Exhibit 10.1

LEASE

by and between

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

and

CARBYLAN THERAPEUTICS, INC.,

a Delaware corporation

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Table of Contents

 

1.

Lease of Premises

  1   

2.

Basic Lease Provisions

  2   

3.

Term

  4   

4.

Possession and Commencement Date.

  4   

5.

Condition of Premises

  6   

6.

Rentable Area

  7   

7.

Rent

  7   

8.

Rent Adjustments

  8   

9.

Operating Expenses

  8   

10.

Taxes on Tenant’s Property

  12   

11.

Security Deposit

  13   

12.

Use

  15   

13.

Rules and Regulations, CC&Rs, Parking Facilities and Common Area

  17   

14.

Project Control by Landlord

  18   

15.

Quiet Enjoyment

  19   

16.

Utilities and Services

  19   

17.

Alterations

  23   

18.

Repairs and Maintenance

  26   

19.

Liens

  27   

20.

Estoppel Certificate

  28   

21.

Hazardous Materials

  28   

22.

Odors and Exhaust

  31   

23.

Insurance; Waiver of Subrogation

  32   

24.

Damage or Destruction

  36   

25.

Eminent Domain

  38   

26.

Surrender

  39   

27.

Holding Over

  40   

28.

Indemnification and Exculpation

  40   

29.

Assignment or Subletting

  41   

30.

Subordination and Attornment

  46   

31.

Defaults and Remedies

  46   

 

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32.

Bankruptcy

  52   

33.

Brokers

  52   

34.

Definition of Landlord

  53   

35.

Limitation of Landlord’s Liability

  53   

36.

Joint and Several Obligations

  54   

37.

Representations

  54   

38.

Confidentiality

  55   

39.

Notices

  55   

40.

Miscellaneous

  55   

 

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LEASE

THIS LEASE (this “Lease”) is entered into as of this 13th day of July, 2015 (the
“Execution Date”), by and between BMR-PACIFIC RESEARCH CENTER LP, a Delaware
limited partnership (“Landlord”), and CARBYLAN THERAPEUTICS, INC., a Delaware
corporation (“Tenant”).

RECITALS

A. WHEREAS, Landlord owns certain real property (the “Property”) and the
improvements on the Property located at 7333-7999 Gateway Boulevard, Newark,
California, including the buildings located thereon; and

B. WHEREAS, Landlord wishes to lease to Tenant, and Tenant desires to lease from
Landlord, certain premises (the “Premises”) located on the second (2nd) floor of
the building known as Suite 240 located and addressed at 7979 Gateway Boulevard,
Newark, California (the “Building” or “Building 6”), pursuant to the terms and
conditions of this Lease, as detailed below.

AGREEMENT

NOW, THEREFORE, Landlord and Tenant, in consideration of the mutual promises
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
agree as follows:

1. Lease of Premises.

1.1. Effective on the Term Commencement Date (as defined below), Landlord hereby
leases to Tenant, and Tenant hereby leases from Landlord, the Premises, as shown
on Exhibit A attached hereto, including exclusive shafts, cable runs, and
mechanical spaces, for use by Tenant in accordance with the Permitted Use (as
defined below) and no other uses. The Property and all landscaping, parking
facilities, private drives and other improvements and appurtenances related
thereto, including the Building, the Amenities Building (as defined below), the
nine (9) other buildings currently located on the Property and each additional
building that is constructed on the Property (following substantial completion
of such building), are hereinafter collectively referred to as the “Project.”
All portions of the Building that are for the non-exclusive use of the tenants
of the Building only, and not the tenants of the Project generally, such as
service corridors, stairways, elevators, public restrooms and public lobbies
(all to the extent located in the Building), are hereinafter referred to as
“Building Common Area.” All portions of the Project that are for the
non-exclusive use of tenants of the Project generally, including driveways,
sidewalks, parking areas, landscaped areas, and (to the extent not located in a
building other than the Amenities Building) service corridors, stairways,
elevators, public restrooms, public lobbies and the amenities building (the
“Amenities Building”) in which Landlord currently provides certain amenities,
including food services, a fitness center and a conference center (“Amenities
Building Services”) (but excluding Building Common Area), are hereinafter
referred to as

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“Project Common Area.” The Building Common Area and Project Common Area are
collectively referred to herein as “Common Area.” The Building is located on a
portion of the Project commonly referred to as the “North Campus,” which is that
part of the Project to the north of Gateway Boulevard comprised of the Building
and five (5) other buildings commonly referred to as Buildings 1, 2, 3, 5 and 7,
together with all appurtenances thereto (collectively, the “North Campus”).

2. Basic Lease Provisions. For convenience of the parties, certain basic
provisions of this Lease are set forth herein. The provisions set forth herein
are subject to the remaining terms and conditions of this Lease and are to be
interpreted in light of such remaining terms and conditions.

2.1. This Lease shall take effect upon the Execution Date and, except as
specifically otherwise provided within this Lease, each of the provisions hereof
shall be binding upon and inure to the benefit of Landlord and Tenant from the
date of execution and delivery hereof by all parties hereto.

2.2. In the definitions below, each current Rentable Area (as defined below) is
expressed in square feet. Rentable Area and “Tenant’s Pro Rata Shares” are all
subject to adjustment as provided in this Lease.

 

Definition or Provision

  

Means the Following (As of the Term
Commencement Date)

Approximate Rentable Area of Premises    18,704 square feet Approximate Rentable
Area of Building    92,324 square feet Approximate Rentable Area of North Campus
   966,271 square feet Approximate Rentable Area of Project    1,389,517 square
feet Tenant’s Pro Rata Share of Building    20.26% Tenant’s Pro Rata Share of
North Campus    1.94% Tenant’s Pro Rata Share of Project    1.35%

 

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2.3. Initial monthly and annual installments of Base Rent for the Premises
(“Base Rent”) as of the Term Commencement Date, subject to adjustment under this
Lease:

 

Dates

   Square Feet
of Rentable
Area      Base Rent per Square
Foot of Rentable Area      Monthly
Base Rent      Annual Base
Rent  

Month 1 – Month 12

     18,704       $ 2.65 monthly       $ 49,565.60       $ 594,787.20   

2.4. Estimated Term Commencement Date: February 1, 2016

2.5. Estimated Term Expiration Date: July 31, 2022

2.6. Security Deposit: $148,696.80

2.7. Permitted Use: Office, R&D and laboratory use in conformity with all
federal, state, municipal and local laws, codes, ordinances, rules and
regulations of Governmental Authorities (as defined below), committees,
associations, or other regulatory committees, agencies or governing bodies
having jurisdiction over the Premises, the Building, the Property, the Project,
Landlord or Tenant, including both statutory and common law and hazardous waste
rules and regulations (“Applicable Laws”)

 

2.8. Address for Rent Payment:       BMR-Pacific Research Center LP    Attention
Entity 285    P.O. Box 511415    Los Angeles, California 90051-7970
2.9. Address for Notices to Landlord:       BMR-Pacific Research Center LP   
17190 Bernardo Center Drive    San Diego, California 92128    Attn: Real Estate
Legal Department 2.10. Address for Notices to Tenant:       Carbylan
Therapeutics, Inc.    3181 Porter Drive    Palo Alto, California 94304    Attn:
David Renzi    (Prior to the Term Commencement Date)    Carbylan Therapeutics,
Inc.    7979 Gateway Boulevard, Suite 240    Newark, California 94560   
Attention: David Renzi    (After the Term Commencement Date)

 

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2.11. Address for Invoices to Tenant: Carbylan Therapeutics, Inc. 7979 Gateway
Boulevard, Suite 240 Newark, California 94560 Attention: Accounts Receivable

2.12. The following Exhibits are attached hereto and incorporated herein by
reference:

 

Exhibit A Premises Exhibit B Work Letter Exhibit B-1 Tenant Work Insurance
Schedule Exhibit C Acknowledgement of Term Commencement Date and Term Expiration
Date Exhibit D Intentionally Omitted Exhibit E Form of Letter of Credit Exhibit
F Rules and Regulations Exhibit G Intentionally Omitted Exhibit H Tenant’s
Personal Property Exhibit I Form of Estoppel Certificate

3. Term. The actual term of this Lease (as the same may be earlier terminated in
accordance with this Lease, the “Term”) shall commence on the actual Term
Commencement Date (as defined in Article 4) and end on the date (the “Term
Expiration Date”) that is seventy-eight (78) months after the actual Term
Commencement Date, subject to earlier termination of this Lease as provided
herein. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA
CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

4. Possession and Commencement Date.

4.1. Landlord shall use commercially reasonable efforts to tender possession of
the Premises to Tenant on the Estimated Term Commencement Date, with the work
(the “Tenant Improvements”) required of Landlord described in the Work Letter
attached hereto as Exhibit B (the “Work Letter”) Substantially Complete (as
defined below) and free of any prior tenant or occupant. Tenant agrees that in
the event such work is not Substantially Complete on or before the Estimated
Term Commencement Date for any reason, then (a) this Lease shall not be void or
voidable, (b) Landlord shall not be liable to Tenant for any loss or damage
resulting therefrom,

 

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(c) the Term Expiration Date shall be extended accordingly and (d) Tenant shall
not be responsible for the payment of any Base Rent or Tenant’s Adjusted Share
of Operating Expenses (as defined below) until the actual Term Commencement Date
as described in Section 4.2 occurs. The term “Substantially Complete” or
“Substantial Completion” means that the Tenant Improvements are substantially
complete in accordance with the Approved Plans (as defined in the Work Letter),
except for minor punch list items. Notwithstanding anything in this Lease
(including the Work Letter) to the contrary, Landlord’s obligation to timely
achieve Substantial Completion shall be subject to extension on a day-for-day
basis as a result of Force Majeure (as defined below). Notwithstanding anything
to the contrary in this Lease, if Substantial Completion has not occurred by the
date that is thirty (30) days after the Estimated Term Commencement Date (the
“Outside Date”), then Tenant shall be entitled to receive one (1) day of Base
Rent abatement for each day thereafter that Substantial Completion has not
occurred; provided, however, that the Outside Date shall be subject to extension
on a day-for-day basis as a result of (a) Force Majeure and (b) any Tenant Delay
(as defined below).

4.2. The “Term Commencement Date” shall be the later of (a) the Estimated Term
Commencement Date and (b) the day Landlord tenders possession of the Premises to
Tenant with the Tenant Improvements Substantially Complete. If possession is
delayed by a Tenant Delay, then the Term Commencement Date shall be the date
that the Term Commencement Date would have occurred but for such Tenant Delay.
The term “Tenant Delay” shall mean any delay in the actual date of Substantial
Completion caused by the act or omission of Tenant, its employees, agents or
contractors, including, without limitation, delays due to (a) Tenant requested
changes to the Approved Schematic Plans or Construction Plans (as defined in the
Work Letter attached hereto as Exhibit B), (b) any Change Request (as defined in
the Work Letter), (c) Tenant’s failure to timely approve any matter requiring
Tenant approval, or (d) any interference by Tenant with the completion of the
Tenant Improvements. If Landlord becomes aware of a Tenant Delay, Landlord shall
endeavor to notify Tenant of such Tenant Delay (provided, however, that
Landlord’s failure to so notify Tenant of any Tenant Delay shall not affect
Tenant’s liability in connection with, or the ramifications under this Lease as
a result of, such Tenant Delay). Tenant shall execute and deliver to Landlord
written acknowledgment of the actual Term Commencement Date and the Term
Expiration Date within ten (10) days after Tenant takes occupancy of the
Premises, in the form attached as Exhibit C hereto. Failure to execute and
deliver such acknowledgment, however, shall not affect the Term Commencement
Date or Landlord’s or Tenant’s liability hereunder. Failure by Tenant to obtain
validation by any medical review board or other similar governmental licensing
of the Premises required for the Permitted Use by Tenant shall not serve to
extend the Term Commencement Date.

4.3. Landlord shall endeavor to permit Tenant to enter upon the Premises at
least fourteen (14) days prior to the Term Commencement Date for the purpose of
installing improvements or the placement of personal property; provided Tenant
shall furnish to Landlord evidence satisfactory to Landlord in advance that
insurance coverages required of Tenant under the provisions of Article 23 are in
effect, and such entry shall be subject to all the terms and conditions of this
Lease other than the payment of Base Rent; and provided, further, that if the
Term Commencement Date is delayed due to such early access, such delay will be a
Tenant Delay, and the Term Commencement Date shall be the date that the Term
Commencement Date would have occurred but for such Tenant Delay.

 

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4.4. Landlord shall cause the Tenant Improvements to be constructed in the
Premises pursuant to the Work Letter at a cost to Landlord not to exceed Five
Hundred Ninety-Eight Thousand Five Hundred Twenty-Eight and 00/100 Dollars
($598,528) (based upon Thirty-Two Dollars ($32.00) per square foot of Rentable
Area (as defined below)) (the “TI Allowance”). The TI Allowance may be applied
to the costs of (m) construction, (n) project management by Landlord (which fee
shall equal three percent (3%) of the cost of the Tenant Improvements, including
the TI Allowance), (o) commissioning of mechanical, electrical and plumbing
systems by a licensed, qualified commissioning agent hired by Landlord, and
review of such party’s commissioning report by a licensed, qualified
commissioning agent hired by Tenant, (p) space planning, architect, engineering
and other related services performed by third parties unaffiliated with Tenant,
(q) building permits and other taxes, fees, charges and levies by Governmental
Authorities (as defined below) for permits or for inspections of the Tenant
Improvements, and (r) costs and expenses for labor, material, equipment and
fixtures. In no event shall the TI Allowance be used for (w) payments to Tenant
or any affiliates of Tenant, (x) the purchase of any furniture, personal
property or other non-building system equipment, (y) costs resulting from any
default by Tenant of its obligations under this Lease or (z) costs that are
recoverable by Tenant from a third party (e.g., insurers, warrantors, or
tortfeasors). Notwithstanding the foregoing, in the event that the TI Allowance
is not exhausted in connection with the Tenant Improvements, Tenant will be
permitted to use any unused portion of the TI Allowance up to a maximum of
Ninety Three Thousand Five Hundred Twenty Dollars ($93,520) (based upon Five
Dollars ($5.00) per square foot of the Rentable Area) (the “FF&E Allowance”) for
reimbursement of Tenant’s cost to purchase furniture, fixtures and equipment to
be used in the Premises. Landlord will reimburse Tenant for the FF&E Allowance
within thirty (30) days after receipt of invoices showing payment for the FF&E
and any other information reasonably requested by Landlord, which invoice shall
be delivered after the Substantial Completion of the Tenant Improvements and the
final reconciliation of all costs associated with the construction of the Tenant
Improvements, but before the TI Deadline (as defined below).

4.5. Tenant shall have until the date which is twelve (12) months after the date
of full execution and delivery of this Lease (the “TI Deadline”), to expend the
unused portion of the TI Allowance, after which date Landlord’s obligation to
fund such costs shall expire.

4.6. In no event shall any unused TI Allowance entitle Tenant to a credit
against Rent payable under this Lease.

5. Condition of Premises. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
condition of the Premises, the Building or the Project, or with respect to the
suitability of the Premises, the Building or the Project for the conduct of
Tenant’s business. Tenant acknowledges that (a) it is fully familiar with the
condition of the Premises and agrees to take the same in its condition “as is”
as of the Term Commencement Date and (b) Landlord shall have no obligation to
alter, repair or otherwise prepare the Premises for Tenant’s occupancy or to pay
for or construct any improvements to the Premises, except with respect to
Landlord’s obligations for construction oversight pursuant to the Work Letter
and payment of the TI Allowance. Notwithstanding the foregoing, Landlord will
deliver the Premises to Tenant with the base Building systems which Landlord is
required to repair and maintain hereunder in good working order as of the Term
Commencement Date, and

 

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in the event of a breach of the foregoing, as Tenant’s sole remedy, Landlord
will cause such Building systems to be placed into good working order, at
Landlord’s cost; provided Tenant must notify Landlord of any breach of the
foregoing within thirty (30) days after the Term Commencement Date or the
Building systems will be deemed to have been delivered in good working order as
of the Term Commencement Date (provided that as to the HVAC system only, the
thirty (30) day period set forth herein will be extended to ninety (90) days
after the Term Commencement Date). Tenant’s taking of possession of the Premises
shall, except as otherwise agreed to in writing by Landlord and Tenant,
conclusively establish that the Premises, the Building and the Project were at
such time in good, sanitary and satisfactory condition and repair.

6. Rentable Area.

6.1. The term “Rentable Area” shall reflect such areas as reasonably calculated
by Landlord’s architect, as the same may be reasonably adjusted from time to
time by Landlord in consultation with Landlord’s architect to reflect changes to
the Premises, the Building or the Project, as applicable.

6.2. The Rentable Area of the Building is generally determined by making
separate calculations of Rentable Area applicable to each floor within the
Building and totaling the Rentable Area of all floors within the Building. The
Rentable Area of a floor is computed by measuring to the outside finished
surface of the permanent outer Building walls. The full area calculated as
previously set forth is included as Rentable Area, without deduction for columns
and projections or vertical penetrations, including stairs, elevator shafts,
flues, pipe shafts, vertical ducts and the like, as well as such items’
enclosing walls.

6.3. The term “Rentable Area,” when applied to the Premises, is that area equal
to the usable area of the Premises, plus an equitable allocation of Rentable
Area within the Building that is not then utilized or expected to be utilized as
usable area, including that portion of the Building devoted to corridors,
equipment rooms, restrooms, elevator lobby, atrium and mailroom.

6.4. The Rentable Area of the Project is the total Rentable Area of all
buildings within the Project.

6.5. Review of allocations of Rentable Areas as between tenants of the Building
and the Project shall be made as frequently as Landlord deems appropriate,
including in order to facilitate an equitable apportionment of Operating
Expenses (as defined below). If such review is by a licensed architect and
allocations are certified by such licensed architect as being correct, then
Tenant shall be bound by such certifications.

7. Rent.

7.1. Tenant shall pay to Landlord as Base Rent for the Premises, commencing on
the Term Commencement Date, the sums set forth in Section 2.3, subject to the
rental adjustments provided in Article 8 hereof. Base Rent shall be paid in
equal monthly installments as set forth in Section 2.3, subject to the rental
adjustments provided in Article 8 hereof, each in advance on the first day of
each and every calendar month during the Term.

 

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7.2. In addition to Base Rent, Tenant shall pay to Landlord as additional rent
(“Additional Rent”) at times hereinafter specified in this Lease (a) Tenant’s
Adjusted Share (as defined below) of Operating Expenses (as defined below),
(b) the Property Management Fee (as defined below), (c) any other amounts that
Tenant assumes or agrees to pay under the provisions of this Lease that are owed
to Landlord, including any and all other sums that may become due by reason of
any default of Tenant or failure on Tenant’s part to comply with the agreements,
terms, covenants and conditions of this Lease to be performed by Tenant, after
notice and the lapse of any applicable cure periods.

7.3. Base Rent and Additional Rent shall together be denominated “Rent.” Rent
shall be paid to Landlord, without abatement (except as otherwise expressly set
forth in Section 16.2 below), deduction or offset, in lawful money of the United
States of America to the address set forth in Section 2.8 or to such other
person or at such other place as Landlord may from time designate in writing. In
the event the Term commences or ends on a day other than the first day of a
calendar month, then the Rent for such fraction of a month shall be prorated for
such period on the basis of the number of days in the month and shall be paid at
the then-current rate for such fractional month.

7.4. Tenant’s obligation to pay Rent shall not be discharged or otherwise
affected by (a) any Applicable Laws now or hereafter applicable to the Premises,
(b) any other restriction on Tenant’s use, (c) except as expressly provided
herein, any casualty or taking or (d) any other occurrence; and Tenant waives
all rights now or hereafter existing to terminate or cancel this Lease or quit
or surrender the Premises or any part thereof, or to assert any defense in the
nature of constructive eviction to any action seeking to recover rent. Tenant’s
obligation to pay Rent with respect to any period or obligations arising,
existing or pertaining to the period prior to the date of the expiration or
earlier termination of the Term or this Lease shall survive any such expiration
or earlier termination; provided, however, that nothing in this sentence shall
in any way affect Tenant’s obligations with respect to any other period.

8. Rent Adjustments. Base Rent shall be subject to an annual upward adjustment
of three percent (3%) of the then-current Base Rent. The first such adjustment
shall become effective commencing on the first (1st) annual anniversary of the
Term Commencement Date, and subsequent adjustments shall become effective on
every successive annual anniversary for so long as this Lease continues in
effect.

9. Operating Expenses.

9.1. As used herein, the term “Operating Expenses” shall include:

(a) Government impositions, including property tax costs consisting of real and
personal property taxes (including amounts due under any improvement bond upon
the Building or the Project (including the parcel or parcels of real property
upon which the Building, the other buildings in the Project and areas serving
the Building and the Project are located)) or assessments in lieu thereof
imposed by any federal, state, regional, local or municipal governmental
authority, agency or subdivision (each, a “Governmental Authority”); taxes on or
measured by gross rentals received from the rental of space in the Project;
taxes based on the square footage of the Premises, the Building or the Project,
as well as any parking charges,

 

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utilities surcharges or any other costs levied, assessed or imposed by, or at
the direction of, or resulting from Applicable Laws or interpretations thereof,
promulgated by any Governmental Authority in connection with the use or
occupancy of the Project or the parking facilities serving the Project; taxes on
this transaction or any document to which Tenant is a party creating or
transferring an interest in the Premises; any fee for a business license to
operate an office building; and any expenses, including the reasonable cost of
attorneys or experts, reasonably incurred by Landlord in seeking reduction by
the taxing authority of the applicable taxes, less tax refunds obtained as a
result of an application for review thereof; and

(b) All other costs paid or incurred by Landlord in connection with the
operation or maintenance of the Building and the Project (including the
Amenities Building, which shall include (i) Project office rent at fair market
rental for a commercially reasonable amount of space for Project management
personnel located in the Amenities Building, to the extent an office used for
Project operations is maintained at the Project, plus customary expenses for
such office, and (ii) fair market rent for the portion of the Amenities Building
used in providing the Amenities Building Services), and costs of repairs and
replacements to improvements within the Project as appropriate to maintain the
Project as required hereunder; costs of utilities furnished to the Common Area;
sewer fees; cable television; trash collection; cleaning, including windows
(including those of the Amenities Building); heating, ventilation and
air-conditioning (“HVAC”); maintenance of landscaping and grounds; snow removal;
maintenance of drives and parking areas; maintenance of the roof (including that
of the Amenities Building); security services and devices; building supplies;
maintenance or replacement of equipment utilized for operation and maintenance
of the Project; license, permit and inspection fees; sales, use and excise taxes
on goods and services purchased by Landlord in connection with the operation,
maintenance or repair of the Building or Project systems and equipment;
telephone, postage, stationery supplies and other expenses incurred in
connection with the operation, maintenance or repair of the Project; accounting,
legal and other professional fees and expenses incurred in connection with the
Project; costs of furniture, draperies, carpeting, landscaping supplies, snow
removal and other customary and ordinary items of personal property provided by
Landlord for use in Common Area or in the Project office; Project office rent or
rental value for a commercially reasonable amount of space, to the extent an
office used for Project operations is maintained at the Project, plus customary
expenses for such office; capital expenditures incurred (x) in replacing
obsolete equipment, (y) for the primary purpose of reducing Operating Expenses
or (z) required by any Governmental Authority to comply with changes in
Applicable Laws that take effect after the Execution Date or to ensure continued
compliance with Applicable Laws in effect as of the Execution Date, in each case
amortized over the useful life thereof, as reasonably determined by Landlord, in
accordance with generally accepted accounting principles, but in no event longer
than ten (10) years; costs of complying with Applicable Laws (except to the
extent such costs are incurred to remedy non-compliance as of the Execution Date
with Applicable Laws); costs to keep the Project in compliance with, or costs or
fees otherwise required under or incurred pursuant to any CC&Rs (as defined
below), including condominium fees; insurance premiums, including premiums for
commercial general liability, property casualty, earthquake, terrorism and
environmental coverages; portions of insured losses paid by Landlord as part of
the deductible portion of a loss pursuant to the terms of insurance policies;
service contracts; costs of services of independent contractors retained to do

 

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work of a nature referenced above; and costs of compensation (including
employment taxes and fringe benefits) of all persons who perform regular and
recurring duties connected with the day-to-day operation and maintenance of the
Project, its equipment, the adjacent walks, landscaped areas, drives and parking
areas, including janitors, floor waxers, window washers, watchmen, gardeners,
sweepers, plow truck drivers, handymen, and engineering/maintenance/facilities
personnel.

(c) Notwithstanding the foregoing, Operating Expenses shall not include any net
income, franchise, gift, transfer, capital stock, estate, inheritance or
succession taxes, or taxes that are the personal obligation of Tenant or of
another tenant of the Project; penalties for late payment of taxes; any leasing
commissions; expenses that relate to preparation of rental space for a tenant;
expenses of initial development and construction, including grading, paving,
landscaping and decorating (as distinguished from maintenance, repair and
replacement of the foregoing); legal expenses relating to other tenants; costs
of repairs to the extent reimbursed by payment of insurance or warranty proceeds
received by Landlord; interest upon loans to Landlord or secured by a mortgage
or deed of trust covering the Project or a portion thereof (provided that
interest upon a government assessment or improvement bond payable in
installments shall constitute an Operating Expense under Subsection 9.1(a));
salaries of executive officers of Landlord; wages, salaries and benefits paid to
any persons not directly involved with the management or operation of the
Building or the oversight thereof; costs relating to disputes with other
tenants, prospective purchasers or mortgagees or costs relating to contract
negotiation for a sale or financing; reserves for repairs, maintenance and
replacements; costs incurred to comply with laws relating to the removal of
Hazardous Materials (as defined in Section 21 below) or to remove, remedy, treat
or contain any Hazardous Material, in either case which Hazardous Material was
brought onto or released upon the Project by Landlord; depreciation claimed by
Landlord for tax purposes (provided that this exclusion of depreciation is not
intended to delete from Operating Expenses actual costs of repairs and
replacements and reasonable reserves in regard thereto that are provided for in
Subsection 9.1(b)); taxes that are excluded from Operating Expenses by the last
sentence of Subsection 9.1(a); costs or expenses incurred in connection with the
financing or sale of the Project or any portion thereof; costs expressly
excluded from Operating Expenses elsewhere in this Lease or that are charged to
or paid by Tenant under other provisions of this Lease; professional fees and
disbursements and other costs and expenses related to the ownership (as opposed
to the use, occupancy, operation, maintenance or repair) of the Project; and any
item that, if included in Operating Expenses, would involve a double collection
for such item by Landlord. To the extent that Tenant uses more than Tenant’s Pro
Rata Share of any item of Operating Expenses, Tenant shall pay Landlord for such
excess in addition to Tenant’s obligation to pay Tenant’s Pro Rata Share of
Operating Expenses (such excess, together with Tenant’s Pro Rata Share,
“Tenant’s Adjusted Share”).

9.2. Tenant shall pay to Landlord on the first day of each calendar month of the
Term, as Additional Rent, (a) the Property Management Fee (as defined below),
and (b) Landlord’s estimate of Tenant’s Adjusted Share of Operating Expenses
with respect to the Building and the Project, as applicable, for such month.

(w) The “Property Management Fee” shall equal three percent (3%) of Base Rent
due from Tenant. Tenant shall pay the Property Management Fee in accordance with

 

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Section 9.2 with respect to the entire Term, including any extensions thereof or
any holdover periods, regardless of whether Tenant is obligated to pay Base
Rent, Operating Expenses or any other Rent with respect to any such period or
portion thereof.

(x) Intentionally Omitted

(y) Within ninety (90) days after the conclusion of each calendar year (or such
longer period as may be reasonably required by Landlord), Landlord shall furnish
to Tenant a statement showing in reasonable detail the actual Operating
Expenses, Tenant’s Adjusted Share of Operating Expenses, and the cost of
providing utilities to the Premises for the previous calendar year
(“Landlord’s Statement”). Any additional sum due from Tenant to Landlord shall
be due and payable within thirty (30) days after receipt of an invoice therefor.
If the amounts paid by Tenant pursuant to this Section exceed Tenant’s Adjusted
Share of Operating Expenses for the previous calendar year, then Landlord shall
credit the difference against the Rent next due and owing from Tenant; provided
that, if the Lease term has expired, Landlord shall accompany Landlord’s
Statement with payment for the amount of such difference.

(z) Any amount due under this Section for any period that is less than a full
month shall be prorated for such fractional month on the basis of the number of
days in the month.

9.3. Landlord may, from time to time, reasonably modify Landlord’s calculation
and allocation procedures for Operating Expenses, so long as such modifications
produce Dollar results substantially consistent with Landlord’s then-current
practice at the Project. Landlord or an affiliate(s) of Landlord currently own
other property(ies) adjacent to the Project or its neighboring properties
(collectively, “Neighboring Properties”). In connection with Landlord performing
services for the Project pursuant to this Lease, similar services may be
performed by the same vendor(s) for Neighboring Properties. In such a case,
Landlord shall reasonably allocate to each Building and the Project the costs
for such services based upon the ratio that the square footage of the Building
or the Project (as applicable) bears to the total square footage of all of the
Neighboring Properties or buildings within the Neighboring Properties for which
the services are performed, unless the scope of the services performed for any
building or property (including the Building and the Project) is
disproportionately more or less than for others, in which case Landlord shall
equitably allocate the costs based on the scope of the services being performed
for each building or property (including the Building and the Project). Since
the Project consists of multiple buildings, certain Operating Expenses may
pertain to a particular building(s), certain Operating Expenses may pertain to
the North Campus, and other Operating Expenses to the Project as a whole.
Landlord reserves the right in its reasonable discretion to allocate any such
costs applicable to any particular building within the Project to such building,
any costs applicable to the North Campus to the buildings comprising the North
Campus (including the Building), and other such costs applicable to the Project
to each building in the Project (including the Building), with the tenants in
each building being responsible for paying their respective proportionate shares
of their buildings to the extent required under their leases. Landlord shall
allocate such costs to the buildings (including the Building) in a reasonable,
non-discriminatory manner, and such allocation shall be binding on Tenant.

 

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9.4. Tenant shall not be responsible for Operating Expenses with respect to any
time period prior to the Term Commencement Date; provided, however, that if
Landlord shall permit Tenant possession of the Premises prior to the Term
Commencement Date, Tenant shall be responsible for Operating Expenses from such
earlier date of possession (the Term Commencement Date or such earlier date, as
applicable, the “Expense Trigger Date”); and provided, further, that Landlord
may annualize certain Operating Expenses incurred prior to the Expense Trigger
Date over the course of the budgeted year during which the Expense Trigger Date
occurs, and Tenant shall be responsible for the annualized portion of such
Operating Expenses corresponding to the number of days during such year,
commencing with the Expense Trigger Date, for which Tenant is otherwise liable
for Operating Expenses pursuant to this Lease. Tenant’s responsibility for
Tenant’s Adjusted Share of Operating Expenses shall continue to the latest of
(a) the date of termination of the Lease, (b) the date Tenant has fully vacated
the Premises and (c) if termination of the Lease is due to a default by Tenant,
the date of rental commencement of a replacement tenant.

9.5. Operating Expenses for the calendar year in which Tenant’s obligation to
share therein commences and for the calendar year in which such obligation
ceases shall be prorated on a basis reasonably determined by Landlord. Expenses
such as taxes, assessments and insurance premiums that are incurred for an
extended time period shall be prorated based upon the time periods to which they
apply so that the amounts attributed to the Premises relate in a reasonable
manner to the time period wherein Tenant has an obligation to share in Operating
Expenses.

9.6. Within thirty (30) days after the end of each calendar month, Tenant shall
submit to Landlord an invoice, or, in the event an invoice is not available, an
itemized list, of all costs and expenses that (a) Tenant has incurred (either
internally or by employing third parties) during the prior month and (b) for
which Tenant reasonably believes it is entitled to reimbursements from Landlord
pursuant to the terms of this Lease or the Work Letter.

9.7. In the event that the Building, North Campus or Project is less than fully
occupied during a calendar year, Tenant acknowledges that Landlord may
extrapolate Operating Expenses that vary depending on the occupancy of the
Building, North Campus or Project, as applicable, to equal Landlord’s reasonable
estimate of what such Operating Expenses would have been had the Building, North
Campus or Project, as applicable, been ninety-five percent (95%) occupied during
such calendar year; provided, however, that Landlord shall not recover more than
one hundred percent (100%) of Operating Expenses.

10. Taxes on Tenant’s Property.

10.1. Tenant shall be solely responsible for the payment of any and all taxes
levied upon (a) personal property and trade fixtures located at the Premises and
(b) any gross or net receipts of or sales by Tenant, and shall pay the same at
least twenty (20) days prior to delinquency.

10.2. If any such taxes on Tenant’s personal property or trade fixtures are
levied against Landlord or Landlord’s property or, if the assessed valuation of
the Building, the Property or the Project is increased by inclusion therein of a
value attributable to Tenant’s personal property or trade fixtures, and if
Landlord, after written notice to Tenant, pays the taxes based upon any such
increase in the assessed value of the Building, the Property or the Project,
then Tenant shall, within ten (10) days after demand, repay to Landlord the
taxes so paid by Landlord.

 

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10.3. If any improvements in or alterations to the Premises, whether owned by
Landlord or Tenant and whether or not affixed to the real property so as to
become a part thereof, are assessed for real property tax purposes at a
valuation higher than the valuation at which improvements conforming to
Landlord’s building standards (the “Building Standard”) in other spaces in the
Building are assessed, then the real property taxes and assessments levied
against Landlord or the Building, the Property or the Project by reason of such
excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Section 10.2. Any
such excess assessed valuation due to improvements in or alterations to space in
the Project leased by other tenants at the Project shall not be included in
Operating Expenses. If the records of the applicable governmental assessor’s
office are available and sufficiently detailed to serve as a basis for
determining whether such Tenant improvements or alterations are assessed at a
higher valuation than the Building Standard, then such records shall be binding
on both Landlord and Tenant.

11. Security Deposit.

11.1. Tenant shall deposit with Landlord on or before the Execution Date the sum
set forth in Section 2.6 (the “Security Deposit”), which sum shall be held by
Landlord as security for the faithful performance by Tenant of all of the terms,
covenants and conditions of this Lease to be kept and performed by Tenant during
the Term and ending upon the expiration or termination of Tenant’s obligations
under this Lease. If Tenant Defaults (as defined below) with respect to any
provision of this Lease, including any provision relating to the payment of
Rent, then Landlord may (but shall not be required to) use, apply or retain all
or any part of the Security Deposit for the payment of any Rent or any other sum
in default, or to compensate Landlord for any other loss or damage that Landlord
may suffer by reason of Tenant’s Default. If any portion of the Security Deposit
is so used or applied, then Tenant shall, within ten (10) days following demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount, and Tenant’s failure to do so shall be
a material breach of this Lease. The provisions of this Article shall survive
the expiration or earlier termination of this Lease. TENANT HEREBY WAIVES THE
REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE
AMENDED FROM TIME TO TIME.

11.2. In the event of bankruptcy or other debtor-creditor proceedings against
Tenant, the Security Deposit shall be deemed to be applied first to the payment
of Rent and other charges due Landlord for all periods prior to the filing of
such proceedings.

11.3. Landlord may deliver to any purchaser of Landlord’s interest in the
Premises the funds deposited hereunder by Tenant, and thereupon Landlord shall
be discharged from any further liability with respect to such deposit. This
provision shall also apply to any subsequent transfers.

11.4. The Security Deposit, or any balance thereof, shall be returned to Tenant
(or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder)
within thirty (30) days after the expiration or earlier termination of this
Lease; provided Tenant is not then in Default under the terms of this Lease.

 

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11.5. If the Security Deposit shall be in cash, Landlord shall hold the Security
Deposit in an account at a banking organization selected by Landlord; provided,
however, that Landlord shall not be required to maintain a separate account for
the Security Deposit, but may intermingle it with other funds of Landlord.
Landlord shall be entitled to all interest and/or dividends, if any, accruing on
the Security Deposit. Landlord shall not be required to credit Tenant with any
interest for any period during which Landlord does not receive interest on the
Security Deposit.

11.6. The Security Deposit may be in the form of cash, a letter of credit or any
other security instrument acceptable to Landlord in its sole discretion. Tenant
may at any time, except when Tenant is in Default (as defined below), deliver a
letter of credit (the “L/C Security”) as the entire Security Deposit, as
follows:

(a) If Tenant elects to deliver L/C Security, then Tenant shall provide
Landlord, and maintain in full force and effect throughout the Term and until
the date that is three (3) months after the then-current Term Expiration Date, a
letter of credit in the form of Exhibit E issued by an issuer reasonably
satisfactory to Landlord, in the amount of the Security Deposit, with an initial
term of at least one year. Landlord may require the L/C Security to be re-issued
by a different issuer at any time during the Term if Landlord reasonably
believes that the issuing bank of the L/C Security is or may soon become
insolvent; provided, however, Landlord shall return the existing L/C Security to
the existing issuer immediately upon receipt of the substitute L/C Security. If
any issuer of the L/C Security shall become insolvent or placed into FDIC
receivership, then Tenant shall immediately deliver to Landlord (without the
requirement of notice from Landlord) substitute L/C Security issued by an issuer
reasonably satisfactory to Landlord, and otherwise conforming to the
requirements set forth in this Article. As used herein with respect to the
issuer of the L/C Security, “insolvent” shall mean the determination of
insolvency as made by such issuer’s primary bank regulator (i.e., the state bank
supervisor for state chartered banks; the OCC or OTS, respectively, for
federally chartered banks or thrifts; or the Federal Reserve for its member
banks). If, at the Term Expiration Date, any Rent remains uncalculated or
unpaid, then (i) Landlord shall with reasonable diligence complete any necessary
calculations, (ii) Tenant shall extend the expiry date of such L/C Security from
time to time as Landlord reasonably requires and (iii) in such extended period,
Landlord shall not unreasonably refuse to consent to an appropriate reduction of
the L/C Security. Tenant shall reimburse Landlord’s reasonable legal costs in
handling Landlord’s acceptance of L/C Security or its replacement or extension.

(b) If Tenant delivers to Landlord satisfactory L/C Security in place of the
entire Security Deposit, Landlord shall remit to Tenant any cash Security
Deposit Landlord previously held.

(c) Landlord may draw upon the L/C Security, and hold and apply the proceeds in
the same manner and for the same purposes as the Security Deposit, if (i) an
uncured Default (as defined below) exists, (ii) as of the date forty-five
(45) days before any L/C Security expires (even if such scheduled expiry date is
after the Term Expiration Date) Tenant has not

 

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delivered to Landlord an amendment or replacement for such L/C Security,
reasonably satisfactory to Landlord, extending the expiry date to the earlier of
(1) three (3) months after the then-current Term Expiration Date or (2) the date
one year after the then-current expiry date of the L/C Security, (iii) the L/C
Security provides for automatic renewals, Landlord asks the issuer to confirm
the current L/C Security expiry date, and the issuer fails to do so within ten
(10) business days, (iv) Tenant fails to pay (when and as Landlord reasonably
requires) any bank charges for Landlord’s transfer of the L/C Security or
(v) the issuer of the L/C Security ceases, or announces that it will cease, to
maintain an office in the city where Landlord may present drafts under the L/C
Security (and fails to permit drawing upon the L/C Security by overnight courier
or facsimile). This Section does not limit any other provisions of this Lease
allowing Landlord to draw the L/C Security under specified circumstances.

(d) Tenant shall not seek to enjoin, prevent, or otherwise interfere with
Landlord’s draw under L/C Security, even if it violates this Lease. Tenant
acknowledges that the only effect of a wrongful draw would be to substitute a
cash Security Deposit for L/C Security, causing Tenant no legally recognizable
damage. Landlord shall hold the proceeds of any draw in the same manner and for
the same purposes as a cash Security Deposit. In the event of a wrongful draw,
the parties shall cooperate to allow Tenant to post replacement L/C Security
simultaneously with the return to Tenant of the wrongfully drawn sums, and
Landlord shall upon request confirm in writing to the issuer of the L/C Security
that Landlord’s draw was erroneous.

(e) If Landlord transfers its interest in the Premises, then Tenant shall at
Tenant’s expense, within five (5) business days after receiving a request from
Landlord, deliver (and, if the issuer requires, Landlord shall consent to) an
amendment to the L/C Security naming Landlord’s grantee as substitute
beneficiary. If the required Security Deposit changes while L/C Security is in
force, then Tenant shall deliver (and, if the issuer requires, Landlord shall
consent to) a corresponding amendment to the L/C Security.

12. Use.

12.1. Tenant shall use the Premises for the Permitted Use, and shall not use the
Premises, or permit or suffer the Premises to be used, for any other purpose
without Landlord’s prior written consent, which consent Landlord may withhold in
its sole and absolute discretion.

12.2. Tenant shall not use or occupy the Premises in violation of Applicable
Laws; zoning ordinances; or the certificate of occupancy issued for the Building
or the Project, and shall, upon five (5) days’ written notice from Landlord,
discontinue any use of the Premises that is declared or claimed by any
Governmental Authority having jurisdiction to be a violation of any of the
above, or that in Landlord’s reasonable opinion violates any of the above.
Tenant shall comply with any direction of any Governmental Authority having
jurisdiction that shall, by reason of the nature of Tenant’s use or occupancy of
the Premises, impose any duty upon Tenant or Landlord with respect to the
Premises or with respect to the use or occupation thereof, and shall indemnify,
save, defend (at Landlord’s option and with counsel reasonably acceptable to
Landlord) and hold Landlord and its affiliates, employees, agents and
contractors; and any lender, mortgagee, ground lessor or beneficiary (each, a
“Lender” and, collectively with Landlord and its affiliates, employees, agents
and contractors, the “Landlord Indemnitees”) harmless from and

 

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against any and all demands, claims, liabilities, losses, costs, expenses,
actions, causes of action, damages, suits or judgments, and all reasonable
expenses (including reasonable attorneys’ fees, charges and disbursements,
regardless of whether the applicable demand, claim, action, cause of action or
suit is voluntarily withdrawn or dismissed) incurred in investigating or
resisting the same (collectively, “Claims”) of any kind or nature that arise
before, during or after the Term as a result of Tenant’s breach of this Section.

12.3. Tenant shall not do or permit to be done anything that will invalidate or
increase the cost of any fire, environmental, extended coverage or any other
insurance policy covering the Building or the Project, and shall comply with all
rules, orders, regulations and requirements of the insurers of the Building and
the Project, and Tenant shall promptly, upon demand, reimburse Landlord for any
additional premium charged for such policy by reason of Tenant’s failure to
comply with the provisions of this Article.

12.4. Tenant shall keep all doors opening onto public corridors closed, except
when in use for ingress and egress.

12.5. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by Tenant, nor shall any changes be made to existing locks or
the mechanisms thereof without Landlord’s prior written consent. Tenant shall,
upon termination of this Lease, return to Landlord all keys to offices and
restrooms either furnished to or otherwise procured by Tenant. In the event any
key so furnished to Tenant is lost, Tenant shall pay to Landlord the reasonable
cost of replacing the same or of changing the lock or locks opened by such lost
key if Landlord shall deem it necessary to make such change.

12.6. No awnings or other projections shall be attached to any outside wall of
the Building. No curtains, blinds, shades or screens shall be attached to or
hung in, or used in connection with, any window or door of the Premises other
than Landlord’s standard window coverings. Neither the interior nor exterior of
any windows shall be coated or otherwise sunscreened without Landlord’s prior
written consent, nor shall any bottles, parcels or other articles be placed on
the windowsills or items attached to windows that are visible from outside the
Premises. No equipment, furniture or other items of personal property shall be
placed on any exterior balcony without Landlord’s prior written consent.

12.7. No sign, advertisement or notice (“Signage”) shall be exhibited, painted
or affixed by Tenant on any part of the Premises or the Building without
Landlord’s prior written consent. Signage shall conform to Landlord’s design
criteria. For any Signage, Tenant shall, at Tenant’s own cost and expense,
(a) acquire all permits for such Signage in compliance with Applicable Laws and
(b) design, fabricate, install and maintain such Signage in a first-class
condition. Tenant shall be responsible for reimbursing Landlord for the
reasonable cost incurred by Landlord in removing any of Tenant’s Signage upon
the expiration or earlier termination of the Lease. Interior signs on entry
doors to the Premises and the directory tablet shall be inscribed, painted or
affixed for Tenant by Landlord at Tenant’s sole cost and expense, and shall be
of a size, color and type and be located in a place reasonably acceptable to
Landlord. The directory tablet shall be provided exclusively for the display of
the name and location of tenants only. Tenant shall not place anything on the
exterior of the corridor walls or corridor doors other than

 

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Landlord’s standard lettering. At Landlord’s option, Landlord may install any
Tenant Signage, and Tenant shall pay all reasonable costs associated with such
installation within thirty (30) days after demand therefor.

12.8. Tenant may only place equipment within the Premises with floor loading
consistent with the Building’s structural design unless Tenant obtains
Landlord’s prior written approval. Tenant may place such equipment only in a
location designed to carry the weight of such equipment.

12.9. Tenant shall cause any equipment or machinery to be installed in the
Premises so as to reasonably prevent sounds or vibrations therefrom from
extending into the Common Area or other offices in the Project.

12.10. Tenant shall not (a) do or permit anything to be done in or about the
Premises that shall in any way obstruct or interfere with the rights of other
tenants or occupants of the Project, or injure or annoy them, (b) use or allow
the Premises to be used for immoral, unlawful or objectionable purposes,
(c) cause, maintain or permit any nuisance or waste in, on or about the Project
or (d) take any other action that would in Landlord’s reasonable determination
in any manner adversely affect other tenants’ quiet use and enjoyment of their
space or adversely impact their ability to conduct business in a professional
and suitable work environment. Notwithstanding anything in this Lease to the
contrary, Tenant may not install any security systems (including cameras)
outside the Premises or that record sounds or images outside the Premises
without Landlord’s prior written consent, which Landlord may withhold in its
sole and absolute discretion.

12.11. Notwithstanding any other provision herein to the contrary, Tenant shall
be responsible for all liabilities, costs and expenses arising out of or in
connection with the compliance of the Premises with the Americans with
Disabilities Act, 42 U.S.C. § 12101, et seq., and any state and local
accessibility laws, codes, ordinances and rules (collectively, and together with
regulations promulgated pursuant thereto, the “ADA”), and Tenant shall
indemnify, save, defend (at Landlord’s option and with counsel reasonably
acceptable to Landlord) and hold the Landlord Indemnitees harmless from and
against Claims arising out of any such failure of the Premises to comply with
the ADA. The Premises have not undergone inspection by a Certified Access
Specialist (as defined in California Civil Code Section 55.52). For the
avoidance of doubt, “Lenders” shall also include historic tax credit investors
and new market tax credit investors. The provisions of this Section shall
survive the expiration or earlier termination of this Lease.

12.12. Tenant shall maintain temperature and humidity in the Premises in
accordance with ASHRAE standards at all times.

13. Rules and Regulations, CC&Rs, Parking Facilities and Common Area.

13.1. Tenant shall have the non-exclusive right, in common with others, to use
the Common Area in conjunction with Tenant’s use of the Premises for the
Permitted Use, and such use of the Common Area and Tenant’s use of the Premises
shall be subject to the rules and regulations adopted by Landlord and attached
hereto as Exhibit F, together with such other

 

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reasonable and nondiscriminatory rules and regulations as are hereafter
promulgated by Landlord in its sole and absolute discretion (the “Rules and
Regulations”). Tenant shall and shall ensure that its contractors,
subcontractors, employees, subtenants and invitees faithfully observe and comply
with the Rules and Regulations. Landlord shall not be responsible to Tenant for
the violation or non-performance by any other tenant or any agent, employee or
invitee thereof of any of the Rules and Regulations.

13.2. This Lease is subject to any recorded covenants, conditions or
restrictions on the Project or Property, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time (the “CC&Rs”).
Tenant shall comply with the CC&Rs.

13.3. Tenant shall have a non-exclusive, irrevocable license to use Tenant’s Pro
Rata Share of parking facilities serving the Building in common on an unreserved
basis with other tenants of the Building during the Term at no additional cost.

13.4. Tenant agrees not to unreasonably overburden the parking facilities and
agrees to cooperate with Landlord and other tenants in the use of the parking
facilities. Landlord reserves the right to determine that parking facilities are
becoming overcrowded and to limit Tenant’s use thereof. Upon such determination,
Landlord may reasonably allocate parking spaces among Tenant and other tenants
of the Building or the Project. Nothing in this Section, however, is intended to
create an affirmative duty on Landlord’s part to monitor parking.

14. Project Control by Landlord.

14.1. Landlord reserves full control over the Building and the Project to the
extent not inconsistent with Tenant’s enjoyment of the Premises as provided by
this Lease. This reservation includes Landlord’s right to subdivide the Project;
convert the Building and other buildings within the Project to condominium
units; change the size of the Project by selling all or a portion of the Project
or adding real property and any improvements thereon to the Project; grant
easements and licenses to third parties; maintain or establish ownership of the
Building separate from fee title to the Property; make additions to or
reconstruct portions of the Building and the Project; install, use, maintain,
repair, replace and relocate for service to the Premises and other parts of the
Building or the Project pipes, ducts, conduits, wires and appurtenant fixtures,
wherever located in the Premises, the Building or elsewhere at the Project; and
alter or relocate any other Common Area or facility, including private drives,
lobbies, entrances and landscaping; provided, however, that such rights shall be
exercised in a way that does not materially adversely affect Tenant’s beneficial
use and occupancy of the Premises, including the Permitted Use and Tenant’s
access to the Premises. Tenant acknowledges that Landlord specifically reserves
the right to allow the exclusive use of corridors and restroom facilities
located on specific floors to one or more tenants occupying such floors;
provided, however, that Tenant shall not be deprived of the use of the corridors
reasonably required to serve the Premises or of restroom facilities serving the
floor upon which the Premises are located.

14.2. Possession of areas of the Premises necessary for utilities, services,
safety and operation of the Building is reserved to Landlord.

 

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14.3. Tenant shall, at Landlord’s request, promptly execute such further
documents as may be reasonably appropriate to assist Landlord in the performance
of its obligations hereunder; provided that Tenant need not execute any document
that creates additional liability for Tenant or that deprives Tenant of the
quiet enjoyment and use of the Premises as provided for in this Lease.

14.4. Landlord may, at any and all reasonable times during non-business hours
(or during business hours, if (a) with respect to Subsections 14.4(u) through
14.4(y), Tenant so requests, and (b) with respect to Subsection 14.4(z), if
Landlord so requests), and upon twenty-four (24) hours’ prior notice (which may
be oral or by email to the office manager or other Tenant-designated individual
at the Premises; but provided that no time restrictions shall apply or advance
notice be required if an emergency necessitates immediate entry), enter the
Premises to (u) inspect the same and to determine whether Tenant is in
compliance with its obligations hereunder, (v) supply any service Landlord is
required to provide hereunder, (w) alter, improve or repair any portion of the
Building other than the Premises for which access to the Premises is reasonably
necessary, (x) post notices of nonresponsibility, (y) access the telephone
equipment, electrical substation and fire risers and (z) show the Premises to
prospective tenants during the final year of the Term and current and
prospective purchasers and lenders at any time. In connection with any such
alteration, improvement or repair as described in Subsection 14.4(w), Landlord
may erect in the Premises or elsewhere in the Project scaffolding and other
structures reasonably required for the alteration, improvement or repair work to
be performed. In no event shall Tenant’s Rent abate as a result of Landlord’s
activities pursuant to this Section; provided, however, that all such activities
shall be conducted in such a manner so as to cause as little interference to
Tenant as is reasonably possible. Landlord shall at all times retain a key with
which to unlock all of the doors in the Premises. Tenant will have the right to
have a representative of Tenant accompany Landlord during any entry into the
Premises pursuant to this Article 14 (except for entries due to an emergency).
If an emergency necessitates immediate access to the Premises, Landlord may use
whatever force is necessary to enter the Premises, and any such entry to the
Premises shall not constitute a forcible or unlawful entry to the Premises, a
detainer of the Premises, or an eviction of Tenant from the Premises or any
portion thereof. In the event there is damage to the Premises during an entry by
Landlord which is caused by the gross negligence of the Landlord or Landlord’s
forcible entry during an emergency (where such emergency was not caused by
Tenant), then Landlord will repair such damage at Landlord’s cost.

15. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the Rent and
performing its obligations contained in this Lease (within the notice and cure
periods provided herein), may peacefully and quietly have, hold and enjoy the
Premises, free from any claim by Landlord or persons claiming under Landlord,
but subject to all of the terms and provisions hereof, provisions of Applicable
Laws and rights of record to which this Lease is or may become subordinate. This
covenant is in lieu of any other quiet enjoyment covenant, either express or
implied.

16. Utilities and Services.

16.1. Tenant shall pay for all water (including the cost to service, repair and
replace reverse osmosis, de-ionized and other treated water), gas, heat, light,
power, telephone, internet service, cable television, other telecommunications
and other utilities supplied to the Premises, together with any fees, surcharges
and taxes thereon. If any such utility is not separately metered

 

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to Tenant, Tenant shall pay Tenant’s Adjusted Share of all charges of such
utility jointly metered with other premises as Additional Rent or, in the
alternative, Landlord may, at its option, monitor the usage of such utilities by
Tenant and charge Tenant with the cost of purchasing, installing and monitoring
such metering equipment, which cost shall be paid by Tenant as Additional Rent.
Landlord may base its bills for utilities that are not separately metered on
reasonable estimates; provided that Landlord adjusts such billings promptly
thereafter or as part of the next Landlord’s Statement to reflect the actual
cost of providing utilities to the Premises. To the extent that Tenant uses more
than Tenant’s Pro Rata Share of any utilities that are not separately metered,
as confirmed by Landlord’s utility consultant, then Tenant shall pay Landlord
for Tenant’s Adjusted Share of such utilities to reflect such excess. In the
event that the Building, North Campus or Project is less than fully occupied
during a calendar year, Tenant acknowledges that Landlord may extrapolate
utility usage that varies depending on the occupancy of the Building, North
Campus or Project (as applicable) to equal Landlord’s reasonable estimate of
what such utility usage would have been had the Building, North Campus or
Project, as applicable, been ninety-five percent (95%) occupied during such
calendar year; provided, however, that Landlord shall not recover more than one
hundred percent (100%) of the cost of such utilities. Tenant shall not be liable
for the cost of utilities supplied to the Premises attributable to the time
period prior to the Term Commencement Date; provided, however, that, if Landlord
shall permit Tenant possession of the Premises prior to the Term Commencement
Date and Tenant uses the Premises for any purpose other than placement of
personal property as set forth in Section 4.3, then Tenant shall be responsible
for the cost of utilities supplied to the Premises from such earlier date of
possession.

16.2. Landlord shall not be liable for, nor shall any eviction of Tenant result
from, the failure to furnish any utility or service, whether or not such failure
is caused by accidents; breakage; casualties (to the extent not caused by the
party claiming Force Majeure); Severe Weather Conditions (as defined below);
physical natural disasters (but excluding weather conditions that are not Severe
Weather Conditions); strikes, lockouts or other labor disturbances or labor
disputes (other than labor disturbances and labor disputes resulting solely from
the acts or omissions of the party claiming Force Majeure); acts of terrorism;
riots or civil disturbances; wars or insurrections; shortages of materials
(which shortages are not unique to the party claiming Force Majeure); government
regulations, moratoria or other governmental actions, inactions or delays;
failures by third parties to deliver gas, oil or another suitable fuel supply,
or inability of the party claiming Force Majeure, by exercise of reasonable
diligence, to obtain gas, oil or another suitable fuel; or other causes beyond
the reasonable control of the party claiming that Force Majeure has occurred
(collectively, “Force Majeure”); or, to the extent permitted by Applicable Laws,
Landlord’s negligence. In the event of such failure, Tenant shall not be
entitled to termination of this Lease or any abatement or reduction of Rent, nor
shall Tenant be relieved from the operation of any covenant or agreement of this
Lease. “Severe Weather Conditions” means weather conditions that are materially
worse than those that reasonably would be anticipated for the Property at the
applicable time based on historic meteorological records. Notwithstanding
anything to the contrary in this Lease, if, for more than ten (10) consecutive
business days following written notice to Landlord and as a direct result of
Landlord’s gross negligence or willful misconduct (and except to the extent that
such failure is caused in whole or in part by the action or inaction of a Tenant
Party (as defined below)), the provision of utilities to

 

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all or a material portion of the Premises that Landlord must provide pursuant to
this Lease is interrupted (a “Material Services Failure”), then Tenant’s Base
Rent (or, to the extent that less than all of the Premises are affected, a
proportionate amount (based on the Rentable Area of the Premises that is
rendered unusable) of Base Rent) shall thereafter be abated until the Premises
are again usable by Tenant for the Permitted Use; provided, however, that, if
Landlord is diligently pursuing the restoration of such utilities and Landlord
provides substitute utilities reasonably suitable for Tenant’s continued use and
occupancy of the Premises for the Permitted Use (e.g., supplying potable water
or portable air conditioning equipment), then Base Rent shall not be abated.
During any Material Services Failure, Tenant will cooperate with Landlord to
arrange for the provision of any interrupted utility services on an interim
basis via temporary measures until final corrective measures can be
accomplished, and Tenant will permit Landlord the necessary access to the
Premises to remedy such Material Service Failure. In the event of any
interruption of utilities that Landlord must provide pursuant to this Lease,
regardless of the cause, Landlord shall diligently pursue the restoration of
such other utilities. Notwithstanding anything in this Lease to the contrary,
but subject to Article 24 (which shall govern in the event of a casualty), the
provisions of this Section shall be Tenant’s sole recourse and remedy in the
event of an interruption of utilities to the Premises.

16.3. Tenant shall pay for, prior to delinquency of payment therefor, any
utilities and services that may be furnished to the Premises during or, if
Tenant occupies the Premises after the expiration or earlier termination of the
Term, after the Term, beyond those utilities provided by Landlord, including
telephone, internet service, cable television and other telecommunications,
together with any fees, surcharges and taxes thereon. Upon Landlord’s demand,
utilities and services provided to the Premises that are separately metered
shall be paid by Tenant directly to the supplier of such utilities or services.

16.4. Tenant shall not, without Landlord’s prior written consent, use any device
in the Premises (including data processing machines) that will in any way
(a) increase the amount of ventilation, air exchange, gas, steam, electricity or
water required or consumed in the Premises based upon Tenant’s Pro Rata Share of
the Building or Project (as applicable) beyond the existing capacity of the
Building or the Project usually furnished or supplied for the Permitted Use or
(b) exceed Tenant’s Pro Rata Share of the Building’s or Project’s (as
applicable) capacity to provide such utilities or services.

16.5. If Tenant shall require utilities or services in excess of those usually
furnished or supplied for tenants in similar spaces in the Building or the
Project by reason of Tenant’s equipment or extended hours of business
operations, then Tenant shall first procure Landlord’s consent for the use
thereof, which consent Landlord may condition upon the availability of such
excess utilities or services, and Tenant shall pay as Additional Rent an amount
equal to the cost of providing such excess utilities and services, without
markup or profit to Landlord.

16.6. Landlord shall provide water in Common Area for lavatory and landscaping
purposes only, which water shall be from the local municipal or similar source;
provided, however, that if Landlord determines that Tenant requires, uses or
consumes water provided to the Common Area for any purpose other than ordinary
lavatory purposes, Landlord may install a water meter (“Tenant Water Meter”) and
thereby measure Tenant’s water consumption for all

 

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purposes. Tenant shall pay Landlord for the costs of any Tenant Water Meter and
the installation and maintenance thereof, without markup or profit to Landlord,
during the Term. If Landlord installs a Tenant Water Meter, Tenant shall pay for
water consumed, as shown on such meter, as and when bills are rendered. If
Tenant fails to timely make such payments, Landlord may pay such charges and
collect the same from Tenant. Any such costs or expenses incurred or payments
made by Landlord for any of the reasons or purposes stated in this Section shall
be deemed to be Additional Rent payable by Tenant and collectible by Landlord as
such.

16.7. Landlord reserves the right to stop service of the elevator, plumbing,
ventilation, air conditioning and utility systems, when Landlord deems necessary
or desirable, due to accident, emergency or the need to make repairs,
alterations or improvements, until such repairs, alterations or improvements
shall have been completed, and Landlord shall further have no responsibility or
liability for failure to supply elevator facilities, plumbing, ventilation, air
conditioning or utility service when prevented from doing so by Force Majeure
or, to the extent permitted by Applicable Laws, Landlord’s negligence. Without
limiting the foregoing, it is expressly understood and agreed that any covenants
on Landlord’s part to furnish any service pursuant to any of the terms,
covenants, conditions, provisions or agreements of this Lease, or to perform any
act or thing for the benefit of Tenant, shall not be deemed breached if Landlord
is unable to furnish or perform the same by virtue of Force Majeure or, to the
extent permitted by Applicable Laws, Landlord’s negligence.

16.8. [intentionally omitted]

16.9. Notwithstanding anything to the contrary in this Lease, the existing HVAC
unit exclusively servicing the Premises and any supplemental HVAC unit(s)
installed by Tenant after the date of this Lease (collectively, the “HVAC Unit”)
shall be the sole responsibility of Tenant and, except as expressly set forth in
Section 16.10 below, Landlord shall have no obligations with respect thereto.
Tenant shall, at its sole cost and expense, maintain and keep any HVAC Unit in
good condition and repair and shall otherwise be solely responsible for any
repair, maintenance and replacement costs with respect to the HVAC Unit (subject
to Landlord’s obligations with respect to the Existing HVAC Unit expressly set
forth in Section 16.10 below). Tenant shall keep in full force and effect during
the Term (and occupancy by Tenant, if any, after termination of this Lease) a
preventative maintenance contract for quarterly, semi-annual, and annual HVAC
Unit inspections and maintenance using a qualified, licensed, bonded service
provider reasonably approved by Landlord (such service provider, “Tenant’s
Service Provider”). If requested in writing by Landlord, Tenant shall provide to
Landlord copies of all HVAC Unit maintenance contracts and HVAC Unit maintenance
reports on a quarterly basis. In the event Landlord determines that Tenant is
not properly maintaining an HVAC Unit, Landlord may take over Tenant’s
responsibilities with respect to such HVAC Unit. Any such costs or expenses
incurred, or payments made by Landlord as a result of Tenant failing to properly
maintain a HVAC Unit, shall be deemed to be Additional Rent payable by Tenant
within thirty (30) days of receiving an invoice therefor. Notwithstanding
anything to the contrary in this Lease, Landlord shall have no liability, and
Tenant shall have no right or remedy, on account of any interruption or
impairment with respect to any HVAC Unit.

 

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16.10. In the event that Tenant’s Service Provider reasonably determines that
(a) based on the age of such unit and the expected economic cost to repair such
unit, the HVAC Unit serving the Premises as of the Execution Date (the “Existing
HVAC Unit”) has reached the end of its useful life and should be replaced, and
(b) the need for such replacement was not caused by the failure to properly
repair and maintain, misuse, misconduct, damage, destruction, omissions, and/or
negligence of a Tenant Party (collectively, “Tenant Damage”), Tenant shall
deliver written notice to Landlord (a “Replacement Notice”) requesting that
Landlord replace such Existing HVAC Unit (which notice shall include reasonably
detailed information from Tenant’s Service Provider supporting its
determination). Upon receipt of a Replacement Notice, Landlord shall have the
option to cause Landlord’s consultant to inspect the Existing HVAC Unit. If
Landlord’s consultant reasonably determines that the need for such replacement
was caused by Tenant Damage, then Tenant shall be obligated to repair or replace
the Existing HVAC Unit at Tenant’s sole cost and expense. If Landlord’s
consultant reasonably determines that the need for such replacement was not
caused by Tenant Damage but that the Existing HVAC Unit can be economically
repaired, then Tenant shall be obligated to repair the Existing HVAC Unit at
Tenant’s sole cost and expense, but if Landlord’s consultant finds that the need
for such replacement was not caused by Tenant Damage and based on the age of the
unit and the expected cost of repairs, the Existing HVAC Unit should be
replaced, then Landlord shall replace the Existing HVAC Unit (provided, however,
that Landlord shall be permitted to include all costs incurred by Landlord
connection with such replacement in Operating Expenses, subject to amortization
as set forth in Section 9.1(b) above).

16.11. For any utilities serving the Premises for which Tenant is billed
directly by such utility provider, Tenant agrees to furnish to Landlord (a) any
invoices or statements for such utilities within thirty (30) days after Tenant’s
receipt thereof, (b) within thirty (30) days after Landlord’s request, any other
utility usage information reasonably requested by Landlord, and (c) within
thirty (30) days after each calendar year during the Term, authorization to
allow Landlord to access Tenant’s usage information necessary for Landlord to
complete an ENERGY STAR® Statement of Performance (or similar comprehensive
utility usage report (e.g., related to Labs 21), if requested by Landlord) and
any other information reasonably requested by Landlord for the immediately
preceding year; and Tenant shall comply with any other energy usage or
consumption requirements required by Applicable Laws. Tenant shall retain
records of utility usage at the Premises, including invoices and statements from
the utility provider, for at least sixty (60) months, or such other period of
time as may be reasonably requested by Landlord. Tenant acknowledges that any
utility information for the Premises, the Building and the Project may be shared
with third parties, including Landlord’s consultants and Governmental
Authorities. In the event that Tenant fails to comply with this Section, Tenant
hereby authorizes Landlord to collect utility usage information directly from
the applicable utility providers. In addition to the foregoing, Tenant shall
comply with all Applicable Laws related to the disclosure and tracking of energy
consumption at the Premises. The provisions of this Section shall survive the
expiration or earlier termination of this Lease.

17. Alterations.

17.1. Tenant shall make no alterations, additions or improvements in or to the
Premises or engage in any construction, demolition, reconstruction, renovation
or other work (whether

 

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major or minor) of any kind in, at or serving the Premises (“Alterations”)
without Landlord’s prior written approval, which approval Landlord shall not
unreasonably withhold, condition or delay; provided, however, that, in the event
any proposed Alteration affects (a) any structural portions of the Building,
including exterior walls, the roof, the foundation or slab, foundation or slab
systems (including barriers and subslab systems) or the core of the Building,
(b) the exterior of the Building or (c) any Building systems, including
elevator, plumbing, HVAC, electrical, security, life safety and power, then
Landlord may withhold its approval in its sole and absolute discretion. Tenant
shall, in making any Alterations, use only those architects, contractors,
suppliers and mechanics of which Landlord has given prior written approval,
which approval shall be in Landlord’s sole and absolute discretion. In seeking
Landlord’s approval, Tenant shall provide Landlord, at least thirty (30) days in
advance of any proposed construction, with plans, specifications, bid proposals,
certified stamped engineering drawings and calculations by Tenant’s engineer of
record or architect of record (including connections to the Building’s
structural system, modifications to the Building’s envelope, non-structural
penetrations in slabs or walls, and modifications or tie-ins to life safety
systems), work contracts, requests for laydown areas and such other information
concerning the nature and cost of the Alterations as Landlord may reasonably
request. In no event shall Tenant use or Landlord be required to approve any
architects, consultants, contractors, subcontractors or material suppliers that
Landlord reasonably believes could cause labor disharmony or may not have
sufficient experience, in Landlord’s reasonable opinion, to perform work in an
occupied Class “A” laboratory research building. Notwithstanding the foregoing,
Tenant may make strictly cosmetic changes to the Premises that do not require
any permits or more than three (3) total contractors and subcontractors
(“Cosmetic Alterations”) without Landlord’s consent; provided that (y) the cost
of any Cosmetic Alterations does not exceed One Hundred Thousand Dollars
($100,000) annually, (z) such Cosmetic Alterations do not (i) require any
structural or other substantial modifications to the Premises, (ii) require any
changes to or adversely affect the Building systems, (iii) affect the exterior
of the Building or (iv) trigger any requirement under Applicable Laws that would
require Landlord to make any alteration or improvement to the Premises, the
Building or the Project.

17.2. Tenant shall not construct or permit to be constructed partitions or other
obstructions that might interfere with free access to mechanical installation or
service facilities of the Building or with other tenants’ components located
within the Building, or interfere with the moving of Landlord’s equipment to or
from the enclosures containing such installations or facilities.

17.3. Tenant shall accomplish any work performed on the Premises or the Building
in such a manner as to permit any life safety systems to remain fully operable
at all times.

17.4. Any work performed on the Premises, the Building or the Project by Tenant
or Tenant’s contractors shall be done at such times and in such manner as
Landlord may from time to time reasonably designate. Tenant covenants and agrees
that all work done by Tenant or Tenant’s contractors shall be performed in full
compliance with Applicable Laws. Within thirty (30) days after completion of any
Alterations (other than Cosmetic Alterations), Tenant shall provide Landlord
with complete “as built” drawing print sets and electronic CADD files on disc
(or files in such other current format in common use as Landlord reasonably
approves or requires) showing any changes in the Premises, as well as a
commissioning report prepared by a

 

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licensed, qualified commissioning agent hired by Tenant and approved by Landlord
for all new or affected mechanical, electrical and plumbing systems. Any such
“as built” plans shall show the applicable Alterations as an overlay on the
Building as-built plans; provided that Landlord provides the Building “as built”
plans to Tenant.

17.5. Before commencing any Alterations, Tenant shall (a) give Landlord at least
thirty (30) days’ prior written notice of the proposed commencement of such work
and the names and addresses of the persons supplying labor or materials therefor
so that Landlord may enter the Premises to post and keep posted thereon and
therein notices or to take any further action that Landlord may reasonably deem
proper for the protection of Landlord’s interest in the Project and (b) shall,
if required by Landlord, secure, at Tenant’s own cost and expense, a completion
and lien indemnity bond reasonably satisfactory to Landlord for such work.

17.6. Tenant shall repair any damage to the Premises caused by Tenant’s removal
of any property from the Premises. During any such restoration period, Tenant
shall pay Rent to Landlord as provided herein as if such space were otherwise
occupied by Tenant. The provisions of this Section shall survive the expiration
or earlier termination of this Lease.

17.7. The Premises plus any Alterations; Signage; Tenant Improvements, attached
equipment, decorations, fixtures and trade fixtures; movable laboratory casework
and related appliances; and other additions and improvements attached to or
built into the Premises made by either of the parties (including all floor and
wall coverings; paneling; sinks and related plumbing fixtures; laboratory
benches; exterior venting fume hoods; walk-in freezers and refrigerators;
ductwork; conduits; electrical panels and circuits; attached machinery and
equipment; and built-in furniture and cabinets, in each case, together with all
additions and accessories thereto), shall (unless, prior to such construction or
installation, Landlord elects otherwise in writing) at all times remain the
property of Landlord, shall remain in the Premises and shall (unless, prior to
construction or installation thereof, Landlord elects otherwise in writing) be
surrendered to Landlord upon the expiration or earlier termination of this
Lease. For the avoidance of doubt, the items listed on Exhibit H attached hereto
(which Exhibit H may be updated by Tenant from and after the Term Commencement
Date, subject to Landlord’s written consent) constitute Tenant’s property and
shall be removed by Tenant upon the expiration or earlier termination of the
Lease.

17.8. Notwithstanding any other provision of this Article to the contrary, in no
event shall Tenant remove any improvement from the Premises as to which Landlord
contributed payment, including the Tenant Improvements, without Landlord’s prior
written consent, which consent Landlord may withhold in its sole and absolute
discretion.

17.9. If Tenant shall fail to remove any of its property from the Premises prior
to the expiration or earlier termination of this Lease, then Landlord may, at
its option, remove the same in any manner that Landlord shall choose and store
such effects without liability to Tenant for loss thereof or damage thereto, and
Tenant shall pay Landlord, within ten (10) days after demand, any costs and
expenses incurred due to such removal and storage or Landlord may, at its sole
option and without notice to Tenant, sell such property or any portion thereof
at private sale and without legal process for such price as Landlord may obtain
and apply the proceeds of such sale against any (a) amounts due by Tenant to
Landlord under this Lease and (b) any expenses incident to the removal, storage
and sale of such personal property.

 

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17.10. Tenant shall pay to Landlord an amount equal to three percent (3%) of the
cost to Tenant of all Alterations to cover Landlord’s overhead and expenses for
plan review, engineering review, coordination, scheduling and supervision
thereof. For purposes of payment of such sum, Tenant shall submit to Landlord
copies of all bills, invoices and statements covering the costs of such charges,
accompanied by payment to Landlord of the fee set forth in this Section. Tenant
shall reimburse Landlord for any extra expenses incurred by Landlord by reason
of faulty work done by Tenant or its contractors, or by reason of delays caused
by such work, or by reason of inadequate clean-up.

17.11. Within sixty (60) days after final completion of any Alterations
performed by Tenant with respect to the Premises, Tenant shall submit to
Landlord documentation showing the amounts expended by Tenant with respect to
such Alterations, together with supporting documentation reasonably acceptable
to Landlord.

17.12. Tenant shall take, and shall cause its contractors to take, commercially
reasonable steps to protect the Premises during the performance of any
Alterations, including covering or temporarily removing any window coverings so
as to guard against dust, debris or damage.

17.13. Tenant shall require its contractors and subcontractors performing work
on the Premises to name Landlord and its affiliates and Lenders as additional
insureds on their respective insurance policies.

18. Repairs and Maintenance.

18.1. Landlord shall repair and maintain the structural and exterior portions
and Common Area of the Building and the Project, including roofing and covering
materials; foundations (excluding any architectural slabs, but including any
structural slabs); exterior walls; plumbing; fire sprinkler systems (if any);
elevators; and electrical systems installed or furnished by Landlord.

18.2. Except for services of Landlord, if any, required by Section 18.1, Tenant
shall at Tenant’s sole cost and expense maintain and keep the Premises and every
part thereof in good condition and repair, damage thereto from ordinary wear and
tear excepted, and shall, within ten (10) days after receipt of written notice
from Landlord, provide to Landlord any maintenance records that Landlord
reasonably requests. Tenant shall, upon the expiration or sooner termination of
the Term, surrender the Premises to Landlord in as good a condition as when
received, ordinary wear and tear (and casualty repairs that are not Tenant’s
responsibility pursuant to this Lease) excepted; and shall, at Landlord’s
request and Tenant’s sole cost and expense, remove all telephone and data
systems, wiring and equipment from the Premises, and repair any damage to the
Premises caused thereby. Landlord shall have no obligation to alter, remodel,
improve, repair, decorate or paint the Premises or any part thereof, other than
pursuant to the terms and provisions of the Work Letter.

 

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18.3. Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance that is Landlord’s obligation pursuant to this Lease
unless such failure shall persist for an unreasonable time after Tenant provides
Landlord with written notice of the need of such repairs or maintenance. Tenant
waives its rights under Applicable Laws now or hereafter in effect to make
repairs at Landlord’s expense.

18.4. If any excavation shall be made upon land adjacent to or under the
Building, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause such excavation, license to enter the Premises
for the purpose of performing such work as such person shall deem reasonably
necessary or desirable to preserve and protect the Building from injury or
damage and to support the same by proper foundations, without any claim for
damages or liability against Landlord and without reducing or otherwise
affecting Tenant’s obligations under this Lease.

18.5. This Article relates to repairs and maintenance arising in the ordinary
course of operation of the Building and the Project. In the event of a casualty
described in Article 24, Article 24 shall apply in lieu of this Article. In the
event of eminent domain, Article 25 shall apply in lieu of this Article.

18.6. Costs incurred by Landlord pursuant to this Article shall constitute
Operating Expenses.

19. Liens.

19.1. Subject to the immediately succeeding sentence, Tenant shall keep the
Premises, the Building and the Project free from any liens arising out of work
or services performed, materials furnished to or obligations incurred by Tenant.
Tenant further covenants and agrees that any mechanic’s or materialman’s lien
filed against the Premises, the Building or the Project for work or services
claimed to have been done for, or materials claimed to have been furnished to,
or obligations incurred by Tenant shall be discharged or bonded by Tenant within
twenty (20) days after the filing thereof, at Tenant’s sole cost and expense.

19.2. Should Tenant fail to discharge or bond against any lien of the nature
described in Section 19.1, Landlord may, at Landlord’s election, pay such claim
or post a statutory lien bond or otherwise provide security to eliminate the
lien as a claim against title, and Tenant shall immediately reimburse Landlord
for the costs thereof as Additional Rent. Tenant shall indemnify, save, defend
(at Landlord’s option and with counsel reasonably acceptable to Landlord) and
hold the Landlord Indemnitees harmless from and against any Claims arising from
any such liens, including any administrative, court or other legal proceedings
related to such liens.

19.3. In the event that Tenant leases or finances the acquisition of office
equipment, furnishings or other personal property of a removable nature utilized
by Tenant in the operation of Tenant’s business, Tenant warrants that any
Uniform Commercial Code financing statement shall, upon its face or by exhibit
thereto, indicate that such financing statement is applicable only to removable
personal property of Tenant located within the Premises. In no event shall the
address of the Premises, the Building or the Project be furnished on a financing
statement

 

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without qualifying language as to applicability of the lien only to removable
personal property located in an identified suite leased by Tenant. Should any
holder of a financing statement record or place of record a financing statement
that appears to constitute a lien against any interest of Landlord or against
equipment that may be located other than within an identified suite leased by
Tenant, Tenant shall, within ten (10) days after filing such financing
statement, cause (a) a copy of the lender security agreement or other documents
to which the financing statement pertains to be furnished to Landlord to
facilitate Landlord’s ability to demonstrate that the lien of such financing
statement is not applicable to Landlord’s interest and (b) Tenant’s lender to
amend such financing statement and any other documents of record to clarify that
any liens imposed thereby are not applicable to any interest of Landlord in the
Premises, the Building or the Project.

20. Estoppel Certificate. Tenant shall, within ten (10) days after receipt of
written notice from Landlord, execute, acknowledge and deliver a statement in
writing substantially in the form attached to this Lease as Exhibit I, or on any
other form reasonably requested by a current or proposed Lender or encumbrancer
or proposed purchaser, (a) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease as so modified is in full force and effect) and the
dates to which rental and other charges are paid in advance, if any,
(b) acknowledging that there are not, to Tenant’s knowledge, any uncured
defaults on the part of Landlord hereunder, or specifying such defaults if any
are claimed, and (c) setting forth such further information with respect to this
Lease or the Premises as may be reasonably requested thereon. Any such
statements may be relied upon by any prospective purchaser or encumbrancer of
all or any portion of the Property. Tenant’s failure to deliver any such
statement within such the prescribed time shall, at Landlord’s option,
constitute a Default (as defined below) under this Lease, and, in any event,
shall be binding upon Tenant that the Lease is in full force and effect and
without modification except as may be represented by Landlord in any certificate
prepared by Landlord and delivered to Tenant for execution.

21. Hazardous Materials.

21.1. Tenant shall not cause or permit any Hazardous Materials (as defined
below) to be brought upon, kept or used in or about the Premises, the Building
or the Project in violation of Applicable Laws by Tenant or any of its
employees, agents, contractors or invitees (collectively with Tenant, each a
“Tenant Party”). If (a) Tenant breaches such obligation, (b) the presence of
Hazardous Materials as a result of such a breach results in contamination of the
Project, any portion thereof, or any adjacent property, (c) contamination of the
Premises otherwise occurs during the Term or any extension or renewal hereof or
holding over hereunder (other than if such contamination results from
(i) migration of Hazardous Materials from outside the Premises not caused by a
Tenant Party or (ii) to the extent such contamination is caused by Landlord’s
gross negligence or willful misconduct) or (d) contamination of the Project
occurs as a result of Hazardous Materials that are placed on or under or are
released into the Project by a Tenant Party, then Tenant shall indemnify, save,
defend (at Landlord’s option and with counsel reasonably acceptable to Landlord)
and hold the Landlord Indemnitees harmless from and against any and all Claims
of any kind or nature to the extent arising from any of the foregoing, including
(w) diminution in value, if any, of the Project or any portion thereof after
remediation of such contamination in accordance with Applicable Laws (provided
such remediation is actually

 

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performed by Tenant), (x) damages for the loss or restriction on use of rentable
or usable space or of any amenity of the Project, (y) damages arising from any
adverse impact on marketing of space in the Project or any portion thereof and
(z) sums paid in settlement of Claims that arise before, during or after the
Term as a result of such breach or contamination. This indemnification by Tenant
includes costs incurred in connection with any investigation of site conditions
or any clean-up, remedial, removal or restoration work required by any
Governmental Authority because of Hazardous Materials present in the air, soil
or groundwater above, on, under or about the Project as a result of any act or
omission of Tenant or any Tenant Party or breach of this Section 21 by Tenant or
a Tenant Party. Without limiting the foregoing, if the presence of any Hazardous
Materials in, on, under or about the Project, any portion thereof or any
adjacent property caused or permitted by any Tenant Party results in any
contamination of the Project, any portion thereof or any adjacent property, then
Tenant shall promptly take all actions at its sole cost and expense as are
necessary to return the Project, any portion thereof or any adjacent property to
its respective condition existing prior to the time of such contamination;
provided that Landlord’s written approval of such action shall first be
obtained, which approval Landlord shall not unreasonably withhold; and provided,
further, that it shall be reasonable for Landlord to withhold its consent if
Landlord reasonably determines that such actions could have a material adverse
long-term or short-term effect on the Project, any portion thereof or any
adjacent property. Tenant’s obligations under this Section shall not be
affected, reduced or limited by any limitation on the amount or type of damages,
compensation or benefits payable by or for Tenant under workers’ compensation
acts, disability benefit acts, employee benefit acts or similar legislation.
Notwithstanding the foregoing, Landlord shall indemnify, save, defend (at
Tenant’s option and with counsel reasonably acceptable to Tenant) and hold the
Tenant Parties harmless from and against any and all Claims resulting from the
presence of Hazardous Materials at the Project in violation of Applicable Laws
as of the Execution Date, unless placed at the Project by a Tenant Party.

21.2. Landlord acknowledges that it is not the intent of this Article to
prohibit Tenant from operating its business for the Permitted Use. Tenant may
operate its business according to the custom of Tenant’s industry so long as the
use or presence of Hazardous Materials is strictly and properly monitored in
accordance with Applicable Laws. As a material inducement to Landlord to allow
Tenant to use Hazardous Materials in connection with its business, Tenant agrees
to deliver to Landlord (a) a list identifying each type of Hazardous Material to
be present at the Premises that is subject to regulation under any environmental
Applicable Laws, (b) a list of any and all approvals or permits from
Governmental Authorities required in connection with the presence of such
Hazardous Material at the Premises and (c) correct and complete copies of
(i) notices of violations of Applicable Laws related to Hazardous Materials and
(ii) plans relating to the installation of any storage tanks to be installed in,
on, under or about the Project (provided that installation of storage tanks
shall only be permitted after Landlord has given Tenant its written consent to
do so, which consent Landlord may withhold in its sole and absolute discretion
as to below ground storage tanks and in its reasonable discretion as to
above-ground tanks, provided that Landlord will reasonably designate the
location of any approved tanks) and closure plans or any other documents
required by any and all Governmental Authorities for any storage tanks installed
in, on, under or about the Project for the closure of any such storage tanks
(collectively, “Hazardous Materials Documents”). Tenant shall deliver to
Landlord updated

 

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Hazardous Materials Documents, within fourteen (14) days after receipt of a
written request therefor from Landlord, not more often than once per year,
unless (m) there are any changes to the Hazardous Materials Documents or
(n) Tenant initiates any Alterations or changes its business, in either case in
a way that involves any material increase in the types or amounts of Hazardous
Materials. For each type of Hazardous Material listed, the Hazardous Materials
Documents shall include (t) the chemical name, (u) the material state (e.g.,
solid, liquid, gas or cryogen), (v) the concentration, (w) the storage amount
and storage condition (e.g., in cabinets or not in cabinets), (x) the use amount
and use condition (e.g., open use or closed use), (y) the location (e.g., room
number or other identification) and (z) if known, the chemical abstract service
number. Notwithstanding anything in this Section to the contrary, Tenant shall
not be required to provide Landlord with any documents containing information of
a proprietary nature, unless such documents contain a reference to Hazardous
Materials or activities related to Hazardous Materials. If Tenant provides
Landlord with Hazardous Materials Documents containing information of a
proprietary nature (and Tenant notifies Landlord that such Hazardous Materials
Documents contain information of a proprietary nature), Landlord shall keep the
same confidential and shall not disclose them to any third-party except to
Landlord’s consultants and attorneys or as may be required by Applicable Laws.
Landlord may, at Landlord’s expense, cause the Hazardous Materials Documents to
be reviewed by a person or firm qualified to analyze Hazardous Materials to
confirm compliance with the provisions of this Lease and with Applicable Laws.
In the event that a review of the Hazardous Materials Documents indicates
non-compliance with this Lease or Applicable Laws, Tenant shall, at its expense,
diligently take steps to bring its storage and use of Hazardous Materials into
compliance. Notwithstanding anything in this Lease to the contrary or Landlord’s
review into Tenant’s Hazardous Materials Documents or use or disposal of
hazardous materials, however, Landlord shall not have and expressly disclaims
any liability related to Tenant’s or other tenants’ use or disposal of Hazardous
Materials, it being acknowledged by Tenant that Tenant is best suited to
evaluate the safety and efficacy of its Hazardous Materials usage and
procedures.

21.3. Tenant represents and warrants to Landlord that is not nor has it been, in
connection with the use, disposal or storage of Hazardous Materials, (a) subject
to a material enforcement order issued by any Governmental Authority or
(b) required to take any remedial action.

21.4. At any time, and from time to time, prior to the expiration of the Term,
Landlord shall have the right to conduct appropriate tests of the Project or any
portion thereof to demonstrate that Hazardous Materials are present or that
contamination has occurred due to the acts or omissions of a Tenant Party.
Tenant shall pay all reasonable costs of such tests if such tests reveal that
Hazardous Materials exist at the Project in violation of Tenant’s obligations
and covenants under this Lease.

21.5. If underground or other storage tanks storing Hazardous Materials
installed or utilized by Tenant are located on the Premises, or are hereafter
placed on the Premises by Tenant (or by any other party, if such storage tanks
are utilized by Tenant), then Tenant shall monitor the storage tanks, maintain
appropriate records, implement reporting procedures, properly close any
underground storage tanks, and take or cause to be taken all other steps
necessary or required under the Applicable Laws. Tenant shall have no
responsibility or liability for underground or other storage tanks installed by
anyone other than Tenant unless Tenant utilizes such tanks, in which case
Tenant’s responsibility for such tanks shall be as set forth in this Section.

 

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21.6. Tenant shall promptly report to Landlord any actual or suspected presence
of mold or water intrusion at the Premises.

21.7. Tenant’s obligations under this Article shall survive the expiration or
earlier termination of the Lease. During any period of time needed by Tenant or
Landlord after the termination of this Lease to complete the removal from the
Premises of any such Hazardous Materials, Tenant shall be deemed a holdover
tenant and subject to the provisions of Article 27.

21.8. As used herein, the term “Hazardous Material” means any toxic, explosive,
corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise hazardous substance, material or waste that is or becomes regulated by
Applicable Laws or any Governmental Authority.

21.9. Notwithstanding anything to the contrary in this Lease, Landlord shall
have sole control over the equitable allocation of fire control areas (as
defined in the Uniform Building Code as adopted by the city or municipality(ies)
in which the Project is located (the “UBC”)) within the Project for the storage
of Hazardous Materials. Notwithstanding anything to the contrary in this Lease,
the quantity of Hazardous Materials allowed by this Section is specific to
Tenant and shall not run with the Lease in the event of a Transfer (as defined
in Article 29). In the event of a Transfer, if the use of Hazardous Materials by
such new tenant (“New Tenant”) is such that New Tenant utilizes fire control
areas in the Project in excess of New Tenant’s Pro Rata Share of the Building or
the Project, as applicable, then New Tenant shall, at its sole cost and expense
and upon Landlord’s written request, establish and maintain a separate area of
the Premises classified by the UBC as an “H” occupancy area for the use and
storage of Hazardous Materials, or take such other action as is necessary to
ensure that its share of the fire control areas of the Building and the Project
is not greater than New Tenant’s Pro Rata Share of the Building or the Project,
as applicable. Notwithstanding anything in this Lease to the contrary, Landlord
shall not have and expressly disclaims any liability related to Tenant’s or
other tenants’ use or disposal of fire control areas, it being acknowledged by
Tenant that Tenant and other tenants are best suited to evaluate the safety and
efficacy of its Hazardous Materials usage and procedures.

22. Odors and Exhaust. Tenant acknowledges that Landlord would not enter into
this Lease with Tenant unless Tenant assured Landlord that under no
circumstances will any other occupants of the Building or the Project (including
persons legally present in any outdoor areas of the Project) be subjected to
odors or fumes (whether or not noxious), and that the Building and the Project
will not be damaged by any exhaust, in each case from Tenant’s operations.
Landlord and Tenant therefore agree as follows:

22.1. Tenant shall not cause or permit (or conduct any activities that would
cause) any release of any odors or fumes of any kind from the Premises.

22.2. If the Building has a ventilation system that, in Landlord’s judgment, is
adequate, suitable, and appropriate to vent the Premises in a manner that does
not release odors affecting

 

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any indoor or outdoor part of the Project, Tenant shall vent the Premises
through such system. If Landlord at any time reasonably determines that any
existing ventilation system is inadequate, or if no ventilation system exists,
Tenant shall in compliance with Applicable Laws vent all fumes and odors from
the Premises (and remove odors from Tenant’s exhaust stream) as Landlord
reasonably requires. The placement and configuration of all ventilation exhaust
pipes, louvers and other equipment shall be subject to Landlord’s approval.
Tenant acknowledges Landlord’s legitimate desire to maintain the Project (indoor
and outdoor areas) in an odor-free manner, and Landlord may require Tenant to
abate and remove all odors in a manner that goes beyond the requirements of
Applicable Laws.

22.3. Tenant shall, at Tenant’s sole cost and expense, provide odor eliminators
and other devices (such as filters, air cleaners, scrubbers and whatever other
equipment may in Landlord’s reasonable judgment be necessary or appropriate from
time to time) to completely remove, eliminate and abate any odors, fumes or
other substances in Tenant’s exhaust stream that emanate from Tenant’s Premises.
Any work Tenant performs under this Section shall constitute Alterations.

22.4. Tenant’s responsibility to remove, eliminate and abate odors, fumes and
exhaust shall continue throughout the Term. Landlord’s construction of the
Tenant Improvements shall not preclude Landlord from requiring additional
measures to eliminate odors, fumes and other adverse impacts of Tenant’s exhaust
stream (as Landlord may designate in Landlord’s reasonable discretion). Tenant
shall install additional equipment as Landlord reasonably requires from time to
time under the preceding sentence. Such installations shall constitute
Alterations.

22.5. If Tenant fails to install satisfactory odor control equipment within
twenty (20) days after Landlord’s demand made at any time, then Landlord may,
without limiting Landlord’s other rights and remedies, require Tenant to cease
and suspend any operations in the Premises that, in Landlord’s determination,
cause odors, fumes or exhaust. For example, if Landlord determines that Tenant’s
production of a certain type of product causes odors, fumes or exhaust, and
Tenant does not install satisfactory odor control equipment within twenty
(20) days after Landlord’s request, then Landlord may require Tenant to stop
producing such type of product in the Premises unless and until Tenant has
installed odor control equipment satisfactory to Landlord.

23. Insurance; Waiver of Subrogation.

23.1. Landlord shall maintain insurance for the Building and the Project in
amounts equal to full replacement cost (exclusive of the costs of excavation,
foundations and footings, engineering costs or such other costs to the extent
the same are not incurred in the event of a rebuild and without reference to
depreciation taken by Landlord upon its books or tax returns) or such lesser
coverage as Landlord may elect, provided that such coverage shall not be less
than the amount of such insurance Landlord’s Lender, if any, requires Landlord
to maintain, providing protection against any peril generally included within
the classification “Fire and Extended Coverage,” together with insurance against
sprinkler damage (if applicable), vandalism and malicious mischief. Landlord,
subject to availability thereof, shall further insure, if Landlord deems it
appropriate, coverage against flood, environmental hazard, earthquake, loss or
failure of

 

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building equipment, rental loss during the period of repairs or rebuilding,
Workers’ Compensation insurance and fidelity bonds for employees employed to
perform services. Notwithstanding the foregoing, Landlord may, but shall not be
deemed required to, provide insurance for any improvements installed by Tenant
or that are in addition to the standard improvements customarily furnished by
Landlord, without regard to whether or not such are made a part of or are
affixed to the Building.

23.2. In addition, Landlord shall carry Commercial General Liability insurance
with limits of not less than One Million Dollars ($1,000,000) per
occurrence/general aggregate for bodily injury (including death), or property
damage with respect to the Project.

23.3. Tenant shall, at its own cost and expense, procure and maintain during the
Term the following insurance for the benefit of Tenant and Landlord (as their
interests may appear) with insurers financially acceptable and lawfully
authorized to do business in the state where the Premises are located:

(a) Commercial General Liability insurance on a broad-based occurrence coverage
form, with coverages including but not limited to bodily injury (including
death), property damage (including loss of use resulting therefrom),
premises/operations, personal & advertising injury, and contractual liability
with limits of liability of not less than $2,000,000 for bodily injury and
property damage per occurrence, $2,000,000 general aggregate, which limits may
be met by use of excess and/or umbrella liability insurance provided that such
coverage is at least as broad as the primary coverages required herein.

(b) Commercial Automobile Liability insurance covering liability arising from
the use or operation of any auto, including those owned, hired or otherwise
operated or used by or on behalf of the Tenant. The coverage shall be on a
broad-based occurrence form with combined single limits of not less than
$1,000,000 per accident for bodily injury and property damage.

(c) Commercial Property insurance covering property damage to the full
replacement cost value and business interruption. Covered property shall include
all tenant improvements in the Premises (to the extent not insured by Landlord
pursuant to Section 23.1) and Tenant’s Property including personal property,
furniture, fixtures, machinery, equipment, stock, inventory and improvements and
betterments, which may be owned by Tenant or Landlord and required to be insured
hereunder, or which may be leased, rented, borrowed or in the care custody or
control of Tenant, or Tenant’s agents, employees or subcontractors. Such
insurance, with respect only to all Tenant Improvements, Alterations or other
work performed on the Premises by Tenant which become Landlord’s property upon
Lease expiration or termination (collectively, “Tenant Work”), shall name
Landlord and Landlord’s current and future mortgagees as loss payees as their
interests may appear. Such insurance shall be written on an “all risk” of
physical loss or damage basis including the perils of fire, extended coverage,
electrical injury, mechanical breakdown, windstorm, vandalism, malicious
mischief, sprinkler leakage, back-up of sewers or drains, flood, earthquake,
terrorism and such other risks Landlord may from time to time reasonably
designate, for the full replacement cost value of the covered items with an
agreed amount endorsement with no co-insurance. Business interruption coverage

 

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shall have limits sufficient to cover Tenant’s lost profits and necessary
continuing expenses, including rents due Landlord under the Lease. The minimum
period of indemnity for business interruption coverage shall be twelve
(12) months plus twelve (12) months’ extended period of indemnity.

(d) Workers’ Compensation insurance as is required by statute or law, or as may
be available on a voluntary basis and Employers’ Liability insurance with limits
of not less than the following: each accident, Five Hundred Thousand Dollars
($500,000); disease ($500,000); disease (each employee), Five Hundred Thousand
Dollars ($500,000).

(e) [intentionally omitted]

(f) Pollution Legal Liability insurance is required if Tenant stores, handles,
generates or treats Hazardous Materials, as determined solely by Landlord, on or
about the Premises. Such coverage shall include bodily injury, sickness,
disease, death or mental anguish or shock sustained by any person; property
damage including physical injury to or destruction of tangible property
including the resulting loss of use thereof, clean-up costs, and the loss of use
of tangible property that has not been physically injured or destroyed; and
defense costs, charges and expenses incurred in the investigation, adjustment or
defense of claims for such compensatory damages. Coverage shall apply to both
sudden and non-sudden pollution conditions including the discharge, dispersal,
release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants, contaminants or
pollutants into or upon land, the atmosphere or any watercourse or body of
water. Claims-made coverage is permitted, provided the policy retroactive date
is continuously maintained prior to the commencement date of this agreement, and
coverage is continuously maintained during all periods in which Tenant occupies
the Premises. Coverage shall be maintained with limits of not less than
$1,000,000 per incident with a $2,000,000 policy aggregate and for a period of
two (2) years thereafter.

(g) During all construction by Tenant at the Premises, with respect to tenant
improvements being constructed (including any Alterations, insurance required in
Exhibit B-1 must be in place.

23.4. The insurance required of Tenant by this Article shall be with companies
at all times having a current rating of not less than A- and financial category
rating of at least Class VII in “A.M. Best’s Insurance Guide” current edition.
Tenant shall obtain for Landlord from the insurance companies/broker or cause
the insurance companies/broker to furnish certificates of insurance evidencing
all coverages required herein to Landlord. No such policy shall be cancelable or
subject to reduction of coverage or other modification or cancellation except
after twenty (20) days’ prior written notice to Landlord from Tenant or its
insurers (except in the event of non-payment of premium, in which case ten
(10) days’ written notice shall be given). All such policies shall be written as
primary policies, not contributing with and not in excess of the coverage that
Landlord may carry. Tenant’s required policies shall contain severability of
interests clauses stating that, except with respect to limits of insurance,
coverage shall apply separately to each insured or additional insured. Tenant
shall, at least twenty-five (25) days prior to the expiration of such policies,
furnish Landlord with renewal certificates of insurance.

 

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Tenant agrees that if Tenant does not take out and maintain such insurance,
Landlord may (but shall not be required to) procure such insurance on Tenant’s
behalf and at its cost to be paid by Tenant as Additional Rent. Commercial
General Liability, Commercial Automobile Liability, Umbrella Liability and
Pollution Legal Liability insurance as required above shall name Landlord,
BioMed Realty, L.P., and BioMed Realty Trust, Inc. and their respective
officers, employees, agents, general partners, members, subsidiaries, affiliates
and Lenders (“Landlord Parties”) as additional insureds as respects liability
arising from work or operations performed by or on behalf of Tenant, Tenant’s
use or occupancy of Premises, and ownership, maintenance or use of vehicles by
or on behalf of Tenant.

23.5. In each instance where insurance is to name Landlord Parties as additional
insureds, Tenant shall, upon Landlord’s written request, also designate and
furnish certificates evidencing such Landlord Parties as additional insureds to
(a) any Lender of Landlord holding a security interest in the Building or the
Project, (b) the landlord under any lease whereunder Landlord is a tenant of the
real property upon which the Building is located if the interest of Landlord is
or shall become that of a tenant under a ground lease rather than that of a fee
owner and (c) any management company retained by Landlord to manage the Project.

23.6. Tenant assumes the risk of damage to any fixtures, goods, inventory,
merchandise, equipment and leasehold improvements, and Landlord shall not be
liable for injury to Tenant’s business or any loss of income therefrom, relative
to such damage, all as more particularly set forth within this Lease. Tenant
shall, at Tenant’s sole cost and expense, carry such insurance as Tenant desires
for Tenant’s protection with respect to personal property of Tenant or business
interruption.

23.7. Notwithstanding anything in this Lease to the contrary, Landlord and
Tenant and their insurers hereby waive any and all rights of recovery or
subrogation against the other party and their respective officers, directors,
employees, agents, general partners, members, subsidiaries, affiliates and
lenders, with respect to any loss, damage, claims, suits or demands, howsoever
caused, that are covered, or would have been covered by the insurance that each
party is required to maintain under this Lease if such insurance had been
obtained by such party, by valid and collectible insurance, including any
deductibles or self-insurance maintained thereunder. If necessary, each party
agrees to endorse the required insurance policies to permit waivers of
subrogation as required hereunder and hold harmless and indemnify the other
party and its officers, directors, employees, agents, general partners, members,
subsidiaries, affiliates and lenders, for any loss or expense incurred as a
result of a failure to obtain such waivers of subrogation from insurers. Such
waivers shall continue so long as the same are available at commercially
reasonable cost. Landlord and Tenant, upon obtaining the policies of insurance
required or permitted under this Lease, shall give notice to their respective
insurance carriers that the foregoing waiver of subrogation is contained in this
Lease. If such policies shall not be obtainable with such waiver or shall be so
obtainable only at a premium over that chargeable without such waiver, then such
party shall notify the other party of such conditions, in which event, if
applicable, the notified party shall have the option to pay such premium.

 

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23.8. Landlord may require insurance policy limits required under this Lease to
be raised to conform with requirements of Landlord’s Lender or to bring coverage
limits to levels then being required of new tenants within the Project.

23.9. Any costs incurred by Landlord pursuant to this Article shall constitute a
portion of Operating Expenses.

23.10. The provisions of this Article shall survive the expiration or earlier
termination of this Lease.

24. Damage or Destruction.

24.1. In the event of a partial destruction of (a) the Premises or (b) Common
Area of the Building or the Project ((a) and (b) together, the “Affected Areas”)
by fire or other perils covered by extended coverage insurance not exceeding
twenty-five percent (25%) of the full insurable value thereof, and provided that
(x) the damage thereto is such that the Affected Areas may be repaired,
reconstructed or restored within a period of six (6) months from the date of the
happening of such casualty, (y) Landlord shall receive insurance proceeds
sufficient to cover the cost of such repairs, reconstruction and restoration
(except for any deductible amount provided by Landlord’s policy, which
deductible amount, if paid by Landlord, shall constitute an Operating Expense)
and (z) such casualty was not intentionally caused by a Tenant Party, then
Landlord shall commence and proceed diligently with the work of repair,
reconstruction and restoration of the Affected Areas and this Lease shall
continue in full force and effect.

24.2. In the event of any damage to or destruction of the Building or the
Project other than as described in Section 24.1, Landlord may elect to repair,
reconstruct and restore the Building or the Project, as applicable, in which
case this Lease shall continue in full force and effect. If Landlord elects not
to repair, reconstruct and restore the Building or the Project, as applicable,
then this Lease shall terminate as of the date of such damage or destruction. In
the event of any damage or destruction (regardless of whether such damage is
governed by Section 24.1 or this Section), if (a) in Landlord’s determination as
set forth in the Damage Repair Estimate (as defined below), the Affected Areas
cannot be repaired, reconstructed or restored within twelve (12) months after
the date of the Damage Repair Estimate or (b) subject to Section 24.6, the
Affected Areas are not actually repaired, reconstructed and restored within
fifteen (15) months after the date of the Damage Repair Estimate, then Tenant
shall have the right to terminate this Lease, effective as of the date of such
damage or destruction, by delivering to Landlord its written notice of
termination (a “Termination Notice”) (y) with respect to Subsections 24.2(a) no
later than fifteen (15) days after Landlord delivers to Tenant Landlord’s Damage
Repair Estimate and (z) with respect to Subsection 24.2(b), no later than
fifteen (15) days after such fifteen (15) month period (as the same may be
extended pursuant to Section 24.6) expires. If Tenant provides Landlord with a
Termination Notice pursuant to Subsection 24.2(z), Landlord shall have an
additional thirty (30) days after receipt of such Termination Notice to complete
the repair, reconstruction and restoration. If Landlord does not complete such
repair, reconstruction and restoration within such thirty (30) day period, then
Tenant may terminate this Lease by giving Landlord written notice within two
(2) business days after the expiration of such thirty (30) day period. If
Landlord does complete such repair, reconstruction and restoration within such
thirty (30) day period, then this Lease shall continue in full force and effect.

 

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24.3. As soon as reasonably practicable, but in any event within sixty (60) days
following the date of damage or destruction, Landlord shall notify Tenant of
Landlord’s good faith estimate of the period of time in which the repairs,
reconstruction and restoration will be completed (the “Damage Repair Estimate”),
which estimate shall be based upon the opinion of a contractor reasonably
selected by Landlord and experienced in comparable repair, reconstruction and
restoration of similar buildings. Additionally, Landlord shall give written
notice to Tenant within sixty (60) days following the date of damage or
destruction of its election not to repair, reconstruct or restore the Building
or the Project, as applicable.

24.4. Upon any termination of this Lease under any of the provisions of this
Article, the parties shall be released thereby without further obligation to the
other from the date possession of the Premises is surrendered to Landlord,
except with regard to (a) items occurring prior to the damage or destruction and
(b) provisions of this Lease that, by their express terms, survive the
expiration or earlier termination hereof.

24.5. In the event of repair, reconstruction and restoration as provided in this
Article, all Rent to be paid by Tenant under this Lease shall be abated
proportionately based on the extent to which Tenant’s use of the Premises is
impaired during the period of such repair, reconstruction or restoration, unless
Landlord provides Tenant with other space during the period of repair,
reconstruction and restoration that, in Tenant’s reasonable opinion, is suitable
for the temporary conduct of Tenant’s business; provided, however, that the
amount of such abatement shall be reduced by the amount of Rent that is received
by Tenant as part of the business interruption or loss of rental income with
respect to the Premises from the proceeds of business interruption or loss of
rental income insurance.

24.6. Notwithstanding anything to the contrary contained in this Article, should
Landlord be delayed or prevented from completing the repair, reconstruction or
restoration of the damage or destruction to the Premises after the occurrence of
such damage or destruction by Force Majeure or delays caused by a Tenant Party,
then the time for Landlord to commence or complete repairs, reconstruction and
restoration shall be extended on a day-for-day basis; provided, however, that,
at Landlord’s election, Landlord shall be relieved of its obligation to make
such repairs, reconstruction and restoration.

24.7. If Landlord is obligated to or elects to repair, reconstruct or restore as
herein provided, then Landlord shall be obligated to make such repairs,
reconstruction or restoration only with regard to (a) those portions of the
Premises that were originally provided at Landlord’s expense and (b) the Common
Area portion of the Affected Areas. The repairs, reconstruction or restoration
of improvements not originally provided by Landlord or at Landlord’s expense
shall be the obligation of Tenant. In the event Tenant has elected to upgrade
certain improvements from the Building Standard, Landlord shall, upon the need
for replacement due to an insured loss, provide only the Building Standard,
unless Tenant again elects to upgrade such improvements and pay any incremental
costs related thereto, except to the extent that excess insurance proceeds, if
received, are adequate to provide such upgrades, in addition to providing for
basic repairs, reconstruction and restoration of the Premises, the Building and
the Project.

 

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24.8. Notwithstanding anything to the contrary contained in this Article,
Landlord shall not have any obligation whatsoever to repair, reconstruct or
restore the Premises if the damage resulting from any casualty covered under
this Article occurs during the last twelve (12) months of the Term or any
extension thereof, or to the extent that insurance proceeds are not available
therefor.

24.9. Landlord’s obligation, should it elect or be obligated to repair,
reconstruct or restore, shall be limited to the Affected Areas, and shall be
conditioned upon Landlord receiving any permits or authorizations required by
Applicable Laws. Tenant shall, at its expense, replace or fully repair all of
Tenant’s personal property and any Alterations installed by Tenant existing at
the time of such damage or destruction. If Affected Areas are to be repaired,
reconstructed or restored in accordance with the foregoing, Landlord shall make
available to Tenant any portion of insurance proceeds it receives that are
allocable to the Alterations constructed by Tenant pursuant to this Lease;
provided Tenant is not then in default under this Lease, and subject to the
requirements of any Lender of Landlord.

24.10. This Article sets forth the terms and conditions upon which this Lease
may terminate in the event of any damage or destruction. Accordingly, the
parties hereby waive the provisions of California Civil Code Sections 1932(2)
and 1933(4) (and any successor statutes) permitting the parties to terminate
this Lease as a result of any damage or destruction.

25. Eminent Domain.

25.1. In the event (a) the whole of all Affected Areas or (b) such part thereof
as shall substantially interfere with Tenant’s use and occupancy of the Premises
for the Permitted Use shall be taken for any public or quasi-public purpose by
any lawful power or authority by exercise of the right of appropriation,
condemnation or eminent domain, or sold to prevent such taking, Tenant or
Landlord may terminate this Lease effective as of the date possession is
required to be surrendered to such authority, except with regard to (y) items
occurring prior to the taking and (z) provisions of this Lease that, by their
express terms, survive the expiration or earlier termination hereof.

25.2. In the event of a partial taking of (a) the Building or the Project or
(b) drives, walkways or parking areas serving the Building or the Project for
any public or quasi-public purpose by any lawful power or authority by exercise
of right of appropriation, condemnation, or eminent domain, or sold to prevent
such taking, then, without regard to whether any portion of the Premises
occupied by Tenant was so taken, Landlord may elect to terminate this Lease
(except with regard to (y) items occurring prior to the taking and
(z) provisions of this Lease that, by their express terms, survive the
expiration or earlier termination hereof) as of such taking if such taking is,
in Landlord’s sole opinion, of a material nature such as to make it uneconomical
to continue use of the unappropriated portion for purposes of renting office or
laboratory space.

25.3. Tenant shall be entitled to any award that is specifically awarded as
compensation for (a) the taking of Tenant’s personal property that was installed
at Tenant’s expense and (b) the costs of Tenant moving to a new location. Except
as set forth in the previous sentence, any award for such taking shall be the
property of Landlord.

 

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25.4. If, upon any taking of the nature described in this Article, this Lease
continues in effect, then Landlord shall promptly proceed to restore the
Affected Areas to substantially their same condition prior to such partial
taking. To the extent such restoration is infeasible, as determined by Landlord
in its sole and absolute discretion, the Rent shall be decreased proportionately
to reflect the loss of any portion of the Premises no longer available to
Tenant.

25.5. This Article sets forth the terms and conditions upon which this Lease may
terminate in the event of any damage or destruction. Accordingly, the parties
hereby waive the provisions of California Code of Civil Procedure
Section 1265.130 (and any successor statutes) permitting the parties to
terminate this Lease as a result of any damage or destruction.

26. Surrender.

26.1. At least thirty (30) days prior to Tenant’s surrender of possession of any
part of the Premises, Tenant shall provide Landlord with a facility
decommissioning and Hazardous Materials closure plan for the Premises (“Exit
Survey”) prepared by an independent third party state-certified professional
with appropriate expertise, which Exit Survey must be reasonably acceptable to
Landlord. The Exit Survey shall comply with the American National Standards
Institute’s Laboratory Decommissioning guidelines (ANSI/AIHA Z9.11-2008) or any
successor standards published by ANSI or any successor organization (or, if ANSI
and its successors no longer exist, a similar entity publishing similar
standards). In addition, at least ten (10) days prior to Tenant’s surrender of
possession of any part of the Premises, Tenant shall (a) provide Landlord with
written evidence of all appropriate governmental releases obtained by Tenant in
accordance with Applicable Laws, including laws pertaining to the surrender of
the Premises, (b) place Laboratory Equipment Decontamination Forms on all
decommissioned equipment to assure safe occupancy by future users and
(c) conduct a site inspection with Landlord. In addition, Tenant agrees to
remain responsible after the surrender of the Premises for the remediation of
any recognized environmental conditions set forth in the Exit Survey and comply
with any recommendations set forth in the Exit Survey. Tenant’s obligations
under this Section shall survive the expiration or earlier termination of the
Lease.

26.2. No surrender of possession of any part of the Premises shall release
Tenant from any of its obligations hereunder, unless such surrender is accepted
in writing by Landlord.

26.3. The voluntary or other surrender of this Lease by Tenant shall not effect
a merger with Landlord’s fee title or leasehold interest in the Premises, the
Building, the Property or the Project, unless Landlord consents in writing, and
shall, at Landlord’s option, operate as an assignment to Landlord of any or all
subleases.

26.4. The voluntary or other surrender of any ground or other underlying lease
that now exists or may hereafter be executed affecting the Building or the
Project, or a mutual cancellation thereof or of Landlord’s interest therein by
Landlord and its lessor shall not effect a merger with Landlord’s fee title or
leasehold interest in the Premises, the Building or the Property and shall, at
the option of the successor to Landlord’s interest in the Building or the
Project, as applicable, operate as an assignment of this Lease.

 

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27. Holding Over.

27.1. If, with Landlord’s prior written consent, Tenant holds possession of all
or any part of the Premises after the Term, Tenant shall become a tenant from
month to month after the expiration or earlier termination of the Term, and in
such case Tenant shall continue to pay (a) Base Rent in accordance with Article
7, as adjusted in accordance with Article 8, and (b) any amounts for which
Tenant would otherwise be liable under this Lease if the Lease were still in
effect, including payments for Tenant’s Adjusted Share of Operating Expenses.
Any such month-to-month tenancy shall be subject to every other term, covenant
and agreement contained herein.

27.2. Notwithstanding the foregoing, if Tenant remains in possession of the
Premises after the expiration or earlier termination of the Term without
Landlord’s prior written consent, (a) Tenant shall become a tenant at sufferance
subject to the terms and conditions of this Lease, except that the monthly rent
shall be equal to one hundred fifty percent (150%) of the Rent in effect during
the last thirty (30) days of the Term, and (b) Tenant shall be liable to
Landlord for any and all damages suffered by Landlord as a result of such
holdover, including any lost rent or consequential, special and indirect damages
(in each case, regardless of whether such damages are foreseeable).

27.3. Acceptance by Landlord of Rent after the expiration or earlier termination
of the Term shall not result in an extension, renewal or reinstatement of this
Lease.

27.4. The foregoing provisions of this Article are in addition to and do not
affect Landlord’s right of reentry or any other rights of Landlord hereunder or
as otherwise provided by Applicable Laws.

27.5. The provisions of this Article shall survive the expiration or earlier
termination of this Lease.

28. Indemnification and Exculpation.

28.1. Subject to Section 23.7 above, Tenant agrees to indemnify, save, defend
(at Landlord’s option and with counsel reasonably acceptable to Landlord) and
hold the Landlord Indemnitees harmless from and against any and all Claims of
any kind or nature, real or alleged, arising from injury to or death of any
person or damage to any property occurring within or about the Premises, the
Building, the Property or the Project, arising directly or indirectly out of
(a) the presence at or use or occupancy of the Premises or Project by a Tenant
Party, (b) an act or omission on the part of any Tenant Party, (c) a breach or
default by Tenant in the performance of any of its obligations hereunder or
(d) injury to or death of persons or damage to or loss of any property, real or
alleged, arising from the serving of alcoholic beverages at the Premises or
Project, including liability under any dram shop law, host liquor law or similar
Applicable Law, except to the extent directly caused by Landlord’s or a Landlord
Indemnitee’s negligence or willful misconduct. Tenant’s obligations under this
Section shall not be affected, reduced or

 

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limited by any limitation on the amount or type of damages, compensation or
benefits payable by or for Tenant under workers’ compensation acts, disability
benefit acts, employee benefit acts or similar legislation. Tenant’s obligations
under this Section shall survive the expiration or earlier termination of this
Lease.

28.2. Notwithstanding anything in this Lease to the contrary, Landlord shall not
be liable to Tenant for and Tenant assumes all risk of (a) damage or losses
caused by fire, electrical malfunction, gas explosion or water damage of any
type (including broken water lines, malfunctioning fire sprinkler systems, roof
leaks or stoppages of lines), unless any such loss is due to Landlord’s willful
disregard of written notice by Tenant of need for a repair that Landlord is
responsible to make for an unreasonable period of time, and (b) damage to
personal property or scientific research, including loss of records kept by
Tenant within the Premises (in each case, regardless of whether such damages are
foreseeable). Tenant further waives any claim for injury to Tenant’s business or
loss of income relating to any such damage or destruction of personal property
as described in this Section. Notwithstanding anything in the foregoing or this
Lease to the contrary, except (x) as otherwise provided herein (including
Section 27.2), (y) as may be provided by Applicable Laws or (z) in the event of
Tenant’s breach of Article 21 or Section 26.1, in no event shall Landlord or
Tenant be liable to the other for any consequential, special or indirect damages
arising out of this Lease, including lost profits (provided that this Subsection
28.2(z) shall not limit Tenant’s liability for Base Rent or Additional Rent
pursuant to this Lease).

28.3. Landlord shall not be liable for any damages arising from any act,
omission or neglect of any other tenant in the Building or the Project, or of
any other third party.

28.4. Tenant acknowledges that security devices and services, if any, while
intended to deter crime, may not in given instances prevent theft or other
criminal acts. Landlord shall not be liable for injuries or losses caused by
criminal acts of third parties, and Tenant assumes the risk that any security
device or service may malfunction or otherwise be circumvented by a criminal. If
Tenant desires protection against such criminal acts, then Tenant shall, at
Tenant’s sole cost and expense, obtain appropriate insurance coverage. Tenant’s
security programs and equipment for the Premises shall be coordinated with
Landlord and subject to Landlord’s reasonable approval.

28.5. The provisions of this Article shall survive the expiration or earlier
termination of this Lease.

29. Assignment or Subletting.

29.1. Except as hereinafter expressly permitted, none of the following (each, a
“Transfer”), either voluntarily or by operation of Applicable Laws, shall be
directly or indirectly performed without Landlord’s prior written consent (which
shall not be unreasonably withheld, conditioned or delayed): (a) Tenant selling,
hypothecating, assigning, pledging, encumbering or otherwise transferring this
Lease or subletting the Premises or (b) a controlling interest in Tenant being
sold, assigned or otherwise transferred (other than as a result of shares in
Tenant being sold on a public stock exchange). For purposes of the preceding
sentence, “control” means (a) owning (directly or indirectly) more than fifty
percent (50%) of the stock or other equity interests of another person or
(b) possessing, directly or indirectly, the power to direct or cause the

 

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direction of the management and policies of such person. Notwithstanding the
foregoing, Tenant shall have the right to Transfer, without Landlord’s prior
written consent, Tenant’s interest in this Lease or the Premises or any part
thereof to any person (i) that as of the date of determination and at all times
thereafter directly, or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with Tenant, (ii) into which Tenant
is merged or consolidated or (iii) that acquires all or substantially all of the
assets, stock, or other equity interest of Tenant (“Tenant’s Affiliate”);
provided that Tenant shall notify Landlord in writing at least thirty (30) days
prior to the effectiveness of such Transfer to Tenant’s Affiliate (an “Exempt
Transfer”) (except that in the event such prior disclosure is prohibited by
Applicable Laws, Tenant shall be permitted to provide such notification to
Landlord as soon as practicable but in no event later than the date that is ten
(10) business days following the effective date of the Transfer) and otherwise
comply with the requirements of this Lease regarding such Transfer; and
provided, further, that the person that will be the tenant under this Lease
after the Exempt Transfer has a net worth (as of both the day immediately prior
to and the day immediately after the Exempt Transfer) that is equal to or
greater than the net worth (as of both the Execution Date and the date of the
Exempt Transfer) of the transferring Tenant. For purposes of the immediately
preceding sentence, “control” requires both (a) owning (directly or indirectly)
more than fifty percent (50%) of the stock or other equity interests of another
person and (b) possessing, directly or indirectly, the power to direct or cause
the direction of the management and policies of such person. An Exempt Transfer
shall also include transfers of interests on stock exchanges and other
over-the-counter exchanges, including an initial public offering of Tenant’s
stock. In no event shall Tenant perform a Transfer to or with an entity that is
a tenant at the Project or that is in discussions or negotiations with Landlord
or an affiliate of Landlord to lease premises at the Project or a property owned
by Landlord or an affiliate of Landlord. Notwithstanding anything in this Lease
to the contrary, if (a) any proposed transferee, assignee or sublessee of Tenant
has been required by any prior landlord, Lender or Governmental Authority to
take material remedial action in connection with Hazardous Materials
contaminating a property if the contamination resulted from such party’s action
or omission or use of the property in question or (b) any proposed transferee,
assignee or sublessee is subject to a material enforcement order issued by any
Governmental Authority in connection with the use, disposal or storage of
Hazardous Materials, then it shall not be unreasonable for Landlord to withhold
its consent to any proposed transfer, assignment or subletting (with respect to
any such matter involving a proposed transferee, assignee or sublessee).

29.2. In the event Tenant desires to effect a Transfer, then, at least thirty
(30) days prior to the date when Tenant desires the Transfer to be effective
(the “Transfer Date”), Tenant shall provide written notice to Landlord (the
“Transfer Notice”) (except that in the event such prior disclosure is prohibited
by Applicable Laws, Tenant shall be permitted to provide such notification to
Landlord as soon as practicable but in no event later than the date that is
(i) ten (10) days prior to any Transfer to which Landlord’s consent is required
and (ii) ten (10) business days following the effective date of any Exempt
Transfer) containing information (including references) concerning the character
of the proposed transferee, assignee or sublessee; the Transfer Date; the most
recent unconsolidated financial statements of Tenant and of the proposed
transferee, assignee or sublessee satisfying the requirements of Section 40.2
(“Required Financials”); any ownership or commercial relationship between Tenant
and the proposed transferee, assignee or sublessee; and the consideration and
all other material terms and conditions of the proposed Transfer, all in such
detail as Landlord shall reasonably require.

 

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29.3. Landlord, in determining whether consent should be given to a proposed
Transfer (other than an Exempt Transfer), may give consideration to (a) the
financial strength of Tenant and of such transferee, assignee or sublessee
(notwithstanding Tenant remaining liable for Tenant’s performance), (b) any
change in use that such transferee, assignee or sublessee proposes to make in
the use of the Premises and (c) Landlord’s desire to exercise its rights under
Section 29.7 to cancel this Lease. Landlord shall not unreasonably withhold or
condition its consent to any assignment or subletting of the Premises; provided
that in no event shall Landlord be deemed to be unreasonable for declining to
consent to a Transfer to a transferee, assignee or sublessee of poor reputation,
lacking financial qualifications (based on Landlord’s usual underwriting
criteria for tenants of the Project) or seeking a change in the Permitted Use,
or jeopardizing directly or indirectly the status of Landlord or any of
Landlord’s affiliates as a Real Estate Investment Trust under the Internal
Revenue Code of 1986 (as the same may be amended from time to time, the “Revenue
Code”). Notwithstanding anything contained in this Lease to the contrary, (w) no
Transfer shall be consummated on any basis such that the rental or other amounts
to be paid by the occupant, assignee, manager or other transferee thereunder
would be based, in whole or in part, on the income or profits derived by the
business activities of such occupant, assignee, manager or other transferee;
(x) Tenant shall not furnish or render any services to an occupant, assignee,
manager or other transferee with respect to whom transfer consideration is
required to be paid, or manage or operate the Premises or any capital additions
so transferred, with respect to which transfer consideration is being paid;
(y) Tenant shall not consummate a Transfer with any person in which Landlord
owns an interest, directly or indirectly (by applying constructive ownership
rules set forth in Section 856(d)(5) of the Revenue Code); and (z) Tenant shall
not consummate a Transfer with any person or in any manner that could cause any
portion of the amounts received by Landlord pursuant to this Lease or any
sublease, license or other arrangement for the right to use, occupy or possess
any portion of the Premises to fail to qualify as “rents from real property”
within the meaning of Section 856(d) of the Revenue Code, or any similar or
successor provision thereto or which could cause any other income of Landlord to
fail to qualify as income described in Section 856(c)(2) of the Revenue Code.

29.4. The following are conditions precedent to a Transfer or to Landlord
considering a request by Tenant to a Transfer:

(a) Tenant shall remain fully liable under this Lease. Tenant agrees that it
shall not be (and shall not be deemed to be) a guarantor or surety of this
Lease, however, and waives its right to claim that is it is a guarantor or
surety or to raise in any legal proceeding any guarantor or surety defenses
permitted by this Lease or by Applicable Laws;

(b) If Tenant or the proposed transferee, assignee or sublessee does not or
cannot deliver the Required Financials, then Landlord may elect to have either
Tenant’s ultimate parent company or the proposed transferee’s, assignee’s or
sublessee’s ultimate parent company provide a guaranty of the applicable
entity’s obligations under this Lease, in a form acceptable to Landlord, which
guaranty shall be executed and delivered to Landlord by the applicable guarantor
prior to the Transfer Date;

 

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(c) Tenant shall provide Landlord with evidence reasonably satisfactory to
Landlord that the value of Landlord’s interest under this Lease shall not be
diminished or reduced by the proposed Transfer. Such evidence shall include
evidence respecting the relevant business experience and financial
responsibility and status of the proposed transferee, assignee or sublessee;

(d) Tenant shall reimburse Landlord for Landlord’s reasonable, actual costs and
expenses, including reasonable attorneys’ fees, charges and disbursements
incurred in connection with the review, processing and documentation of such
request (not to exceed Two Thousand Five Hundred Dollars ($2,500);

(e) If Tenant’s transfer of rights or sharing of the Premises provides for the
receipt by, on behalf of or on account of Tenant of any consideration of any
kind whatsoever (including a premium rental for a sublease or lump sum payment
for an assignment, but excluding Tenant’s reasonable costs in marketing and
subleasing the Premises and any consideration which is attributable to the
intellectual property or goodwill of Tenant as opposed to its interest in this
Lease) in excess of the rental and other charges due to Landlord under this
Lease, Tenant shall pay fifty percent (50%) of all of such excess to Landlord,
after making deductions for any reasonable marketing expenses, tenant
improvement funds expended by Tenant, alterations, cash concessions, brokerage
commissions, attorneys’ fees and free rent actually paid by Tenant. If such
consideration consists of cash paid to Tenant, payment to Landlord shall be made
upon receipt by Tenant of such cash payment;

(f) The proposed transferee, assignee or sublessee shall agree that, in the
event Landlord gives such proposed transferee, assignee or sublessee notice that
Tenant is in default under this Lease after any applicable notice and cure
period, such proposed transferee, assignee or sublessee shall thereafter make
all payments otherwise due Tenant directly to Landlord, which payments shall be
received by Landlord without any liability being incurred by Landlord, except to
credit such payment against those due by Tenant under this Lease, and any such
proposed transferee, assignee or sublessee shall agree to attorn to Landlord or
its successors and assigns should this Lease be terminated for any reason;
provided, however, that in no event shall Landlord or its Lenders, successors or
assigns be obligated to accept such attornment;

(g) Landlord’s consent to any such Transfer shall be effected on Landlord’s
commercially reasonable forms;

(h) Tenant shall not then be in default hereunder in any respect after the
expiration of any applicable notice and cure period;

(i) Such proposed transferee, assignee or sublessee’s use of the Premises shall
be the same as the Permitted Use;

(j) Landlord shall not be bound by any provision of any agreement pertaining to
the Transfer, except for Landlord’s written consent to the same;

 

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(k) Tenant shall pay all transfer and other taxes (including interest and
penalties) assessed or payable for any Transfer;

(l) Landlord’s consent (or waiver of its rights) for any Transfer shall not
waive Landlord’s right to consent or refuse consent to any later Transfer;

(m) Tenant shall deliver to Landlord one executed copy of any and all written
instruments evidencing or relating to the Transfer; and

(n) Tenant shall deliver to Landlord a list of Hazardous Materials (as defined
in Section 21.8), certified by the proposed transferee, assignee or sublessee to
be true and correct, that the proposed transferee, assignee or sublessee intends
to use or store in the Premises. Additionally, Tenant shall deliver to Landlord,
on or before the date any proposed transferee, assignee or sublessee takes
occupancy of the Premises, all of the items relating to Hazardous Materials of
such proposed transferee, assignee or sublessee as described in Section 21.2.

29.5. Any Transfer that is not in compliance with the provisions of this Article
or with respect to which Tenant does not fulfill its obligations pursuant to
this Article shall be void and shall, at the option of Landlord, terminate this
Lease.

29.6. Notwithstanding any Transfer, Tenant shall remain fully and primarily
liable for the payment of all Rent and other sums due or to become due
hereunder, and for the full performance of all other terms, conditions and
covenants to be kept and performed by Tenant. The acceptance of Rent or any
other sum due hereunder, or the acceptance of performance of any other term,
covenant or condition thereof, from any person or entity other than Tenant shall
not be deemed a waiver of any of the provisions of this Lease or a consent to
any Transfer.

29.7. If Tenant delivers to Landlord a Transfer Notice indicating a desire to
transfer this Lease to a proposed transferee, assignee or sublessee, then
Landlord shall have the option, exercisable by giving notice to Tenant at any
time within ten (10) days after Landlord’s receipt of such Transfer Notice, to
terminate this Lease as of the date specified in the Transfer Notice as the
Transfer Date, except for those provisions that, by their express terms, survive
the expiration or earlier termination hereof. If Landlord exercises such option,
then Tenant shall have the right to withdraw such Transfer Notice by delivering
to Landlord written notice of such election within five (5) days after
Landlord’s delivery of notice electing to exercise Landlord’s option to
terminate this Lease. In the event Tenant withdraws the Transfer Notice as
provided in this Section, this Lease shall continue in full force and effect. No
failure of Landlord to exercise its option to terminate this Lease shall be
deemed to be Landlord’s consent to a proposed Transfer.

29.8. If Tenant sublets the Premises or any portion thereof, Tenant hereby
immediately and irrevocably assigns to Landlord, as security for Tenant’s
obligations under this Lease, all rent from any such subletting, and appoints
Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a
receiver for Tenant appointed on Landlord’s application) may collect such rent
and apply it toward Tenant’s obligations under this Lease; provided that, until
the occurrence of a Default (as defined below) by Tenant, Tenant shall have the
right to collect such rent.

 

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29.9. In the event that Tenant enters into a sublease for the entire Premises in
accordance with this Article that expires within two (2) days of the Term
Expiration Date, the term expiration date of such sublease shall,
notwithstanding anything in this Lease, the sublease or any consent to the
sublease to the contrary, be deemed to be the date that is two (2) days prior to
the Term Expiration Date.

30. Subordination and Attornment.

30.1. This Lease shall be subject and subordinate to the lien of any mortgage,
deed of trust, or lease in which Landlord is tenant now or hereafter in force
against the Building or the Project and to all advances made or hereafter to be
made upon the security thereof without the necessity of the execution and
delivery of any further instruments on the part of Tenant to effectuate such
subordination. As of the Execution Date of this Lease, there is no loan
encumbering Landlord’s interest in the Property. The automatic subordination to
any future mortgage, deed of trust or lease provided for in this Section is
expressly conditioned upon the holder of such mortgage, deed of trust or lease,
agreeing that as long as no Default occurs under this Lease, the holder of such
mortgage, deed of trust or lease will not disturb Tenant’s rights of possession
under this Lease.

30.2. Notwithstanding the foregoing, Tenant shall execute and deliver upon
demand such further instrument or instruments evidencing such subordination of
this Lease to the lien of any such mortgage or mortgages or deeds of trust or
lease in which Landlord is tenant as may be required by Landlord. If any such
mortgagee, beneficiary or landlord under a lease wherein Landlord is tenant
(each, a “Mortgagee”) so elects, however, this Lease shall be deemed prior in
lien to any such lease, mortgage, or deed of trust upon or including the
Premises regardless of date and Tenant shall execute a statement in writing to
such effect at Landlord’s request. If Tenant fails to execute any document
required from Tenant under this Section within ten (10) days after written
request therefor, Tenant hereby constitutes and appoints Landlord or its special
attorney-in-fact to execute and deliver any such document or documents in the
name of Tenant. Such power is coupled with an interest and is irrevocable. For
the avoidance of doubt, “Mortgagees” shall also include historic tax credit
investors and new market tax credit investors.

30.3. Upon written request of Landlord and opportunity for Tenant to review,
Tenant agrees to execute any Lease amendments not materially increasing Tenant’s
obligations or reducing Tenant’s rights under the terms of this Lease, if
required by a Mortgagee incident to the financing of the real property of which
the Premises constitute a part.

30.4. In the event any proceedings are brought for foreclosure, or in the event
of the exercise of the power of sale under any mortgage or deed of trust made by
Landlord covering the Premises, Tenant shall at the election of the purchaser at
such foreclosure or sale attorn to the purchaser upon any such foreclosure or
sale and recognize such purchaser as Landlord under this Lease.

31. Defaults and Remedies.

31.1. Late payment by Tenant to Landlord of Rent and other sums due shall cause
Landlord to incur costs not contemplated by this Lease, the exact amount of
which shall be

 

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extremely difficult and impracticable to ascertain. Such costs include
processing and accounting charges and late charges that may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises.
Therefore, if any installment of Rent due from Tenant is not received by
Landlord within the applicable cure period in Section 31.4, Tenant shall pay to
Landlord (a) an additional sum of six percent (6%) of the overdue Rent as a late
charge plus (b) interest at an annual rate (the “Default Rate”) equal to the
lesser of (a) twelve percent (12%) and (b) the highest rate permitted by
Applicable Laws. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord shall incur by reason of late
payment by Tenant and shall be payable as Additional Rent to Landlord due with
the next installment of Rent or within five (5) business days after Landlord’s
demand, whichever is earlier. Landlord’s acceptance of any Additional Rent
(including a late charge or any other amount hereunder) shall not be deemed an
extension of the date that Rent is due or prevent Landlord from pursuing any
other rights or remedies under this Lease, at law or in equity.

31.2. No payment by Tenant or receipt by Landlord of a lesser amount than the
Rent payment herein stipulated shall be deemed to be other than on account of
the Rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord’s
right to recover the balance of such Rent or pursue any other remedy provided in
this Lease or in equity or at law. If a dispute shall arise as to any amount or
sum of money to be paid by Tenant to Landlord hereunder, Tenant shall have the
right to make payment “under protest,” such payment shall not be regarded as a
voluntary payment, and there shall survive the right on the part of Tenant to
institute suit for recovery of the payment paid under protest.

31.3. If Tenant fails to pay any sum of money required to be paid by it
hereunder or perform any other act on its part to be performed hereunder, in
each case within the applicable cure period (if any) described in Section 31.4,
then Landlord may (but shall not be obligated to), without waiving or releasing
Tenant from any obligations of Tenant, make such payment or perform such act;
provided that such failure by Tenant unreasonably interfered with the use of the
Building or the Project by any other tenant or with the efficient operation of
the Building or the Project, or resulted or could have resulted in a violation
of Applicable Laws or the cancellation of an insurance policy maintained by
Landlord. Notwithstanding the foregoing, in the event of an emergency, Landlord
shall have the right to enter the Premises and act in accordance with its rights
as provided elsewhere in this Lease. In addition to the late charge described in
Section 31.1, Tenant shall pay to Landlord as Additional Rent all sums so paid
or incurred by Landlord, together with interest at the Default Rate, computed
from the date such sums were paid or incurred.

31.4. The occurrence of any one or more of the following events shall constitute
a “Default” hereunder by Tenant:

(a) Tenant abandons the Premises;

 

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(b) Tenant fails to make any payment of Rent, as and when due, or to satisfy its
obligations under Article 19, where such failure shall continue for a period of
three (3) business days after written notice thereof from Landlord to Tenant;

(c) Tenant fails to observe or perform any obligation or covenant contained
herein (other than described in Sections 31.4(a) and 31.4(b)) to be performed by
Tenant, where such failure continues for a period of ten (10) days after written
notice thereof from Landlord to Tenant; provided that, if the nature of Tenant’s
default is such that it reasonably requires more than ten (10) days to cure,
Tenant shall not be deemed to be in Default if Tenant commences such cure within
such ten (10) day period and thereafter diligently prosecutes the same to
completion; and provided, further, that such cure is completed no later than
sixty (60) days after Tenant’s receipt of written notice from Landlord;

(d) Tenant makes an assignment for the benefit of creditors;

(e) A receiver, trustee or custodian is appointed to or does take title,
possession or control of all or substantially all of Tenant’s assets;

(f) Tenant files a voluntary petition under the United States Bankruptcy Code or
any successor statute (as the same may be amended from time to time, the
“Bankruptcy Code”) or an order for relief is entered against Tenant pursuant to
a voluntary or involuntary proceeding commenced under any chapter of the
Bankruptcy Code;

(g) Any involuntary petition is filed against Tenant under any chapter of the
Bankruptcy Code and is not dismissed within one hundred twenty (120) days;

(h) Tenant fails to deliver an estoppel certificate in accordance with Article
20; or

(i) Tenant’s interest in this Lease is attached, executed upon or otherwise
judicially seized and such action is not released within one hundred twenty
(120) days of the action.

Notices given under this Section shall specify the alleged default and shall
demand that Tenant perform the provisions of this Lease or pay the Rent that is
in arrears, as the case may be, within the applicable period of time, or quit
the Premises. No such notice shall be deemed a forfeiture or a termination of
this Lease unless Landlord elects otherwise in such notice.

31.5. In the event of a Default by Tenant, and at any time thereafter, with or
without notice or demand and without limiting Landlord in the exercise of any
right or remedy that Landlord may have, Landlord has the right to do any or all
of the following:

(a) Halt any Tenant Improvements and Alterations and order Tenant’s contractors,
subcontractors, consultants, designers and material suppliers to stop work;

(b) Terminate Tenant’s right to possession of the Premises by written notice to
Tenant or by any lawful means, in which case Tenant shall immediately surrender
possession of

 

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the Premises to Landlord. In such event, Landlord shall have the immediate right
to re-enter and remove all persons and property, and such property may be
removed and stored in a public warehouse or elsewhere at the cost and for the
account of Tenant, all without service of notice or resort to legal process and
without being deemed guilty of trespass or becoming liable for any loss or
damage that may be occasioned thereby; and

(c) Terminate this Lease, in which event Tenant shall immediately surrender
possession of the Premises to Landlord. In such event, Landlord shall have the
immediate right to re-enter and remove all persons and property, and such
property may be removed and stored in a public warehouse or elsewhere at the
cost and for the account of Tenant, all without service of notice or resort to
legal process and without being deemed guilty of trespass or becoming liable for
any loss or damage that may be occasioned thereby. In the event that Landlord
shall elect to so terminate this Lease, then Landlord shall be entitled to
recover from Tenant all damages incurred by Landlord by reason of Tenant’s
default, including:

(i) The sum of:

A. The worth at the time of award of any unpaid Rent that had accrued at the
time of such termination; plus

B. The worth at the time of award of the amount by which the unpaid Rent that
would have accrued during the period commencing with termination of the Lease
and ending at the time of award exceeds that portion of the loss of Landlord’s
rental income from the Premises that Tenant proves to Landlord’s reasonable
satisfaction could have been reasonably avoided; plus

C. The worth at the time of award of the amount by which the unpaid Rent for the
balance of the Term after the time of award exceeds that portion of the loss of
Landlord’s rental income from the Premises that Tenant proves to Landlord’s
reasonable satisfaction could have been reasonably avoided; plus

D. Any other amount necessary to compensate Landlord for all the detriment
caused by Tenant’s failure to perform its obligations under this Lease or that
in the ordinary course of things would be likely to result therefrom, including
the cost of restoring the Premises to the condition required under the terms of
this Lease, including any rent payments not otherwise chargeable to Tenant
(e.g., during any “free” rent period or rent holiday); plus

E. 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 Laws; or

(ii) At Landlord’s election, as minimum liquidated damages in addition to any
(A) amounts paid or payable to Landlord pursuant to Section 31.5(c)(i)(A) prior
to such election and (B) costs of restoring the Premises to the condition
required under the terms of this Lease, an amount (the “Election Amount”) equal
to either (Y) the positive difference (if any, and measured at the time of such
termination) between (1) the then-present value of the total Rent and other
benefits that would have accrued to Landlord under this Lease for the remainder

 

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of the Term if Tenant had fully complied with the Lease minus (2) the
then-present cash rental value of the Premises as determined by Landlord for
what would be the then-unexpired Term if the Lease remained in effect, computed
using the discount rate of the Federal Reserve Bank of San Francisco at the time
of the award plus one (1) percentage point (the “Discount Rate”) or (Z) twelve
(12) months (or such lesser number of months as may then be remaining in the
Term) of Base Rent and Additional Rent at the rate last payable by Tenant
pursuant to this Lease, in either case as Landlord specifies in such election.
Landlord and Tenant agree that the Election Amount represents a reasonable
forecast of the minimum damages expected to occur in the event of a breach,
taking into account the uncertainty, time and cost of determining elements
relevant to actual damages, such as fair market rent, time and costs that may be
required to re-lease the Premises, and other factors; and that the Election
Amount is not a penalty.

As used in Sections 31.5(c)(i)(A) and (B), “worth at the time of award” shall be
computed by allowing interest at the Default Rate. As used in
Section 31.5(c)(i)(C), the “worth at the time of the award” shall be computed by
taking the present value of such amount, using the Discount Rate.

31.6. In addition to any other remedies available to Landlord at law or in
equity and under this Lease, Landlord shall have the remedy described in
California Civil Code Section 1951.4 and may continue this Lease in effect after
Tenant’s Default or abandonment and recover Rent as it becomes due, provided
Tenant has the right to sublet or assign, subject only to reasonable
limitations. In addition, Landlord shall not be liable in any way whatsoever for
its failure or refusal to relet the Premises. For purposes of this Section, the
following acts by Landlord will not constitute the termination of Tenant’s right
to possession of the Premises:

(a) Acts of maintenance or preservation or efforts to relet the Premises,
including alterations, remodeling, redecorating, repairs, replacements or
painting as Landlord shall reasonably consider advisable for the purpose of
reletting the Premises or any part thereof; or

(b) The appointment of a receiver upon the initiative of Landlord to protect
Landlord’s interest under this Lease or in the Premises.

Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may
elect at any time to terminate this Lease and to recover damages to which
Landlord is entitled.

31.7. If Landlord does not elect to terminate this Lease as provided in
Section 31.5, then Landlord may, from time to time, recover all Rent as it
becomes due under this Lease. At any time thereafter, Landlord may elect to
terminate this Lease and to recover damages to which Landlord is entitled.

31.8. In the event Landlord elects to terminate this Lease and relet the
Premises, Landlord may execute any new lease in its own name. Tenant hereunder
shall have no right or

 

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authority whatsoever to collect any Rent from such tenant. The proceeds of any
such reletting shall be applied as follows:

(a) First, to the payment of any indebtedness other than Rent due hereunder from
Tenant to Landlord, including storage charges or brokerage commissions owing
from Tenant to Landlord as the result of such reletting;

(b) Second, to the payment of the costs and expenses of reletting the Premises,
including (i) alterations and repairs that Landlord deems reasonably necessary
and advisable and (ii) reasonable attorneys’ fees, charges and disbursements
incurred by Landlord in connection with the retaking of the Premises and such
reletting;

(c) Third, to the payment of Rent and other charges due and unpaid hereunder;
and

(d) Fourth, to the payment of future Rent and other damages payable by Tenant
under this Lease.

31.9. All of Landlord’s rights, options and remedies hereunder shall be
construed and held to be nonexclusive and cumulative. Landlord shall have the
right to pursue any one or all of such remedies, or any other remedy or relief
that may be provided by Applicable Laws, whether or not stated in this Lease. No
waiver of any Default of Tenant hereunder shall be implied from any acceptance
by Landlord of any Rent or other payments due hereunder or any omission by
Landlord to take any action on account of such default if such default persists
or is repeated, and no express waiver shall affect defaults other than as
specified in such waiver. Notwithstanding any provision of this Lease to the
contrary, in no event shall Landlord be required to mitigate its damages with
respect to any default by Tenant, except as required by Applicable Laws. Any
such obligation imposed by Applicable Laws upon Landlord to relet the Premises
after any termination of this Lease shall be subject to the reasonable
requirements of Landlord to (a) lease to high quality tenants on such terms as
Landlord may from time to time deem appropriate in its discretion and
(b) develop the Project in a harmonious manner with a mix of uses, tenants,
floor areas, terms of tenancies, etc., as determined by Landlord. Landlord shall
not be obligated to relet the Premises to (y) any Tenant’s Affiliate or (z) any
party (i) unacceptable to a Lender, (ii) that requires Landlord to make
improvements to or re-demise the Premises, (iii) that desires to change the
Permitted Use, (iv) that desires to lease the Premises for more or less than the
remaining Term or (v) to whom Landlord or an affiliate of Landlord may desire to
lease other available space in the Project or at another property owned by
Landlord or an affiliate of Landlord.

31.10. Landlord’s termination of (a) this Lease or (b) Tenant’s right to
possession of the Premises shall not relieve Tenant of any liability to Landlord
that has previously accrued or that shall arise based upon events that occurred
prior to the later to occur of (y) the date of Lease termination and (z) the
date Tenant surrenders possession of the Premises.

31.11. To the extent permitted by Applicable Laws, Tenant waives any and all
rights of redemption granted by or under any present or future Applicable Laws
if Tenant is evicted or dispossessed for any cause, or if Landlord obtains
possession of the Premises due to Tenant’s Default hereunder or otherwise.

 

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31.12. Landlord shall not be in default or liable for damages under this Lease
unless Landlord fails to perform obligations required of Landlord within a
reasonable time, but in no event shall such failure continue for more than
thirty (30) days after written notice from Tenant specifying the nature of
Landlord’s failure; provided, however, that 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 if Landlord commences
performance within such thirty (30) day period and thereafter diligently
prosecutes the same to completion. In no event shall Tenant have the right to
terminate or cancel this Lease or to withhold or abate rent or to set off any
Claims against Rent as a result of any default or breach by Landlord of any of
its covenants, obligations, representations, warranties or promises hereunder,
except as may otherwise be expressly set forth in this Lease.

31.13. In the event of any default by Landlord, Tenant shall give notice by
registered or certified mail to any (a) beneficiary of a deed of trust or
(b) mortgagee under a mortgage covering the Premises, the Building or the
Project and to any landlord of any lease of land upon or within which the
Premises, the Building or the Project is located, and shall offer such
beneficiary, mortgagee or landlord a reasonable opportunity to cure the default,
including time to obtain possession of the Building or the Project by power of
sale or a judicial action if such should prove necessary to effect a cure;
provided that Landlord shall furnish to Tenant in writing, upon written request
by Tenant, the names and addresses of all such persons who are to receive such
notices.

32. Bankruptcy. In the event a debtor, trustee or debtor in possession under the
Bankruptcy Code, or another person with similar rights, duties and powers under
any other Applicable Laws, proposes to cure any default under this Lease or to
assume or assign this Lease and is obliged to provide adequate assurance to
Landlord that (a) a default shall be cured, (b) Landlord shall be compensated
for its damages arising from any breach of this Lease and (c) future performance
of Tenant’s obligations under this Lease shall occur, then such adequate
assurances shall include any or all of the following, as designated by Landlord
in its sole and absolute discretion:

32.1. Those acts specified in the Bankruptcy Code or other Applicable Laws as
included within the meaning of “adequate assurance,” even if this Lease does not
concern a shopping center or other facility described in such Applicable Laws;

32.2. A prompt cash payment to compensate Landlord for any monetary defaults or
actual damages arising directly from a breach of this Lease;

32.3. A cash deposit in an amount at least equal to the then-current amount of
the Security Deposit; or

32.4. The assumption or assignment of all of Tenant’s interest and obligations
under this Lease.

33. Brokers.

33.1. Landlord and Tenant represent and warrant that each of them has had no
dealings with any real estate broker or agent in connection with the negotiation
of this Lease other than

 

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Cornish & Carey Commercial Newmark Knight Frank (“Broker”), and that each of
them knows of no other real estate broker or agent that is or might be entitled
to a commission in connection with this Lease. Landlord shall compensate Broker
in relation to this Lease pursuant to a separate agreement between Landlord and
Broker.

33.2. Tenant represents and warrants that no broker or agent has made any
representation or warranty relied upon by Tenant in Tenant’s decision to enter
into this Lease, other than as contained in this Lease.

33.3. Tenant acknowledges and agrees that the employment of brokers by Landlord
is for the purpose of solicitation of offers of leases from prospective tenants
and that no authority is granted to any broker to furnish any representation
(written or oral) or warranty from Landlord unless expressly contained within
this Lease. Landlord is executing this Lease in reliance upon Tenant’s
representations, warranties and agreements contained within Sections 33.1 and
33.2.

33.4. Tenant agrees to indemnify, save, defend (at Landlord’s option and with
counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees
harmless from any and all cost or liability for compensation claimed by any
broker or agent, other than Broker, employed or engaged by Tenant or claiming to
have been employed or engaged by Tenant.

34. Definition of Landlord. With regard to obligations imposed upon Landlord
pursuant to this Lease, the term “Landlord,” as used in this Lease, shall refer
only to Landlord or Landlord’s then-current successor-in-interest. In the event
of any transfer, assignment or conveyance of Landlord’s interest in this Lease
or in Landlord’s fee title to or leasehold interest in the Property, as
applicable, Landlord herein named (and in case of any subsequent transfers or
conveyances, the subsequent Landlord) shall be automatically freed and relieved,
from and after the date of such transfer, assignment or conveyance, from all
liability for the performance of any covenants or obligations contained in this
Lease thereafter to be performed by Landlord (provided that Landlord will be
released as to the obligation to return the Security Deposit only to the extent
Landlord has transferred the Security Deposit to such transferee, assignee or
conveyee (or the obligation to return such Security Deposit has been otherwise
assumed by such transferee, assignee or conveyee)) and, without further
agreement, the transferee, assignee or conveyee of Landlord’s in this Lease or
in Landlord’s fee title to or leasehold interest in the Property, as applicable,
shall be deemed to have assumed and agreed to observe and perform any and all
covenants and obligations of Landlord hereunder during the tenure of its
interest in the Lease or the Property. Landlord or any subsequent Landlord may
transfer its interest in the Premises or this Lease without Tenant’s consent.

35. Limitation of Landlord’s Liability.

35.1. If Landlord is in default under this Lease and, as a consequence, Tenant
recovers a monetary judgment against Landlord, the judgment shall be satisfied
only out of (a) the proceeds of sale received on execution of the judgment and
levy against the right, title and interest of Landlord in the Building and the
Project, (b) rent or other income from such real property receivable by Landlord
or (c) the consideration received by Landlord from the sale, financing,
refinancing or other disposition of all or any part of Landlord’s right, title
or interest in the Building or the Project.

 

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35.2. Neither Landlord nor any of its affiliates, nor any of their respective
partners, shareholders, directors, officers, employees, members or agents shall
be personally liable for Landlord’s obligations or any deficiency under this
Lease, and service of process shall not be made against any shareholder,
director, officer, employee or agent of Landlord or any of Landlord’s
affiliates. No partner, shareholder, director, officer, employee, member or
agent of Landlord or any of its affiliates shall be sued or named as a party in
any suit or action, and service of process shall not be made against any partner
or member of Landlord except as may be necessary to secure jurisdiction of the
partnership, joint venture or limited liability company, as applicable. No
partner, shareholder, director, officer, employee, member or agent of Landlord
or any of its affiliates shall be required to answer or otherwise plead to any
service of process, and no judgment shall be taken or writ of execution levied
against any partner, shareholder, director, officer, employee, member or agent
of Landlord or any of its affiliates.

35.3. Each of the covenants and agreements of this Article shall be applicable
to any covenant or agreement either expressly contained in this Lease or imposed
by Applicable Laws and shall survive the expiration or earlier termination of
this Lease.

36. Joint and Several Obligations. If more than one person or entity executes
this Lease as Tenant, then:

36.1. Each of them is jointly and severally liable for the keeping, observing
and performing of all of the terms, covenants, conditions, provisions and
agreements of this Lease to be kept, observed or performed by Tenant, and such
terms, covenants, conditions, provisions and agreements shall be binding with
the same force and effect upon each and all of the persons executing this
Agreement as Tenant; and

36.2. The term “Tenant,” as used in this Lease, shall mean and include each of
them, jointly and severally. The act of, notice from, notice to, refund to, or
signature of any one or more of them with respect to the tenancy under this
Lease, including any renewal, extension, expiration, termination or modification
of this Lease, shall be binding upon each and all of the persons executing this
Lease as Tenant with the same force and effect as if each and all of them had so
acted, so given or received such notice or refund, or so signed.

37. Representations. Tenant represents that (a) Tenant is duly incorporated or
otherwise established or formed and validly existing under the laws of its state
of incorporation, establishment or formation, (b) Tenant has and is duly
qualified to do business in the state in which the Property is located,
(c) Tenant has full corporate, partnership, trust, association or other
appropriate power and authority to enter into this Lease and to perform all
Tenant’s obligations hereunder, (d) each person (and all of the persons if more
than one signs) signing this Lease on behalf of Tenant is duly and validly
authorized to do so and (e) neither (i) the execution, delivery or performance
of this Lease nor (ii) the consummation of the transactions contemplated hereby
will violate or conflict with any provision of documents or instruments under
which Tenant is constituted or to which Tenant is a party. In addition, Tenant
represents that none of (x) it, (y) its affiliates or partners nor (z) to the
best of its knowledge, its members, shareholders or other equity owners or any
of their respective employees, officers, directors, representatives or agents is
a person or entity with whom U.S. persons or entities are restricted from doing
business

 

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under regulations of the Office of Foreign Asset Control (“OFAC”) of the
Department of the Treasury (including those named on OFAC’s Specially Designated
and Blocked Persons List) or under any statute, executive order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism)
or other similar governmental action.

38. Confidentiality. Tenant shall keep the terms and conditions of this Lease
and any information provided to Tenant or its employees, agents or contractors
pursuant to Article 9 confidential and shall not (a) disclose to any third party
any terms or conditions of this Lease or any other Lease-related document
(including subleases, assignments, work letters, construction contracts, letters
of credit, subordination agreements, non-disturbance agreements, brokerage
agreements or estoppels) or (b) provide to any third party an original or copy
of this Lease (or any Lease-related document). Landlord shall not release to any
third party any non-public financial information or non-public information about
Tenant’s ownership structure that Tenant gives Landlord. Notwithstanding the
foregoing, confidential information under this Section may be released by
Landlord or Tenant under the following circumstances: (x) if required by
Applicable Laws or in any judicial proceeding; provided that the releasing party
has given the other party reasonable notice of such requirement, if feasible,
(y) to a party’s attorneys, accountants, brokers and other bona fide consultants
or advisers (with respect to this Lease only); provided such third parties agree
to be bound by this Section or (z) to bona fide prospective assignees or
subtenants of this Lease; provided they agree in writing to be bound by this
Section.

39. Notices. Except as otherwise stated in this Lease, any notice, consent,
demand, invoice, statement or other communication required or permitted to be
given hereunder shall be in writing and shall be given by (a) personal delivery,
(b) overnight delivery with a reputable international overnight delivery
service, such as FedEx, or (c) facsimile or email transmission, so long as such
transmission is followed within one (1) business day by delivery utilizing one
of the methods described in Subsection 39(a) or (b). Any such notice, consent,
demand, invoice, statement or other communication shall be deemed delivered
(x) upon receipt, if given in accordance with Subsection 39(a); (y) one
(1) business day after deposit with a reputable international overnight delivery
service, if given if given in accordance with Subsection 39(b); or (z) upon
transmission, if given in accordance with Subsection 39(c). Except as otherwise
stated in this Lease, any notice, consent, demand, invoice, statement or other
communication required or permitted to be given pursuant to this Lease shall be
addressed to Tenant at the Premises, or to Landlord or Tenant at the addresses
shown in Sections 2.9 and 2.10 or 2.11, respectively. Either party may, by
notice to the other given pursuant to this Section, specify additional or
different addresses for notice purposes.

40. Miscellaneous.

40.1. Landlord reserves the right to change the name of the Building or the
Project in its sole discretion.

40.2. To induce Landlord to enter into this Lease, Tenant agrees that it shall
furnish to Landlord, from time to time, within ten (10) business days after
receipt of Landlord’s written request (if such statements were not previously
delivered to Landlord), the most recent year-end

 

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unconsolidated financial statements reflecting Tenant’s current financial
condition audited by a nationally recognized accounting firm. Tenant shall,
within ninety (90) days after the end of Tenant’s financial year, furnish
Landlord with a certified copy of Tenant’s year-end unconsolidated financial
statements for the previous year audited by a nationally recognized accounting
firm. Tenant represents and warrants that all financial statements, records and
information furnished by Tenant to Landlord in connection with this Lease are
true, correct and complete in all respects. If audited financials are not
otherwise prepared, unaudited financials complying with generally accepted
accounting principles and certified by the chief financial officer of Tenant as
true, correct and complete in all respects shall suffice for purposes of this
Section. The provisions of this Section shall not apply at any time while Tenant
is a corporation whose shares are traded on any nationally recognized stock
exchange.

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

40.4. The terms of this Lease are intended by the parties as a final, complete
and exclusive expression of their agreement with respect to the terms that are
included herein, and may not be contradicted or supplemented by evidence of any
other prior or contemporaneous agreement.

40.5. Landlord may, but shall not be obligated to, record a short form or
memorandum hereof without Tenant’s consent. Within ten (10) days after receipt
of written request from Landlord, Tenant shall execute a termination of any
short form or memorandum of lease recorded with respect hereto. Tenant shall be
responsible for the cost of recording any short form or memorandum of this
Lease, including any transfer or other taxes incurred in connection with such
recordation. Neither party shall record this Lease.

40.6. Where applicable in this Lease, the singular includes the plural and the
masculine or neuter includes the masculine, feminine and neuter. The words
“include,” “includes,” “included” and “including” mean “‘include,’ etc., without
limitation.” The word “shall” is mandatory and the word “may” is permissive. The
section headings of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part of this Lease.
Landlord and Tenant have each participated in the drafting and negotiation of
this Lease, and the language in all parts of this Lease shall be in all cases
construed as a whole according to its fair meaning and not strictly for or
against either Landlord or Tenant.

40.7. Except as otherwise expressly set forth in this Lease, each party shall
pay its own costs and expenses incurred in connection with this Lease and such
party’s performance under this Lease; provided that, if either party commences
an action, proceeding, demand, claim, action, cause of action or suit against
the other party arising out of or in connection with this Lease, then the
substantially prevailing party shall be reimbursed by the other party for all
reasonable costs and expenses, including reasonable attorneys’ fees and
expenses, incurred by the substantially prevailing party in such action,
proceeding, demand, claim, action, cause of action or suit, and in any appeal in
connection therewith (regardless of whether the applicable action, proceeding,
demand, claim, action, cause of action, suit or appeal is voluntarily withdrawn
or dismissed).

 

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40.8. Time is of the essence with respect to the performance of every provision
of this Lease.

40.9. Each provision of this Lease performable by Tenant shall be deemed both a
covenant and a condition.

40.10. Notwithstanding anything to the contrary contained in this Lease,
Tenant’s obligations under this Lease are independent and shall not be
conditioned upon performance by Landlord.

40.11. Whenever consent or approval of either party is required, that party
shall not unreasonably withhold, condition or delay such consent or approval,
except as may be expressly set forth to the contrary.

40.12. Any provision of this Lease that shall prove to be invalid, void or
illegal shall in no way affect, impair or invalidate any other provision hereof,
and all other provisions of this Lease shall remain in full force and effect and
shall be interpreted as if the invalid, void or illegal provision did not exist.

40.13. Each of the covenants, conditions and agreements herein contained shall
inure to the benefit of and shall apply to and be binding upon the parties
hereto and their respective heirs; legatees; devisees; executors;
administrators; and permitted successors and assigns. This Lease is for the sole
benefit of the parties and their respective heirs, legatees, devisees,
executors, administrators and permitted successors and assigns, and nothing in
this Lease shall give or be construed to give any other person or entity any
legal or equitable rights. Nothing in this Section shall in any way alter the
provisions of this Lease restricting assignment or subletting.

40.14. This Lease shall be governed by, construed and enforced in accordance
with the laws of the state in which the Premises are located, without regard to
such state’s conflict of law principles.

40.15. [intentionally omitted]

40.16. This Lease may be executed in one or more counterparts, each of which,
when taken together, shall constitute one and the same document.

40.17. No provision of this Lease may be modified, amended or supplemented
except by an agreement in writing signed by Landlord and Tenant.

40.18. No waiver of any term, covenant or condition of this Lease shall be
binding upon Landlord or Tenant unless executed in writing by the waiving party.
The waiver by either party of any breach or default of any term, covenant or
condition contained in this Lease shall not be deemed to be a waiver of any
preceding or subsequent breach or default of such term, covenant or condition or
any other term, covenant or condition of this Lease.

 

57

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40.19. To the extent permitted by Applicable Laws, the parties waive trial by
jury in any action, proceeding or counterclaim brought by the other party hereto
related to matters arising out of or in any way connected with this Lease; the
relationship between Landlord and Tenant; Tenant’s use or occupancy of the
Premises; or any claim of injury or damage related to this Lease or the
Premises.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

58

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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date
first above written.

 

LANDLORD:

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

By:  

/s/ Kevin M. Simonsen

Name:  

Kevin M. Simonsen

Title:  

Sr. VP, Real Estate Legal

TENANT:

CARBYLAN THERAPEUTICS, INC.,

a Delaware corporation

By:  

/s/ David M. Renzi

Name:   David M. Renzi Title:   President and CEO

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EXHIBIT A

PREMISES

 

LOGO [g97611g25e24.jpg]

 

A-1

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EXHIBIT B

WORK LETTER

This Work Letter (this “Work Letter”) is made and entered into as of the 13th
day of July, 2015, by and between BMR-PACIFIC RESEARCH CENTER LP, a Delaware
limited partnership (“Landlord”), and CARBYLAN THERAPEUTICS, INC., a Delaware
corporation (“Tenant”), and is attached to and made a part of that certain Lease
dated as of July 13, 2015 (as the same may be amended, amended and restated,
supplemented or otherwise modified from time to time, the “Lease”), by and
between Landlord and Tenant for the Premises located at 7979 Gateway Boulevard,
Newark, California. All capitalized terms used but not otherwise defined herein
shall have the meanings given them in the Lease.

1. General Requirements.

1.1. Authorized Representatives.

(a) Landlord designates, as Landlord’s authorized representative (“Landlord’s
Authorized Representative”), (i) Joel Leong as the person authorized to initial
plans, drawings, approvals and to sign change orders pursuant to this Work
Letter and (ii) an officer of Landlord as the person authorized to sign any
amendments to this Work Letter or the Lease. Tenant shall not be obligated to
respond to or act upon any such item until such item has been initialed or
signed (as applicable) by the appropriate Landlord’s Authorized Representative.
Landlord may change either Landlord’s Authorized Representative upon one
(1) business day’s prior written notice to Tenant.

(b) Tenant designates David Renzi (“Tenant’s Authorized Representative”) as the
person authorized to initial and sign all plans, drawings, change orders and
approvals pursuant to this Work Letter. Landlord shall not be obligated to
respond to or act upon any such item until such item has been initialed or
signed (as applicable) by Tenant’s Authorized Representative. Tenant may change
Tenant’s Authorized Representative upon one (1) business day’s prior written
notice to Landlord.

1.2. Schedule. The schedule for design and development of the Tenant
Improvements, including the time periods for preparation and review of
construction documents, approvals and performance, shall be in accordance with a
schedule to be prepared by Landlord (the “Schedule”). The Schedule shall be
subject to adjustment as mutually agreed upon in writing by the parties, or as
otherwise provided in this Work Letter.

1.3. Landlord’s Architects, Contractors and Consultants. The architect,
engineering consultants, design team, general contractor and subcontractors
responsible for the construction of the Tenant Improvements shall be selected by
Landlord. Landlord shall endeavor to provide Tenant with copies of Landlord’s
approved contractor list for the Project and bid proposals (prior to the
selection of the winning bid) in connection with the Tenant Improvements.

2. Tenant Improvements. All Tenant Improvements shall be performed by Landlord’s
contractor, at Tenant’s sole cost and expense; provided that Landlord will
contribute an amount

 

B-1

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up to the TI Allowance toward the cost of completing the Tenant Improvements.
All Tenant Improvements shall be constructed in substantial accordance with the
Approved Plans (as defined below), the Lease and this Work Letter. To the extent
that the total projected cost of the Tenant Improvements (as projected by
Landlord) exceeds the TI Allowance (such excess, the “Excess TI Costs”), Tenant
shall advance to Landlord any Excess TI Costs within ten (10) days after receipt
of an invoice therefor, but in any case before Landlord commences the Tenant
Improvements. If Landlord is delayed in performing the Tenant Improvements due
to Tenant’s failure to timely pay the Excess TI Costs to Landlord, Landlord
shall be entitled to a day-for-day extension to achieve Substantial Completion
of the Tenant Improvements for the period of such delay. If the actual Excess TI
Costs are less than the Excess TI Costs paid by Tenant to Landlord, Landlord
shall credit Tenant with the overage paid by Tenant against Tenant’s Rent
obligations, beginning after Landlord has completed the final accounting for the
Tenant Improvements. If the cost of the Tenant Improvements (as projected by
Landlord) increases over Landlord’s initial projection, then Landlord may notify
Tenant and Tenant shall deposit any additional Excess TI Costs with Landlord in
the same way that Tenant deposited the initial Excess TI Costs. If Tenant fails
to pay, or is late in paying, any sum due to Landlord under this Work Letter,
then Landlord shall have all of the rights and remedies set forth in the Lease
for nonpayment of Rent (including the right to interest and the right to assess
a late charge), and for purposes of any litigation instituted with regard to
such amounts the same shall be considered Rent. All material and equipment
furnished by Landlord or its contractors as the Tenant Improvements shall be new
or “like new,” and the Tenant Improvements shall be performed in a first-class,
workmanlike manner.

2.1. Work Plans. Landlord shall prepare and submit to Tenant for approval
schematics covering the Tenant Improvements prepared in conformity with the
applicable provisions of this Work Letter (the “Draft Schematic Plans”). The
Draft Schematic Plans shall contain sufficient information and detail to
accurately describe the proposed design to Tenant. Tenant shall notify Landlord
in writing within five (5) business days after receipt of the Draft Schematic
Plans whether Tenant approves or objects to the Draft Schematic Plans and of the
manner, if any, in which the Draft Schematic Plans are unacceptable. Tenant’s
failure to respond within such five (5) business day period shall be deemed
approval by Tenant. If Tenant reasonably objects to the Draft Schematic Plans,
then Landlord shall revise the Draft Schematic Plans and cause Tenant’s
objections to be remedied in the revised Draft Schematic Plans. Landlord shall
then resubmit the revised Draft Schematic Plans to Tenant for approval, such
approval not to be unreasonably withheld, conditioned or delayed. Tenant’s
approval of or objection to revised Draft Schematic Plans and Landlord’s
correction of the same shall be in accordance with this Section until Tenant has
approved the Draft Schematic Plans in writing or been deemed to have approved
them. The iteration of the Draft Schematic Plans that is approved or deemed
approved by Tenant without objection shall be referred to herein as the
“Approved Schematic Plans.” In the event that Draft Schematic Plans are not
approved by Tenant in accordance with this Section prior to July 17, 2015, then,
notwithstanding anything in the Lease or this Work Letter to the contrary,
Landlord shall be entitled to a day-for-day delay for every day after such date
until Draft Schematic Plans are approved by Tenant in accordance with this
Section.

2.2. Construction Plans. Landlord shall prepare final plans and specifications
for the Tenant Improvements that (a) are consistent with and are logical
evolutions of the Approved

 

B-2

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Schematic Plans and (b) incorporate any other Tenant-requested (and
Landlord-approved) Changes (as defined below). As soon as such final plans and
specifications (“Construction Plans”) are completed, Landlord shall deliver the
same to Tenant for Tenant’s approval, which approval shall not be unreasonably
withheld, conditioned or delayed. Such Construction Plans shall be approved or
disapproved by Tenant within five (5) business days after delivery to Tenant.
Tenant’s failure to respond within such five (5) business day period shall be
deemed approval by Tenant. If the Construction Plans are disapproved by Tenant,
then Tenant shall notify Landlord in writing of its reasonable objections to
such Construction Plans, and the parties shall confer and negotiate in good
faith to reach agreement on the Construction Plans. Promptly after the
Construction Plans are approved by Landlord and Tenant, two (2) copies of such
Construction Plans shall be initialed and dated by Landlord and Tenant, and
Landlord shall promptly submit such Construction Plans to all appropriate
Governmental Authorities for approval. The Construction Plans so approved, and
all change orders specifically permitted by this Work Letter, are referred to
herein as the “Approved Plans.”

2.3. Changes to the Tenant Improvements. Any changes to the Approved Plans
(each, a “Change”) shall be requested and instituted in accordance with the
provisions of this Article 2 and shall be subject to the written approval of the
non-requesting party in accordance with this Work Letter.

(a) Change Request. Either Landlord or Tenant may request Changes after Tenant
approves the Approved Plans by notifying the other party thereof in writing in
substantially the same form as the AIA standard change order form (a “Change
Request”), which Change Request shall detail the nature and extent of any
requested Changes, including (a) the Change, (b) the party required to perform
the Change and (c) any modification of the Approved Plans and the Schedule, as
applicable, necessitated by the Change. If the nature of a Change requires
revisions to the Approved Plans, then the requesting party shall be solely
responsible for the cost and expense of such revisions and any increases in the
cost of the Tenant Improvements as a result of such Change. Change Requests
shall be signed by the requesting party’s Authorized Representative.

(b) Approval of Changes. All Change Requests shall be subject to the other
party’s prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed. The non-requesting party shall have five
(5) business days after receipt of a Change Request to notify the requesting
party in writing of the non-requesting party’s decision either to approve or
object to the Change Request. The non-requesting party’s failure to respond
within such five (5) business day period shall be deemed approval by the
non-requesting party.

3. Requests for Consent. Except as otherwise provided in this Work Letter,
Tenant shall respond to all requests for consents, approvals or directions made
by Landlord pursuant to this Work Letter within five (5) business days following
Tenant’s receipt of such request. Tenant’s failure to respond within such five
(5) business day period shall be deemed approval by Tenant.

 

B-3

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4. TI Allowance.

4.1. Application of TI Allowance. Landlord shall contribute the TI Allowance and
any Excess TI Costs advanced by Tenant to Landlord toward the costs and expenses
incurred in connection with the performance of the Tenant Improvements, in
accordance with Article 4 of the Lease. If the entire TI Allowance is not
applied toward or reserved for the costs of the Tenant Improvements, then Tenant
shall not be entitled to a credit of such unused portion of the TI Allowance. If
the entire Excess TI Costs advanced by Tenant to Landlord are not applied toward
the costs of the Tenant Improvements, then Landlord shall promptly return such
excess to Tenant following completion of the Tenant Improvements. Tenant may
apply the TI Allowance for the payment of construction and other costs in
accordance with the terms and provisions of the Lease.

4.2. Approval of Budget for the Tenant Improvements. Notwithstanding anything to
the contrary set forth elsewhere in this Work Letter or the Lease, Landlord
shall not have any obligation to expend any portion of the TI Allowance until
Landlord and Tenant shall have approved in writing the budget for the Tenant
Improvements (the “Approved Budget”). Prior to Landlord’s approval of the
Approved Budget, Tenant shall pay all of the costs and expenses incurred in
connection with the Tenant Improvements as they become due. Tenant shall
promptly reimburse Landlord for costs or expenses relating to the Tenant
Improvements that exceed the amount of the TI Allowance.

5. Miscellaneous.

5.1. Incorporation of Lease Provisions. Sections 40.6 through 40.19 of the Lease
are incorporated into this Work Letter by reference, and shall apply to this
Work Letter in the same way that they apply to the Lease.

5.2. General. Except as otherwise set forth in the Lease or this Work Letter,
this Work Letter shall not apply to improvements performed in any additional
premises added to the Premises at any time or from time to time, whether by any
options under the Lease or otherwise; or to any portion of the Premises or any
additions to the Premises in the event of a renewal or extension of the original
Term, whether by any options under the Lease or otherwise, unless the Lease or
any amendment or supplement to the Lease expressly provides that such additional
premises are to be delivered to Tenant in the same condition as the initial
Premises.

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B-4

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to be
effective on the date first above written.

 

LANDLORD:

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

By:

/s/ Kevin M. Simonsen

Name: Kevin M. Simonsen Title: Sr. VP, Real Estate Legal TENANT:

CARBYLAN THERAPEUTICS, INC.,

a Delaware corporation

By:

/s/ David M. Renzi

Name: David M. Renzi Title: President and CEO

 

B-5

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EXHIBIT B-1

TENANT WORK INSURANCE SCHEDULE

Tenant shall be responsible for requiring all of Tenant contractors doing
construction or renovation work to purchase and maintain such insurance as shall
protect it from the claims set forth below which may arise out of or result from
any Tenant Work whether such Tenant Work is completed by Tenant or by any Tenant
contractors or by any person directly or indirectly employed by Tenant or any
Tenant contractors, or by any person for whose acts Tenant or any Tenant
contractors may be liable:

1. Claims under workers’ compensation, disability benefit and other similar
employee benefit acts which are applicable to the Tenant Work to be performed.

2. Claims for damages because of bodily injury, occupational sickness or
disease, or death of employees under any applicable employer’s liability law.

3. Claims for damages because of bodily injury, or death of any person other
than Tenant’s or any Tenant contractors’ employees.

4. Claims for damages insured by usual personal injury liability coverage which
are sustained (a) by any person as a result of an offense directly or indirectly
related to the employment of such person by Tenant or any Tenant contractors or
(b) by any other person.

5. Claims for damages, other than to the Tenant Work itself, because of injury
to or destruction of tangible property, including loss of use therefrom.

6. Claims for damages because of bodily injury or death of any person or
property damage arising out of the ownership, maintenance or use of any motor
vehicle.

Tenant contractors’ Commercial General Liability Insurance shall include
premises/operations (including explosion, collapse and underground coverage if
such Tenant Work involves any underground work), elevators, independent
contractors, products and completed operations, and blanket contractual
liability on all written contracts, all including broad form property damage
coverage.

 

B-1-1

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Tenant contractors’ Commercial General, Automobile, Employers and Umbrella
Liability Insurance shall be written for not less than limits of liability as
follows:

 

a.

Commercial General Liability:

 

     Bodily Injury and Property Damage

Commercially reasonable amounts, but in any event no less than $1,000,000 per
occurrence and $2,000,000 general aggregate, with $2,000,000 products and
completed operations aggregate.

b.

Commercial Automobile Liability:

 

     Bodily Injury and Property Damage

$1,000,000 per accident

c.

Employer’s Liability:

 

     Each Accident

     Disease – Policy Limit

     Disease – Each Employee

 

 

$500,000

$500,000

$500,000

d.

Umbrella Liability:

 

     Bodily Injury and Property Damage

Commercially reasonable amounts (excess of coverages a, b and c above), but in
any event no less than $5,000,000 per occurrence / aggregate.

All subcontractors for Tenant contractors shall carry the same coverages and
limits as specified above, unless different limits are reasonably approved by
Landlord. The foregoing policies shall contain a provision to the extent
obtainable that coverages afforded under the policies shall not be canceled or
not renewed until at least thirty (30) days’ prior written notice has been given
to the Landlord. Certificates of insurance including required endorsements
showing such coverages to be in force shall be filed with Landlord prior to the
commencement of any Tenant Work and prior to each renewal. Coverage for
completed operations must be maintained for the lesser of ten (10) years and the
applicable statue of repose following completion of the Tenant Work, and
certificates evidencing this coverage must be provided to Landlord. The minimum
A.M. Best’s rating of each insurer shall be A- VII. Landlord and its mortgagees
shall be named as an additional insureds under Tenant contractors’ Commercial
General Liability, Commercial Automobile Liability and Umbrella Liability
Insurance policies as respects liability arising from work or operations
performed, or ownership, maintenance or use of autos, by or on behalf of such
contractors. Each contractor and its insurers shall provide waivers of
subrogation with respect to any claims covered or that should have been covered
by valid and collectible insurance, including any deductibles or self-insurance
maintained thereunder.

If any contractor’s work involves the handling or removal of asbestos (as
determined by Landlord in its sole and absolute discretion), such contractor
shall also carry Pollution Legal Liability insurance. Such coverage shall
include bodily injury, sickness, disease, death or mental anguish or shock
sustained by any person; property damage, including physical injury to or
destruction of tangible property (including the resulting loss of use thereof),
clean-up costs and the loss of use of tangible property that has not been
physically injured or destroyed; and defense costs, charges and expenses
incurred in the investigation, adjustment or defense of claims for such damages.
Coverage shall apply to both sudden and non-sudden pollution conditions
including the discharge, dispersal, release or escape of smoke, vapors, soot,
fumes, acids, alkalis, toxic chemicals, liquids or gases, waste materials or
other irritants, contaminants or pollutants into or upon land, the atmosphere or
any watercourse or body of water. Claims-made coverage is permitted, provided
the policy retroactive date is continuously maintained prior to the Term
Commencement Date, and coverage is continuously maintained during all periods in
which Tenant occupies the Premises. Coverage shall be maintained with limits of
not less than $1,000,000 per incident with a $2,000,000 policy aggregate.

 

B-1-2

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EXHIBIT C

ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE

AND TERM EXPIRATION DATE

THIS ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE AND TERM EXPIRATION DATE is
entered into as of [            ], 20[    ], with reference to that certain
Lease (the “Lease”) dated as of [            ], 20[    ], by CARBYLAN
THERAPEUTICS, INC., a Delaware corporation (“Tenant”), in favor of BMR-PACIFIC
RESEARCH CENTER LP, a Delaware limited partnership (“Landlord”). All capitalized
terms used herein without definition shall have the meanings ascribed to them in
the Lease.

Tenant hereby confirms the following:

1. Tenant accepted possession of the Premises for use in accordance with the
Permitted Use on [            ], 20[    ]. Tenant first occupied the Premises
for the Permitted Use on [            ], 20[    ].

2. The Premises are in good order, condition and repair.

3. The Tenant Improvements are Substantially Complete.

4. To Tenant’s knowledge, all conditions of the Lease to be performed by
Landlord as a condition to the full effectiveness of the Lease have been
satisfied, and Landlord has fulfilled all of its duties in the nature of
inducements offered to Tenant to lease the Premises.

5. In accordance with the provisions of Article 4 of the Lease, the Term
Commencement Date is [            ], 20[    ], and, unless the Lease is
terminated prior to the Term Expiration Date pursuant to its terms, the Term
Expiration Date shall be [            ], 20[    ].

6. The Lease is in full force and effect, and the same represents the entire
agreement between Landlord and Tenant concerning the Premises[, except
[                    ]].

7. To Tenant’s knowledge, Tenant has no existing defenses against the
enforcement of the Lease by Landlord, and there exist no offsets or credits
against Rent owed or to be owed by Tenant.

8. The obligation to pay Rent is presently in effect and all Rent obligations on
the part of Tenant under the Lease commenced to accrue on [            ],
20[    ], with Base Rent payable on the dates and amounts set forth in the chart
below:

 

Dates

   Approximate
Square Feet of
Rentable Area   Base Rent per Square
Foot of Rentable Area   Monthly
Base Rent   Annual
Base Rent

[        ]/[    ]/[        ]-

   [    ]   $[            ]   [    ]   [    ]

[        ]/[    ]/[        ]

     [monthly][OR][annually]    

 

C-1

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9. The undersigned Tenant has not made any prior assignment, transfer,
hypothecation or pledge of the Lease or of the rents thereunder or sublease of
the Premises or any portion thereof.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

C-2

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IN WITNESS WHEREOF, Tenant has executed this Acknowledgment of Term Commencement
Date and Term Expiration Date as of the date first written above.

 

TENANT:

CARBYLAN THERAPEUTICS, INC.,

a Delaware corporation

By:

 

Name:

 

Title:

 

 

C-3

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EXHIBIT D

INTENTIONALLY OMITTED

 

D-1

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EXHIBIT E

[FORM OF LETTER OF CREDIT

[On letterhead or L/C letterhead of Issuer]

LETTER OF CREDIT

Date:             , 20    

 

 

(the “Beneficiary”)

 

 

 

  Attention:

 

L/C. No.:

 

Loan No. :

 

Ladies and Gentlemen:

We establish in favor of Beneficiary our irrevocable and unconditional Letter of
Credit numbered as identified above (the “L/C”) for an aggregate amount of
$        , expiring at      :00 p.m. on                      or, if such day is
not a Banking Day, then the next succeeding Banking Day (such date, as extended
from time to time, the “Expiry Date”). “Banking Day” means a weekday except a
weekday when commercial banks in                      are authorized or required
to close.

We authorize Beneficiary to draw on us (the “Issuer”) for the account of
                     (the “Account Party”), under the terms and conditions of
this L/C.

Funds under this L/C are available by presenting the following documentation
(the “Drawing Documentation”): (a) the original L/C and (b) a sight draft
substantially in the form of Attachment 1, with blanks filled in and bracketed
items provided as appropriate. No other evidence of authority, certificate, or
documentation is required.

Drawing Documentation must be presented at Issuer’s office at
                     on or before the Expiry Date by personal presentation,
courier or messenger service, or fax. Presentation by fax shall be effective
upon electronic confirmation of transmission as evidenced by a printed report
from the sender’s fax machine. After any fax presentation, but not as a
condition to its effectiveness, Beneficiary shall with reasonable promptness
deliver the original Drawing Documentation by any other means. Issuer will on
request issue a receipt for Drawing Documentation.

We agree, irrevocably, and irrespective of any claim by any other person, to
honor drafts drawn under and in conformity with this L/C, within the maximum
amount of this L/C, presented to us on or before the Expiry Date, provided we
also receive (on or before the Expiry Date) any other Drawing Documentation this
L/C requires.

 

E-1

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We shall pay this L/C only from our own funds by check or wire transfer, in
compliance with the Drawing Documentation.

If Beneficiary presents proper Drawing Documentation to us on or before the
Expiry Date, then we shall pay under this L/C at or before the following time
(the “Payment Deadline”): (a) if presentment is made at or before noon of any
Banking Day, then the close of such Banking Day; and (b) otherwise, the close of
the next Banking Day. We waive any right to delay payment beyond the Payment
Deadline. If we determine that Drawing Documentation is not proper, then we
shall so advise Beneficiary in writing, specifying all grounds for our
determination, within one Banking Day after the Payment Deadline.

Partial drawings are permitted. This L/C shall, except to the extent reduced
thereby, survive any partial drawings.

We shall have no duty or right to inquire into the validity of or basis for any
draw under this L/C or any Drawing Documentation. We waive any defense based on
fraud or any claim of fraud.

The Expiry Date shall automatically be extended by one year (but never beyond
                     (the “Outside Date”)) unless, on or before the date 90 days
before any Expiry Date, we have given Beneficiary notice that the Expiry Date
shall not be so extended (a “Nonrenewal Notice”). We shall promptly upon request
confirm any extension of the Expiry Date under the preceding sentence by issuing
an amendment to this L/C, but such an amendment is not required for the
extension to be effective. We need not give any notice of the Outside Date.

Beneficiary may from time to time without charge transfer this L/C, in whole but
not in part, to any transferee (the “Transferee”). Issuer shall look solely to
Account Party for payment of any fee for any transfer of this L/C. Such payment
is not a condition to any such transfer. Beneficiary or Transferee shall
consummate such transfer by delivering to Issuer the original of this L/C and a
Transfer Notice substantially in the form of Attachment 2, purportedly signed by
Beneficiary, and designating Transferee. Issuer shall promptly reissue or amend
this L/C in favor of Transferee as Beneficiary. Upon any transfer, all
references to Beneficiary shall automatically refer to Transferee, who may then
exercise all rights of Beneficiary. Issuer expressly consents to any transfers
made from time to time in compliance with this paragraph.

Any notice to Beneficiary shall be in writing and delivered by hand with receipt
acknowledged or by overnight delivery service such as FedEx (with proof of
delivery) at the above address, or such other address as Beneficiary may specify
by written notice to Issuer. A copy of any such notice shall also be delivered,
as a condition to the effectiveness of such notice, to:                      (or
such replacement as Beneficiary designates from time to time by written notice).

No amendment that adversely affects Beneficiary shall be effective without
Beneficiary’s written consent.

 

E-2

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This L/C is subject to and incorporates by reference: (a) the International
Standby Practices 98 (“ISP 98”); and (b) to the extent not inconsistent with ISP
98, Article 5 of the Uniform Commercial Code of the State of New York.

 

Very truly yours, [Issuer Signature]

 

E-3

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ATTACHMENT 1 TO EXHIBIT E

FORM OF SIGHT DRAFT

[BENEFICIARY LETTERHEAD]

TO:

[Name and Address of Issuer]

SIGHT DRAFT

AT SIGHT, pay to the Order of                     , the sum of
                    United States Dollars ($        ). Drawn under [Issuer]
Letter of Credit No.                      dated                     .

[Issuer is hereby directed to pay the proceeds of this Sight Draft solely to the
following account:                     .]

[Name and signature block, with signature or purported signature of Beneficiary]

Date:                     

 

E-1-1

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ATTACHMENT 2 TO EXHIBIT E

FORM OF TRANSFER NOTICE

[BENEFICIARY LETTERHEAD]

TO:

[Name and Address of Issuer] (the “Issuer”)

TRANSFER NOTICE

By signing below, the undersigned, Beneficiary (the “Beneficiary”) under
Issuer’s Letter of Credit No.                      dated
                    (the “L/C”), transfers the L/C to the following transferee
(the “Transferee”):

[Transferee Name and Address]

The original L/C is enclosed. Beneficiary directs Issuer to reissue or amend the
L/C in favor of Transferee as Beneficiary. Beneficiary represents and warrants
that Beneficiary has not transferred, assigned, or encumbered the L/C or any
interest in the L/C, which transfer, assignment, or encumbrance remains in
effect.

[Name and signature block, with signature or purported signature of Beneficiary]

Date:                     ]

 

E-2-1

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EXHIBIT F

RULES AND REGULATIONS

NOTHING IN THESE RULES AND REGULATIONS (“RULES AND REGULATIONS”) SHALL SUPPLANT
ANY PROVISION OF THE LEASE. IN THE EVENT OF A CONFLICT OR INCONSISTENCY BETWEEN
THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL.

1. No Tenant Party shall encumber or obstruct the common entrances, lobbies,
elevators, sidewalks and stairways of the Building(s) or the Project or use them
for any purposes other than ingress or egress to and from the Building(s) or the
Project.

2. Except as specifically provided in the Lease, no sign, placard, picture,
advertisement, name or notice shall be installed or displayed on any part of the
outside of the Premises or the Building(s) without Landlord’s prior written
consent. Landlord shall have the right to remove, at Tenant’s sole cost and
expense and without notice, any sign installed or displayed in violation of this
rule.

3. If Landlord objects in writing to any curtains, blinds, shades, screens,
hanging plants or other similar objects attached to or used in connection with
any window or door of the Premises or placed on any windowsill, and (a) such
window, door or windowsill is visible from the exterior of the Premises and
(b) such curtain, blind, shade, screen, hanging plant or other object is not
included in plans approved by Landlord, then Tenant shall promptly remove such
curtains, blinds, shades, screens, hanging plants or other similar objects at
its sole cost and expense.

4. No deliveries shall be made that impede or interfere with other tenants in or
the operation of the Project. Movement of furniture, office equipment or any
other large or bulky material(s) through the Common Area shall be restricted to
such hours as Landlord may designate and shall be subject to reasonable
restrictions that Landlord may impose.

5. Tenant shall not place a load upon any floor of the Premises that exceeds the
load per square foot that (a) such floor was designed to carry or (b) is allowed
by Applicable Laws. Fixtures and equipment that cause noises or vibrations that
may be transmitted to the structure of the Building(s) to such a degree as to be
objectionable to other tenants shall be placed and maintained by Tenant, at
Tenant’s sole cost and expense, on vibration eliminators or other devices
sufficient to eliminate such noises and vibrations to levels reasonably
acceptable to Landlord and the affected tenants of the Project.

6. Tenant shall not use any method of HVAC other than that present at the
Project and serving the Premises as of the Execution Date without Landlord’s
prior written consent in accordance with the Lease.

7. Tenant shall not install any radio, television or other antennae; cell or
other communications equipment; or other devices on the roof or exterior walls
of the Premises except in accordance with the Lease. Tenant shall not interfere
with radio, television or other digital or electronic communications at the
Project or elsewhere.

 

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8. Canvassing, peddling, soliciting and distributing handbills or any other
written material within, on or around the Project (other than within the
Premises) are prohibited. Tenant shall cooperate with Landlord to prevent such
activities by any Tenant Party.

9. Tenant shall store all of its trash, garbage and Hazardous Materials in
receptacles within its Premises or in receptacles designated by Landlord outside
of the Premises. Tenant shall not place in any such receptacle any material that
cannot be disposed of in the ordinary and customary manner of trash, garbage and
Hazardous Materials disposal. Any Hazardous Materials transported through Common
Area shall be held in secondary containment devices. Tenant shall be
responsible, at its sole cost and expense, for Tenant’s removal of its trash,
garbage and Hazardous Materials. Tenant is encouraged to participate in the
waste removal and recycling program in place at the Project.

10. The Premises shall not be used for lodging or for any improper, immoral or
objectionable purpose. No cooking shall be done or permitted in the Premises;
provided, however, that Tenant may use (a) equipment approved in accordance with
the requirements of insurance policies that Landlord or Tenant is required to
purchase and maintain pursuant to the Lease for brewing coffee, tea, hot
chocolate and similar beverages, (b) microwave ovens for employees’ use and
(c) equipment shown on Tenant Improvement plans approved by Landlord; provided,
further, that any such equipment and microwave ovens are used in accordance with
Applicable Laws.

11. Tenant shall not, without Landlord’s prior written consent, use the name of
the Project, if any, in connection with or in promoting or advertising Tenant’s
business except as Tenant’s address.

12. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any Governmental
Authority.

13. Tenant assumes any and all responsibility for protecting the Premises from
theft, robbery and pilferage, which responsibility includes keeping doors locked
and other means of entry to the Premises closed.

14. Tenant shall not modify any locks to the Premises without Landlord’s prior
written consent, which consent Landlord shall not unreasonably withhold,
condition or delay. Tenant shall furnish Landlord with copies of keys, pass
cards or similar devices for locks to the Premises.

15. Tenant shall cooperate and participate in all reasonable security programs
affecting the Premises.

16. Tenant shall not permit any animals in the Project, other than for service
animals or for use in laboratory experiments.

17. Bicycles shall not be taken into the Building(s) (including the elevators
and stairways of the Building) except into areas designated by Landlord.

 

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18. The water and wash closets and other plumbing fixtures shall not be used for
any purposes other than those for which they were constructed, and no sweepings,
rubbish, rags or other substances shall be deposited therein.

19. Discharge of industrial sewage shall only be permitted if Tenant, at its
sole expense, first obtains all necessary permits and licenses therefor from all
applicable Governmental Authorities.

20. Smoking is prohibited inside the Building, except in designated outdoor
areas of the Project (if any).

21. The Project’s hours of operation are currently 24 hours a day seven days a
week.

22. Tenant shall comply with all orders, requirements and conditions now or
hereafter imposed by Applicable Laws or Landlord (“Waste Regulations”) regarding
the collection, sorting, separation and recycling of waste products, garbage,
refuse and trash generated by Tenant (collectively, “Waste Products”), including
(without limitation) the separation of Waste Products into receptacles
reasonably approved by Landlord and the removal of such receptacles in
accordance with any collection schedules prescribed by Waste Regulations.

23. Tenant, at Tenant’s sole cost and expense, shall cause the Premises to be
exterminated to Landlord’s reasonable satisfaction and shall cause all portions
of the Premises used for the storage, preparation, service or consumption of
food or beverages to be cleaned daily in a manner reasonably satisfactory to
Landlord, and to be treated against infestation by insects, rodents and other
vermin and pests whenever there is evidence of any infestation. Tenant shall not
permit any person to enter the Premises or the Project for the purpose of
providing such extermination services, unless such persons have been approved by
Landlord. If requested by Landlord, Tenant shall, at Tenant’s sole cost and
expense, store any refuse generated in the Premises by the consumption of food
or beverages in a cold box or similar facility.

24. If Tenant desires to use any portion of the Common Area for a Tenant-related
event, Tenant must notify Landlord in writing at least thirty (30) days prior to
such event on the form attached as Attachment 1 to this Exhibit, which use shall
be subject to Landlord’s prior written consent, not to be unreasonably withheld,
conditioned or delayed. Notwithstanding anything in this Lease or the completed
and executed Attachment to the contrary, Tenant shall be solely responsible for
setting up and taking down any equipment or other materials required for the
event, and shall promptly pick up any litter and report any property damage to
Landlord related to the event. Any use of the Common Area pursuant to this
Section shall be subject to the provisions of Article 28 of the Lease.

Landlord may waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or any
other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Project, including Tenant.
These Rules and Regulations are in addition to, and shall not be construed to in
any way modify or amend, in whole or in part, the terms covenants, agreements
and conditions of the Lease. Landlord reserves the right to make such other and
reasonable

 

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additional rules and regulations as, in its judgment, may from time to time be
needed for safety and security, the care and cleanliness of the Project, or the
preservation of good order therein; provided, however, that Tenant shall not be
obligated to adhere to such additional rules or regulations until Landlord has
provided Tenant with written notice thereof. Tenant agrees to abide by these
Rules and Regulations and any such additional rules and regulations issued or
adopted by Landlord. Tenant shall be responsible for the observance of these
Rules and Regulations by all Tenant Parties.

 

F-4

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ATTACHMENT 1 TO EXHIBIT F

REQUEST FOR USE OF COMMON AREA

REQUEST FOR USE OF COMMON AREA

 

Date of Request:

 

Landlord/Owner:

 

Tenant/Requestor:

 

Property Location:

 

Event Description:

 

 

 

Proposed Plan for Security & Cleaning:

 

 

 

Date of Event:

 

Hours of Event: (to include set-up and take down):

 

Location at Property (see attached map):

 

Number of Attendees:

 

Open to the Public?     ¨  YES    ¨   NO

Food and/or Beverages?     ¨  YES    ¨   NO

If YES:

•       Will food be prepared on site?

    ¨  YES    ¨   NO

•       Please describe:

 

•       Will alcohol be served?

    ¨  YES    ¨   NO

•       Please describe:

 

•       Will attendees be charged for alcohol?

    ¨  YES    ¨  NO

 

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•       Is alcohol license or permit required?

    ¨  YES    ¨   NO

•       Does caterer have alcohol license or permit:

    ¨  YES    ¨  NO    ¨  N/A

Other Amenities (tent, booths, band, food trucks, bounce house, etc.):

 

 

 

 

Other Event Details or Special Circumstances:

 

 

 

 

 

The undersigned certifies that the foregoing is true, accurate and complete and
he/she is duly authorized to sign and submit this request on behalf of the
Tenant/Requestor named above.

 

CARBYLAN THERAPEUTICS, INC.,

a Delaware corporation

By:

 

Name:

 

Title:

 

Date:

 

 

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EXHIBIT G

INTENTIONALLY OMITTED

 

G-1

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EXHIBIT H

TENANT’S PROPERTY

 

H-1

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EXHIBIT I

FORM OF ESTOPPEL CERTIFICATE

 

To: BMR-Pacific Research Center LP

17190 Bernardo Center Drive

San Diego, California 92128

Attention: Vice President, Real Estate Legal

BioMed Realty, L.P.

17190 Bernardo Center Drive

San Diego, California 92128

 

Re: Suite [                    ] (the “Premises”) at 7333-7999 Gateway
Boulevard, Newark, California (the “Property”)

The undersigned tenant (“Tenant”) hereby certifies to you as follows:

1. Tenant is a tenant at the Property under a lease (the “Lease”) for the
Premises dated as of [            ], 20[    ]. The Lease has not been cancelled,
modified, assigned, extended or amended [except as follows:
[                    ]], and there are no other agreements, written or oral,
affecting or relating to Tenant’s lease of the Premises or any other space at
the Property. The lease term expires on [            ], 20[    ].

2. Tenant took possession of the Premises, currently consisting of
[                    ] square feet, on [            ], 20[    ], and commenced
to pay rent on [            ], 20[    ]. Tenant has full possession of the
Premises, has not assigned the Lease or sublet any part of the Premises, and
does not hold the Premises under an assignment or sublease[, except as follows:
[                    ]].

3. All base rent, rent escalations and additional rent under the Lease have been
paid through [            ], 20[    ]. There is no prepaid rent[, except
$[        ]][, and the amount of security deposit is $[        ] [in
cash][OR][in the form of a letter of credit]]. Tenant currently has no right to
any future rent abatement under the Lease.

4. Base rent is currently payable in the amount of $[        ] per month.

5. Tenant is currently paying estimated payments of additional rent of
$[        ] per month on account of real estate taxes, insurance, management
fees and Common Area maintenance expenses.

6. All work to be performed for Tenant under the Lease has been performed as
required under the Lease and has been accepted by Tenant[, except
[                    ]], and all allowances to be paid to Tenant, including
allowances for tenant improvements, moving expenses or other items, have been
paid.

 

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7. The Lease is in full force and effect, and to Tenant’s knowledge, free from
default and free from any event that could become a default under the Lease, and
Tenant has no claims against the landlord or offsets or defenses against rent,
and there are no disputes with the landlord. Tenant has received no notice of
prior sale, transfer, assignment, hypothecation or pledge of the Lease or of the
rents payable thereunder[, except [                    ]].

8. [Tenant has the following expansion rights or options for leasing additional
space at the Property: [                    ].][OR][Tenant has no rights or
options to purchase the Property.]

9. To Tenant’s knowledge, no hazardous wastes have been generated, treated,
stored or disposed of by or on behalf of Tenant in, on or around the Premises or
the Project in violation of any environmental laws.

10. The undersigned has executed this Estoppel Certificate with the knowledge
and understanding that [INSERT NAME OF LANDLORD, PURCHASER OR LENDER, AS
APPROPRIATE] or its assignee is [acquiring the Property/making a loan secured by
the Property] in reliance on this certificate and that the undersigned shall be
bound by this certificate. The statements contained herein may be relied upon by
[INSERT NAME OF PURCHASER OR LENDER, AS APPROPRIATE], [LANDLORD], BioMed Realty,
L.P., BioMed Realty Trust, Inc., and any [other] mortgagee of the Property and
their respective successors and assigns.

Any capitalized terms not defined herein shall have the respective meanings
given in the Lease.

Dated this [    ] day of [            ], 20[    ].

CARBYLAN THERAPEUTICS, INC.,

a Delaware corporation

 

By:

 

Name:

 

Title:

 

 

I-2