlord elects to terminate this Lease
on account of any default by Tenant, as set forth in this Article 19, Landlord
shall have the right to terminate any and all subleases, licenses, concessions
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Premises or may, in Landlord's sole discretion, succeed to Tenant's interest in
such subleases, licenses, concessions or arrangements.  In the event of
Landlord's election to succeed to Tenant's interest in any such subleases,
licenses, concessions or arrangements, Tenant shall, as of the date of notice by
Landlord of such election, have no further right to or interest in the rent or
other consideration receivable thereunder.  

19.4Efforts to Relet.  No re-entry or repossession, repairs, maintenance,
changes, alterations and additions, reletting, appointment of a receiver to
protect Landlord's interests hereunder, or any other action or omission by
Landlord shall be construed as an election by Landlord to terminate this Lease
or Tenant's right to possession, or to accept a surrender of the Premises, nor
shall same operate to release Tenant in whole or in part from any of Tenant's
obligations hereunder, unless express written notice of such intention is sent
by Landlord to Tenant.  Tenant hereby irrevocably waives any right otherwise
available under any law to redeem or reinstate this Lease.

19.5Landlord Default.

19.5.1General.  Notwithstanding anything to the contrary set forth in this
Lease, Landlord shall not be in default in the performance of any obligation
required to be performed by Landlord pursuant to this Lease unless Landlord
fails to perform such obligation within thirty (30) days after the receipt of
notice from Tenant specifying in detail Landlord's failure to perform; provided,
however, if the nature of Landlord's obligation is such that more than thirty
(30) days are required for its performance, then Landlord shall not be in
default under this Lease if it shall commence such performance within such
thirty (30) day period and thereafter diligently pursue the same to
completion.  Upon any such default by Landlord under this Lease, Tenant may,
except as otherwise specifically provided in this Lease to the contrary,
exercise any of its rights provided at law or in equity.

19.5.2Abatement of Rent.  In the event that Tenant is prevented from using, and
does not use, the Premises or any portion thereof, as a result of (i) any
repair, maintenance or alteration performed by Landlord, or which Landlord
failed to perform, after the Lease Commencement Date and required by this Lease,
which substantially interferes with Tenant's use of the Premises, or (ii) any
failure to provide services, utilities or access to the Premises to the extent
required by this Lease, each as a direct result of Landlord's negligence or
willful misconduct (and except to the extent such failure is caused in whole or
in part by the action or inaction of Tenant) (either such set of circumstances
as set forth in items (i) or (ii), above, to be known as an "Abatement Event"),
then Tenant shall give Landlord notice of such Abatement Event, and if such
Abatement Event continues for ten (10) consecutive business days after
Landlord's receipt of any such notice (the "Eligibility Period") and Landlord
does not diligently commence and pursue to completion the remedy of such
Abatement Event, then the Base Rent, Tenant's Share of Direct Expenses, and
Tenant's obligation, if any, to pay for parking (to the extent not utilized by
Tenant) shall be abated or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use for the normal conduct of Tenant's business, the
Premises or a portion thereof, in the proportion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises; provided, however, in the
event that Tenant is prevented from using, and does not use, a portion of the
Premises for a period of time in excess of the Eligibility Period and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not effectively
conduct its business from such remaining portion, then for such time after
expiration of the Eligibility Period during which Tenant is so prevented from
effectively conducting its business therein, the Base Rent and Tenant's Share of
Direct Expenses for the entire Premises and Tenant's obligation to pay for
parking shall be abated for such time as Tenant continues to be so prevented
from using, and does not use, the Premises.  If, however, Tenant reoccupies any
portion of the Premises during such period, the Rent allocable to such
reoccupied portion, based on the proportion that the rentable area of such
reoccupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date Tenant reoccupies such
portion of the Premises.  To the extent an Abatement Event is caused by an event
covered by Articles 5, 11 or 13 of this Lease, then Tenant's right to abate rent
shall be governed by the terms of such Article 5, 11 or 13, as applicable, and
the Eligibility Period shall not be applicable thereto.  Such right to abate
Base Rent and Tenant's Share of Direct Expenses shall be Tenant's sole and
exclusive remedy for rent abatement at law or in equity for an Abatement
Event.  Except as provided in this Section 19.5.2, nothing contained herein
shall be interpreted to mean that Tenant is excused from paying Rent due
hereunder.

20.COVENANT OF QUIET ENJOYMENTLandlord covenants that Tenant, on paying the
Rent, charges for services and other payments herein reserved and on keeping,
observing and performing all the other terms, covenants, conditions, provisions
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performed, shall, during the Lease Term, peaceably and quietly have, hold and
enjoy the Premises subject to the terms, covenants, conditions, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through Landlord.  The foregoing covenant is in lieu of any other covenant
express or implied.

21.LETTER OF CREDIT

21.1Delivery of Letter of Credit.  Tenant shall deliver to Landlord,
concurrently with Tenant's execution of this Lease, an unconditional, clean,
irrevocable letter of credit (the "L‑C") in the amount set forth in Section 8 of
the Lease Summary (the "L‑C Amount"), which L‑C shall be issued by a
money-center, solvent and nationally recognized bank (a bank which accepts
deposits, maintains accounts, has a local San Francisco Bay Area office which
will negotiate a letter of credit, and whose deposits are insured by the FDIC)
reasonably acceptable to Landlord (such approved, issuing bank being referred to
herein as the "Bank"), which Bank must have a rating from Standard and Poors
Corporation of A- or better (or any equivalent rating thereto from any successor
or substitute rating service selected by Lessor) and a letter of credit issuer
rating from Moody’s Investor Service of A3 or better (or any equivalent rating
thereto from any successor rating agency thereto)) (collectively, the “Bank’s
Credit Rating Threshold”), and which L‑C shall be substantially in the form of
Exhibit F, attached hereto.  Tenant shall pay all expenses, points and/or fees
incurred by Tenant in obtaining the L‑C.  The L‑C shall (i) be "callable" at
sight, irrevocable and unconditional, (ii) be maintained in effect, whether
through renewal or extension, for the period commencing on the date of this
Lease and continuing until the date (the "L‑C Expiration Date") that is no less
than one hundred twenty (120) days after the expiration of the Lease Term as the
same may be extended, and Tenant shall deliver a new L‑C or certificate of
renewal or extension to Landlord at least thirty (30) days prior to the
expiration of the L‑C then held by Landlord, without any action whatsoever on
the part of Landlord, (iii) be fully assignable by Landlord, its successors and
assigns, (iv) permit partial draws and multiple presentations and drawings, and
(v) be otherwise subject to the Uniform Customs and Practices for Documentary
Credits (1993-Rev), International Chamber of Commerce Publication #500, or the
International Standby Practices-ISP 98, International Chamber of Commerce
Publication #590.  Landlord, or its then managing agent, shall have the right to
draw down an amount up to the face amount of the L‑C if any of the following
shall have occurred or be applicable:  (A) such amount is due to Landlord under
the terms and conditions of this Lease, and has not been paid within applicable
notice and cure periods (or, if Landlord is prevented by law from providing
notice, within the period for payment set forth in the Lease), or (B) Tenant has
filed a voluntary petition under the U. S. Bankruptcy Code or any state
bankruptcy code (collectively, "Bankruptcy Code"), or (C) an involuntary
petition has been filed against Tenant under the Bankruptcy Code that is not
dismissed within thirty (30) days, or (D) the Lease has been rejected, or is
deemed rejected, under Section 365 of the U.S. Bankruptcy Code, following the
filing of a voluntary petition by Tenant under the Bankruptcy Code, or the
filing of an involuntary petition against Tenant under the Bankruptcy Code, or
(E) the Bank has notified Landlord that the L‑C will not be renewed or extended
through the L‑C Expiration Date, and Tenant has not provided a replacement L-C
that satisfies the requirements of this Lease at least thirty (30) days prior to
such expiration, or (F) Tenant is placed into receivership or conservatorship,
or becomes subject to similar proceedings under Federal or State law, or
(G) Tenant executes an assignment for the benefit of creditors, or (H) if
(1) any of the Bank's Fitch Ratings (or other comparable ratings to the extent
the Fitch Ratings are no longer available) have been reduced below the Bank's
Credit Rating Threshold, or (2) there is otherwise a material adverse change in
the financial condition of the Bank, and Tenant has failed to provide Landlord
with a replacement letter of credit, conforming in all respects to the
requirements of this Article 21 (including, but not limited to, the requirements
placed on the issuing Bank more particularly set forth in this Section 21.1
above), in the amount of the applicable L‑C Amount, within ten (10) days
following Landlord’s written demand therefor (with no other notice or cure or
grace period being applicable thereto, notwithstanding anything in this Lease to
the contrary) (each of the foregoing being an "L‑C Draw Event").  The L‑C shall
be honored by the Bank regardless of whether Tenant disputes Landlord's right to
draw upon the L‑C.  In addition, in the event the Bank is placed into
receivership or conservatorship by the Federal Deposit Insurance Corporation or
any successor or similar entity, then, effective as of the date such
receivership or conservatorship occurs, said L‑C shall be deemed to fail to meet
the requirements of this Article 21, and, within fifteen (15) days following
Landlord's notice to Tenant of such receivership or conservatorship (the "L‑C
FDIC Replacement Notice"), Tenant shall replace such L‑C with a substitute
letter of credit from a different issuer (which issuer shall meet or exceed the
Bank's Credit Rating Threshold and shall otherwise be acceptable to Landlord in
its reasonable discretion) and that complies in all respects with the
requirements of this Article 21.  If Tenant fails to replace such L‑C with such
conforming, substitute letter of credit pursuant to the terms and conditions of
this Section 21.1, then, notwithstanding anything in this Lease to the contrary,
Landlord shall have the right to declare Tenant in default of this Lease for
which there shall be no notice or grace or cure periods being applicable thereto
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responsible for the payment of any and all Tenant’s and Bank’s costs incurred
with the review of any replacement L‑C, which replacement is required pursuant
to this Section or is otherwise requested by Tenant.  In the event of an
assignment by Tenant of its interest in the Lease (and irrespective of whether
Landlord's consent is required for such assignment), the acceptance of any
replacement or substitute  letter of credit by Landlord from the assignee shall
be subject to Landlord's prior written approval, in Landlord's reasonable
discretion, and the actual and reasonable attorney's fees incurred by Landlord
in connection with such determination shall be payable by Tenant to Landlord
within ten (10) days of billing.

21.2Application of L‑C.  Tenant hereby acknowledges and agrees that Landlord is
entering into this Lease in material reliance upon the ability of Landlord to
draw upon the L‑C upon the occurrence of any L‑C Draw Event.  In the event of
any L‑C Draw Event, Landlord may, but without obligation to do so, and without
notice to Tenant (except in connection with an L-C Draw Event under Section
21.1(H) above), draw upon the L‑C, in part or in whole, in the amount necessary
to cure any such L-C Draw Event and/or to compensate Landlord for any and all
damages of any kind or nature sustained or which Landlord reasonably estimates
that it will sustain resulting from Tenant's breach or default of the Lease or
other L-C Draw Event and/or to compensate Landlord for any and all damages
arising out of, or incurred in connection with, the termination of this Lease,
including, without limitation, those specifically identified in Section 1951.2
of the California Civil Code.  The use, application or retention of the L‑C, or
any portion thereof, by Landlord shall not prevent Landlord from exercising any
other right or remedy provided by this Lease or by any applicable law, it being
intended that Landlord shall not first be required to proceed against the L‑C,
and such L‑C shall not operate as a limitation on any recovery to which Landlord
may otherwise be entitled.  Tenant agrees and acknowledges that (i) the L‑C
constitutes a separate and independent contract between Landlord and the Bank,
(ii) Tenant is not a third party beneficiary of such contract, (iii) Tenant has
no property interest whatsoever in the L‑C or the proceeds thereof, and (iv) in
the event Tenant becomes a debtor under any chapter of the Bankruptcy Code,
Tenant is placed into receivership or conservatorship, and/or there is an event
of a receivership, conservatorship or a bankruptcy filing by, or on behalf of,
Tenant, neither Tenant, any trustee, nor Tenant's bankruptcy estate shall have
any right to restrict or limit Landlord's claim and/or rights to the L‑C and/or
the proceeds thereof by application of Section 502(b)(6) of the U. S. Bankruptcy
Code or otherwise.

21.3Maintenance of L-C by Tenant.  If, as a result of any drawing by Landlord of
all or any portion of the L-C, the amount of the L-C shall be less than the L-C
Amount, Tenant shall, within five (5) days thereafter, provide Landlord with
additional letter(s) of credit in an amount equal to the deficiency, and any
such additional letter(s) of credit shall comply with all of the provisions of
this Article 21.  Tenant further covenants and warrants that it will neither
assign nor encumber the L-C or any part thereof and that neither Landlord nor
its successors or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance.  Without limiting the generality
of the foregoing, if the L-C expires earlier than the L‑C Expiration Date,
Landlord will accept a renewal thereof (such renewal letter of credit to be in
effect and delivered to Landlord, as applicable, not later than thirty (30) days
prior to the expiration of the L-C), which shall be irrevocable and
automatically renewable as above provided through the L‑C Expiration Date upon
the same terms as the expiring L‑C or such other terms as may be acceptable to
Landlord in its sole discretion.  If Tenant exercises its option to extend the
Lease Term pursuant to Section 2.2 of this Lease then, not later than
thirty (30) days prior to the commencement of the Option Term, Tenant shall
deliver to Landlord a new L C or certificate of renewal or extension evidencing
the L-C Expiration Date as thirty (30) days after the expiration of the Option
Term.  However, if the L‑C is not timely renewed, or if Tenant fails to maintain
the L‑C in the amount and in accordance with the terms set forth in this
Article 21, Landlord shall have the right to present the L‑C to the Bank in
accordance with the terms of this Article 21, and the proceeds of the L-C may be
applied by Landlord against any Rent payable by Tenant under this Lease that is
not paid when due and/or to pay for all losses and damages that Landlord has
suffered or that Landlord reasonably estimates that it will suffer as a result
of any breach or default by Tenant under this Lease.  In the event Landlord
elects to exercise its rights as provided above, (I) any unused proceeds shall
constitute the property of Landlord (and not Tenant’s property or, in the event
of a receivership, conservatorship, or a bankruptcy filing by, or on behalf of,
Tenant, property of such receivership, conservatorship or Tenant’s bankruptcy
estate) and need not be segregated from Landlord’s other assets, and
(II) Landlord agrees to pay to Tenant within thirty (30) days after the L‑C
Expiration Date the amount of any proceeds of the L-C received by Landlord and
not applied against any Rent payable by Tenant under this Lease that was not
paid when due or used to pay for any losses and/or damages suffered by Landlord
(or reasonably estimated by Landlord that it will suffer) as a result of any
breach or default by Tenant under this Lease; provided, however, that if prior
to the L‑C Expiration Date a voluntary petition is filed by Tenant, or an
involuntary petition is filed against Tenant by any of Tenant’s creditors, under
the Bankruptcy Code, then Landlord shall not be obligated to make such payment
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the amount of the unused L-C proceeds until either all preference issues
relating to payments under this Lease have been resolved in such bankruptcy or
reorganization case or such bankruptcy or reorganization case has been
dismissed.  If Landlord draws on the L-C due to Tenant’s failure to timely renew
or provide a replacement L-C, such failure shall not be considered a default
under this Lease and Landlord shall return such cash proceeds upon Tenant’s
presentation of a replacement L-C that satisfies the requirements of this Lease,
subject to reasonable satisfaction of any preference risk to Landlord.

21.4Transfer and Encumbrance.  The L-C shall also provide that Landlord may, at
any time and without notice to Tenant and without first obtaining Tenant's
consent thereto, transfer (one or more times) all or any portion of its interest
in and to the L-C to another party, person or entity, if such transfer is from
or as a part of the assignment by Landlord of its rights and interests in and to
this Lease.  In the event of a transfer of Landlord's interest in under this
Lease, Landlord shall transfer the L-C, in whole, to the transferee and
thereupon Landlord shall, without any further agreement between the parties, be
released by Tenant from all liability therefor, and it is agreed that the
provisions hereof shall apply to every transfer or assignment of the whole of
said L-C to a new landlord.  In connection with any such transfer of the L-C by
Landlord, Tenant shall, at Tenant's sole cost and expense, execute and submit to
the Bank such applications, documents and instruments as may be necessary to
effectuate such transfer and, Tenant shall be responsible for paying the Bank's
transfer and processing fees in connection therewith; provided that, Landlord
shall have the right (in its sole discretion), but not the obligation, to pay
such fees on behalf of Tenant, in which case Tenant shall reimburse Landlord
within ten (10) days after Tenant's receipt of an invoice from Landlord
therefor.

21.5L-C Not a Security Deposit.  Landlord and Tenant (1) acknowledge and agree
that in no event or circumstance shall the L‑C or any renewal thereof or
substitute therefor or any proceeds thereof be deemed to be or treated as a
“security deposit” under any law applicable to security deposits in the
commercial context, including, but not limited to, Section 1950.7 of the
California Civil Code, as such Section now exists or as it may be hereafter
amended or succeeded (the “Security Deposit Laws”), (2) acknowledge and agree
that the L‑C (including any renewal thereof or substitute therefor or any
proceeds thereof) is not intended to serve as a security deposit, and the
Security Deposit Laws shall have no applicability or relevancy thereto, and
(3) waive any and all rights, duties and obligations that any such party may
now, or in the future will, have relating to or arising from the Security
Deposit Laws.  Tenant hereby irrevocably waives and relinquishes the provisions
of Section 1950.7 of the California Civil Code and any successor statute, and
all other provisions of law, now or hereafter in effect, which (x) establish the
time frame by which a landlord must refund a security deposit under a lease,
and/or (y) provide that a landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of rent, to repair
damage caused by a tenant or to clean the premises, it being agreed that
Landlord may, in addition, claim those sums specified in this Article 21 and/or
those sums reasonably necessary to (a) compensate Landlord for any loss or
damage caused by Tenant's breach of this Lease, including any damages Landlord
suffers following termination of this Lease, and/or (b) compensate Landlord for
any and all damages arising out of, or incurred in connection with, the
termination of this Lease, including, without limitation, those specifically
identified in Section 1951.2 of the California Civil Code.  Tenant agrees not to
interfere in any way with any payment to Landlord of the proceeds of the L-C,
either prior to or following a "draw" by Landlord of all or any portion of the
L-C, regardless of whether any dispute exists between Tenant and Landlord as to
Landlord's right to draw down all or any portion of the L-C.  No condition or
term of this Lease shall be deemed to render the L‑C conditional and thereby
afford the Bank a justification for failing to honor a drawing upon such L-C in
a timely manner.  Tenant shall not request or instruct the Bank of any L‑C to
refrain from paying sight draft(s) drawn under such L‑C.

21.6Non-Interference By Tenant.  Tenant agrees not to interfere in any way with
any payment to Landlord of the proceeds of the L-C, either prior to or following
a "draw" by Landlord of all or any portion of the L-C, regardless of whether any
dispute exists between Tenant and Landlord as to Landlord's right to draw down
all or any portion of the L-C.  No condition or term of this Lease shall be
deemed to render the L‑C conditional and thereby afford the Bank a justification
for failing to honor a drawing upon such L-C in a timely manner.    Tenant shall
not request or instruct the Bank of any L‑C to refrain from paying sight
draft(s) drawn under such L‑C.

21.7Waiver of Certain Relief.  Tenant unconditionally and irrevocably waives
(and as an independent covenant hereunder, covenants not to assert) any right to
claim or obtain any of the following relief in connection with the L‑C:

 

 

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21.7.1A temporary restraining order, temporary injunction, permanent injunction,
or other order that would prevent, restrain or restrict the presentment of sight
drafts drawn under any L‑C or the Bank's honoring or payment of sight draft(s);
or

21.7.2Any attachment, garnishment, or levy in any manner upon either the
proceeds of any L‑C or the obligations of the Bank (either before or after the
presentment to the Bank of sight drafts drawn under such L‑C) based on any
theory whatever.

21.8Remedy for Improper Drafts.  Tenant's sole remedy in connection with the
improper presentment or payment of sight drafts drawn under any L‑C shall be the
right to obtain from Landlord a refund of the amount of any sight draft(s) that
were improperly presented or the proceeds of which were misapplied, and
reasonable actual out-of-pocket attorneys' fees, provided that at the time of
such refund, Tenant increases the amount of such L‑C to the amount (if any) then
required under the applicable provisions of this Lease.  Tenant acknowledges
that the presentment of sight drafts drawn under any L‑C, or the Bank's payment
of sight drafts drawn under such L‑C, could not under any circumstances cause
Tenant injury that could not be remedied by an award of money damages, and that
the recovery of money damages would be an adequate remedy therefor.  In the
event Tenant shall be entitled to a refund as aforesaid and Landlord shall fail
to make such payment within ten (10) business days after demand, Tenant shall
have the right to deduct the amount thereof from the next installment(s) of Base
Rent.

22.COMMUNICATIONS AND COMPUTER LINETenant may install, maintain, replace, remove
or use any communications or computer wires and cables serving the Premises
(collectively, the "Lines"), provided that Tenant shall obtain Landlord's prior
written consent, use an experienced and qualified contractor reasonably approved
in writing by Landlord, and comply with all of the other applicable provisions
of Articles 7 and 8 of this Lease.  Tenant shall pay all costs in connection
therewith.  Landlord reserves the right, upon notice to Tenant prior to the
expiration or earlier termination of this Lease, to require that Tenant, at
Tenant's sole cost and expense, remove any Lines located in or serving the
Premises prior to the expiration or earlier termination of this Lease.

23.SIGNS

23.1Exterior Signage.  Subject to Landlord's prior written approval, which shall
not be unreasonably withheld, conditioned or delayed, and provided all signs are
in keeping with the quality, design and style of the Building and Project,
Tenant, at its sole cost and expense, may install (i) identification signage on
any existing monument sign located at the exterior of the Project, and
(ii) signage at the entrance to the Building (collectively, "Tenant Signage");
provided, however, in no event shall Tenant's Signage include an "Objectionable
Name," as that term is defined in Section 23.3, of this Lease.  All such signage
shall be subject to Tenant's obtaining all required governmental approvals.  All
permitted signs shall be maintained by Tenant at its expense in a first-class
and safe condition and appearance.  Upon the expiration or earlier termination
of this Lease, Tenant shall remove all of its signs at Tenant's sole cost and
expense.  The graphics, materials, color, design, lettering, lighting, size,
illumination, specifications and exact location of Tenant's Signage
(collectively, the "Sign Specifications") shall be subject to the prior written
approval of Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed, and shall be consistent and compatible with the quality
and nature of the Project.  Tenant hereby acknowledges that, notwithstanding
Landlord's approval of Tenant's Signage, Landlord has made no representation or
warranty to Tenant with respect to the probability of obtaining all necessary
governmental approvals and permits for Tenant's Signage.  In the event Tenant
does not receive the necessary governmental approvals and permits for Tenant's
Signage, Tenant's and Landlord's rights and obligations under the remaining
terms and conditions of this Lease shall be unaffected.  

23.2Objectionable Name.  Tenant's Signage shall not include a name or logo which
relates to an entity which is of a character or reputation, or is associated
with a political faction or orientation, which is inconsistent with the quality
of the Project, or which would otherwise reasonably offend a landlord of the
Comparable Buildings (an "Objectionable Name").  The parties hereby agree that
the following name, or any reasonable derivation thereof, shall be deemed not to
constitute an Objectionable Name:  "Audentes Therapeutics, Inc.."

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

23.4Termination of Right to Tenant's Signage.  The rights contained in this
Article 23 shall be personal to Original Tenant and its Permitted Assignee, and
may only be exercised and maintained by such parties (and not any other
assignee, sublessee or other transferee of the Original Tenant's interest in
this Lease) to the extent (x) they are not in default under this Lease (beyond
any applicable notice and cure period) and (y) if they occupy the entire
Premises.

24.COMPLIANCE WITH LAWLandlord shall comply with all "Applicable Laws" (defined
below) relating to the Base Building and Common Areas, provided that compliance
with such Applicable Laws is not the responsibility of Tenant under this Lease,
and provided further that, as between Landlord and Tenant, Landlord shall not be
deemed to be in default of the Lease as a result of the failure to comply with
any Applicable Laws unless Landlord's failure to comply therewith would prohibit
Tenant from obtaining or maintaining a certificate of occupancy for the
Premises, would materially affect the safety of Tenant's employees or create a
material health hazard for Tenant's employees, or would otherwise result in any
material cost or liability to Tenant.  Tenant shall not do anything or suffer
anything to be done in or about the Premises or the Project which will in any
way conflict with any law, statute, ordinance or other governmental rule,
regulation or requirement now in force or which may hereafter be enacted or
promulgated (the "Applicable Laws").  At its sole cost and expense, Tenant shall
promptly comply with all such Applicable Laws (including the making of any
alterations to the Premises required by Applicable Laws) which relate to
(i) Tenant's use of the Premises, (ii) the Alterations or the Tenant
Improvements in the Premises, or (iii) the "Base Building" (which shall include
the Building Structure, and the public restrooms, elevators, exit stairwells and
the Building Systems located in the internal core of the Buildings on the floor
or floors on which the Premises is located), but, as to the Base Building, only
to the extent such obligations are triggered by Tenant's Alterations, the Tenant
Improvements, or Tenant's particular use of the Premises.  Should any standard
or regulation now or hereafter be imposed on Landlord or Tenant by a state,
federal or local governmental body charged with the establishment, regulation
and enforcement of occupational, health or safety standards for employers,
employees, landlords or tenants, then Tenant agrees, at its sole cost and
expense, to comply promptly with such standards or regulations.  Tenant shall be
responsible, at its sole cost and expense, to make all alterations to the
Building and Premises as are required to comply with the governmental rules,
regulations, requirements or standards described in this Article 24.  The
judgment of any court of competent jurisdiction or the admission of Tenant in
any judicial action, regardless of whether Landlord is a party thereto, that
Tenant has violated any of said governmental measures, shall be conclusive of
that fact as between Landlord and Tenant.  For purposes of Section 1938 of the
California Civil Code, Landlord hereby discloses to Tenant, and Tenant hereby
acknowledges, that the Project, Building and Premises have not undergone
inspection by a Certified Access Specialist (CASp).  As required by Section
1938(e) of the California Civil Code, Landlord hereby states as follows:  "A
Certified Access Specialist (CASp) can inspect the subject premises and
determine whether the subject premises comply with all of the applicable
construction-related accessibility standards under state law.  Although state
law does not require a CASp inspection of the subject premises, the commercial
property owner or lessor may not prohibit the lessee or tenant from obtaining a
CASp inspection of the subject premises for the occupancy or potential occupancy
of the lessee or tenant, if requested by the lessee or tenant.  The parties
shall mutually agree on the arrangements for the time and manner of the CASp
inspection, the payment of the fee for the CASp inspection, and the cost of
making any repairs necessary to correct violations of construction-related
accessibility standards within the premises."  In furtherance of the foregoing,
Landlord and Tenant hereby agree as follows:  (a) any CASp inspection requested
by Tenant shall be conducted, at Tenant's sole cost and expense, by a CASp
approved in advance by Landlord (such approval not to be unreasonably withheld,
conditioned or delayed); and (b) pursuant to Article 24 below, Tenant, at its
cost, is responsible for making any repairs within the Premises to correct
violations of construction-related accessibility standards; and, if anything
done by or for Tenant in its use or occupancy of the Premises shall require
repairs to the Building (outside the Premises) to correct violations of
construction-related accessibility standards, then Tenant shall, at Landlord's
option, either perform such repairs at Tenant's sole cost and expense or
reimburse Landlord upon demand, as Additional Rent, for the cost to Landlord of
performing such repairs.  

25.LATE CHARGESIf any installment of Rent or any other sum due from Tenant shall
not be received by Landlord or Landlord's designee within five (5) business days
after Tenant's receipt of written notice from Landlord that said amount is due,
then Tenant shall pay to Landlord a late charge equal to five percent (5%) of
the overdue amount plus any reasonable attorneys' fees incurred by Landlord by
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charges when due hereunder.  Notwithstanding the foregoing, the first late
payment by Tenant in any twelve (12) month period shall not be subject to such
late charge.  The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner.  In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within ten (10) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) the
annual "Bank Prime Loan" rate cited in the Federal Reserve Statistical Release
Publication G.13(415), published on the first Tuesday of each calendar month (or
such other comparable index as Landlord and Tenant shall reasonably agree upon
if such rate ceases to be published) plus three (3) percentage points, and (ii)
the highest rate permitted by Applicable Law.  Notwithstanding the foregoing,
the first late payment by Tenant in any twelve (12) month period shall not be
subject to such interest.

26.LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

26.1Landlord's Cure.  All covenants and agreements to be kept or performed by
Tenant under this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any reduction of Rent, except to the extent, if any,
otherwise expressly provided herein.  If Tenant shall fail to perform any
obligation under this Lease, and such failure shall continue in excess of the
time allowed under Section 19.1.2, above, unless a specific time period is
otherwise stated in this Lease, Landlord may, but shall not be obligated to,
make any such payment or perform any such act on Tenant's part without waiving
its rights based upon any default of Tenant and without releasing Tenant from
any obligations hereunder.

26.2Tenant's Reimbursement.  Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor:  (i) sums equal to expenditures reasonably
made and obligations incurred by Landlord in connection with the remedying by
Landlord of Tenant's defaults pursuant to the provisions of Section 26.1; (ii)
sums equal to all losses, costs, liabilities, damages and expenses referred to
in Article 10 of this Lease; and (iii) sums equal to all expenditures made and
obligations incurred by Landlord in collecting or attempting to collect the Rent
or in enforcing or attempting to enforce any rights of Landlord under this Lease
or pursuant to law, including, without limitation, all reasonable legal fees and
other amounts so expended.  Tenant's obligations under this Section 26.2 shall
survive the expiration or sooner termination of the Lease Term.

27.ENTRY BY LANDLORDLandlord reserves the right at all reasonable times and upon
not less than twenty-four (24) hours' notice to Tenant (except in the case of an
emergency) to enter the Premises to (i) inspect them; (ii) show the Premises to
prospective purchasers, or to current or prospective mortgagees, ground or
underlying lessors or insurers or, during the last twelve (12) months of the
Lease Term, to prospective tenants; (iii) post notices of nonresponsibility (to
the extent applicable pursuant to then Applicable Law); or (iv) alter, improve
or repair the Premises or the Building, or for structural alterations, repairs
or improvements to the Building or the Building's systems and equipment.
Landlord may make any such entries without the abatement of Rent, except as
otherwise provided in this Lease, and may take such reasonable steps as required
to accomplish the stated purposes.  In an emergency, Landlord shall have the
right to use any means that Landlord may deem proper to open the doors in and to
the Premises.  Any entry into the Premises by Landlord in the manner
hereinbefore described shall not be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or an actual or constructive eviction of
Tenant from any portion of the Premises.  

28.TENANT PARKINGTenant shall have the right to use the amount of parking set
forth in Section 9 of the Summary, in the on-site and/or off-site, as the case
may be, parking facility (or facilities) which serve the Project.  Tenant shall
abide by all reasonable rules and regulations which are prescribed from time to
time for the orderly operation and use of the parking facility where the parking
passes are located (including any sticker or other identification system
established by Landlord and the prohibition of vehicle repair and maintenance
activities in the parking facilities) (provided that such rules and regulations
are not discriminatorily applied vis-à-vis Tenant), and shall cooperate in
seeing that Tenant's employees and visitors also comply with such rules and
regulations.  Tenant's use of the Project parking facility shall be at Tenant's
sole risk and Tenant acknowledges and agrees that Landlord shall have no
liability whatsoever for damage to the vehicles of Tenant, its employees and/or
visitors, or for other personal injury or property damage or theft relating to
or connected with the parking rights granted herein or any of

 

 

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Tenant's, its employees' and/or visitors' use of the parking facilities, except
to the extent arising from the negligence or willful misconduct of Landlord or
the Landlord Parties.  

29.MISCELLANEOUS PROVISIONS

29.1Terms; Captions.  The words "Landlord" and "Tenant" as used herein shall
include the plural as well as the singular.  The necessary grammatical changes
required to make the provisions hereof apply either to corporations or
partnerships or individuals, men or women, as the case may require, shall in all
cases be assumed as though in each case fully expressed.  The captions of
Articles and Sections are for convenience only and shall not be deemed to limit,
construe, affect or alter the meaning of such Articles and Sections.

29.2Binding Effect.  Subject to all other provisions of this Lease, each of the
covenants, conditions and provisions of this Lease shall extend to and shall, as
the case may require, bind or inure to the benefit not only of Landlord and of
Tenant, but also of their respective heirs, personal representatives, successors
or assigns, provided this clause shall not permit any assignment by Tenant
contrary to the provisions of Article 14 of this Lease.

29.3No Air Rights.  No rights to any view or to light or air over any property,
whether belonging to Landlord or any other person, are granted to Tenant by this
Lease.  If at any time any windows of the Premises are temporarily darkened or
the light or view therefrom is obstructed by reason of any repairs,
improvements, maintenance or cleaning in or about the  Project, the same shall
be without liability to Landlord and without any reduction or diminution of
Tenant's obligations under this Lease.

29.4Modification of Lease.  Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification of this Lease,
which modification will not cause an increased cost or expense to Tenant or in
any other way materially and adversely change the rights or obligations of
Tenant hereunder, then and in such event, Tenant agrees that this Lease may be
so modified and agrees to execute whatever documents are reasonably required
therefor and to deliver the same to Landlord within ten (10) business days
following a request therefor.  At the request of Landlord or any mortgagee or
ground lessor, Tenant agrees to execute a commercially reasonable memorandum of
Lease and deliver the same to Landlord within ten (10) business days following
the request therefor.

29.5Transfer of Landlord's Interest.  Tenant acknowledges that Landlord has the
right to transfer all or any portion of its interest in the Project or Building
and in this Lease, and Tenant agrees that in the event of any such transfer,
Landlord shall automatically be released from all liability under this Lease and
Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer and such transferee
shall be deemed to have fully assumed and be liable for all obligations of this
Lease to be performed by Landlord, including the return of any Security Deposit,
and Tenant shall attorn to such transferee.

29.6Prohibition Against Recording.  Except as provided in Section 29.4 of this
Lease, neither this Lease, nor any memorandum, affidavit or other writing with
respect thereto, shall be recorded by Tenant or by anyone acting through, under
or on behalf of Tenant.

29.7Landlord's Title.  Landlord's title is and always shall be paramount to the
title of Tenant.  Nothing herein contained shall empower Tenant to do any act
which can, shall or may encumber the title of Landlord.

29.8Relationship of Parties.  Nothing contained in this Lease shall be deemed or
construed by the parties hereto or by any third party to create the relationship
of principal and agent, partnership, joint venturer or any association between
Landlord and Tenant.

29.9Application of Payments.  Landlord shall have the right to apply payments
received from Tenant pursuant to this Lease, regardless of Tenant's designation
of such payments, to satisfy any obligations of Tenant hereunder, in such order
and amounts as Landlord, in its sole discretion, may elect.

29.10Time of Essence.  Time is of the essence with respect to the performance of
every provision of this Lease in which time of performance is a factor.

 

 

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29.11Partial Invalidity.  If any term, provision or condition contained in this
Lease shall, to any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term, provision or condition to persons or
circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

29.12No Warranty.  In executing and delivering this Lease, Tenant has not relied
on any representations, including, but not limited to, any representation as to
the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.

29.13Landlord Exculpation; Mutual Waiver of Consequential Damages.  The
liability of Landlord or the Landlord Parties to Tenant for any default by
Landlord under this Lease or arising in connection herewith or with Landlord's
operation, management, leasing, repair, renovation, alteration or any other
matter relating to the Project or the Premises shall be limited solely and
exclusively to an amount which is equal to the interest of Landlord in the
Building.  Neither Landlord, nor any of the Landlord Parties shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by, through
or under Tenant.  The limitations of liability contained in this Section 29.13
shall inure to the benefit of Landlord's and the Landlord Parties' present and
future partners, beneficiaries, officers, directors, trustees, shareholders,
agents and employees, and their respective partners, heirs, successors and
assigns.  Under no circumstances shall any present or future partner of Landlord
(if Landlord is a partnership), or trustee or beneficiary (if Landlord or any
partner of Landlord is a trust), have any liability for the performance of
Landlord's obligations under this Lease.  Notwithstanding any contrary provision
herein, neither Landlord nor the Landlord Parties shall be liable under any
circumstances for injury or damage to, or interference with, Tenant's business,
including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use or any other
consequential damages, in each case, however occurring, or loss to inventory,
scientific research, scientific experiments, laboratory animals, products,
specimens, samples, and/or scientific, business, accounting and other records of
every kind and description kept at the premises and any and all income derived
or derivable therefrom.  Similarly, except with respect to Tenant's violations
of the provisions of this Lease regarding Hazardous Materials and Tenant's
holding over in the Premises following the expiration or sooner termination of
this Lease, Tenant shall not be liable under any circumstances for injury or
damage to, or interference with, Landlord's business, including, but not limited
to, loss of profits or other revenues  (not including, however, loss of rents),
loss of business opportunity, loss of goodwill or loss of use or any other
consequential damages, in each case, however occurring.  Except to the extent
provided by Applicable Law (e.g., piercing the corporate veil), under no
circumstances shall any present or future partner, member, stockholder, trustee,
beneficiary, officer, director, employee or agent of Tenant or the Tenant
Parties have any personal liability for the performance of Tenant’s obligations
under this Lease.

29.14Entire Agreement.  It is understood and acknowledged that there are no oral
agreements between the parties hereto affecting this Lease and this Lease
constitutes the parties' entire agreement with respect to the leasing of the
Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease.  None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties hereto.

29.15Right to Lease.  Landlord reserves the absolute right to effect such other
tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project.  Tenant does not rely on the fact, nor does Landlord represent, that
any specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.

29.16Force Majeure.  Any prevention, delay or stoppage due to strikes, lockouts,
labor disputes, acts of God, acts of war, terrorist acts, inability to obtain
services, labor, or materials or reasonable substitutes therefor, governmental
actions, civil commotions, fire or other casualty, and other causes beyond the
reasonable control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid pursuant to
this Lease (collectively, a "Force Majeure"), notwithstanding anything to the
contrary contained in

 

 

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this Lease, shall excuse the performance of such party for a period equal to any
such prevention, delay or stoppage and, therefore, if this Lease specifies a
time period for performance of an obligation of either party, that time period
shall be extended by the period of any delay in such party's performance caused
by a Force Majeure.

29.17Waiver of Redemption by Tenant.  Tenant hereby waives, for Tenant and for
all those claiming under Tenant, any and all rights now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant's right of occupancy of the Premises after any termination of this Lease.

29.18Notices.  All notices, demands, statements, designations, approvals  or
other communications (collectively, "Notices") given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be (A)
sent by United States certified or registered mail, postage prepaid, return
receipt requested ("Mail"), (B) delivered by a nationally recognized overnight
courier, or (C) delivered personally.  Any Notice shall be sent, transmitted, or
delivered, as the case may be, to Tenant at the appropriate address set forth in
Section 10 of the Summary, or to such other place as Tenant may from time to
time designate in a Notice to Landlord, or to Landlord at the addresses set
forth below, or to such other places as Landlord may from time to time designate
in a Notice to Tenant.  Any Notice will be deemed given (i) three (3) days after
the date it is posted if sent by Mail, (ii) the date the telecopy is
transmitted, (iii) the date the overnight courier delivery is made, or (iv) the
date personal delivery is made.  As of the date of this Lease, any Notices to
Landlord must be sent, transmitted, or delivered, as the case may be, to the
following addresses:

Britannia Gateway II Limited Partnership
c/o HCP, Inc.
3760 Kilroy Airport Way, Suite 300
Long Beach, CA  90806-2473
Attn:  Legal Department

with a copy to:

HCP Life Science Estates
950 Tower Lane, Suite 1650

Foster City, CA 94404
Attention:  Jonathan M. Bergschneider

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

29.20Authority.  Tenant hereby represents and warrants that Tenant is a duly
formed and existing entity qualified to do business in the State of California
and that Tenant has full right and authority to execute and deliver this Lease
and that each person signing on behalf of Tenant is authorized to do so.  In
such event, Tenant shall, within ten (10) days following written request from
Landlord, deliver to Landlord satisfactory evidence of such authority and, if a
corporation, upon ten (10) days written request by Landlord, also deliver to
Landlord satisfactory evidence of (i) good standing in Tenant's state of
incorporation and (ii) qualification to do business in the State of
California.  Landlord hereby represents and warrants that Landlord is a duly
formed and existing entity qualified to do business in the State of California
and that Landlord has full right and authority to execute and deliver this Lease
and that each person signing on behalf of Landlord is authorized to do so.

29.21Attorneys' Fees.  In the event that either Landlord or Tenant should bring
suit for the possession of the Premises, for the recovery of any sum due under
this Lease, or because of the breach of any provision of this Lease or for any
other relief against the other, then all costs and expenses, including
reasonable attorneys' fees, incurred by the prevailing party therein shall be
paid by the other party, which obligation on the part of the other party shall
be deemed to have accrued on the date of the commencement of such action and
shall be enforceable whether or not the action is prosecuted to judgment.

29.22Governing Law; WAIVER OF TRIAL BY JURY.  This Lease shall be construed and
enforced in accordance with the laws of the State of California.  IN ANY ACTION
OR PROCEEDING ARISING HEREFROM, LANDLORD AND TENANT HEREBY CONSENT TO (I) THE
JURISDICTION OF ANY

 

 

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COMPETENT COURT WITHIN THE STATE OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY
MEANS AUTHORIZED BY CALIFORNIA LAW, AND (III) IN THE INTEREST OF SAVING TIME AND
EXPENSE, TRIAL WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT
BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT
OF ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP
OF LANDLORD AND TENANT, TENANT'S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY.  IN THE EVENT
LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE RENT
OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR
DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING
OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.

29.23Submission of Lease.  Submission of this instrument for examination or
signature by Tenant does not constitute a reservation of, option for or option
to lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.

29.24Brokers.  Landlord and Tenant hereby warrant to each other that they have
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 12 of the Summary (the "Brokers"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease.  Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys' fees) with respect to any leasing commission or
equivalent compensation alleged to be owing on account of any dealings with any
real estate broker or agent, other than the Brokers, occurring by, through, or
under the indemnifying party.  The terms of this Section 29.24 shall survive the
expiration or earlier termination of the Lease Term.

29.25Independent Covenants.  This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord.

29.26Project or Building Name, Address and Signage.  Subject to the terms of
this Section 29.26, Landlord shall have the right at any time to change the name
and/or address of the Project or Building and to install, affix and maintain any
and all signs on the exterior and on the interior of the Project or Building as
Landlord may, in Landlord's sole discretion, desire.  Notwithstanding the
foregoing, in no event shall Landlord change the name of the Building to be or
erect any signage on the interior or exterior of the Building or adjacent to the
Building which is reasonably deemed to be offensive in nature..  Tenant shall
not use the name of the Project or Building or use pictures or illustrations of
the Project or Building in advertising or other publicity or for any purpose
other than as the address of the business to be conducted by Tenant in the
Premises, without the prior written consent of Landlord.

29.27Counterparts.  This Lease may be executed in counterparts with the same
effect as if both parties hereto had executed the same document.  Both
counterparts shall be construed together and shall constitute a single lease.

29.28Intentionally Omitted.  

29.29Development of the Project.  

29.29.1Subdivision.  Landlord reserves the right to subdivide all or a portion
of the buildings and Common Areas.  Tenant agrees to execute and deliver, upon
demand by Landlord and in the commercially reasonable form requested by
Landlord, any additional documents needed to conform this Lease to the
circumstances resulting from a subdivision and any all maps in connection
therewith.  Notwithstanding anything to the contrary set forth in this Lease,
the separate ownership of any buildings and/or Common Areas by an entity other
than Landlord shall not affect the calculation of Direct Expenses or Tenant's
payment of Tenant's Share of Direct Expenses.

 

 

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29.29.2Construction of Property and Other Improvements.  Tenant acknowledges
that portions of the Project may be under construction following Tenant's
occupancy of the Premises, and that such construction may result in levels of
noise, dust, obstruction of access, etc. which are in excess of that present in
a fully constructed project.  Landlord shall use commercially reasonable efforts
to minimize the impact of such construction.  Tenant hereby waives any and all
rent offsets or claims of constructive eviction which may arise in connection
with such construction.

29.30No Violation.  Each of Tenant and Landlord hereby warrants and represents
to the other party that neither its execution of nor performance under this
Lease shall cause it to be in violation of any agreement, instrument, contract,
law, rule or regulation by which it is bound, and it shall protect, defend,
indemnify and hold the other party harmless against any claims, demands, losses,
damages, liabilities, costs and expenses, including, without limitation,
reasonable attorneys' fees and costs, arising from its breach of this warranty
and representation.

29.31Transportation Management.  Tenant shall fully comply with all present or
future programs intended to manage parking, transportation or traffic in and
around the Project and/or the Building, and in connection therewith, Tenant
shall take responsible action for the transportation planning and management of
all employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities.  Such programs may include,
without limitation: (i) restrictions on the number of peak-hour vehicle trips
generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of
an in-house ridesharing program and an employee transportation coordinator; (iv)
working with employees and any Project, Building or area-wide ridesharing
program manager; (v) instituting employer-sponsored incentives (financial or
in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work
shifts for employees.

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

LANDLORD:

 

BRITANNIA GATEWAY II LIMITED PARTNERSHIP,
a Delaware limited partnership

By:HCP Biotech Gateway Incorporated,
its General Partner

By:/s/ Jonathan M. Bergschneider

Jonathan M. Bergschneider
Senior Managing Director

 

 

TENANT:

AUDENTES THERAPEUTICS, INC.,
a Delaware corporation

By:   /s/ Matthew Patterson

Matthew Patterson

Print Name

Its:   President and CEO

By:  

 

Print Name

Its:  

 

 

 

 

 

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EXHIBIT A

BRITANNIA GATEWAY BUSINESS PARK

OUTLINE OF PREMISES

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EXHIBIT A-1

BRITANNIA GATEWAY BUSINESS PARK

PROJECT SITE PLAN

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EXHIBIT B

BRITANNIA GATEWAY BUSINESS PARK

TENANT WORK LETTER

This Tenant Work Letter shall set forth the terms and conditions relating to the
initial improvement of the Premises for Tenant following the date of this
Lease.  This Tenant Work Letter is essentially organized chronologically and
addresses the issues of construction, in sequence, as such issues will arise
during construction in the Premises.    

SECTION 1

CONDITION OF PREMISES

1.1Condition of Premises.  Tenant acknowledges that except as provided in the
preceding sentence, Tenant shall accept the Premises in their existing, "as-is"
condition on the date of delivery thereof to Tenant.  Except for the payment of
the Tenant Improvement Allowance as provided in Section 2, below, and the
Landlord’s Work, set forth in Section 1.2, below, Landlord shall have no
obligation to make or pay for any improvements to the Premises.

1.2Landlord's Work.  Landlord shall, at Landlord's sole cost and expense,
utilizing Building standard methods, materials, components, and finishes in good
and workmanlike manner and in compliance with all Applicable Laws, (i) cause the
construction or installation of Building standard demising walls separating the
Premises from the remainder of the floor in which the Premises is located and
perform all other work required to separate the Premises from the remainder of
the floor in which the Premises is located, (ii) perform any work necessary to
cause the plumbing, electrical systems, fire sprinkler system, lighting, and all
other building systems serving the Premises to be in good operating condition
and repair, and (iii) provided that Tenant continues to utilize existing
entrances for required means of egress from the Building, Landlord will be
responsible for making modifications to the exterior of the Building, the
existing Building entrances, and all exterior Common Areas (including required
striping and handicapped spaces in the parking areas) as required to cause such
areas to be in compliance with ADA and parking requirements, to the extent
required to allow the legal occupancy of the Premises or completion of the
Tenant Improvements (collectively, the "Landlord's Work").  Tenant hereby
acknowledges that Landlord may perform all or portions of such Landlord's Work
concurrently with the construction of the Tenant Improvements by Tenant and
during the Lease Term, and Landlord and Tenant shall cooperate (and shall cause
their respective contractors, subcontractors and agents to cooperate) with each
other in good faith in order that the work being performed by each party may be
completed without material interference with the completion of the work being
completed by the other party and without increase in cost to the other party.
Tenant hereby acknowledges that Landlord shall be permitted to perform the
Landlord's Work during Tenant's occupancy of the Premises.  Notwithstanding such
occupancy of the Premises during the performance of the Landlord's Work,
Landlord shall be permitted to perform the Landlord's Work during normal
business hours, and Tenant shall provide a clear working area for such work, if
necessary (including, but not limited to, the moving of furniture, fixtures and
Tenant’s property away from the area in which Landlord is performing the
Landlord's Work).  Further, Tenant shall cooperate with all reasonable Landlord
requests made in connection with or related to Landlord's completion of the
Landlord's Work.  Tenant hereby agrees that the performance of the Landlord's
Work in the Premises shall in no way constitute a constructive eviction of
Tenant nor, except as expressly set forth in this Lease, entitle Tenant to any
abatement of rent.  Landlord shall have no responsibility or for any reason be
liable to Tenant for any direct or indirect injury to or interference with
Tenant’s business arising from the Landlord's Work, nor shall Tenant be entitled
to any compensation or damages from Landlord for loss of use of the whole or any
part of the Premises, or for any inconvenience or annoyance occasioned by the
Landlord's Work or Landlord's actions (or the actions of Landlord's contractors,
employees and/or agents) in connection with the Landlord's Work.  Further,
except to the extent arising from Landlord’s or any of its contractor’s,
employee’s and/or agent’s negligence or willful misconduct, Landlord shall have
no responsibility or for any reason be liable to Tenant for damage to Tenant’s
personal property or improvements resulting from the Landlord's Work or
Landlord’s actions (or the actions of Landlord's contractors, employees and/or
agents) in connection with the Landlord's Work.  Landlord shall use commercially
reasonable efforts to perform the Landlord's Work in a manner designed to
minimize interference with Tenant’s normal business operations in the Premises,
and in connection therewith, construction activities that are reasonably
anticipated to be disruptive to Tenant are to be conducted after

 

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normal business hours. Such activities to be performed after normal business
hours include, but are not limited to: shooting drywall screwing, hammering,
loud cutting, painting, staining, sanding, welding and soldering.

SECTION 2

TENANT IMPROVEMENTS

2.1

Tenant Improvement Allowance.  Commencing as of the Lease Commencement Date,
Tenant shall be entitled to use the "Tenant Improvement Allowance", as defined
in Section 5 of the Summary to this Lease, for the costs relating to the initial
design and construction of Tenant's improvements, which are permanently affixed
to the Premises or which are "Tenant Improvement Allowance Items," as that term
is defined in Section 2.2.1, below (collectively, the "Tenant
Improvements").  In no event shall Landlord be obligated to make disbursements
pursuant to this Tenant Work Letter or otherwise in connection with Tenant's
construction of the Tenant Improvements or any Tenant Improvement Allowance
Items, as defined below, in a total amount which exceeds the sum of the Tenant
Improvement Allowance and the Additional TI Allowance (defined in Section 2.5
below).  All Tenant Improvements for which the Tenant Improvement Allowance has
been made available shall be deemed Landlord's property under the terms of the
Lease; provided, however, Landlord may, by written notice to Tenant given
concurrently with Landlord's approval of the "Final Working Drawings", as that
term is defined in Section 3.3, below, require Tenant, prior to the end of the
Lease Term, or given following any earlier termination of this Lease, at
Tenant's expense, to remove any Tenant Improvements and to repair any damage to
the Premises and Building caused by such removal and return the affected portion
of the Premises to a Building standard general office condition.  Any portion of
the Tenant Improvement Allowance that is not disbursed or allocated for
disbursement by December 31, 2018, shall revert to Landlord and Tenant shall
have no further rights with respect thereto, provided that such date shall be
extended on a day for day basis in the event of any delay in the delivery of the
Premises to Tenant beyond February 1, 2018.

2.2

Disbursement of the Tenant Improvement Allowance.

2.2.1Tenant Improvement Allowance Items.  Except as otherwise set forth in this
Tenant Work Letter, the Tenant Improvement Allowance and Additional Improvement
Allowance shall be disbursed by Landlord only for the following items and costs
(collectively the "Tenant Improvement Allowance Items"):

2.2.1.1Payment of all reasonable fees of the "Architect" and the "Engineers," as
those terms are defined in Section 3.1 of this Tenant Work Letter, project
management fees, and payment of the fees incurred by, and the cost of documents
and materials supplied by, Landlord and Landlord's consultants in connection
with the preparation and review of the "Construction Drawings," as that term is
defined in Section 3.2 of this Tenant Work Letter;

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

2.2.1.3The payment for all demolition and removal of existing improvements in
the Premises and the PMA fee;

2.2.1.4The cost of construction of the Tenant Improvements, including, without
limitation, testing and inspection costs, costs incurred for removal of existing
furniture, fixtures or equipment in the Premises, hoisting and trash removal
costs, costs to purchase and install in the Premises equipment customarily
incorporated into laboratory improvements or laboratory utility systems,
including, without limitation, UPS, DI Systems, boilers, air compressors,
glass/cage washers and autoclaves, painting, and contractors' fees and general
conditions;

2.2.1.5The cost of any changes in the Base Building when such changes are
required by the Construction Drawings (including if such changes are due to the
fact that such work is prepared on an unoccupied basis), such cost to include
all direct architectural and/or engineering fees and expenses incurred in
connection therewith;

2.2.1.6The cost of any changes to the Construction Drawings or Tenant
Improvements required by all applicable building codes (the "Code");

2.2.1.7Sales and use taxes;

 

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2.2.1.8Subject to Section 2.2, above, all other actual out-of-pocket costs
expended by Landlord in connection with the construction of the Tenant
Improvements, including, without limitation, costs expended by Landlord pursuant
to Section 4.1.1 of this Tenant Work Letter, below.

2.2.2Disbursement of Tenant Improvement Allowance.  During the construction of
the Tenant Improvements, Landlord shall make monthly disbursements of the Tenant
Improvement Allowance and Additional TI Allowance, if applicable, for Tenant
Improvement Allowance Items for the benefit of Tenant and shall authorize the
release of monies for the benefit of Tenant as follows.

2.2.2.1Monthly Disbursements.  On or before the fifth (5th) day of each calendar
month, during the design and construction of the Tenant Improvements (or such
other date as Landlord may designate), Tenant may deliver to Landlord:  (i) a
request for reimbursement of amounts paid to the "Contractor," as that term is
defined in Section 4.1.1 of this Tenant Work Letter, approved by Tenant, in a
form to be provided by Landlord, showing the schedule, by trade, of percentage
of completion of the Tenant Improvements in the Premises, detailing the portion
of the work completed and the portion not completed; (ii) invoices from all of
"Tenant's Agents," as that term is defined in Section 4.1.2 of this Tenant Work
Letter, for labor rendered and materials for the Premises; (iii) executed
mechanic's lien releases, as applicable, from all of Tenant's Agents which shall
comply with the appropriate provisions, as reasonably determined by Landlord, of
the California Civil Code; and (iv) all other information reasonably requested
by Landlord.  Tenant's request for payment shall be deemed Tenant's acceptance
and approval of the work furnished and/or the materials supplied as set forth in
Tenant's payment request.  Within forty-five (45) days thereafter, Landlord
shall deliver a check to Tenant made payable to Tenant in payment of the lesser
of:  (A) the amounts so requested by Tenant as set forth in this
Section 2.2.3.1, above (or, subject to the terms of Section 4.2.1, below, a
percentage thereof), and (B) the balance of any remaining available portion of
the Tenant Improvement Allowance and Additional Improvement Allowance, if
applicable, provided that Landlord does not dispute any request for payment
based on non-compliance of any work with the "Approved Working Drawings," as
that term is defined in Section 3.5 below, or due to any substandard
work.  Landlord's payment of such amounts shall not be deemed Landlord's
approval or acceptance of the work furnished or materials supplied as set forth
in Tenant's payment request.

2.2.2.2Final Deliveries.  Following the completion of construction of the Tenant
Improvements, Tenant shall deliver to Landlord properly executed final
mechanic's lien releases in compliance with the California Civil Code from all
of Tenant's Agents, and a certificate certifying that the construction of the
Tenant Improvements in the Premises has been substantially completed.  Tenant
shall record a valid Notice of Completion in accordance with the requirements of
Section 4.3 of this Tenant Work Letter.

2.2.2.3Other Terms.  Landlord shall only be obligated to make disbursements from
the Tenant Improvement Allowance and Additional TI Allowance, if applicable, to
the extent costs are incurred by Tenant for Tenant Improvement Allowance
Items.  All Tenant Improvement Allowance Items for which the Tenant Improvement
Allowance and Additional TI Allowance have been made available shall be deemed
Landlord's property under the terms of this Lease.

2.4

Building Standards.  The quality of Tenant Improvements shall be in keeping with
the existing improvements in the Premises.

2.5

Additional Tenant Improvement Allowance.  In addition to the Tenant Improvement
Allowance, Tenant shall have the right, by written notice to Landlord given on
or before December 31, 2018 (provided that such date shall be extended on a day
for day basis in the event of any delay in the delivery of the Premises to
Tenant beyond February 1, 2018), to use up to $35.00 per rentable square foot of
the Premises (i.e., up to $929,355.00) (the "Additional TI Allowance") towards
the payment of the costs of the Tenant Improvement Allowance Items.  In the
event Tenant exercises its right to use all or any portion of the Additional TI
Allowance, Tenant shall be required to pay Landlord, commencing on the date the
Tenant Improvements are completed (the "Additional Payment Commencement Date"),
the "Additional TI Allowance Payment," as that term is defined below, in
consideration of Landlord provision of the Additional TI Allowance.  The
"Additional TI Allowance Payment" shall be determined as the missing component
of an annuity, which annuity shall have (i) the amount of the Additional TI
Allowance utilized by Tenant as the present value amount, (ii) a number equal to
the number of full calendar months then remaining in the Lease Term as the
number of payments, (iii) a monthly interest factor equal to eighty-three
one-hundredths percent (0.83%), which is equal to ten percent (10%) divided by
twelve (12) months per year, and (iv) the Additional TI Allowance Payment as the
missing component of the annuity.  Following the calculation of the Additional
TI Allowance Payment, Landlord and Tenant will enter into a lease amendment to
confirm the amount thereof.  Any portion of the Tenant Improvement Allowance
that is not disbursed or allocated for disbursement by

 

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December 31, 2018 (provided that such date shall be extended on a day for day
basis in the event of any delay in the delivery of the Premises to Tenant beyond
February 1, 2018), shall revert to Landlord and Tenant shall have no further
rights with respect thereto.  

2.6

Failure to Disburse the Tenant Improvement Allowance.  To the extent that
Landlord fails to make payments from the Tenant Improvement Allowance or
Additional TI Allowance in accordance with the terms of this Tenant Work Letter,
and such amounts remain unpaid for thirty (30) days after notice from Tenant,
then without limiting Tenant's other remedies under the Lease, Tenant may, after
Landlord's failure to pay such amounts within ten (10) business days after
Tenant's delivery of a second notice from Tenant delivered after the expiration
of such 30-day period, pay the same and deduct the amount thereof, together with
interest at the interest rate set forth in Section 25, from the Rent next due
and owning under the Lease.  Notwithstanding the foregoing, if during either the
30-day or 10-day period set forth above, Landlord (i) delivers notice to Tenant
that it disputes any portion of the amounts claimed to be due (the "Allowance
Dispute Notice"), and (ii) pays any amounts not in dispute, Tenant shall have no
right to offset any disputed amounts against rent, but may institute proceedings
to recover such amounts from Landlord.

SECTION 3

CONSTRUCTION DRAWINGS

3.1

Selection of Architect.  Tenant shall retain an architect/space planner (the
"Architect") approved in advance by Landlord (which approval shall not be
unreasonably withheld, conditioned or delayed) to prepare the Final Space Plan
and Final Working Drawings as provided in Section 3.2 and 3.3, below.  Tenant
shall retain the engineering consultants or design/build subcontractors
designated by Tenant and reasonably approved in advance by Landlord (the
"Engineers") to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC, lifesafety, and
sprinkler work in the Premises, which work is not part of the Base
Building.  All such plans and drawings shall comply with the drawing format and
specifications reasonably determined by Landlord, and shall be subject to
Landlord's reasonable approval.  Tenant and Architect shall verify, in the
field, the dimensions and conditions as shown on the relevant portions of the
Base Building plans, and Tenant and Architect shall be solely responsible for
the same, and Landlord shall have no responsibility in connection
therewith.  Landlord's review of any plans or drawings as set forth in this
Section 3, shall be for its sole purpose and shall not imply Landlord's review
of the same, or obligate Landlord to review the same, for quality, design, Code
compliance or other like matters.  

3.2

Final Space Plan.  Tenant shall supply Landlord with four (4) copies signed by
Tenant of its final space plan for the Premises before any architectural working
drawings or engineering drawings have been commenced.  The final space plan (the
"Final Space Plan") shall include a layout and designation of all offices, labs,
rooms and other partitioning, their intended use, and equipment to be contained
therein.  Landlord may request clarification or more specific drawings for
special use items not included in the Final Space Plan.  Landlord shall advise
Tenant within five (5) business days after Landlord's receipt of the Final Space
Plan for the Premises if the same is unsatisfactory or incomplete in any respect
with reasonable specificity.  If Tenant is so advised, Tenant shall promptly
cause the Final Space Plan to be revised to correct any deficiencies or other
matters Landlord may reasonably require.

3.3

Final Working Drawings.  After the Final Space Plan has been approved by
Landlord, Tenant shall supply the Engineers with a complete listing of standard
and non-standard equipment and specifications, including, without limitation,
Title 24 calculations, electrical requirements and special electrical receptacle
requirements for the Premises, to enable the Engineers and the Architect to
complete the "Final Working Drawings" (as that term is defined below) in the
manner as set forth below.  Upon the approval of the Final Space Plan by
Landlord and Tenant, Tenant shall promptly cause the Architect and the Engineers
to complete the architectural and engineering drawings for the Premises, and
Architect shall compile a fully coordinated set of architectural, structural,
mechanical, electrical and plumbing working drawings in a form which is
sufficiently complete to allow all of Tenant's Agents to bid on the work and to
obtain all applicable permits (collectively, the "Final Working Drawings") and
shall submit the same to Landlord for Landlord's approval, which shall not be
unreasonably withheld, conditioned, or delayed.  Tenant shall supply Landlord
with four (4) copies signed by Tenant of such Final Working Drawings.  Landlord
shall advise Tenant within ten (10) business days after Landlord's receipt of
the Final Working Drawings for the Premises if the same is unsatisfactory or
incomplete in any respect with reasonable specificity.  If Tenant is so advised,
Tenant shall promptly

 

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cause the Final Working Drawings to be revised in accordance with such review
and any disapproval of Landlord in connection therewith.  

3.5

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

SECTION 4

CONSTRUCTION OF THE TENANT IMPROVEMENTS

4.1

Tenant's Selection of Contractors.

4.1.1The Contractor; Landlord's Project Manager.  Tenant shall retain a licensed
general contractor, approved in advance by Landlord, to construct the Tenant
Improvements ("Contractor").  Landlord's approval of the Contractor shall not be
unreasonably withheld, conditioned or delayed.  Landlord hereby pre-approves
NOVO as the Contractor.  Landlord shall retain Project Management Advisors, Inc.
("PMA") as a third party project manager for construction oversight of the
Tenant Improvements on behalf of Landlord, and Tenant shall pay a fee to
Landlord with respect to the PMA services equal to $4,069.00 per month of
construction, which such amount shall be payable only during the period during
actual design and construction prior to substantial competition.

4.1.2Tenant's Agents.  All subcontractors, laborers, materialmen, and suppliers
used by Tenant (such subcontractors, laborers, materialmen, and suppliers, and
the Contractor to be known collectively as "Tenant's Agents").  The
subcontractors used by Tenant, but not any laborers, materialmen, and suppliers,
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld, conditioned, or delayed.  If Landlord does not approve
any of Tenant's proposed subcontractors, Tenant shall submit other proposed
subcontractors for Landlord's written approval.

4.2

Construction of Tenant Improvements by Tenant's Agents.

4.2.1Construction Contract; Cost Budget.  Tenant shall engage the Contractor
under a commercially reasonable and customary construction contract, approved by
Landlord (such approval not to be unreasonably withheld, conditioned or delayed)
(collectively, the "Contract").  Prior to the commencement of the construction
of the Tenant Improvements, and after Tenant has accepted all bids for the
Tenant Improvements, Tenant shall provide Landlord with a detailed breakdown, by
trade, of the final costs to be incurred or which have been incurred, as set
forth more particularly in Sections 2.2.1.1 through 2.2.1.10, above, in
connection with the design and construction of the Tenant Improvements to be
performed by or at the direction of Tenant or the Contractor, which costs form a
basis for the estimated total costs of the work of the Tenant Improvement
project (the "Final Costs").  The difference between the amount of the Final
Costs and the amount of the Tenant Improvement Allowance (less any portion
thereof already disbursed by Landlord, or in the process of being disbursed by
Landlord, on or before the commencement of construction of the Tenant
Improvements) is referred to herein as the "Over-Allowance Amount".  In the
event that an Over-Allowance Amount exists in connection with any particular
construction project involving the construction of the Improvements, then Tenant
shall pay a percentage of each amount requested by Contractor or otherwise
disbursed under this Work Letter, which percentage shall be equal to the
Over-Allowance Amount divided by the amount of the Final Costs and such payments
by Tenant (the “Over-Allowance Payments”) shall be a condition to Landlord’s
obligation to pay any amounts from the Tenant Improvement Allowance.  In the
event that, after the Final Costs have been delivered by Tenant to Landlord, the
costs relating to the design and construction of the Tenant Improvements shall
change, any additional costs necessary to such design and construction in excess
of the Final Costs, shall be in accordance with the terms of the immediately
preceding sentence and the amounts to be disbursed by Landlord pursuant to the
terms of this Work Letter thereafter shall be accordingly adjusted so that
Landlord’s disbursements in the aggregate pursuant to the terms of this Work
Letter and Tenant’s Over-Allowance Payments are each proportionate to the
adjusted Final Costs.  In connection with any Over-Allowance Payment made by
Tenant

 

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pursuant to this Section 4.2.1, Tenant shall provide Landlord with the documents
described in Sections 2.2.2.1 (i), (ii), (iii) and (iv) of this Tenant Work
Letter, above, for Landlord's approval (such approval not to be unreasonably
withheld, conditioned or delayed), prior to Tenant paying such costs.  All
Tenant Improvements paid for by the Over-Allowance Amount shall be deemed
Landlord's property under the terms of the Lease.

4.2.2Tenant's Agents.

4.2.2.1Compliance with Drawings and Schedule.  Tenant's and Tenant's Agent's
construction of the Tenant Improvements shall comply with the
following:  (i) the Tenant Improvements shall be constructed in strict
accordance with the Approved Working Drawings; and (ii) Tenant's Agents shall
submit schedules of all work relating to the Tenant's Improvements to Contractor
and Contractor shall, within five (5) business days of receipt thereof, inform
Tenant's Agents of any changes which are necessary thereto, and Tenant's Agents
shall adhere to such corrected schedule.  

4.2.2.2Indemnity.  Tenant's indemnity of Landlord as set forth in this Lease
shall also apply with respect to any and all costs, losses, damages, injuries
and liabilities related in any way to any act or omission of Tenant or Tenant's
Agents, or anyone directly or indirectly employed by any of them, or in
connection with Tenant's non-payment of any amount arising out of the Tenant
Improvements and/or Tenant's disapproval of all or any portion of any request
for payment.  Such indemnity by Tenant, as set forth in this Lease, shall also
apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord's performance of any ministerial acts
reasonably necessary (i) to permit Tenant to complete the Tenant Improvements,
and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.  The foregoing indemnity shall not apply to claims
caused by the gross negligence or willful misconduct of Landlord, Landlord
Parties, its member partners, shareholders, officers, directors, agents,
employees, and/or contractors.

4.2.2.2Requirements of Tenant's Agents.  Each of Tenant's Agents shall guarantee
to Tenant and for the benefit of Landlord that the portion of the Tenant
Improvements for which it is responsible shall be free from any defects in
workmanship and materials for a period of not less than one (1) year from the
date of substantial completion of the work under the Contract ("Substantial
Completion").  Each of Tenant's Agents shall be responsible for the replacement
or repair, without additional charge, of all work done or furnished in
accordance with its contract that shall become defective within one (1) year
after Substantial Completion.  The correction of such work shall include,
without additional charge, all additional expenses and damages incurred in
connection with such removal or replacement of all or any part of the Tenant
Improvements, and/or the Building and/or common areas that may be damaged or
disturbed thereby.  All such warranties or guarantees as to materials or
workmanship of or with respect to the Tenant Improvements shall be contained in
the Contract or subcontract and shall be written such that such guarantees or
warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either.  Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such right of direct enforcement.

4.2.2.4Insurance Requirements.

4.2.2.4.1

General Coverages.  All of Tenant's Agents shall carry the following insurance
with insurers having a  minimum A.M. best rating of A- VIII or better (i)
worker's compensation insurance covering all of Tenant's Agents' respective
employees with a waiver of subrogation in favor of Landlord and the property
manager, (ii) general liability insurance with a limit of not less than
$1,000,000 per occurrence and $2,000,000 general aggregate, including
products/completed operations and contractual coverage, and including Landlord
and its property manager as additional insureds, and (ii) if the cost of such
Tenant Improvements exceeds $100,000 in the aggregate, then Builders Risk
insurance covering the construction of the Tenant Improvements, and such policy
shall include Landlord as an additional insured.

4.2.2.4.2

Intentionally Omitted.  

4.2.2.4.3

General Terms.  Certificates for all insurance carried pursuant to this
Section 4.2.2.4 shall be delivered to Landlord before the commencement of
construction of the Expansion Tenant Improvements and before the Contractor's
equipment is moved onto the site.  All such policies of insurance must contain a
provision that the company writing said policy will endeavor to give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance.  In the event
that the Expansion Tenant Improvements are damaged by any cause during the
course of the construction thereof,

 

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Tenant shall promptly repair the same at Tenant's sole cost and
expense.  Tenant's Agents shall maintain all of the foregoing insurance coverage
in force until the Expansion Tenant Improvements are fully completed, except for
any Products and Completed Operation Coverage insurance required by Landlord,
which is to be maintained for ten (10) years following completion of the
work.  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.  The requirements for the
foregoing insurance shall not derogate from the provisions for indemnification
of Landlord by Tenant under Section 4.2.2.2 of this Tenant Work Letter.

4.2.2Governmental Compliance.  The Tenant Improvements shall comply in all
respects with the following:  (i) all state, federal, city or quasi-governmental
laws, codes, ordinances and regulations, as each may apply according to the
rulings of the controlling public official, agent or other person;
(ii) applicable standards of the American Insurance Association (formerly, the
National Board of Fire Underwriters) and the National Electrical Code; and
(iii) building material manufacturer's specifications.

4.2.4Inspection by Landlord.  Landlord shall have the right to inspect the
Tenant Improvements at all reasonable times during the construction period and
with reasonable prior notice, provided however, that Landlord's failure to
inspect the Tenant Improvements shall in no event constitute a waiver of any of
Landlord's rights hereunder nor shall Landlord's inspection of the Tenant
Improvements constitute Landlord's approval of the same.  Should Landlord
reasonably disapprove any portion of the Tenant Improvements, on the grounds
that the construction is defective or fails to comply with the Approved Working
Drawings, Landlord shall notify Tenant in writing of such disapproval and shall
specify the items disapproved.  Any such defects or deviations shall be
rectified by Tenant at no expense to Landlord, provided however, that in the
event Landlord determines that a defect or deviation exists that might adversely
affect the mechanical, electrical, plumbing, heating, ventilating and air
conditioning or life-safety systems of the Building, the structure or exterior
appearance of the Building or any other tenant's use of such other tenant's
leased premises, Landlord may, upon notice to Tenant, take such action as
Landlord reasonably deems necessary, at Tenant's expense and without incurring
any liability on Landlord's part (except to the extent arising from the
negligence or willful misconduct of Landlord or the Landlord Parties), to
correct any such defect, deviation and/or matter, including, without limitation,
causing the cessation of performance of the construction of the Tenant
Improvements until such time as the defect, deviation and/or matter is corrected
to Landlord's reasonable satisfaction.

4.2.5Meetings.  Commencing upon the execution of this Lease, Tenant shall hold
weekly meetings at a reasonable time, with the Architect and the Contractor
regarding the progress of the preparation of Construction Drawings and the
construction of the Tenant Improvements, and Landlord and/or its agents shall
receive prior notice of, and shall have the right to attend, all such meetings,
and, upon Landlord's request, certain of Tenant's Agents shall attend such
meetings.  In addition, minutes shall be taken at all such meetings, a copy of
which minutes shall be promptly delivered to Landlord.  One such meeting each
month shall include the review of Contractor's current request for payment.

4.3

Notice of Completion; Copy of Record Set of Plans.  Within ten (10) days after
completion of construction of the Tenant Improvements, Tenant shall cause a
valid Notice of Completion to be recorded in the office of the Recorder of the
county in which the Building is located in accordance with Section 3093 of the
Civil Code of the State of California or any successor statute, and shall
furnish a copy thereof to Landlord upon such recordation.  If Tenant fails to do
so, Landlord may execute and file the same on behalf of Tenant as Tenant's agent
for such purpose, at Tenant's sole cost and expense.  At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (x) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (y) to certify to
the best of their knowledge that the "record-set" of as-built drawings are true
and correct, which certification shall survive the expiration or termination of
this Lease, and (z) to deliver to Landlord two (2) sets of copies of such record
set of drawings (hard copy and CAD files) within ninety (90) days following
issuance of a certificate of occupancy for the Premises, and (ii) Tenant shall
deliver to Landlord a copy of all warranties, guaranties, and operating manuals
and information relating to the improvements, equipment, and systems in the
Premises.  Within fifteen (15) days after request by Tenant following the
Substantial Completion of the Tenant Improvements, Landlord will acknowledge its
approval of the Tenant Improvements (provided that such approval has been
granted) by placing its signature on a Contractor’s Certificate of Substantial
Completion fully executed by the Architect, Contractor and Tenant.  Landlord’s
approval shall not create any contingent liabilities for Landlord with respect
to any latent quality, design, Code compliance or other like matters that may
arise subsequent to Landlord’s approval.

 

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SECTION 5

MISCELLANEOUS

5.1

Tenant's Entry Into the Premises Prior to Substantial Completion.  Provided that
Tenant and its agents do not interfere with Contractor's work in the Building
and the Premises, Contractor shall allow Tenant access to the Premises prior to
the Substantial Completion of the Premises for the purpose of Tenant installing
equipment or fixtures (including Tenant's data and telephone equipment) in the
Premises.  

5.2

Tenant's Representative.  Tenant has designated David Nagler and Steve Terry as
its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who shall each have full authority and responsibility to act on
behalf of the Tenant as required in this Tenant Work Letter.

5.3

Landlord's Representative.  Landlord has designated Jeff Marcowitz with PMA, as
its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

5.4

Time is of the Essence in This Tenant Work Letter.  Unless otherwise indicated,
all references herein to a "number of days" shall mean and refer to calendar
days.  If any item requiring approval is timely disapproved by Landlord, the
procedure for preparation of the document and approval thereof shall be repeated
until the document is approved by Landlord.

5.5

Tenant's Lease Default.  Notwithstanding any provision to the contrary contained
in the Lease or this Tenant Work Letter, if any economic or material
non-economic default by Tenant under the Lease (beyond the applicable notice and
cure periods) or this Tenant Work Letter (including, without limitation, any
failure by Tenant to fund any portion of the Over-Allowance Amount) occurs at
any time on or before the substantial completion of the Tenant Improvements and
such default remains uncured ten (10) days following Landlord's notice of such
default to Tenant, then in addition to all other rights and remedies granted to
Landlord pursuant to the Lease, Landlord shall have the right to withhold
payment of all or any portion of the Tenant Improvement Allowance and/or
Landlord may, without any liability whatsoever, cause the cessation of
construction of the Tenant Improvements (in which case, Tenant shall be
responsible for any delay in the substantial completion of the Tenant
Improvements and any costs occasioned thereby) until such time as the subject
default is cured.

 

 

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EXHIBIT C

BRITANNIA GATEWAY BUSINESS PARK

NOTICE OF LEASE TERM DATES

To:

_______________________
_______________________
_______________________
_______________________

 

Re:

Lease dated ____________, 20__ between ____________________, a
_____________________ ("Landlord"), and _______________________, a
_______________________ ("Tenant") concerning Suite ______ on floor(s)
__________ of the building located at  ___________________________, California.

Gentlemen:

In accordance with the Lease (the "Lease"), we wish to advise you and/or confirm
as follows:

 

1.

The Lease Term shall commence on or has commenced on _____________ for a term of
_______________ ending on _______________.

 

2.

Rent commenced to accrue on ____________, in the amount of ____________.

 

3.

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

 

4.

Your rent checks should be made payable to __________ at ______________.

 

5.

The exact number of rentable/usable square feet within the Premises is _________
square feet.

 

6.

Tenant's Share as adjusted based upon the exact number of usable square feet
within the Premises is ____________%.

 

"Landlord":

,
a

By:  
      Its:  

 

 

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Agreed to and Accepted as
of                , 200  .

"Tenant":

a

By:
     Its:

 

 

 

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EXHIBIT D

BRITANNIA GATEWAY BUSINESS PARK

FORM OF TENANT'S ESTOPPEL CERTIFICATE

The undersigned as Tenant under that certain Lease (the "Lease") made and
entered into as of ___________, 20___ by and between _______________ as
Landlord, and the undersigned as Tenant, for Premises consisting of the entire
office building located at ______________________________, California, certifies
as follows:

1.

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

2.

The undersigned currently occupies the Premises described in the Lease, the
Lease Term commenced on __________, and the Lease Term expires on ___________,
and except as may otherwise be set forth in the Lease, the undersigned has no
option to terminate or cancel the Lease or to purchase all or any part of the
Premises, the Building and/or the Project except as follows: ______________.

3.

Base Rent became payable on ____________.

4.

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

5.

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

 

6.

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

7.

To Tenant's knowledge, all conditions of the Lease to be performed by Landlord
necessary to the enforceability of the Lease have been satisfied and Landlord is
not in default thereunder.  In addition, the undersigned has not delivered any
notice to Landlord regarding a default by Landlord thereunder.  Except as may
otherwise be set forth in the Lease, the Lease does not require Landlord to
provide any rental concessions or to pay any leasing brokerage commissions.  

8.

No rental has been paid more than thirty (30) days in advance and no security
has been deposited with Landlord except as provided in the Lease.  Neither
Landlord, nor its successors or assigns, shall in any event be liable or
responsible for, or with respect to, the retention, application and/or return to
Tenant of any security deposit paid to any prior landlord of the Premises,
whether or not still held by any such prior landlord, unless and until the party
from whom the security deposit is being sought, whether it be a lender, or any
of its successors or assigns, has actually received for its own account, as
landlord, such security deposit (or portion thereof).

9.

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

10.

Tenant hereby represents and warrants that Tenant is a duly formed and existing
entity qualified to do business in California and that Tenant has full right and
authority to execute and deliver this Estoppel Certificate and that each person
signing on behalf of Tenant is authorized to do so.

11.

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

 

-1-

 

[Audentes Therapeutics, Inc.]

 

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

 

12.

Tenant is in compliance with all federal, state and local laws, ordinances,
rules and regulations relating to hazardous or toxic materials pursuant to the
terms of the Lease.  Tenant has never permitted or suffered, nor does Tenant
have any knowledge of, the generation, manufacture, treatment, use, storage,
disposal or discharge of any hazardous, toxic or dangerous waste, substance or
material in, on, under or about the Project or the Premises or any adjacent
premises or property in violation of any federal, state or local law, ordinance,
rule or regulation relating to hazardous or toxic materials.

13.

To the undersigned's knowledge, all tenant improvement work to be performed by
Landlord under the Lease has been completed in accordance with the Lease and has
been accepted by the undersigned and all reimbursements and allowances due to
the undersigned under the Lease in connection with any tenant improvement work
have been paid in full.  To the undersigned's knowledge, all work (if any) in
the common areas required by the Lease to be completed by Landlord has been
completed and all parking spaces required by the Lease have been furnished
and/or all parking ratios required by the Lease have been met.

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

Executed at ______________ on the ____ day of ___________, 200_.

 

"Tenant":

,
a

By:  
      Its:  

By:  
      Its:  

 

 

 

-2-

 

[Audentes Therapeutics, Inc.]

 

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

 

EXHIBIT E

BRITANNIA GATEWAY BUSINESS PARK

ENVIRONMENTAL QUESTIONNAIRE

ENVIRONMENTAL QUESTIONNAIRE
FOR COMMERCIAL AND INDUSTRIAL PROPERTIES

 

 

Tenant Name:  

 

 

Lease Address:

 

 

Lease Type (check correct box – right click to properties):  ☐ Primary
Lease/Lessee    

☐ Sublease from:

 

Instructions: The following questionnaire is to be completed by the Lessee
representative with knowledge of the planned operations for the specified
building/location. Please print clearly and attach additional sheets as
necessary.

 

1.0

PROCESS INFORMATION

 

Describe planned site use, including a brief description of manufacturing
processes and/or pilot plants planned for this site, if any.

 

 

 

 

 

 

 

 

 

 

2.0

HAZARDOUS MATERIALS – OTHER THAN WASTE

 

Will (or are) non-waste hazardous materials be/being used or stored at this
site? If so, continue with the next question. If not, go to Section 3.0.

 

2.1

Are any of the following materials handled on the Property?       ☐ Yes   ☐ No

[A material is handled if it is used, generated, processed, produced, packaged,
treated, stored, emitted, discharged, or disposed.] If YES, check (right click
to properties) the applicable correct Fire Code hazard categories below.

☐

Combustible dusts/fibers

☐

Explosives

☐

Flammable liquids

☐

Combustible liquids (e.g., oils)

☐

Compressed gas - inert

☐

Flammable solids/pyrophorics

☐

Cryogenic liquids - inert

☐

Compressed gas - flammable/pyrophoric

☐

Organic peroxides

☐

Cryogenic liquids - flammable

☐

Compressed gas - oxidizing

☐

Oxidizers - solid or liquid

☐

Cryogenic liquids - oxidizing

☐

Compressed gas - toxic

☐

Reactives - unstable or water reactive

☐

Corrosives - solid or liquid

☐

Compressed gas - corrosive

☐

Toxics - solid or liquid

 

 

2-2.

For all materials checked in Section 2.1 above, please list the specific
material(s), use(s), and quantities of each used or stored on the site in the
table below; or attach a separate inventory. NOTE: If proprietary, the
constituents need not be named but the hazard information and volumes are
required.

 

 

-1-

 

[Audentes Therapeutics, Inc.]

 

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

 

Material/

Chemical

Physical State (Solid, Liquid, or Gas)

Container Size

Number of Containers Used & Stored

Total Quantity

Units (pounds for solids, gallons or liters for liquids, & cubic feet for gases)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2-3.

Describe the planned storage area location(s) for the materials in Section 2-2
above. Include site maps and drawings as appropriate.

 

 

 

 

 

 

 

 

 

 

 

2-4.

Other hazardous materials. Check below (right click to properties) if
applicable. NOTE: If either of the latter

 

-2-

 

[Audentes Therapeutics, Inc.]

 

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

 

 

two are checked (BSL-3 and/or radioisotope/radiation), be advised that not all
lease locations/cities or lease agreements allow these hazards; and if either of
these hazards are planned, additional information will be required with copies
of oversight agency authorizations/licenses as they become available.

☐

Risk Group 2/Biosafety Level-2 Biohazards

☐

Risk Group 3/Biosafety Level-3 Biohazards

☐

Radioisotopes/Radiation

3.0

HAZARDOUS WASTE (i.e., REGULATED CHEMICAL WASTE)

Are (or will) hazardous wastes (be) generated?       ☐ Yes   ☐ No

If YES, continue with the next question. If not, skip this section and go to
section 4.0.

 

 

3.1

Are or will any of the following hazardous (CHEMICAL) wastes generated, handled,
or disposed of (where applicable and allowed) on the property?

 

☐

Liquids

☐

Process sludges

☐

PCBs

☐

Solids

☐

Metals

☐

wastewater

 

 

3-2.

List and estimate the quantities of hazardous waste identified in Question 3-1
above.

HAZARDOUS (CHEMICAL) WASTE GENERATED

SOURCE

WASTE TYPE

APPROX. MONTHLY QUANTITY with units

 

DISPOSITION [e.g., off-site landfill, incineration, fuel blending scrap metal;
wastewater neutralization (onsite or off-site)]

RCRA listed (federal)

Non-RCRA (Calif-ornia ONLY or recycle)

 

 

☐

☐

 

 

 

 

☐

☐

 

 

 

 

☐

☐

 

 

 

 

☐

☐

 

 

 

 

☐

☐

 

 

 

3-3.

Waste characterization by:        Process knowledge ☐       EPA lab analysis
☐     Both ☐

 

3-4.  

Please include name, location, and permit number (e.g. EPA ID No.) for
transporter and disposal facility if applicable. Attach separate pages as
necessary. If not yet known, write “TBD.”

 

Hazardous Waste Transporter/Disposal Facility Name

Facility Location

Transporter (T) or Disposal (D) Facility

Permit Number

 

 

 

 

 

 

 

 

 

 

 

 

 

3-5.

Are pollution controls or monitoring employed in the process to prevent or
minimize the release of wastes into the environment? NOTE: This does NOT mean
fume hoods; examples include air scrubbers, cyclones, carbon or HEPA filters at
building exhaust fans, sedimentation tanks, pH neutralization systems for
wastewater, etc.

 

☐ Yes   ☐ No

 

 

If YES, please list/describe:

 

-3-

 

[Audentes Therapeutics, Inc.]

 

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

 

 

 

 

 

 

 

 

4.0

OTHER REGULATED WASTE (i.e., REGULATED BIOLOGICAL WASTE, referred to as “Medical
Waste” in California)

 

4-1.

Will (or do) you generate medical waste?   ☐ Yes   ☐ No   If NO, skip to Section
5.0.

 

4-2.

Check the types of waste that will be generated, all of which fall under the
California Medical Waste Act:

☐

Contaminated sharps (i.e., if contaminated with  ≥ Risk Group 2 materials)

☐

Animal carcasses

☐

Pathology waste known or suspected to be contaminated with ≥ Risk Group 2
pathogens)

☐

Red bag  biohazardous waste (i.e., with  ≥ Risk Group 2 materials) for
autoclaving

☐

Human or non-human primate blood, tissues, etc.

(e.g., clinical specimens)

☐

Trace Chemotherapeutic Waste and/or Pharmaceutical waste NOT otherwise regulated
as RCRA chemical waste

 

4-3.

What vendor will be used for off-site autoclaving and/or incineration?

 

 

 

 

4-5.

Do you have a Medical Waste Permit for this site?    ☐ Yes   ☐ No, not
required.  

☐ No, but an application will be submitted.

5.0

UNDERGROUND STORAGE TANKS (USTS) & ABOVEGROUND STORAGE TANKS (ASTS)

 

5-1.

Are underground storage tanks (USTs), aboveground storage tanks (ASTs), or
associated pipelines used for the storage of petroleum products, chemicals, or
liquid wastes present on site (lease renewals) or required for planned
operations (new tenants)?     ☐ Yes   ☐ No  

NOTE: If you will have your own diesel emergency power generator, then you will
have at least one AST! [NOTE: If a backup generator services multiple tenants,
then the landlord usually handles the permits.]

If  NO, skip to section 6.0. If YES, please describe capacity, contents, age,
type of the USTs or ASTs, as well any associated leak detection/spill prevention
measures. Please attach additional pages if necessary.

 

UST or AST

Capacity (gallons)

 

Contents

Year Installed

Type (Steel, Fiberglass, etc.)

Associated Leak Detection / Spill Prevention Measures*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*NOTE: The following are examples of leak detection / spill prevention measures:
integrity testing, inventory reconciliation, leak detection system, overfill
spill protection, secondary containment, cathodic protection.

 

5-2.

Please provide copies of written tank integrity test results and/or monitoring
documentation, if available.

 

5-3.

Is the UST/AST registered and permitted with the appropriate regulatory
agencies?     ☐ Yes   ☐ No, not yet  

If YES, please attach a copy of the required permit(s). See Section 7-1 for the
oversight agencies that issue permits, with the exception of those for diesel
emergency power generators which are permitted by the local Air Quality District
(Bay Area Air Quality Management District = BAAQMD; or San Diego Air Pollution
Control District = San Diego APCD).

 

5-4.

If this Questionnaire is being completed for a lease renewal, and if any of the
USTs/ASTs have leaked,

 

-4-

 

[Audentes Therapeutics, Inc.]

 

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

 

 

please state the substance released, the media(s) impacted (e.g., soil, water,
asphalt, etc.), the actions taken, and all remedial responses to the incident.

 

 

 

 

 

 

 

 

 

 

 

5-5.

If this Questionnaire is being completed for a lease renewal, have USTs/ASTs
been removed from the Property?

☐ Yes   ☐ No

If YES, please provide any official closure letters or reports and supporting
documentation (e.g., analytical test results, remediation report results, etc.).

 

5-6.

For Lease renewals, are there any above or below ground pipelines on site used
to transfer chemicals or wastes?

☐ Yes   ☐ No

For new tenants, are installations of this type required for the planned
operations?   ☐ Yes   ☐ No

If YES to either question in this section 5-6, please describe.

 

 

 

 

 

 

 

 

 

 

 

 

6.0

ASBESTOS CONTAINING BUILDING MATERIALS

Please be advised that an asbestos survey may have been performed at the
Property. If provided, please review the information that identifies the
locations of known asbestos containing material or presumed asbestos containing
material. All personnel and appropriate subcontractors should be notified of the
presence of these materials, and informed not to disturb these materials. Any
activity that involves the disturbance or removal of these materials must be
done by an appropriately trained individual/contractor.

 

7.0

OTHER REGULATORY PERMITS/REQUIREMENTS

 

 

7-1.

Does the operation have or require an industrial wastewater permit to discharge
into the local National Pollutant Discharge Elimination System (NPDES)?
[Example: This applies when wastewater from equipment cleaning is routed through
a pH neutralization system prior to discharge into the sanitary or lab sewer for
certain pharmaceutical manufacturing wastewater; etc.] Permits are obtained from
the regional sanitation district that is treating wastewater.

☐ Yes   ☐ No   ☐, but one will be prepared and submitted to the Landlord
property management company.

If so, please attach a copy of this permit or provide it later when it has been
prepared.

 

7-2.

Has a Hazardous Materials Business Plan (HMBP) been developed for the site and
submitted via the State of California Electronic Reporting System (CERS)? [NOTE:
The trigger limits for having to do this are ≥ 200 cubic feet if any one type of
compressed gas(except for carbon dioxide and inert simple asphyxiant gases,
which have a higher trigger limit of  ≥ 1,000 cubic feet); ≥ 55 gallons if any
one type of hazardous chemical liquid; and ≥500 pounds of any one type of
hazardous chemical solid. So a full-sixe gas cylinder and a 260-liter of liquid
nitrogen are triggers! Don’t forget the diesel fuel in a backup emergency
generator if  the diesel tank size is ≥ 55 gallons and it is permitted under the
tenant (rather than  under the landlord).] NOTE: Each local Certified Unified
Program Agency (CUPA) in California governs the HMBP process so start there.
Examples: the CUPA for cities in San Mateo County is the County Environmental
Health Department; the CUPA for the City of Hayward, CA is the Hayward Fire
Department; the CUPA for Mountain View is the Mountain View Fire Department;
and, the CUPA for San Diego is the County of San Diego Hazardous Materials
Division (HMD),

 

-5-

 

[Audentes Therapeutics, Inc.]

 

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

 

☐ Yes   ☐ No, not required.  ☐ No, but one will be prepared and submitted, and a
copy will be provided to the landlord property management company.

If one has been completed, please attach a copy.  Continue to provide updated
versions as they are completed. This is a legal requirement in that State law
requires that the owner/operator of a business located on leased or rented real
property shall notify, in writing, the owner of the property that the business
is subject to and is in compliance with the Hazardous Materials Business Plan
requirements (Health and Safety Code Chapter 6.95 Section 25505.1).

 

7-3.

NOTE: Please be advised that if you are involved in any tenant improvements that
require a construction permit, you will be asked to provide the local city with
a Hazardous Materials Inventory Statement (HMIS) to ensure that your hazardous
chemicals fall within the applicable Fire Code fire control area limits for the
applicable construction occupancy of the particular building.  The HMIS will
include much of the information listed in Section 2-2.  Neither the landlord nor
the landlord’s property management company expressly warrants that the inventory
provided in Section 2-2 will necessarily meet the applicable California Fire
Code fire control area limits for building occupancy, especially in shared
tenant occupancy situations. It is the responsibility of the tenant to ensure
that a facility and site can legally handle the intended operations and
hazardous materials desired/ needed for its operations, but the landlord is
happy to assist in this determination when possible.

CERTIFICATION

 

I am familiar with the real property described in this questionnaire. By signing
below, I represent and warrant that the answers to the above questions are
complete and accurate to the best of my knowledge. I also understand that Lessor
will rely on the completeness and accuracy of my answers in assessing any
environmental liability risks associated with the property.

 

/s/ David Nagler

 

 

Signature:    

 

David Nagler

 

Name:

 

Senior Vice President HR & Corporate Affairs

 

Title:

 

7/11/17

 

Date:

 

 

 

Telephone:

 

 

 

-6-

 

[Audentes Therapeutics, Inc.]

 

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

 

EXHIBIT F

FORM OF LETTER OF CREDIT

 

(Letterhead of a money center bank

acceptable to the Landlord)

 

FAX NO. [(___) ___-____]
SWIFT:  [Insert No., if any]

[Insert Bank Name And Address]

 

DATE OF ISSUE:

BENEFICIARY:
[Insert Beneficiary Name And Address]

APPLICANT:
[Insert Applicant Name And Address]

 

LETTER OF CREDIT NO.

EXPIRATION DATE:
AT OUR COUNTERS

AMOUNT AVAILABLE:
USD[Insert Dollar Amount]
(U.S. DOLLARS [Insert Dollar Amount])

LADIES AND GENTLEMEN:

WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. ___________ IN
YOUR FAVOR FOR THE ACCOUNT OF [Insert Tenant's Name], A [Insert Entity Type], UP
TO THE AGGREGATE AMOUNT OF USD[Insert Dollar Amount] ([Insert Dollar Amount]
U.S. DOLLARS) EFFECTIVE IMMEDIATELY AND EXPIRING ON ___(Expiration Date)___
AVAILABLE BY PAYMENT UPON PRESENTATION OF YOUR DRAFT AT SIGHT DRAWN ON [Insert
Bank Name] WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENT(S):

1.

THE ORIGINAL OF THIS IRREVOCABLE STANDBY LETTER OF CREDIT AND AMENDMENT(S), IF
ANY.

2.

BENEFICIARY'S SIGNED STATEMENT PURPORTEDLY SIGNED BY AN AUTHORIZED
REPRESENTATIVE OF [Insert Landlord's Name], A [Insert Entity Type] ("LANDLORD")
STATING THE FOLLOWING:

"THE UNDERSIGNED HEREBY CERTIFIES THAT THE LANDLORD, EITHER (A) UNDER THE LEASE
(DEFINED BELOW), OR (B) AS A RESULT OF THE TERMINATION OF SUCH LEASE,  HAS THE
RIGHT TO DRAW DOWN THE AMOUNT OF USD IN ACCORDANCE WITH THE TERMS OF THAT
CERTAIN OFFICE LEASE DATED [Insert Lease Date], AS AMENDED (COLLECTIVELY, THE
"LEASE"), OR SUCH AMOUNT CONSTITUTES DAMAGES OWING BY THE TENANT TO BENEFICIARY
RESULTING FROM THE BREACH OF SUCH LEASE BY THE TENANT THEREUNDER, OR THE
TERMINATION OF SUCH LEASE, AND SUCH AMOUNT REMAINS UNPAID AT THE TIME OF THIS
DRAWING."

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT WE HAVE RECEIVED A WRITTEN NOTICE OF
[Insert Bank Name]'S ELECTION NOT TO EXTEND ITS STANDBY LETTER OF CREDIT
NO. ___________ AND HAVE NOT RECEIVED A REPLACEMENT LETTER OF

 

-1-

 

[Audentes Therapeutics, Inc.]

 

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

 

CREDIT WITHIN AT LEAST THIRTY (30) DAYS PRIOR TO THE PRESENT EXPIRATION DATE."

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE
FULL AMOUNT OF LETTER OF CREDIT NO. ___________ AS THE RESULT OF THE FILING OF A
VOLUNTARY PETITION UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY CODE BY
THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED [Insert Lease Date], AS AMENDED
(COLLECTIVELY, THE "LEASE"), WHICH FILING HAS NOT BEEN DISMISSED AT THE TIME OF
THIS DRAWING."

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE
FULL AMOUNT OF LETTER OF CREDIT NO. ___________ AS THE RESULT OF AN INVOLUNTARY
PETITION HAVING BEEN FILED UNDER THE U.S. BANKRUPTCY CODE OR A STATE BANKRUPTCY
CODE AGAINST THE TENANT UNDER THAT CERTAIN OFFICE LEASE DATED [Insert Lease
Date], AS AMENDED (COLLECTIVELY, THE "LEASE"), WHICH FILING HAS NOT BEEN
DISMISSED AT THE TIME OF THIS DRAWING."

OR

"THE UNDERSIGNED HEREBY CERTIFIES THAT BENEFICIARY IS ENTITLED TO DRAW DOWN THE
FULL AMOUNT OF LETTER OF CREDIT NO. ________________ AS THE RESULT OF THE
REJECTION, OR DEEMED REJECTION, OF THAT CERTAIN OFFICE LEASE DATED [Insert Lease
Date], AS AMENDED, UNDER SECTION 365 OF THE U.S. BANKRUPTCY CODE."

SPECIAL CONDITIONS:

PARTIAL DRAWINGS AND MULTIPLE PRESENTATIONS MAY BE MADE UNDER THIS STANDBY
LETTER OF CREDIT, PROVIDED, HOWEVER, THAT EACH SUCH DEMAND THAT IS PAID BY US
SHALL REDUCE THE AMOUNT AVAILABLE UNDER THIS STANDBY LETTER OF CREDIT.

ALL INFORMATION REQUIRED WHETHER INDICATED BY BLANKS, BRACKETS OR OTHERWISE,
MUST BE COMPLETED AT THE TIME OF DRAWING.  [Please Provide The Required Forms
For Review, And Attach As Schedules To The Letter Of Credit.]

ALL SIGNATURES MUST BE MANUALLY EXECUTED IN ORIGINALS.

ALL BANKING CHARGES ARE FOR THE APPLICANT'S ACCOUNT.

IT IS A CONDITION OF THIS STANDBY LETTER OF CREDIT THAT IT SHALL BE DEEMED
AUTOMATICALLY EXTENDED WITHOUT AMENDMENT FOR A PERIOD OF ONE YEAR  FROM THE
PRESENT OR ANY FUTURE EXPIRATION DATE, UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO
THE EXPIRATION DATE WE SEND YOU NOTICE BY NATIONALLY RECOGNIZED OVERNIGHT
COURIER SERVICE THAT WE ELECT NOT TO EXTEND THIS LETTER OF CREDIT FOR ANY SUCH
ADDITIONAL PERIOD.  SAID NOTICE WILL BE SENT TO THE ADDRESS INDICATED ABOVE,
UNLESS A CHANGE OF ADDRESS IS OTHERWISE NOTIFIED BY YOU TO US IN WRITING BY
RECEIPTED MAIL OR COURIER. ANY NOTICE TO US WILL BE DEEMED EFFECTIVE ONLY UPON
ACTUAL RECEIPT BY US AT OUR DESIGNATED OFFICE.  IN NO EVENT, AND WITHOUT FURTHER
NOTICE FROM OURSELVES, SHALL THE EXPIRATION DATE BE EXTENDED BEYOND A FINAL
EXPIRATION DATE OF ___ (120 days from the Lease Expiration Date).

 

-2-

 

[Audentes Therapeutics, Inc.]

 

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

 

THIS LETTER OF CREDIT MAY BE TRANSFERRED SUCCESSIVELY IN WHOLE OR IN PART ONLY
UP TO THE THEN AVAILABLE AMOUNT IN FAVOR OF A NOMINATED TRANSFEREE
("TRANSFEREE"), ASSUMING SUCH TRANSFER TO SUCH TRANSFEREE IS IN COMPLIANCE WITH
ALL APPLICABLE U.S. LAWS AND REGULATIONS.  AT THE TIME OF TRANSFER, THE ORIGINAL
LETTER OF CREDIT AND ORIGINAL AMENDMENT(S) IF ANY, MUST BE SURRENDERED TO US
TOGETHER WITH OUR TRANSFER FORM (AVAILABLE UPON REQUEST) AND PAYMENT OF OUR
CUSTOMARY TRANSFER FEES, WHICH FEES SHALL BE PAYABLE BY APPLICANT (PROVIDED THAT
BENEFICIARY MAY, BUT SHALL NOT BE OBLIGATED TO, PAY SUCH FEES TO US ON BEHALF OF
APPLICANT, AND SEEK REIMBURSEMENT THEREOF FROM APPLICANT).  IN CASE OF ANY
TRANSFER UNDER THIS LETTER OF CREDIT, THE DRAFT AND ANY REQUIRED STATEMENT MUST
BE EXECUTED BY THE TRANSFEREE AND WHERE THE BENEFICIARY'S NAME APPEARS WITHIN
THIS STANDBY LETTER OF CREDIT, THE TRANSFEREE'S NAME IS AUTOMATICALLY
SUBSTITUTED THEREFOR.

ALL DRAFTS REQUIRED UNDER THIS STANDBY LETTER OF CREDIT MUST BE MARKED: ''DRAWN
UNDER [Insert Bank Name] STANDBY LETTER OF CREDIT NO. ___________."

We hereby agree with you that if drafts are presented to [Insert Bank Name]
under this Letter of Credit at or prior to [Insert Time – (e.g., 11:00 AM)], on
a business day, and provided that such drafts presented conform to the terms and
conditions of this Letter of Credit, payment shall be initiated by us in
immediately available funds by our close of business on the succeeding business
day.  If drafts are presented to [Insert Bank Name] under this Letter of Credit
after [Insert Time – (e.g., 11:00 AM)], on a business day, and provided that
such drafts conform with the terms and conditions of this Letter of Credit,
payment shall be initiated by us in immediately available funds by our close of
business on the second succeeding business day.  As used in this Letter of
Credit, "business day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in the state of California are authorized or
required by law to close.  If the expiration date for this Letter of Credit
shall ever fall on a day which is not a business day then such expiration date
shall automatically be extended to the date which is the next business day.

Presentation of a drawing under this Letter of Credit may be made on or prior to
the then current expiration date hereof by hand delivery, courier service,
overnight mail, or facsimile.  Presentation by facsimile transmission shall be
by transmission of the above required sight draft drawn on us together with this
Letter of Credit to our facsimile number, [Insert Fax Number – (___) ___-____],
attention:  [Insert Appropriate Recipient], with telephonic confirmation of our
receipt of such facsimile transmission at our telephone number [Insert Telephone
Number – (___) ___-____] or to such other facsimile or telephone numbers, as to
which you have received written notice from us as being the applicable such
number.  We agree to notify you in writing, by NATIONALLY RECOGNIZED OVERNIGHT
courier service, of any change in such direction.  Any facsimile presentation
pursuant to this paragraph shall also state thereon that the original of such
sight draft and Letter of Credit are being remitted, for delivery on the next
business day, to [Insert Bank Name] at the applicable address for presentment
pursuant to the paragraph FOLLOWINg this one.

WE HEREBY ENGAGE WITH YOU THAT ALL DOCUMENT(S) DRAWN UNDER AND IN COMPLIANCE
WITH THE TERMS OF THIS STANDBY LETTER OF CREDIT WILL BE DULY HONORED IF DRAWN
AND PRESENTED FOR PAYMENT AT OUR OFFICE LOCATED AT [Insert Bank Name], [Insert
Bank Address], ATTN: [Insert Appropriate Recipient], ON OR BEFORE THE EXPIRATION
DATE OF THIS CREDIT, ___(Expiration Date)___.

IN THE EVENT THAT THE ORIGINAL OF THIS STANDBY LETTER OF CREDIT IS LOST, STOLEN,
MUTILATED, OR OTHERWISE DESTROYED, WE HEREBY AGREE TO ISSUE A DUPLICATE ORIGINAL
HEREOF UPON RECEIPT OF A WRITTEN REQUEST FROM YOU AND A CERTIFICATION BY YOU

 

-3-

 

[Audentes Therapeutics, Inc.]

 

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

 

(PURPORTEDLY SIGNED BY YOUR AUTHORIZED REPRESENTATIVE) OF THE LOSS, THEFT,
MUTILATION, OR OTHER DESTRUCTION OF THE ORIGINAL HEREOF.

EXCEPT SO FAR AS OTHERWISE EXPRESSLY STATED HEREIN, THIS STANDBY LETTER OF
CREDIT IS SUBJECT TO THE "INTERNATIONAL STANDBY PRACTICES" (ISP 98)
INTERNATIONAL CHAMBER OF COMMERCE (PUBLICATION NO. 590).

 

Very truly yours,

(Name of Issuing Bank)

By:  

 

 

-4-

 

[Audentes Therapeutics, Inc.]

 

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

 

LEASE

 

BRITANNIA GATEWAY BUSINESS PARK

 

 

 

 

BRITANNIA GATEWAY II LIMITED PARTNERSHIP,

a Delaware limited partnership,

as Landlord,

and

AUDENTES THERAPEUTICS, INC.,

a Delaware corporation,

as Tenant.

 

 

 

 

[Audentes Therapeutics, Inc.]

 

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TABLE OF CONTENTS

Page

1.

PREMISES, BUILDING, PROJECT, AND COMMON AREAS5

 

2.

LEASE TERM; OPTION TERM6

 

3.

BASE RENT 6

 

4.

ADDITIONAL RENT6

 

5.

USE OF PREMISES11

 

6.

SERVICES AND UTILITIES16

 

7.

REPAIRS 17

 

8.

ADDITIONS AND ALTERATIONS17

 

9.

COVENANT AGAINST LIENS 19

 

10.

INSURANCE19

 

11.

DAMAGE AND DESTRUCTION21

 

12.

NONWAIVER 22

 

13.

CONDEMNATION 23

 

14.

ASSIGNMENT AND SUBLETTING23

 

15.

SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF TRADE FIXTURES26

 

16.

HOLDING OVER 27

 

17.

ESTOPPEL CERTIFICATES 27

 

18.

SUBORDINATION 28

 

19.

DEFAULTS; REMEDIES28

 

20.

COVENANT OF QUIET ENJOYMENT 30

 

21.

SECURITY DEPOSIT 30

 

22.

COMMUNICATIONS AND COMPUTER LINE 30

 

23.

SIGNS30

 

24.

COMPLIANCE WITH LAW 31

 

25.

LATE CHARGES 31

 

26.

LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT32

 

27.

ENTRY BY LANDLORD 32

 

28.

TENANT PARKING 32

 

29.

MISCELLANEOUS PROVISIONS32

 

 

EXHIBITS

AOUTLINE OF PREMISES

BTENANT WORK LETTER

CFORM OF NOTICE OF LEASE TERM DATES

DFORM OF TENANT'S ESTOPPEL CERTIFICATE

EENVIRONMENTAL QUESTIONNAIRE

FFORM OF LETTER OF CREDIT

 

(i)

 

[Audentes Therapeutics, Inc.]

 

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

Page

 

 

 

 

 

(ii)

 

[Audentes Therapeutics, Inc.]

 

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

INDEX

Page(s)

Abatement Event32

Accountant12

Advocate Arbitrators6

Alterations19

Base Building37

Base Rent7

Brokers42

Building4

Common Areas4

Comparable Buildings6

Comparable Transactions5

Concessions6

Contemplated Effective Date27

Contemplated Transfer Space26

Direct Expenses8

Eligibility Period32

Estimate12

Estimate Statement12

Estimated Direct Expenses12

Existing Hazardous Materials15

Expense Year8

Fair Rental Value,5

Force Majeure41

Intention to Transfer Notice26

Landlord1

Landlord Parties21

Landlord Repair Notice23

L‑C33

L‑C Amount33

Lease1

Lease Commencement Date5

Lease Expiration Date5

Lease Term5

Lease Year5

Lines36

Mail41

Net Worth28

Neutral Arbitrator6

Nine Month Period27

Notices41

Objectionable Name37

Operating Expenses8

Option Rent5

Original Improvements22

Outside Agreement Date6

Permitted Capital Expenses8

Premises4

Project,4

Reminder Notice19, 25

Sign Specifications37

 

(lxxii)

 

[Audentes Therapeutics, Inc.]

 

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

Page(s)

Statement12

Subject Space25

Summary1

Tax Expenses11

Tenant1

Tenant Work Letter4

Tenant's Accountant12

Tenant's Share11

Transfer Notice25

Transferee25

 

 

(lxxiii)

 

[Audentes Therapeutics, Inc.]