Exhibit 10.28

 

OFFICE LEASE

 

This Office Lease (this “Lease”), dated January 8, 2020, by and between BRE CA
OFFICE OWNER LLC, a Delaware limited liability company (“Landlord”), and KURA
ONCOLOGY, INC., a Delaware corporation (“Tenant”).  The following exhibits are
incorporated herein and made a part hereof:  Exhibit A (Outline of Premises);
Exhibit A-1 (Legal Description of Property); Exhibit B (Expenses and Taxes);
Exhibit C (Work Letter); Exhibit D (Form of Confirmation Letter); Exhibit E
(Rules and Regulations); Exhibit F (Additional Provisions); and Exhibit G
(Judicial Reference).

1BASIC LEASE INFORMATION.

1.1Premises.

1.1.1“Building”:  12730 High Bluff Drive, San Diego, California 92130, commonly
known as Highlands Corporate Center.

1.1.2“Premises”:  13,420 rentable square feet of space located on the 4th floor
of the Building and commonly known as Suite 400, the outline and location of
which is set forth in Exhibit A.  If the Premises include any floor in its
entirety, all corridors and restroom facilities located on such floor shall be
considered part of the Premises.

1.1.3“Property”:  The Building, the parcel(s) of land upon which it is located,
and, at Landlord’s discretion, any parking facilities and other improvements
serving the Building and the parcel(s) of land upon which such parking
facilities and other improvements are located.

1.1.4“Project”:  The Property or, at Landlord’s discretion, any project
containing the Property and any other land, buildings or other improvements.

1.2Term.

1.2.1The term of this Lease (the “Term”) shall begin on the Commencement Date
and expire on the Expiration Date (or any earlier date on which this Lease is
terminated as provided herein).

1.2.2“Commencement Date” means May 1, 2020.  Notwithstanding anything to the
contrary contained herein, Tenant shall have the right to commence business from
the Premises during the period, if any (the “Beneficial Occupancy Period”) from
the date of substanital completion of the Tenant Improvements in the Premises
until the Commencement Date, provided that (i) Tenant shall give Landlord at
least ten (10) days prior notice of any such occupancy of the Premises, (ii) a
certificate of occupancy (or its equivalent) shall have been issued by the
appropriate governmental authorities for the Premises, and (iii) all of the
terms and conditions of this Lease shall apply, including Tenant’s obligations
to pay parking fees pursuant to Section 1 of Exhibit F below, during the
Beneficial Occupancy Period (if any), except that Tenant’s obligation to pay
monthly Base Rent and any Expenses or Taxes shall not apply during the
Beneficial Occupancy Period.

1.2.3“Expiration Date”: The last day of the 64th full calendar month beginning
on or after the Commencement Date.

1.3“Base Rent”

 

Period of Term

Monthly Base Rent

Annual Base Rent Rate/RSF

Commencement Date - Last day of the 12th full calendar month of the Term

$57,706.00

$51.60

First day of the 13th full calendar month of the Term - Last day of the 24th
full calendar month of the Term

$59,439.42

$53.15

First day of the 25th full calendar month of the Term - Last day of the 36th
full calendar month of the Term

$61,217.57

$54.74

First day of the 37th full calendar month of the Term - Last day of the 48th
full calendar month of the Term

$63,051.63

$56.38

First day of the 49th full calendar month of the Term - Last day of the 60th
full calendar month of the Term

$64,952.80

$58.08

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First day of the 61st full calendar month of the Term - Last day of the 64th
full calendar month of the Term

$66,898.70

$59.82

 

Notwithstanding the foregoing, Base Rent shall be abated (the “Abated Base
Rent”), in the amount of  $57,706.00 per month, for the period commencing on the
first day of the 2nd full calendar month of the Term and ending on the last day
of the 5th full calendar month of the Term (the “Abatement Period”); provided,
however, that if a Default (defined in Section 18.1) exists when any such
abatement would otherwise apply, such abatement shall be deferred until the
date, if any, on which such Default is cured.

1.4“Base Year” means calendar year 2020.

1.5“Tenant’s Share” means 22.4014% (based upon a total of 59,907 rentable square
feet in the Building). 

1.6“Permitted Use” means general office use consistent with a first-class office
building.

1.7“Security Deposit” means $66,897.07, as more particularly described in
Section 20.  The amount of the Prepaid Base Rent (defined in Section 3) is
$57,706.00.

1.8Parking.  During the initial Term, Tenant shall have the right to use (a) 45
unreserved parking space(s), at the rate of $0.00 per space per month (as such
rate may be adjusted from time to time to reflect Landlord’s then current rate),
and (b)  5 reserved parking space(s), at locations designated by Landlord and at
the rate of $100.00 per space per month (as such rate may be adjusted from time
to time to reflect Landlord’s then current rate).

1.9Address of Tenant.  Before the Commencement Date, notices shall be sent to
Tenant at:  c/o CBRE, Inc., 400 South Hope Street, 25th Floor, Los Angeles,
CA  90071, Attention: Gregg Pasternack, Senior Vice President.  On and after the
Commencement Date, notices shall be sent to Tenant at the Premises.

1.10Address of Landlord.  Notices shall be sent to Landlord at BRE CA Office
Owner LLC, c/o EQ Office, 6080 Center Drive, Suite 120, Los Angeles, CA 90045,
Attention: Regional Finance Group - MLA, with copies to BRE CA Office Owner LLC,
c/o EQ Office, 3100 Bristol Street, Suite 200, Costa Mesa, California 92626,
Attention: Senior Corporate Counsel, and BRE CA Office Owner LLC, c/o EQ Office,
233 South Wacker Drive, Suite 4700, Chicago, Illinois 60606 – 6374, Attention:
Lease Administration.

1.11Brokers.  Sean Fitzmaurice, CBRE, 4301 La Jolla Village Drive, San Diego, CA
92122 (“Tenant’s Broker”), representing Tenant, and Mike Hoeck, CBRE, 4301 La
Jolla Village Drive, San Diego, CA 92122 (“Landlord’s Broker”), representing
Landlord.

1.12Guarantor.  As of the date hereof, there is no Guarantor.

2PREMISES AND COMMON AREAS.

2.1The Premises.

2.1.1Subject to the terms hereof, Landlord hereby leases the Premises to Tenant
and Tenant hereby leases the Premises from Landlord.  Landlord and Tenant
acknowledge that the rentable area of the Premises is as set forth in
Section 1.1.2 and the rentable area of the Building is as set forth in
Section 1.1.3. At any time, Landlord may deliver to Tenant a notice
substantially in the form of Exhibit D, as a confirmation of the information set
forth therein.  Tenant shall execute and return (or, by notice to Landlord,
reasonably object to) such notice within 10 business days after receiving it.

2.1.2Except as expressly provided herein, the Premises are accepted by Tenant in
their “as is”, “where is” configuration and condition existing on the date
hereof (or in such other configuration and condition as any existing tenant of
the Premises may cause to exist in accordance with its lease), without any
obligation of Landlord to perform or pay for any alterations to the Premises,
and without any representation or warranty regarding the configuration or
condition of the Premises, the Building or the Project or their suitability for
Tenant’s business.

2.1.3This Lease is solely a lease of space in the Building and does not
constitute a lease of any land.

2.2Common Areas.  Tenant may use, in common with Landlord and other parties and
subject to the Rules and Regulations (defined in Exhibit E), any portions of the
Property that are designated from time to time by Landlord for such use (the
“Common Areas”).

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2.3Exclusive Patio Area.  If Landlord is able to obtain all required
governmental permits and approvals, and any approvals required under applicable
covenants, conditions and restrictions, Landlord shall construct, at Landlord’s
sole cost and expense, a patio extending out from the fourth (4th) floor of the
Building on the east-facing side of the Premises (the “Patio Area”) pursuant to
plans and specifications determined by Landlord.  Landlord shall use its
good-faith, commercially resonable and diligent efforts to obtain the necessary
permits and approvals, but Landlord makes no representation or warranty as to
whether Landlord will be successful in obtaining such permits and approvals, and
if Landlord is unable to obtain such permits and approvals, Landlord shall not
be subject to any liability for its failure to do so, the Commencement Date
shall not be delayed, and such failure shall not affect the validity of this
Lease nor the obligations of Tenant hereunder; provided that Tenant shall be
provided with one-and-a-half (1.5) months of additional Abated Base Rent, which
additional abatement shall be applied immediately after the Abatement Period
referenced in Section 1.3 above.  If constructed, the Patio Area shall be for
Tenant’s exclusive use, and shall be deemed part of the Premises for all
purposes except for calculation of the rentable square footage set forth in
Section 1.1.2 above.  Accordingly, all of Tenant’s obligations under this Lease
with regard to the interior Premises shall extend to the Patio Area, including,
without limitation, Tenant’s insurance, indemnity, repair and maintenance
obligations.  If Landlord obtains all required permits and approvals, Landlord
shall use commercially reasonable efforts to complete the Patio Area prior to
the Commencement Date; however if Landlord is unable to complete the Patio Area
prior to the Commencement Date, Landlord shall not be subject to any liability
for its failure to do so, the Commencement Date shall not be delayed, and such
failure shall not affect the validity of this Lease nor the obligations of
Tenant hereunder.  Landlord and Tenant hereby acknowledge that if Landlord
obtains all required permits and approvals, Landlord may be constructing the
Patio Area during Tenant’s construction of the Tenant Improvement Work pursuant
to the Work Letter attached hereto as Exhibit C. In such case, Landlord and
Tenant shall reasonably cooperate and coordinate Landlord’s work on the Patio
Area with Tenant’s completion of the Tenant Improvement Work.  Tenant further
acknowledges that any work necessary to provide ingress and egress between the
Premises and the Patio Area shall be performed by Tenant as part of the Tenant
Improvement Work under Exhibit C.

3RENT.

3.1General.  Tenant shall pay all Base Rent and Additional Rent (defined below)
(collectively, “Rent”) to Landlord or Landlord’s agent, without prior notice or
demand (except to the extent expressly provided herein) or any setoff or
deduction, at the place Landlord may designate from time to time, in money of
the United States of America that, at the time of payment, is legal tender for
the payment of all obligations.  “Additional Rent” means all amounts, other than
Base Rent, that Tenant is required to pay Landlord hereunder.  Monthly payments
of Base Rent and monthly payments of Additional Rent for Expenses (defined in
Exhibit B), Taxes (defined in Exhibit B) and parking (collectively, “Monthly
Rent”) shall be paid in advance on or before the first day of each calendar
month during the Term; provided, however, that the installment of Base Rent for
the first full calendar month for which Base Rent is payable hereunder (“Prepaid
Base Rent”) shall be paid upon Tenant’s execution and delivery hereof.  Except
as otherwise provided herein, all other items of Additional Rent shall be paid
within 30 days after Landlord’s request for payment.  Rent for any partial
calendar month shall be prorated based on the actual number of days in such
month.  Without limiting Landlord’s other rights or remedies, (a) if any payment
of Rent is not received by Landlord or its designee within 5 business days after
its due date, Tenant shall pay Landlord a late charge equal to 5% of the overdue
amount; and (b) any Rent that is not paid within 10 days after its due date
shall bear interest, from its due date until paid, at the lesser of 10% per
annum or the highest rate permitted by Law (defined in Section 4).  Tenant’s
covenant to pay Rent is independent of every other covenant
herein.  Notwithstanding the foregoing, Tenant shall be entitled to notice and
the expiration of a five (5) day cure period prior to imposition of any late
charge or interest charge under this Section 3.1 one (1) time per calendar year;
after such written notice has been provided to Tenant in a calendar year, Tenant
shall not be entitled to any further notice prior to imposition of a late charge
or interest under this Section 3.1 in such calendar year. 

3.2Expenses and Taxes.  Tenant shall pay Tenant’s Share of Expenses and Taxes in
accordance with Exhibit B.

4USE; COMPLIANCE WITH LAWS.  Tenant shall not (a) use the Premises for any
purpose other than the Permitted Use, or (b) do anything in or about the
Premises that violates any of the Rules and Regulations, unreasonably interferes
with, injures or annoys other occupants of the Project, or constitutes a
nuisance.  Tenant, at its expense, shall comply with all Laws relating to
(i) the operation of its business at the Project, (ii) the use, condition,
configuration or occupancy of the Premises, (iii) any Supplemental Systems
(defined below) serving the Premises, whether located inside or outside of the
Premises, or (iv) the portions of Base Building Systems (defined below) located
in or exclusively serving the Premises.  If, in order to comply with any such
Law, Tenant must obtain or deliver any permit, certificate or other document
evidencing such compliance, Tenant shall provide a copy of such document to
Landlord promptly after obtaining or delivering it.  Tenant shall promptly
provide Landlord with a copy of any notice it receives regarding any alleged
violation of Law with respect to the Premises or Tenant’s use or occupancy
thereof.  Except to the extent compliance with applicable Laws is the
responsibility of Tenant under this

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Lease, Landlord shall comply with all applicable Laws relating to the Base
Building and the Common Areas, but Landlord shall only have such responsibility
if Landlord’s failure to comply therewith would prohibit Tenant from obtaining
or maintaining a certifiate of occupancy (or its equivalent) for the Premises,
or would unreasonably and materially affect the safety of Tenant’s employees or
create a significant health hazard for Tenant’s employees.  If a change to the
Common Areas or the Base Building (defined below) (other than any portion of a
Base Building System located in or exclusively serving the Premises, which shall
be governed by the second sentence of this Section 4) becomes required under Law
(or if any such requirement is enforced) as a result of any Tenant-Insured
Improvement (defined in Section 9.2.2) which is not typical for general office
use, the installation of any trade fixture, any particular use of the Premises
(as distinguished from general office use), any “assembly occupancy” of the
Premises or any breach of Tenant’s obligations under this Lease, then Tenant,
upon demand, shall pay Landlord the cost of making such change.  “Law” means any
existing or future law, ordinance, regulation or requirement of any governmental
authority having jurisdiction over the Project or the parties.  “Supplemental
System” means any Unit (defined in Section 23.5), supplemental fire-suppression
system, kitchen (including any hot water heater, dishwasher, garbage disposal,
insta-hot dispenser, or plumbing), shower or similar facility, or any other
system that would not customarily be considered part of the base building of a
first-class multi-tenant office building.  “Base Building System” means any
mechanical (including HVAC), electrical, plumbing or fire/life-safety system
serving the Building, other than a Supplemental System.  “Base Building” means
the structural portions of the Building, together with the Base Building
Systems.

5SERVICES.

5.1Standard Services.  Landlord shall provide the following services on all days
(unless otherwise stated below):  (a) subject to limitations imposed by Law,
Building-standard heating, ventilation and air conditioning (“HVAC”) in season
during Building HVAC Hours (defined below), stubbed to the Premises;
(b) electricity supplied by the applicable public utility, stubbed to the
Premises; (c) water supplied by the applicable public utility (i) for use in
lavatories and any drinking facilities located in Common Areas within the
Building, and (ii) stubbed to the Building core for use in any plumbing fixtures
located in the Premises; (d) janitorial services to the Premises, except on
weekends and Holidays (defined below); (e) elevator service (subject to
scheduling by Landlord, and payment of Landlord’s standard usage fee, for any
freight service); and (f) access to the Building for Tenant and its employees,
24 hours per day/7 days per week, subject to the terms hereof and such security
or monitoring systems as Landlord may reasonably impose, including sign-in
procedures and/or presentation of identification cards.  To the extent
reasonably determined by Landlord to be practicable, all electricity provided
under Section 5.1(b) above (including, without limitation, electricity in order
to power the heating, ventilation and air conditioning system serving the
Premises), shall be separately metered or submetered at Tenant’s expense (and
such meter or submeter may be installed as part of the Tenant Improvements) and
Tenant shall make payment directly to the entity providing such electricity to
the Premises if such separate meters are installed.  If, however, separate
meters are not installed and the Premises are submetered or are jointly metered,
then Landlord shall determine and Tenant shall pay the amount reasonably
determined by Landlord to be Tenant’s equitable share of the monthly charge for
such electricity, as Additional Rent.  “Building HVAC Hours” means 8:00 a.m. to
6:00 p.m., Monday through Friday, and 9:00 a.m. to 1:00 p.m. on Saturday,
excluding the day of observation of New Year’s Day, Presidents Day, Memorial
Day, Independence Day, Labor Day, Thanksgiving Day, Christmas Day, and, at
Landlord’s discretion, any other locally or nationally recognized holiday that
is observed by other Comparable Buildings (defined in Section 23.9)
(collectively, “Holidays”).  If Landlord, at Tenant’s request, provides any
service not expressly required hereunder, Tenant shall pay Landlord the
reasonable cost thereof.

5.2Above-Standard Use.  Landlord shall provide Building-standard HVAC service
outside of Building HVAC Hours if Tenant gives Landlord reasonable prior notice
thereof and pays Landlord’s standard charge therefor, which standard charge is
currently $35.00 per hour for the entire Premises, and which charge shall only
increase to the extent Landlord reasonably determines that Landlord’s acutal
cost to provide such services increases.  The connected electrical load of
Tenant’s incidental-use equipment shall not exceed the Building-standard
electrical design load or be distributed within the Premises in a manner that
violates applicable Law.  If Tenant’s consumption of electricity or water
exceeds the rate Landlord reasonably deems to be standard for the Building,
Tenant shall pay Landlord, upon billing, the cost of such excess consumption,
including any costs of installing, operating and maintaining any equipment that
is installed in order to supply or measure such excess electricity or water.

5.3Interruption.  Subject to this Section 5.3 and Section 10, any failure to
furnish, delay in furnishing, or diminution in the quality or quantity of any
service resulting from any application of Law, failure of equipment, performance
of maintenance, repairs, improvements or alterations, utility interruption, or
event of Force Majeure (each, a “Service Interruption”) shall not render
Landlord liable to Tenant, constitute a constructive eviction, or excuse Tenant
from any obligation hereunder.  Notwithstanding the foregoing, an “Abatement
Event” shall be defined as an event that prevents Tenant from using the Premises
or any portion thereof, as a result of any failure to provide services or access
to the Premises, where (a) such event is within Landlord’s reasonable control,
(b) Tenant does not actually use the Premises or such portion thereof, and
(c) such event is not caused by the negligence or willful misconduct of Tenant,

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its agents, employees or contractors.  Tenant shall give Landlord notice
(“Abatement Notice”) of any such Abatement Event, and if such Abatement Event
continues beyond the “Eligibility Period” (as that term is defined below), then
the Base Rent and Tenant’s Share of Expenses and Taxes shall be abated entirely
or reduced, as the case may be, after expiration of the Eligibility Period for
such time that Tenant continues to be so prevented from using, and does not use,
the Premises or a portion thereof, in the proportion that the rentable area of
the portion of the Premises that Tenant is prevented from using, and does not
use, bears to the total rentable area of the Premises.  The term “Eligibility
Period” shall mean a period of five (5) consecutive business days after
Landlord’s receipt of any Abatement Notice(s).  Such right to abate Base Rent
and Tenant’s Share of Expenses and Taxes shall be Tenant’s sole and exclusive
remedy at law or in equity for an Abatement Event.  If a fire or other casualty
results in Tenant’s inability to use the Premises or a portion thereof, the
terms and conditions of Section 10 below shall apply rather than this
Section 5.3.

6REPAIRS AND ALTERATIONS.

6.1Repairs.  Subject to Section 10, Tenant, at its expense, shall perform all
maintenance and repairs (including replacements) to the Premises, and keep the
Premises in as good condition and repair as existed when Tenant took possession
and as thereafter improved, except for reasonable wear and tear and repairs that
are Landlord’s express responsibility hereunder.  Tenant’s maintenance and
repair obligations shall include (a) all leasehold improvements in the Premises,
including any Tenant Improvements (defined in Exhibit C, if any), any
Alterations (defined in Section 6.2), and any leasehold improvements installed
pursuant to any prior lease (the “Leasehold Improvements”), but excluding the
Base Building; (b) any Supplemental Systems serving the Premises, whether
located inside or outside of the Premises; and (c) all Lines (defined in
Section 22) and trade fixtures.  Notwithstanding the foregoing, if a Default
(defined in Section 18.1) or an emergency exists, Landlord may, at its option,
perform such maintenance and repairs on Tenant’s behalf, in which case Tenant
shall pay Landlord, upon demand, the cost of such work.  Landlord shall perform
all maintenance and repairs to (i) the roof and exterior walls and windows of
the Building, (ii) the Base Building, and (iii) the Common Areas.

6.2Alterations.  Tenant may not make any improvement, alteration, addition or
change to the Premises or to any mechanical, plumbing or HVAC facility or other
system (an “Alteration”) without Landlord’s prior consent, which consent shall
not be unreasonably withheld by Landlord.  Notwithstanding the foregoing,
Landlord’s prior consent shall not be required for any Alteration that is
decorative only (e.g., carpet installation or painting), is not visible from
outside the Premises, and does not affect the Base Building or require a
governmental permit (a “Cosmetic Alteration”).  For any Alteration other than a
Cosmetic Alteration, (a) Tenant, before beginning work, shall deliver to
Landlord, and obtain Landlord’s approval of, plans and specifications;
(b) Landlord, in its discretion, may require Tenant to obtain security for
performance satisfactory to Landlord; (c) Tenant shall deliver to Landlord “as
built” drawings (in CAD format, if requested by Landlord), completion
affidavits, and governmental approvals; and (d) Tenant shall pay Landlord upon
demand (i) Landlord’s reasonable out-of-pocket expenses incurred in reviewing
the work, and (ii) a coordination fee equal to 3% of the cost of the work;
provided, however, that this clause (d) shall not apply to any Tenant
Improvements.  For any Alteration, Tenant shall deliver to Landlord full and
final lien waivers.

6.3Tenant Work.  Before beginning any repair or Alteration or any work affecting
Lines (collectively, “Tenant Work”), Tenant shall deliver to Landlord, and
obtain Landlord’s approval of, (a) names of contractors, subcontractors,
mechanics, laborers and materialmen; (b) evidence of contractors’ and
subcontractors’ insurance; and (c) any required governmental permits. Such
approval shall not be unreasonably withheld provided that Landlord may designate
specific contractors for work relating to mechanical, electrical, plumbing,
HVAC, fire/life-safety and sprinkler systems and for vertical Lines (provided
that, to the extent reasonably feasible, more than one contractor per trade is
named, or, if only one contractor is available, such contractor is available to
perform the work for a commercially reasonable cost).  Tenant shall perform all
Tenant Work (i) in a good and workmanlike manner using materials of a quality
reasonably approved by Landlord; (ii) in compliance with any approved plans and
specifications and any approved modifications thereto, all Laws, the National
Electric Code, and Landlord’s reasonable construction rules and regulations; and
(iii) in a manner that does not impair the Base Building.  Tenant shall notify
Landlord at least 15 business days before commencing any work in the Premises. 
If, as a result of any Tenant Work, Landlord becomes required under Law to
perform any inspection, give any notice, or cause such Tenant Work to be
performed in any particular manner, Tenant shall comply with such requirement
and promptly provide Landlord with reasonable documentation of such compliance. 
Landlord’s approval of Tenant’s plans and specifications shall not relieve
Tenant from any obligation under this Section 6.3.  In performing any Tenant
Work, Tenant shall not use contractors, services, labor, materials or equipment
that, in Landlord’s reasonable judgment, would cause labor disharmony with any
workforce or trades engaged in performing other work or services at the Project,
and Tenant shall take all actions necessary to resolve any such labor
disharmony, including, promptly upon Landlord’s request, termination of any work
in the Premises giving rise to such labor disharmony.

7LANDLORD’S PROPERTY.  All Leasehold Improvements shall become Landlord’s
property upon installation and without compensation to Tenant.  Notwithstanding
the foregoing, if any Tenant-

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Insured Improvements (other than any Unit, which shall be governed by
Section 23.5) are not, in Landlord’s reasonable judgment, Building-standard,
then if Landlord notifies Tenant of such requirement at the time consent to such
Alterations is granted, then before the expiration or earlier termination
hereof, Tenant shall, at Landlord’s election, either (a) at Tenant’s expense,
and except as otherwise notified by Landlord, remove such Tenant-Insured
Improvements, repair any resulting damage to the Premises or Building, and
restore the affected portion of the Premises to its configuration and condition
existing before the installation of such Tenant-Insured Improvements (or, at
Landlord’s election, to a Building-standard tenant-improved configuration and
condition as determined by Landlord), or (b) pay Landlord an amount equal to the
estimated cost of such work, as reasonably determined by Landlord.  If Tenant
fails to timely perform any work required under clause (a) of the preceding
sentence, Landlord may perform such work at Tenant’s expense.

8LIENS. Tenant shall keep the Project free from any lien arising out of any work
performed, material furnished or obligation incurred by or on behalf of Tenant
or its subtenants or transferees.  Tenant shall remove any such lien within
10 business days after notice from Landlord, and if Tenant fails to do so,
Tenant shall be deemed in Default under this Lease, and in addition, Landlord,
without limiting its remedies, may bond, insure over or otherwise pay the amount
necessary to cause such removal, whether or not such lien is valid.  The amount
so paid, together with reasonable attorneys’ fees and expenses, shall be
reimbursed by Tenant upon demand.

9INDEMNIFICATION; INSURANCE.

9.1Waiver and Indemnification.  Tenant waives all claims against Landlord, its
Security Holders (defined in Section 16), Landlord’s managing agent(s), their
(direct or indirect) owners, and the beneficiaries, trustees, managers, members,
principals, partners, officers, directors, employees and agents of each of the
foregoing (including Landlord, the “Landlord Parties”) for (i) any damage to
person or property (or resulting from the loss of use thereof), except (subject
to Section 9.4) to the extent such damage is caused by any negligence, willful
misconduct or breach of this Lease of or by any Landlord Party, or (ii) any
failure to prevent or control any criminal or otherwise wrongful conduct by any
third party or to apprehend any third party who has engaged in such conduct. 
Tenant shall indemnify, defend, protect, and hold the Landlord Parties harmless
from and against any obligation, loss, claim, action, liability, penalty,
damage, cost, charge or expense (including reasonable attorneys’ and
consultants’ fees and expenses) (each, a “Claim”) that is imposed or asserted by
any third party and arises from (a) any cause occurring in, on or about the
Premises, or (b) any negligence, willful misconduct or breach of this Lease of
or by Tenant, any party claiming by, through or under Tenant, their (direct or
indirect) owners, or any of their respective beneficiaries, trustees, managers,
members, principals, partners, officers, directors, employees, agents,
contractors, licensees or invitees (each, an “Act of Tenant”), except to the
extent such Claim arises from any negligence, willful misconduct or breach of
this Lease of or by any Landlord Party.  Landlord shall indemnify, defend,
protect, and hold Tenant, its (direct or indirect) owners, and their respective
beneficiaries, trustees, managers, members, principals, partners, officers,
directors, employees and agents harmless from any Claim that is imposed or
asserted by any third party and arises from any negligence, willful misconduct
or breach of this Lease of or by any Landlord Party, except to the extent such
Claim arises from any Act of Tenant (including any breach of any obligation of
Tenant, under Section 4 or 6.3 or any other provision hereof, to cause or pay
for any such compliance).

9.2Tenant’s Insurance.  Tenant shall maintain the following coverages in the
following amounts:

9.2.1Commercial General Liability Insurance covering claims of bodily injury,
personal injury and property damage arising out of Tenant’s operations and
contractual liabilities, including coverage formerly known as broad form, on an
occurrence basis, with combined primary and excess/umbrella limits of at least
$3,000,000 each occurrence and $4,000,000 annual aggregate.

9.2.2Property Insurance covering (i) all office furniture, trade fixtures,
office equipment, free-standing cabinet work, movable partitions, merchandise
and all other items of Tenant’s property in the Premises installed by, for, or
at the expense of Tenant, and (ii) any Leasehold Improvements installed by or
for the benefit of Tenant, whether pursuant to this Lease or pursuant to any
prior lease or other agreement to which Tenant was a party (“Tenant-Insured
Improvements”).  Such insurance shall be written on a special cause of loss or
all risk form for physical loss or damage, for the full replacement cost value
(subject to reasonable deductible amounts) new without deduction for
depreciation of the covered items and in amounts that meet any co-insurance
clauses of the policies of insurance, and shall include coverage for damage or
other loss caused by fire or other peril, including vandalism and malicious
mischief, theft, water damage of any type, including sprinkler leakage, bursting
or stoppage of pipes, and explosion, and providing business interruption
coverage for a period of one year.

9.2.3Workers’ Compensation with limits required by statute and Employers’
Liability limits of $1,000,000.

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9.3Form of Policies.  The minimum limits of insurance required to be carried by
Tenant shall not limit Tenant’s liability.  Such insurance shall be issued by an
insurance company that has an A.M. Best rating of not less than A-VIII. 
Tenant’s Commercial General Liability Insurance shall (a) name the Landlord
Parties and any other party reasonably designated by Landlord (“Additional
Insured Parties”) as additional insureds; and (b) be primary insurance as to all
claims thereunder and provide that any insurance carried by Landlord is excess
and non-contributing with Tenant’s insurance.  Landlord shall be designated as a
loss payee with respect to Tenant’s Property Insurance on any Tenant-Insured
Improvements.  Tenant shall deliver to Landlord, on or before the Commencement
Date and at least 15 days before the expiration dates thereof, certificates from
Tenant’s insurance company on the forms currently designated “ACORD 25”
(Certificate of Liability Insurance) and “ACORD 28” (Evidence of Commercial
Property Insurance) or the equivalent.  Attached to the ACORD 25 (or equivalent)
there shall be an endorsement (or an excerpt from the policy) naming the
Additional Insured Parties as additional insureds, and attached to the ACORD 28
(or equivalent) there shall be an endorsement (or an excerpt from the policy)
designating Landlord as a loss payee with respect to Tenant’s Property Insurance
on any Tenant-Insured Improvements, and each such endorsement (or policy
excerpt) shall be binding on Tenant’s insurance company.

9.4Subrogation.  Subject to Section 10, each party waives, and shall cause its
insurance carrier to waive, any right of recovery against the other party, any
of its (direct or indirect) owners, or any of their respective beneficiaries,
trustees, managers, members, principals, partners, officers, directors,
employees or agents for any loss of or damage to property which loss or damage
is (or, if the insurance required hereunder had been carried, would have been)
covered by the waiving party’s property insurance.  For purposes of this
Section 9.4 only, (a) any deductible with respect to a party’s insurance shall
be deemed covered by, and recoverable by such party under, valid and collectable
policies of insurance, and (b) any contractor retained by Landlord to install,
maintain or monitor a fire or security alarm for the Building shall be deemed an
agent of Landlord.

9.5Landlord’s Insurance. Landlord shall maintain the following insurance,
together with such other insurance coverage as Landlord, in its reasonable
judgment, may elect to maintain (collectively, “Landlord’s Insurance”), the
premiums of which will be included in Expenses:  (1) Commercial General
Liability insurance applicable to the Property, Building and Common Areas
providing, on an occurrence basis, combined primary and excess/umbrella limits
of at least $3,000,000.00 each occurrence and $4,000,000 annual aggregate; and
(2) All Risk Property Insurance or special cause of loss insurance on the
Building at replacement cost value as reasonably estimated by Landlord.

10CASUALTY DAMAGE.  With reasonable promptness after discovering any damage to
the Premises (other than trade fixtures), or to any Common Area or portion of
the Base Building necessary for access to or tenantability of the Premises,
resulting from any fire or other casualty (a “Casualty”), Landlord shall notify
Tenant of Landlord’s reasonable estimate of the time required to substantially
complete repair of such damage (the “Landlord Repairs”).  If, according to such
estimate, the Landlord Repairs cannot be substantially completed within 270 days
after they are commenced, either party may terminate this Lease upon 60 days’
notice to the other party delivered within 10 days after Landlord’s delivery of
such estimate.  Within 90 days after discovering any damage to the Project
resulting from any Casualty, Landlord may, whether or not the Premises are
affected, terminate this Lease by notifying Tenant if (i) any Security Holder
terminates any ground lease or requires that any insurance proceeds be used to
pay any mortgage debt; (ii) any damage to Landlord’s property is not fully
covered by Landlord’s insurance policies; (iii) Landlord decides to rebuild the
Building or Common Areas so that it or they will be substantially different
structurally or architecturally, or (iv) the damage occurs during the last 12
months of the Term.  Tenant may terminate this Lease, by notifying Landlord
within 30 days after receiving Landlord’s estimate of the time required to
substantially complete the Landlord Repairs, if (a) the Casualty has occurred
during the last 12 months of the Term and has damaged a material portion of the
Premises, and (b) such estimate indicates that the damage cannot reasonably be
repaired within 60 days after Tenant’s receipt of such estimate.  If this Lease
is not terminated pursuant to this Section 10, Landlord shall promptly and
diligently perform the Landlord Repairs, subject to reasonable delays for
insurance adjustment and other events of Force Majeure.  The Landlord Repairs
shall restore the Premises (other than trade fixtures) and any Common Area or
portion of the Base Building necessary for access to or tenantability of the
Premises to substantially the same condition that existed when the Casualty
occurred, except for (a) any modifications required by Law or any Security
Holder, and (b) any modifications to the Common Areas that are deemed desirable
by Landlord, are consistent with the character of the Project, and do not
materially impair access to or tenantability of the Premises.  Notwithstanding
Section 9.4, Tenant shall assign to Landlord (or its designee) all insurance
proceeds payable to Tenant under Tenant’s insurance required under Section 9.2
with respect to any Tenant-Insured Improvements (the “Assigned Tenant
Proceeds”), and if the estimated or actual cost of restoring any Tenant-Insured
Improvements exceeds the Assigned Tenant Proceeds received by Landlord, Tenant
shall pay such excess to Landlord (the “Tenant Excess”) within 15 days after
Landlord’s demand.  In no event shall Landlord be required to spend more for the
restoration of any Tenant-Insured Improvements than the applicable Assigned
Tenant Proceeds and Tenant Excess (if any) actually received by Landlord.  No
Casualty and no restoration performed as required hereunder shall render
Landlord liable to Tenant, constitute a constructive eviction, or excuse Tenant
from any obligation

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hereunder; provided, however, that if the Premises (other than trade fixtures)
or any Common Area or portion of the Base Building necessary for access to or
tenantability of the Premises is damaged by a Casualty, then, during any time
that, as a result of such damage, any portion of the Premises is inaccessible or
untenantable and is not occupied by Tenant, Monthly Rent shall be abated in
proportion to the rentable area of such portion of the Premises; provided that
if a portion of the Premises is damaged such that the remaining portion thereof
is not sufficient to allow Tenant to conduct its business operations from such
remaining portion, Tenant shall be entitled to a total abatement of Rent during
the time and to the extent the Premises are unfit for occupancy for the purposes
permitted by this Lease and are not occupied by Tenant.

11NONWAIVER.  No provision hereof shall be deemed waived by either party unless
it is waived by such party expressly and in writing, and no waiver of any breach
of any provision hereof shall be deemed a waiver of any subsequent breach of
such provision or any other provision hereof.  Landlord’s acceptance of Rent
shall not be deemed a waiver of any preceding breach of any provision hereof,
other than Tenant’s failure to pay the particular Rent so accepted, regardless
of Landlord’s knowledge of such preceding breach at the time of such
acceptance.  Any acceptance by Landlord of payment of less than the full amount
of Rent due hereunder shall not be deemed a waiver of Landlord’s right to
receive the full amount of Rent due and shall be applied first to the oldest
Rent obligation then due and next to any current Rent obligation then due, in
each case notwithstanding any statement to the contrary contained on or
accompanying such payment from Tenant.  No receipt of monies by Landlord from
Tenant after the giving of any notice, the commencement of any suit, the
issuance of any final judgment, or the termination hereof shall affect such
notice, suit or judgment, or reinstate or extend the Term or Tenant’s right of
possession hereunder.

12CONDEMNATION.  If any part of the Premises, Building or Project is to be taken
for any public or quasi-public use by power of eminent domain or by private
purchase in lieu thereof (a “Taking”) for more than 180 consecutive days,
Landlord may terminate this Lease.  If more than 25% of the rentable area of the
Premises, or if any Common Area or portion of the Base Building necessary for
access to or tenantability of the Premises, is to be Taken for more than
180 consecutive days, Tenant may terminate this Lease.  Any such termination
shall be effective as of the date possession must be surrendered to the
authority, and the terminating party shall provide termination notice to the
other party within 45 days after receiving written notice of such surrender
date.  Except as provided above in this Section 12, neither party may terminate
this Lease as a result of a Taking.  Tenant shall not assert, and hereby assigns
to Landlord, any claim it may have for compensation because of any Taking;
provided, however, that Tenant may file a separate claim for any Taking of
Tenant’s personal property or any trade fixtures that Tenant is entitled to
remove upon the expiration hereof, and for moving expenses, so long as such
claim does not diminish the award available to Landlord or any Security Holder
and is payable separately to Tenant.  If this Lease is terminated pursuant to
this Section 12, all Rent shall be apportioned as of the date of such
termination.  If a Taking occurs and this Lease is not so terminated, Monthly
Rent shall be abated for the period of such Taking in proportion to the
percentage of the rentable area of the Premises, if any, that is subject to, or
rendered inaccessible or untenantable by, such Taking and not occupied by
Tenant.

13ASSIGNMENT AND SUBLETTING.

13.1Transfers.  Tenant shall not, without  Landlord’s prior consent (subject to
Sections 13.2 and 13.8), assign, mortgage, pledge, hypothecate, encumber, permit
any lien to attach to, or otherwise transfer this Lease or any interest
hereunder, permit any assignment or other transfer hereof or any interest
hereunder by operation of law, enter into any sublease, otherwise permit the
occupancy or use of any part of the Premises by any persons other than Tenant
and its employees and contractors (each, a “Transfer”).  For clarity, no
transfer of Tenant’s equity including, without limitation, any common or
preferred stock sales (whether conducted on a stock exchange or otherwise),
tender offers, new issuances, buy-backs or mergers whereby Tenant is the
surviving entity, shall be deemed a Transfer hereunder.  If Tenant desires
Landlord’s consent to any Transfer, Tenant shall provide Landlord with
(i) notice of the terms of the proposed Transfer, including its proposed
effective date (the “Contemplated Effective Date”), a description of the portion
of the Premises to be transferred (the “Contemplated Transfer Space”), a
calculation of the Transfer Premium (defined in Section 13.3), and a copy of all
existing executed and/or proposed documentation effecting the proposed Transfer,
and (ii) current financial statements of the proposed transferee certified by an
officer or owner thereof and any other information reasonably required by
Landlord in order to evaluate the proposed Transfer (collectively, the “Transfer
Notice”).  Within 30 days after receiving the Transfer Notice, Landlord shall
notify Tenant of (a) its consent to the proposed Transfer, (b) its refusal to
consent to the proposed Transfer or (c) its exercise of its rights under
Section 13.4.  If Landlord fails to so respond in writing to Tenant within said
30 day period, Tenant may send a second written notice (“Deemed Response
Notice”) to Landlord with such information and indicating that such Deemed
Response Notice is being delivered pursuant to Article 13 of this Lease. 
Landlord’s failure to withhold its consent by written notice to Tenant within
five (5) business days after Landlord’s receipt of a properly delivered Deemed
Response Notice shall be deemed to constitute Landlord’s consent to such
Transfer.  Any Transfer made without Landlord’s prior consent shall, at
Landlord’s option, be void and shall, at Landlord’s option, constitute a
Default.  Tenant shall pay Landlord a fee of $1,500.00 for Landlord’s review of
any proposed Transfer, whether or not Landlord consents to it.  No review fee
shall be payable in connection with a Permitted

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Transfer (defined in Section 13.8 below), provided Landlord is not required to
modify this Lease or execute any documents in connection with such Permitted
Transfer.

13.2Landlord’s Consent.  Subject to Section 13.4, Landlord shall not
unreasonably withhold its consent to any proposed Transfer.  Without limitation,
it shall be deemed reasonable for Landlord to withhold its consent to a proposed
Transfer if (i) the proposed transferee is a governmental entity or a nonprofit
organization, or is engaged in a business that is not consistent with the
quality of the Building; or (ii) the proposed transferee or any of its
Affiliates, on the date the Transfer Notice is received, leases or occupies (or,
at any time during the 6-month period ending on the date the Transfer Notice is
received, has negotiated with Landlord or an Affiliate of Landlord to lease)
space in the Project, provided Landlord has suitable alternative space available
in the Project.  Notwithstanding any contrary provision hereof, (a) if Landlord
consents to any Transfer pursuant to this Section 13.2 but Tenant does not enter
into such Transfer within 6 months thereafter, such consent shall no longer
apply and such Transfer shall not be permitted unless Tenant again obtains
Landlord’s consent thereto pursuant and subject to the terms of this Section 13;
and (b) if Landlord withholds its consent in breach of this Section 13.2,
Tenant’s sole remedies shall be contract damages (subject to Section 19) or
specific performance, and Tenant waives all other remedies, including any right
to terminate this Lease.

13.3Transfer Premium.  If Landlord consents to a Transfer, Tenant shall pay
Landlord an amount equal to 50% of any Transfer Premium (defined below). 
“Transfer Premium” means (a) in the case of an assignment, any consideration
(including payment for Leasehold Improvements) paid by the assignee for such
assignment, and (b) in the case of a sublease, license or other occupancy
agreement, for each month of the term of such agreement, the amount by which all
rent and other consideration paid by the transferee to Tenant pursuant to such
agreement exceeds the Monthly Rent payable by Tenant hereunder with respect to
the Contemplated Transfer Space.  In any event, the Transfer Premium shall be
calculated after deducting the reasonable expenses incurred by Tenant for (i)
any changes, alterations and improvements to the Premises paid for by Tenant and
approved by Landlord in connection with the Transfer, (ii) any other
out-of-pocket monetary concessions provided by Tenant to the Transferee, and
(iii) any brokerage commissions paid for by Tenant in connection with the
Transfer.  Payment of Landlord’s share of the Transfer Premium shall be made
(x) in the case of an assignment, within 10 business days after Tenant receives
the consideration described above, and (y) in the case of a sublease, license or
other occupancy agreement, for each month of the term of such agreement, within
10 business days after Tenant receives the rent and other consideration
described above.  

13.4Landlord’s Right to Recapture.  Notwithstanding any contrary provision
hereof, except in the case of a Permitted Transfer (defined in Section 13.8), in
the event of an assignment of this Lease or a sublease of all or a portion of
the Premises for all or substantially all of the remainder of the Term,
Landlord, by notifying Tenant within 30 days after receiving the Transfer
Notice, may terminate this Lease with respect to the Contemplated Transfer Space
as of the Contemplated Effective Date.  If the Contemplated Transfer Space is
less than the entire Premises, then Base Rent, Tenant’s Share, and the number of
parking spaces (if any) to which Tenant is entitled under Section 1.8 shall be
deemed adjusted on the basis of the percentage of the rentable area of the
portion of the Premises retained by Tenant.  Upon request of either party, the
parties shall execute a written agreement prepared by Landlord memorializing
such termination.

13.5Effect of Consent.  If Landlord consents to a Transfer, (i) such consent
shall not be deemed a consent to any further Transfer, (ii) Tenant shall deliver
to Landlord, promptly after execution, an executed copy of all documentation
effecting the Transfer in form reasonably acceptable to Landlord, and
(iii) Tenant shall deliver to Landlord, upon Landlord’s request, a complete
statement, certified by an independent CPA or Tenant’s chief financial officer,
setting forth in detail the computation of any Transfer Premium.  In the case of
an assignment, the assignee shall assume in writing, for Landlord’s benefit, all
of Tenant’s obligations hereunder.  No Transfer, with or without Landlord’s
consent, shall relieve Tenant or any guarantor hereof from any liability
hereunder.  Notwithstanding any contrary provision hereof, Tenant, with or
without Landlord’s consent, shall not enter into, or permit any party claiming
by, through or under Tenant to enter into, any sublease, license or other
occupancy agreement that provides for payment based in whole or in part on the
net income or profit of the subtenant, licensee or other occupant thereunder.

13.6Intentionally Deleted. 

13.7Effect of Default.  If Tenant is in Default, Landlord is irrevocably
authorized, as Tenant’s agent, to direct any transferee under any sublease,
license or other occupancy agreement to make all payments under such agreement
directly to Landlord (which Landlord shall apply towards Tenant’s obligations
hereunder) until such Default is cured.  However, by accepting such payments
directly from the subtenant, Landlord does not waive any claims or release
Tenant from any obligations hereunder, nor recognize the subtenant as the tenant
hereunder.  Such transferee shall rely upon any representation by Landlord that
Tenant is in Default, whether or not confirmed by Tenant.

13.8Permitted Transfers.  “Affiliate” means, with respect to any party, a person
or entity that controls, is under common control with, or is controlled by such
party.  “Control” means the direct or

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indirect power to direct the ordinary management and policies of an entity,
whether through the ownership of voting securities, by contract or
otherwise.    Tenant may (i) assign this Lease to a successor to Tenant by
merger, consolidation, or the purchase of all or substantially all of Tenant’s
assets, or (ii) assign this Lease to an Affiliate, in each case without
Landlord’s consent, provided that all of the following conditions are satisfied
(a “Permitted Transfer”):  (a) Tenant must not be in Default; (b) Tenant must
give Landlord written notice at least 5 business days before such Transfer; (c)
if such Transfer will result from a merger or consolidation of Tenant with
another entity, or the purchase of all or substantially all of Tenant’s assets
by another entity where Tenant will not be the surviving entity to the merger,
then the Credit Requirement (defined below) must be satisfied; and (d) in the
case of an assignment of this Lease other than pursuant to a merger or
consolidation, the assignee must execute and deliver to Landlord, at least 5
business days before the assignment, a commercially reasonable instrument
pursuant to which the assignee assumes, for Landlord’s benefit, all of Tenant’s
obligations hereunder.  Tenant’s notice to Landlord shall include information
and documentation evidencing the Permitted Transfer and showing that each of the
above conditions has been satisfied.  The “Credit Requirement” shall be deemed
satisfied if, as of the date immediately succeeding the date of the Permitted
Transfer, the financial strength of either (a) the entity with which Tenant is
to merge or consolidate in the event of a merger or consolidation, or (b) the
entity which is purchasing all or substantially all of Tenant’s assets in the
event of a sale of all or substantially all of Tenant’s assets, is not less than
that of Tenant as of the date immediately preceding the Transfer as determined
(x) based on credit ratings of such entity and Tenant by both Moody’s and
Standard & Poor’s (or by either such agency alone, if applicable ratings by the
other agency do not exist), or (y) if such credit ratings do not exist, then in
accordance with Moody’s KMV RiskCalc (i.e., the on-line software tool offered by
Moody’s for analyzing credit risk) based on CFO-certified financial statements
for such entity and Tenant covering their last two fiscal years ending before
the Transfer.

14SURRENDER.  Upon the expiration or earlier termination hereof, and subject to
Sections 7 and 10 and this Section 14, Tenant shall surrender possession of the
Premises to Landlord in broom clean good condition and repair, except for
reasonable wear and tear and repairs that are Landlord’s express responsibility
hereunder.  Before such expiration or termination, Tenant, without expense to
Landlord, shall (a) remove from the Premises all debris and rubbish and all
furniture, equipment, trade fixtures, Lines, free-standing cabinet work, movable
partitions and other articles of personal property that are owned or placed in
the Premises by Tenant or any party claiming by, through or under Tenant (except
for any Lines not required to be removed under Section 22), and (b) repair all
damage to the Premises and Building resulting from such removal.  If Tenant
fails to timely perform such removal and repair, Landlord may do so at Tenant’s
expense (including storage costs).  If Tenant fails to remove such property from
the Premises, or from storage, within 30 days after notice from Landlord, any
part of such property shall be deemed, at Landlord’s option, either (x) conveyed
to Landlord without compensation, or (y) abandoned.

15HOLDOVER.  If Tenant fails to surrender the Premises upon the expiration or
earlier termination hereof, Tenant’s tenancy shall be subject to the terms and
conditions hereof; provided, however, that such tenancy shall be a tenancy at
sufferance only, for the entire Premises, and Tenant shall pay Monthly Rent (on
a per-month basis without reduction for any partial month) at a rate equal to
150% of the Monthly Rent applicable during the last calendar month of the Term. 
Nothing in this Section 15 shall be deemed a consent to any holdover or limit
Landlord’s rights or remedies.  If Landlord is unable to deliver possession of
the Premises to, or perform improvements for, a new tenant as a result of
Tenant’s holdover, and such holdover exceeds 30 days in length, Tenant shall be
liable for all resulting damages, including lost profits, incurred by Landlord.

16SUBORDINATION; ESTOPPEL CERTIFICATES. This Lease shall be subject and
subordinate to all existing and future ground or underlying leases, mortgages,
trust deeds and other encumbrances against the Building or Project, all
renewals, extensions, modifications, refinancings, consolidations and
replacements thereof (each, a “Security Agreement”), and all advances made upon
the security of such mortgages or trust deeds, unless in each case the holder of
such Security Agreement (each, a “Security Holder”) requires in writing that
this Lease be superior thereto.  In consideration of, and as a condition
precedent to, Tenant’s agreement to permit its interest pursuant to this Lease
to be subordinated to any particular future ground or underlying lease of the
Building or the Project or to the lien of any first mortgage or trust deed,
hereafter enforced against the Building or the Project and to any renewals,
extensions, modifications, consolidations and replacements thereof, Landlord
shall deliver to Tenant a commercially reasonable non-disturbance agreement
executed by the landlord under such ground lease or underlying lease or the
holder of such mortgage or trust deed, as appropriate.   Upon any termination or
foreclosure (or any delivery of a deed in lieu of foreclosure) of any Security
Agreement, Tenant, upon request, shall attorn, without deduction or set-off, to
the Security Holder or purchaser or any successor thereto and shall recognize
such party as the lessor hereunder provided that such party agrees not to
disturb Tenant’s occupancy so long as Tenant timely pays the Rent and otherwise
performs its obligations hereunder.  Within 10 business days after Landlord’s
request, Tenant shall execute such further commercially reasonable instruments
as Landlord or any Security Holder may reasonably deem necessary to evidence the
subordination or superiority of this Lease to any Security Agreement.  Tenant
waives any right it may have under Law to terminate or otherwise adversely
affect this Lease or Tenant’s obligations hereunder upon a foreclosure.  Within
10 business days after Landlord’s request, Tenant shall execute and

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deliver to Landlord a commercially reasonable estoppel certificate in favor of
such parties as Landlord may reasonably designate, including current and
prospective Security Holders and prospective purchasers.

17ENTRY BY LANDLORD.  At all reasonable times and upon reasonable prior written
notice to Tenant, or in an emergency, Landlord may enter the Premises to
(i) inspect the Premises; (ii) show the Premises to prospective purchasers,
current or prospective Security Holders or insurers, or, during the last
12 months of the Term (or while an uncured Default exists), prospective tenants;
(iii) post notices of non-responsibility; or (iv) perform maintenance, repairs
or alterations.  Notwithstanding the foregoing, at any time and without notice
to Tenant, Landlord may enter the Premises to perform janitorial or other
required services.  If reasonably necessary, Landlord may temporarily close any
portion of the Premises to perform maintenance, repairs or alterations.  In an
emergency, Landlord may use any means it deems proper to open doors to and in
the Premises.  Except in an emergency, Landlord shall use reasonable efforts
(except Landlord shall not be obligated to pay overtime rates for which Tenant
does not agree to reimburse Landlord) to minimize interference with Tenant’s use
of the Premises.  Landlord shall also use reasonable efforts to comply with
Tenant’s reasonable security procedures for which Landlord has prior notice.  No
entry into or closure of any portion of the Premises pursuant to this Section 17
shall render Landlord liable to Tenant, constitute a constructive eviction, or
excuse Tenant from any obligation hereunder.

18DEFAULTS; REMEDIES.

18.1Events of Default.  The occurrence of any of the following shall constitute
a “Default”:

18.1.1Any failure by Tenant to pay any Rent (or deliver any security deposit,
letter of credit, or similar credit enhancement required hereunder) when due
unless such failure is cured within 5 business days after notice; or

18.1.2Except where a specific time period is otherwise set forth for Tenant’s
cure herein (in which event Tenant’s failure to cure within such time period
shall be a Default), and except as otherwise provided in this Section 18.1, any
breach by Tenant of any other provision hereof where such breach continues for
30 days after notice from Landlord; provided that if such breach cannot
reasonably be cured within such 30-day period, Tenant shall not be in Default as
a result of such breach if Tenant diligently commences such cure within such
period, thereafter diligently pursues such cure, and completes such cure within
90 days after Landlord’s notice; or

18.1.3Any breach by Tenant of Section 16 or 17 where such breach continues for
more than 2 business days after written notice from Landlord; or

18.1.4Tenant becomes in breach of Section 23.3(c) or (d).

 

The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by Law, and Landlord shall not be required to give any
additional notice in order to be entitled to commence an unlawful detainer
proceeding.

18.2Remedies Upon Default.  Upon any Default, Landlord shall have, in addition
to any other remedies available to Landlord at law or in equity (which shall be
cumulative and nonexclusive), the option to pursue any one or more of the
following remedies (which shall be cumulative and nonexclusive) without any
notice or demand:

18.2.1Landlord may terminate this Lease, in which case Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy it may have for possession or arrearages
in Rent, enter upon and take possession of the Premises and expel or remove
Tenant and any other person who may be occupying the Premises or any part
thereof, without being liable for prosecution or any claim of damages therefor;
and Landlord may recover from Tenant the following:

(a)The worth at the time of award of the unpaid Rent which had been earned at
the time of such termination; plus

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

(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 the amount of such Rent loss
that Tenant proves could be reasonably avoided; plus

(d)Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant’s failure to perform its obligations hereunder or
which in the ordinary course

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of things would be likely to result therefrom, including brokerage commissions,
advertising expenses, expenses of remodeling any portion of the Premises for a
new tenant (whether for the same or a different use), and any special
concessions made to obtain a new tenant; plus

(e)At Landlord’s option, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by Law.

As used in Sections (a) and (b), the “worth at the time of award” shall be
computed by allowing interest at a rate per annum equal to the lesser of (i) the
annual “Bank Prime Loan” rate cited in the Federal Reserve Statistical Release
Publication G.13(415), published on the first Tuesday of each calendar month (or
such other comparable index as Landlord shall reasonably designate if such rate
ceases to be published) plus two (2) percentage points, or (ii) the highest rate
permitted by Law.  As used in Section (c), the “worth at the time of award”
shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus 1%. 

18.2.2Landlord shall have the remedy described in California Civil Code § 1951.4
(lessor may continue lease in effect after lessee’s breach and abandonment and
recover Rent as it becomes due, if lessee has the right to sublet or assign,
subject only to reasonable limitations).  Accordingly, if Landlord does not
elect to terminate this Lease on account of any default by Tenant, Landlord may,
from time to time, without terminating this Lease, enforce all of its rights and
remedies hereunder, including the right to recover all Rent as it becomes due.

18.2.3Landlord shall at all times have the rights and remedies (which shall be
cumulative with each other and cumulative and in addition to those rights and
remedies available under Sections 18.2.1 and 18.2.2, or any Law or other
provision hereof), without prior demand or notice except as required by Law, to
seek any declaratory, injunctive or other equitable relief, and specifically
enforce this Lease, or restrain or enjoin a violation or breach of any provision
hereof.

18.2.4If Tenant is in Default of any of its non-monetary obligations under this
Lease, Landlord shall have the right to perform such obligations.  Tenant shall
reimburse Landlord for the cost of such performance upon demand together with an
administrative charge equal to 10% of the cost of the work performed by
Landlord.  The repossession or re-entering of all or any part of the Premises
shall not relieve Tenant of its liabilities and obligations under this Lease. 
No right or remedy of Landlord shall be exclusive of any other right or remedy. 
Each right and remedy shall be cumulative and in addition to any other right and
remedy now or subsequently available to Landlord at Law or in equity.

18.3Efforts to Relet.  Unless Landlord provides Tenant with express notice to
the contrary, no re-entry, repossession, repair, maintenance, change,
alteration, addition, reletting, appointment of a receiver or other action or
omission by Landlord shall (a) be construed as an election by Landlord to
terminate this Lease or Tenant’s right to possession, or to accept a surrender
of the Premises, or (b) operate to release Tenant from any of its obligations
hereunder.  Tenant waives, for Tenant and for all those claiming by, through or
under Tenant,  California Civil Code § 3275, California Code of Civil Procedure
§§ 1174(c) and 1179, and any existing or future rights to redeem or reinstate,
by order or judgment of any court or by any legal process or writ, this Lease or
Tenant’s right of occupancy of the Premises after any termination hereof.

19LANDLORD EXCULPATION.  Notwithstanding any contrary provision hereof,
(a) Tenant shall look solely to Landlord’s interest in the Building for the
recovery of any judgment or award against any Landlord Party; (b) no Landlord
Party shall have any personal liability for any judgment or deficiency, and
Tenant waives and releases such personal liability on behalf of itself and all
parties claiming by, through or under Tenant; and (c) no Landlord Party shall be
liable for any loss of profits, loss of rents or other revenues, loss of
business opportunity, loss of goodwill or loss of use, or for any form of
special, indirect or consequential damages.

20SECURITY DEPOSIT.  Concurrently with its execution and delivery hereof, Tenant
shall deposit with Landlord the Security Deposit, if any, as security for
Tenant’s performance of its obligations hereunder.  Upon and during a Default
hereunder, Landlord may, at its option, without limiting its remedies and
without notice to Tenant, apply all or part of the Security Deposit to cure such
Default and compensate Landlord for any loss or damage caused by such Default,
including any loss of rent that would have accrued after the date of
termination, including any damage for which recovery may be made under
California Civil Code § 1951.2.  If Landlord so applies any portion of the
Security Deposit, Tenant, within 3 days after demand therefor, shall restore the
Security Deposit to its original amount.  The Security Deposit is not an advance
payment of Rent or measure of damages.  Any unapplied portion of the Security
Deposit shall be returned to Tenant within 30 days after the latest to occur of
(a) the expiration of the Term, (b) Tenant’s surrender of the Premises as
required hereunder, or (c) determination of the final Rent due from Tenant;
provided, however, that Tenant hereby authorizes Landlord to withhold from the
Security Deposit all amounts allowed by Law and any amount reasonably
anticipated by Landlord to be owed by Tenant under Section 4.1 of Exhibit B with
respect to the final Expense Year.  Landlord shall not be required to keep the
Security Deposit separate from its other accounts or pay interest on the
Security Deposit.  To the fullest

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extent permitted by applicable Law, Tenant agrees that the provisions of this
Section 20 shall supersede and replace all statutory rights of Tenant under
applicable Law regarding the retention, application or return of security
deposits.

21INTENTIONALLY DELETED.

22COMMUNICATIONS AND COMPUTER LINES.  All Lines installed pursuant to this Lease
shall be (a) installed in accordance with Section 6 and (b) clearly marked with
adhesive plastic labels (or plastic tags attached to such Lines with wire) to
show Tenant’s name, suite number, and the purpose of such Lines (i) every 6 feet
outside the Premises (including the electrical room risers and any Common
Areas), and (ii) at their termination points.  Sufficient spare cables and space
for additional cables shall be maintained for other occupants, as reasonably
determined by Landlord.  Unless otherwise notified by Landlord at least 30 days
prior to the expiration of the Term, Tenant, at its expense and before the
expiration or earlier termination hereof, shall remove all Lines and repair any
resulting damage.  “Lines” means all communications or computer wires and cables
serving the Premises, whenever and by whomever installed or paid for, including
any wires or cables installed pursuant to any prior lease.

23MISCELLANEOUS.

23.1Notices.  No notice, demand, statement, designation, request, consent,
approval, election or other communication given hereunder (“Notice”) shall be
binding upon either party unless (a) it is in writing; (b) it is (i) sent by
certified or registered mail, postage prepaid, return receipt requested,
(ii) delivered by a nationally recognized courier service, or (iii) delivered
personally; and (c) it is sent or delivered to the address set forth in
Section 1.9 or 1.10, as applicable, or to such other place (other than a
P.O. box) as the recipient may from time to time designate in a Notice to the
other party.  Any Notice shall be deemed received on the earlier of the date of
actual delivery or the date on which delivery is refused, or, if Tenant is the
recipient and has vacated its notice address without providing a new notice
address, 3 days after the date the Notice is deposited in the U.S. mail or with
a courier service as described above.  No provision of this Lease requiring a
particular Notice to be in writing shall limit the generality of clause (a) of
the first sentence of this Section 23.1  In addition, if the Building is closed,
then notices sent during such closure may be sent via e-mail or in any other
practical manner reasonably designed to ensure receipt by the intended
recipient. 

23.2Force Majeure.  If either party is prevented from performing any obligation
hereunder by any strike, act of God, war, terrorist act, shortage of labor or
materials, governmental action, civil commotion, pandemic or other cause beyond
such party’s reasonable control (“Force Majeure”), such obligation shall be
excused during (and any time period for the performance of such obligation shall
be extended by) the period of such prevention; provided, however, that this
Section 23.2 shall not (a) permit Tenant to hold over in the Premises after the
expiration or earlier termination hereof, or (b) excuse (or extend any time
period for the performance of) (i) any obligation to remit money or deliver
credit enhancement, or (ii) any obligation under Section 9 or 23.3

23.3Representations and Covenants.  Tenant represents, warrants and covenants
that (a) Tenant is, and at all times during the Term will remain, duly
organized, validly existing and in good standing under the Laws of the state of
its formation and qualified to do business in the state or commonwealth in which
the Building is located; (b) neither Tenant’s execution of nor its performance
under this Lease will cause Tenant to be in violation of any agreement or Law;
(c) Tenant (and any guarantor hereof) has not, and at no time during the Term
will have, (i) made a general assignment for the benefit of creditors,
(ii) filed a voluntary petition in bankruptcy or otherwise sought relief with
respect to its debts under any Law relating to bankruptcy or insolvency, (iii)
suffered or sought the appointment of a receiver or other similar official to
take possession of all or substantially all of its assets, (iv) suffered (A) the
filing by creditors of an involuntary petition in bankruptcy that is not
dismissed within 30 days, or (B) the attachment or other judicial seizure of all
or substantially all of its assets, (v) admitted in writing its inability to pay
its debts as they come due, or (vi) made an offer of settlement, extension or
composition to its creditors generally; and (d) no party that (other than
through the passive ownership of interests traded on a recognized securities
exchange) constitutes, owns, controls, or is owned or controlled by Tenant, any
guarantor hereof or any subtenant of Tenant, is or at any time during the Term
will be, (i) in violation of any Laws relating to terrorism or money laundering,
or (ii) among the parties identified on any list compiled pursuant to Executive
Order 13224 for the purpose of identifying suspected terrorists or on the most
current list published by the U.S. Treasury Department Office of Foreign Assets
Control at its official website,
http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx or
any replacement website or other replacement official publication of such list.

23.4Signs.  Landlord shall include Tenant’s name in any tenant directory located
in the lobby on the first floor of the Building.  If any part of the Premises is
located on a multi-tenant floor, Landlord, at Tenant’s cost, shall provide
identifying suite signage for Tenant comparable to that provided by Landlord on
similar floors in the Building.  Tenant may not install (a) any signs outside
the Premises, or (b) without Landlord’s prior consent in its sole and absolute
discretion, any signs, window coverings, blinds or similar

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items that are visible from outside the Premises.  Notwithstanding the
foregoing, subject to this Section 23.4, Tenant shall be entitled to install, at
its sole cost and expense, one (1) building top sign on the side of the Building
facing south (“Signage”).  The graphics, materials, size, color, design,
lettering, lighting (if any), specifications and exact location of the Signage
(collectively, the “Signage Specifications”) shall be subject to the prior
written approval of Landlord, which approval shall not be unreasonably
withheld.  In addition, the Signage and all Signage Specifications therefore
shall be subject to Tenant’s receipt of all required governmental permits and
approvals, shall be subject to all applicable governmental laws and ordinances,
and all covenants, conditions and restrictions affecting the Building.  Tenant
hereby acknowledges that, notwithstanding Landlord’s approval of the Signage
and/or the Signage Specifications therefor, Landlord has made no representations
or warranty to Tenant with respect to the probability of obtaining such
approvals and permits.  In the event Tenant does not receive the necessary
permits and approvals for the Signage, Tenant’s and Landlord’s rights and
obligations under the remaining provisions of this Lease shall not be affected. 
The cost of installation of the Signage, as well as all costs of design and
construction of such Signage and all other costs associated with such Signage,
including, without limitation, permits, maintenance and repair, shall be the
sole responsibility of Tenant.  Notwithstanding anything to the contrary
contained herein, in the event that at any time during the Term of this Lease
(or any Option Term, if applicable), Tenant fails to occupy at least 75% of the
Premises, Tenant’s right to the Signage shall thereupon terminate and Tenant
shall remove such Signage as provided in this Section 23.4 below.  The rights to
the Signage shall be personal to the originally named Tenant and an assignee
under a Permitted Transfer, and may not be otherwise transferred.  Should the
Signage require maintenance or repairs as determined in Landlord’s reasonable
judgment, Landlord shall have the right to provide written notice thereof to
Tenant and Tenant shall cause such repairs and/or maintenance to be performed
within thirty (30) days after receipt of such notice from Landlord at Tenant’s
sole cost and expense.  Should Tenant fail to perform such maintenance and
repairs within the period described in the immediately preceding sentence,
Landlord shall have the right to cause such work to be performed and to charge
Tenant, as Additional Rent, for the cost of such work.  Upon the expiration or
earlier termination of this Lease (or the termination of Tenant’s Signage right
as described above), Tenant shall, at Tenant’s sole cost and expense, cause the
Signage to be removed from the exterior of the Building and shall cause the
exterior of the Building to be restored to the condition existing prior to the
placement of such Signage.  If Tenant fails to remove such Signage and to
restore the exterior of the Building as provided in the immediately preceding
sentence within thirty (30) days following the expiration or earlier termination
of this Lease (or the termination of Tenant’s Signage as provided above), then
Landlord may perform such work, and all costs and expenses incurred by Landlord
in so performing such work shall be reimbursed by Tenant to Landlord within ten
(10) days after Tenant’s receipt of invoice therefor.  The immediately preceding
sentence shall survive the expiration or earlier termination of this Lease. 

23.5Supplemental HVAC.  If the Premises are served by any supplemental HVAC unit
(a “Unit”), then (a) Tenant shall pay the costs of all electricity consumed in
the Unit’s operation, together with the cost of installing a meter to measure
such consumption; (b) Tenant, at its expense, shall (i) operate and maintain the
Unit in compliance with all applicable Laws and such reasonable rules and
procedures as Landlord may impose; and (ii) keep the Unit in as good working
order and condition as existed upon installation (or, if later, when Tenant took
possession of the Premises), subject to normal wear and tear and damage
resulting from Casualty; (c) the Unit shall become Landlord’s property upon
installation and without compensation to Tenant; provided, however, that upon
Landlord’s request at the expiration or earlier termination hereof, Tenant, at
its expense, shall remove the Unit and repair any resulting damage (and if
Tenant fails to timely perform such work, Landlord may do so at Tenant’s
expense); (d) the Unit shall be deemed (i) a Leasehold Improvement (except for
purposes of Section 7), and (ii) for purposes of Section 10, part of the
Premises; (e) if the Unit exists on the date of mutual execution and delivery
hereof, Tenant accepts the Unit in its “as is” condition, without representation
or warranty as to quality, condition, fitness for use or any other matter;
(f) if the Unit connects to the Building’s condenser water loop (if any), then
Tenant shall pay to Landlord, as Additional Rent, Landlord’s standard one-time
fee for such connection and Landlord’s standard monthly per-ton usage fee; and
(g) if any portion of the Unit is located on the roof, then (i) Tenant’s access
to the roof shall be subject to such reasonable rules and procedures as Landlord
may impose; (ii) Tenant shall maintain the affected portion of the roof in a
clean and orderly condition and shall not interfere with use of the roof by
Landlord or any other tenants or licensees; and (iii) Landlord may relocate the
Unit and/or temporarily interrupt its operation, without liability to Tenant, as
reasonably necessary to maintain and repair the roof or otherwise operate the
Building.

23.6Attorneys’ Fees.  In any action or proceeding between the parties, including
any appellate or alternative dispute resolution proceeding, the prevailing party
may recover from the other party all of its costs and expenses in connection
therewith, including reasonable attorneys’ fees and costs.  Tenant shall pay all
reasonable attorneys’ fees and other fees and costs that Landlord incurs in
protecting its rights hereunder in any bankruptcy case, assignment for the
benefit of creditors, or other insolvency, liquidation or reorganization
proceeding involving Tenant or this Lease.

23.7Brokers.  Tenant represents to Landlord that it has dealt only with Tenant’s
Broker as its broker, agent or finder in connection with this Lease.  Tenant
shall indemnify, defend, and hold the Landlord Parties harmless from all claims
of any brokers, agents or finders other than Tenant’s Broker, claiming to have

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represented Tenant in connection with this Lease.  Landlord shall indemnify,
defend and hold Tenant harmless from all claims of any brokers, agents or
finders, including Landlord’s Broker, claiming to have represented Landlord in
connection with this Lease.  Tenant acknowledges that any Affiliate of Landlord
that is involved in the negotiation of this Lease is representing only Landlord,
and that any assistance rendered by any agent or employee of such Affiliate in
connection with this Lease or any subsequent amendment or other document related
hereto has been or will be rendered as an accommodation to Tenant solely in
furtherance of consummating the transaction on behalf of Landlord, and not as
agent for Tenant.

23.8Governing Law; WAIVER OF TRIAL BY JURY.  This Lease shall be construed and
enforced in accordance with the Laws of the state or commonwealth in which the
Building is located and Landlord and Tenant hereby irrevocably consent to the
jurisdiction and proper venue of such state or commonwealth.  THE PARTIES WAIVE,
TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY
LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM
FOR INJURY OR DAMAGE OR ANY EMERGENCY OR STATUTORY REMEDY.

23.9Interpretation.  The capitalized term “Section” refers to a section hereof
unless otherwise specifically provided herein.  As used in this Lease, the terms
“herein,” “hereof,” “hereto” and “hereunder” refer to this Lease and the term
“include” and its derivatives are not limiting.  Any reference herein to “any
part” or “any portion” of the Premises, the Property or any other property shall
be construed to refer to all or any part of such property.  In connection with
insurance, the term “deductible” includes self-insured retention.  Wherever this
Lease requires Landlord to act in a reasonable manner (whether in incurring an
expense, establishing a rule or regulation, providing an approval or consent, or
performing any other act), the reasonableness of such act shall be determined by
reference to the practices of owners of buildings (“Comparable Buildings”) that
(i) are comparable to the Building in size, age, class, quality and location,
and (ii) at Landlord’s option, have been, or are being prepared to be, certified
under the U.S. Green Building Council’s Leadership in Energy and Environmental
Design (LEED) rating system or a similar rating system.  Wherever this Lease
prohibits either party from engaging in any particular conduct, this Lease shall
be deemed also to require such party to cause each of its employees and agents
(and, in the case of Tenant, each of its licensees, invitees and subtenants, and
any other party claiming by, through or under Tenant) to refrain from engaging
in such conduct.  Tenant waives the benefit of any rule that a written agreement
shall be construed against the drafting party.

23.10Entire Agreement.  This Lease sets forth the entire agreement between the
parties relating to the subject matter hereof and supersedes any previous
agreements (none of which shall be used to interpret this Lease).  Tenant
acknowledges that in entering into this Lease it has not relied upon any
representation, warranty or statement, whether oral or written, not expressly
set forth herein.  This Lease can be modified only by a written agreement signed
by both parties.

23.11Unrelated Business Income.  If Landlord is advised by its counsel at any
time that any part of the payments by Tenant to Landlord under this Lease may be
characterized as unrelated business income under the United States Internal
Revenue Code and its regulations, then Tenant shall enter into any amendment
proposed by Landlord to avoid such income, so long as the amendment does not
require Tenant to make more payments or accept fewer services from Landlord,
than this Lease provides.

23.12Financial Statements.  At Landlord’s request from time to time in
connection with any potential sale or financing of the Building, Tenant shall
provide to Landlord the then current financial statements of Tenant and any
guarantor hereof and such other information regarding the financial condition of
Tenant and any such guarantor as Landlord may reasonably request; provided that,
for so long as Tenant’s equity is traded on a United States public stock
exchange, Tenant may fulfill the foregoing requirement by providing Landlord
with Tenant’s quarterly and annual reports filed publicly pursuant to applicable
Laws. 

23.13Other.  If any provision hereof is void or unenforceable, no other
provision shall be affected.  Submission of this instrument for examination or
signature by Tenant does not constitute an option or offer to lease.  If Tenant
is comprised of two or more persons or entities, then (a) their obligations
shall be joint and several, (b) any request or demand from any one such person
or entity shall be deemed to have been made by all such persons or entities; and
(c) any notice given to any one such person or entity shall be deemed to have
been given to all such persons or entities.  Time is of the essence with respect
to the payment of Rent and Tenant’s exercise of any expansion, renewal or
extension rights granted to Tenant.  So long as Tenant performs its obligations
hereunder, Tenant shall have peaceful and quiet possession of the Premises
against any party claiming by, through or under Landlord, subject to the terms
hereof.  This covenant shall be binding upon Landlord and its successors only
during its or their respective periods of ownership of the Building.  Landlord
may transfer its interest herein, in which event (a) to the extent the
transferee assumes in writing Landlord’s obligations arising hereunder after the
date of such transfer (including the return of any Security Deposit), Landlord
shall be released from, and Tenant shall look solely to the transferee for the
performance of, such obligations; and (b) Tenant shall attorn to the
transferee.  Landlord reserves all rights not expressly granted to Tenant
hereunder, including the right to

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make alterations to the Project.  No rights to any view or to light or air over
any property are granted to Tenant hereunder.  The expiration or earlier
termination hereof shall not relieve either party of any obligation that accrued
before, or continues to accrue after, such expiration or termination.  To the
extent permitted by applicable Law, this Lease may be executed in counterparts
and/or executed and/or transmitted by electronic means.

23.14Waiver of Statutory Provisions.  Each party waives California Civil Code §§
1932(2), 1933(4) and 1945.  Tenant waives (a) any rights under (i) California
Civil Code §§ 1932(1), 1941, 1942, 1950.7 or any similar Law, or (ii) California
Code of Civil Procedure §§ 1263.260 or 1265.130; and (b) any right to terminate
this Lease under California Civil Code § 1995.310.

23.15Tax Waiver.  Tenant waives all rights pursuant to all Laws to contest any
taxes or other levies or protest appraised values or receive notice of
reappraisal regarding the Property (including Landlord’s personalty),
irrespective of whether Landlord contests same.

 

 

[SIGNATURES ARE ON THE FOLLOWING PAGE]

 

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

 

 

LANDLORD:

 

 

 

BRE CA OFFICE OWNER LLC, a Delaware limited liability company

 

 

By:___/s/ Spencer Rose________________

Name:_____ Spencer Rose________________

Title:______ Managing Director___________

 

 

 

TENANT:

 

 

 

KURA ONCOLOGY, INC., a Delaware corporation

 

By:___/s/ Marc Grasso__________________

Name:_____ Marc Grasso__________________

Title:_____CFO and CBO_________________

 

 

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EXHIBIT A

 

HIGHLANDS CORPORATE CENTER SOUTH PLAZA

 

OUTLINE OF PREMISES

 

See Attached

 

[g4g3qy1dmnih000001.jpg]

  

 

Exhibit A-1 - 1

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EXHIBIT B

 

HIGHLANDS CORPORATE CENTER SOUTH PLAZA

 

EXPENSES AND TAXES

 

 

1General Terms.

In addition to Base Rent, Tenant shall pay, in accordance with Section 4 below,
for each Expense Year (defined in Section 2.1 below), an amount equal to the sum
of (a) Tenant’s Share of any amount (the “Expense Excess”) by which Expenses for
such Expense Year exceed Expenses for the Base Year, plus (b) Tenant’s Share of
any amount (the “Tax Excess”) by which Taxes for such Expense Year exceed Taxes
for the Base Year.  No decrease in Expenses or Taxes for any Expense Year below
the corresponding amount for the Base Year shall entitle Tenant to any decrease
in Base Rent or any credit against amounts due hereunder.  Tenant’s Share of the
Expense Excess and Tenant’s Share of the Tax Excess for any partial Expense Year
shall be prorated based on the number of days in such Expense Year.

 

2Definitions.

2.1“Expense Year” means each calendar year (other than the Base Year and any
preceding calendar year) in which any portion of the Term occurs.

2.2“Expenses” means all expenses, costs and amounts that Landlord pays or
accrues during the Base Year or any Expense Year because of or in connection
with the management, maintenance, security, repair, replacement, restoration or
operation of the Property, as determined in accordance with sound property
management accounting principles, consistently applied.  Landlord shall act in a
reasonable manner in incurring Expenses.  Expenses shall include (i) the cost of
supplying all utilities (and taxes and surcharges thereon), the cost of
operating, repairing, maintaining and renovating the utility, telephone,
mechanical, sanitary, storm-drainage, and elevator systems, and the cost of
maintenance and service contracts in connection therewith; (ii) the cost of
licenses, certificates, permits and inspections, the cost of contesting any Laws
that may affect Expenses, and the costs of complying with any business
improvement district, governmentally-mandated transportation-management or
similar program; (iii) the cost of all insurance premiums and deductibles;
(iv) the cost of landscaping and relamping and the cost of painting and/or
decorating all areas of the Building not demised to tenants; (v) the cost of
parking-area operation, repair, restoration, and maintenance; (vi) a management
fee in the amount (which is hereby acknowledged to be reasonable) of 3% of gross
annual receipts from the Building (excluding the management fee), together with
other reasonable fees and costs, including consulting fees, legal fees and
accounting fees, of all contractors and consultants in connection with the
management, operation, maintenance and repair of the Property; (vii) the fair
rental value of any management office space and the cost of equipping, staffing
and operating an on-site and/or off-site management office for the Building;
(viii) wages, salaries and other compensation, expenses and benefits, including
taxes levied thereon, of all persons engaged in the operation, maintenance and
security of the Property, and costs of training and uniforms for such persons;
(ix) the costs of operation, repair, maintenance and replacement of all systems
and equipment (and components thereof) of the Property; (x) the cost of
janitorial, alarm, security and other services, replacement of wall and floor
coverings, ceiling tiles and fixtures in Common Areas, maintenance and
replacement of curbs and walkways, repair to roofs and re-roofing; (xi) the cost
of services generally provided to or made available to all tenants at the
Building; (xii) rental or acquisition costs (including taxes thereon) of
supplies, tools, equipment, materials and personal property used in the
maintenance, operation and repair of the Property; (xiii) all capital
expenditures that are (A) intended to reduce current or future Expenses, to the
extent of the reasonably anticipated cost savings, enhance the safety or
security of the Property or its occupants, or (B) required under any Law first
enacted after the date of this Lease; and (xiv) payments under any existing or
future reciprocal easement agreement, transportation management agreement,
cost-sharing agreement or other covenant, condition, restriction or similar
instrument affecting the Property. 

Notwithstanding the foregoing, Expenses shall not include:

 

(1)capital expenditures not described in clauses (xii) or (xiii) above (in
addition, any capital expenditure shall be amortized including actual or imputed
interest on the amortized cost over the reasonable useful life of the
improvement);

(2)depreciation;

(3)payments of mortgage or other non-operating debts of Landlord;

(4)costs of repairs to the extent Landlord is reimbursed by insurance or
condemnation proceeds;

(5)costs of leasing space in the Building, including brokerage commissions,
lease concessions, rental abatements and construction allowances granted to
specific tenants;

(6)costs of selling, financing or refinancing the Building;

Exhibit B - 1

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

 

(7)fines, penalties or interest resulting from late payment of Taxes or
Expenses;

(8)organizational expenses of creating or operating the entity that constitutes
Landlord;

(9)damages paid to Tenant hereunder or to other tenants of the Building under
their respective leases

(10)costs of leasing commissions, attorneys’ fees and other costs and expenses
incurred in connection with negotiations or disputes with present or prospective
tenants or other occupants of the Building;  

(11)costs of any compensation and employee benefits paid to clerks, attendants
or other persons in a commercial concession operated by Landlord;

(12)marketing costs, legal fees, space planner’s fees, and advertising and
promotional expenses and brokerage fees incurred in connection with the original
development, subsequent improvement, or original or future leasing of the
Building;  

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

(14)the wages and benefits of any employee who does not devote substantially all
of his or her employed time to the Building unless such wages and benefits are
prorated to reflect time spent on operating and managing the Building vis-à-vis
time spent on matters unrelated to operating and managing the Building;
provided, that in no event shall Expenses for purposes of this Lease include
wages and/or benefits attributable to personnel above the level of Portfolio
Manager or Building engineer;

(15)costs incurred to comply with laws relating to hazardous material, which was
in existence in the Building prior to the Commencement Date, and was of such a
nature that a federal, State or municipal governmental authority, if it had then
had knowledge of the presence of such hazardous material, in the state, and
under the conditions that it then existed in the Building, would have then
required the removal of such hazardous material or other remedial or containment
action with respect thereto; and

(16)costs, including legal fees, space planners’ fees, advertising and
promotional expenses (except as otherwise set forth above), and brokerage fees
incurred in connection with the original construction or development, or
original or future leasing of the Project, in connection with any major
renovation or major change in the Project such as, but not limited to, adding or
deleting floors or other material expansion of rentable area of the Project or
the Building or any material expansion of the parking area serving the Project,
and costs, including permit, license and inspection costs, incurred with respect
to the installation of tenant improvements made for tenants occupying space in
the Project or incurred in renovating or otherwise improving, decorating,
painting or redecorating vacant space for tenants or other occupants of the
Project.

If, during any portion of the Base Year or any Expense Year, the Building is
less than 95% occupied (or a service provided by Landlord to Tenant is not
provided by Landlord to a tenant that provides such service itself, or any
tenant of the Building is entitled to free rent, rent abatement or the like),
with the result that Expenses for such year are less than what they would have
been if the Building had been 95% occupied (and all services provided by
Landlord to Tenant had been provided by Landlord to all tenants, and no tenant
of the Building had been entitled to free rent, rent abatement or the like)
throughout such year (the “95% Amount”), then Expenses for such year shall be
deemed to be the 95% Amount.  Notwithstanding any contrary provision hereof,
Expenses for the Base Year shall include any market-wide cost increases
resulting from extraordinary circumstances, including Force Majeure (defined in
Section 23.2 of the Lease), boycotts, strikes, conservation surcharges,
embargoes or shortages; provided, however, that at such time as any such
particular assessments, charges, costs or fees are no longer included in
Operating Expenses, such particular assessments, charges, costs or fees shall be
excluded from the Base Year calculation of Operating Expenses.  Notwithstanding
the foregoing, for purposes of computing Tenant’s Share of Expenses, the
Controllable Expenses (hereinafter defined) shall not increase by more than 5%
per Expense Year on a compounding and cumulative basis over the course of the
Term.  In other words, Controllable Expenses for the first Expense Year after
the Base Year shall not exceed 105% of the Controllable Expenses for the Base
Year.  Controllable Expenses for the second Expense Year after the Base Year
shall not exceed 105% of the limit on Controllable Expenses for the first
Expense Year after the Base Year, etc.  By way of illustration, if Controllable
Expenses were $10.00 per rentable square foot for the Base Year, then
Controllable Expenses for the first Expense Year following the Base Year shall
not exceed $10.50 per rentable square foot, and Controllable Expenses for the
second Expense Year following the Base Year shall not exceed $11.03 per rentable
square foot.  Any Controllable Expenses that are not included as part of
Expenses during any Expense Year due to the application of this cap may be
included as part of Controllable Expenses in any subsequent Expense Year subject
to the cap applicable to the calculation of Controllable Expenses for such
subsequent Expense Year. 

 

2.3“Taxes” means all federal, state, county or local governmental or municipal
taxes, fees, charges, assessments, levies, licenses or other impositions,
whether general, special, ordinary or extraordinary, that are paid or accrued
during the Base Year or any Expense Year (without regard to any different fiscal
year used by such governmental or municipal authority) because of or in
connection with the ownership, leasing or operation of the Property.  Taxes
shall include (a) real estate taxes; (b) general and special assessments;
(c) transit taxes; (d) leasehold taxes; (e) personal property taxes imposed upon
the fixtures, machinery, equipment, apparatus, systems, appurtenances, furniture
and other personal property used in connection with the Property; (f) any tax on
the rent, right to rent or other income from any portion of the Property or as
against the business of leasing any portion of the Property; (g) any assessment,
tax,

Exhibit B - 2

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fee, levy or charge imposed by any governmental agency, or by any
non-governmental entity pursuant to any private cost-sharing agreement, in order
to fund the provision or enhancement of any fire-protection, street-, sidewalk-
or road-maintenance, refuse-removal or other service that is (or, before the
enactment of Proposition 13, was) normally provided by governmental agencies to
property owners or occupants without charge (other than through real property
taxes); and (h) payments in lieu of taxes under any tax increment financing
agreement, abatement agreement, agreement to construct improvements, or other
agreement with any governmental body or agency or taxing authority.  Any costs
and expenses (including reasonable attorneys’ and consultants’ fees) incurred in
attempting to protest, reduce or minimize Taxes shall be included in Taxes for
the year in which they are incurred.  Notwithstanding any contrary provision
hereof, Taxes shall be determined without regard to any “green building” credit
and shall exclude (i) all excess profits taxes, franchise taxes, gift taxes,
capital stock taxes, inheritance and succession taxes, transfer taxes, estate
taxes, federal and state income taxes, and other taxes to the extent
(x) applicable to Landlord’s general or net income (as opposed to rents,
receipts or income attributable to operations at the Property), or (y) measured
solely by the square footage, rent, fees, services, tenant allowances or similar
amounts, rights or obligations described or provided in or under any particular
lease, license or similar agreement or transaction at the Building; (ii) any
Expenses; (iii) any items required to be paid or reimbursed by Tenant under
Section 5 below; (iv) fines, penalties or interest resulting from late payment
of Taxes.

2.4“Controllable Expenses” shall mean all Expenses other than (i) costs of
utilities, (ii) the cost of repairs and restoration due to hurricanes and other
weather-related causes, (iii) insurance premiums and deductibles, (iv) capital
expenditures under subsection 2.2(viii)(B) and subject to subsection 2.2(1), (v)
any market-wide cost increases resulting from extraordinary circumstances,
including Force Majeure, boycotts, strikes, conservation surcharges, embargoes
or shortages, (vi) other Expenses to the extent: (a) that a component of such
Expenses are union labor wages (including labor that is unionized after the date
hereof), or (b) such Expenses are incurred as a result of any requirements of
Law. 

3Allocation.

Landlord, in its reasonable discretion, may equitably allocate Expenses among
office, retail or other portions or occupants of the Property.  If Landlord
incurs Expenses or Taxes for the Property together with another property,
Landlord, in its reasonable discretion, shall equitably allocate such shared
amounts between the Property and such other property.

 

4Calculation and Payment of Expense Excess and Tax Excess.

4.1Statement of Actual Expenses and Taxes; Payment by Tenant. 

Landlord shall give to Tenant, by August 1 of each year after the end of each
Expense Year, a statement (the “Statement”) setting forth the actual Expenses,
Taxes, Expense Excess and Tax Excess for such Expense Year.  If the amount paid
by Tenant for such Expense Year pursuant to Section 4.2 is less or more than the
sum of Tenant’s Share of the actual Expense Excess  plus Tenant’s Share of the
actual Tax Excess (as such amounts are set forth in such Statement), Tenant
shall pay Landlord the amount of such underpayment, or receive a credit in the
amount of such overpayment, with or against the Rent next coming due hereunder;
provided, however, that if this Lease has expired or terminated and Tenant has
vacated the Premises, Tenant shall pay Landlord the amount of such underpayment,
or Landlord shall pay Tenant the amount of such overpayment (less any Rent due),
within 30 days after delivery of such Statement.  Any failure of Landlord to
timely deliver the Statement for any Expense Year shall not diminish either
party’s rights under this Exhibit; provided that Tenant shall not be responsible
for payment of any Expenses (other than Taxes) first shown on a Statement
delivered more than 18 months after the applicable Expense Year in which it was
incurred.

 

4.2Statement of Estimated Expenses and Taxes. 

Landlord shall give to Tenant, for each Expense Year, a statement (the “Estimate
Statement”) setting forth Landlord’s reasonable estimates of the Expenses,
Taxes, Expense Excess and Tax Excess ( the “Estimated Expense Excess”) and Tax
Excess (the “Estimated Tax Excess”) for such Expense Year.  Upon receiving an
Estimate Statement, Tenant shall pay, with its next installment of Base Rent, an
amount equal to the excess of (a) the amount obtained by multiplying (i) the sum
of Tenant’s Share of the Estimated Expense Excess plus Tenant’s Share of the
Estimated Tax Excess (as such amounts are set forth in such Estimate Statement),
by (ii) a fraction, the numerator of which is the number of months that have
elapsed in the applicable Expense Year (including the month of such payment) and
the denominator of which is 12, over (b) any amount previously paid by Tenant
for such Expense Year pursuant to this Section 4.2.  Until Landlord delivers a
new Estimate Statement (which Landlord may do at any time), Tenant shall pay
monthly, with the monthly Base Rent installments, an amount equal to one-twelfth
(1/12) of the sum of Tenant’s Share of the Estimated Expense Excess plus
Tenant’s Share of the Estimated Tax Excess, as such amounts are set forth in the
previous Estimate Statement.  Any failure of Landlord to timely deliver any
Estimate Statement shall not diminish Landlord’s rights to receive payments and
revise any previous Estimate Statement under this Exhibit.

Exhibit B - 3

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4.3Retroactive Adjustment of Taxes. 

Notwithstanding any contrary provision hereof, if, after Landlord’s delivery of
any Statement, an increase or decrease in Taxes occurs for the applicable
Expense Year or for the Base Year (whether by reason of reassessment, error, or
otherwise), Taxes for such Expense Year or the Base Year, as the case may be,
and the Tax Excess for such Expense Year shall be retroactively adjusted.  If,
as a result of such adjustment, it is determined that Tenant has under- or
overpaid Tenant’s Share of such Tax Excess, Tenant shall pay Landlord the amount
of such underpayment, or receive a credit in the amount of such overpayment,
with or against the Rent next coming due hereunder; provided, however, that if
this Lease has expired or terminated and Tenant has vacated the Premises, Tenant
shall pay Landlord the amount of such underpayment, or Landlord shall pay Tenant
the amount of such overpayment (less any Rent due), within 30 days after such
adjustment is made.

 

5Charges for Which Tenant Is Directly Responsible.

Notwithstanding any contrary provision hereof, Tenant, promptly upon demand,
shall pay (or if paid by Landlord, reimburse Landlord for) each of the following
to the extent levied against Landlord or Landlord’s property: (a) any tax based
upon or measured by (i) the cost or value of Tenant’s trade fixtures, equipment,
furniture or other personal property, or (ii) the cost or value of the Leasehold
Improvements (defined in Section 6.1 of the Lease) to the extent such cost or
value exceeds that of a Building-standard build-out, as reasonably determined by
Landlord; (b) any rent tax, sales tax, service tax, transfer tax, value added
tax, use tax, business tax, gross income tax, gross receipts tax, or other tax,
assessment, fee, levy or charge measured solely by the square footage, Rent,
services, tenant allowances or similar amounts, rights or obligations described
or provided in or under this Lease; (c) any tax assessed upon the possession,
leasing, operation, management, maintenance, alteration, repair, use or
occupancy by Tenant of any portion of the Property; and (d) any tax assessed on
this transaction or on any document to which Tenant is a party that creates an
interest or estate in the Premises.

6Books and Records.

Within 150 days after receiving any Statement (the “Review Notice Period”),
Tenant may give Landlord notice (“Review Notice”) stating that Tenant elects to
review Landlord’s calculation of the Expense Excess for the Expense Year to
which such Statement applies.  Within a reasonable time after receiving a timely
Review Notice (and, at Landlord’s option, an executed confidentiality agreement
as described below), Landlord shall deliver to Tenant, or make available for
inspection at a location reasonably designated by Landlord, copies of such
records.  Within 90 days after such records are made available to Tenant (the
“Objection Period”), Tenant may deliver to Landlord notice (an “Objection
Notice”) stating with reasonable specificity any objections to the Statement, in
which event Landlord and Tenant shall work together in good faith to resolve
Tenant’s objections.  Tenant may not deliver more than one Review Notice or more
than one Objection Notice with respect to any Statement.  If Tenant fails to
give Landlord a Review Notice before the expiration of the Review Notice Period
or fails to give Landlord an Objection Notice before the expiration of the
Objection Period, Tenant shall be deemed to have approved the Statement. 
Notwithstanding any contrary provision hereof, Landlord shall not be required to
deliver or make available to Tenant records relating to the Base Year, and
Tenant may not object to Expenses or Taxes for the Base Year, other than in
connection with and concurrently with the first review for an Expense Year
performed by Tenant pursuant to this Section 6 on the terms and conditions set
forth herein.  If Tenant retains an agent to review Landlord’s records, the
agent must be with a CPA firm licensed to do business in the state or
commonwealth in which the Building is located and its fees shall not be
contingent, in whole or in part, upon the outcome of the review.  Tenant shall
be responsible for all costs of such review unless it is determined by Landlord
and Tenant or by the Neutral Auditor that Tenant was overcharged by more than 5%
in which case Landlord shall pay all audit charges.  The records and any related
information obtained from Landlord shall be treated as confidential, and as
applicable only to the Premises, by Tenant, its auditors, consultants, and any
other parties reviewing the same on behalf of Tenant (collectively, “Tenant’s
Auditors”).  Before making any records available for review, Landlord may
require Tenant and Tenant’s Auditors to execute a reasonable confidentiality
agreement, in which event Tenant shall cause the same to be executed and
delivered to Landlord within 30 days after receiving it from Landlord, and if
Tenant fails to do so, the Objection Period shall be reduced by one day for each
day by which such execution and delivery follows the expiration of such 30-day
period.  Notwithstanding any contrary provision hereof, Tenant may not examine
Landlord’s records or dispute any Statement if any Rent remains unpaid past its
due date.  If, for any Expense Year, Landlord and Tenant determine that the sum
of Tenant’s Share of the actual Expense Excess is less or more than the amount
reported, Tenant shall receive a credit in the amount of its overpayment, or pay
Landlord the amount of its underpayment, against or with the Rent next due
hereunder; provided, however, that if this Lease has expired or terminated and
Tenant has vacated the Premises, Landlord shall pay Tenant the amount of its
overpayment (less any Rent due), or Tenant shall pay Landlord the amount of its
underpayment, within 30 days after such determination.  If Landlord does not
agree with Tenant’s determination, a final, binding determination shall be made
by a neutral accountant selected by Landlord and reasonably approved by Tenant
(the “Neutral Auditor”).

 

Exhibit B - 4

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EXHIBIT C

 

HIGHLANDS CORPORATE CENTER SOUTH PLAZA

 

WORK LETTER

 

As used in this Exhibit C (this “Work Letter”), (i)“Tenant Improvements” means
all improvements to be constructed in the Premises pursuant to this Work Letter;
(ii) “Tenant Improvement Work” means the construction of the Tenant
Improvements, together with any related work (including demolition) that is
necessary to construct the Tenant Improvements; and (iii) “Agreement” means the
Lease of which this Work Letter is a part.  All capitalized terms not otherwise
defined herein shall have the meaning set forth in the Agreement.

1ALLOWANCE.

1.1Allowance.  Subject to the terms set forth herein, Tenant shall be entitled
to a one-time tenant improvement allowance (the “Allowance”) in the amount of
$1,026,630.00 (based upon $76.50 per rentable square foot of the Premises) to be
applied toward the Allowance Items (defined in Section 1.2 below).  Tenant shall
be responsible for all costs associated with the Tenant Improvement Work,
including the costs of the Allowance Items, to the extent such costs exceed the
lesser of (a) the Allowance, or (b) the aggregate amount that Landlord is
required to disburse for such purpose pursuant to this Work Letter. 
Notwithstanding any contrary provision of this Work Letter, if Tenant fails to
use the entire Allowance by April 30, 2021 (the “Unused Allowance Deadline”),
the unused amount shall revert to Landlord and Tenant shall not be entitled to
any credit, offset, abatement or payment and Tenant shall have no further rights
with respect thereto.  Except as provided in Section 1.2.2 below, in no event
shall any portion of the Allowance be used for the purchase of any equipment,
furniture or other items of personal property of Tenant.

1.2Disbursement of Allowance.

1.2.1Allowance Items.  Except as otherwise provided in this Work Letter, the
Allowance shall be disbursed by Landlord only for the following items (the
“Allowance Items”):  (a) the fees of the Architect (defined in Section 2.1
below) and the Engineers (defined in Section 2.1 below), and any Review Fees
(defined in Section 2.3 below); (b) plan-check, permit, license and other fees
relating to performance of the Tenant Improvement Work; (c) the cost of
performing the Tenant Improvement Work, including contractors’ fees and general
conditions, after-hours charges, testing and inspection costs, freight elevator
usage, hoisting and trash removal costs, and all other costs reasonably expended
by Tenant in connection with the performance of the Tenant Improvement Work;
(d) the cost of any change to the base, shell or core of the Premises or
Building required by the Plans (defined in Section 2.1 below) (including if such
change is due to the fact that such work is prepared on an unoccupied basis),
including all direct architectural and/or engineering fees and expenses incurred
in connection therewith; (e) the cost of any change to the Plans or Tenant
Improvement Work required by law; (f) the Coordination Fee (defined in
Section 3.2.2 below); (g) sales and use taxes; and (h) the fees of Tenant’s
construction manager, which fees, notwithstanding any contrary prorvisions of
this Work Letter, shall not exceed a total of $41,065.20.  Upon completion of
the Tenant Improvement Work and payment of all costs related thereto, and
provided Tenant is not in Default under the Agreement, Tenant may request by
written notice to Landlord that Landlord apply up to a total of $134,200.00 of
the unused Allowance (the “Unused Allowance”) against the (i) cost of furniture,
fixtures and equipment and voice and data cabling to be installed in the
Premises (collectivley, the “Equipment Costs”), or (ii) the then next due
installments of Base Rent for the Premises due under the Lease.  However, in no
event shall Landlord have any obligation to apply any portion of the Unused
Allowance against the Equipment Costs or Tenant’s Base Rent after the Unused
Allowance Deadline, it being agreed that Tenant shall not be entitled to any
credit, offset, abatement or payment with respect thereto after the Unused
Allowance Deadline.  If Tenant desires that Landlord shall disburse any portion
of the Unused Allowance toward the Equipment Costs, Landlord shall disburse such
portion of the Unused Allowance requested by Tenant for such purpose within 30
days after Landlord’s receipt of invoices from Tenant with respect to Tenant’s
actual Equipment Costs (provided that such invoices are received by Landlord
prior to the date which is 30 days prior to the Unused Allowance Deadline).

1.2.2Disbursement.  Subject to the provisions of this Work Letter, Landlord
shall make monthly disbursements of the Allowance for Allowance Items and shall
authorize the release of monies for Tenant’s benefit as follows:

1.2.2.1Monthly Disbursements.  Not more frequently than once per calendar month
during the performance of the Tenant Improvement Work, Tenant may deliver to
Landlord:  (i) a request for payment of the Contractor (defined in Section 3.1
below), approved by Tenant, in AIA G-702/G-703 format or another format
reasonably requested by Landlord, showing the schedule of values, by trade, of
percentage of completion of the Tenant Improvement Work, detailing the portion
of the work completed and the portion not completed; (ii) copies of all
third-party contracts (including change orders) pursuant to

Exhibit C - 1

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which the Tenant Improvement Work has been performed, including paid invoices
from all of Tenant’s Agents (defined in Section 3.1.2 below) for labor rendered
and materials delivered to the Premises (collectively, the “Construction
Contracts”); (iii) executed conditional mechanic’s lien releases from all of
Tenant’s Agents (along with unconditional mechanic’s lien releases with respect
to payments made pursuant to Tenant’s prior submission hereunder) which shall
comply with California Civil Code §§ 8132 and/or 8134, as applicable; and
(iv) all other information reasonably requested by Landlord.  Tenant’s request
for payment shall be deemed Tenant’s acceptance and approval of the work
furnished and/or the materials supplied as set forth in Tenant’s payment
request.  Subject to the terms hereof, within 30 days after receiving such
materials, Landlord shall disburse to Tenant, or at Landlord’s option, to the
order of the contractor and/or the Tenant’s Agents that performed the applicable
work, an amount equal to the lesser of (a) 90% of the Landlord’s Share (defined
below) of the amount requested by Tenant pursuant to the preceding sentence, it
being agreed that Landlord may retain from each disbursement a 10% retention
(the aggregate amount of such retentions shall be referred to in this Work
Letter as the “Final Retention”), or (b) the amount of any remaining portion of
the Allowance (not including the Final Retention).  In the alternative, Landlord
may elect, in Landlord’s sole discretion, to disburse to Tenant the full amount
of the Landlord’s Share of the amount requested by Tenant for each such
disbursement in accordance with this Section 1.2.2.1, and withhold the full
amount of the 10% retention from the final disbursement(s) requested by Tenant.
Landlord shall have no obligation to make any such disbursements if Landlord
disputes any request for payment based on any failure of the work to comply with
the Approved Construction Drawings (defined in Section 2.3 below) or if such
work otherwise is not of the required quality, or for any other reason. 
Landlord’s payment of such amounts shall not be deemed Landlord’s approval or
acceptance of the work or materials described in Tenant’s payment request.  As
used in this Section 1.2.2.1, “Landlord’s Share” means the lesser of (i) 100%,
or (ii) the percentage obtained by dividing the Allowance by the estimated sum
of all Allowance Items, as determined based on the Construction Contracts.

1.2.2.2Final Retention.  Subject to the terms hereof, Landlord shall disburse to
Tenant, or at Landlord’s option, to the order of the contractor that performed
the applicable work, the Final Retention, together with any other undisbursed
portion of the Allowance required to pay for the Allowance Items, within 30 days
after the latest of (a) the completion of the Tenant Improvement Work in
accordance with the Approved Construction Drawings; (b) Tenant’s delivery to
Landlord of (i) properly executed mechanic’s lien releases in compliance with
California Civil Code §§ 8132 and/or 8134, as applicable, (ii) a certificate
from the Architect, in a form reasonably acceptable to Landlord, certifying that
the Tenant Improvement Work has been substantially completed and installed in
good and workmanlike manner in accordance with the Approved Construction
Drawings and applicable laws, (iii) evidence that all required governmental
approvals required for Tenant to legally occupy the Premises have been obtained,
and (iv) any other information reasonably requested by Landlord; (c) Tenant’s
performance of its obligations under clause (a) of the first sentence of
Section 3.3 below; or (d) Tenant’s compliance with Landlord’s standard
“close-out” requirements regarding city approvals, closeout tasks, the general
contractor, financial close-out matters, and tenant vendors.  Landlord’s payment
of the Final Retention shall not be deemed Landlord’s approval or acceptance of
the work or materials described in Tenant’s payment requests.

2PLANS.

2.1Selection of Architect/Plans.  Tenant shall retain RBN (the “Architect”) and
the engineering consultants designated by Landlord or an engineering consultant
proposed by Tenant and reasonably approved by Landlord (the “Engineers”) to
prepare all architectural plans for the Premises and all engineering working
drawings relating to the structural, mechanical, electrical, plumbing, HVAC,
life-safety, and sprinkler work in the Premises.  The plans and drawings to be
prepared by the Architect and the Engineers hereunder shall be referred to
herein collectively as the “Plans.”  All Plans shall (a) comply with the
industry standard drawing format and specifications required by Landlord, (b) be
consistent with Landlord’s requirements for avoiding aesthetic, engineering or
other conflicts with the design and function of the balance of the Building, and
(c) otherwise be subject to Landlord’s approval, which shall not be unreasonably
withheld.  Tenant shall cause the Architect to verify, in the field, the
dimensions and conditions as shown on the relevant portions of the base Building
plans, and Landlord shall have no responsibility in connection therewith. 
Landlord’s review of the Plans and approval of the Approved Construction
Drawings shall be for its sole benefit and shall not create or imply any
obligation on the part of Landlord to review the same for Tenant’s benefit,
whether with respect to quality, design, compliance with law or any other
matter.  Accordingly, notwithstanding any review of the Plans by Landlord or any
of its space planners, architects, engineers or other consultants, and
notwithstanding any advice or assistance that may be rendered to Tenant by
Landlord or any such consultant, Landlord shall not be liable for any error or
omission in the Plans or have any other liability relating thereto.  Without
limiting the foregoing, Tenant shall be responsible for ensuring (x) that all
elements of the design of the Plans comply with law and are otherwise suitable
for Tenant’s use of the Premises (including the configuration of the Premises
and the placement of Tenant’s furniture, appliances and equipment), and (y) that
no Tenant Improvement impairs any system or structural component of the
Building, and Landlord’s approval of the Construction Drawings (defined in
Section 2.3 below) shall not relieve Tenant from such responsibility.

Exhibit C - 2

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2.2Space Plan.  Tenant shall cause the Architect to prepare a space plan for the
Tenant Improvement Work, including a layout and designation of all offices,
rooms and other partitioning, and equipment to be contained in the Premises,
together with their intended use (the “Space Plan”), and shall deliver a pdf
copy of the Space Plan, signed by Tenant, by email (return receipt requested) to
Landlord for its approval.  Landlord shall provide Tenant with notice approving
or reasonably disapproving the Space Plan within 5 business days after the later
of Landlord’s receipt thereof or the mutual execution and delivery of the
Agreement.  If Landlord disapproves the Space Plan, Landlord’s notice of
disapproval shall describe with reasonable specificity the basis for such
disapproval and the changes that would be necessary to resolve Landlord’s
objections.  If Landlord disapproves the Space Plan, Tenant shall cause the
Space Plan to be modified and resubmitted to Landlord for its approval.  Such
procedure shall be repeated as necessary until Landlord has approved the Space
Plan.  At Landlord’s option, before submitting the Construction Drawings, Tenant
shall supply Landlord with intermediate stages of the Plans.

2.3Construction Drawings.  After Landlord approves the Space Plan, Tenant shall
cause the Architect and the Engineers to complete the architectural, engineering
and final architectural working drawings for the Tenant Improvement Work in a
form that is sufficient to enable subcontractors to bid on the work and to
obtain all applicable permits (collectively, the “Construction Drawings”), and
shall deliver two (2) full size sets of the Construction Drawings, signed by
Tenant, to Landlord for its approval.  Notwithstanding the foregoing, at
Tenant’s option, the Construction Drawings may be prepared in two phases (first
the architectural drawings, then engineering drawings consistent with the
previously provided architectural drawings), provided that each phase shall be
subject to Landlord’s approval.  Landlord shall provide Tenant with notice
approving or reasonably disapproving the Construction Drawings (or the
applicable component thereof) within 10 business days after the later of
Landlord’s receipt thereof or the mutual execution and delivery of the
Agreement.  If Landlord disapproves the Construction Drawings (or any component
thereof), Landlord’s notice of disapproval shall describe with reasonable
specificity the basis for such disapproval and the changes that would be
necessary to resolve Landlord’s objections.  If Landlord disapproves the
Construction Drawings (or any component thereof), Tenant shall cause the
Construction Drawings to be modified and resubmitted to Landlord for its
approval.  Such procedure shall be repeated as necessary until Landlord has
approved the Construction Drawings (or the applicable component thereof). 
Tenant shall not commence the Tenant Improvement Work until after the
Construction Drawings are approved by Landlord.  No revision may be made to the
approved Construction Drawings (the “Approved Construction Drawings”) without
Landlord’s prior consent, which shall not be unreasonably withheld.  Tenant
shall reimburse Landlord, upon demand, for any out-of-pocket fees reasonably
incurred by Landlord for review of the Plans by Landlord’s third party
consultants (“Review Fees”).

2.4Permits.  Tenant shall submit the Approved Construction Drawings to the
appropriate municipal authorities and otherwise apply for and obtain from such
authorities all applicable building permits necessary to allow the Contractor to
commence and complete the performance of the Tenant Improvement Work (the
“Permits”).  Tenant shall coordinate with Landlord in order to allow Landlord,
at its option, to take part in all phases of the permitting process and shall
supply Landlord, as soon as possible, with all plan check numbers and dates of
submittal.  Notwithstanding any contrary provision of this Section 2.4, Tenant,
and not Landlord or its consultants, shall be responsible for obtaining any
Permit or certificate of occupancy; provided, however, that Landlord shall
cooperate with Tenant in executing permit applications and performing other
ministerial acts reasonably necessary to enable Tenant to obtain any Permit or
certificate of occupancy.  Prior to the issuance of the Permits, Tenant may
access the Premises for planning and inspections (but not construction).  Tenant
shall not commence construction until all required Permits are obtained.

3CONSTRUCTION.

3.1Selection of Contractors.

3.1.1The Contractor.  Tenant shall retain a general contractor (the
“Contractor”) to perform the Tenant Improvement Work.  The Contractor shall be
selected by Tenant, by notice to Landlord, and reasonably approved by Landlord. 
For purposes of this Section 3.1.1, Landlord’s approval of a proposed general
contractor shall not be considered unreasonably withheld (without limitation on
other reasons) if such general contractor (a) does not have trade references
reasonably acceptable to Landlord, (b) does not maintain insurance as required
under the terms of the Agreement, (c) does not provide current financial
statements reasonably acceptable to Landlord, or (d) is not licensed as a
contractor in the state/municipality in which the Premises is located.  Tenant
acknowledges that the foregoing is not an exclusive list of the reasons why
Landlord may reasonably disapprove a proposed general contractor.

3.1.2Tenant’s Agents.  All subcontractors used by Tenant (such subcontractors,
together with the Contractor, to be referred to herein collectively as “Tenant’s
Agents”) must be approved by Landlord.  Such approval shall not be unreasonably
withheld; provided, however, that Landlord may require Tenant to retain certain
subcontractors designated by Landlord for mechanical, electrical, and fire life
safety.

Exhibit C - 3

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3.2Construction.

3.2.1Construction Contract; Final Costs.  Tenant shall not enter into a
construction contract with the Contractor (the “Contract”) unless it complies
with Sections 3.2.3 and 3.2.4 below and Tenant shall deliver a copy thereof to
Landlord for its records and to confirm such compliance.  Before commencing
construction of the Tenant Improvement Work, Tenant shall deliver to Landlord a
detailed breakdown of the schedule of values, by trade, of the final costs that
will be or have been incurred, as set forth more particularly in Section 1.2.1
above, in connection with the performance of the Tenant Improvement Work and
that form the basis for the amount of the Contract (the “Final Costs”).  If the
Final Costs exceed the Allowance, then, Tenant shall be responsible for such
excess and shall pay such excess prior to Landlord’s obligation to commence
funding the Allowance and Landlord may require Tenant to provide reasonable
evidence that Tenant has funded such excess prior to commencement of Landlord’s
obligation to fund the Allowance.  If, after being delivered to Landlord, the
Final Costs increase to a total amount which is in excess of the Allowance,
Tenant shall similarly be responsible for funding such excess prior to
Landlord’s obligation to fund the Allowance.  The amounts payable by Tenant
hereunder constitute Rent payable pursuant to the Agreement, and the failure to
timely pay the same constitutes an event of default under the Agreement.

3.2.2Landlord’s General Conditions for Tenant Improvement Work.  The Tenant
Improvement Work shall be performed in a good and workmanlike manner and in
strict accordance with the Approved Construction Drawings.  Tenant shall cause
Tenant’s Agents to submit to Landlord schedules of all work relating to the
Tenant Improvement Work, whereupon Landlord, within five (5) business days,
shall inform Tenant’s Agents of any necessary changes thereto, and Tenant shall
cause Tenant’s Agents to adhere to such corrected schedule.  Tenant shall abide
by all rules established by Landlord relating to the performance of the Tenant
Improvement Work, including rules relating to the use of freight, loading dock
and service elevators; any required shutdown of utilities (including life-safety
systems); storage of materials; and coordination of work with other tenants’
contractors.  In addition to any Review Fees payable by Tenant to Landlord (as
provided in Section 2.3 above), in consideration of Landlord’s coordination of
the performance of the Tenant Improvement Work, Tenant shall pay Landlord a fee
(the “Coordination Fee”) in an amount equal to 1% of the hard costs of
constructing the Tenant Improvement Work.

3.2.3Warranty of Contractor.  Tenant shall cause the Contractor to agree to be
responsible for (a) the repair, replacement and/or removal, without additional
charge, of any portion of the Tenant Improvement Work that is or becomes
defective, in workmanship, materials or otherwise, on or before the date
occurring one (1) year after the later to occur of (i) completion of the Tenant
Improvement Work, or (ii) the Commencement Date; and (b) the repair of any
damage to the Building and/or Common Areas resulting from such repair,
replacement and/or removal.  Such agreement shall be expressly set forth in the
Contract and, by its terms, shall inure to the benefit of both Landlord and
Tenant as their respective interests may appear, and shall be enforceable by
either Landlord or Tenant.  Upon Landlord’s request, Tenant shall provide
Landlord with any assignment or other assurance that may be necessary to enable
Landlord to enforce such agreement directly against the Contractor.

3.2.4Insurance Requirements.  Tenant shall carry “Builder’s All Risk” insurance
in an amount approved by Landlord covering the Tenant Improvement Work, together
with such other insurance as Landlord may reasonably require.

3.2.5Compliance.  The Tenant Improvement Work shall comply in all respects with
(i) all applicable laws; (ii) all applicable standards of the American Insurance
Association (formerly, the National Board of Fire Underwriters) and the National
Electrical Code; and (iii) all applicable building material manufacturer’s
specifications.  Without limiting the foregoing, if, as a result of Tenant’s
performance of the Tenant Improvement Work, Landlord becomes required under law
to perform any inspection or give any notice relating to the Premises or the
Tenant Improvement Work, or to ensure that the Tenant Improvement Work is
performed in any particular manner, Tenant shall comply with such requirement on
Landlord’s behalf and promptly thereafter provide Landlord with reasonable
documentation of such compliance. 

3.2.6Inspection by Landlord.  Notwithstanding any contrary provision of the
Agreement, Landlord, at any time and without notice to Tenant, may enter the
Premises to inspect the Tenant Improvement Work.  Neither Landlord’s performance
of such inspection nor its failure to perform such inspection shall result in a
waiver of any of Landlord’s rights hereunder or be deemed to imply Landlord’s
approval of the Tenant Improvement Work.  If, by notice to Tenant, Landlord
reasonably identifies any defect in the Tenant Improvement Work, Tenant shall
promptly cause the Contractor to correct such defect at no expense to Landlord. 
Notwithstanding any contrary provision of this Work Letter or the Agreement, if
a material defect in the Tenant Improvement Work so identified by Landlord might
adversely affect any system or structural component of the Building, the curtain
wall or exterior appearance of the Building, or any other tenant’s use of the
Building, or might give rise to liability on the part of Landlord to any third
party, then (a) Landlord, at Tenant’s expense, may take such action (including
suspension of the Tenant

Exhibit C - 4

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Improvement Work) as Landlord reasonably deems necessary to correct such defect,
and (b) until such defect is corrected, Landlord shall have no obligation to
disburse any portion of the Allowance.

3.2.7Meetings.  Upon commencement of the construction, Tenant shall hold weekly
meetings with the Architect and the Contractor regarding the progress of the
performance of the Tenant Improvement Work.  Such meetings shall be held at a
mutually agreeable location and at a reasonable time of which Tenant shall
provide Landlord with at least three (3) business days’ prior notice.  Landlord
may attend such meetings, and, upon Landlord’s request, Tenant shall cause
Tenant’s Agents to attend such meetings.  Tenant shall cause minutes of such
meetings to be prepared and copies thereof to be delivered promptly to
Landlord.  One such meeting per month shall include a review of the Contractor’s
current request for payment.

3.2.8Tenant’s Covenants.  Within 10 days after completing the Tenant Improvement
Work, Tenant shall cause a Notice of Completion to be recorded in the office of
the Recorder of the county in which the Building is located, in accordance with
California Civil Code § 3093 or any successor statute, and shall furnish a copy
thereof to Landlord upon such recordation.  If Tenant fails to do so, Landlord
may execute and file the same on behalf of Tenant as Tenant’s agent for such
purpose, at Tenant’s expense.  Within 30 days after completing the Tenant
Improvement Work, (a) Tenant shall cause the Architect and the Contractor to
(i) update the Approved Construction Drawings as necessary to reflect all
changes made to the Approved Construction Drawings during the course of
construction, (ii) certify to the best of their knowledge that the updated
drawings are true and correct, which certification shall survive the expiration
or termination of the Agreement, and (iii) deliver to Landlord two (2) CD ROMS
of such updated drawings in accordance with Landlord’s CAD Format Requirements
(defined below); and (b) Tenant shall deliver to Landlord copies of all
warranties, guaranties, and operating manuals and information relating to the
improvements, equipment, and systems in the Premises.  For purposes hereof,
“Landlord’s CAD Format Requirements” shall mean (w) the version is no later than
current Autodesk version of AutoCAD plus the most recent release version,
(x) files must be unlocked and fully accessible (no “cad-lock”, read-only,
password protected or “signature” files), (y) files must be in “.dwg” format,
and (z) if the data was electronically in a non-Autodesk product, then files
must be converted into “‘dwg” files when given to Landlord.

4MISCELLANEOUS. 

4.1Tenant Default.  Notwithstanding any contrary provision of this Work Letter
or the Agreement, if Tenant defaults under this Work Letter or the Agreement
before the Tenant Improvement Work is completed, then (a) Landlord’s obligations
under this Work Letter shall be excused, and Landlord may cause the Contractor
to cease performance of the Tenant Improvement Work, until such default is
cured, and (b) Tenant shall be responsible for any resulting delay in the
completion of the Tenant Improvement Work.

4.2Other.  This Work Letter shall not apply to any space other than the
Premises.  Tenant agrees to accept the Premises in its “as-is”, “where-as”
condition and configuration, it being agreed that Landlord shall not be required
to perform any work or, except as provided above with respect to the Allowance,
incur any costs in connection with the construction or demolition of any
improvements in the Premises.

4.3Landlord Delay. The Commencement Date specified in Section 1.2.2(ii) of the
Basic Lease Information shall be extended by the number of days of delay of the
substantial completion of the Tenant Improvements in the Premises to the extent
caused by a “Landlord Delay,” as that term is defined, below.  As used herein,
the term “Landlord Delay” shall mean (i) failure of Landlord to timely deliver
the Premises for Tenant’s construction or to timely approve or disapprove any
Construction Drawings; (ii) unreasonable and material interference by Landlord,
its agents, employees or contractors with the substantial completion of the
Tenant Improvements and which objectively preclude construction of tenant
improvements in the Building by any person, which interference relates to access
by Tenant, its agents and contractors to the Building or any Building facilities
(including loading docks, if any, and freight elevators) or service (including
parking areas as provided herein) during normal construction hours, or the use
thereof during normal construction hours; or (iii) delays due to the acts or
failures to act of Landlord, its agents, employees or contractors with respect
to payment of the Allowance and any cessation of work upon the Tenant
Improvements as a result thereof.  Notwithstanding anything to the contrary
contained herein, a Landlord Delay shall not include any of the foregoing delays
to the extent caused by the acts, omissions, or misconduct of Tenant or Tenant’s
Agents.  No Landlord Delay shall be deemed to have occurred unless Tenant has
given Landlord written notice that an act or omission on the part of Landlord or
its agents is about to occur or has occurred which will cause a delay in the
completion of the Improvements and Landlord has failed to cure such delay within
one (1) business day after Landlord’s receipt of such notice, in which case the
number of days of delay after such notice shall be a Landlord Delay.

 

Exhibit C - 5

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EXHIBIT D

 

HIGHLANDS CORPORATE CENTER SOUTH PLAZA

 

CONFIRMATION LETTER

 

_____________________, 20__

To:________________
_______________________
_______________________
_______________________

 

Re:Office Lease (the “Lease”) dated ______________, 20____, between BRE CA
Office Owner LLC, a Delaware limited liability company (“Landlord”), and KURA
ONCOLOGY, INC., a Delaware corporation (“Tenant”), concerning Suite 400 on the
4th floor of the building located at 12730 High Bluff Drive, San Diego,
California. 

Lease ID: _____________________________

Business Unit Number: __________________

 

Dear _________________:

In accordance with the Lease, Tenant accepts possession of the Premises and
confirms that the Commencement Date is _____________, and the Expiration Date is
_______________.

Please acknowledge the foregoing by signing all 3 counterparts of this letter in
the space provided below and returning 2 fully executed counterparts to my
attention.  Please note that, pursuant to Section 2.1 of the Lease, Tenant is
required to execute and return (or, by notice to Landlord, reasonably object to)
this letter within 10 business days after receiving it.

 

“Landlord”:

BRE CA OFFICE OWNER LLC, a limited liability company

 

By:________________________________

Name: __________________________

Title: ___________________________

Agreed and Accepted as of ____________, 20__.

“Tenant”:

 

Kura Oncology, Inc., a Delaware corporation

 

By:_________________________

Name:_____________________

Title:_____________________

 

 

Exhibit D - 1

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EXHIBIT E

 

HIGHLANDS CORPORATE CENTER SOUTH PLAZA

 

RULES AND REGULATIONS

 

Tenant shall comply with the following rules and regulations (as modified or
supplemented from time to time, the “Rules and Regulations”).  Landlord shall
not be responsible to Tenant for the nonperformance of any of the Rules and
Regulations by any other tenants or occupants of the Project.  In the event of
any conflict between the Rules and Regulations and the other provisions of this
Lease, the latter shall control.

 

1.Tenant shall not alter any lock or install any new or additional locks or
bolts on any doors or windows of the Premises or the Building without obtaining
Landlord’s prior consent. Landlord shall have the right at all times to retain
and use keys or other access codes or devices to all locks within and into the
Premises. Tenant shall bear the cost of any lock changes or repairs required by
Tenant.  Two keys will be furnished by Landlord for the Premises, and any
additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.  Upon the termination of this
Lease, Tenant shall restore to Landlord all keys of stores, offices and toilet
rooms furnished to or otherwise procured by Tenant, and if any such keys are
lost, Tenant shall pay Landlord the cost of replacing them or of changing the
applicable locks if Landlord deems such changes necessary. 

2.All doors opening to public corridors shall be kept closed at all times except
for normal ingress and egress to the Premises. 

3.Landlord may close and keep locked all entrance and exit doors of the Building
during such hours as are customary for Comparable Buildings.  Tenant shall cause
its employees, agents, contractors, invitees and licensees who use Building and
corridor doors during such hours to securely close and lock them after such
use.  Any person entering or leaving the Building during such hours, or when the
Building doors are otherwise locked, may be required to sign the Building
register, and access to the Building may be refused unless such person has
proper identification or has a previously arranged access pass.  Landlord will
furnish passes to persons for whom Tenant requests them.  Tenant shall be
responsible for all persons for whom Tenant requests passes and shall be liable
to Landlord for all acts of such persons.  Landlord and its agents shall not be
liable for damages for any error with regard to the admission or exclusion of
any person to or from the Building.  In case of invasion, mob, riot, public
excitement or other commotion, Landlord may prevent access to the Building or
the Project during the continuance thereof by any means it deems appropriate for
the safety and protection of life and property.

4.No furniture, freight or equipment shall be brought into the Building without
prior notice to Landlord.  All moving activity into or out of the Building shall
be scheduled with Landlord and done only at such time and in such manner as
Landlord designates.  Landlord may prescribe the weight, size and position of
all safes and other heavy property brought into the Building and also the times
and manner of moving the same in and out of the Building.  Safes and other heavy
objects shall, if considered necessary by Landlord, stand on supports of such
thickness as is necessary to properly distribute the weight.  Landlord will not
be responsible for loss of or damage to any such safe or property.  Any damage
to the Building, its contents, occupants or invitees resulting from Tenant’s
moving or maintaining any such safe or other heavy property shall be the sole
responsibility and expense of Tenant (notwithstanding Sections 6 and 9.4 of the
Lease).

5.No furniture, packages, supplies, equipment or merchandise will be received in
the Building or carried up or down in the elevators, except between such hours,
in such specific elevator and by such personnel as shall be designated by
Landlord.

6.No sign, advertisement, notice or handbill shall be exhibited, distributed,
painted or affixed by Tenant on any part of the Premises or the Building without
Landlord’s prior consent.  Tenant shall not disturb, solicit, peddle or canvass
any occupant of the Project.

7.The toilet rooms, urinals, wash bowls and other apparatus, plumbing, fixtures
and appliances shall not be used for any purpose other than that for which they
were constructed, and no foreign substance shall be thrown or placed therein. 
Notwithstanding Sections 6 and 9.4 of the Lease, Tenant shall bear the expense
of any breakage, stoppage or damage resulting from any violation of this rule by
Tenant or any of its employees, agents, contractors, invitees or licensees.

8.Tenant shall not overload the floor of the Premises, or mark, drive nails or
screws or drill into the partitions, woodwork or drywall of the Premises, or
otherwise deface the Premises, without Landlord’s prior consent.  Tenant shall
not purchase bottled water, ice, towel, linen, maintenance or other like
services from any person not approved by Landlord.

Exhibit E - 1

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9.Except for vending machines intended for the sole use of Tenant’s employees
and invitees, no vending machine or machines other than fractional horsepower
office machines shall be installed, maintained or operated in the Premises
without Landlord’s prior consent.

10.Tenant shall not, without Landlord’s prior consent, use, store, install,
disturb, spill, remove, release or dispose of, within or about the Premises or
any other portion of the Project, any asbestos-containing materials, any solid,
liquid or gaseous material now or subsequently considered toxic or hazardous
under the provisions of 42 U.S.C. Section 9601 et seq. or any other applicable
environmental Law, or any inflammable, explosive or dangerous fluid or
substance; provided, however, that Tenant may use, store and dispose of such
substances in such amounts as are typically found in similar premises used for
general office purposes provided that such use, storage and disposal does not
damage any part of the Premises, Building or Project and is performed in a safe
manner and in accordance with all Laws.  Tenant shall comply with all Laws
pertaining to and governing the use of such materials by Tenant and shall remain
solely liable for the costs of abatement and removal.  No burning candle or
other open flame shall be ignited or kept by Tenant in or about the Premises,
Building or Project.

11.Tenant shall not, without Landlord’s prior consent, use any method of heating
or air conditioning other than that supplied by Landlord.

12.Tenant shall not use or keep any foul or noxious gas or substance in or on
the Premises, or occupy or use the Premises in a manner offensive or
objectionable to Landlord or other occupants of the Project by reason of noise,
odors or vibrations, or interfere with other occupants or those having business
therein, whether by the use of any musical instrument, loudspeaker or
otherwise.  Tenant shall not throw anything out of doors, windows or skylights
or down passageways.

13.Tenant shall not bring into or keep within the Project, the Building or the
Premises any animals (other than service animals), birds, aquariums, or, except
in areas designated by Landlord, bicycles or other vehicles.

14.No cooking shall be done in the Premises, nor shall the Premises be used for
lodging, for living quarters or sleeping apartments, or for any improper,
objectionable, illegal or immoral purposes.  Notwithstanding the foregoing,
Underwriters’ laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and invitees, provided that such use complies with all
Laws.

15.The Premises shall not be used for manufacturing or for the storage of
merchandise except to the extent such storage may be incidental to the Permitted
Use.  Tenant shall not occupy the Premises as an office for a messenger-type
operation or dispatch office, public stenographer or typist, or for the
manufacture or sale of liquor, narcotics or tobacco, or as a medical office, a
barber or manicure shop, an employment bureau, or a business that is materially
involved in the cannabis industry without Landlord’s prior consent.

16.Landlord may exclude from the Project any person who, in Landlord’s judgment,
is intoxicated or under the influence of liquor or drugs, or who violates any of
these Rules and Regulations.

17.Tenant shall not loiter in or on the entrances, corridors, sidewalks,
lobbies, courts, halls, stairways, elevators, vestibules or any Common Areas for
the purpose of smoking tobacco products or for any other purpose, nor in any way
obstruct such areas, and shall use them only as a means of ingress and egress
for the Premises.  Tenant shall not permit smoke from the Premises to emanate
into the Common Areas or any other part of the Building.  Landlord shall have
the right to designate the Building (including the Premises) as a non-smoking
Building.  Tenant must comply with any applicable state or local “No Smoking”
ordinance.

18.Tenant shall not waste electricity, water or air conditioning, shall
cooperate with Landlord to ensure the most effective operation of the Building’s
heating and air conditioning system, and shall not attempt to adjust any
controls.  Tenant shall install and use in the Premises only ENERGY STAR rated
equipment, where available.  Tenant shall use recycled paper in the Premises to
the extent consistent with its business requirements.  Tenant shall not use more
than its proportionate share of telephone lines and other telecommunication
facilities available to service the Building.

19.Tenant shall store all its trash and garbage inside the Premises.  No
material shall be placed in the trash or garbage receptacles if, under Law, it
may not be disposed of in the ordinary and customary manner of disposing of
trash and garbage in the vicinity of the Building.  All trash, garbage and
refuse disposal shall be made only through entryways and elevators provided for
such purposes at such times as Landlord shall designate.  Tenant shall comply
with Landlord’s recycling program, if any.

20.Tenant shall comply with all safety, security, fire protection and evacuation
procedures, programs and regulations established or required by Landlord, any
governmental agency or Law.

Exhibit E - 2

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21.The work of cleaning personnel shall not be hindered by Tenant after 5:30
p.m., and cleaning work may be done at any time when the offices are vacant.
Windows, doors and fixtures may be cleaned at any time.  Tenant shall provide
adequate waste and rubbish receptacles to prevent unreasonable hardship to the
cleaning service. Any persons employed by Tenant to do janitorial work (a) shall
be subject to Landlord’s prior consent; (b) shall not, in Landlord’s reasonable
judgment, disturb labor harmony with any workforce or trades engaged in
performing other work or services at the Project; and (c) while in the Building
and outside of the Premises, shall be subject to the control and direction of
the Building manager (but not as an agent or employee of such manager or
Landlord), and Tenant shall be responsible for all acts of such persons.

22.No awning or other projection shall be attached to the outside walls of the
Building without Landlord’s prior consent.  Other than Landlord’s
Building-standard window coverings, 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.  All electrical ceiling fixtures hung in the Premises or spaces along
the perimeter of the Building must be fluorescent and/or of a quality, type,
design and a warm white bulb color approved in advance by Landlord.  Neither the
interior nor exterior of any windows shall be coated or otherwise sunscreened
without Landlord’s prior consent.  Tenant shall abide by Landlord’s regulations
concerning the opening and closing of window coverings.

23.Tenant shall not obstruct any sashes, sash doors, skylights, windows or doors
that reflect or admit light or air into the halls, passageways or other public
places in the Building, nor shall Tenant place any bottles, parcels or other
articles on the windowsills.

24.Tenant must comply with requests by Landlord concerning the informing of
their employees of items of importance to the Landlord.

25.All office equipment of an electrical or mechanical nature shall be placed by
Tenant in the Premises in settings approved by Landlord, to absorb or prevent
any vibration, noise or annoyance.

26.Tenant shall not use any hand trucks except those equipped with rubber tires
and rubber side guards.

27.No auction, liquidation, fire sale, going-out-of-business or bankruptcy sale
shall be conducted in the Premises without Landlord’s prior consent.

28.Tenant shall not (a) use any name of the Building or Project for any purpose
other than to identify the address of the business to be conducted by Tenant in
the Premises, (b) use any image of the Building or Project in any advertising or
other publicity without Landlord’s prior consent, or (c) use any name or image
of the Building or Project in any manner that would infringe any trade name,
trade mark, copyright or similar right of Landlord or any third party in or to
any name or image of the Building or Project.  Without limiting the foregoing,
Tenant shall not, in any signage displayed at the Building or Project, on its
website, or in any other advertising or promotional material, identify,
describe, or refer to itself or its business as “Kura Oncology, Inc. Highlands
Corporate Center South Plaza or “Kura Oncology, Inc. At Highlands Corporate
Center South Plaza.

29.Landlord has no obligation to allow any particular telecommunication service
provider to have access to the Building or to the Premises.  If Landlord permits
access, Landlord may condition the access upon the payment to Landlord by the
service provider of fees assessed by Landlord in Landlord’s sole discretion.

Landlord may from time to time modify or supplement these Rules and Regulations
in a manner that, in Landlord’s reasonable judgment, is appropriate for the
management, safety, care and cleanliness of the Premises, the Building, the
Common Areas and the Project, for the preservation of good order therein, and
for the convenience of other occupants and tenants thereof, provided that no
such modification or supplement shall materially reduce Tenant’s rights or
materially increase Tenant’s obligations hereunder.  Landlord may waive any of
these Rules and Regulations for the benefit of any tenant, but no such waiver
shall be construed as a waiver of such Rule and Regulation in favor of any other
tenant nor prevent Landlord from thereafter enforcing such Rule and Regulation
against any tenant.  Notwithstanding the foregoing, no rule that is added to the
initial Rules and Regulations shall be enforced against Tenant in a manner that
unreasonably discriminates in favor of any other similarly situated tenant.

 

Exhibit E - 3

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EXHIBIT F

 

HIGHLANDS CORPORATE CENTER SOUTH PLAZA

 

ADDITIONAL PROVISIONS

 

1

PARKING.  Tenant may park in the Building’s parking facilities (the “Parking
Facility”), in common with other tenants of the Building, upon the following
terms and conditions.  Tenant shall not use more than the number of unreserved
and/or reserved parking spaces set forth in Section 1.8 of the Lease.  Tenant
shall pay Landlord, in accordance with Section 3 of the Lease, any fees for the
parking spaces described in Section 1.8 of the Lease.  Tenant shall comply with
all rules and regulations established by Landlord from time to time for the
orderly operation and use of the Parking Facility, including any sticker or
other identification system and the prohibition of vehicle repair and
maintenance activities in the Parking Facility.  Landlord may, in its
discretion, allocate and assign parking passes among Tenant and the other
tenants in the Building.  Tenant’s use of the Parking Facility shall be at
Tenant’s sole risk, and Landlord shall have no liability for any personal injury
or damage to or theft of any vehicles or other property occurring in the Parking
Facility or otherwise in connection with any use of the Parking Facility by
Tenant or its employees or invitees.  Landlord may alter the size,
configuration, design, layout or any other aspect of the Parking Facility, and,
in connection therewith, temporarily deny or restrict access to the Parking
Facility, in each case without abatement of Rent or liability to Tenant. 
Landlord may delegate its responsibilities hereunder to a parking operator, in
which case (i) such parking operator shall have all the rights of control
reserved herein by Landlord, (ii) Tenant shall enter into a parking agreement
with such parking operator, (iii) Tenant shall pay such parking operator, rather
than Landlord, any charge described in Section 1.8 of the Lease for the parking
spaces, and (iv) Landlord shall have no liability for claims arising through
acts or omissions of such parking operator except to the extent caused by
Landlord’s negligence or willful misconduct.  Tenant’s parking rights under this
Section 1 are solely for the benefit of Tenant’s employees and invitees and such
rights may not be transferred without Landlord’s prior consent, except pursuant
to a Transfer permitted under Section 13 of the Lease.  For the avoidance of
doubt, nothing herein shall be deemed to limit Landlord’s right to charge
visitors a fee to use any parking spaces other than those described in
Section 1.8 of the Lease.

2

CALIFORNIA CIVIL CODE SECTION 1938.

Pursuant to California Civil Code § 1938(a), Landlord hereby states that the
Premises have not undergone inspection by a Certified Access Specialist (CASp)
(defined in California Civil Code § 55.52).  Accordingly, pursuant to California
Civil Code § 1938(e), Landlord hereby further states as follows:

A Certified Access Specialist (CASp) can inspect the subject premises and
determine whether the subject premises comply with all of the applicable
construction-related accessibility standards under state law.  Although state
law does not require a CASp inspection of the subject premises, the commercial
property owner or lessor may not prohibit the lessee or tenant from obtaining a
CASp inspection of the subject premises for the occupancy or potential occupancy
of the lessee or tenant, if requested by the lessee or tenant.  The parties
shall mutually agree on the arrangements for the time and manner of the CASp
inspection, the payment of the fee for the CASp inspection, and the cost of
making any repairs necessary to correct violations of construction-related
accessibility standards within the premises.

 

In accordance with the foregoing, Landlord and Tenant agree that if Tenant
obtains a CASp inspection of the Premises, then Tenant shall pay (i) the fee for
such inspection, and (ii) except as may be otherwise expressly provided in this
Lease, the cost of making any repairs necessary to correct violations of
construction-related accessibility standards within the Premises.

3

RESERVED.

4

EXTENSION OPTION.

 

4.1

Grant of Option; Conditions.  Tenant shall have the right to extend the Term
(the “Extension Option”) for one additional period of 5 years commencing on the
day following the Expiration Date of the initial Term and ending on the 5th
anniversary of the Expiration Date (the “Extension Term”), if:

 

4.1.1

Landlord receives irrevocable and unconditional written notice of exercise
(“Extension Notice”) not less than 9 full calendar months prior to the
expiration of the initial Term and not more than 12 full calendar months prior
to the expiration of the initial Term; and

Exhibit F - 1

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4.1.2

Tenant is not in Default under the Lease beyond any applicable cure periods at
the time that Tenant delivers its Extension Notice; and

 

4.1.3

Not more than 25% of the Premises is sublet (other than pursuant to a Permitted
Transfer, as defined in Section 13.8 of the Lease) at the time that Tenant
delivers its Extension Notice; and

 

4.1.4

The Lease has not been assigned (other than pursuant to a Permitted Transfer, as
defined in Section 13.8 of the Lease) prior to the date that Tenant delivers its
Extension Notice.

 

4.2

Terms Applicable to Premises During Extension Term.

 

4.2.1

The initial Base Rent rate per rentable square foot for the Premises during the
Extension Term shall equal the Prevailing Market (hereinafter defined) rate per
rentable square foot for the Premises.   Base Rent during the Extension Term
shall increase, if at all, in accordance with the increases assumed in the
determination of Prevailing Market rate.  Base Rent attributable to the Premises
shall be payable in monthly installments in accordance with the terms and
conditions of the Lease.

 

4.2.2

Tenant shall pay Additional Rent (i.e. Taxes and Expenses) for the Premises
during the Extension Term in accordance with the Lease, and the manner and
method in which Tenant reimburses Landlord for Tenant’s share of Taxes and
Expenses and the Base Year applicable to such matter, shall be some of the
factors considered in determining the Prevailing Market rate for the Extension
Term.

 

4.3

Definition of the Prevailing Market.  For purposes hereof, “Prevailing Market”
shall mean the arms length fair market annual rental rate per rentable square
foot under renewal leases and amendments entered into on or about the date on
which the Prevailing Market is being determined hereunder for space comparable
to the Premises in the Building and office buildings comparable to the Building
on High Bluff Drive and El Camino Real in the Del Mar Heights submarket of San
Diego, California (the “Comparable Market”).   The determination of the
Prevailing Market shall take into account any material economic differences
between the terms of this Lease and any comparison lease, such as rent
abatements, construction costs and other concessions, the term for such lease,
and the manner, if any, in which the landlord under any such lease is reimbursed
for operating expenses and taxes.  Notwithstanding the foregoing, space leased
under any of the following circumstances shall not be considered to be
comparable for purposes hereof: (i) the lease term is for less than 5 years or
more than 7 years, (ii) the space is encumbered by the option rights of another
tenant, or (iii) the space has a lack of windows and/or an awkward or unusual
shape or configuration.  The foregoing is not intended to be an exclusive list
of space that will not be considered to be comparable.

 

4.4

Effect of Failure to Give Notice; Arbitration Procedure.  Tenant shall exercise
the Extension Option by giving the Landlord the Extension Notice.  If Tenant
fails to give the Extension Notice to Landlord within the time period described
above, then the Extension Option shall be null and void and of no further force
or effect.  Within 30 days of receiving Tenant’s Extension Notice, Landlord
shall give Tenant notice of Landlord’s determination of the Prevailing Market
rate for the Extension Term (the “Landlord’s Determination Notice”).  If Tenant
disagrees with Landlord’s determination of the Prevailing Market rate, Landlord
and Tenant shall attempt to agree on the Prevailing Market rate.  If the parties
do not so agree on the Prevailing Market rate within 30 days of the date of
Landlord’s Determination Notice, Landlord and Tenant shall submit the
determination of the Prevailing Market rate to binding arbitration unless the
parties otherwise mutually agree in their respective sole discretion.  In such
event, Landlord and Tenant shall attempt to agree on an arbitrator within 10
days after the expiration of such 30 day period.  If they fail, after good faith
efforts, to agree on an arbitrator within such 10 day period, Landlord and
Tenant shall each appoint a reputable commercial leasing broker as arbitrator,
each of whom shall have at least 10 years’ active and current experience in the
commercial real estate industry and the High Bluff Drive and El Camino Real
leasing market with working knowledge of current rental rates and leasing
practices related to buildings similar to the Building.  Such an appointment
shall be signified in writing by each party to the other.  If either party shall
fail to appoint an arbitrator within a period of 10 days after written notice
from the other party to make such appointment, the sole arbitrator appointed
shall make the determination of the Prevailing Market rate in the same manner
provided below as though it were the third arbitrator.  If both parties appoint
an arbitrator, the arbitrators so appointed shall appoint a third arbitrator,
who is a reputable commercial leasing broker and has at least 10 years’ active
and current experience in the commercial real estate industry and in the

Exhibit F - 2

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

 

 

High Bluff Drive and El Camino Real leasing market with working knowledge of
current rental rates and leasing practices related to buildings similar to the
Building, within 10 days after the appointment of the second arbitrator.  Each
of Landlord and Tenant shall furnish each of the three arbitrators with a copy
of their respective final determination of the Prevailing Market rate.  The
third arbitrator shall proceed with all reasonable dispatch to determine whether
Landlord’s final determination of the Prevailing Market rate or Tenant’s final
determination of the Prevailing Market rate, most closely reflects the
Prevailing Market rate and in no event shall the arbitrator have the right (i)
to average the final determination of the Prevailing Market rate of Landlord and
Tenant or (ii) to choose another rate.  The decision of such third arbitrator
shall in any event be rendered within 30 days after his/her appointment, or
within such other period as the parties shall agree, and such decision shall be
in writing and in duplicate, one counterpart thereof to be delivered to each of
the parties.  The arbitration shall be conducted in accordance with the rules of
the American Arbitration Association (or its successor) and applicable Law and
this Section, which shall govern to the extent of any conflict between this
Section and the rules of the American Arbitration Association, and the decision
of the third arbitrator shall be reviewable only to the extent provided by the
rules of the American Arbitration Association and shall otherwise be binding,
final and conclusive on the parties.  Each party shall pay the fees of the
arbitrator it chose and the fees of its counsel and the losing party shall pay
for the fees of the third arbitrator and the reasonable and necessary expenses
incident to the proceedings; provided however, if a party fails to appoint an
arbitrator, the fees of the sole arbitrator shall be split between the two
parties equally.

 

4.5

Extension Amendment.  If Tenant is entitled to and validly exercises its
Extension Option, Landlord shall prepare an amendment (the “Extension
Amendment”) to reflect changes in the Base Rent, Term, Expiration Date and other
appropriate terms.  The Extension Amendment shall be (i) sent to Tenant within a
reasonable time after determination of the Prevailing Market rate, and
(ii) executed by Tenant (or reasonable comments made) and returned to Landlord
within 15 days after the Extension Amendment is delivered to Tenant by
Landlord.  Notwithstanding the foregoing, an otherwise valid exercise of the
Extension Option shall be fully effective whether or not the Extension Amendment
is executed.

 

4.6

Time of the Essence.  Time is of the essence with respect to all of the time
periods set forth in this Section 4.

 

4.7

Personal to Tenant.  Notwithstanding anything herein to the contrary, Tenant’s
Extension Option is personal to Tenant and in no event shall such Extension
Option be assignable (other than pursuant to a Permitted Transfer, as defined in
Section 13.8 of the Lease).

5

RIGHT OF FIRST OFFER.

 

5.1

Grant of Option; Conditions.

 

5.1.1

Subject to the terms of this Section 5, Tenant shall have a one time right of
first offer (“Right of First Offer”) with respect to any space which may become
“Available” (as defined below) on the third (3rd) floor of the Building (each, a
“Potential Offering Space”).  Tenant’s Right of First Offer shall be exercised
as follows:  At any time after Landlord has determined that a Potential Offering
Space has become Available (defined below), but before leasing such Potential
Offering Space to a third party, Landlord, subject to the terms of this
Section 5, shall provide Tenant with a written notice (for purposes of this
Section 5, an “Advice”) advising Tenant of the material terms on which Landlord
is prepared to lease such Potential Offering Space (sometimes referred to herein
as an “Offering Space”) to Tenant, which terms shall be consistent with
Section  5.2 below.  For purposes hereof, a Potential Offering Space shall be
deemed to become “Available” as follows:  (i) if such Potential Offering Space
is not leased to a third party as of the date of mutual execution and delivery
of this Lease, such Potential Offering Space shall be deemed to become Available
when Landlord has located a prospective tenant that may be interested in leasing
such Potential Offering Space; and (ii) if such Potential Offering Space is
leased to a third party tenant as of the date of mutual execution and delivery
of this Lease, such Potential Offering Space shall be deemed to become Available
when Landlord has determined that such third-party tenant, and any occupant of
such Potential Offering Space claiming under such third-party tenant, will not
extend or renew the term of its lease, or enter into a new lease, for such
Potential Offering Space.  Upon receiving an Advice, Tenant may lease the
Offering Space, in its entirety only, on the terms set forth in the Advice, by
delivering to Landlord a written notice (for purposes of this Section 5, a
“Notice of Exercise”) within five (5) days after receiving the Advice.

Exhibit F - 3

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

 

 

5.1.2

If Tenant receives an Advice but does not deliver a Notice of Exercise within
the period of time required under Section 5.1.1 above, Landlord may lease the
Offering Space to any party on any terms determined by Landlord in its sole and
absolute discretion; provided, however, that if Landlord intends to enter into a
lease upon terms which are more than ten percent (10%) more favorable to a third
(3rd) party tenant than those terms proposed by Landlord in the Advice (blending
all concessions on a straight-line basis over the applicable lease terms),
Landlord shall first deliver written notice to Tenant (“Second Chance Notice”)
providing Tenant with the opportunity to lease the Offering Space on such more
favorable terms.  Tenant’s failure to elect to lease the Offering Space upon
such more favorable terms by written notice to Landlord within three (3)
business days after Tenant’s receipt of such Second Chance Notice from Landlord
shall be deemed to constitute Tenant’s election not to lease such space upon
such more favorable terms, in which case Landlord shall be entitled to lease
such space to any third (3rd) party on terms no more favorable to the third
(3rd) party than those set forth in the Second Chance Notice.  If Landlord does
lease such First Offer Space to a third (3rd) party tenant pursuant to the terms
and conditions of this 5.1.2 above, Tenant shall have no further right to lease
such First Offer Space.

 

5.1.3

Notwithstanding any contrary provision hereof, (i) Landlord shall not be
required to provide Tenant with an Advice if any of the following conditions
exists when Landlord would otherwise deliver the Advice; and (ii) if Tenant
receives an Advice from Landlord, Tenant shall not be entitled to lease the
Offering Space based on such Advice if any of the following conditions exists:

A.                 a Default exists;

B.                  all or any portion of the Premises is sublet (other than to
an Affiliate of Tenant);

C.                  the Lease has been assigned (other than pursuant to a
Permitted Transfer); or

D.                 Tenant is not occupying the Premises.

If, by operation of the preceding sentence, Landlord is not required to provide
Tenant with an Advice, or Tenant, after receiving an Advice, is not entitled to
lease the Offering Space based on such Advice, then Landlord may lease the
Offering Space to any party on any terms determined by Landlord in its sole and
absolute discretion.

 

5.2

Terms for Offering Space.

 

5.2.1

The term for the Offering Space shall be the greater of (i) coterminous with the
term for the balance of the Premises, or (ii) 36 full calendar months, together
with any partial calendar month occurring at the beginning of such term.

 

5.2.2

The term for the Offering Space shall commence on the commencement date stated
in the Advice and thereupon the Offering Space shall be considered a part of the
Premises subject to the provisions of the Lease; provided, however, that the
provisions of the Advice (including the provision of the Advice establishing the
expiration date for the Offering Space) shall prevail to the extent they
conflict with the provisions of the Lease.

 

5.2.3

Tenant shall pay Base Rent and Additional Rent for the Offering Space in
accordance with the provisions of the Advice, which shall reflect the Prevailing
Market (defined in Section 5.5 below) rate for the Offering Space as determined
in Landlord’s reasonable judgment.

 

5.2.4

Except as may be otherwise provided in the Advice, (i) the Offering Space shall
be accepted by Tenant in its configuration and condition existing when Landlord
tenders possession of the Offering Space to Tenant, without any obligation on
the part of Landlord to perform or pay for any alterations or improvements
thereto; and (ii) if Landlord is delayed in delivering possession of the
Offering Space by any holdover or unlawful possession of the Offering Space by
any party, Landlord shall use reasonable efforts to obtain possession of the
Offering Space and any obligation of Landlord to tender possession of, permit
entry to, or perform

Exhibit F - 4

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

 

 

alterations to the Offering Space shall be deferred until after Landlord has
obtained possession of the Offering Space.

 

5.3

Termination of Right of First Offer; One Time Right.

 

5.3.1

Notwithstanding any contrary provision hereof, Landlord shall not be required to
provide Tenant with an Advice, and Tenant shall not be entitled to exercise its
Right of First Offer, after the date of expiration or earlier termination of the
Lease.

 

5.3.2

Notwithstanding any contrary provision hereof, Landlord shall not be required to
provide Tenant with an Advice, and Tenant shall not be entitled to exercise its
Right of First Offer, with respect to any Potential Offering Space after the
date, if any, on which Landlord becomes entitled to lease such Potential
Offering Space to a third party under Section 5.1.2 or 5.1.3 above.

 

5.4

Offering Amendment.  If Tenant validly exercises its Right of First Offer,
Landlord, within a reasonable period of time thereafter, shall prepare and
deliver to Tenant an amendment (the “Offering Amendment”) adding the Offering
Space to the Premises on the terms set forth in the Advice and reflecting the
changes in the Base Rent, the rentable square footage of the Premises, Tenant’s
Share, and other appropriate terms in accordance with this Section 5.  Tenant
shall execute and return (or provide Landlord with reasonable written objections
to) the Offering Amendment within 15 days after receiving it, but an otherwise
valid exercise of the Right of First Offer shall be fully effective whether or
not the Offering Amendment is executed.

 

5.5

Definition of Prevailing Market.  For purposes of this Section 5, “Prevailing
Market” means the arms-length, fair-market, annual rental rate per rentable
square foot, under renewal and expansion leases and amendments entered into on
or about the date on which the Prevailing Market is being determined hereunder,
for space comparable to the Offering Space in the Comparable Market (as defined
in Section 4.3 above).  The determination of Prevailing Market shall take into
account (i) any material economic differences between the terms of the Lease and
any comparison lease or amendment, such as rent abatements, construction costs
and other concessions, and the manner, if any, in which the landlord under any
such lease is reimbursed for operating expenses and taxes; and (ii) any material
differences in configuration or condition between the Offering Space and any
comparison space.

 

5.6

Subordination.  Notwithstanding any contrary provision hereof, Tenant’s Right of
First Offer shall be subject and subordinate to the expansion rights (whether
such rights are designated as a right of first offer, right of first refusal,
expansion option or otherwise) of any tenant of the Project existing on the date
hereof.

 

 

Exhibit F - 5

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

 

EXHIBIT G

 

HIGHLANDS CORPORATE CENTER SOUTH PLAZA

 

JUDICIAL REFERENCE

 

IF THE JURY-WAIVER PROVISIONS OF SECTION 23.8 OF THE LEASE ARE NOT ENFORCEABLE
UNDER CALIFORNIA LAW, THE PROVISIONS SET FORTH BELOW SHALL APPLY.

It is the desire and intention of the parties to agree upon a mechanism and
procedure under which controversies and disputes arising out of the Lease or
related to the Premises will be resolved in a prompt and expeditious manner. 
Accordingly, except with respect to actions for unlawful or forcible detainer or
with respect to the prejudgment remedy of attachment, any action, proceeding or
counterclaim brought by either party hereto against the other (and/or against
its officers, directors, employees, agents or subsidiaries or affiliated
entities) on any matters arising out of or in any way connected with the Lease,
Tenant’s use or occupancy of the Premises and/or any claim of injury or damage,
whether sounding in contract, tort, or otherwise, shall be heard and resolved by
a referee under the provisions of the California Code of Civil Procedure,
Sections 638 — 645.1, inclusive (as same may be amended, or any successor
statute(s) thereto) (the “Referee Sections”).  Any fee to initiate the judicial
reference proceedings and all fees charged and costs incurred by the referee
shall be paid by the party initiating such procedure (except that if a reporter
is requested by either party, then a reporter shall be present at all
proceedings where requested and the fees of such reporter – except for copies
ordered by the other parties – shall be borne by the party requesting the
reporter); provided however, that allocation of the costs and fees, including
any initiation fee, of such proceeding shall be ultimately determined in
accordance with Section 23.6 of the Lease.  The venue of the proceedings shall
be in the county in which the Premises are located.  Within 10 days of receipt
by any party of a request to resolve any dispute or controversy pursuant to this
Exhibit G, the parties shall agree upon a single referee who shall try all
issues, whether of fact or law, and report a finding and judgment on such issues
as required by the Referee Sections.  If the parties are unable to agree upon a
referee within such 10-day period, then any party may thereafter file a lawsuit
in the county in which the Premises are located for the purpose of appointment
of a referee under the Referee Sections.  If the referee is appointed by the
court, the referee shall be a neutral and impartial retired judge with
substantial experience in the relevant matters to be determined, from Jams, ADR
Services, Inc. or a similar mediation/arbitration entity approved by each party
in its sole and absolute discretion.  The proposed referee may be challenged by
any party for any of the grounds listed in the Referee Sections.  The referee
shall have the power to decide all issues of fact and law and report his or her
decision on such issues, and to issue all recognized remedies available at law
or in equity for any cause of action that is before the referee, including an
award of attorneys’ fees and costs in accordance with the Lease.  The referee
shall not, however, have the power to award punitive damages, nor any other
damages that are not permitted by the express provisions of the Lease, and the
parties waive any right to recover any such damages.  The parties may conduct
all discovery as provided in the California Code of Civil Procedure, and the
referee shall oversee discovery and may enforce all discovery orders in the same
manner as any trial court judge, with rights to regulate discovery and to issue
and enforce subpoenas, protective orders and other limitations on discovery
available under California Law.  The reference proceeding shall be conducted in
accordance with California Law (including the rules of evidence), and in all
regards, the referee shall follow California Law applicable at the time of the
reference proceeding.  The parties shall promptly and diligently cooperate with
one another and the referee, and shall perform such acts as may be necessary to
obtain a prompt and expeditious resolution of the dispute or controversy in
accordance with the terms of this Exhibit G.  In this regard, the parties agree
that the parties and the referee shall use best efforts to ensure that (a)
discovery be conducted for a period no longer than six (6) months from the date
the referee is appointed, excluding motions regarding discovery, and (b) a trial
date be set within nine (9) months of the date the referee is appointed.  In
accordance with Section 644 of the California Code of Civil Procedure, the
decision of the referee upon the whole issue must stand as the decision of the
court, and upon the filing of the statement of decision with the clerk of the
court, or with the judge if there is no clerk, judgment may be entered thereon
in the same manner as if the action had been tried by the court.  Any decision
of the referee and/or judgment or other order entered thereon shall be
appealable to the same extent and in the same manner that such decision,
judgment, or order would be appealable if rendered by a judge of the superior
court in which venue is proper hereunder.  The referee shall in his/her
statement of decision set forth his/her findings of fact and conclusions of
law.  The parties intend this general reference agreement to be specifically
enforceable in accordance with the Code of Civil Procedure.  Nothing in this
Exhibit G shall prejudice the right of any party to obtain provisional relief or
other equitable remedies from a court of competent jurisdiction as shall
otherwise be available under the Code of Civil Procedure and/or applicable court
rules.

Exhibit G - 1