Exhibit 10.9

LEASE

by and between

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

and

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

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Table of Contents

 

1.

 

Lease of Premises

     1  

2.

 

Basic Lease Provisions

     2  

3.

 

Term

     4  

4.

 

Possession and Commencement Date.

     4  

5.

 

Condition of Premises

     6  

6.

 

Rentable Area

     6  

7.

 

Rent

     7  

8.

 

Rent Adjustments

     8  

9.

 

Operating Expenses

     8  

10.

 

Taxes on Tenant’s Property

     14  

11.

 

Security Deposit

     14  

12.

 

Use

     17  

13.

 

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

     21  

14.

 

Project Control by Landlord

     21  

15.

 

Quiet Enjoyment

     22  

16.

 

Utilities and Services

     23  

17.

 

Alterations

     26  

18.

 

Repairs and Maintenance

     29  

19.

 

Liens

     30  

20.

 

Estoppel Certificate

     31  

21.

 

Hazardous Materials

     31  

22.

 

Odors and Exhaust

     34  

23.

 

Insurance; Waiver of Subrogation

     35  

24.

 

Damage or Destruction

     38  

25.

 

Eminent Domain

     41  

26.

 

Surrender

     41  

27.

 

Holding Over

     42  

28.

 

Indemnification and Exculpation

     43  

29.

 

Assignment or Subletting

     44  

30.

 

Subordination and Attornment

     48  

31.

 

Defaults and Remedies

     49  

 

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32.

 

Bankruptcy

     54  

33.

 

Brokers

     55  

34.

 

Definition of Landlord

     55  

35.

 

Limitation of Landlord’s Liability

     56  

36.

 

Joint and Several Obligations

     56  

37.

 

Representations

     57  

38.

 

Confidentiality

     57  

39.

 

Notices

     57  

40.

 

Miscellaneous

     58  

 

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LEASE

THIS LEASE (this “Lease”) is entered into as of this 6th day of March, 2017 (the
“Execution Date”), by and between BMR-PACIFIC RESEARCH CENTER LP, a Delaware
limited partnership (“Landlord”), and PROTAGONIST THERAPEUTICS, INC., a Delaware
corporation (“Tenant”).

RECITALS

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

B.    WHEREAS, Landlord wishes to lease to Tenant, and Tenant desires to lease
from Landlord, certain premises as shown on Exhibit A attached hereto (the
“Premises”) located on the first (1st) and second (2nd) floors of the building
addressed at 7707 Gateway Boulevard, Newark, California (the “Building”),
pursuant to the terms and conditions of this Lease, as detailed below.

AGREEMENT

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

1.    Lease of Premises

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

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which is that part of the Project to the north of Gateway Boulevard comprised of
the Building and five (5) other buildings commonly referred to as Buildings 1,
2, 3, 6 and 7, together with all appurtenances thereto (collectively, the “North
Campus”).

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

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

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

 

Definition or Provision

   Means the Following
(As of the Term Commencement Date) Approximate Rentable Area of Premises   
42,877 square feet Approximate Rentable Area of Building    148,848 square feet
Approximate Rentable Area of North Campus    966,271 square feet Approximate
Rentable Area of Project    1,389,517 square feet Tenant’s Pro Rata Share of
Building    28.81% Tenant’s Pro Rata Share of North Campus    4.44% Tenant’s Pro
Rata Share of Project    3.09%

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

 

Dates

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

Month 1 – Month 6

     21,291 *     $3.40 monthly    $ 72,389.40  

Month 7 – Month 12

     31,291 *     $3.40 monthly    $ 106,389.40  

Month 13 – Month 24

     42,877      $3.60 monthly    $ 154,357.20  

 

* Base Rent for months one (1) through (6) of the Term will be calculated based
upon 21,291 square feet of Rentable Area and Base Rent for months seven
(7) through twelve (12) of the Term will be calculated based upon 31,291 square
feet of Rentable Area; provided, however, that Tenant’s Pro Rata Shares shall,
at all times, be calculated based on the total Rentable Area of the Premises.

 

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2.4.    Estimated Term Commencement Date: July 1, 2017

2.5.    Estimated Term Expiration Date: June 30, 2024

2.6.    Security Deposit: $450,000 (subject to Section 11.7 below)

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

2.8.    Address for Rent Payment:

BMR-Pacific Research Center LP

Attention Entity 285

P.O. Box 511415

Los Angeles, California 90051-7970

2.9.    Address for Notices to Landlord:

BMR-Pacific Research Center LP

17190 Bernardo Center Drive

San Diego, California 92128

Attn: Legal Department

2.10.    Address for Notices to Tenant:

Protagonist Therapeutics, Inc.

7707 Gateway Boulevard,

Newark, California

Attn: Tom O’Neil, Chief Financial Officer

2.11.    Address for Invoices to Tenant:

Protagonist Therapeutics, Inc.

7707 Gateway Boulevard,

Newark, California

Attn: Tom O’Neil, Chief Financial Officer

 

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

 

Exhibit A

  

Premises

Exhibit B

  

Work Letter

Exhibit B-1

  

Tenant Work Insurance Schedule

Exhibit C

  

Acknowledgement of Term Commencement Date and Term Expiration Date

Exhibit D

  

FF&E

Exhibit E

  

Form of Letter of Credit

Exhibit F

  

Rules and Regulations

Exhibit G

  

Approved Vendor List

Exhibit H

  

Tenant’s Personal Property

Exhibit I

  

Form of Estoppel Certificate

Exhibit J

  

Landlord Work Area

3.    Term. The actual term of this Lease (as the same may be earlier terminated
in accordance with this Lease, the “Term”) shall commence on the actual Term
Commencement Date (as defined in Article 4) and end on the date (the “Term
Expiration Date”) that is eighty-four (84) months after the actual Term
Commencement Date, subject to earlier termination of this Lease as provided
herein. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA
CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME.

4.    Possession and Commencement Date.

4.1.    The “Term Commencement Date” shall be the earlier of (a) the Estimated
Term Commencement Date and (b) the later of (i) June 1, 2017 and (ii) the day
Tenant commences business operations in the Premises. Tenant shall execute and
deliver to Landlord written acknowledgment of the actual Term Commencement Date
and the Term Expiration Date within ten (10) days after Tenant takes occupancy
of the Premises, in the form attached as Exhibit C hereto. Failure to execute
and deliver such acknowledgment, however, shall not affect the Term Commencement
Date or Landlord’s or Tenant’s liability hereunder. Failure by Tenant to obtain
validation by any medical review board or other similar governmental licensing
of the Premises required for the Permitted Use by Tenant shall not serve to
extend the Term Commencement Date. The term “Substantially Complete” or
“Substantial Completion” means that the Tenant Improvements (as defined below)
are substantially complete in accordance with the Approved Plans (as defined in
the Work Letter), except for minor punch list items.

4.2.    Tenant shall cause the work (the “Tenant Improvements”) described in the
Work Letter attached hereto as Exhibit B (the “Work Letter”) to be constructed
in the Premises pursuant to the Work Letter at a cost to Landlord not to exceed
Four Hundred Sixty-Nine Thousand Three Hundred Sixty-Five Dollars ($469,365)
(the “TI Allowance”). The TI Allowance may be applied to the costs of
(m) construction, (n) project review by Landlord (which fee shall equal three
percent (3%) of the cost of the Tenant Improvements, including the TI
Allowance), (o) commissioning of mechanical, electrical and plumbing systems by
a licensed, qualified commissioning agent hired by Tenant, and review of such
party’s commissioning

 

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report by a licensed, qualified commissioning agent hired by Landlord, (p) space
planning, architect, engineering and other related services performed by third
parties unaffiliated with Tenant, (q) building permits and other taxes, fees,
charges and levies by Governmental Authorities (as defined below) for permits or
for inspections of the Tenant Improvements, and (r) costs and expenses for
labor, material, equipment and fixtures. In no event shall the TI Allowance be
used for (v) the cost of work that is not authorized by the Approved Plans (as
defined in the Work Letter) or otherwise approved in writing by Landlord,
(w) payments to Tenant or any affiliates of Tenant, (x) the purchase of any
furniture, personal property or other non-building system equipment, (y) costs
resulting from any default by Tenant of its obligations under this Lease or
(z) costs that are recoverable by Tenant from a third party (e.g., insurers,
warrantors, or tortfeasors).

4.3.    Tenant shall have until December 31, 2018 to expend the unused portion
of the TI Allowance, after which date Landlord’s obligation to fund such costs
shall expire.

4.4.    In no event shall any unused TI Allowance entitle Tenant to a credit
against Rent payable under this Lease. Tenant shall deliver to Landlord (a) a
certificate of occupancy (or its substantial equivalent) for the Premises
suitable for the Permitted Use (if required by Applicable Law for legal
occupancy of the Premises) and (b) a Certificate of Substantial Completion in
the form of the American Institute of Architects document G704, executed by the
project architect and the general contractor.

4.5.    Tenant shall have exclusive access to the Premises (subject to the
terms, conditions and provisions of Section 4.6 below) from and after the
Execution Date for purposes of (a) constructing the Tenant Improvements (in
accordance with all of the terms, conditions and provisions of this Lease and
the Work Letter), (b) the placement of Tenant’s furniture, fixtures, equipment
and personal property, and (c) commencing business operations in the Premises;
provided, however, that, prior to entering upon the Premises, Tenant shall
furnish to Landlord evidence satisfactory to Landlord that insurance coverages
required of Tenant under the provisions of Article 23 are in effect, and such
entry shall be subject to all the terms and conditions of this Lease other than
the payment of Base Rent, the Property Management Fee (as defined below) or
Tenant’s Adjusted Share of Operating Expenses (as defined below) (except that,
in the event that Tenant uses the Premises for the purposes set forth in
Subsection (c) above prior to the Term Commencement Date, Tenant shall be
obligated to pay the Property Management Fee and Tenant’s Adjusted Share of
Operating Expenses from and after the date that Tenant first commences business
operations in the Premises).

4.6    Notwithstanding anything to the contrary in this Lease, Tenant
acknowledges that, as of the Execution Date, Landlord is in the process of
constructing certain work on the slab, vapor barrier and flooring in the portion
of the first (1st) floor of the Premises outlined on Exhibit J attached hereto
(such work, the “Landlord Work”). From and after the Execution Date, Tenant
shall permit Landlord to enter the Premises at all times (including during
business hours) to construct the Landlord Work, and Tenant shall (at no cost to
Tenant) otherwise reasonably cooperate with Landlord throughout the construction
process to enable Landlord to complete the Landlord Work in a timely and
efficient manner. In constructing the Landlord Work, Landlord shall reasonably
cooperate with Tenant so as to cause as little interference to Tenant as is

 

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reasonably possible; provided, however, that in no event shall Landlord’s
construction of the Landlord Work in the Premises (a) cause Rent (as defined
below) to abate under this Lease, (b) give rise to any claim by Tenant for
damages or (c) constitute a forcible or unlawful entry, a detainer or an
eviction of Tenant. In the event that Landlord fails to complete the Landlord
Work on or before the Term Commencement Date (as defined in Section 4.1 above),
the Term Commencement Date shall be extended on a day-for-day basis until
Landlord completes the Landlord Work (such that the Term Commencement Date shall
be the date immediately following the day that Landlord completes the Landlord
Work).

4.7    Landlord and Tenant shall mutually agree upon the selection of the
architect, engineer, general contractor and major subcontractors, and Landlord
and Tenant shall each participate in the review of the competitive bid process;
provided that the architects, engineers, general contractors and subcontractors
listed on Exhibit G attached hereto are pre-approved by Landlord for the initial
Tenant Improvements. Landlord may refuse to approve any architects, consultants,
contractors, subcontractors or material suppliers that Landlord reasonably
believes could cause labor disharmony or may not have sufficient experience, in
Landlord’s reasonable opinion, to perform work in an occupied Class “A”
laboratory research building and in lab areas.

4.8    Tenant shall pay all utility charges, together with any fees, surcharges
and taxes thereon for the period beginning on the date that Tenant first
accesses the Premises for any reason after the Execution Date.

5.    Condition of Premises. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
condition of the Premises, the Building or the Project, or with respect to the
suitability of the Premises, the Building or the Project for the conduct of
Tenant’s business. Tenant acknowledges that (a) it is fully familiar with the
condition of the Premises and agrees to take the same in its condition “as is”
as of the Execution Date and (b) Landlord shall have no obligation to alter,
repair or otherwise prepare the Premises for Tenant’s occupancy or to pay for or
construct any improvements to the Premises, except with respect to payment of
the TI Allowance. Tenant’s taking of possession of the Premises shall, except as
otherwise agreed to in writing by Landlord and Tenant, conclusively establish
that the Premises, the Building and the Project were at such time in good,
sanitary and satisfactory condition and repair.

6.    Rentable Area.

6.1.    The term “Rentable Area” shall reflect such areas as reasonably
calculated by Landlord’s architect, as the same may be reasonably adjusted from
time to time by Landlord in consultation with Landlord’s architect to reflect
changes to the Premises, the Building or the Project, as applicable; provided
that in no event will the Base Rent payable pursuant to this Lease change as a
result of any remeasurement of the Premises, Building or Project, unless due to
a physical change of the same.

6.2.    The Rentable Area of the Building is generally determined by making
separate calculations of Rentable Area applicable to each floor within the
Building and totaling the Rentable Area of all floors within the Building. The
Rentable Area of a floor is computed by measuring to the outside finished
surface of the permanent outer Building walls. The full area

 

6

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calculated as previously set forth is included as Rentable Area, without
deduction for columns and projections or vertical penetrations, including
stairs, elevator shafts, flues, pipe shafts, vertical ducts and the like, as
well as such items’ enclosing walls.

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

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

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

7.    Rent.

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

7.2.    In addition to Base Rent, commencing on the Expense Trigger Date (as
defined in Section 9.5 below), Tenant shall pay to Landlord as additional rent
(“Additional Rent”) at times hereinafter specified in this Lease (a) Tenant’s
Adjusted Share (as defined below) of Operating Expenses (as defined below), (b)
the Property Management Fee (as defined below), (c) [intentionally omitted] and
(d) any other amounts that Tenant assumes or agrees to pay under the provisions
of this Lease that are owed to Landlord, including any and all other sums that
may become due by reason of any default of Tenant or failure on Tenant’s part to
comply with the agreements, terms, covenants and conditions of this Lease to be
performed by Tenant, after notice and the lapse of any applicable cure periods.

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

7.4.    Tenant’s obligation to pay Rent shall not be discharged or otherwise
affected by (a) any Applicable Laws now or hereafter applicable to the Premises,
(b) any other restriction on

 

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Tenant’s use, (c) except as expressly provided herein, any casualty or taking or
(d) any other occurrence; and Tenant waives all rights now or hereafter existing
to terminate or cancel this Lease or quit or surrender the Premises or any part
thereof, or to assert any defense in the nature of constructive eviction to any
action seeking to recover rent. Tenant’s obligation to pay Rent with respect to
any period or obligations arising, existing or pertaining to the period prior to
the date of the expiration or earlier termination of the Term or this Lease
shall survive any such expiration or earlier termination; provided, however,
that nothing in this sentence shall in any way affect Tenant’s obligations with
respect to any other period.

8.    Rent Adjustments. Base Rent shall be subject to an annual upward
adjustment of three percent (3%) of the then-current Base Rent. The first such
adjustment shall become effective commencing on the second (2nd) annual
anniversary of the Term Commencement Date, and subsequent adjustments shall
become effective on every successive annual anniversary for so long as this
Lease continues in effect.

9.    Operating Expenses.

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

(a)    Government impositions, including property tax costs consisting of real
and personal property taxes (including amounts due under any improvement bond
upon the Building or the Project (including the parcel or parcels of real
property upon which the Building, the other buildings in the Project and areas
serving the Building and the Project are located)) or assessments in lieu
thereof imposed by any federal, state, regional, local or municipal governmental
authority, agency or subdivision (each, a “Governmental Authority”); taxes on or
measured by gross rentals received from the rental of space in the Project;
taxes based on the square footage of the Premises, the Building or the Project,
as well as any parking charges, utilities surcharges or any other costs levied,
assessed or imposed by, or at the direction of, or resulting from Applicable
Laws or interpretations thereof, promulgated by any Governmental Authority in
connection with the use or occupancy of the Project or the parking facilities
serving the Project; taxes on this transaction or any document to which Tenant
is a party creating or transferring an interest in the Premises; any fee for a
business license to operate an office building; and any expenses, including the
reasonable cost of attorneys or experts, reasonably incurred by Landlord in
seeking reduction by the taxing authority of the applicable taxes, less tax
refunds obtained as a result of an application for review thereof; and

(b)    All other costs of any kind paid or incurred by Landlord in connection
with the operation or maintenance of the Building and the Project (including the
Amenities Building, which shall include (i) Project office rent at fair market
rental for a commercially reasonable amount of space for Project management
personnel located in the Amenities Building, to the extent an office used for
Project operations is maintained at the Project, plus customary expenses for
such office, and (ii) fair market rent for the portion of the Amenities Building
used in providing the Amenities Building Services), and costs of repairs and
replacements to improvements within the Project as appropriate to maintain the
Project as required hereunder, including costs of funding such reasonable
reserves as Landlord, consistent with good business practice, may establish to
provide for future repairs and replacements, or as any Lender (as defined below)
may require; costs of utilities furnished to the Common Area;

 

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sewer fees; cable television; trash collection; cleaning, including windows
(including those of the Amenities Building); heating, ventilation and
air-conditioning (“HVAC”); maintenance of landscaping and grounds; snow removal;
maintenance of drives and parking areas; maintenance of the roof (including that
of the Amenities Building); security services and devices; building supplies;
maintenance or replacement of equipment utilized for operation and maintenance
of the Project; license, permit and inspection fees; sales, use and excise taxes
on goods and services purchased by Landlord in connection with the operation,
maintenance or repair of the Building or Project systems and equipment;
telephone, postage, stationery supplies and other expenses incurred in
connection with the operation, maintenance or repair of the Project; accounting,
legal and other professional fees and expenses incurred in connection with the
Project; costs of furniture, draperies, carpeting, landscaping supplies, snow
removal and other customary and ordinary items of personal property provided by
Landlord for use in Common Area or in the Project office; capital expenditures
(amortized over the useful life thereof, as reasonably determined by Landlord,
in accordance with generally accepted accounting principles, but in no event
longer than fifteen (15) years) (any such capital expenditures, “Permitted
Capital Expenditures”); costs of complying with Applicable Laws (except to the
extent such costs are incurred to remedy non-compliance as of the Execution Date
with Applicable Laws); costs to keep the Project in compliance with, or costs or
fees otherwise required under or incurred pursuant to any CC&Rs (as defined
below), including condominium fees; insurance premiums, including premiums for
commercial general liability, property casualty, earthquake, terrorism and
environmental coverages; portions of insured losses paid by Landlord as part of
the deductible portion of a loss pursuant to the terms of insurance policies;
service contracts; costs of services of independent contractors retained to do
work of a nature referenced above; and costs of compensation (including
employment taxes and fringe benefits) of all persons who perform regular and
recurring duties connected with the day-to-day operation and maintenance of the
Project, its equipment, the adjacent walks, landscaped areas, drives and parking
areas, including janitors, floor waxers, window washers, watchmen, gardeners,
sweepers, plow truck drivers, handymen, and engineering/maintenance/facilities
personnel.

(c)    Notwithstanding the foregoing, Operating Expenses shall not include any
net income, franchise, capital stock, estate or inheritance taxes, or taxes that
are the personal obligation of Tenant or of another tenant of the Project; any
leasing commissions; expenses that relate to preparation of rental space for a
tenant; expenses of initial development and construction, including grading,
paving, landscaping and decorating (as distinguished from maintenance, repair
and replacement of the foregoing); legal expenses relating to other tenants;
costs of repairs to the extent reimbursed by payment of insurance proceeds
received by Landlord; interest upon loans to Landlord or secured by a loan
agreement, mortgage, deed of trust, security instrument or other loan document
covering the Project or a portion thereof (collectively, “Loan Documents”)
(provided that interest upon a government assessment or improvement bond payable
in installments shall constitute an Operating Expense under Subsection 9.1(a));
salaries of executive officers of Landlord; depreciation claimed by Landlord for
tax purposes (provided that this exclusion of depreciation is not intended to
delete from Operating Expenses actual costs of repairs and replacements and
reasonable reserves in regard thereto that are provided for in Subsection
9.1(b)); taxes that are excluded from Operating Expenses by the last sentence of
Subsection 9.1(a); costs or expenses incurred in connection with the financing
or sale of the Project or any portion thereof; costs expressly excluded from

 

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Operating Expenses elsewhere in this Lease or that are charged to or paid by
Tenant under other provisions of this Lease; professional fees and disbursements
and other costs and expenses related to the ownership (as opposed to the use,
occupancy, operation, maintenance or repair) of the Project; costs incurred by
Landlord due to the violation by Landlord of any law, code, regulation,
ordinance or the like that would not have been incurred but for such violation;
costs, including permit, license and inspection costs, incurred with respect to
the installation of other tenants’ or occupants’ improvements made for tenants
or other occupants in the Building or incurred in renovating or otherwise
improving, decorating, painting or redecorating space for tenants or other
occupants in the Building; expenses in connection with services or other
benefits which are not offered to Tenant or for which Tenant is charged for
directly but which are provided to another tenant or occupant of the Building,
without charge; electric power costs or other utility costs that any tenant pays
directly to the local public service company; costs (including in connection
therewith all attorneys’ fees) arising from claims, disputes or potential
disputes in connection with potential or actual claims, litigation or
arbitrations pertaining to another tenant of the Building; advertising and
promotional expenses; charitable or political contributions; costs incurred in
connection with the acquisition of art work (provided that costs to repair and
maintain art work may be included in Operating Expenses); costs reimbursed by
insurance or by other tenants of the Project; penalties, fines or interest
incurred as a result of Landlord’s inability or failure to make payment of taxes
or other obligations of Landlord when due and/or to file any tax or
informational returns when due, or from Landlord’s failure to make any payment
of taxes required to be made by Landlord hereunder before delinquency; bad debt
loss, rent loss or reserves for bad debt or rental losses; capital expenditures
other than Permitted Capital Expenditures; costs incurred to investigate, remove
or remediate any Hazardous Materials (a) at the Project in violation of
Applicable Laws as of the Execution Date (unless placed at the Project by a
Tenant Party), (b) to the extent brought onto the Project after the Execution
Date by (i) Landlord or any Landlord Parties, or (ii) a tenant at the Project
other than Tenant (provided, however, in the event that Landlord is not able to
determine which specific tenant brought the Hazardous Materials onto the
Project, this exclusion to Operating Expenses shall not apply, provided,
further, that Landlord shall use reasonable efforts to determine which specific
tenant, if any, brought the Hazardous Materials onto the Project), or (c) to the
extent reimbursed by payment of insurance proceeds received by Landlord; and any
item that, if included in Operating Expenses, would involve a double collection
for such item by Landlord. To the extent that Tenant uses more than Tenant’s Pro
Rata Share of any item of Operating Expenses, Tenant shall pay Landlord for such
excess in addition to Tenant’s obligation to pay Tenant’s Pro Rata Share of
Operating Expenses (such excess, together with Tenant’s Pro Rata Share,
“Tenant’s Adjusted Share”).

9.2.    Tenant shall pay to Landlord on the first day of each calendar month of
the Term (and any period of occupancy prior to the Term as further described in
Section 9.5), as Additional Rent, (a) the Property Management Fee (as defined
below), (b) [intentionally omitted] and (c) Landlord’s estimate of Tenant’s
Adjusted Share of Operating Expenses with respect to the Building and the
Project, as applicable, for such month.

(w)    The “Property Management Fee” shall equal three percent (3%) of Base Rent
due from Tenant. Tenant shall pay the Property Management Fee in accordance with
Section 9.2 with respect to the entire Term (and any period of occupancy prior
to the Term as

 

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further described in Section 9.5), including any extensions thereof or any
holdover periods, regardless of whether Tenant is obligated to pay Base Rent,
Operating Expenses or any other Rent with respect to any such period or portion
thereof. For the first twelve (12) months of the Term (and any period of
occupancy prior to the Term as further described in Section 9.5), the Property
Management Fee shall be calculated as if Tenant were paying One Hundred
Forty-Five Thousand Seven Hundred Eighty-One and 80/100 Dollars ($145,781.80)
per month for Base Rent.

(x)    [Intentionally omitted].

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

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

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

 

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building being responsible for paying their respective proportionate shares of
their buildings to the extent required under their leases. Landlord shall
allocate such costs to the buildings (including the Building) in a reasonable,
non-discriminatory manner, and such allocation shall be binding on Tenant.

9.4.    Landlord’s annual statement shall be final and binding upon Tenant
unless Tenant, within forty-five (45) days after Tenant’s receipt thereof, shall
contest any item therein by giving written notice to Landlord, specifying each
item contested and the reasons therefor; provided that Tenant shall in all
events pay the amount specified in Landlord’s annual statement, pending the
results of the Independent Review and determination of the Accountant(s), as
applicable and as each such term is defined below. If, during such thirty
(30)-day period, Tenant reasonably and in good faith questions or contests the
correctness of Landlord’s statement of Tenant’s Adjusted Share of Operating
Expenses, Landlord shall provide Tenant with reasonable access to Landlord’s
books and records to the extent relevant to determination of Operating Expenses,
and such information as Landlord reasonably determines to be responsive to
Tenant’s written inquiries. In the event that, after Tenant’s review of such
information, Landlord and Tenant cannot agree upon the amount of Tenant’s
Adjusted Share of Operating Expenses, then Tenant shall have the right to have
an independent public accounting firm hired by Tenant on an hourly basis and not
on a contingent-fee basis (at Tenant’s sole cost and expense) and approved by
Landlord (which approval Landlord shall not unreasonably withhold or delay)
audit and review such of Landlord’s books and records for the year in question
as directly relate to the determination of Operating Expenses for such year (the
“Independent Review”), but not books and records of entities other than
Landlord. Landlord shall make such books and records available at the location
where Landlord maintains them in the ordinary course of its business. Landlord
need not provide copies of any books or records. Tenant shall commence the
Independent Review within fifteen (15) days after the date Landlord has given
Tenant access to Landlord’s books and records for the Independent Review. Tenant
shall complete the Independent Review and notify Landlord in writing of Tenant’s
specific objections to Landlord’s calculation of Operating Expenses (including
Tenant’s accounting firm’s written statement of the basis, nature and amount of
each proposed adjustment) no later than sixty (60) days after Landlord has first
given Tenant access to Landlord’s books and records for the Independent Review.
Landlord shall review the results of any such Independent Review. The parties
shall endeavor to agree promptly and reasonably upon Operating Expenses taking
into account the results of such Independent Review. If, as of the date that is
sixty (60) days after Tenant has submitted the Independent Review to Landlord,
the parties have not agreed on the appropriate adjustments to Operating
Expenses, then the parties shall engage a mutually agreeable independent third
party accountant with at least ten (10) years’ experience in commercial real
estate accounting in the Newark, California area, that has not represented
Landlord or Tenant in any capacity within the previous five (5) year period (the
“Accountant”). If the parties cannot agree on the Accountant, each shall within
ten (10) days after such impasse appoint an Accountant (different from the
accountant and accounting firm that conducted the Independent Review) and,
within ten (10) days after the appointment of both such Accountants, those two
Accountants shall select a third (which cannot be the accountant and accounting
firm that conducted the Independent Review). If either party fails to timely
appoint an Accountant, then the Accountant the other party appoints shall be the
sole Accountant. Within ten (10) days after appointment of the Accountant(s),
Landlord and Tenant shall each simultaneously give the

 

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Accountants (with a copy to the other party) its determination of Operating
Expenses, with such supporting data or information as each submitting party
determines appropriate. Within ten (10) days after such submissions, the
Accountants shall by majority vote select either Landlord’s or Tenant’s
determination of Operating Expenses. The Accountants may not select or designate
any other determination of Operating Expenses. The determination of the
Accountant(s) shall bind the parties. If the parties agree or the Accountant(s)
determine that the Operating Expenses actually paid by Tenant for the calendar
year in question exceeded Tenant’s obligations for such calendar year, then
Landlord shall, at Tenant’s option, either (a) credit the excess to the next
succeeding installments of estimated Additional Rent or (b) pay the excess to
Tenant within thirty (30) days after delivery of such results. If the parties
agree or the Accountant(s) determine that Tenant’s payments of Operating
Expenses for such calendar year were less than Tenant’s obligation for the
calendar year, then Tenant shall pay the deficiency to Landlord within thirty
(30) days after delivery of such results. If the Independent Review reveals or
the Accountant(s) determine that the Operating Expenses billed to Tenant by
Landlord and paid by Tenant to Landlord for the applicable calendar year in
question exceeded by more than five percent (5%) what Tenant should have been
billed during such calendar year, then Landlord shall pay the reasonable cost of
the Independent Review and the reasonable cost of the Accountant(s). In all
other cases Tenant shall pay the cost of the Independent Review and the
Accountant(s).

9.5.    Tenant shall not be responsible for Operating Expenses with respect to
any time period prior to the Term Commencement Date; provided, however, that if
Tenant commences business operations in the Premises prior to the Term
Commencement Date, Tenant shall be responsible for Operating Expenses from the
date that Tenant so commences business operations in the Premises (the Term
Commencement Date or such earlier date, as applicable, the “Expense Trigger
Date”); and provided, further, that Landlord may annualize certain Operating
Expenses incurred prior to the Expense Trigger Date over the course of the
budgeted year during which the Expense Trigger Date occurs, and Tenant shall be
responsible for the annualized portion of such Operating Expenses corresponding
to the number of days during such year, commencing with the Expense Trigger
Date, for which Tenant is otherwise liable for Operating Expenses pursuant to
this Lease. Tenant’s responsibility for Tenant’s Adjusted Share of Operating
Expenses shall continue to the later of (a) the date of termination of the Lease
and (b) the date Tenant has fully vacated the Premises (provided that in the
event of termination of the Lease due to a default by Tenant, Tenant’s
responsibility for Operating Expenses will be governed by Article 31 and not the
foregoing provisions).

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

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

 

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

10.    Taxes on Tenant’s Property.

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

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

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

11.    Security Deposit.

11.1.    Tenant shall deposit with Landlord on or before the Execution Date the
sum set forth in Section 2.6 (the “Security Deposit”), which sum shall be held
by Landlord as security for the faithful performance by Tenant of all of the
terms, covenants and conditions of this Lease to be kept and performed by Tenant
during the period commencing on the Execution Date and ending upon the
expiration or termination of Tenant’s obligations under this Lease. If Tenant
Defaults (as defined below) with respect to any provision of this Lease,
including any provision relating to the payment of Rent, then Landlord may (but
shall not be required to) use, apply or

 

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retain all or any part of the Security Deposit for the payment of any Rent or
any other sum in default, or to compensate Landlord for any other loss or damage
that Landlord may suffer by reason of Tenant’s default. If any portion of the
Security Deposit is so used or applied, then Tenant shall, within ten (10) days
following demand therefor, deposit cash with Landlord in an amount sufficient to
restore the Security Deposit to its original amount, and Tenant’s failure to do
so shall be a material breach of this Lease. The provisions of this Article
shall survive the expiration or earlier termination of this Lease. TENANT HEREBY
WAIVES THE REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE
SAME MAY BE AMENDED FROM TIME TO TIME.

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

11.3.    Landlord may deliver to any successor-in-interest to Landlord under
this Lease the funds deposited hereunder by Tenant, and thereupon Landlord shall
be discharged from any further liability with respect to such deposit. This
provision shall also apply to any subsequent transfers.

11.4.    If Tenant shall fully and faithfully perform every provision of this
Lease to be performed by it, then the Security Deposit, or any balance thereof,
shall be returned to Tenant (or, at Landlord’s option, to the last assignee of
Tenant’s interest hereunder) within thirty (30) days after the expiration or
earlier termination of this Lease.

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

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

(a)    If Tenant elects to deliver L/C Security, then Tenant shall provide
Landlord, and maintain in full force and effect throughout the Term and until
the date that is ninety (90) days after the then-current Term Expiration Date, a
letter of credit in the form of Exhibit E issued by an issuer reasonably
satisfactory to Landlord, in the amount of the Security Deposit, with an initial
term of at least one year. Landlord may require the L/C Security to be re-issued
by a different issuer at any time during the Term if Landlord reasonably
believes that the issuing bank of the L/C Security is or may soon become
insolvent; provided, however, Landlord shall return the existing L/C Security to
the existing issuer immediately upon receipt of the substitute L/C Security. If
any issuer of the L/C Security shall become insolvent or placed into FDIC
receivership, then Tenant shall immediately deliver to Landlord (without the

 

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requirement of notice from Landlord) substitute L/C Security issued by an issuer
reasonably satisfactory to Landlord, and otherwise conforming to the
requirements set forth in this Article. As used herein with respect to the
issuer of the L/C Security, “insolvent” shall mean the determination of
insolvency as made by such issuer’s primary bank regulator (i.e., the state bank
supervisor for state chartered banks; the OCC or OTS, respectively, for
federally chartered banks or thrifts; or the Federal Reserve for its member
banks). If, at the Term Expiration Date, any Rent remains uncalculated or
unpaid, then (i) Landlord shall with reasonable diligence complete any necessary
calculations, (ii) Tenant shall extend the expiry date of such L/C Security from
time to time as Landlord reasonably requires and (iii) in such extended period,
Landlord shall not unreasonably refuse to consent to an appropriate reduction of
the L/C Security. Tenant shall reimburse Landlord’s actual and reasonable legal
costs in handling Landlord’s acceptance of L/C Security or its replacement or
extension.

(b)    If Tenant delivers to Landlord satisfactory L/C Security in place of the
entire Security Deposit, Landlord shall, within thirty (30) days of Tenant’s
written request, remit to Tenant any cash Security Deposit Landlord previously
held.

(c)    Landlord may draw upon the L/C Security, and hold and apply the proceeds
in the same manner and for the same purposes as the Security Deposit, if (i) an
uncured Default (as defined below) exists, (ii) as of the date that is
forty-five (45) days before any L/C Security expires (even if such scheduled
expiry date is after the Term Expiration Date) Tenant has not delivered to
Landlord an amendment or replacement for such L/C Security, reasonably
satisfactory to Landlord, extending the expiry date to the earlier of (1) ninety
(90) days after the then-current Term Expiration Date or (2) the date that is
one year after the then-current expiry date of the L/C Security, (iii) the L/C
Security provides for automatic renewals, Landlord asks the issuer to confirm
the current L/C Security expiry date, and the issuer fails to do so within ten
(10) business days, (iv) Tenant fails to pay (when and as Landlord reasonably
requires) any bank charges for Landlord’s transfer of the L/C Security or
(v) the issuer of the L/C Security ceases, or announces that it will cease, to
maintain an office in the city where Landlord may present drafts under the L/C
Security (and fails to permit drawing upon the L/C Security by overnight courier
or facsimile). This Section does not limit any other provisions of this Lease
allowing Landlord to draw the L/C Security under specified circumstances.

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

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

 

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11.7    If Tenant, as of the fourth (4th) annual anniversary of the Term
Commencement Date (the “L/C Security Reduction Date”), (a) has a market
capitalization of Two Hundred Fifty Million Dollars ($250,000,000) or more, and
(b) has not been in Default under this Lease during the twelve (12) month period
immediately preceding the L/C Security Reduction Date ((a) and (b),
collectively, the “L/C Security Reduction Obligations”), then Tenant, no later
than sixty (60) days after the L/C Security Reduction Date, may notify Landlord
in writing that Tenant desires to reduce the Security Deposit by the L/C
Security Reduction Amount (as defined below), which notification shall include
(y) a certificate (in form and substance reasonably acceptable to Landlord) from
Tenant’s Chief Financial Officer certifying that Tenant has satisfied the L/C
Security Reduction Obligations, and (z) Tenant’s most recent unconsolidated
financial statements audited by a nationally recognized accounting firm. If,
within ten (10) business days following Landlord’s receipt of such notice,
Landlord reasonably determines that Tenant has met the L/C Security Reduction
Obligations, then Landlord shall notify Tenant in writing and the Security
Deposit shall be reduced by an amount equal to Two Hundred Twenty-Five Thousand
Dollars ($225,000) (such amount, the “L/C Security Reduction Amount”), such that
the amount of the required Security Deposit under the Lease shall be Two Hundred
Twenty-Five Thousand Dollars ($225,000). If Landlord is holding a cash Security
Deposit, then it shall return to Tenant cash in an amount equal to the L/C
Security Reduction Amount within thirty (30) days of its approval of such
certification. If the Security Deposit is in the form of the L/C Security,
Tenant may provide to Landlord a replacement L/C Security in the amount of the
reduced Security Deposit. Provided such replacement L/C Security complies with
the terms and provisions of this Article 11, Landlord shall, within thirty
(30) days after its receipt of such replacement L/C Security, return to Tenant
the L/C Security then being held by Landlord.

12.    Use.

12.1.    Tenant shall use the Premises for the Permitted Use, and shall not use
the Premises, or permit or suffer the Premises to be used, for any other purpose
without Landlord’s prior written consent, which consent Landlord may withhold in
its sole and absolute discretion. During the Term, Tenant shall, subject to
Force Majeure, casualty and all of the other terms, conditions and provisions of
this Lease, have access to the Premises twenty-four (24) hours per day, seven
(7) days per week.

12.2.    Tenant shall not use or occupy the Premises in violation of Applicable
Laws; zoning ordinances; or the certificate of occupancy (or its substantial
equivalent) issued for the Building or the Project, and shall, upon five
(5) days’ written notice from Landlord, discontinue any use of the Premises that
is declared or claimed by any Governmental Authority having jurisdiction to be a
violation of any of the above, or that in Landlord’s reasonable opinion violates
any of the above. Tenant shall comply with any direction of any Governmental
Authority having jurisdiction that shall, by reason of the nature of Tenant’s
use or occupancy of the Premises, impose any duty upon Tenant or Landlord with
respect to the Premises or with respect to the use or occupation thereof, and
shall indemnify, defend (at the option of and with counsel reasonably acceptable
to the indemnified party(ies)), save, reimburse and hold harmless (collectively,
“Indemnify,” “Indemnity” or “Indemnification,” as the case may require) the

 

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Landlord and its affiliates, employees, agents and contractors; and any lender,
mortgagee, ground lessor or beneficiary (each, a “Lender” and, collectively with
Landlord and its affiliates, employees, agents and contractors, the “Landlord
Indemnitees”) harmless from and against any and all demands, claims,
liabilities, losses, costs, expenses, actions, causes of action, damages, suits
or judgments, and all reasonable expenses (including reasonable attorneys’ fees,
charges and disbursements, regardless of whether the applicable demand, claim,
action, cause of action or suit is voluntarily withdrawn or dismissed) incurred
in investigating or resisting the same (collectively, “Claims”) of any kind or
nature that arise before, during or after the Term as a result of Tenant’s
breach of this Section.

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

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

12.5.    No additional locks or bolts of any kind shall be placed upon any of
the doors or windows by Tenant, nor shall any changes be made to existing locks
or the mechanisms thereof without Landlord’s prior written consent, which shall
not be unreasonably withheld, conditioned or delayed. Tenant shall, upon
termination of this Lease, return to Landlord all keys to offices and restrooms
either furnished to or otherwise procured by Tenant. In the event any key so
furnished to Tenant is lost, Tenant shall pay to Landlord the cost of replacing
the same or of changing the lock or locks opened by such lost key if Landlord
shall deem it necessary to make such change.

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

12.7.    No sign, advertisement or notice (“Signage”) shall be exhibited,
painted or affixed by Tenant on any part of the Premises or the Building without
Landlord’s prior written consent. Signage shall conform to Landlord’s design
criteria. For any Signage, Tenant shall, at Tenant’s own cost and expense,
(a) acquire all permits for such Signage in compliance with Applicable Laws and
(b) design, fabricate, install and maintain such Signage in a first-class
condition. Tenant shall be responsible for reimbursing Landlord for costs
incurred by Landlord in removing any of Tenant’s Signage upon the expiration or
earlier termination of the Lease. Interior signs on entry doors to the Premises
and the directory tablet shall be inscribed, painted or affixed for Tenant by
Landlord at Tenant’s sole cost and expense, and shall be of a size, color

 

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and type and be located in a place acceptable to Landlord. The directory tablet
shall be provided exclusively for the display of the name and location of
tenants only. Tenant shall not place anything on the exterior of the corridor
walls or corridor doors other than Landlord’s standard lettering. At Landlord’s
option, Landlord may install any Tenant Signage, and Tenant shall pay all costs
associated with such installation within thirty (30) days after demand therefor.

Subject to all of the terms, conditions and provisions of this Section 12.7,
Tenant shall be entitled to install, at its sole cost and expense, a strip on
the Building’s monument sign (“Monument Signage”). The graphics, materials,
size, color, design, lettering, lighting (if any), specifications and exact
location of the Monument 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 Monument Signage and all Signage
Specifications therefore shall be subject to Tenant’s receipt of all required
governmental permits and approvals, and shall be subject to all Applicable Laws
and any covenants, conditions and restrictions affecting the Project. In the
event Tenant does not receive the necessary permits and approvals for the
Monument 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 Monument Signage, as well as all costs of design and
construction of such Monument Signage and all other costs associated with such
Monument Signage, including, without limitation, permits, maintenance and
repair, shall be the sole responsibility of Tenant. Should the Monument 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, Tenant shall, at Tenant’s sole cost and expense, cause the Monument
Signage to be removed from the Building’s monument sign and shall cause the
monument sign to be restored to the condition existing prior to the placement of
such Monument Signage. If Tenant fails to remove such Monument Signage and to
restore the monument sign as provided in the immediately preceding sentence on
or before the expiration or earlier termination of this Lease, 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 therefore. The immediately preceding
sentence shall survive the expiration or earlier termination of this Lease.

The rights to the Monument Signage shall be personal to the originally named
Tenant and may not be transferred. Should the name of the original Tenant
change, then the Monument Signage may be modified at Tenant’s sole cost and
expense to reflect the new name, but only if the new name does not (i) relate to
an entity that is of a character, reputation, or associated with a political
orientation or a faction, that is inconsistent with the quality of the Building
or would otherwise reasonably offend an institutional landlord of a project
comparable to the Project, taking into consideration the level and visibility of
such signage or (ii) cause Landlord to be in default under any lease or license
with another tenant of the Project.

 

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

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

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

12.11.    Notwithstanding any other provision herein to the contrary, Tenant
shall be responsible for all liabilities, costs and expenses arising out of or
in connection with the compliance of the Premises with the Americans with
Disabilities Act, 42 U.S.C. § 12101, et seq., and any state and local
accessibility laws, codes, ordinances and rules (collectively, and together with
regulations promulgated pursuant thereto, the “ADA”), and Tenant shall Indemnify
the Landlord Indemnitees from and against Claims arising out of any such failure
of the Premises to comply with the ADA. The Premises have not undergone
inspection by a Certified Access Specialist (as defined in California Civil Code
Section 55.52). A Certified Access Specialist can inspect the Premises and
determine whether the Premises comply with all of the applicable
construction-related accessibility standards under State law. Although State law
does not require a Certified Access Specialist inspection of the Premises,
Landlord may not prohibit Tenant from obtaining a Certified Access Specialist
inspection of the Premises for the occupancy or potential occupancy of Tenant,
if requested by Tenant. Landlord and Tenant shall agree on the arrangements for
the time and manner of the Certified Access Specialist inspection, the payment
of the fee for the Certified Access Specialist inspection, and the cost of
making any repairs necessary to correct violations of construction-related
accessibility standards within the Premises. For the avoidance of doubt,
“Lenders” shall also include historic tax credit investors and new market tax
credit investors. The provisions of this Section shall survive the expiration or
earlier termination of this Lease.

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

 

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

13.1.    Tenant shall have the non-exclusive right, in common with others, to
use the Common Area in conjunction with Tenant’s use of the Premises for the
Permitted Use, and such use of the Common Area and Tenant’s use of the Premises
shall be subject to the rules and regulations adopted by Landlord and attached
hereto as Exhibit F, together with such other reasonable and nondiscriminatory
rules and regulations as are hereafter promulgated by Landlord in its sole and
absolute discretion (the “Rules and Regulations”); provided that any future
Rules and Regulations do not materially and adversely affect Tenant’s ability to
use the Premises for the Permitted Use. Tenant shall and shall ensure that its
contractors, subcontractors, employees, subtenants and invitees faithfully
observe and comply with the Rules and Regulations. Landlord shall not be
responsible to Tenant for the violation or non-performance by any other tenant
or any agent, employee or invitee thereof of any of the Rules and Regulations.

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

13.3.    Tenant shall have a non-exclusive, irrevocable license to use Tenant’s
Pro Rata Share of parking facilities serving the Building in common on an
unreserved basis with other tenants of the Building during the Term at no
additional cost. As of the Execution Date, Tenant’s Pro Rata Share of parking
facilities amounts to approximately one hundred thirty-seven (137) unreserved
parking spaces (i.e., 3.2 spaces per 1,000 square feet of Rentable Area within
the Premises).

13.4.    Tenant agrees not to unreasonably overburden the parking facilities and
agrees to cooperate with Landlord and other tenants in the use of the parking
facilities. Landlord reserves the right to determine that parking facilities are
becoming overcrowded and to limit Tenant’s use thereof; provided that in no
event shall Landlord exercise such right in a manner that reduces Tenant’s
parking allocation below 3.2 spaces per 1,000 square feet of Rentable Area
within the Premises. Upon such determination, Landlord may reasonably allocate
parking spaces among Tenant and other tenants of the Building or the Project.
Nothing in this Section, however, is intended to create an affirmative duty on
Landlord’s part to monitor parking.

14.    Project Control by Landlord.

14.1.    Landlord reserves full control over the Building and the Project to the
extent not inconsistent with Tenant’s enjoyment of the Premises as provided by
this Lease. This reservation includes Landlord’s right to subdivide the Project;
convert the Building and other buildings within the Project to condominium
units; change the size of the Project by selling all or a portion of the Project
or adding real property and any improvements thereon to the Project; grant
easements and licenses to third parties; maintain or establish ownership of the
Building separate from fee title to the Property; make additions to or
reconstruct portions of the Building and the Project; install, use, maintain,
repair, replace and relocate for service to the Premises and other parts of the
Building or the Project pipes, ducts, conduits, wires and appurtenant fixtures,
wherever located in the Premises, the Building or elsewhere at the Project; and
alter or relocate

 

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any other Common Area or facility, including private drives, lobbies, entrances
and landscaping; provided, however, that such rights shall be exercised in a way
that does not materially adversely affect Tenant’s beneficial use and occupancy
of the Premises, including the Permitted Use and Tenant’s access to the
Premises. Tenant acknowledges that Landlord specifically reserves the right to
allow the exclusive use of corridors and restroom facilities located on specific
floors to one or more tenants occupying such floors; provided, however, that
Tenant shall not be deprived of the use of the corridors reasonably required to
serve the Premises or of restroom facilities serving the floor upon which the
Premises are located.

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

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

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

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

 

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16.    Utilities and Services.

16.1.    Tenant shall pay for all water (including the cost to service, repair
and replace reverse osmosis, de-ionized and other treated water), gas, heat,
light, power, telephone, internet service, cable television, other
telecommunications and other utilities supplied to the Premises, together with
any fees, surcharges and taxes thereon. If any such utility is not separately
metered to Tenant, Tenant shall pay Tenant’s Adjusted Share of all charges of
such utility jointly metered with other premises as Additional Rent or, in the
alternative, Landlord may, at its option, monitor the usage of such utilities by
Tenant and charge Tenant with the cost of purchasing, installing and monitoring
such metering equipment, which cost shall be paid by Tenant as Additional Rent.
Landlord may base its bills for utilities on reasonable estimates; provided that
Landlord adjusts such billings promptly thereafter or as part of the next
Landlord’s Statement to reflect the actual cost of providing utilities to the
Premises. To the extent that Tenant uses more than Tenant’s Pro Rata Share of
any utilities, then Tenant shall pay Landlord for Tenant’s Adjusted Share of
such utilities to reflect such excess. In the event that the Building, North
Campus or Project is less than fully occupied during a calendar year, Tenant
acknowledges that Landlord may extrapolate utility usage that varies depending
on the occupancy of the Building, North Campus or Project (as applicable) to
equal Landlord’s reasonable estimate of what such utility usage would have been
had the Building, North Campus or Project, as applicable, been ninety-five
percent (95%) occupied during such calendar year; provided, however, that
Landlord shall not recover more than one hundred percent (100%) of the cost of
such utilities.

16.2.    Landlord shall not be liable for, nor shall any eviction of Tenant
result from, the failure to furnish any utility or service, whether or not such
failure is caused by accidents; breakage; casualties (to the extent not caused
by the party claiming Force Majeure); Severe Weather Conditions (as defined
below); physical natural disasters (but excluding weather conditions that are
not Severe Weather Conditions); strikes, lockouts or other labor disturbances or
labor disputes (other than labor disturbances and labor disputes resulting
solely from the acts or omissions of the party claiming Force Majeure); acts of
terrorism; riots or civil disturbances; wars or insurrections; shortages of
materials (which shortages are not unique to the party claiming Force Majeure);
government regulations, moratoria or other governmental actions, inactions or
delays; failures to grant consent or delays in granting consent by any Lender
whose consent is required under any applicable Loan Document; failures by third
parties to deliver gas, oil or another suitable fuel supply, or inability of the
party claiming Force Majeure, by exercise of reasonable diligence, to obtain
gas, oil or another suitable fuel; or other causes beyond the reasonable control
of the party claiming that Force Majeure has occurred (collectively, “Force
Majeure”); or, to the extent permitted by Applicable Laws, Landlord’s
negligence. In the event of such failure, Tenant shall not be entitled to
termination of this Lease or any abatement or reduction of Rent, nor shall
Tenant be relieved from the operation of any covenant or agreement of this
Lease. “Severe Weather Conditions” means weather conditions that are materially
worse than those that reasonably would be anticipated for the Property at the
applicable time based on historic meteorological records. In the event that the
negligence or willful misconduct of Landlord (or any Landlord Party) causes an
interruption of any utilities or services that Landlord must provide pursuant to
this Lease, Landlord shall use commercially reasonable efforts to pursue the
restoration of such utilities and/or services as soon as reasonably possible.

 

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

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

16.5.    If Tenant shall require utilities or services in excess of those
usually furnished or supplied for tenants in similar spaces in the Building or
the Project by reason of Tenant’s equipment or extended hours of business
operations, then Tenant shall first procure Landlord’s consent for the use
thereof, which consent Landlord may condition upon the availability of such
excess utilities or services, and Tenant shall pay as Additional Rent an amount
equal to the cost of providing such excess utilities and services.

16.6.    Landlord shall provide water in Common Area for lavatory and
landscaping purposes only, which water shall be from the local municipal or
similar source; provided, however, that if Landlord determines that Tenant
requires, uses or consumes water provided to the Common Area for any purpose
other than ordinary lavatory purposes, Landlord may install a water meter
(“Tenant Water Meter”) and thereby measure Tenant’s water consumption for all
purposes. Tenant shall pay Landlord for the costs of any Tenant Water Meter and
the installation and maintenance thereof during the Term. If Landlord installs a
Tenant Water Meter, Tenant shall pay for water consumed, as shown on such meter,
as and when bills are rendered. If Tenant fails to timely make such payments,
Landlord may pay such charges and collect the same from Tenant. Any such costs
or expenses incurred or payments made by Landlord for any of the reasons or
purposes stated in this Section shall be deemed to be Additional Rent payable by
Tenant and collectible by Landlord as such.

16.7.    Landlord reserves the right to stop service of the elevator, plumbing,
ventilation, air conditioning and utility systems (a “Service Stoppage”), when
Landlord deems necessary or desirable, due to accident, emergency or the need to
make repairs, alterations or improvements, until such repairs, alterations or
improvements shall have been completed, and Landlord shall further have no
responsibility or liability for failure to supply elevator facilities, plumbing,
ventilation, air conditioning or utility service when prevented from doing so by
Force Majeure or, to the extent permitted by Applicable Laws, Landlord’s
negligence. Without limiting the foregoing, it is expressly understood and
agreed that any covenants on Landlord’s part to furnish

 

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any service pursuant to any of the terms, covenants, conditions, provisions or
agreements of this Lease, or to perform any act or thing for the benefit of
Tenant, shall not be deemed breached if Landlord is unable to furnish or perform
the same by virtue of Force Majeure or, to the extent permitted by Applicable
Laws, Landlord’s negligence. Except in case of emergencies (in which event no
notice shall be required), Landlord shall provide Tenant with twenty-four
(24) hours’ notice prior to any Service Stoppage (which notice may be oral or by
email to the office manager or other Tenant-designated individual at the
Premises).

16.8.    As of the Execution Date, an existing back-up generator (the
“Generator”) is connected to the Premises’ emergency electrical panel. Landlord
shall deliver the Generator to Tenant on the Execution Date in good working
order, condition and repair. Except for Landlord’s obligation to deliver the
Generator to Tenant on the Execution Date in good working order, condition and
repair (as set forth in the immediately preceding grammatical sentence), Tenant
acknowledges and agrees that Landlord has made no representation or warranty
(express or implied) regarding the condition of the Generator or the suitability
of the Generator for Tenant’s use. From and after the Execution Date, the
Generator shall be the sole responsibility of Tenant and Landlord shall have no
obligations with respect thereto. Tenant shall, at its sole cost and expense,
maintain and keep the Generator (a) in good condition and repair, (b) in
accordance with industry standard practices, (c) in compliance with all
Applicable Laws (including, without limitation, any required permits); and
Tenant shall otherwise be solely responsible for any repair, maintenance and/or
replacement costs with respect to the Generator. If requested in writing by
Landlord, Tenant shall provide to Landlord copies of any Generator maintenance
contracts and any Generator maintenance reports; provided, however, that Tenant
shall not be required to provide such copies to Landlord more than one (1) time
per year (except that such limitation shall not apply at any time that Tenant is
in Default of this Lease). Notwithstanding anything to the contrary in this
Lease, Landlord shall have no liability, and Tenant shall have no right or
remedy, on account of any interruption or impairment with respect to the
Generator.

16.9.    For the Premises, Tenant shall (subject to Landlord’s obligations as
set forth in Section 18.1 below) (a) maintain and operate the HVAC systems used
for the Permitted Use only (“Base HVAC”) and (b) subject to Subsection 16.9(a),
furnish HVAC as reasonably required (except as this Lease otherwise provides)
for reasonably comfortable occupancy of the Premises twenty-four (24) hours a
day, every day during the Term, subject to casualty, eminent domain or as
otherwise specified in this Article. Notwithstanding anything to the contrary in
this Section, Landlord shall have no liability, and Tenant shall have no right
or remedy, on account of any interruption or impairment in HVAC services. In the
event of any interruption or impairment in HVAC services due to any portion of
the HVAC system which Landlord is obligated to maintain hereunder, Landlord will
use commercially reasonable efforts to correct such interruption or impairment
as soon as reasonably possible.

16.10.    For any utilities serving the Premises for which Tenant is billed
directly by such utility provider, Tenant agrees to furnish to Landlord (a) any
invoices or statements for such utilities within thirty (30) days after Tenant’s
receipt thereof, (b) within thirty (30) days after Landlord’s request, any other
utility usage information reasonably requested by Landlord, and (c) within
thirty (30) days after each calendar year during the Term, authorization to
allow Landlord to access Tenant’s usage information necessary for Landlord to
complete an ENERGY

 

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STAR® Statement of Performance (or similar comprehensive utility usage report
(e.g., related to Labs 21), if requested by Landlord) and any other information
reasonably requested by Landlord for the immediately preceding year; and Tenant
shall comply with any other energy usage or consumption requirements required by
Applicable Laws. Tenant shall retain records of utility usage at the Premises,
including invoices and statements from the utility provider, throughout the Term
and for such period of time after the expiration or earlier termination of this
Lease as may be required in order for Landlord to comply with Applicable Laws.
Tenant acknowledges that any utility information for the Premises, the Building
and the Project may be shared with third parties, including Landlord’s
consultants and Governmental Authorities. In the event that Tenant fails to
comply with this Section, Tenant hereby authorizes Landlord to collect utility
usage information directly from the applicable utility providers. In addition to
the foregoing, Tenant shall comply with all Applicable Laws related to the
disclosure and tracking of energy consumption at the Premises. The provisions of
this Section shall survive the expiration or earlier termination of this Lease.

17.    Alterations.

17.1.    Tenant shall make no alterations, additions or improvements other than
the Tenant Improvements in or to the Premises or engage in any construction,
demolition, reconstruction, renovation or other work (whether major or minor) of
any kind in, at or serving the Premises (“Alterations”) without Landlord’s prior
written approval, which approval may be subject to the consent of one or more
Lenders, if required under any applicable Loan Document, but which approval
Landlord shall not otherwise unreasonably withhold; provided, however, that, in
the event any proposed Alteration affects (a) any structural portions of the
Building, including exterior walls, the roof, the foundation or slab, foundation
or slab systems (including barriers and subslab systems) or the core of the
Building, (b) the exterior of the Building or (c) any Building systems,
including elevator, plumbing, HVAC, electrical, security, life safety and power,
then Landlord may withhold its approval in its sole and absolute discretion.
Tenant shall, in making any Alterations, use only those architects, contractors,
suppliers and mechanics of which Landlord has given prior written approval,
which approval shall be in Landlord’s commercially reasonable discretion. In
seeking Landlord’s approval, Tenant shall provide Landlord, at least thirty
(30) days in advance of the desired commencement date of any proposed
construction, with plans, specifications, bid proposals, certified stamped
engineering drawings and calculations by Tenant’s engineer of record or
architect of record (including connections to the Building’s structural system,
modifications to the Building’s envelope, non-structural penetrations in slabs
or walls, and modifications or tie-ins to life safety systems), work contracts,
requests for laydown areas and such other information concerning the nature and
cost of the Alterations as Landlord may reasonably request, provided that Tenant
shall not commence any such Alterations that require Landlord’s consent unless
and until Tenant has received the written approval of Landlord and any and all
Lenders whose consent is required under any applicable Loan Document. In no
event shall Tenant use or Landlord be required to approve any architects,
consultants, contractors, subcontractors or material suppliers that Landlord
reasonably believes could cause labor disharmony or may not have sufficient
experience, in Landlord’s reasonable opinion, to perform work in an occupied
Class “A” laboratory research building and in tenant-occupied lab areas.

 

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

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

17.4.    Any work performed on the Premises, the Building or the Project by
Tenant or Tenant’s contractors shall be done at such times and in such manner as
Landlord may from time to time reasonably designate; provided that Tenant will
be permitted to perform Alterations during business hours so long as such
Alterations do not create any noise, odors, vibration or other disturbance which
(in Landlord’s sole discretion) could disturb other tenants of the Building.
Tenant covenants and agrees that all work done by Tenant or Tenant’s contractors
shall be performed in full compliance with Applicable Laws. Within thirty
(30) days after completion of any Alterations, Tenant shall provide Landlord
with complete “as built” drawing print sets and electronic CADD files on disc
(or files in such other current format in common use as Landlord reasonably
approves or requires) showing any changes in the Premises, as well as a
commissioning report prepared by a licensed, qualified commissioning agent hired
by Tenant and approved by Landlord for all new or affected mechanical,
electrical and plumbing systems. Any such “as built” plans shall show the
applicable Alterations as an overlay on the Building as-built plans; provided
that Landlord provides the Building “as built” plans to Tenant.

17.5.    Before commencing any Alterations or Tenant Improvements, Tenant shall
(a) give Landlord at least thirty (30) days’ prior written notice of the
proposed commencement of such work and the names and addresses of the persons
supply labor or materials therefor so that Landlord may enter the Premises to
post and keep posted thereon and therein notices or to take any further action
that Landlord may reasonably deem proper for the protection of Landlord’s
interest in the Project and (b) shall, if required by Landlord, secure, at
Tenant’s own cost and expense, a completion and lien indemnity bond satisfactory
to Landlord for such work (provided that Landlord shall only be permitted to
impose such requirement in connection with Alterations costing in excess of
Seventy-Five Thousand Dollars ($75,000)).

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

17.7.    The Premises plus any Alterations; Signage; Tenant Improvements;
attached equipment, decorations, fixtures and trade fixtures; laboratory
casework and related appliances; and other additions and improvements attached
to or built into the Premises made by either of the parties (including all floor
and wall coverings; paneling; sinks and related plumbing fixtures; fixed
laboratory benches; exterior venting fume hoods; walk-in freezers and
refrigerators; ductwork; conduits; electrical panels and circuits; attached
machinery and equipment; and built-in furniture and cabinets, in each case,
together with all additions and accessories thereto), shall (unless, prior to
such construction or installation, Landlord elects otherwise in writing) at all

 

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times remain the property of Landlord, shall remain in the Premises and shall
(unless, prior to construction or installation thereof, Landlord elects
otherwise in writing) be surrendered to Landlord upon the expiration or earlier
termination of this Lease. For the avoidance of doubt, the items listed on
Exhibit H attached hereto (which Exhibit H may be updated by Tenant from and
after the Term Commencement Date, subject to Landlord’s written consent)
constitute Tenant’s property and shall be removed by Tenant upon the expiration
or earlier termination of the Lease.

17.8.    Notwithstanding any other provision of this Article to the contrary, in
no event shall Tenant remove any improvement from the Premises in which any
Lender has a security interest or as to which Landlord contributed payment,
including the Tenant Improvements, without Landlord’s prior written consent,
which consent Landlord may withhold in its sole and absolute discretion;
provided that Landlord hereby confirms that the items listed on Exhibit H remain
the property of Tenant and may be removed by Tenant in its sole discretion
(subject to the terms, conditions and provisions set forth in Section 17.6
above).

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

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

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

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

 

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

17.14.    Notwithstanding anything to the contrary contained in this Lease,
Tenant shall have no obligation to remove any portion of the Tenant Improvements
or any subsequent Alterations approved by Landlord, unless Landlord shall have
notified Tenant in writing that removal at the end of the Term would be required
at the time of Landlord’s consent to such Tenant Improvements or Alterations.

18.    Repairs and Maintenance.

18.1.    Landlord shall repair and maintain in good condition and repair the
structural and exterior portions and Common Area of the Building and the
Project, including roofing and covering materials; foundations (excluding any
architectural slabs, but including any structural slabs); exterior walls;
plumbing; fire sprinkler systems (if any); the chiller(s) located on the roof of
the Building which do not exclusively serve the Premises or any other tenant’s
premises; elevators; and base Building electrical systems installed or furnished
by Landlord.

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

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

18.4.    If any excavation shall be made upon land adjacent to or under the
Building, or shall be authorized to be made, Tenant shall afford to the person
causing or authorized to cause such excavation, license to enter the Premises
for the purpose of performing such work as such person shall deem necessary or
desirable to preserve and protect the Building from injury or damage and to
support the same by proper foundations, without any claim for damages or
liability against Landlord and without reducing or otherwise affecting Tenant’s
obligations under this Lease. Landlord will use commercially reasonable efforts
to minimize any disruption to Tenant’s business operations due to work performed
in accordance with this Section.

 

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

18.6.    Costs incurred by Landlord pursuant to this Article shall constitute
Operating Expenses to the extent permitted by Section 9.1.

19.    Liens.

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

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

19.3.    In the event that Tenant leases or finances the acquisition of office
equipment, furnishings or other personal property of a removable nature utilized
by Tenant in the operation of Tenant’s business, Tenant warrants that any
Uniform Commercial Code financing statement shall, upon its face or by exhibit
thereto, indicate that such financing statement is applicable only to removable
personal property of Tenant located within the Premises. In no event shall the
address of the Premises, the Building or the Project be furnished on a financing
statement without qualifying language as to applicability of the lien only to
removable personal property located in an identified suite leased by Tenant.
Should any holder of a financing statement record or place of record a financing
statement that appears to constitute a lien against any interest of Landlord or
against equipment that may be located other than within an identified suite
leased by Tenant, Tenant shall, within ten (10) days after filing such financing
statement, cause (a) a copy of the lender security agreement or other documents
to which the financing statement pertains to be furnished to Landlord to
facilitate Landlord’s ability to demonstrate that the lien of such financing
statement is not applicable to Landlord’s interest and (b) Tenant’s lender to
amend such financing statement and any other documents of record to clarify that
any liens imposed thereby are not applicable to any interest of Landlord in the
Premises, the Building or the Project.

 

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

21.    Hazardous Materials.

21.1.    Tenant shall not cause or permit any Hazardous Materials (as defined
below) to be brought upon, kept or used in or about the Premises, the Building
or the Project in violation of Applicable Laws by Tenant or any of its
employees, agents, contractors or invitees (collectively with Tenant, each a
“Tenant Party”). If (a) Tenant breaches such obligation, (b) the presence of
Hazardous Materials as a result of such a breach results in contamination of the
Project, any portion thereof, or any adjacent property, (c) contamination of the
Premises otherwise occurs during the Term or any extension or renewal hereof or
holding over hereunder (other than if such contamination results from migration
of Hazardous Materials from outside the Premises not caused by a Tenant Party)
or (d) contamination of the Project occurs as a result of Hazardous Materials
that are placed on or under or are released into the Project by a Tenant Party,
then Tenant shall Indemnify the Landlord Indemnitees from and against any and
all Claims of any kind or nature, including (w) diminution in value of the
Project or any portion thereof, (x) damages for the loss or restriction on use
of rentable or usable space or of any amenity of the Project, (y) damages
arising from any adverse impact on marketing of space in the Project or any
portion thereof and (z) sums paid in settlement of Claims that arise before,
during or after the Term as a result of such breach or contamination. This
Indemnification by Tenant includes costs incurred in connection with any
investigation of site conditions or any clean-up, remedial, removal or
restoration work required by any Governmental Authority because of Hazardous
Materials for which Tenant is responsible under the terms of this Section
present in the air, soil or groundwater above, on, under or about the Project.
Without limiting the foregoing, if the presence of any Hazardous Materials in,
on, under or about the Project, any portion thereof or any adjacent property
caused or permitted by any Tenant Party results in any contamination of the
Project, any portion thereof or any adjacent property, then Tenant shall
promptly take all actions at its sole cost and expense as are necessary to
return the Project, any portion thereof or any adjacent property to its
respective condition existing prior to the time of such contamination; provided
that Landlord’s written approval of such action shall first be obtained, which
approval Landlord shall not unreasonably withhold; and provided, further, that
it shall be reasonable for Landlord to withhold its consent if such actions
could have a material adverse long-term or

 

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short-term effect on the Project, any portion thereof or any adjacent property.
Tenant’s obligations under this Section shall not be affected, reduced or
limited by any limitation on the amount or type of damages, compensation or
benefits payable by or for Tenant under workers’ compensation acts, disability
benefit acts, employee benefit acts or similar legislation.

21.2.    Landlord acknowledges that it is not the intent of this Article to
prohibit Tenant from operating its business for the Permitted Use. Tenant may
operate its business according to the custom of Tenant’s industry so long as the
use or presence of Hazardous Materials is strictly and properly monitored in
accordance with Applicable Laws. As a material inducement to Landlord to allow
Tenant to use Hazardous Materials in connection with its business, Tenant agrees
to deliver to Landlord (a) a list identifying each type of Hazardous Material to
be present at the Premises that is subject to regulation under any environmental
Applicable Laws in the form of a Tier II form pursuant to Section 312 of the
Emergency Planning and Community Right-to-Know Act of 1986 (or any successor
statute) or any other form reasonably requested by Landlord, (b) a list of any
and all approvals or permits from Governmental Authorities required in
connection with the presence of such Hazardous Material at the Premises and
(c) correct and complete copies of (i) notices of violations of Applicable Laws
related to Hazardous Materials and (ii) plans relating to the installation of
any storage tanks to be installed in, on, under or about the Project (provided
that installation of storage tanks shall only be permitted after Landlord has
given Tenant its written consent to do so, which consent Landlord may withhold
in its sole and absolute discretion) and closure plans or any other documents
required by any and all Governmental Authorities for any storage tanks installed
in, on, under or about the Project for the closure of any such storage tanks
(collectively, “Hazardous Materials Documents”). Tenant shall deliver to
Landlord updated Hazardous Materials Documents, within fourteen (14) days after
receipt of a written request therefor from Landlord, not more often than once
per year, unless (m) there are any changes to the Hazardous Materials Documents
or (n) Tenant initiates any Alterations or changes its business, in either case
in a way that involves any material increase in the types or amounts of
Hazardous Materials, in which case Tenant shall deliver updated Hazardous
Materials documents (without Landlord having to request them) before or, if not
practicable to do so before, as soon as reasonably practicable after the
occurrence of the events in Subsection 21.2(m) or (n). For each type of
Hazardous Material listed, the Hazardous Materials Documents shall include
(t) the chemical name, (u) the material state (e.g., solid, liquid, gas or
cryogen), (v) the concentration, (w) the storage amount and storage condition
(e.g., in cabinets or not in cabinets), (x) the use amount and use condition
(e.g., open use or closed use), (y) the location (e.g., room number or other
identification) and (z) if known, the chemical abstract service number.
Notwithstanding anything in this Section to the contrary, Tenant shall not be
required to provide Landlord with any documents containing information of a
proprietary nature, unless such documents contain a reference to Hazardous
Materials or activities related to Hazardous Materials. Landlord may, at
Landlord’s expense, cause the Hazardous Materials Documents to be reviewed by a
person or firm qualified to analyze Hazardous Materials to confirm compliance
with the provisions of this Lease and with Applicable Laws. In the event that a
review of the Hazardous Materials Documents indicates non-compliance with this
Lease or Applicable Laws, Tenant shall, at its expense, diligently take steps to
bring its storage and use of Hazardous Materials into compliance.
Notwithstanding anything in this Lease to the contrary or Landlord’s review into
Tenant’s Hazardous Materials Documents or use or disposal of hazardous
materials, however, Landlord shall not have and expressly disclaims any
liability

 

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related to Tenant’s or other tenants’ use or disposal of Hazardous Materials, it
being acknowledged by Tenant that Tenant is best suited to evaluate the safety
and efficacy of its Hazardous Materials usage and procedures.

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

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

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

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

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

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

21.9.    Notwithstanding anything to the contrary in this Lease, Landlord shall
have sole control over the equitable allocation of fire control areas (as
defined in the Uniform Building Code as adopted by the city or municipality(ies)
in which the Project is located (the “UBC”)) within the Project for the storage
of Hazardous Materials. Notwithstanding anything to the contrary in this Lease,
the quantity of Hazardous Materials allowed by this Section is specific to
Tenant and shall not run with the Lease in the event of a Transfer (as defined
in Article 29). In the event of a Transfer, if the use of Hazardous Materials by
such new tenant (“New Tenant”) is such that New Tenant utilizes fire control
areas in the Project in excess of New Tenant’s Pro

 

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Rata Share of the Building or the Project, as applicable, then New Tenant shall,
at its sole cost and expense and upon Landlord’s written request, establish and
maintain a separate area of the Premises classified by the UBC as an “H”
occupancy area for the use and storage of Hazardous Materials, or take such
other action as is necessary to ensure that its share of the fire control areas
of the Building and the Project is not greater than New Tenant’s Pro Rata Share
of the Building or the Project, as applicable. Notwithstanding anything in this
Lease to the contrary, Landlord shall not have and expressly disclaims any
liability related to Tenant’s or other tenants’ use or disposal of fire control
areas, it being acknowledged by Tenant that Tenant and other tenants are best
suited to evaluate the safety and efficacy of its Hazardous Materials usage and
procedures.

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

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

22.2.    If the Building has a ventilation system that, in Landlord’s judgment,
is adequate, suitable, and appropriate to vent the Premises in a manner that
does not release odors affecting any indoor or outdoor part of the Project,
Tenant shall vent the Premises through such system. If Landlord at any time
reasonably determines that any existing ventilation system is inadequate, or if
no ventilation system exists, Tenant shall in compliance with Applicable Laws
vent all fumes and odors from the Premises (and remove odors from Tenant’s
exhaust stream) as Landlord reasonably requires. The placement and configuration
of all ventilation exhaust pipes, louvers and other equipment shall be subject
to Landlord’s reasonable approval. Tenant acknowledges Landlord’s legitimate
desire to maintain the Project (indoor and outdoor areas) in an odor-free
manner, and Landlord may require Tenant to abate and remove all odors in a
manner that goes beyond the requirements of Applicable Laws.

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

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

 

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22.5.    If Tenant fails to install satisfactory odor control equipment within
ten (10) business days after Landlord’s demand made at any time, then Landlord
may, without limiting Landlord’s other rights and remedies, require Tenant to
cease and suspend any operations in the Premises that, in Landlord’s reasonable
determination, cause odors, fumes or exhaust. For example, if Landlord
determines that Tenant’s production of a certain type of product causes odors,
fumes or exhaust, and Tenant does not install satisfactory odor control
equipment within ten (10) business days after Landlord’s request, then Landlord
may require Tenant to stop producing such type of product in the Premises unless
and until Tenant has installed odor control equipment satisfactory to Landlord.

23.    Insurance; Waiver of Subrogation.

23.1.    Landlord shall maintain insurance for the Building and the Project in
amounts equal to full replacement cost (exclusive of the costs of excavation,
foundations and footings, engineering costs or such other costs to the extent
the same are not incurred in the event of a rebuild and without reference to
depreciation taken by Landlord upon its books or tax returns) or such lesser
coverage as Landlord may elect, provided that such coverage shall not be less
than the amount of such insurance Landlord’s Lender, if any, requires Landlord
to maintain, providing protection against any peril generally included within
the classification “Fire and Extended Coverage,” together with insurance against
sprinkler damage (if applicable), vandalism and malicious mischief. Landlord,
subject to availability thereof, shall further insure, if Landlord deems it
appropriate, coverage against flood, environmental hazard, earthquake, loss or
failure of building equipment, rental loss during the period of repairs or
rebuilding, Workers’ Compensation insurance and fidelity bonds for employees
employed to perform services. Notwithstanding the foregoing, Landlord may, but
shall not be deemed required to, provide insurance for any improvements
installed by Tenant or that are in addition to the standard improvements
customarily furnished by Landlord, without regard to whether or not such are
made a part of or are affixed to the Building.

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

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

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

 

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

(c)    Commercial Property insurance covering property damage to the full
replacement cost value and business interruption. Covered property shall include
all tenant improvements in the Premises (to the extent not insured by Landlord
pursuant to Section 23.1) and Tenant’s Property including personal property,
furniture, fixtures, machinery, equipment, stock, inventory and improvements and
betterments, which may be owned by Tenant or Landlord and required to be insured
hereunder, or which may be leased, rented, borrowed or in the care custody or
control of Tenant, or Tenant’s employees. Such insurance, with respect only to
all Tenant Improvements, Alterations or other work performed on the Premises by
Tenant (collectively, “Tenant Work”), shall name Landlord and Landlord’s current
and future mortgagees as loss payees as their interests may appear. Such
insurance shall be written on an “all risk” of physical loss or damage basis
including the perils of fire, extended coverage, electrical injury, mechanical
breakdown, windstorm, vandalism, malicious mischief, sprinkler leakage, back-up
of sewers or drains, flood, earthquake and such other risks Landlord may from
time to time designate, for the full replacement cost value of the covered items
with an agreed amount endorsement with no co-insurance. Business interruption
coverage shall have limits sufficient to cover Tenant’s lost profits and
necessary continuing expenses, including rents due Landlord under the Lease. The
minimum period of indemnity for business interruption coverage shall be twelve
(12) months plus twelve (12) months’ extended period of indemnity.

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

(e)    Medical malpractice insurance at limits of not less than $1,000,000 each
claim during such periods, if any, that Tenant engages in the practice of
medicine at the Premises. For avoidance of doubt, Tenant shall not be required
to carry the foregoing medical malpractice insurance so long as Tenant is not
(i) treating patients at the Premises, (ii) conducting clinical trials on human
beings at the Premises or (iii) otherwise engaging in the practice of medicine
at the Premises.

(f)    Pollution Legal Liability insurance is required if Tenant stores,
handles, generates or treats Hazardous Materials, as determined solely by
Landlord, on or about the Premises. Such coverage shall include bodily injury,
sickness, disease, death or mental anguish or shock sustained by any person;
property damage including physical injury to or destruction of tangible property
including the resulting loss of use thereof, clean-up costs, and the loss of use
of tangible property that has not been physically injured or destroyed; and
defense costs, charges and expenses incurred in the investigation, adjustment or
defense of claims for such compensatory damages. Coverage shall apply to both
sudden and non-sudden pollution conditions including the discharge, dispersal,
release or escape of smoke, vapors, soot, fumes, acids, alkalis, toxic
chemicals, liquids or gases, waste materials or other irritants, contaminants

 

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or pollutants into or upon land, the atmosphere or any watercourse or body of
water. Claims-made coverage is permitted, provided the policy retroactive date
is continuously maintained prior to the commencement date of this agreement, and
coverage is continuously maintained during all periods in which Tenant occupies
the Premises. Coverage shall be maintained with limits of not less than
$1,000,000 per incident with a $2,000,000 policy aggregate and for a period of
two (2) years thereafter.

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

23.4.    The insurance required of Tenant by this Article shall be with
companies at all times having a current rating of not less than A- and financial
category rating of at least Class VII in “A.M. Best’s Insurance Guide” current
edition. Tenant shall obtain for Landlord from the insurance companies/broker or
cause the insurance companies/broker to furnish certificates of insurance
evidencing all coverages required herein to Landlord. Tenant shall give twenty
(20) days’ prior written notice to Landlord if any such policy is to be
cancelled or reduced below the coverage requirements of this Article (except in
the event of non-payment of premium, in which case ten (10) days’ written notice
shall be given). All such policies shall be written as primary policies, not
contributing with and not in excess of the coverage that Landlord may carry.
Tenant’s required policies shall contain severability of interests clauses
stating that, except with respect to limits of insurance, coverage shall apply
separately to each insured or additional insured. Tenant shall, at least
twenty-five (25) days prior to the expiration of such policies, furnish Landlord
with renewal certificates of insurance or binders. Tenant agrees that if Tenant
does not take out and maintain such insurance, Landlord may (but shall not be
required to) procure such insurance on Tenant’s behalf and at its cost to be
paid by Tenant as Additional Rent. Commercial General Liability, Commercial
Automobile Liability, Umbrella Liability and Pollution Legal Liability insurance
as required above shall name Landlord, BioMed Realty, L.P., and BRE Edison
Parent L.P., and their respective officers, employees, agents, general partners,
members, subsidiaries, affiliates and Lenders (“Landlord Parties”) as additional
insureds as respects liability arising from work or operations performed by or
on behalf of Tenant, Tenant’s use or occupancy of Premises, and ownership,
maintenance or use of vehicles by or on behalf of Tenant.

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

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

 

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23.7.    Tenant and its insurers hereby waive any and all rights of recovery or
subrogation against the Landlord Parties with respect to any loss, damage,
claims, suits or demands, howsoever caused, that are covered, or should have
been covered, by valid and collectible insurance, including any deductibles or
self-insurance maintained thereunder. If necessary, Tenant agrees to endorse the
required insurance policies to permit waivers of subrogation as required
hereunder and hold harmless and indemnify the Landlord Parties for any loss or
expense incurred as a result of a failure to obtain such waivers of subrogation
from insurers. Such waivers shall continue so long as Tenant’s insurers so
permit. Any termination of such a waiver shall be by written notice to Landlord,
containing a description of the circumstances hereinafter set forth in this
Section. Tenant, upon obtaining the policies of insurance required or permitted
under this Lease, shall give notice to its insurance carriers that the foregoing
waiver of subrogation is contained in this Lease. If such policies shall not be
obtainable with such waiver or shall be so obtainable only at a premium over
that chargeable without such waiver, then Tenant shall notify Landlord of such
conditions.

23.8.    Landlord may require insurance policy limits required under this Lease
to be raised to conform with requirements of Landlord’s Lender.

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

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

24.    Damage or Destruction.

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

24.2.    In the event of any damage to or destruction of the Building or the
Project other than as described in Section 24.1, Landlord may elect to repair,
reconstruct and restore the Building or the Project, as applicable, in which
case this Lease shall continue in full force and

 

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effect. If Landlord elects not to repair, reconstruct and restore the Building
or the Project, as applicable, then this Lease shall terminate as of the date of
such damage or destruction. In the event of any damage or destruction
(regardless of whether such damage is governed by Section 24.1 or this Section),
if (a) in Landlord’s determination as set forth in the Damage Repair Estimate
(as defined below), the Affected Areas cannot be repaired, reconstructed or
restored within twelve (12) months after the date of the Damage Repair Estimate,
(b) subject to Section 24.6, the Affected Areas are not actually repaired,
reconstructed and restored within eighteen (18) months after the date of the
Damage Repair Estimate, or (c) the damage and destruction occurs within the last
twelve (12) months of the then-current Term, then Tenant shall have the right to
terminate this Lease, effective as of the date of such damage or destruction, by
delivering to Landlord its written notice of termination (a “Termination
Notice”) (y) with respect to Subsections 24.2(a) and (c), no later than fifteen
(15) days after Landlord delivers to Tenant Landlord’s Damage Repair Estimate
and (z) with respect to Subsection 24.2(b), no later than fifteen (15) days
after such eighteen (18) month period (as the same may be extended pursuant to
Section 24.6) expires. If Tenant provides Landlord with a Termination Notice
pursuant to Subsection 24.2(z), Landlord shall have an additional thirty
(30) days after receipt of such Termination Notice to complete the repair,
reconstruction and restoration. If Landlord does not complete such repair,
reconstruction and restoration within such thirty (30) day period, then Tenant
may terminate this Lease by giving Landlord written notice within two
(2) business days after the expiration of such thirty (30) day period. If
Landlord does complete such repair, reconstruction and restoration within such
thirty (30) day period, then this Lease shall continue in full force and effect.

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

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

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

 

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24.6.    Notwithstanding anything to the contrary contained in this Article,
(a) Landlord shall not be required to repair, reconstruct or restore any damage
or destruction to the extent that Landlord is prohibited from doing so by any
applicable Loan Document or any Lender whose consent is required thereunder
withholds its consent, and (b) should Landlord be delayed or prevented from
completing the repair, reconstruction or restoration of the damage or
destruction to the Premises after the occurrence of such damage or destruction
by Force Majeure or delays caused by a Lender or Tenant Party, then the time for
Landlord to commence or complete repairs, reconstruction and restoration shall
be extended on a day-for-day basis; provided, however, that, at Landlord’s
election in the event of an occurrence under clause (b), Landlord shall be
relieved of its obligation to make such repairs, reconstruction and restoration
upon Landlord’s delivery of written notice to Tenant.

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

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

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

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

 

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25.    Eminent Domain.

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

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

25.3.    To the extent permitted under all applicable Loan Documents or
otherwise consented to by any and all Lenders whose consent is required
thereunder, Tenant shall be entitled to any award that is specifically awarded
as compensation for (a) the taking of Tenant’s personal property that was
installed at Tenant’s expense and (b) the costs of Tenant moving to a new
location. Except as set forth in the previous sentence, any award for such
taking shall be the property of Landlord.

25.4.    If, upon any taking of the nature described in this Article, this Lease
continues in effect, then Landlord shall promptly proceed to restore the
Affected Areas to substantially their same condition prior to such partial
taking. To the extent such restoration is infeasible, as determined by Landlord
in its sole and absolute discretion, the Rent shall be decreased proportionately
to reflect the loss of any portion of the Premises no longer available to
Tenant. Notwithstanding anything to the contrary contained in this Article,
Landlord shall not be required to restore the Affected Areas to the extent that
Landlord is prohibited from doing so by any applicable Loan Document or any
Lender whose consent is required thereunder withholds its consent.

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

26.    Surrender.

26.1.    At least thirty (30) days prior to Tenant’s surrender of possession of
any part of the Premises, Tenant shall provide Landlord with a facility
decommissioning and Hazardous Materials closure plan for the Premises (“Exit
Survey”) prepared by an independent third party

 

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state-certified professional with appropriate expertise, which Exit Survey must
be reasonably acceptable to Landlord. The Exit Survey shall comply with the
American National Standards Institute’s Laboratory Decommissioning guidelines
(ANSI/AIHA Z9.11-2008) or any successor standards published by ANSI or any
successor organization (or, if ANSI and its successors no longer exist, a
similar entity publishing similar standards). In addition, prior to, and as a
condition to, Tenant’s surrender of possession of any part of the Premises,
Tenant shall (a) provide Landlord with written evidence of all appropriate
governmental releases obtained by Tenant in accordance with Applicable Laws,
including laws pertaining to the surrender of the Premises, (b) place Laboratory
Equipment Decontamination Forms on all decommissioned equipment to assure safe
occupancy by future users and (c) conduct a site inspection with Landlord. In
addition, Tenant agrees to remain responsible after the surrender of the
Premises for the remediation of any recognized environmental conditions set
forth in the Exit Survey (for which Tenant is responsible pursuant to the terms
of this Lease) and comply with any recommendations set forth in the Exit Survey.
During any period of time needed after the expiration or earlier termination of
this Lease to complete the requirements set forth in this Section, Tenant shall
be deemed a holdover tenant and subject to the provisions of Article 27.
Tenant’s obligations under this Section shall survive the expiration or earlier
termination of the Lease.

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

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

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

27.    Holding Over.

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

27.2.    Notwithstanding the foregoing, if Tenant remains in possession of the
Premises after the expiration or earlier termination of the Term without
Landlord’s prior written consent,

 

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(a) Tenant shall become a tenant at sufferance subject to the terms and
conditions of this Lease, except that the monthly rent shall be equal to one
hundred fifty percent (150%) of the Rent in effect during the last thirty
(30) days of the Term, and (b) Tenant shall be liable to Landlord for any and
all damages suffered by Landlord as a result of such holdover, including any
lost rent or consequential, special and indirect damages (in each case,
regardless of whether such damages are foreseeable).

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

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

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

28.    Indemnification and Exculpation.

28.1.    Tenant agrees to Indemnify the Landlord Indemnitees from and against
any and all Claims of any kind or nature, real or alleged, arising from
(a) injury to or death of any person or damage to any property occurring within
or about the Premises, the Building, the Property or the Project, arising
directly or indirectly out of (i) the presence at or use or occupancy of the
Premises or Project by a Tenant Party, (ii) an act or omission on the part of
any Tenant Party, (b) a breach or default by Tenant in the performance of any of
its obligations hereunder (including any Claim asserted by any Lender against
any Landlord Indemnitees under any Loan Document as a direct result of such
breach or default by Tenant) or (c) injury to or death of persons or damage to
or loss of any property, real or alleged, arising from the serving of alcoholic
beverages at the Premises or Project, including liability under any dram shop
law, host liquor law or similar Applicable Law, except to the extent directly
caused by Landlord’s negligence or willful misconduct. Tenant’s obligations
under this Section shall not be affected, reduced or limited by any limitation
on the amount or type of damages, compensation or benefits payable by or for
Tenant under workers’ compensation acts, disability benefit acts, employee
benefit acts or similar legislation. Tenant’s obligations under this Section
shall survive the expiration or earlier termination of this Lease.

28.2.    Notwithstanding anything in this Lease to the contrary, Landlord shall
not be liable to Tenant for and Tenant assumes all risk of (a) damage or losses
caused by fire, electrical malfunction, gas explosion or water damage of any
type (including broken water lines, malfunctioning fire sprinkler systems, roof
leaks or stoppages of lines), unless any such loss is due to Landlord’s willful
disregard of written notice by Tenant of need for a repair that Landlord is
responsible to make for an unreasonable period of time, and (b) damage to
personal property or scientific research, including loss of records kept by
Tenant within the Premises (in each case, regardless of whether such damages are
foreseeable). Tenant further waives any claim for injury to Tenant’s business or
loss of income relating to any such damage or destruction of personal property
as described in this Section. Notwithstanding anything in the foregoing or this
Lease to the contrary, except (x) as otherwise provided herein (including
Section 27.2), (y) as may be

 

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provided by Applicable Laws or (z) in the event of Tenant’s breach of Article 21
or Section 26.1, in no event shall Landlord or Tenant be liable to the other for
any consequential, special or indirect damages arising out of this Lease,
including lost profits (provided that this Subsection 28.2(z) shall not limit
Tenant’s liability for Base Rent or Additional Rent pursuant to this Lease).

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

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

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

29.    Assignment or Subletting.

29.1.    Except as hereinafter expressly permitted, none of the following (each,
a “Transfer”), either voluntarily or by operation of Applicable Laws, shall be
directly or indirectly performed without Landlord’s prior written consent:
(a) Tenant selling, hypothecating, assigning, pledging, encumbering or otherwise
transferring this Lease or subletting the Premises or (b) a controlling interest
in Tenant being sold, assigned or otherwise transferred (other than as a result
of shares in Tenant being sold on a public stock exchange). For purposes of the
preceding sentence, “control” means (a) owning (directly or indirectly) more
than fifty percent (50%) of the stock or other equity interests of another
person or (b) possessing, directly or indirectly, the power to direct or cause
the direction of the management and policies of such person. Notwithstanding the
foregoing, Tenant shall have the right to Transfer, without Landlord’s prior
written consent, Tenant’s interest in this Lease or the Premises or any part
thereof to any person that (i) acquires all or substantially all of the assets
of Tenant, (ii) is a successor to Tenant by merger, consolidation or
reorganization, or (iii) as of the date of determination and at all times
thereafter directly, or indirectly through one or more intermediaries, controls,
is controlled by or is under common control with Tenant (any person described in
(i), (ii), or (iii), a “Tenant’s Affiliate”); provided that Tenant shall notify
Landlord in writing at least ten (10) business days prior to the effectiveness
of such Transfer to Tenant’s Affiliate (an “Exempt Transfer”) and otherwise
comply with the requirements of this Lease regarding such Transfer; and
provided, further, that the person that will be the tenant under this Lease
after the Exempt Transfer has a net worth (as of both the day immediately prior
to and the day immediately after the Exempt Transfer) that is equal to or
greater than the greater of (x) the net worth of the transferring Tenant as of
the Execution Date, and (z) the lesser of (i) the net worth of the Transferring
Tenant as of the date of the Exempt Transfer, and (ii) a net worth of Five
Hundred Million Dollars ($500,000,000). For purposes of the immediately
preceding

 

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sentence, “control” requires both (a) owning (directly or indirectly) more than
fifty percent (50%) of the stock or other equity interests of another person and
(b) possessing, directly or indirectly, the power to direct or cause the
direction of the management and policies of such person. In no event shall
Tenant perform a Transfer to or with an entity that is a tenant at the Project
or that is in discussions or negotiations with Landlord or an affiliate of
Landlord to lease premises at the Project or a property owned by Landlord or an
affiliate of Landlord. Notwithstanding anything in this Lease to the contrary,
if (a) Tenant or any proposed transferee, assignee or sublessee of Tenant has
been required by any prior landlord, Lender or Governmental Authority to take
material remedial action in connection with Hazardous Materials contaminating a
property if the contamination resulted from such party’s action or omission or
use of the property in question or (b) Tenant or any proposed transferee,
assignee or sublessee is subject to a material enforcement order issued by any
Governmental Authority in connection with the use, disposal or storage of
Hazardous Materials, then Landlord shall have the right to terminate this Lease
in Landlord’s sole and absolute discretion (with respect to any such matter
involving Tenant), and it shall not be unreasonable for Landlord to withhold its
consent to any proposed transfer, assignment or subletting (with respect to any
such matter involving a proposed transferee, assignee or sublessee).

29.2.    In the event Tenant desires to effect a Transfer, then, at least thirty
(30) but not more than ninety (90) days prior to the date when Tenant desires
the Transfer to be effective (the “Transfer Date”), Tenant shall provide written
notice to Landlord (the “Transfer Notice”) containing information (including
references) concerning the character of the proposed transferee, assignee or
sublessee; the Transfer Date; the most recent unconsolidated financial
statements of Tenant and of the proposed transferee, assignee or sublessee
satisfying the requirements of Section 40.2 (“Required Financials”); any
ownership or commercial relationship between Tenant and the proposed transferee,
assignee or sublessee; copies of Hazardous Materials Documents for the proposed
transferee, assignee or sublessee; and the consideration and all other material
terms and conditions of the proposed Transfer, all in such detail as Landlord
shall reasonably require.

29.3.    Landlord, in determining whether consent should be given to a proposed
Transfer, may give consideration to (a) the financial strength of Tenant and of
such transferee, assignee or sublessee (notwithstanding Tenant remaining liable
for Tenant’s performance), (b) any change in use that such transferee, assignee
or sublessee proposes to make in the use of the Premises and (c) Landlord’s
desire to exercise its rights under Section 29.7 to cancel this Lease. In no
event shall Landlord be deemed to be unreasonable for declining to consent to a
Transfer if any applicable Loan Document prohibits such assignment or any Lender
whose consent is required thereunder withholds its consent, or if the Transfer
is to a transferee, assignee or sublessee of poor reputation, lacking financial
qualifications or seeking a change in the Permitted Use, or jeopardizing
directly or indirectly the status of Landlord or any of Landlord’s affiliates as
a Real Estate Investment Trust under the Internal Revenue Code of 1986 (as the
same may be amended from time to time, the “Revenue Code”). Notwithstanding
anything contained in this Lease to the contrary, (w) no Transfer shall be
consummated on any basis such that the rental or other amounts to be paid by the
occupant, assignee, manager or other transferee thereunder would be based, in
whole or in part, on the income or profits derived by the business activities of
such occupant, assignee, manager or other transferee; (x) Tenant shall not
furnish or render any

 

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services to an occupant, assignee, manager or other transferee with respect to
whom transfer consideration is required to be paid, or manage or operate the
Premises or any capital additions so transferred, with respect to which transfer
consideration is being paid; (y) Tenant shall not consummate a Transfer with any
person in which Landlord owns an interest, directly or indirectly (by applying
constructive ownership rules set forth in Section 856(d)(5) of the Revenue
Code); and (z) Tenant shall not consummate a Transfer with any person or in any
manner that could cause any portion of the amounts received by Landlord pursuant
to this Lease or any sublease, license or other arrangement for the right to
use, occupy or possess any portion of the Premises to fail to qualify as “rents
from real property” within the meaning of Section 856(d) of the Revenue Code, or
any similar or successor provision thereto or which could cause any other income
of Landlord to fail to qualify as income described in Section 856(c)(2) of the
Revenue Code.

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

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

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

(c)    In the case of an Exempt Transfer, Tenant shall provide Landlord with
evidence reasonably satisfactory to Landlord that the Transfer qualifies as an
Exempt Transfer;

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

(e)    Tenant shall reimburse Landlord for Landlord’s actual costs and expenses,
including reasonable attorneys’ fees, charges and disbursements incurred in
connection with the review, processing and documentation of such request;

(f)    Except with respect to an Exempt Transfer, if Tenant’s transfer of rights
or sharing of the Premises provides for the receipt by, on behalf of or on
account of Tenant of any consideration of any kind whatsoever (including a
premium rental for a sublease or lump sum payment for an assignment, but
excluding Tenant’s reasonable costs in marketing and subleasing the Premises) in
excess of the rental and other charges due to Landlord under this Lease, Tenant
shall pay fifty percent (50%) of all of such excess to Landlord, after making
deductions for any

 

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reasonable marketing expenses, tenant improvement funds expended by Tenant,
alterations, cash concessions, brokerage commissions, attorneys’ fees and free
rent actually paid by Tenant. If such consideration consists of cash paid to
Tenant, payment to Landlord shall be made upon receipt by Tenant of such cash
payment;

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

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

(i)    Tenant shall not then be in Default hereunder in any respect;

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

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

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

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

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

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

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

 

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

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

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

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

30.    Subordination and Attornment.

30.1.    This Lease shall be subject and subordinate to the lien of any
mortgage, deed of trust, or lease in which Landlord is tenant now or hereafter
in force against the Building or the Project and to all advances made or
hereafter to be made upon the security thereof without the necessity of the
execution and delivery of any further instruments on the part of Tenant to
effectuate such subordination.

30.2.    Notwithstanding the foregoing, Tenant shall execute and deliver upon
demand such further instrument or instruments evidencing such subordination of
this Lease to the lien of any such mortgage or mortgages or deeds of trust or
lease in which Landlord is tenant as may be required by Landlord; provided that
such instrument(s) contain commercially reasonable non-disturbance language in
favor of Tenant. If any Lender so elects, however, this Lease shall be

 

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deemed prior in lien to any such lease, mortgage, or deed of trust upon or
including the Premises regardless of date and Tenant shall execute a statement
in writing to such effect at Landlord’s request. If Tenant fails to execute any
document required from Tenant under this Section within ten (10) days after
written request therefor, Tenant hereby constitutes and appoints Landlord or its
special attorney-in-fact to execute and deliver any such document or documents
in the name of Tenant. Such power is coupled with an interest and is
irrevocable. For the avoidance of doubt, “Lenders” shall also include historic
tax credit investors and new market tax credit investors.

30.3.    Upon written request of Landlord and opportunity for Tenant to review,
Tenant agrees to execute any Lease amendments not materially altering the terms
of this Lease, if required by a Lender incident to the financing of the real
property of which the Premises constitute a part.

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

31.    Defaults and Remedies.

31.1.    Late payment by Tenant to Landlord of Rent and other sums due shall
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which shall be extremely difficult and impracticable to ascertain. Such costs
include processing and accounting charges and late charges that may be imposed
on Landlord by the terms of any mortgage or trust deed covering the Premises.
Therefore, if any installment of Rent due from Tenant is not received by
Landlord within three (3) days after the date such payment is due, Tenant shall
pay to Landlord (a) an additional sum of five percent (5%) of the overdue Rent
as a late charge plus (b) interest at an annual rate (the “Default Rate”) equal
to the lesser of (a) ten percent (10%) and (b) the highest rate permitted by
Applicable Laws. The parties agree that this late charge represents a fair and
reasonable estimate of the costs that Landlord shall incur by reason of late
payment by Tenant and shall be payable as Additional Rent to Landlord due with
the next installment of Rent or within five (5) business days after Landlord’s
demand, whichever is earlier. Landlord’s acceptance of any Additional Rent
(including a late charge or any other amount hereunder) shall not be deemed an
extension of the date that Rent is due or prevent Landlord from pursuing any
other rights or remedies under this Lease, at law or in equity. Notwithstanding
anything to the contrary in this Section, Tenant shall not be obligated to pay a
late charge pursuant to this Section for the first (1st) late payment of Rent
during any twelve (12) month period during the Term, unless Tenant fails to make
such payment within five (5) days after Tenant’s receipt of notice from Landlord
regarding such late payment.

31.2.    No payment by Tenant or receipt by Landlord of a lesser amount than the
Rent payment herein stipulated shall be deemed to be other than on account of
the Rent, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment as Rent be deemed an accord and satisfaction,
and Landlord may accept such check or payment without prejudice to Landlord’s
right to recover the balance of such Rent or pursue any other

 

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remedy provided in this Lease or in equity or at law. If a dispute shall arise
as to any amount or sum of money to be paid by Tenant to Landlord hereunder,
Tenant shall have the right to make payment “under protest,” such payment shall
not be regarded as a voluntary payment, and there shall survive the right on the
part of Tenant to institute suit for recovery of the payment paid under protest.

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

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

(a)    Tenant abandons the Premises;

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

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

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

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

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

 

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

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

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

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

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

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

(b)    Terminate Tenant’s right to possession of the Premises by written notice
to Tenant or by any lawful means, in which case Tenant shall immediately
surrender possession of the Premises to Landlord. In such event, Landlord shall
have the immediate right to re-enter and remove all persons and property, and
such property may be removed and stored in a public warehouse or elsewhere at
the cost and for the account of Tenant, all without service of notice or resort
to legal process and without being deemed guilty of trespass or becoming liable
for any loss or damage that may be occasioned thereby; and

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

(i)    The sum of:

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

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

 

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

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

E.    At Landlord’s election, such other amounts in addition to or in lieu of
the foregoing as may be permitted from time to time by Applicable Laws; or

(ii)    At Landlord’s election, as minimum liquidated damages in addition to any
(A) amounts paid or payable to Landlord pursuant to Section 31.5(c)(i)(A) prior
to such election and (B) costs of restoring the Premises to the condition
required under the terms of this Lease, an amount (the “Election Amount”) equal
to either (Y) the positive difference (if any, and measured at the time of such
termination) between (1) the then-present value of the total Rent and other
benefits that would have accrued to Landlord under this Lease for the remainder
of the Term if Tenant had fully complied with the Lease minus (2) the
then-present cash rental value of the Premises as determined by Landlord for
what would be the then-unexpired Term if the Lease remained in effect, computed
using the discount rate of the Federal Reserve Bank of San Francisco at the time
of the award plus one (1) percentage point (the “Discount Rate”) or (Z) twelve
(12) months (or such lesser number of months as may then be remaining in the
Term) of Base Rent and Additional Rent at the rate last payable by Tenant
pursuant to this Lease, in either case as Landlord specifies in such election.
Landlord and Tenant agree that the Election Amount represents a reasonable
forecast of the minimum damages expected to occur in the event of a breach,
taking into account the uncertainty, time and cost of determining elements
relevant to actual damages, such as fair market rent, time and costs that may be
required to re-lease the Premises, and other factors; and that the Election
Amount is not a penalty.

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

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

 

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failure or refusal to relet the Premises. For purposes of this Section, the
following acts by Landlord will not constitute the termination of Tenant’s right
to possession of the Premises:

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

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

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

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

31.8.    In the event Landlord elects to terminate this Lease and relet the
Premises, Landlord may execute any new lease in its own name. Tenant hereunder
shall have no right or authority whatsoever to collect any Rent from such
tenant. The proceeds of any such reletting shall be applied as follows:

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

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

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

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

31.9.    All of Landlord’s rights, options and remedies hereunder shall be
construed and held to be nonexclusive and cumulative. Landlord shall have the
right to pursue any one or all of such remedies, or any other remedy or relief
that may be provided by Applicable Laws, whether or not stated in this Lease. No
waiver of any default of Tenant hereunder shall be implied from any acceptance
by Landlord of any Rent or other payments due hereunder or any omission by
Landlord to take any action on account of such default if such default persists
or is repeated, and no express waiver shall affect defaults other than as
specified in such waiver. Notwithstanding any provision of this Lease to the
contrary, in no event shall Landlord be required to mitigate its damages with
respect to any default by Tenant, except as required by Applicable Laws. Any

 

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such obligation imposed by Applicable Laws upon Landlord to relet the Premises
after any termination of this Lease shall be subject to the reasonable
requirements of Landlord to (a) lease to high quality tenants on such terms as
Landlord may from time to time deem appropriate in its discretion and
(b) develop the Project in a harmonious manner with a mix of uses, tenants,
floor areas, terms of tenancies, etc., as determined by Landlord. Landlord shall
not be obligated to relet the Premises to (y) any Tenant’s Affiliate or (z) any
party (i) unacceptable to a Lender, (ii) that requires Landlord to make
improvements to or re-demise the Premises, (iii) that desires to change the
Permitted Use, (iv) that desires to lease the Premises for more or less than the
remaining Term or (v) to whom Landlord or an affiliate of Landlord may desire to
lease other available space in the Project or at another property owned by
Landlord or an affiliate of Landlord.

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

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

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

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

32.    Bankruptcy. In the event a debtor, trustee or debtor in possession under
the Bankruptcy Code, or another person with similar rights, duties and powers
under any other Applicable Laws, proposes to cure any default under this Lease
or to assume or assign this Lease and is obliged to provide adequate assurance
to Landlord that (a) a default shall be cured, (b) Landlord shall be

 

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compensated for its damages arising from any breach of this Lease and (c) future
performance of Tenant’s obligations under this Lease shall occur, then such
adequate assurances shall include any or all of the following, as designated by
Landlord in its sole and absolute discretion:

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

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

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

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

33.    Brokers.

33.1.    Tenant represents and warrants that it has had no dealings with any
real estate broker or agent in connection with the negotiation of this Lease
other than Newmark Cornish and Carey (“Broker”), and that it knows of no other
real estate broker or agent that is or might be entitled to a commission in
connection with this Lease. Landlord represents and warrants that it has had no
dealings with any real estate broker or agent in connection with the negotiation
of this Lease other than Kidder Mathews, and that it knows of no other real
estate broker or agent that is or might be entitled to a commission in
connection with this Lease. Landlord shall compensate Broker in relation to this
Lease pursuant to a separate agreement between Landlord and Broker.

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

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

33.4.    Tenant agrees to Indemnify the Landlord Indemnitees from any and all
cost or liability for compensation claimed by any broker or agent, other than
Broker, employed or engaged by Tenant or claiming to have been employed or
engaged by Tenant.

34.    Definition of Landlord. With regard to obligations imposed upon Landlord
pursuant to this Lease, the term “Landlord,” as used in this Lease, shall refer
only to Landlord or Landlord’s then-current successor-in-interest. In the event
of any transfer, assignment or conveyance of Landlord’s interest in this Lease
or in Landlord’s fee title to or leasehold interest in the Property, as
applicable, Landlord herein named (and in case of any subsequent transfers or
conveyances, the subsequent Landlord) shall be automatically freed and relieved,
from and after the date of

 

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such transfer, assignment or conveyance, from all liability for the performance
of any covenants or obligations contained in this Lease thereafter to be
performed by Landlord and, without further agreement, the transferee, assignee
or conveyee of Landlord’s in this Lease or in Landlord’s fee title to or
leasehold interest in the Property, as applicable, shall be deemed to have
assumed and agreed to observe and perform any and all covenants and obligations
of Landlord hereunder during the tenure of its interest in the Lease or the
Property. Landlord or any subsequent Landlord may transfer its interest in the
Premises or this Lease without Tenant’s consent.

35.    Limitation of Landlord’s Liability.

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

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

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

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

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

36.2.    The term “Tenant,” as used in this Lease, shall mean and include each
of them, jointly and severally. The act of, notice from, notice to, refund to,
or signature of any one or

 

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more of them with respect to the tenancy under this Lease, including any
renewal, extension, expiration, termination or modification of this Lease, shall
be binding upon each and all of the persons executing this Lease as Tenant with
the same force and effect as if each and all of them had so acted, so given or
received such notice or refund, or so signed.

37.    Representations. Tenant guarantees, warrants and represents that
(a) Tenant is duly incorporated or otherwise established or formed and validly
existing under the laws of its state of incorporation, establishment or
formation, (b) Tenant has and is duly qualified to do business in the state in
which the Property is located, (c) Tenant has full corporate, partnership,
trust, association or other appropriate power and authority to enter into this
Lease and to perform all Tenant’s obligations hereunder, (d) each person (and
all of the persons if more than one signs) signing this Lease on behalf of
Tenant is duly and validly authorized to do so and (e) neither (i) the
execution, delivery or performance of this Lease nor (ii) the consummation of
the transactions contemplated hereby will violate or conflict with any provision
of documents or instruments under which Tenant is constituted or to which Tenant
is a party. In addition, Tenant guarantees, warrants and represents that none of
(x) it, (y) its affiliates or partners nor (z) to the best of its knowledge, its
members, shareholders or other equity owners or any of their respective
employees, officers, directors, representatives or agents is a person or entity
with whom U.S. persons or entities are restricted from doing business under
regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of
the Treasury (including those named on OFAC’s Specially Designated and Blocked
Persons List) or under any statute, executive order (including the September 24,
2001, Executive Order Blocking Property and Prohibiting Transactions with
Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar
governmental action.

38.    Confidentiality. Tenant shall keep the terms and conditions of this Lease
and any information provided to Tenant or its employees, agents or contractors
pursuant to Article 9 confidential and shall not (a) disclose to any third party
any terms or conditions of this Lease or any other Lease-related document
(including subleases, assignments, work letters, construction contracts, letters
of credit, subordination agreements, non-disturbance agreements, brokerage
agreements or estoppels) or (b) provide to any third party an original or copy
of this Lease (or any Lease-related document). Landlord shall not release to any
third party any non-public financial information or non-public information about
Tenant’s ownership structure that Tenant gives Landlord. Notwithstanding the
foregoing, confidential information under this Section may be released by
Landlord or Tenant under the following circumstances: (x) if required by
Applicable Laws (including, without limitation, any applicable rules and
regulations established by the United States Securities and Exchange Commission)
or in any judicial proceeding; provided that the releasing party has given the
other party reasonable notice of such requirement, if feasible, (y) to a party’s
attorneys, accountants, brokers, lenders, potential lenders, investors,
potential investors and other bona fide consultants or advisers (with respect to
this Lease only); provided such third parties agree to be bound by this Section
or (z) to bona fide prospective assignees or subtenants of this Lease; provided
they agree in writing to be bound by this Section.

39.    Notices. Except as otherwise stated in this Lease, any notice, consent,
demand, invoice, statement or other communication required or permitted to be
given hereunder shall be in writing and shall be given by (a) personal delivery,
(b) overnight delivery with a reputable international

 

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

40.    Miscellaneous.

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

40.2.    To induce Landlord to enter into this Lease, Tenant agrees that it
shall furnish to Landlord, from time to time, within ten (10) business days
after receipt of Landlord’s written request, the most recent year-end
unconsolidated financial statements reflecting Tenant’s current financial
condition audited by a nationally recognized accounting firm. Tenant shall,
within ninety (90) days after the end of Tenant’s financial year, furnish
Landlord with a certified copy of Tenant’s year-end unconsolidated financial
statements for the previous year audited by a nationally recognized accounting
firm. Tenant represents and warrants that all financial statements, records and
information furnished by Tenant to Landlord in connection with this Lease are
true, correct and complete in all respects. If audited financials are not
otherwise prepared, unaudited financials complying with generally accepted
accounting principles and certified by the chief financial officer of Tenant as
true, correct and complete in all respects shall suffice for purposes of this
Section. The provisions of this Section shall not apply at any time while Tenant
is a corporation whose shares are traded on any nationally recognized stock
exchange.

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

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

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

 

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

40.7.    Except as otherwise expressly set forth in this Lease, each party shall
pay its own costs and expenses incurred in connection with this Lease and such
party’s performance under this Lease; provided that, if either party commences
an action, proceeding, demand, claim, action, cause of action or suit against
the other party arising out of or in connection with this Lease, then the
substantially prevailing party shall be reimbursed by the other party for all
reasonable costs and expenses, including reasonable attorneys’ fees and
expenses, incurred by the substantially prevailing party in such action,
proceeding, demand, claim, action, cause of action or suit, and in any appeal in
connection therewith (regardless of whether the applicable action, proceeding,
demand, claim, action, cause of action, suit or appeal is voluntarily withdrawn
or dismissed). In addition, Landlord shall, upon demand, be entitled to all
reasonable attorneys’ fees and all other reasonable costs incurred in the
preparation and service of any notice or demand hereunder, regardless of whether
a legal action is subsequently commenced, or incurred in connection with any
contested matter or other proceeding in bankruptcy court concerning this Lease.

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

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

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

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

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

 

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

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

40.15.    Tenant guarantees, warrants and represents that the individual or
individuals signing this Lease have the power, authority and legal capacity to
sign this Lease on behalf of and to bind all entities, corporations,
partnerships, limited liability companies, joint venturers or other
organizations and entities on whose behalf such individual or individuals have
signed.

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

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

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

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

40.20.    Throughout the Term, Tenant shall have the right to use the furniture,
fixtures and equipment currently located within the Premises and listed on
Exhibit D attached hereto (collectively, the “FF&E”). Landlord has made no
representations or warranties, express, implied or otherwise, regarding the
condition or working order of the FF&E. Tenant confirms that it has had the
reasonable opportunity to inventory and inspect the FF&E and hereby represents
that (i) it accepts the FF&E “AS IS AND WITH ALL FAULTS”, and (ii) it is
satisfied that all items of FF&E listed on Exhibit D attached hereto are
currently located within the Premises and are hereby accepted by Tenant, subject
to and in accordance with the terms of this Section. Tenant acknowledges and
agrees that Landlord shall continue to own the FF&E, and Tenant shall acquire no
ownership interest therein. Throughout the Term, Tenant shall be obligated to
(a) maintain, repair, safeguard and keep lien free the FF&E, and (b) ensure that
the FF&E is covered by the insurance policy required to be maintained by Tenant
pursuant to

 

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Section 23.3(c) of this Lease. With the exception of ordinary wear and tear,
Tenant shall promptly repair or replace any FF&E that becomes damaged, destroyed
or for any reason is no longer located at the Premises, and shall keep a
detailed log of any such repairs or replacements. All replacements shall be of
substantially similar style and quality as the original items of FF&E so
replaced. Tenant shall provide Landlord with a copy of such log upon request. In
no event shall Landlord have any liability or responsibility with respect to the
FF&E, and Landlord shall have no responsibility to repair or refurbish the FF&E
at any time. At the expiration or earlier termination of the Term, Landlord and
Tenant shall jointly inventory the FF&E then located within the Premises, and
Tenant shall pay to Landlord, within thirty (30) days following the effective
date of expiration or earlier termination of this Lease, an amount equal to the
cost to repair or replace any items of the FF&E which are no longer located at
the Premises, are of inferior style or quality as compared with the original
FF&E, or which exhibit damage beyond ordinary wear and tear as reasonably
determined by Landlord.

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

 

LANDLORD:

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

By:  

 

Name:  

 

Title:  

 

TENANT:

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

By:  

 

Name:  

 

Title:  

 

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EXHIBIT A

PREMISES

 

LOGO [g310331g0303134535831.jpg]

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EXHIBIT B

WORK LETTER

This Work Letter (this “Work Letter”) is made and entered into as of the
                     day of March, 2017, by and between BMR-PACIFIC RESEARCH
CENTER LP, a Delaware limited partnership (“Landlord”), and PROTAGONIST
THERAPEUTICS, INC., a Delaware corporation (“Tenant”), and is attached to and
made a part of that certain Lease dated as of March     , 2017 (as the same may
be amended, amended and restated, supplemented or otherwise modified from time
to time, the “Lease”), by and between Landlord and Tenant for the Premises
located at 7707 Gateway Boulevard, Newark, California. All capitalized terms
used but not otherwise defined herein shall have the meanings given them in the
Lease.

1.    General Requirements.

1.1.    Authorized Representatives.

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

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

1.2.    Schedule. The schedule for design and development of the Tenant
Improvements, including the time periods for preparation and review of
construction documents, approvals and performance, shall be in accordance with a
schedule to be prepared by Tenant (the “Schedule”). Tenant shall prepare the
Schedule so that it is a reasonable schedule for the completion of the Tenant
Improvements. The Schedule shall clearly identify all activities requiring
Landlord participation, including specific dates and time periods when Tenant’s
contractor will require access to areas of the Project outside of the Premises.
As soon as the Schedule is completed, Tenant shall deliver the same to Landlord
for Landlord’s approval, which approval shall not be unreasonably withheld,
conditioned or delayed. Such Schedule shall be approved or disapproved by
Landlord within ten (10) business days after delivery to Landlord. Landlord’s
failure to respond within such ten (10) business day period shall be deemed
approval by Landlord. If Landlord disapproves the Schedule, then Landlord shall
notify Tenant in writing of its objections to such Schedule, and the parties
shall confer and negotiate in good faith to reach agreement on the Schedule. The
Schedule shall be subject to adjustment as mutually agreed upon in writing by
the parties, or as provided in this Work Letter.

 

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1.3.    Tenant’s Architects, Contractors and Consultants. The architect,
engineering consultants, design team, general contractor and subcontractors
responsible for the construction of the Tenant Improvements shall be selected by
Tenant and approved by Landlord, which approval Landlord shall not unreasonably
withhold, condition or delay. Landlord may refuse to use any architects,
consultants, contractors, subcontractors or material suppliers that Landlord
reasonably believes could cause labor disharmony or may not have sufficient
experience, in Landlord’s reasonable opinion, to perform work in an occupied
Class “A” laboratory research building and in lab areas. All Tenant contracts
related to the Tenant Improvements shall provide that Tenant may assign such
contracts and any warranties with respect to the Tenant Improvements to Landlord
at any time.

2.    Tenant Improvements. All Tenant Improvements shall be performed by
Tenant’s contractor, at Tenant’s sole cost and expense (subject to Landlord’s
obligations with respect to any portion of the TI Allowance) and in accordance
with the Approved Plans (as defined below), the Lease and this Work Letter. To
the extent that the total projected cost of the Tenant Improvements (as
reasonably projected by Landlord) exceeds the TI Allowance (such excess, the
“Excess TI Costs”), Tenant shall advance to Landlord any Excess TI Costs within
ten (10) days after receipt of an invoice therefor, but in any case before
Tenant commences the Tenant Improvements. If the actual Excess TI Costs are less
than the Excess TI Costs paid by Tenant to Landlord, Landlord shall credit
Tenant with the overage paid by Tenant against Tenant’s Rent obligations,
beginning after Landlord has completed the final accounting for the Tenant
Improvements (which final accounting shall be completed within thirty (30) days
following the completion of the Tenant Improvements). If the cost of the Tenant
Improvements (as reasonably projected by Landlord) increases over Landlord’s
initial projection, then Landlord may notify Tenant and Tenant shall deposit any
additional Excess TI Costs with Landlord in the same way that Tenant deposited
the initial Excess TI Costs. If Tenant fails to pay, or is late in paying, any
sum due to Landlord under this Work Letter (and Tenant fails to cure such
non-payment within three (3) business days after notice from Landlord), then
Landlord shall have all of the rights and remedies set forth in the Lease for
nonpayment of Rent (including the right to interest and the right to assess a
late charge), and for purposes of any litigation instituted with regard to such
amounts the same shall be considered Rent. All material and equipment furnished
by Tenant or its contractors as the Tenant Improvements shall be new or “like
new;” the Tenant Improvements shall be performed in a first-class, workmanlike
manner; and the quality of the Tenant Improvements shall be of a nature and
character not less than the Building Standard. Tenant shall take, and shall
require its contractors to take, commercially reasonable steps to protect the
Premises during the performance of any Tenant Improvements, including covering
or temporarily removing any window coverings so as to guard against dust, debris
or damage. All Tenant Improvements shall be performed in accordance with Article
17 of the Lease; provided that, notwithstanding anything in the Lease or this
Work Letter to the contrary, in the event of a conflict between this Work Letter
and Article 17 of the Lease, the terms of this Work Letter shall govern.

 

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2.1.    Work Plans. Tenant shall prepare and submit to Landlord for approval
schematics covering the Tenant Improvements prepared in conformity with the
applicable provisions of this Work Letter (the “Draft Schematic Plans”). The
Draft Schematic Plans shall contain sufficient information and detail to
accurately describe the proposed design to Landlord and such other information
as Landlord may reasonably request. Landlord shall notify Tenant in writing
within ten (10) business days after receipt of the Draft Schematic Plans whether
Landlord approves or objects to the Draft Schematic Plans and of the manner, if
any, in which the Draft Schematic Plans are unacceptable. Landlord’s failure to
respond within such ten (10) business day period shall be deemed approval by
Landlord. If Landlord reasonably objects to the Draft Schematic Plans, then
Tenant shall revise the Draft Schematic Plans and cause Landlord’s objections to
be remedied in the revised Draft Schematic Plans. Tenant shall then resubmit the
revised Draft Schematic Plans to Landlord for approval, such approval not to be
unreasonably withheld, conditioned or delayed. Landlord’s approval of or
objection to revised Draft Schematic Plans and Tenant’s correction of the same
shall be in accordance with this Section until Landlord has approved the Draft
Schematic Plans in writing or been deemed to have approved them. The iteration
of the Draft Schematic Plans that is approved or deemed approved by Landlord
without objection shall be referred to herein as the “Approved Schematic Plans.”

2.2.    Construction Plans. Tenant shall prepare final plans and specifications
for the Tenant Improvements that (a) are consistent with and are logical
evolutions of the Approved Schematic Plans and (b) incorporate any other
Tenant-requested (and Landlord-approved) Changes (as defined below). As soon as
such final plans and specifications (“Construction Plans”) are completed, Tenant
shall deliver the same to Landlord for Landlord’s approval, which approval shall
not be unreasonably withheld, conditioned or delayed. All such Construction
Plans shall be submitted by Tenant to Landlord in electronic .pdf, CADD and
full-size hard copy formats, and shall be approved or disapproved by Landlord
within ten (10) business days after delivery to Landlord. Landlord’s failure to
respond within such ten (10) business day period shall be deemed approval by
Landlord. If the Construction Plans are disapproved by Landlord, then Landlord
shall notify Tenant in writing of its objections to such Construction Plans, and
the parties shall confer and negotiate in good faith to reach agreement on the
Construction Plans. Promptly after the Construction Plans are approved by
Landlord and Tenant, two (2) copies of such Construction Plans shall be
initialed and dated by Landlord and Tenant, and Tenant shall promptly submit
such Construction Plans to all appropriate Governmental Authorities for
approval. The Construction Plans so approved, and all change orders specifically
permitted by this Work Letter, are referred to herein as the “Approved Plans.”

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

(a)    Change Request. Either Landlord or Tenant may request Changes after
Landlord approves the Approved Plans by notifying the other party thereof in
writing in substantially the same form as the AIA standard change order form (a
“Change Request”), which Change Request shall detail the nature and extent of
any requested Changes, including (a) the

 

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Change, (b) the party required to perform the Change and (c) any modification of
the Approved Plans and the Schedule, as applicable, necessitated by the Change.
If the nature of a Change requires revisions to the Approved Plans, then the
requesting party shall be solely responsible for the cost and expense of such
revisions and any increases in the cost of the Tenant Improvements as a result
of such Change. Change Requests shall be signed by the requesting party’s
Authorized Representative.

(b)    Approval of Changes. All Change Requests shall be subject to the other
party’s prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed. The non-requesting party shall have three
(3) business days after receipt of a Change Request to notify the requesting
party in writing of the non-requesting party’s decision either to approve or
object to the Change Request. The non-requesting party’s failure to respond
within such three (3) business day period shall be deemed approval by the
non-requesting party.

2.4.    Preparation of Estimates. Tenant shall, before proceeding with any
Change, using its best efforts, prepare as soon as is reasonably practicable
(but in no event more than five (5) business days after delivering a Change
Request to Landlord or receipt of a Change Request) an estimate of the increased
costs or savings that would result from such Change, as well as an estimate of
such Change’s effects on the Schedule. Landlord shall have five (5) business
days after receipt of such information from Tenant to (a) in the case of a
Tenant-initiated Change Request, approve or reject such Change Request in
writing, or (b) in the case of a Landlord-initiated Change Request, notify
Tenant in writing of Landlord’s decision either to proceed with or abandon the
Landlord-initiated Change Request.

2.5.    Quality Control Program; Coordination. Tenant shall provide Landlord
with information regarding the following (together, the “QCP”): (a) Tenant’s
general contractor’s quality control program and (b) evidence of subsequent
monitoring and action plans. The QCP shall be subject to Landlord’s reasonable
review and approval and shall specifically address the Tenant Improvements.
Tenant shall ensure that the QCP is regularly implemented on a scheduled basis
and shall provide Landlord with reasonable prior notice and access to attend all
inspections and meetings between Tenant and its general contractor. At the
conclusion of the Tenant Improvements, Tenant shall deliver the quality control
log to Landlord, which shall include all records of quality control meetings and
testing and of inspections held in the field, including inspections relating to
concrete, steel roofing, piping pressure testing and system commissioning.

3.    Completion of Tenant Improvements. Tenant, at its sole cost and expense
(except for the TI Allowance), shall perform and complete the Tenant
Improvements in all respects (a) in substantial conformance with the Approved
Plans, (b) otherwise in compliance with provisions of the Lease and this Work
Letter and (c) in accordance with Applicable Laws, the requirements of Tenant’s
insurance carriers, the requirements of Landlord’s insurance carriers (to the
extent Landlord provides its insurance carriers’ requirements to Tenant) and the
board of fire underwriters having jurisdiction over the Premises. The Tenant
Improvements shall be deemed completed at such time as Tenant shall furnish to
Landlord (t) evidence satisfactory to Landlord that (i) all Tenant Improvements
have been completed and paid for in full (which shall be evidenced by the
architect’s certificate of completion and the general contractor’s and each

 

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subcontractor’s and material supplier’s final unconditional waivers and releases
of liens, each in a form acceptable to Landlord in its reasonable discretion and
complying with Applicable Laws, and a Certificate of Substantial Completion in
the form of the American Institute of Architects document G704, executed by the
project architect and the general contractor, together with a statutory notice
of substantial completion from the general contractor), (ii) all Tenant
Improvements have been accepted by Landlord, (iii) any and all liens related to
the Tenant Improvements have either been discharged of record (by payment, bond,
order of a court of competent jurisdiction or otherwise) or waived by the party
filing such lien and (iv) no security interests relating to the Tenant
Improvements are outstanding, (u) all certifications and approvals with respect
to the Tenant Improvements that may be required from any Governmental Authority
and any board of fire underwriters or similar body for the use and occupancy of
the Premises (including a certificate of occupancy (or its substantial
equivalent) for the Premises for the Permitted Use), (v) certificates of
insurance required by the Lease to be purchased and maintained by Tenant, (w) an
affidavit from Tenant’s architect certifying that all work performed in, on or
about the Premises is in accordance with the Approved Plans, (x) complete “as
built” drawing print sets, project specifications and shop drawings and
electronic CADD files on disc (showing the Tenant Improvements as an overlay on
the Building “as built” plans (provided that Landlord provides the Building
“as-built” plans provided to Tenant) of all contract documents for work
performed by their architect and engineers in relation to the Tenant
Improvements, (y) a commissioning report prepared by a licensed, qualified
commissioning agent hired by Tenant and approved by Landlord for all new or
affected mechanical, electrical and plumbing systems (which report Landlord may
hire a licensed, qualified commissioning agent to peer review, and whose
reasonable recommendations Tenant’s commissioning agent shall perform and
incorporate into a revised report) and (z) such other “close out” materials as
Landlord reasonably requests consistent with Landlord’s own requirements for its
contractors, such as copies of manufacturers’ warranties, operation and
maintenance manuals and the like.

4.    Insurance.

4.1.    Property Insurance. At all times during the period beginning with
commencement of construction of the Tenant Improvements and ending with final
completion of the Tenant Improvements, Tenant shall maintain, or cause to be
maintained (in addition to the insurance required of Tenant pursuant to the
Lease), property insurance insuring Landlord and the Landlord Parties, as their
interests may appear. Such policy shall, on a completed values basis for the
full insurable value at all times, insure against loss or damage by fire,
vandalism and malicious mischief and other such risks as are customarily covered
by the so-called “broad form extended coverage endorsement” upon all Tenant
Improvements and the general contractor’s and any subcontractors’ machinery,
tools and equipment, all while each forms a part of, or is contained in, the
Tenant Improvements or any temporary structures on the Premises, or is adjacent
thereto; provided that, for the avoidance of doubt, insurance coverage with
respect to the general contractor’s and any subcontractors’ machinery, tools and
equipment shall be carried on a primary basis by such general contractor or the
applicable subcontractor(s). Tenant agrees to pay any deductible, and Landlord
is not responsible for any deductible, for a claim under such insurance. Such
property insurance shall contain an express waiver of any right of subrogation
by the insurer against Landlord and the Landlord Parties, and shall name
Landlord and its affiliates as loss payees as their interests may appear.

 

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4.2.    Workers’ Compensation Insurance. At all times during the period of
construction of the Tenant Improvements, Tenant shall, or shall cause its
contractors or subcontractors to, maintain statutory workers’ compensation
insurance as required by Applicable Laws.

5.    Liability. Tenant assumes sole responsibility and liability for any and
all injuries or the death of any persons, including Tenant’s contractors and
subcontractors and their respective employees, agents and invitees, and for any
and all damages to property caused by, resulting from or arising out of any act
or omission on the part of Tenant, Tenant’s contractors or subcontractors, or
their respective employees, agents and invitees in the prosecution of the Tenant
Improvements. Tenant agrees to Indemnify the Landlord Indemnitees from and
against all Claims due to, because of or arising out of any and all such
injuries, death or damage, whether real or alleged, and Tenant and Tenant’s
contractors and subcontractors shall assume and defend at their sole cost and
expense all such Claims; provided, however, that nothing contained in this Work
Letter shall be deemed to Indemnify Landlord from or against liability caused by
Landlord’s negligence or willful misconduct. Any deficiency in design or
construction of the Tenant Improvements shall be solely the responsibility of
Tenant, notwithstanding the fact that Landlord may have approved of the same in
writing.

6.    TI Allowance.

6.1.    Application of TI Allowance. Landlord shall contribute the TI Allowance
and any Excess TI Costs advanced by Tenant to Landlord toward the costs and
expenses incurred in connection with the performance of the Tenant Improvements,
in accordance with Article 4 of the Lease. If the entire TI Allowance is not
applied toward or reserved for the costs of the Tenant Improvements on or before
the deadline set forth in Section 4.3 of the Lease, then Tenant shall not be
entitled to a credit of such unused portion of the TI Allowance. If the entire
Excess TI Costs advanced by Tenant to Landlord are not applied toward the costs
of the Tenant Improvements, then Landlord shall promptly return such excess to
Tenant following completion of the Tenant Improvements. Tenant may apply the TI
Allowance for the payment of construction and other costs in accordance with the
terms and provisions of the Lease.

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

6.3.    Fund Requests. Upon submission by Tenant to Landlord of (a) a statement
(a “Fund Request”) setting forth the total amount of the TI Allowance requested,
(b) a summary of the Tenant Improvements performed using AIA standard form
Application for Payment (G 702) executed by the general contractor and by the
architect, (c) invoices from the general contractor, the architect, and any
subcontractors, material suppliers and other parties requesting payment with
respect to the amount of the TI Allowance then being requested,
(d) unconditional lien

 

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releases from the general contractor and each subcontractor and material
supplier with respect to previous payments made by either Landlord or Tenant for
the Tenant Improvements in a form acceptable to Landlord and complying with
Applicable Laws and (e) conditional lien releases from the general contractor
and each subcontractor and material supplier with respect to the Tenant
Improvements performed that correspond to the Fund Request each in a form
acceptable to Landlord and complying with Applicable Laws, then Landlord shall,
within thirty (30) days following receipt by Landlord of a Fund Request and the
accompanying materials required by this Section, pay to (as elected by Landlord)
the applicable contractors, subcontractors and material suppliers or Tenant (for
reimbursement for payments made by Tenant to such contractors, subcontractors or
material suppliers either prior to Landlord’s approval of the Approved TI Budget
or as a result of Tenant’s decision to pay for the Tenant Improvements itself
and later seek reimbursement from Landlord in the form of one lump sum payment
in accordance with the Lease and this Work Letter), the amount of Tenant
Improvement costs set forth in such Fund Request; provided, however, that
Landlord shall not be obligated to make any payments under this Section until
the budget for the Tenant Improvements is approved in accordance with
Section 6.2, and any Fund Request under this Section shall be subject to the
payment limits set forth in Section 6.2 above and Article 4 of the Lease.
Notwithstanding anything in this Section to the contrary, Tenant shall not
submit a Fund Request more often than every thirty (30) days. Any additional
Fund Requests submitted by Tenant shall be void and of no force or effect.

6.4.    Accrual Information. In addition to the other requirements of this
Section 6, Tenant shall, no later than the second (2nd) business day of each
month until the Tenant Improvements are complete, provide Landlord with an
estimate of (a) the percentage of design and other soft cost work that has been
completed, (b) design and other soft costs spent through the end of the previous
month, both from commencement of the Tenant Improvements and solely for the
previous month, (c) the percentage of construction and other hard cost work that
has been completed, (d) construction and other hard costs spent through the end
of the previous month, both from commencement of the Tenant Improvements and
solely for the previous month, and (e) the estimated date of Substantial
Completion of the Tenant Improvements.

7.    Miscellaneous.

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

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

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

LANDLORD:

 

BMR-PACIFIC RESEARCH CENTER LP,

a Delaware limited partnership

By:  

 

Name:  

 

Title:  

 

TENANT:

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

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EXHIBIT B-1

TENANT WORK INSURANCE SCHEDULE

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

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

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

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

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

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

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

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

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

 

a. Commercial General Liability:

 

Bodily Injury and Property Damage

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

 

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b. Commercial Automobile Liability:

 

Bodily Injury and Property Damage

   $1,000,000 per accident

 

c. Employer’s Liability:

 

Each Accident

Disease – Policy Limit

Disease – Each Employee

  

 

 

 

$500,000

$500,000

$500,000

d. Umbrella Liability:

 

Bodily Injury and Property Damage

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

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

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

 

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EXHIBIT C

ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE

AND TERM EXPIRATION DATE

THIS ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE AND TERM EXPIRATION DATE is
entered into as of [            ], 2017, with reference to that certain Lease
(the “Lease”) dated as of [            ], 2017, by PROTAGONIST THERAPEUTICS,
INC., a Delaware corporation (“Tenant”), in favor of BMR-PACIFIC RESEARCH CENTER
LP, a Delaware limited partnership (“Landlord”). All capitalized terms used
herein without definition shall have the meanings ascribed to them in the Lease.

Tenant hereby confirms the following:

1.    Tenant accepted possession of the Premises for construction of
improvements or the installation of personal or other property on
[            ], 20[    ], and for use in accordance with the Permitted Use on
[            ], 20[    ]. Tenant first occupied the Premises for the Permitted
Use on [            ], 20[    ].

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

3.    The Tenant Improvements are Substantially Complete.

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

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

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

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

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

 

Dates

   Approximate
Square Feet of
Rentable Area   

Base Rent per Square

Foot of Rentable Area

   Monthly Base Rent

[        ]/[    ]/[         ]-[        ]/[    ]/[        ]

   [                    ]   

$[            ] monthly

   [                    ]

 

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

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

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

TENANT:

 

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

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EXHIBIT D

FF&E

2 Televisions

1 Multimedia projector and screen

1 formal boardroom table and 12 leather chairs

1 small conference room table and 8 leather chairs

1 small conference room table and 6 leather chairs

1 reception desk

Approx. 18 cubicle stations

Approx. 18 office tables + chairs on the 2nd floor

Approx. 15 office tables + chairs on the 1st floor

Approx. 30 break room chairs (orange)

Approx. 6 rest/lounge area chairs

 

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EXHIBIT E

FORM OF LETTER OF CREDIT

[On letterhead or L/C letterhead of Issuer]

LETTER OF CREDIT

Date:             , 20    

                                                              (the
“Beneficiary”)

                                                             

                                                             

Attention:                                            

L/C. No.:                                             

Loan No.:                                          

Ladies and Gentlemen:

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

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

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

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

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

 

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

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

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

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

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

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

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

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

 

E-2

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

Very truly yours,

[Issuer Signature]

 

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ATTACHMENT 1 TO EXHIBIT E

FORM OF SIGHT DRAFT

[BENEFICIARY LETTERHEAD]

TO:

[Name and Address of Issuer]

SIGHT DRAFT

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

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

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

Date:                     

 

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ATTACHMENT 2 TO EXHIBIT E

FORM OF TRANSFER NOTICE

[BENEFICIARY LETTERHEAD]

TO:

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

TRANSFER NOTICE

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

[Transferee Name and Address]

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

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

Date:                     

 

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EXHIBIT F

RULES AND REGULATIONS

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

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

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

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

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

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

6.    Tenant shall not use any method of HVAC other than that approved in
writing by Landlord or present at the Project and serving the Premises as of the
Execution Date.

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

 

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

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

 

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

 

F-4

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ATTACHMENT 1 TO EXHIBIT F

REQUEST FOR USE OF COMMON AREA

REQUEST FOR USE OF COMMON AREA

 

Date of Request:                                  
                                         
                                         
                                                                       
Landlord/Owner:                                   
                                         
                                         
                                                                      
Tenant/Requestor:                                   
                                         
                                         
                                                                    
Property Location:                                  
                                         
                                         
                                                                     
Event Description:                                  
                                         
                                         
                                                                     

 

 

Proposed Plan for Security & Cleaning:                           
                                         
                                         
                                         

 

 

Date of Event:                                        
                                         
                                         
                                                                     
Hours of Event: (to include set-up and take down):                
                                         
                                                                            
Location at Property (see attached map):                                        
                                         
                                                                    
Number of Attendees:                                 
                                         
                                         
                                                                

Open to the Public?    ☐  YES    ☐  NO

Food and/or Beverages?    ☐  YES    ☐  NO

If YES:

 

  •   Will food be prepared on site?    ☐  YES    ☐  NO

 

  •   Please describe:                                
                                         
                                         
                                                           

 

  •   Will alcohol be served?    ☐  YES    ☐  NO

 

  •   Please describe:                                
                                         
                                         
                                                           

 

  •   Will attendees be charged for alcohol?    ☐  YES    ☐  NO

 

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  •   Is alcohol license or permit required?    ☐  YES    ☐  NO

 

  •   Does caterer have alcohol license or permit:    ☐  YES    ☐  NO    ☐  N/A

 

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

 

 

Other Event Details or Special
Circumstances:                                      
                                         
                                                               

 

 

 

 

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

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

 

By:  

 

Name:  

 

Title:  

 

Date:  

 

 

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EXHIBIT G

APPROVED VENDOR LIST

None.

 

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EXHIBIT H

TENANT’S PROPERTY

None.

 

H-1

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EXHIBIT I

FORM OF ESTOPPEL CERTIFICATE

 

To: BMR-Pacific Research Center LP

17190 Bernardo Center Drive

San Diego, California 92128

Attention: Legal Department

BioMed Realty, L.P.

17190 Bernardo Center Drive

San Diego, California 92128

 

Re: First and second floors (the “Premises”) at 7707 Gateway Boulevard, Newark,
California (the “Property”)

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

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

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

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

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

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

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

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

 

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8.    Tenant has no rights or options to purchase the Property.

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

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

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

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

PROTAGONIST THERAPEUTICS, INC.,

a Delaware corporation

 

By:

 

 

Name:

 

 

Title:

 

 

 

I-2

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EXHIBIT J

LANDLORD WORK AREA

 

LOGO [g310331g0303134538062.jpg]

 

J-1