EXHIBIT 10.5

LEASE AGREEMENT

THIS LEASE AGREEMENT (this “Lease”) is made as of the 14th day of September,
2007, between ARE-SAN FRANCISCO NO. 12, LLC, a Delaware limited liability
company (“Landlord”), and EXELIXIS, INC., a Delaware corporation (“Tenant”).

 

Address:    The to be constructed building to be known as 249 East Grand Avenue,
South San Francisco, California Premises:    The third floor and fourth floor of
the Building, containing approximately 64,000 rentable square feet and the
server room on the first floor of the Building, containing approximately 2,000
rentable square feet, all as shown on Exhibit A, together with the non-exclusive
right to use the Common Areas, including, without limitation, the Building’s
loading dock. The rentable square footage of the Premises is subject to
adjustment as provided for in Section 6 hereof. Project:    The real property on
which the building (the “Building”) in which the Premises are located, together
with all improvements thereon and appurtenances thereto as described on Exhibit
B. Commencement Date:    The date upon which Landlord’s Work is Substantially
Completed Base Rent:    $1.75 per rentable square foot per month for months 1 –
12    $3.25 per rentable square foot per month for months 13 – 24    $3.50 per
rentable square foot per month for months 25 – 36    The Base Rent described
above is subject to adjustment as provided for in this Lease.

Rent Adjustment Percentage: 3% annual increase, commencing on the third
anniversary of the Commencement Date.

Rentable Area of Premises: 66,000 sq. ft., subject to adjustment as provided for
in Section 6 hereof.

Rentable Area of Building: 129,393 sq. ft., subject to adjustment as provided
for in Section 6 hereof.

Rentable Area of Project: 129,393 sq. ft., subject to adjustment as provided for
in Section 6 hereof.

Tenant’s Share of the Building: 51%, subject to adjustment as provided for in
Section 6 hereof.

Building’s Share of the Project: 100%, being calculated by dividing the Rentable
Area of the Building by the Rentable Area of the Project, subject to adjustment
as provided for in Section 6 hereof.

Building’s Share of the Project’s Taxes: 25%, subject to adjustment as provided
for in Section 6 hereof.

Security Deposit: None

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Target Completion Date: May 17, 2008; provided, however, that the Target
Completion Date shall be extended one day for each day after October 15, 2007
that the Construction Drawings (as defined in the Work Letter) have not been
approved by both parties and the City of South San Francisco; provided, however,
that Landlord has used reasonable diligence in submitting them to Tenant for
approval in accordance with its obligations under the Work Letter.

Base Term: Beginning on the Commencement Date and ending 90 months from the
first day of the first full month of the Term (as defined in Section 2) hereof

Permitted Use: Office and related uses consistent with the character of the
Project and otherwise in compliance with the provisions of Section 7 hereof.

 

Address for Rent Payment:

  Landlord’s Notice Address:

P.O. BOX 79840

  385 E. Colorado Boulevard, Suite 299

Baltimore, MD 21279-0840

  Pasadena, CA 91101   Attention: Corporate Secretary

Tenant’s Notice Address:

249 East Grand Avenue

South San Francisco, California 94080

Attention: Chief Financial Officer

With a copy to:

249 East Grand Avenue

South San Francisco, California 94080

Attention: Vice President, Corporate Legal Affairs and Secretary

The following Exhibits and Addenda are attached hereto and incorporated herein
by this reference:

 

[ X ] EXHIBIT A – PREMISES DESCRIPTION

  [ X ] EXHIBIT B – DESCRIPTION OF PROJECT

[ X ] EXHIBIT C – WORK LETTER

  [ X ] EXHIBIT D – COMMENCEMENT DATE

[ X ] EXHIBIT E – RULES AND REGULATIONS

  [ X ] EXHIBIT F – TENANT’S PERSONAL PROPERTY [ X ] EXHIBIT G – DOG VISITATION
POLICY  

1. Lease of Premises. Upon and subject to all of the terms and conditions hereof
(including, without limitation, the fulfillment of Landlord’s obligation to
Deliver the Landlord’s Work Substantially Completed in accordance with the Work
Letter attached hereto as Exhibit C), Landlord leases the Premises to Tenant and
Tenant leases the Premises from Landlord. The portions of the Project which are
for the non-exclusive use of tenants of the Project are collectively referred to
herein as the “Common Areas.” Landlord reserves the right to modify Common
Areas, provided that such modifications do not materially adversely affect
Tenant’s use of the Premises for the Permitted Use.

2. Delivery; Acceptance of Premises; Commencement Date. Landlord shall use
reasonable efforts to deliver the Premises to Tenant on or before the Target
Completion Date, with Landlord’s Work Substantially Completed (“Delivery” or
“Deliver”). If Landlord fails to timely Deliver the Premises, Landlord shall not
be liable to Tenant for any loss or damage resulting therefrom, and this Lease
shall not be void or voidable except as provided herein. If Landlord does not
Deliver the Premises within 180 days of the Target Completion Date for any
reason other than delays caused by Tenant Delays and Force Majeure (as defined
in Section 34 below) provided that delays caused by Force Majeure shall not
extend the Target Completion Date for more than an additional 90 days, this
Lease may be terminated by Tenant by written notice to Landlord, and if so
terminated, neither Landlord nor Tenant shall have any further rights, duties or
obligations under this Lease, except with respect to provisions which expressly
survive termination of this Lease. As used herein, the terms “Landlord’s Work,”
“Tenant Delays” and “Substantially Completed” shall have the meanings set forth
for such terms in the

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Work Letter. If Tenant does not elect to void this Lease within 10 business days
of the lapse of such 180 day period (as such date may be extended for delays
caused by Tenant Delays and Force Majeure as provided for above), such right to
void this Lease shall be waived and this Lease shall remain in full force and
effect.

The “Commencement Date” shall be the date the Landlord’s Work is Substantially
Completed. Upon request of Landlord, Tenant shall execute and deliver a written
acknowledgment of the Commencement Date and the expiration date of the Term when
such are established in the form of the “Acknowledgement of Commencement Date”
attached to this Lease as Exhibit D; provided, however, Tenant’s failure to
execute and deliver such acknowledgment shall not affect Landlord’s rights
hereunder. The “Term” of this Lease shall be the Base Term, as defined above on
the first page of this Lease and any Extension Term which Tenant may elect
pursuant to Section 40.

Except as set forth in the Work Letter and this Lease: (i) Tenant shall accept
the Premises in their condition as of the Commencement Date, subject to all
applicable Legal Requirements (as defined in Section 7 hereof); (ii) Landlord
shall have no obligation for any defects in the Premises; and (iii) Tenant’s
taking possession of the Premises shall be conclusive evidence that Tenant
accepts the Premises and that the Premises were in good condition at the time
possession was taken. Any occupancy of the Premises by Tenant before the
Commencement Date shall be subject to all of the terms and conditions of this
Lease, excluding the obligation to pay Base Rent and Operating Expenses.

Tenant agrees and acknowledges that neither Landlord nor any agent of Landlord
has made any representation or warranty with respect to the condition of all or
any portion of the Premises or the Project, and/or the suitability of the
Premises or the Project for the conduct of Tenant’s business, and Tenant waives
any implied warranty that the Premises or the Project are suitable for the
Permitted Use. This Lease constitutes the complete agreement of Landlord and
Tenant with respect to the subject matter hereof and supersedes any and all
prior representations, inducements, promises, agreements, understandings and
negotiations which are not contained herein. Landlord in executing this Lease
does so in reliance upon Tenant’s representations, warranties, acknowledgments
and agreements contained herein.

3. Rent.

(a) Base Rent. Upon execution of this Lease, Tenant shall deliver to Landlord an
amount equal to $115,500.00, the estimated amount of the first month’s Base
Rent. If this Lease is terminated pursuant to its terms prior to Substantial
Completion of the Landlord’s Work, the amount so deposited, together with
interest at the rate of five percent per year, shall be returned to Tenant
within thirty (30) days of such date of such termination. Beginning on the
Commencement Date, Tenant shall pay to Landlord in advance, without demand,
abatement, deduction or set-off, monthly installments of Base Rent on or before
the first day of each calendar month during the Term hereof, in lawful money of
the United States of America, at the office of Landlord for payment of Rent set
forth above, or to such other person or at such other place as Landlord may from
time to time designate in writing. Payments of Base Rent for any fractional
calendar month shall be prorated. The obligation of Tenant to pay Base Rent and
other sums to Landlord and the obligations of Landlord under this Lease are
independent obligations. Tenant shall have no right at any time to abate,
reduce, or set-off any Rent (as defined in Section 5) due hereunder except for
any abatement as may be expressly provided in this Lease.

(b) Additional Rent. In addition to Base Rent, beginning on the Commencement
Date, Tenant agrees to pay to Landlord as additional rent (“Additional Rent”):
(i) Tenant’s Share of the Building with respect to Operating Expenses (as
defined in Section 5), and (ii) any and all other amounts Tenant assumes or
agrees to pay under the provisions of this Lease, including, without limitation,
any and all other sums that may become due by reason of any default of Tenant or
failure to comply with the agreements, terms, covenants and conditions of this
Lease to be performed by Tenant, after any applicable notice and cure period.

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4. Rent Adjustments.

(a) Tenant Improvement Allowance; Reduction in Base Rent. Landlord shall,
subject to the terms of the Work Letter, provide a tenant improvement allowance
(“TI Allowance”) for the construction of the Tenant Improvements (as defined in
the Work Letter) in the Premises of up to $70.00 per rentable square foot of the
Premises. Base Rent shall decrease by $0.012 for every $1.00 of TI Allowance
that is not expended by Landlord, up to a maximum reduction of $0.12 per
rentable square foot per month. For example, if only $60.00 per rentable square
foot of the TI Allowance is expended by Landlord, the monthly Base Rent for
months 1 though 12 of the Lease would be reduced from $1.75 to $1.63 per
rentable square foot per month, the monthly Base Rent for months 13 though 24 of
the Lease would be reduced from $3.25 to $3.13 per rentable square foot per
month and the monthly Base Rent for months 25 though 36 of the Lease would be
reduced from $3.50 to $3.37 per rentable square foot per month. The TI Allowance
shall only be available for use by Tenant as part of the construction of the
initial Tenant Improvements and, except for the reduction of Base Rent provided
for in this Section 4(a), Tenant shall have no right thereafter to use any
undisbursed portion thereof.

In addition, Landlord shall, subject to the terms of the Work Letter, provide an
additional tenant improvement allowance (“Additional TI Allowance”) for the
construction of the Tenant Improvements in the Premises of up to $10.00 per
rentable square foot of the Premises. The Additional TI Allowance shall only be
available for use by Tenant as part of the construction of the initial Tenant
Improvements and Tenant shall have no right thereafter to use any undisbursed
portion thereof.

(b) Adjustments Following Substantial Completion of Landlord’s Work. Upon
Substantial Completion of the Landlord’s Work, Tenant shall pay to Landlord, as
Additional Rent, concurrently with its payment of Base Rent, the following:
(i) an amount equal to the amount of the Additional TI Allowance expended by
Landlord amortized over the Base Term at a rate of 9% per annum, in equal
monthly installments so that the full amount shall be paid on or before the
expiration of the Base Term, (ii) an amount equal to the first One Million Three
Hundred Thousand Dollars ($1,300,000) (“$1.3M”) of Excess TI Costs (as defined
in Section 5(d) of the Work Letter), amortized over the first year of the Base
Term at a rate of 9% per annum, in equal monthly installments so that the full
amount shall be paid on or before the expiration of the first year of the Base
Term; (iii) an amount equal to the difference between the total Excess TI Costs
and $1.3M shall be amortized over the Base Term at a rate of 12% per annum, in
equal monthly installments so that the full amount shall be paid on or before
the expiration of the Base Term; and (iv) in the event that Substantial
Completion of Landlord’s Work has been delayed as a result of a Tenant Delay, an
amount equal to the Base Rent that would have accrued if the Landlord’s Work had
been Substantially Completed on the day it would have been Substantially
Completed but for the Tenant Delay, amortized over the Base Term at a rate of
9% per annum, in equal monthly installments so that the full amount shall be
paid on or before the expiration of the Base Term (“Tenant Delay Rent”).

(c) Periodic Adjustments. Commencing on the third anniversary of the
Commencement Date and on each annual anniversary thereafter (each an “Adjustment
Date”), Base Rent shall be increased by multiplying the Base Rent payable
immediately before such Adjustment Date by the Rent Adjustment Percentage and
adding the resulting amount to the Base Rent payable immediately before such
Adjustment Date. Base Rent, as so adjusted, shall thereafter be due as provided
herein. Base Rent adjustments for any fractional calendar month shall be
prorated.

5. Operating Expense Payments. Landlord shall deliver to Tenant a written
estimate of Operating Expenses for each calendar year during the Term (the
“Annual Estimate of Operating Expenses”), which may be revised by Landlord from
time to time during such calendar year but not more frequently than quarterly.
Beginning on the Commencement Date, during each month of the Term, on the same
date that Base Rent is due, Tenant shall pay Landlord an amount equal to 1/12th
of Tenant’s Share of the Building with respect to the Annual Estimate of
Operating Expenses. Payments for any fractional calendar month shall be
prorated.

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The term “Operating Expenses” means all costs and expenses of any kind or
description whatsoever incurred or accrued each calendar year by Landlord with
respect to the Building (including the Building’s Share of the Project of all
costs and expenses of any kind or description incurred or accrued by Landlord
with respect to the Project which are not specific to the Building or any other
building located in the Project) (including, without duplication, Building’s
Share of Project’s Taxes (as defined in Section 9), capital repairs and
improvements amortized over the useful life of such capital items (calculated in
accordance with U.S. generally accepted accounting principles (“US GAAP”)), and
the costs of Landlord’s third party property manager not to exceed 1% of Base
Rent or, if there is no third party property manager, administration rent in the
amount of 1.0% of Base Rent, excluding only:

(a) the original design and/or construction costs of the Project and costs of
correcting defects in such original design and/or construction or renovation;

(b) capital expenditures for expansion of the Project;

(c) interest, principal payments of Mortgage (as defined in Section 27) debts of
Landlord, financing costs and amortization of funds borrowed by Landlord,
whether secured or unsecured and all payments of base rent (but not taxes or
operating expenses) under any ground lease or other underlying lease of all or
any portion of the Project;

(d) depreciation of the Project (except for capital improvements, a properly
amortized portion of the cost of which is includable in Operating Expenses);

(e) advertising, legal and space planning expenses and leasing commissions and
other costs and expenses incurred in procuring and leasing space to tenants for
the Project, including any leasing office maintained in the Project, free rent
and construction allowances for tenants;

(f) legal and other expenses incurred in the negotiation or enforcement of
leases;

(g) completing, fixturing, improving, renovating, painting, redecorating or
other work, which Landlord pays for or performs for other tenants within their
premises, and costs of correcting defects in such work;

(h) costs of utilities outside normal business hours sold to tenants of the
Project;

(i) costs to be reimbursed by other tenants of the Project or Taxes to be paid
directly by Tenant or other tenants of the Project, whether or not actually
paid;

(j) salaries, wages, benefits and other compensation paid to officers and
employees of Landlord who are not assigned in whole or in part to the operation,
management, maintenance or repair of the Project;

(k) general organizational, administrative and overhead costs relating to
maintaining Landlord’s existence, either as a corporation, partnership, or other
entity, including general corporate, legal and accounting expenses;

(l) costs (including attorneys’ fees and costs of settlement, judgments and
payments in lieu thereof) incurred in connection with disputes with tenants,
other occupants, or prospective tenants, and costs and expenses, including legal
fees, incurred in connection with negotiations or disputes with employees,
consultants, management agents, leasing agents, purchasers or mortgagees of the
Building;

(m) costs (including attorneys’ fees and costs of settlement, judgments and
payments in lieu thereof) incurred by Landlord due to the violation by Landlord,
its employees, agents or contractors or any tenant of the terms and conditions
of any lease of space in the Project or any Legal Requirement (as defined in
Section 7);

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(n) penalties, fines or interest incurred as a result of Landlord’s inability or
failure to make payment of Taxes 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;

(o) costs of goods and/or services in, for, or to the Project paid to Landlord
or to subsidiaries or affiliates of Landlord for goods and/or services in, for,
or to the Project to the extent the same exceeds the costs of such goods and/or
services rendered by unaffiliated third parties on a competitive basis;

(p) costs of Landlord’s charitable or political contributions, or of fine art
(and insurance therefor) maintained at the Project;

(q) costs in connection with services (including electricity), items or other
benefits of a type which are not standard for the Project and which are not
available to Tenant without specific charges therefor, but which are provided to
another tenant or occupant of the Project, whether or not such other tenant or
occupant is specifically charged therefor by Landlord;

(r) costs incurred in the sale or refinancing of the Project;

(s) net income taxes of Landlord or the owner of any interest in the Project,
franchise, capital stock, gift, estate or inheritance taxes or any federal,
state or local documentary taxes imposed against the Project or any portion
thereof or interest therein;

(t) any expenses otherwise includable within Operating Expenses to the extent
actually reimbursed by persons other than tenants of the Project under leases
for space in the Project;

(u) costs of repairs and other work occasioned by fire, windstorm, or other
casualty for which Landlord is reimbursed by insurance or for which Landlord
would have been reimbursed by insurance if Landlord failed to maintain the
insurance which Landlord is required to maintain under this Lease;

(v) The cost of containing, removing, or otherwise remediating any contamination
of the Project (including the underlying land and ground water) by Hazardous
Materials where such contamination was not caused by or contributed to by Tenant
and/or any Tenant Party;

(w) wages, salaries, or other compensation paid to any executive employees above
the grade of building manager;

(x) until such time as Landlord has completed the initial landscaping for all of
the real property described on Exhibit B, Landlord shall only be entitled to
include as part of Operating Expenses landscaping costs (including, without
limitation, the costs of water, utilities, materials and labor) attributable to
25% of the real property described on Exhibit B; and

(y) during any period during which Tenant has contracted with a third party to
provide security services to the Building, the costs and expenses, if any,
incurred by Landlord in connection with providing overlapping security services;
provided, however, that such security services including, without limitation,
the scope thereof which are being obtained by Tenant have been reasonably
coordinated with any services which Landlord may elect to provide.

Within 90 days after the end of each calendar year (or such longer period as may
be reasonably required), Landlord shall furnish to Tenant a statement (an
“Annual Statement”) showing in reasonable detail: (a) the total and Tenant’s
Share of the Building with respect to actual Operating Expenses for the previous
calendar year, and (b) the total of Tenant’s payments in respect of Operating
Expenses for such year. If Tenant’s Share of the Building with respect to actual
Operating Expenses for such year exceeds Tenant’s payments of Operating Expenses
for such year, the excess shall be due and payable by Tenant as Rent within 30
days after delivery of such Annual Statement to Tenant. If Tenant’s payments of
Operating Expenses for such year exceed Tenant’s Share of the Building with
respect to actual Operating

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Expenses for such year Landlord shall pay the excess to Tenant within 30 days
after delivery of such Annual Statement, except that after the expiration, or
earlier termination of the Term or if Tenant is delinquent in its obligation to
pay Rent, Landlord shall pay the excess to Tenant after deducting all other
amounts due Landlord.

The Annual Statement shall be final and binding upon Tenant unless Tenant,
within 90 days after Tenant’s receipt thereof, shall contest any item therein by
giving written notice to Landlord, specifying each item contested and the reason
therefor. If, during such 90 day period, Tenant reasonably and in good faith
questions or contests the accuracy of the Annual Statement, Landlord will
provide Tenant with access to Landlord’s books and records relating to the
operation of the Project and such information as Landlord reasonably determines
to be responsive to Tenant’s questions (the “Expense Information”). If after
Tenant’s review of such Expense Information, Landlord and Tenant cannot agree
upon the amount payable by Tenant, then Tenant shall have the right to have an
independent regionally recognized public accounting firm selected by Tenant,
working pursuant to a fee arrangement other than a contingent fee (at Tenant’s
sole cost and expense) and approved by Landlord (which approval shall not be
unreasonably withheld or delayed), audit and/or review the Expense Information
for the year in question (the “Independent Review”). The results of any such
Independent Review shall be binding on Landlord and Tenant. If the Independent
Review shows that the payments actually made by Tenant with respect to Operating
Expenses for the calendar year in question exceeded the amount owed by Tenant
for such calendar year, Landlord shall at Landlord’s option either (i) credit
the excess amount to the next succeeding installments of estimated Operating
Expenses or (ii) pay the excess to Tenant within 30 days after delivery of such
statement, except that after the expiration or earlier termination of this Lease
or if Tenant is delinquent in its obligation to pay Rent, Landlord shall pay the
excess to Tenant after deducting all other amounts due Landlord. If the
Independent Review shows that Tenant’s payments with respect to Operating
Expenses for such calendar year were less than the amount owed by Tenant for the
calendar year, Tenant shall pay the deficiency to Landlord within 30 days after
delivery of such statement. If the Independent Review shows that Tenant has
overpaid with respect to Operating Expenses by more than 5% then Landlord shall
reimburse Tenant for all costs incurred by Tenant for the Independent Review.

Operating Expenses for the calendar years in which Tenant’s obligation to share
therein begins and ends shall be prorated. Notwithstanding anything set forth
herein to the contrary, if the Building is not at least 95% occupied on average
during any year of the Term, Landlord may adjust Tenant’s Share of the Building
with respect to Operating Expenses for such year to be computed as though the
Building had been 95% occupied on average during such year.

Landlord may equitably increase Tenant’s Share of the Building for any item of
expense or cost reimbursable by Tenant that relates to a repair, replacement, or
service that benefits only the Premises or that varies with Tenant’s occupancy
or use. Base Rent, Tenant’s Share of the Building with respect to Operating
Expenses and all other amounts payable by Tenant to Landlord hereunder are
collectively referred to herein as “Rent.”

6. Adjustments of Rentable Area; Share of Operating Expenses and Definitions.

The rentable square footage of the Premises and the Building shall be subject to
adjustment by Landlord based upon the Constructions Drawings approved by both
parties, using the 1996 Standard Method of Measuring Floor Area in Office
Buildings as adopted by the Building Owners and Managers Association (ANSI/BOMA
Z65.1-1996) (the “Measurement Standard”). A copy of the letter or report from
Landlord’s architect or engineer setting forth the actual Rentable Area of the
Premises and the Building based upon the Construction Drawings approved by both
parties (and using the Measurement Standard), together with all documentary
support therefor, shall be furnished to Tenant (the “Notice of Re-determination
of RSF”). If the actual rentable square footage of the Premises and Building as
set forth in the Notice of Re-determination of RSF deviates from the amount
specified in the definitions of “Premises”, “Rentable Area of Premises”,
“Rentable Area of Building” and “Rentable Area of Project” on page 1 of this
Lease, then, this Lease shall be amended so as to (i) reflect the actual
rentable square footage as set forth in the Notice of Re-determination of RSF in
the definitions of “Premises”, “Rentable Area of Premises”, “Rentable Area of
Building” and “Rentable Area of Project”, and (ii)

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appropriately adjust the amount set forth in the definition of “Tenant’s Share
of the Building” which was calculated based on the actual rentable square
footage of the Premises and the Building as set forth in the Notice of
Re-determination of RSF. Tenant’s Share of the Building and the Building’s Share
of the Project shall be subject to further adjustment for changes in the
physical size of the Premises or the Project.

Landlord and Tenant acknowledge that Landlord intends to develop other buildings
at the Project. Upon completion of each new building at the Project, (x) the
definition of “Rentable Area of Project” on page 1 of this Lease shall be
amended so as to reflect the actual rentable square footage of all of the
buildings which have been completed at the Project, and (y) the definitions of
“Building’s Share of Project” “Building’s Share of Project Taxes” and on page 1
of this Lease shall also be amended because the same were calculated based on
the actual rentable square footage of the Building and the then Rentable Area of
Project. Landlord shall provide Tenant with written notice of each such
adjustment and the resulting changes to the defined terms “Rentable Area of
Project”, “Building’s Share of Project” and “Building’s along with documentary
support therefor.

7. Use. The Premises shall be used solely for the Permitted Use set forth in the
basic lease provisions on page 1 of this Lease, and in compliance with all laws,
orders, judgments, ordinances, regulations, codes, directives, permits,
licenses, covenants and restrictions now or hereafter applicable to the
Premises, and to the use and occupancy thereof, including, without limitation,
the Americans With Disabilities Act, 42 U.S.C. § 12101, et seq. (together with
the regulations promulgated pursuant thereto, “ADA”) (collectively, “Legal
Requirements” and each, a “Legal Requirement”). Tenant shall, upon 5 days’
written notice from Landlord, discontinue any use of the Premises which is
declared by any Governmental Authority (as defined in Section 9) having
jurisdiction to be a violation of a Legal Requirement. Tenant will not use or
permit the Premises to be used for any purpose or in any manner that would void
Tenant’s or Landlord’s insurance, increase the insurance risk, or cause the
disallowance of any sprinkler or other credits. Tenant shall not permit any part
of the Premises to be used as a “place of public accommodation”, as defined in
the ADA or any similar legal requirement. Tenant shall reimburse Landlord
promptly upon demand for any additional premium charged for any such insurance
policy by reason of Tenant’s failure to comply with the provisions of this
Section or otherwise caused by Tenant’s use and/or occupancy of the Premises.
Tenant will use the Premises in a careful, safe and proper manner and will not
commit or permit waste, overload the floor or structure of the Premises, subject
the Premises to use that would damage the Premises or obstruct or interfere with
the rights of Landlord or other tenants or occupants of the Project, including
conducting or giving notice of any auction, liquidation, or going out of
business sale on the Premises, or using or allowing the Premises to be used for
any unlawful purpose. Tenant shall cause any equipment or machinery to be
installed in the Premises so as to reasonably prevent sounds or vibrations from
the Premises from extending into Common Areas, or other space in the Project.
Tenant shall not place any machinery or equipment in or upon the Premises or
transport or move such items through the Common Areas of the Project or in the
Project elevators which exceeds the structural capacity of the Building. Except
as may be provided under the Work Letter, Tenant shall not, without the prior
written consent of Landlord, use the Premises in any manner which will require
ventilation, air exchange, heating, gas, steam, electricity or water beyond the
existing capacity of the Project as proportionately allocated to the Premises
based upon Tenant’s Share of the Building as usually furnished for the Permitted
Use.

Tenant and Landlord acknowledge that structural reinforcements may be required
in connection with Tenant’s server room and fire proof high density storage
rooms. All of the costs related to such structural reinforcements shall be borne
by Landlord as part of cost of the Building Shell.

Following Landlord’s Delivery of the Premises to Tenant, Tenant, at its sole
expense, shall make any alterations or modifications to the interior or the
exterior of the Premises or the Project that are required by Legal Requirements
(including, without limitation, compliance of the Premises with the ADA related
to Tenant’s use or occupancy of the Premises. Except as otherwise expressly set
forth in this Lease, Tenant shall be responsible for any and all demands,
claims, liabilities, losses, costs, expenses, actions, causes of action, damages
or judgments, and all reasonable expenses incurred in investigating or resisting
the same (including, without limitation, reasonable attorneys’ fees, charges and

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disbursements and costs of suit) (collectively, “Claims”) arising out of or in
connection with Legal Requirements, and Tenant shall indemnify, defend, hold and
save Landlord harmless from and against any and all Claims arising out of or in
connection with any failure of the Premises to comply with any Legal
Requirement.

8. Holding Over. If, with Landlord’s express written consent, Tenant retains
possession of the Premises after the termination of the Term, (i) unless
otherwise agreed in such written consent, such possession shall be subject to
immediate termination by Landlord at any time, (ii) all of the other terms and
provisions of this Lease (including, without limitation, the adjustment of Base
Rent pursuant to Section 4 hereof) shall remain in full force and effect
(excluding any expansion or renewal option or other similar right or option)
during such holdover period, (iii) Tenant shall continue to pay Base Rent in the
amount payable upon the date of the expiration or earlier termination of this
Lease or such other amount as Landlord may indicate, in Landlord’s sole and
absolute discretion, in such written consent, and (iv) all other payments shall
continue under the terms of this Lease. If Tenant remains in possession of the
Premises after the expiration or earlier termination of the Term without the
express written consent of Landlord, (A) Tenant shall become a tenant at
sufferance upon the terms of this Lease except that the monthly rental shall be
equal to 150% of Rent in effect during the last 30 days of the Term, and
(B) Tenant shall be responsible for all damages suffered by Landlord resulting
from or occasioned by Tenant’s holding over, including consequential damages. No
holding over by Tenant, whether with or without consent of Landlord, shall
operate to extend this Lease except as otherwise expressly provided, and this
Section 8 shall not be construed as consent for Tenant to retain possession of
the Premises. Acceptance by Landlord of Rent after the expiration of the Term or
earlier termination of this Lease shall not result in a renewal or reinstatement
of this Lease.

9. Taxes. As of the Commencement Date, the term “Building Share of Project’s
Taxes” shall mean 25%. Upon completion by Landlord of construction of three
additional buildings in the Project, the “Building Share of Project’s Taxes”
shall be calculated by dividing the Rentable Area of the Building by the total
Rentable Area of all completed buildings in the Project. Landlord shall pay, as
part of Operating Expenses, all taxes, levies, assessments and governmental
charges of any kind (collectively referred to as “Taxes”) imposed by any
federal, state, regional, municipal, local or other governmental authority or
agency, including, without limitation, quasi-public agencies (collectively,
“Governmental Authority”) during the Term, including, without limitation, all
Taxes: (i) imposed on or measured by or based, in whole or in part, on rent
payable to Landlord under this Lease and/or from the rental by Landlord of the
Project or any portion thereof, or (ii) based on the square footage, assessed
value or other measure or evaluation of any kind of the Premises or the Project,
or (iii) assessed or imposed by or on the operation or maintenance of any
portion of the Premises or the Project, including parking, or (iv) assessed or
imposed by, or at the direction of, or resulting from statutes or regulations,
or interpretations thereof, promulgated by, any Governmental Authority, or
(v) imposed as a license or other fee on Landlord’s business of leasing space in
the Project. Landlord may contest by appropriate legal proceedings the amount,
validity, or application of any Taxes or liens securing Taxes. Taxes shall not
include any net income taxes imposed on Landlord unless such net income taxes
are in substitution for any Taxes payable hereunder. If any such Tax is levied
or assessed directly against Tenant, then Tenant shall be responsible for and
shall pay the same at such times and in such manner as the taxing authority
shall require. Tenant shall pay, prior to delinquency, any and all Taxes levied
or assessed against any personal property or trade fixtures placed by Tenant in
the Premises, whether levied or assessed against Landlord or Tenant. If any
Taxes on Tenant’s personal property or trade fixtures are levied against
Landlord or Landlord’s property, or if the assessed valuation of the Project is
increased by a value attributable to 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, higher than the base valuation on
which Landlord from time-to-time allocates Taxes to all tenants in the Project,
Landlord shall have the right, but not the obligation, to pay such Taxes.
Landlord’s reasonable determination of any excess assessed valuation shall be
binding and conclusive, absent error. The amount of any such payment by Landlord
shall constitute Additional Rent due from Tenant to Landlord immediately upon
demand.

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10. Parking. Subject to all matters of record, Force Majeure, a Taking (as
defined in Section 19 below) and the exercise by Landlord of its rights
hereunder, Tenant shall have the right, in common with other tenants of the
Project pro rata in accordance with the rentable area of the Premises and the
rentable areas of the Project occupied by such other tenants, to park in those
areas designated for non-reserved parking, subject in each case to Landlord’s
rules and regulations. Landlord may dictate specific parking locations for
spaces allocated to tenants of the Project, provided that Tenant is treated no
less favorably with respect to such designation than any other tenant of the
Project. With respect to the parking allocated to Tenant pursuant to this
Section 10, if Landlord constructs a parking structure which serves the Project,
Landlord shall make the determination of how many of the parking spaces
allocated to Tenant shall be surface parking spaces and how many shall be
structured parking spaces (after such structure has been constructed, if at
all), provided that Tenant is treated no less favorably with respect to such
allocation than any other tenant of the Project. Landlord shall not be
responsible for enforcing Tenant’s parking rights against any third parties,
including other tenants of the Project. As part of Tenant’s share of parking
spaces, Tenant be entitled to the use of 2 spaces immediately adjacent to the
Building in location designated by Landlord for Tenant’s exclusive use;
provided, however, that if Tenant leases the entire Building, then, upon written
request to Landlord, Tenant shall be entitled to the use of another 3 spaces
immediately adjacent to the Building in location designated by Landlord for
Tenant’s exclusive use.

11. Utilities, Services. The hours of operation of the Premises are 6:00 a.m. to
8:00 p.m., Monday through Friday and 8:00 a.m. to 5:00 p.m. on Saturday, legal
holidays excepted. During such periods, Landlord shall provide, subject to the
terms of this Section 11, water, electricity, heating and cooling (“HVAC”),
light, power, telephone, sewer, and other utilities (including gas and fire
sprinklers to the extent the Project is plumbed for such services), refuse and
trash collection and janitorial services (collectively, “Utilities”). Upon
request, Landlord shall make available at Tenant’s sole cost and expense after
hours Utilities. During any period that Tenant is the sole tenant of the
Building, Landlord shall provide Tenant with access to the environmental
management system so that Tenant may directly control its own after hours
Utilities. During any periods that Tenant is not the sole tenant of the
Building, Landlord shall use reasonable efforts to attempt to find a solution,
reasonably acceptable to both parties, to provide Tenant with the ability to
control its own after hours Utilities; provided, however, that Tenant shall pay
for all costs incurred by Landlord in connection with implementing such
solution. In no event shall Landlord be required to implement any solution which
may result in Tenant having the ability to affect in any way any other tenant’s
premises in the Building. Landlord shall pay, as Operating Expenses or subject
to Tenant’s reimbursement obligation herein, for all Utilities used on the
Premises, all maintenance charges for Utilities, and any storm sewer charges or
other similar charges for Utilities imposed by any Governmental Authority or
Utility provider, and any taxes, penalties, surcharges or similar charges
thereon. Upon Tenant’s request, Landlord shall cause, at Tenant’s expense, any
Utilities to be separately metered or charged directly to Tenant by the
provider. Tenant shall pay directly to the Utility provider, prior to
delinquency, any separately metered Utilities and services which may be
furnished to Tenant or the Premises during the Term. Tenant shall pay, as part
of Operating Expenses, its share of all charges for jointly metered Utilities
based upon consumption, as reasonably determined by Landlord. No interruption or
failure of Utilities, from any cause whatsoever other than Landlord’s willful
misconduct, shall result in eviction or constructive eviction of Tenant,
termination of this Lease or the abatement of Rent; provided, however, that, if
any Essential Services are interrupted as a result of the negligence or willful
misconduct of Landlord and Tenant’s use or occupancy of the Premises is
substantially impaired thereby for a period of more than 3 consecutive business
days after notice from Tenant to Landlord of such impairment, Base Rent and
Operating Expenses for the affected portion of the Premises shall be abated
during the period of such interruption or failure. As used herein, the term
“Essential Services” shall mean the following services: access to the Premises,
HVAC service, data transmission systems including, without limitation, the
conduit connecting the Premises with Tenant’s other facilities, water,
electricity and any other material service without which service Tenant would
not be able to conduct its normal operations at the Project, but in each case
only to the extent that Landlord has an obligation to provide same to Tenant
under this Lease or caused the interruption.

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12. Alterations and Tenant’s Property.

(a) Alterations. This Section 12(a) shall govern Alterations (as defined below)
that may occur after the Substantial Completion of the Landlord’s Work in
accordance with the Work Letter, and shall not be applicable to the Building
Shell or Tenant Improvements, the performance of which shall be governed by the
Work Letter. Landlord shall, when requested by Tenant in connection with any
planned Alterations, provide a set of the “as-built” plans of the Building then
in Landlord’s possession to Tenant, in the format reasonably requested by
Tenant. Any alterations, additions, or improvements made to the Premises by or
on behalf of Tenant, including additional locks or bolts of any kind or nature
upon any doors or windows in the Premises, but excluding installation, removal
or realignment of furniture systems (other than removal of furniture systems
owned or paid for by Landlord) not involving any modifications to the structure
or connections (other then by ordinary plugs or jacks) to Building Systems (as
defined in Section 13) (“Alterations”) shall be subject to Landlord’s prior
written consent, which may be given or withheld in Landlord’s sole discretion if
any such Alteration affects the structure or Building Systems. If Landlord
approves any Alterations, Landlord may impose such conditions on Tenant in
connection with the commencement, performance and completion of such Alterations
as Landlord may deem appropriate in Landlord’s reasonable discretion. Any
request for approval shall be in writing, delivered not less than 15 business
days in advance of any proposed construction, and accompanied by plans,
specifications, bid proposals, work contracts and such other information
concerning the nature and cost of the alterations as may be reasonably requested
by Landlord, including the identities and mailing addresses of all general
contractors performing work or supplying materials. Landlord’s right to review
plans and specifications and to monitor construction shall be solely for its own
benefit, and Landlord shall have no duty to ensure that such plans and
specifications or construction comply with applicable Legal Requirements. Tenant
shall cause, at its sole cost and expense, all Alterations to comply with
insurance requirements and with Legal Requirements and shall implement at its
sole cost and expense any alteration or modification required by Legal
Requirements as a result of any Alterations. Tenant shall pay to Landlord, as
Additional Rent, on demand an amount equal to 2% of all charges incurred by
Tenant or its contractors or agents in connection with any Alteration to cover
Landlord’s overhead and expenses for plan review, coordination, scheduling and
supervision; provided, however, that no fee shall charged by Landlord if
Landlord is not involved in supervision of the applicable Alteration. Before
Tenant begins any Alteration, Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall reimburse
Landlord for, and indemnify and hold Landlord harmless from, any expense
incurred by Landlord by reason of faulty work done by Tenant or its contractors,
delays caused by such work, or inadequate cleanup.

Tenant shall furnish security or make other arrangements satisfactory to
Landlord to assure payment for the completion of all Alterations work free and
clear of liens, and shall provide (and cause each contractor or subcontractor to
provide) certificates of insurance for workers’ compensation and other coverage
in amounts and from an insurance company satisfactory to Landlord protecting
Landlord against liability for personal injury or property damage during
construction. Upon completion of any Alterations, Tenant shall deliver to
Landlord: (i) sworn statements setting forth the names of all contractors and
subcontractors who did the work and final lien waivers from all such contractors
and subcontractors; and (ii) “as built” plans for any such Alteration, if the
nature of such Alteration requires such plans.

(b) Removable Installations. Except for Removable Installations (as hereinafter
defined), all Installations (as hereinafter defined) shall be and shall remain
the property of Landlord during the Term and following the expiration or earlier
termination of the Term, shall not be removed by Tenant at any time during the
Term, and shall remain upon and be surrendered with the Premises as a part
thereof. Notwithstanding the foregoing, Landlord may, at the time its approval
of any such Installation is requested, notify Tenant that Landlord requires that
Tenant remove such Installation upon the expiration or earlier termination of
the Term, in which event Tenant shall remove such Installation in accordance
with the immediately succeeding sentence. Upon the expiration or earlier
termination of the Term, Tenant shall remove (i) all wires, cables or similar
equipment which Tenant has installed in the Premises or in the risers or plenums
of the Building, (ii) any Installations for which Landlord has given Tenant
notice of removal in accordance with the immediately preceding sentence, and
(iii) all of Tenant’s Property (as hereinafter defined), and Tenant shall
restore and repair any damage caused by or occasioned as a result of such
removal, including, without limitation, capping off all such connections behind
the walls of the Premises and repairing any holes. If Landlord is requested by
Tenant or any lender, lessor or other person or entity claiming an interest in
any of Tenant’ Property to waive any lien Landlord may have

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against any of Tenant’s Property, Landlord shall consent to such waiver
utilizing a form approved by Landlord, and Landlord shall be entitled to be paid
as administrative rent a fee of $1,000 per occurrence for its time and effort in
preparing and negotiating such a waiver of lien.

For purposes of this Lease, (w) “Removable Installations” means any items listed
on Exhibit F attached hereto and any items agreed by Landlord in writing to be
included on Exhibit F in the future, (x) “Tenant’s Property” means Removable
Installations and, other than Installations, any personal property or equipment
of Tenant that may be removed without material damage to the Premises, and
(z) “Installations” means all property of any kind paid for with the TI Fund
and/or by Landlord, all Alterations, all fixtures, and all partitions, hardware,
built-in machinery, built-in casework and cabinets and other similar additions,
equipment, property and improvements built into the Premises so as to become an
integral part of the Premises, including, without limitation, built-in plumbing,
electrical and mechanical equipment and systems, and any power generator and
transfer switch.

13. Landlord’s Repairs. Landlord shall, as an Operating Expense subject to the
limitations set forth in Section 5, maintain all of the structural, exterior,
parking and other Common Areas of the Project, including HVAC, plumbing, fire
sprinklers, elevators and all other building systems serving the Premises and
other portions of the Project (“Building Systems”), in good repair, reasonable
wear and tear and uninsured losses and damages caused by Tenant, or by any of
Tenant’s agents, servants, employees, invitees and contractors (collectively,
“Tenant Parties”) excluded. Losses and damages caused by Tenant or any Tenant
Party shall be repaired by Landlord, to the extent not covered by insurance, at
Tenant’s sole cost and expense. Landlord reserves the right to stop Building
Systems services when necessary (i) by reason of accident or emergency, or
(ii) for planned repairs, alterations or improvements, which are, in the
reasonable judgment of Landlord, desirable or necessary to be made, until said
repairs, alterations or improvements shall have been completed. Landlord shall
have no responsibility or liability for failure to supply Building Systems
services during any such period of interruption; provided, however, that
Landlord shall, except in case of emergency, make a commercially reasonable
effort to give Tenant 24 hours advance notice of any planned stoppage of
Building Systems services for routine maintenance, repairs, alterations or
improvements. If the stoppage of any Essential Service is as a result of the
negligence or willful misconduct of Landlord and Tenant’s use or occupancy of
the Premises is substantially impaired thereby for a period of more than 3
consecutive business days after notice from Tenant to Landlord of such
impairment, Base Rent and Operating Expenses for the affected portion of the
Premises shall be abated during the period of such stoppage. Tenant shall
promptly give Landlord written notice of any repair required by Landlord
pursuant to this Section of which Tenant becomes aware, after which Landlord
shall use commercially reasonable efforts to effect such repair. Landlord shall
not be liable for any failure to make any repairs or to perform any maintenance
unless such failure shall persist for an unreasonable time after Tenant’s
written notice of the need for such repairs or maintenance. Tenant waives its
rights under any state or local law to terminate this Lease or to make such
repairs at Landlord’s expense and agrees that the parties’ respective rights
with respect to such matters shall be solely as set forth herein. Repairs
required as the result of fire, earthquake, flood, vandalism, war, or similar
cause of damage or destruction shall be controlled by Section 18.

14. Tenant’s Repairs. Except for those portions of the Premises for which
Landlord is expressly responsible pursuant to Section 13 hereof, during the
Term, Tenant, at its expense, shall repair, replace and maintain in good
condition all portions of the Premises, including, without limitation, entries,
doors, ceilings, interior windows, interior walls, and the interior side of
demising walls. Should Tenant fail to make any such repair or replacement or
fail to maintain the Premises, Landlord shall give Tenant notice of such
failure. If Tenant fails to commence cure of such failure within 10 days of
Landlord’s notice, and thereafter diligently prosecute such cure to completion,
Landlord may perform such work and shall be reimbursed by Tenant within 10 days
after demand therefor; provided, however, that if such failure by Tenant creates
or could create an emergency, Landlord may immediately commence cure of such
failure and shall thereafter be entitled to recover the costs of such cure from
Tenant. Subject to Sections 17 and 18, Tenant shall bear the full uninsured cost
of any repair or replacement to any part of the Project that results from damage
caused by Tenant or any Tenant Party and any repair that benefits only the
Premises.

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15. Mechanic’s Liens. During the Term, Tenant shall discharge, by bond or
otherwise, any mechanic’s lien filed against the Premises or against the Project
for work claimed to have been done for, or materials claimed to have been
furnished to, Tenant within 10 days after the filing thereof, at Tenant’s sole
cost and shall otherwise keep the Premises and the Project free from any liens
arising out of work performed, materials furnished or obligations incurred by
Tenant. Should Tenant fail to discharge any lien described herein, Landlord
shall have the right, but not the obligation, to pay such claim or post a bond
or otherwise provide security to eliminate the lien as a claim against title to
the Project and the cost thereof shall be immediately due from Tenant as
Additional Rent. If Tenant shall lease or finance 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 filed as a matter of public
record by any lessor or creditor of Tenant will 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 Project be furnished on the statement without qualifying language
as to applicability of the lien only to removable personal property, located in
an identified suite held by Tenant.

16. Indemnification. During the Term, Tenant agrees to indemnify and defend,
save and hold Landlord harmless from and against any and all Claims for injury
or death to persons or damage to property occurring within or about the
Premises, arising directly or indirectly out of use or occupancy of the Premises
or a breach or default by Tenant in the performance of any of its obligations
hereunder, unless caused by the willful misconduct or gross negligence of
Landlord. Landlord shall not be liable to Tenant for, and Tenant assumes all
risk of damage to, personal property (including, without limitation, loss of
records kept within the Premises). Tenant further waives any and all Claims for
injury to Tenant’s business or loss of income relating to any such damage or
destruction of personal property (including, without limitation, any loss of
records). Landlord shall not be liable for any damages arising from any act,
omission or neglect of any tenant in the Project or of any other third party.

17. Insurance. Landlord shall maintain all risk property and, if applicable,
sprinkler damage insurance covering the full replacement cost of the Project or
such lesser coverage amount as Landlord may elect provided such coverage amount
is not less than 90% of such full replacement cost. Landlord shall further
procure and maintain commercial general liability insurance with a single loss
limit of not less than $2,000,000 for bodily injury and property damage with
respect to the Project. Landlord may, but is not obligated to, maintain such
other insurance and additional coverages as it may deem necessary, including,
but not limited to, flood, environmental hazard and earthquake, loss or failure
of building equipment, errors and omissions, rental loss during the period of
repair or rebuilding, workers’ compensation insurance and fidelity bonds for
employees employed to perform services and insurance for any improvements
installed by Tenant or which are in addition to the standard improvements
customarily furnished by Landlord without regard to whether or not such are made
a part of the Project. All such insurance shall be included as part of the
Operating Expenses. The Project may be included in a blanket policy (in which
case the cost of such insurance allocable to the Project will be determined by
Landlord based upon the insurer’s cost calculations).

Tenant, at its sole cost and expense, shall maintain during the Term: all risk
property insurance with business interruption and extra expense coverage,
covering the full replacement cost of all property and improvements installed or
placed in the Premises by Tenant at Tenant’s expense; workers’ compensation
insurance with no less than the minimum limits required by law; employer’s
liability insurance with such limits as required by law; and commercial general
liability insurance, with a minimum limit of not less than $2,000,000 per
occurrence for bodily injury and property damage with respect to the Premises.
The commercial general liability insurance policy shall name Alexandria Real
Estate Equities, Inc., and Landlord, its officers, directors, employees,
managers, agents, and contractors (collectively, “Landlord Parties”), as
additional insureds; insure on an occurrence and not a claims-made basis; be
issued by insurance companies which have a rating of not less than policyholder
rating of A and financial category rating of at least Class X in “Best’s
Insurance Guide”; shall not be cancelable for nonpayment of premium unless 10
days prior written notice shall have been given to Landlord from the insurer;
contain a hostile fire endorsement and a contractual liability endorsement; and
provide primary coverage to Landlord (any policy issued to Landlord providing
duplicate or similar coverage shall be deemed excess

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over Tenant’s policies). Copies of such policies (if requested by Landlord), or
certificates of insurance showing the limits of coverage required hereunder and
showing Landlord as an additional insured, along with reasonable evidence of the
payment of premiums for the applicable period, shall be delivered to Landlord by
Tenant upon commencement of the Term and upon each renewal of said insurance.
Tenant’s policy may be a “blanket policy” with an aggregate per location
endorsement which specifically provides that the amount of insurance shall not
be prejudiced by other losses covered by the policy. Tenant shall, prior to the
expiration of such policies, furnish Landlord with renewal certificates.

In each instance where insurance is to name Landlord as an additional insured,
Tenant shall upon written request of Landlord also designate and furnish
certificates so evidencing Landlord as additional insured to: (i) any lender of
Landlord holding a security interest in the Project or any portion thereof,
(ii) the landlord under any lease wherein Landlord is tenant of the real
property on which the Project is located, if the interest of Landlord is or
shall become that of a tenant under a ground or other underlying lease rather
than that of a fee owner, and/or (iii) any management company retained by
Landlord to manage the Project.

The property insurance obtained by Landlord and Tenant shall include a waiver of
subrogation by the insurers and all rights based upon an assignment from its
insured, against Landlord or Tenant, and their respective officers, directors,
employees, managers, agents, invitees and contractors (“Related Parties”), in
connection with any loss or damage thereby insured against. Neither party nor
its respective Related Parties shall be liable to the other for loss or damage
caused by any risk insured against under property insurance required to be
maintained hereunder, and each party waives any claims against the other party,
and its respective Related Parties, for such loss or damage. The failure of a
party to insure its property shall not void this waiver. Landlord and its
respective Related Parties shall not be liable for, and Tenant hereby waives all
claims against such parties for, business interruption and losses occasioned
thereby sustained by Tenant or any person claiming through Tenant resulting from
any accident or occurrence in or upon the Premises or the Project from any cause
whatsoever. If the foregoing waivers shall contravene any law with respect to
exculpatory agreements, the liability of Landlord or Tenant shall be deemed not
released but shall be secondary to the other’s insurer.

Landlord may require insurance policy limits to be raised to conform with
requirements of Landlord’s lender.

18. Restoration. If, at any time during the Term, the Project or the Premises
are damaged or destroyed by a fire or other insured casualty, Landlord shall
notify Tenant within 60 days after discovery of such damage as to the amount of
time Landlord reasonably estimates it will take to restore the Project or the
Premises, as applicable (the “Restoration Period”). If the Restoration Period is
estimated to exceed 12 months (the “Maximum Restoration Period”), Landlord may,
in such notice, elect to terminate this Lease as of the date that is 75 days
after the date of discovery of such damage or destruction; provided, however,
that notwithstanding Landlord’s election to restore, Tenant may elect to
terminate this Lease by written notice to Landlord delivered within 5 business
days of receipt of a notice from Landlord estimating a Restoration Period for
the Premises longer than the Maximum Restoration Period. Unless Landlord or
Tenant so elect to terminate this Lease, Landlord shall, subject to receipt of
sufficient insurance proceeds (with any deductible to be treated as a current
Operating Expense), promptly restore the Premises (excluding the improvements
installed by Tenant or by Landlord and paid for by Tenant, subject to delays
arising from the collection of insurance proceeds, from Force Majeure events;
provided, however, that if repair or restoration of the Premises is not
substantially complete as of the end of the Maximum Restoration Period or, if
longer, the Restoration Period, Landlord may, in its sole and absolute
discretion, elect not to proceed with such repair and restoration, or Tenant may
by written notice to Landlord delivered within 5 business days of the expiration
of the Maximum Restoration Period or, if longer, the Restoration Period, elect
to terminate this Lease in which event Landlord shall be relieved of its
obligation to make such repairs or restoration and this Lease shall terminate as
of the date that is 75 days after the discovery of such damage or destruction,
but Landlord shall retain any Rent paid and the right to any Rent payable by
Tenant prior to such election by Landlord or Tenant.

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Tenant, at its expense, shall promptly perform, subject to delays arising from
the collection of insurance proceeds, from Force Majeure (as defined in
Section 34) events, all repairs or restoration not required to be done by
Landlord.

Notwithstanding the foregoing, either Landlord or Tenant may terminate this
Lease upon written notice to the other if the Premises are damaged during the
last year of the Term and Landlord reasonably estimates that it will take more
than 2 months to repair such damage; provided, however, that such notice is
delivered within 10 business days after the date that Landlord provides Tenant
with written notice of the estimated Restoration Period. Landlord shall also
have the right to terminate this Lease if insurance proceeds are not available
for such restoration

Rent shall be abated from the date that the Premises are not usable by Tenant
following the damage or destruction until the Premises are repaired and
restored, in the proportion which the area of the Premises, if any, which is not
usable by Tenant bears to the total area of the Premises. Such abatement shall
be the sole remedy of Tenant, and except as provided in this Section 18, Tenant
waives any right to terminate the Lease by reason of damage or casualty loss.

The provisions of this Lease, including this Section 18, constitute an express
agreement between Landlord and Tenant with respect to any and all damage to, or
destruction of, all or any part of the Premises, or any other portion of the
Project, and any statute or regulation which is now or may hereafter be in
effect shall have no application to this Lease or any damage or destruction to
all or any part of the Premises or any other portion of the Project, the parties
hereto expressly agreeing that this Section 18 sets forth their entire
understanding and agreement with respect to such matters.

19. Condemnation. If at any time during the Term the whole or any material part
of the Premises or the Project is taken for any public or quasi-public use under
governmental law, ordinance, or regulation, or by right of eminent domain, or by
private purchase in lieu thereof (a “Taking” or “Taken”), and the Taking would
in Landlord’s reasonable judgment either prevent or materially interfere with
Tenant’s use of the Premises or materially interfere with or impair Landlord’s
ownership or operation of the Project, then upon written notice by Landlord this
Lease shall terminate and Rent shall be apportioned as of said date. If part of
the Premises shall be Taken, and this Lease is not terminated as provided above,
Landlord shall promptly restore the Premises and the Project as nearly as is
commercially reasonable under the circumstances to their condition prior to such
partial Taking and the rentable square footage of the Building, the rentable
square footage of the Premises, Tenant’s Share of the Building and the Rent
payable hereunder during the unexpired Term shall be reduced to such extent as
may be fair and reasonable under the circumstances. Upon any such Taking,
Landlord shall be entitled to receive the entire price or award from any such
Taking without any payment to Tenant, and Tenant hereby assigns to Landlord
Tenant’s interest, if any, in such award. Tenant shall have the right, to the
extent that same shall not diminish Landlord’s award, to make a separate claim
against the condemning authority (but not Landlord) for such compensation as may
be separately awarded or recoverable by Tenant for moving expenses and damage to
Tenant’s trade fixtures, if a separate award for such items is made to Tenant.
Tenant hereby waives any and all rights it might otherwise have pursuant to any
provision of state law to terminate this Lease upon a partial Taking of the
Premises or the Project.

20. Events of Default. Each of the following events shall be a default
(“Default”) by Tenant under this Lease:

(a) Payment Defaults. Tenant shall fail to pay any installment of Rent or any
other payment hereunder when due; provided, however, that Landlord will give
Tenant notice and an opportunity to cure any failure to pay Rent within 3 days
of any such notice.

(b) Insurance. Any insurance required to be maintained by Tenant pursuant to
this Lease shall be canceled or terminated or shall expire or shall be reduced
or materially changed, or Landlord shall receive a notice of nonrenewal of any
such insurance and Tenant shall fail to obtain replacement insurance at least 20
days before the expiration of the current coverage.

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(c) Abandonment. Tenant shall abandon the Premises.

(d) Improper Transfer. Tenant shall assign, sublease or otherwise transfer or
attempt to transfer all or any portion of Tenant’s interest in this Lease or the
Premises except as expressly permitted herein, or Tenant’s interest in this
Lease shall be attached, executed upon, or otherwise judicially seized and such
action is not released within 90 days of the action.

(e) Liens. Tenant shall fail to discharge or otherwise obtain the release of any
lien placed upon the Premises in violation of this Lease within 20 days after
any such lien is filed against the Premises.

(f) Insolvency Events. Tenant or any guarantor or surety of Tenant’s obligations
hereunder shall: (A) make a general assignment for the benefit of creditors;
(B) commence any case, proceeding or other action seeking to have an order for
relief entered on its behalf as a debtor or to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, liquidation,
dissolution or composition of it or its debts or seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or of
any substantial part of its property (collectively a “Proceeding for Relief”);
(C) become the subject of any Proceeding for Relief which is not dismissed
within 90 days of its filing or entry; or (D) die or suffer a legal disability
(if Tenant, guarantor, or surety is an individual) or be dissolved or otherwise
fail to maintain its legal existence (if Tenant, guarantor or surety is a
corporation, partnership or other entity).

(g) Estoppel Certificate or Subordination Agreement. Tenant fails to execute any
document required from Tenant under Sections 23 or 27 within 5 days after a
second notice requesting such document.

(h) Other Defaults. Tenant shall fail to comply with any provision of this Lease
other than those specifically referred to in this Section 20, and, except as
otherwise expressly provided herein, such failure shall continue for a period of
30 days after written notice thereof from Landlord to Tenant; provided that if
the nature of Tenant’s default pursuant to this Section 20(h) is such that it
cannot be cured by the payment of money and reasonably requires more than 30
days to cure, then Tenant shall not be deemed to be in default if Tenant
commences such cure within said 30 day period and thereafter diligently
prosecutes the same to completion.

Any notice given under Section 20(h) hereof shall: (i) specify the alleged
default, (ii) demand that Tenant cure such default, (iii) be in lieu of, and not
in addition to, or shall be deemed to be, any notice required under any
provision of applicable law, and (iv) not be deemed a forfeiture or a
termination of this Lease unless Landlord elects otherwise in such notice.

21. Landlord’s Remedies.

(a) Payment By Landlord; Interest; EITF 97-10. Upon a Default by Tenant
hereunder, Landlord may, without waiving or releasing any obligation of Tenant
hereunder, make such payment or perform such act. All sums so paid or incurred
by Landlord, together with interest thereon, from the date such sums were paid
or incurred, at the annual rate equal to 12% per annum or the highest rate
permitted by law (the “Default Rate”), whichever is less, shall be payable to
Landlord on demand as Additional Rent. Nothing herein shall be construed to
create or impose a duty on Landlord to mitigate any damages resulting from
Tenant’s Default hereunder. Notwithstanding anything to the contrary contained
in this Lease, in connection with any Default that may occur prior to
Substantial Completion of the Landlord’s Work, under no circumstances shall
Tenant be responsible for any amount in excess of eighty nine percent (89%) of
the “total project costs” as such phrase is used in Emerging Issues Task Force
Issue No. 97-10.

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(b) Late Payment Rent. Late payment by Tenant to Landlord of Rent and other sums
due will cause Landlord to incur costs not contemplated by this Lease, the exact
amount of which will be extremely difficult and impracticable to ascertain. Such
costs include, but are not limited to, processing and accounting charges and
late charges which may be imposed on Landlord under any Mortgage covering the
Premises. Therefore, if any installment of Rent due from Tenant is not received
by Landlord within 5 days after the date such payment is due, Tenant shall pay
to Landlord an additional sum equal to 6% of the overdue Rent as a late charge.
The parties agree that this late charge represents a fair and reasonable
estimate of the costs Landlord will incur by reason of late payment by Tenant.
In addition to the late charge, Rent not paid when due shall bear interest at
the Default Rate from the first business day after the date of Landlord’s notice
to Tenant until paid.

(c) Remedies. Upon the occurrence of a Default, Landlord, at its option, without
further notice or demand to Tenant, shall have in addition to all other rights
and remedies provided in this Lease, at law or in equity, the option to pursue
any one or more of the following remedies, each and all of which shall be
cumulative and nonexclusive, without any notice or demand whatsoever.

(i) Terminate this Lease, or at Landlord’s option, Tenant’s right to possession
only, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy which it may have for possession or arrearages in rent, enter upon
and take possession of the Premises and expel or remove Tenant and any other
person who may be occupying the Premises or any part thereof, without being
liable for prosecution or any claim or damages therefor;

(ii) Upon any termination of this Lease, whether pursuant to the foregoing
Section 21(c)(i) or otherwise, Landlord may recover from Tenant the following:

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

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

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

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

(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 law.

The term “rent” as used in this Section 21 shall be deemed to be and to mean all
sums of every nature required to be paid by Tenant pursuant to the terms of this
Lease, whether to Landlord or to others. As used in Sections 21(c)(ii) (A) and
(B), above, the “worth at the time of award” shall be computed by allowing
interest at the Default Rate. As used in Section 21(c)(ii)(C) above, the “worth
at the time of award” shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time of award
plus 1%.

(iii) Landlord may continue this Lease in effect after Tenant’s Default and
recover rent as it becomes due (Landlord and Tenant hereby agreeing that Tenant
has the right to sublet

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or assign hereunder, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease following a Default by Tenant,
Landlord may, from time to time, without terminating this Lease, enforce all of
its rights and remedies hereunder, including the right to recover all Rent as it
becomes due.

(iv) Whether or not Landlord elects to terminate this Lease following a Default
by Tenant, Landlord shall have the right to terminate any and all subleases,
licenses, concessions or other consensual arrangements for possession entered
into by Tenant and affecting the Premises or may, in Landlord’s sole discretion,
succeed to Tenant’s interest in such subleases, licenses, concessions or
arrangements. Upon Landlord’s election to succeed to Tenant’s interest in any
such subleases, licenses, concessions or arrangements, Tenant shall, as of the
date of notice by Landlord of such election, have no further right to or
interest in the rent or other consideration receivable thereunder.

(v) Independent of the exercise of any other remedy of Landlord hereunder or
under applicable law, during the Term of the Lease, Landlord may conduct an
environmental test of the Premises as generally described in Section 30(c)
hereof, at Tenant’s expense; provided, however, that the provisions of this
clause (v) shall not apply if the Permitted Use at that time is purely office
use.

(vi) Notwithstanding anything to the contrary contained in this Lease, in
connection with any Default that may occur prior to Substantial Completion of
the Landlord’s Work, under no circumstances shall Tenant be responsible for any
amount in excess of eighty nine percent (89%) of the “total project costs” as
such phrase is used in Emerging Issues Task Force Issue No. 97-10.

(d) Effect of Exercise. Exercise by Landlord of any remedies hereunder or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, it being understood
that such surrender and/or termination can be effected only by the express
written agreement of Landlord and Tenant. Any law, usage, or custom to the
contrary notwithstanding, Landlord shall have the right at all times to enforce
the provisions of this Lease in strict accordance with the terms hereof; and the
failure of Landlord at any time to enforce its rights under this Lease strictly
in accordance with same shall not be construed as having created a custom in any
way or manner contrary to the specific terms, provisions, and covenants of this
Lease or as having modified the same and shall not be deemed a waiver of
Landlord’s right to enforce one or more of its rights in connection with any
subsequent default. A receipt by Landlord of Rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord’s intention to re-enter, re-take or otherwise obtain possession of the
Premises as provided in any statute, or to institute legal proceedings to that
end, and also waives all right of redemption in case Tenant shall be
dispossessed by a judgment or by warrant of any court or judge. Any reletting of
the Premises or any portion thereof shall be on such terms and conditions as
Landlord in its sole discretion may determine. Landlord shall not be liable for,
nor shall Tenant’s obligations hereunder be diminished because of, Landlord’s
failure to relet the Premises or collect rent due in respect of such reletting
or otherwise to mitigate any damages arising by reason of Tenant’s Default;
provided, however, that the provisions of this sentence shall not apply if the
Permitted Use is purely office use.

22. Assignment and Subletting.

(a) General Prohibition. Without Landlord’s prior written consent subject to and
on the conditions described in this Section 22, other than pursuant to a
Permitted Assignment or Permitted Sublease (as defined below), Tenant shall not,
directly or indirectly, voluntarily or by operation of law, assign this Lease or
sublease the Premises or any part thereof or mortgage, pledge, or hypothecate
its leasehold interest or grant any concession or license within the Premises,
and any attempt to do any of the foregoing shall be void and of no effect. If
Tenant is a corporation, partnership or limited liability

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company, the shares or other ownership interests thereof which are not actively
traded upon a stock exchange or in the over-the-counter market, a transfer or
series of transfers whereby 25% or more of the issued and outstanding shares or
other ownership interests of such corporation are, or voting control is,
transferred (but excepting transfers upon deaths of individual owners) from a
person or persons or entity or entities which were owners thereof at time of
execution of this Lease to persons or entities who were not owners of shares or
other ownership interests of the corporation, partnership or limited liability
company at time of execution of this Lease, shall be deemed an assignment of
this Lease requiring the consent of Landlord as provided in this Section 22.

(b) Permitted Transfers. If Tenant desires to assign, sublease, hypothecate or
otherwise transfer this Lease or sublet the Premises, other than pursuant to a
Permitted Assignment or Permitted Sublease, then at least 15 business days, but
not more than 60 business days, before the date Tenant desires the assignment or
sublease to be effective (the “Assignment Date”), Tenant shall give Landlord a
notice (the “Assignment Notice”) containing such information about the proposed
assignee or sublessee, including the proposed use of the Premises and any
Hazardous Materials proposed to be used, stored handled, treated, generated in
or released or disposed of from the Premises, the Assignment Date, any
relationship between Tenant and the proposed assignee or sublessee, and all
material terms and conditions of the proposed assignment or sublease, including
a copy of any proposed assignment or sublease in its final form, and such other
information as Landlord may deem reasonably necessary or appropriate to its
consideration whether to grant its consent. Landlord may, by giving written
notice to Tenant within 15 business days after receipt of the Assignment Notice:
(i) grant such consent, (ii) refuse such consent, in its reasonable discretion;
or (iii) terminate this Lease with respect to the space described in the
Assignment Notice as of the Assignment Date (an “Assignment Termination”),
unless Tenant withdraws its request for consent within 5 business days following
its receipt of Landlord’s notice of its intent to so terminate. Among other
reasons, it shall be reasonable for Landlord to withhold its consent in any of
these instances: (1) the proposed assignee or subtenant is a governmental
agency; (2) in Landlord’s reasonable judgment, the use of the Premises by the
proposed assignee or subtenant would entail any alterations that would lessen
the value of the leasehold improvements in the Premises, or would require
materially increased services by Landlord; (3) in Landlord’s reasonable
judgment, the proposed assignee or subtenant lacks the creditworthiness to
support the financial obligations it will incur under the proposed assignment or
sublease; (4) in Landlord’s reasonable judgment, the character, reputation, or
business of the proposed assignee or subtenant is inconsistent with the desired
tenant-mix or the quality of other tenancies in the Project or is inconsistent
with the type and quality of the nature of the Building; (5) Landlord has
received from any prior landlord to the proposed assignee or subtenant a
materially negative report concerning such prior landlord’s experience with the
proposed assignee or subtenant; (6) Landlord has experienced previous defaults
by or is in litigation with the proposed assignee or subtenant; (7) the use of
the Premises by the proposed assignee or subtenant will violate any applicable
Legal Requirement; or (8) the assignment or sublease is prohibited by Landlord’s
lender. If Landlord delivers notice of its election to exercise an Assignment
Termination, Tenant shall have the right to withdraw such Assignment Notice by
written notice to Landlord of such election within 5 business days after
Landlord’s notice electing to exercise the Assignment Termination. If Tenant
withdraws such Assignment Notice, this Lease shall continue in full force and
effect. If Tenant does not withdraw such Assignment Notice, this Lease, and the
term and estate herein granted, shall terminate as of the Assignment Date with
respect to the space described in such Assignment Notice. No failure of Landlord
to exercise any such option to terminate this Lease, or to deliver a timely
notice in response to the Assignment Notice, shall be deemed to be Landlord’s
consent to the proposed assignment, sublease or other transfer. Tenant shall
reimburse Landlord for all of Landlord’s reasonable out-of-pocket expenses in
connection with its consideration of any Assignment Notice.

Notwithstanding the foregoing, Landlord’s consent to an assignment of this Lease
or a subletting of any portion of the Premises to any entity controlling,
controlled by or under common control with Tenant (a “Control Permitted
Assignment”) shall not be required. In addition, Tenant shall have the right to
assign this Lease to a corporation or other entity which is a
successor-in-interest to Tenant, by way of merger, consolidation or corporate
reorganization, or by the purchase of all or substantially all of the assets or
the ownership interests of Tenant provided that (i) such merger or
consolidation, or such acquisition or assumption, as the case may be, is for a
good business purpose and not principally for the

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purpose of transferring the Lease, and (ii) the net worth (as determined in
accordance with US GAAP) of the assignee is not less than the net worth (as
determined in accordance with US GAAP) of Tenant as of the date of Tenant’s most
current quarterly or annual financial statements, (iii) such assignee shall
agree in writing to assume all of the terms, covenants and conditions of this
Lease arising after the effective date of the assignment, and (iv) Tenant gives
written notice to Landlord within thirty (30) days following such assignment (a
“Corporate Permitted Assignment”). In addition, Tenant shall have the right,
without Landlord’s consent, to sublease, license or otherwise grant the right to
occupy a portion of the Premises to any entity with which Tenant is engaged in a
joint venture in the ordinary course of Tenant’s business (a “Permitted
Sublease”). Any Control Permitted Assignment and Corporate Permitted Assignment
are hereinafter collectively referred to as “Permitted Assignments.”

(c) Additional Conditions. As a condition to any such assignment or subletting,
whether or not Landlord’s consent is required, Landlord may require:

(i) that any assignee or subtenant agree, in writing at the time of such
assignment or subletting, that if Landlord gives such party notice that Tenant
is in default under this Lease, such party shall thereafter make all payments
otherwise due Tenant directly to Landlord, which payments will be received by
Landlord without any liability except to credit such payment against those due
under the Lease, and any such third party shall agree to attorn to Landlord or
its successors and assigns should this Lease be terminated for any reason;
provided, however, in no event shall Landlord or its successors or assigns be
obligated to accept such attornment; and

(ii) A list of Hazardous Materials, certified by the proposed assignee or
sublessee to be true and correct, which the proposed assignee or sublessee
intends to use, store, handle, treat, generate in or release or dispose of from
the Premises, together with copies of all documents relating to such use,
storage, handling, treatment, generation, release or disposal of Hazardous
Materials by the proposed assignee or subtenant in the Premises or on the
Project, prior to the proposed assignment or subletting, including, without
limitation: permits; approvals; reports and correspondence; storage and
management plans; plans relating to the installation of any storage tanks to be
installed in or under the Project (provided, said installation of tanks shall
only be permitted after Landlord has given its written consent to do so, which
consent may be withheld in Landlord’s sole and absolute discretion); and all
closure plans or any other documents required by any and all federal, state and
local Governmental Authorities for any storage tanks installed in, on or under
the Project for the closure of any such tanks. Neither Tenant nor any such
proposed assignee or subtenant is required, however, to provide Landlord with
any portion(s) of the such documents containing information of a proprietary
nature which, in and of themselves, do not contain a reference to any Hazardous
Materials or hazardous activities. The provisions of the clause (ii) shall not
apply if the Permitted Use is purely an office use at the time of the proposed
assignment or sublease.

(d) No Release of Tenant, Sharing of Excess Rents. Notwithstanding any
assignment or subletting, Tenant and any guarantor or surety of Tenant’s
obligations under this Lease shall at all times remain fully and primarily
responsible and liable for the payment of Rent and for compliance with all of
Tenant’s other obligations under this Lease. If the Rent due and payable by a
sublessee or assignee (or a combination of the rental payable under such
sublease or assignment plus any bonus or other consideration therefor or
incident thereto in any form) exceeds the sum of the rental payable under this
Lease, (excluding however, any Rent payable under this Section) and actual and
reasonable brokerage fees and legal costs (“Excess Rent”), then Tenant shall be
bound and obligated to pay Landlord as Additional Rent hereunder 50% of such
Excess Rent within 30 days following receipt thereof by Tenant. If Tenant shall
sublet the Premises or any part 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 Landlord as assignee and as
attorney-in-fact for Tenant, or a receiver for Tenant appointed on Landlord’s
application, may collect such rent and apply it toward Tenant’s obligations
under this Lease; except that, until the occurrence of a Default, Tenant shall
have the right to collect such rent.

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(e) No Waiver. The consent by Landlord to an assignment or subletting shall not
relieve Tenant or any assignees of this Lease or any sublessees of the Premises
from obtaining the consent of Landlord to any further assignment or subletting
nor shall it release Tenant or any assignee or sublessee of Tenant from full and
primary liability under the Lease. The acceptance of Rent hereunder, or the
acceptance of performance of any other term, covenant, or condition thereof,
from any other person or entity shall not be deemed to be a waiver of any of the
provisions of this Lease or a consent to any subletting, assignment or other
transfer of the Premises.

23. Estoppel Certificate. Tenant shall, within 10 business days of written
notice from Landlord, execute, acknowledge and deliver a statement in writing in
any form reasonably requested by a proposed lender or purchaser, (i) 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 the rental and
other charges are paid in advance, if any, (ii) acknowledging that there are not
any uncured defaults on the part of Landlord hereunder, or specifying such
defaults if any are claimed, and (iii) setting forth such further information
with respect to the status of this Lease or the Premises as may be requested
thereon. Any such statement may be relied upon by any prospective purchaser or
encumbrancer of all or any portion of the real property of which the Premises
are a part. Tenant’s failure to deliver such statement within such time shall,
at the option of Landlord, constitute a Default under this Lease, and, in any
event, shall be conclusive 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. Upon
request by Tenant, Landlord will similarly execute an estoppel certificate:
(i) 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 the
rental and other charges are paid in advanced, if any, (ii) acknowledging that
there are not, to Landlord’s knowledge, any uncured defaults on the part of
Tenant hereunder, or specifying such defaults if any are claimed and
(iii) setting forth such further information with respect to the status of this
Lease or the Premises as may be reasonably requested thereon.

24. Quiet Enjoyment. So long as Tenant shall perform all of the covenants and
agreements herein required to be performed by Tenant, Tenant shall, subject to
the terms of this Lease, at all times during the Term, have peaceful and quiet
enjoyment of the Premises against any person claiming by, through or under
Landlord.

25. Prorations. All prorations required or permitted to be made hereunder shall
be made on the basis of a 360 day year and 30 day months.

26. Rules and Regulations. Tenant shall, at all times during the Term and any
extension thereof, comply with all reasonable rules and regulations at any time
or from time to time established by Landlord covering use of the Premises and
the Project. The current rules and regulations are attached hereto as Exhibit E.
If there is any conflict between said rules and regulations and other provisions
of this Lease, the terms and provisions of this Lease shall control. Landlord
shall not have any liability or obligation for the breach of any rules or
regulations by other tenants in the Project and shall not enforce such rules and
regulations in a discriminatory manner.

27. Subordination. This Lease and Tenant’s interest and rights hereunder are
hereby made and shall be subject and subordinate at all times to the lien of any
Mortgage now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant; provided,
however, that so long as there is no Default hereunder, Tenant’s right to
possession of the Premises shall not be disturbed by the Holder of any such
Mortgage. Tenant agrees, at the election of the Holder of any such Mortgage, to
attorn to any such Holder. Tenant agrees upon demand to execute, acknowledge and
deliver such instruments, confirming such subordination, and such instruments of
attornment as shall be requested by any such Holder, provided any such
instruments contain appropriate non-disturbance provisions assuring Tenant’s
quiet enjoyment of the Premises as set forth in Section 24 hereof.
Notwithstanding the foregoing, any such

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Holder may at any time subordinate its Mortgage to this Lease, without Tenant’s
consent, by notice in writing to Tenant, and thereupon this Lease shall be
deemed prior to such Mortgage without regard to their respective dates of
execution, delivery or recording and in that event such Holder shall have the
same rights with respect to this Lease as though this Lease had been executed
prior to the execution, delivery and recording of such Mortgage and had been
assigned to such Holder. The term “Mortgage” whenever used in this Lease shall
be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the “Holder” of a Mortgage shall be deemed to
include the beneficiary under a deed of trust.

As of the date of this Lease, there is no existing Mortgage encumbering the
Project.

28. Surrender. Upon the expiration of the Term or earlier termination of
Tenant’s right of possession, Tenant shall surrender the Premises to free of
Hazardous Materials brought upon, kept, used, stored, handled, treated,
generated in, or released or disposed of from, the Premises by any person other
than a Landlord Party; provided, however, Tenant shall not be responsible for
(a) any Hazardous Materials which existed in, on or under the Premises as of the
Commencement Date or (b) any Hazardous Materials which migrated from outside of
the Premises into the Premises unless the presence of such Hazardous Materials
(i) is the result of a breach by Tenant of any of its obligations under this
Lease, or (ii) was caused, contributed to or exacerbated by Tenant or any Tenant
Party. If the Permitted Use is hereafter amended to include research and
development laboratory and there is contamination in the Premises, the burden
shall be on Tenant to prove the matters described in clause (a) and/or (b), as
the case may be, to Landlord’s reasonable satisfaction. Upon the expiration of
the Term or earlier termination of Tenant’s right of possession, Tenant shall
surrender the Premises to Landlord in the same condition as received, subject to
any Alterations or Installations permitted by Landlord to remain in the
Premises, broom clean, ordinary wear and tear and casualty loss and condemnation
covered by Sections 18 and 19 excepted.

If the Permitted Use is hereafter amended to include research and development
laboratory, then the provisions of this paragraph shall apply. At least 3 months
prior to the surrender of the Premises, Tenant shall deliver to Landlord a
narrative description of the actions proposed (or required by any Governmental
Authority) to be taken by Tenant in order to surrender the Premises (including
any Installations permitted by Landlord to remain in the Premises) at the
expiration or earlier termination of the Term, free from any residual impact
from Hazardous Materials for which Tenant is responsible under this Lease and
otherwise released for unrestricted use and occupancy (the “Surrender Plan”).
Such Surrender Plan shall be accompanied by a current listing of (i) all
Hazardous Materials licenses and permits held by or on behalf of any Tenant
Party with respect to the Premises, and (ii) all Hazardous Materials used,
stored, handled, treated, generated, released or disposed of from the Premises,
and shall be subject to the review and approval of Landlord’s environmental
consultant. In connection with the review and approval of the Surrender Plan,
upon the request of Landlord, Tenant shall deliver to Landlord or its consultant
such additional non-proprietary information concerning Hazardous Materials as
Landlord shall request. On or before such surrender, Tenant shall deliver to
Landlord evidence that the approved Surrender Plan shall have been
satisfactorily completed and Landlord shall have the right, subject to
reimbursement at Tenant’s expense as set forth below, to cause Landlord’s
environmental consultant to inspect the Premises and perform such additional
procedures as may be deemed reasonably necessary to confirm that the Premises
are, as of the effective date of such surrender or early termination of the
Lease, free from any residual impact from Hazardous Materials for which Tenant
is responsible under this Lease. Tenant shall reimburse Landlord, as Additional
Rent, for the actual out-of pocket expense incurred by Landlord for Landlord’s
environmental consultant to review and approve the Surrender Plan and to visit
the Premises and verify satisfactory completion of the same, which cost shall
not exceed $5,000. Landlord shall have the unrestricted right to deliver such
Surrender Plan and any report by Landlord’s environmental consultant with
respect to the surrender of the Premises to third parties; provided, however,
that Landlord instructs such parties to treat the same as confidential.

Tenant shall immediately return to Landlord all keys and/or access cards to
parking, the Project, restrooms or all or any portion of the Premises furnished
to or otherwise procured by Tenant. If any such access card or key is lost,
Tenant shall pay to Landlord, at Landlord’s election, either the cost of
replacing

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such lost access card or key or the cost of reprogramming the access security
system in which such access card was used or changing the lock or locks opened
by such lost key. Any Tenant’s Property, Alterations and property not so removed
by Tenant as permitted or required herein shall be deemed abandoned and may be
stored, removed, and disposed of by Landlord at Tenant’s expense, and Tenant
waives all claims against Landlord for any damages resulting from Landlord’s
retention and/or disposition of such property. All obligations of Tenant
hereunder not fully performed as of the termination of the Term, including the
obligations of Tenant under Section 30 hereof, shall survive the expiration or
earlier termination of the Term, including, without limitation, indemnity
obligations, payment obligations with respect to Rent and obligations concerning
the condition and repair of the Premises.

29. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY LAW, TENANT AND LANDLORD
WAIVE ANY RIGHT TO TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND
TENANT ARISING OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

30. Environmental Requirements.

(a) Prohibition/Compliance. Except for Hazardous Materials contained in products
customarily used by tenants in de minimis quantities for ordinary cleaning and
office purposes, Tenant shall not permit or cause any party to bring any
Hazardous Materials upon the Premises or the Project or use, store, handle,
treat, generate, manufacture, transport, release or dispose of any Hazardous
Materials in, on or from the Premises or the Project without Landlord’s prior
written consent which may be withheld in Landlord’s sole discretion. Tenant, at
its sole cost and expense, shall operate its business in the Premises in strict
compliance with all Environmental Requirements and shall remove or remediate in
a manner satisfactory to Landlord any Hazardous Materials released on or from
the Project by Tenant or any Tenant Party. Tenant shall complete and certify
disclosure statements as requested by Landlord from time to time relating to
Tenant’s use, storage, handling, treatment, generation, manufacture,
transportation, release or disposal of Hazardous Materials on or from the
Premises, except for Hazardous Materials contained in products customarily used
by tenants in de minimis quantities for ordinary cleaning and office purposes.
The term “Environmental Requirements” means all applicable present and future
statutes, regulations, ordinances, rules, codes, judgments, orders or other
similar enactments of any Governmental Authority regulating or relating to
health, safety, or environmental conditions on, under, or about the Premises or
the Project, or the environment, including without limitation, the following:
the Comprehensive Environmental Response, Compensation and Liability Act; the
Resource Conservation and Recovery Act; and all state and local counterparts
thereto, and any regulations or policies promulgated or issued thereunder. The
term “Hazardous Materials” means and includes any substance, material, waste,
pollutant, or contaminant listed or defined as hazardous or toxic, or regulated
by reason of its impact or potential impact on humans, animals and/or the
environment under any Environmental Requirements, asbestos and petroleum,
including crude oil or any fraction thereof, natural gas liquids, liquefied
natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and
such synthetic gas). As defined in Environmental Requirements, Tenant is and
shall be deemed to be the “operator” of Tenant’s “facility” and the “owner” of
all Hazardous Materials brought on the Premises by Tenant or any Tenant Party,
and the wastes, by-products, or residues generated, resulting, or produced
therefrom.

(b) Indemnity. During the Term, Tenant agrees to indemnify and defend and hold
Landlord, its officers, directors, employees, agents and contractors harmless
from any and all actions (including, without limitation, remedial or enforcement
actions of any kind, administrative or judicial proceedings, and orders or
judgments arising out of or resulting therefrom), costs, claims, damages
(including, without limitation, punitive damages and damages based upon
diminution in value of the Premises or the Project, or the loss of, or
restriction on, use of the Premises or any portion of the Project), expenses
(including, without limitation, attorneys’, consultants’ and experts’ fees,
court costs and amounts paid in settlement of any claims or actions), fines,
forfeitures or other civil, administrative or criminal penalties, injunctive or
other relief (whether or not based upon personal injury, property damage, or
contamination of, or adverse effects upon, the environment, water tables or
natural resources), liabilities or losses (collectively,

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“Environmental Claims”) which arise during or after the Term as a result of such
contamination. This indemnification of Landlord by Tenant includes, without
limitation, costs incurred in connection with any investigation of site
conditions or any cleanup, remedial, removal, or restoration work required by
any federal, state or local Governmental Authority because of Hazardous
Materials present in the air, soil or ground water above, on, or under the
Premises. Without limiting the foregoing, if the presence of any Hazardous
Materials on the Premises, the Project or any adjacent property caused or
permitted by Tenant or any Tenant Party results in any contamination of the
Premises, the Project or any adjacent property, Tenant shall promptly take all
actions at its sole expense and in accordance with applicable law as are
necessary to return the Premises, the Project or any adjacent property to the
condition required by applicable law, provided that Landlord’s approval of such
action shall first be obtained, which approval shall not unreasonably be
withheld so long as such actions would not potentially have any material adverse
long-term or short-term effect on the Premises or the Project.

(c) Landlord’s Tests. Notwithstanding anything to the contrary contained in this
Section 30(c), Tenant shall not be required to pay for the costs of any testing
undertaken by Landlord pursuant to this Section 30(c) so long as the Permitted
Use is purely office use. Landlord shall have access to, and a right to perform
inspections and tests of, the Premises to determine Tenant’s compliance with
Environmental Requirements, its obligations under this Section 30, or the
environmental condition of the Premises or the Project. In connection with such
testing, upon the request of Landlord, Tenant shall deliver to Landlord or its
consultant such non-proprietary information concerning the use of Hazardous
Materials in or about the Premises by Tenant or any Tenant Party. Access shall
be granted to Landlord upon Landlord’s prior notice to Tenant and at such times
so as to minimize, so far as may be reasonable under the circumstances, any
disturbance to Tenant’s operations. Such inspections and tests shall be
conducted at Landlord’s expense, unless such inspections or tests reveal that
Tenant has not complied with any Environmental Requirement, in which case Tenant
shall reimburse Landlord for the reasonable cost of such inspection and tests.
Tenant shall, at its sole cost and expense, promptly and satisfactorily
remediate any environmental conditions identified by such testing in accordance
with all Environmental Requirements. Landlord’s receipt of or satisfaction with
any environmental assessment in no way waives any rights that Landlord may have
against Tenant.

(d) Tenant’s Obligations. Tenant’s obligations under this Section 30 shall
survive the expiration or earlier termination of the Lease. During any period of
time after the expiration or earlier termination of this Lease required by
Tenant or Landlord to complete the removal from the Premises of any Hazardous
Materials (including, without limitation, the release and termination of any
licenses or permits restricting the use of the Premises and the completion of
the approved Surrender Plan), Tenant shall continue to pay the full Rent in
accordance with this Lease for any portion of the Premises not relet by Landlord
in Landlord’s sole discretion, which Rent shall be prorated daily.

31. Tenant’s Remedies/Limitation of Liability. Landlord shall not be in default
hereunder unless Landlord fails to perform any of its obligations hereunder
within 30 days after written notice from Tenant specifying such failure (unless
such performance will, due to the nature of the obligation, require a period of
time in excess of 30 days, then after such period of time as is reasonably
necessary). Upon any default by Landlord, Tenant shall give notice by registered
or certified mail to any Holder of a Mortgage covering the Premises and to any
landlord of any lease of property in or on which the Premises are located and
Tenant shall offer such Holder and/or landlord a reasonable opportunity to cure
the default, including time to obtain possession of the Project by power of sale
or a judicial action if such should prove necessary to effect a cure; provided
Landlord shall have furnished to Tenant in writing the names and addresses of
all such persons who are to receive such notices. All obligations of Landlord
hereunder shall be construed as covenants, not conditions; and, except as may be
otherwise expressly provided in this Lease, Tenant may not terminate this Lease
for breach of Landlord’s obligations hereunder.

All obligations of Landlord under this Lease will be binding upon Landlord only
during the period of its ownership of the Premises and not thereafter. The term
“Landlord” in this Lease shall mean only the owner for the time being of the
Premises. Upon the transfer by such owner of its interest in the Premises, such
owner shall thereupon be released and discharged from all obligations of
Landlord thereafter accruing, but such obligations shall be binding during the
Term upon each new owner for the duration of such owner’s ownership.

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32. Inspection and Access. Landlord and Landlord’s representatives may enter the
Premises during business hours on not less than 48 hours advance written notice
(except in the case of emergencies in which case no such notice shall be
required and such entry may be at any time) for the purpose of effecting any
such repairs, inspecting the Premises, showing the Premises to prospective
purchasers and, during the last year of the Term, to prospective tenants or for
any other business purpose. Landlord may erect a suitable sign on the Premises
stating the Premises are available to let or that the Project is available for
sale. Landlord may grant easements, make public dedications, designate Common
Areas and create restrictions on or about the Premises, provided that no such
easement, dedication, designation or restriction materially, adversely affects
Tenant’s use or occupancy of the Premises for the Permitted Use. At Landlord’s
request, Tenant shall execute such instruments as may be necessary for such
easements, dedications or restrictions, provided that such items do not impose
any financial or other material burden on Tenant. Tenant shall at all times,
except in the case of emergencies, have the right to escort Landlord or its
agents, representatives, contractors or guests while the same are in the
Premises, provided such escort does not materially and adversely affect
Landlord’s access rights hereunder.

33. Security. Tenant shall have the right, but not the obligation, to contract
with a third party to provide security services to the Building. Tenant
acknowledges and agrees that security devices and services, if any, while
intended to deter crime may not in given instances prevent theft or other
criminal acts and that Landlord is not obligated to provide any security
services with respect to the Premises. Tenant agrees that Landlord shall not be
liable to Tenant for, and Tenant waives any claim against Landlord with respect
to, any loss by theft or any other damage suffered or incurred by Tenant in
connection with any unauthorized entry into the Premises or any other breach of
security with respect to the Premises, except to the extent caused by the
willful misconduct of Landlord, its officers, employees, agents or contractors.
Tenant shall be solely responsible for the personal safety of Tenant’s officers,
employees, agents, contractors, guests and invitees while any such person is in,
on or about the Premises and/or the Project. Tenant shall at Tenant’s cost
obtain insurance coverage to the extent Tenant desires protection against such
criminal acts.

34. Force Majeure. Landlord shall not responsible or liable for delays in the
performance of its obligations hereunder when caused by, related to, or arising
out of acts of God, strikes, lockouts, or other labor disputes, embargoes,
quarantines, unusual weather, national, regional, or local disasters,
calamities, or catastrophes, inability to obtain labor or materials (or
reasonable substitutes therefor) at reasonable costs or failure of, or inability
to obtain, utilities necessary for performance, governmental restrictions,
orders, limitations, regulations, or controls, national emergencies, delay in
issuance or revocation of permits, enemy or hostile governmental action,
terrorism, insurrection, riots, civil disturbance or commotion, fire or other
casualty, and other causes or events beyond the reasonable control of Landlord
(“Force Majeure”).

35. Brokers. Landlord and Tenant each represents and warrants that it has not
dealt with any broker, agent or other person (collectively, “Broker”) in
connection with this transaction and that no Broker brought about this
transaction, other than Cornish & Carey, Inc. Landlord and Tenant each hereby
agrees to indemnify and hold the other harmless from and against any claims by
any Broker, other than the broker, if any named in this Section 35, claiming a
commission or other form of compensation by virtue of having dealt with Tenant
or Landlord, as applicable, with regard to this leasing transaction. Landlord
shall pay commission to Cornish & Carey, Inc. pursuant to a separate written
agreement between Cornish & Carey, Inc. and Landlord.

36. Limitation on Landlord’s Liability. NOTWITHSTANDING ANYTHING SET FORTH
HEREIN OR IN ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT TO THE CONTRARY:
(A) LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OTHER PERSON FOR (AND TENANT
AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS, DAMAGE OR INJURY, WHETHER
ACTUAL OR CONSEQUENTIAL TO: TENANT’S PERSONAL PROPERTY OF

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EVERY KIND AND DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES,
EQUIPMENT, INVENTORY, SCIENTIFIC RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORY
ANIMALS, PRODUCT, SPECIMENS, SAMPLES, AND/OR SCIENTIFIC, BUSINESS, ACCOUNTING
AND OTHER RECORDS OF EVERY KIND AND DESCRIPTION KEPT AT THE PREMISES AND ANY AND
ALL INCOME DERIVED OR DERIVABLE THEREFROM; (B) THERE SHALL BE NO PERSONAL
RECOURSE TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR
ARISING IN ANY WAY UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND
TENANT WITH RESPECT TO THE SUBJECT MATTER HEREOF AND ANY LIABILITY OF LANDLORD
HEREUNDER SHALL BE STRICTLY LIMITED SOLELY TO LANDLORD’S INTEREST IN THE PROJECT
OR ANY PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY INSURANCE PROCEEDS
PAYABLE IN RESPECT OF LANDLORD’S INTEREST IN THE PROJECT OR IN CONNECTION WITH
ANY SUCH LOSS; AND (C) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED
AGAINST LANDLORD IN CONNECTION WITH THIS LEASE NOR SHALL ANY RECOURSE BE HAD TO
ANY OTHER PROPERTY OR ASSETS OF LANDLORD OR ANY OF LANDLORD’S OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO CIRCUMSTANCES SHALL
LANDLORD OR ANY OF LANDLORD’S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR
CONTRACTORS BE LIABLE FOR INJURY TO TENANT’S BUSINESS OR FOR ANY LOSS OF INCOME
OR PROFIT THEREFROM.

37. Severability. If any clause or provision of this Lease is illegal, invalid
or unenforceable under present or future laws, then and in that event, it is the
intention of the parties hereto that the remainder of this Lease shall not be
affected thereby. It is also the intention of the parties to this Lease that in
lieu of each clause or provision of this Lease that is illegal, invalid or
unenforceable, there be added, as a part of this Lease, a clause or provision as
similar in effect to such illegal, invalid or unenforceable clause or provision
as shall be legal, valid and enforceable.

38. Signs; Exterior Appearance. Tenant shall not, without the prior written
consent of Landlord, which may be granted or withheld in Landlord’s sole
discretion: (i) attach any awnings, exterior lights, decorations, balloons,
flags, pennants, banners, painting or other projection to any outside wall of
the Project, (ii) use any curtains, blinds, shades or screens other than
Landlord’s standard window coverings, (iii) coat or otherwise sunscreen the
interior or exterior of any windows, (iv) place any bottles, parcels, or other
articles on the window sills, (v) place any equipment, furniture or other items
of personal property on any exterior balcony, or (vi) paint, affix or exhibit on
any part of the Premises or the Project any signs, notices, window or door
lettering, placards, decorations, or advertising media of any type which can be
viewed from the exterior of the Premises. Interior signs on doors and the
directory tablet shall be inscribed, painted or affixed for Tenant by Landlord
at the sole cost and expense of Tenant, and shall be of a size, color and type
acceptable to Landlord. Nothing may be placed on the exterior of corridor walls
or corridor doors other than Landlord’s standard lettering. The directory tablet
shall be provided exclusively for the display of the name and location of
tenants.

Landlord shall, at Landlord’s sole cost and expense, include Tenant’s name on a
non-exclusive basis on a building monument sign (“Monument Sign”) at the
Project. Tenant shall be entitled, at Tenant’s sole cost and expense, to install
a building sign with Tenant’s name (the “Building Sign”) on the exterior of the
Building on either the south or west façade on the fascia of the Building above
the highest windows of the Building, in a location approved in writing by
Landlord. The Monument Sign and the Building Sign (collectively, “Tenant’s
Signs”) including, without limitation, the size, color and type, shall be
subject to Landlord’s prior written approval which shall not be unreasonably
withheld provided the same comply with Landlord’s signage program at the Project
and applicable Legal Requirements. Tenant shall be solely responsible for all
costs, fees, charges, expenses or other sums related to the Building Sign,
including without limitation, costs related to manufacture and installation of
the Building Sign and compliance with applicable Legal Requirements and
Landlord’s signage program at the Project. Tenant shall be solely responsible
for the maintenance of all of Building Sign and the removal of the Building Sign
at the expiration or earlier termination of this Lease and repair all damage
resulting from such removal. The signage rights granted to Tenant pursuant to
this Section 38 are personal to Tenant any may not be assigned to any other
party without Landlord’s consent, which may be granted or withheld in Landlord’s
sole discretion separate and apart from any consent by Landlord to an assignment
of Tenant’s interest in

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the Lease, except that they may be assigned in connection with any Permitted
Assignment of this Lease. In the event that Tenant does not exercise its
Expansion Right, Landlord shall have the right to allow one additional tenant to
install a sign on the fascia of the Building with such tenant’s name, provided
that such tenant leases all of the Expansion Space and, provided further, that
such tenant’s building sign is not located on the same facade of the Building as
the Tenant’s Building Sign. Tenant acknowledges that it may be necessary,
pursuant to applicable Legal Requirements, for Tenant to reduce the size of
Tenant’s Building Sign in order for the other tenant to be permitted in
accordance with applicable Legal Requirements, to install its sign on the fascia
of the Building.

39. Right to Expand.

(a) Expansion in the Project. Tenant shall have the one-time right, exercisable
on or before December 31, 2008, to elect to expand the original Premises (the
“Expansion Right”) to include all of the remaining approximately 62,393 rentable
square feet (as the same may be adjusted based on the results of measurement
provided for in Section 6) in the Building (“Expansion Space”) upon the terms
and conditions in this Section. If Tenant elects to exercise the Expansion
Right, Tenant shall, on or before December 31, 2008, deliver written notice to
Landlord of its election to exercise the Expansion Right (“Expansion Exercise
Notice”). Tenant acknowledges and agrees that all of the terms and conditions of
this Lease shall apply to the leasing of the Expansion Space, except that:
(a) the term of the lease with respect to the Expansion Space shall commence
upon the Substantial Completion (as defined in the Work Letter) by Landlord of
the Tenant Improvements (as defined in the Work Letter) within the Expansion
Space (“Expansion Space Tenant Improvements”); (b) Tenant shall continue to pay
Base Rent for the original Premises as provided for in this Lease and, in
addition thereto, beginning on the date of Substantial Completion of the
Expansion Space Tenant Improvements, Tenant shall pay Base Rent for the
Expansion Space at the then current monthly Base Rent per rentable square foot
payable for the original Premises (as the same is adjusted from time to time
pursuant to Section 4(b) and (c) of this Lease), but specifically excluding any
applicable reductions applicable to the original Premises provided for in
Section 4(a) of this Lease; (c) subject to adjustment based on the results of
the measurement provided for in Section 6), Tenant’s Share of the Building with
respect to the Expansion Space shall be 49.%; (d) the Expansion Space Tenant
Improvements shall be constructed in accordance with the Work Letter except that
(i) all references to “Premises” contained in the Work Letter shall be deemed to
refer to the Expansion Space, (ii) the parties shall cause the Design Drawings
for the Expansion Space shall be finalized no later than 30 days after Tenant’s
delivery of the Expansion Exercise Notice to Landlord, (iii) the parties shall
cause the Construction Drawings shall be completed and approved by the parties
and the City of South San Francisco no later then 90 days after Tenant’s
delivery of the Expansion Exercise Notice to Landlord, (iv) Landlord shall,
subject to the terms of the Work Letter, provide a tenant improvement allowance
(“Expansion Space TI Allowance”) for the construction of the Expansion Space
Tenant Improvements of up to $70.00 per rentable square foot of the Expansion
Space which amount shall be reduced by the Lobby Cost (as defined in
Section 5(a) of the Work Letter), (v) all references to “TI Allowance” contained
in the Work Letter shall be deemed to mean the Expansion Space TI Allowance, and
(vi) all references to “Landlord’s Work” and Tenant Improvements contained in
the Work Letter shall be deemed to refer to only the Expansion Space Tenant
Improvements; (e) Tenant shall commence paying Base Rent and Tenant’s Share of
the Building with respect to Operating Expenses upon delivery of the Expansion
Space to Tenant with the Expansion Space Tenant Improvements Substantially
Completed ; and (f) Base Rent for the Expansion Space shall decrease by $0.012
for every $1.00 of Expansion Space TI Allowance that is not disbursed by
Landlord for the Expansion Space Tenant Improvements in the same way that Base
Rent is to be reduced for the original Premises in accordance with the terms of
Section 4(a) up to a maximum reduction of $0.12 per month. Notwithstanding
anything to the contrary contained in this Lease, in the event that Substantial
Completion of the Expansion Space Tenant Improvements has been delayed as a
result of a Tenant Delay, Tenant shall pay to Landlord, within thirty (30) days
of demand therefor, an amount equal to the Base Rent that would have accrued in
connection with the Expansion Space if the Expansion Space Tenant Improvements
had been Substantially Completed on the day they would have been Substantially
Completed but for the Tenant Delay.

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(b) Amended Lease. If: (i) Tenant fails to deliver to Landlord an Expansion
Exercise Notice on or before December 31, 2008, or (ii) after the expiration of
a period of 10 days from the date Landlord delivers to Tenant for execution (in
the event that Tenant timely exercised the Expansion Right) an amendment setting
forth the terms for the rental of the Expansion Space consistent with the terms
of Section 39(a) and including no other additional terms, Tenant fails to
execute and deliver to Landlord the amendment, Tenant shall be deemed to have
waived its right to lease such Expansion Space.

(c) Exceptions. Notwithstanding the above, the Expansion Right shall not be in
effect and may not be exercised by Tenant:

(i) during any period of time that Tenant is in Default under any provision of
the Lease; or

(ii) if Tenant has been in Default under any provision of the Lease 3 or more
times, whether or not the Defaults are cured, during the 12 month period prior
to the date on which Tenant seeks to exercise the Expansion Right.

(d) Termination. The Expansion Right shall terminate and be of no further force
or effect even after Tenant’s due and timely exercise of the Expansion Right,
if, after such exercise, but prior to the commencement date of the lease of such
Expansion Space, (i) Tenant fails to timely cure any default by Tenant under the
Lease; or (ii) Tenant has Defaulted 3 or more times during the period from the
date of the exercise of the Expansion Right to the date of the commencement of
the lease of the Expansion Space, whether or not such Defaults are cured.

(e) Rights Personal. Expansion Rights are personal to Tenant and are not
assignable without Landlord’s consent, which may be granted or withheld in
Landlord’s sole discretion separate and apart from any consent by Landlord to an
assignment of Tenant’s interest in the Lease, except that they may be assigned
in connection with any Permitted Assignment of this Lease.

(f) No Extensions. The period of time within which any Expansion Rights may be
exercised shall not be extended or enlarged by reason of Tenant’s inability to
exercise the Expansion Rights.

40. Right to Extend Term. Tenant shall have the right to extend the Term of the
Lease upon the following terms and conditions:

(a) Extension Rights. Tenant shall, subject to the provisions of this
Section 40, have 2 rights (each, an “Extension Right”) to extend the Term of
this Lease (each, an “Extension Term”), on the same terms and conditions as this
Lease (other than Base Rent). The first Extension Right shall be for 3 years
and, if at the end of the first Extension Term Tenant is then leasing the entire
Building, Tenant shall have the right to further extend the Term for 10 years.
If Tenant is not leasing the entire Building at the end of the first Extension
Term, Tenant shall have no right to elect to extend the Term for the Second
Extension Term. Tenant shall exercise each Extension Right by giving Landlord
written notice of its election to exercise each Extension Right at least 9
months prior, and no earlier than 12 months prior, to the expiration of the Base
Term of the Lease or the expiration of the first Extension Term.

Upon the commencement of any Extension Term, Base Rent shall be payable at the
Market Rate (as defined below). Base Rent shall thereafter be adjusted on each
annual anniversary of the commencement of such Extension Term by a percentage as
determined at the time the Market Rate is determined. As used herein, “Market
Rate” shall mean the then market rental rate as of the commencement date of the
relevant Extension Term, for comparable space in comparable locations, in
projects of comparable quality, in the South San Francisco area, offered for
lease upon terms substantially similar to those set forth in this Lease, as
agreed upon by Landlord and Tenant or as determined in accordance with the
provisions below, but shall in no event be less than the Base Rent payable as of
the date immediately preceding the commencement of such Extension Term.

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If, on or before the date which is 180 days prior to the expiration of the Base
Term of this Lease, or the expiration of the first Extension Term, as applicable
(the “Negotiation Period”), Tenant and Landlord have not agreed upon the Market
Rate and the appropriate rent escalations during the applicable Extension Term
after negotiating in good faith, Tenant shall be deemed to have elected
arbitration as described in Section 40(b), unless prior to expiration of the
Negotiation Period Tenant gives written notice to Landlord that Tenant is
withdrawing its election to exercise its Extension Right.

(b) Arbitration.

(i) Within 10 days of Tenant’s deemed election to arbitrate Market Rate and
escalations, each party shall deliver to the other a proposal containing the
Market Rate and escalations that the submitting party believes to be correct
(“Extension Proposal”). If either party fails to timely submit an Extension
Proposal, the other party’s submitted proposal shall determine the Base Rent and
escalations for the Extension Term. If both parties submit Extension Proposals,
then Landlord and Tenant shall meet within 7 days after delivery of the last
Extension Proposal and make a good faith attempt to mutually appoint a single
Arbitrator (and defined below) to determine the Market Rate and escalations. If
Landlord and Tenant are unable to agree upon a single Arbitrator, then each
shall, by written notice delivered to the other within 10 days after the
meeting, select an Arbitrator. If either party fails to timely give notice of
its selection for an Arbitrator, the other party’s submitted proposal shall
determine the Base Rent for the Extension Term. The 2 Arbitrators so appointed
shall, within 30 days after their appointment attempt to agree upon which of the
submitted proposals is the closest to the Arbitrator’s opinion of Market Rate.
If they agree, then the submitted proposal they agree upon shall be the Market
Rate for the Extension Term. If they are unable to do so agree, within 35 days
after their appointment the two Arbitrators shall appoint a third Arbitrator. If
the 2 Arbitrators so selected cannot agree on the selection of the third
Arbitrator within the time above specified, then either party, on behalf of both
parties, may request such appointment of such third Arbitrator by application to
any state court of general jurisdiction in the jurisdiction in which the
Premises are located, upon 10 days prior written notice to the other party of
such intent. A majority decision of a panel of three Arbitrators upon which of
the submitted proposals is the closest to the arbitrator’s opinion of Market
Rate shall determine the Market Rate.

(ii) The decision of the 3 Arbitrator(s) shall be made within 30 days after the
appointment of the third Arbitrator. The decision of the single Arbitrator shall
be final and binding upon the parties. The joint decision of the two Arbitrators
shall be final and binding upon the parties. The majority decision of a three
Arbitrator panel shall be final and binding upon the parties. Each party shall
pay the fees and expenses of the Arbitrator appointed by or on behalf of such
party and the fees and expenses of the third Arbitrator shall be borne equally
by both parties. If the Market Rate and escalations are not determined by the
first day of the Extension Term, then Tenant shall pay Landlord Base Rent in an
amount equal to the Base Rent in effect immediately prior to the Extension Term
until such determination is made. After the determination of the Market Rate and
escalations, the parties shall make any necessary adjustments to such payments
made by Tenant. Landlord and Tenant shall then execute an amendment recognizing
the Market Rate and escalations for the Extension Term.

(iii) An “Arbitrator” shall be any person appointed by or on behalf of either
party or appointed pursuant to the provisions hereof and: (i) shall be (A) a
member of the American Institute of Real Estate Appraisers with not less than 10
years of experience in the appraisal of improved office and high tech industrial
real estate in the South San Francisco area, or (B) a licensed commercial real
estate broker with not less than 15 years experience representing landlords
and/or tenants in the leasing of high tech or life sciences space in the South
San Francisco area, (ii) devoting substantially all of their time to
professional appraisal or brokerage work, as applicable, at the time of
appointment and (iii) be in all respects impartial and disinterested.

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(c) Rights Personal. Extension Rights are personal to Tenant and the transfer of
any Permitted Assignment and are not assignable to any other party without
Landlord’s consent, which may be granted or withheld in Landlord’s sole
discretion separate and apart from any consent by Landlord to an assignment of
Tenant’s interest in the Lease, except that they may be assigned in connection
with any Permitted Assignment of this Lease.

(d) Exceptions. Notwithstanding anything set forth above to the contrary,
Extension Rights shall not be in effect and Tenant may not exercise any of the
Extension Rights:

(i) during any period of time that Tenant is in Default under any provision of
this Lease; or

(ii) if Tenant has been in Default under any provision of this Lease 3 or more
times, whether or not the Defaults are cured, during the 12 month period
immediately prior to the date that Tenant intends to exercise an Extension
Right, whether or not the Defaults are cured.

(e) No Extensions. The period of time within which any Extension Rights may be
exercised shall not be extended or enlarged by reason of Tenant’s inability to
exercise the Extension Rights.

(f) Termination. The Extension Rights shall terminate and be of no further force
or effect even after Tenant’s due and timely exercise of an Extension Right, if,
after such exercise, but prior to the commencement date of an Extension Term,
(i) Tenant fails to timely cure any default by Tenant under this Lease; or
(ii) Tenant has Defaulted 3 or more times during the period from the date of the
exercise of an Extension Right to the date of the commencement of the Extension
Term, whether or not such Defaults are cured.

41. Roof Equipment. Subject to the provisions of this Lease, during the Term,
Tenant may, at its sole cost, install, maintain, and from time to time replace
antennae on the roof of the Building (collectively, “Roof Equipment”), at no
additional rental expense to Tenant (other than reimbursing Landlord for any
costs reasonably incurred by Landlord in connection with the exercise by Tenant
of any rights granted to Tenant under this Section 41); provided, however, that
(i) Tenant shall obtain Landlord’s prior written approval of the proposed size,
weight and location of the Roof Equipment and method for fastening the same to
the roof, (ii) Tenant shall, at its sole cost, comply with reasonable
requirements imposed by Landlord and all Legal Requirements and the conditions
of any bond or warranty maintained by Landlord on the roof, (iii) Tenant shall
be responsible for paying for any structural upgrades that may be reasonably
required by Landlord in connection with the Roof Equipment, and (iv) Tenant
shall remove, at its expense, at the expiration or earlier termination of this
Lease, any Roof Equipment which Landlord requires to be removed. Landlord shall
have the right supervise any roof penetration. Tenant shall repair any damage to
the Building caused by Tenant’s installation, maintenance, replacement, use or
removal of the Roof Equipment. The Roof Equipment shall remain the property of
Tenant. Landlord shall give Tenant written notice and 30 days to cure such
interference before requiring Tenant to remove any Roof Equipment. Tenant shall
install, use, maintain and repair the Roof Equipment, and use the access areas,
so as not to damage or interfere with the operation of the Building or with the
occupancy or activities of any other tenant of the Building. Tenant shall
protect, defend, indemnify and hold harmless Landlord from and against claims,
damages, liabilities, costs and expenses of every kind and nature, including
attorneys’ fees, incurred by or asserted against Landlord arising out of
Tenant’s installation, maintenance, replacement, use or removal of the Roof
Equipment. Tenant’s right to use the roof as contemplated in this Section 41
shall be non-exclusive until such time as Tenant leases the entire Building.

42. Generator. Subject to the provisions of this Lease, Tenant may request
Landlord to install an emergency generator (a “Generator”) as part of the Tenant
Improvements, in a location agreed upon by Landlord and Tenant, and if such
Generator is installed as part of the Tenant Improvements and paid for out of
the TI Allowance and/or the Additional TI Allowance, the Generator shall be the
property of Landlord. As an alternative, during the Term, Tenant may install in
a location agreed upon by Landlord and Tenant, maintain, and from time to time
replace, a Generator at no additional rental expense to Tenant (other than
reimbursing Landlord for any costs reasonably incurred by Landlord in connection
with

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the exercise by Tenant of any rights granted to Tenant under this Section 42);
provided, however, that (i) Tenant shall, at its sole cost, comply with
reasonable requirements imposed by Landlord and all Legal Requirements, (ii) the
Generator shall be the property of Tenant and Tenant may remove, and shall
remove if Landlord requires the same to be removed, at Tenant’s expense, the
Generator at the expiration or earlier termination of this Lease, (iii) Landlord
shall have the right supervise the installation of the Generator, and
(iv) Tenant shall repair any damage caused by Tenant’s installation,
maintenance, replacement, use or removal of the Generator. Tenant shall protect,
defend, indemnify and hold harmless Landlord from and against claims, damages,
liabilities, costs and expenses of every kind and nature, including attorneys’
fees, incurred by or asserted against Landlord arising out of Tenant’s
installation, maintenance, replacement, use or removal of the Generator.

43. Tenant’s Other Campus.

(a) IT Connection. Tenant has advised Landlord that Tenant desires IT
connectivity between the Premises and Tenant’s other premises located on East
Grand Avenue (“Campus Premises”) and Landlord has agreed to be responsible, at
Landlord’s sole cost and expense, for the initial trenching and backfilling (and
any related permits) reasonably required to be performed on the Project and, if
the City of South San Francisco (“City”) permits such work, across East Grand
Avenue. Tenant shall be responsible, at Tenant’s sole cost and expense, for the
conduit required on the Project to achieve Tenant’s IT connectivity, across East
Grand Avenue and on the property where the Campus Premises is located. Tenant
shall also be responsible, at Tenant’ sole cost and expense, for the trenching
and backfilling required to be performed on the property where the Campus
Premises is located and any and all other costs in connection with Tenant’s IT
connectivity between the Premises and the Campus Premises including, without
limitation, the costs of installing, maintaining, repairing, replacing and
removing the cabling and any related trenching and backfilling. The obligations
of Landlord described in this Section 43(a) are obligations to be performed on
or before the Commencement Date and are not continuing obligations of Landlord
during the Term; provided that nothing in this Section 43 shall be construed to
alter the meaning of the provisions set forth in Section 11 with respect to
interruption of Essential Services.

(b) Street Crossing. Landlord has agreed, at Landlord’s sole cost and expense,
to pay for or reimburse the City if the City requires reimbursement, as
applicable, for reasonable street crossing safety enhancements, reasonably
acceptable to Landlord and Tenant, such as bright paints, crossing signage or a
flashing monument on East Grand Avenue at the crossing between the Building and
the property where the Campus Premises is located. The obligations of Landlord
described in this Section 43(b) are obligations to be performed, on or before
the Commencement Date and are not continuing obligations of Landlord during the
Term.

44. Dog Visitation. Subject to compliance with the Dog Visitation Policy
described on Exhibit G attached hereto, Tenant’s employees may bring dogs into
the Premises. Tenant shall protect, defend, indemnify and hold harmless Landlord
from and against claims, damages, liabilities, costs and expenses of every kind
and nature, including attorneys’ fees, incurred by or asserted against Landlord
arising in connection with the rights granted to Tenant’s employees pursuant to
this Section 44.

45. Intentionally Deleted.

46. Intentionally Deleted.

47. Miscellaneous.

(a) Notices. All notices or other communications between the parties shall be in
writing and shall be deemed duly given upon delivery or refusal to accept
delivery by the addressee thereof if delivered in person, or upon actual receipt
if delivered by reputable overnight guaranty courier, addressed and sent to the
parties at their addresses set forth above. Landlord and Tenant may from time to
time by written notice to the other designate another address for receipt of
future notices.

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(b) Joint and Several Liability. If and when included within the term “Tenant,”
as used in this instrument, there is more than one person or entity, each shall
be jointly and severally liable for the obligations of Tenant.

(c) Financial Information. This Section shall only be applicable during any
period in which Tenant is not publicly traded. Tenant shall furnish Landlord
with true and complete copies of (i) Tenant’s most recent audited annual
financial statements, prepared in accordance with US GAAP, within 90 days of the
end of each of Tenant’s fiscal years during the Term, (ii) Tenant’s most recent
unaudited quarterly financial statements within 45 days of the end of each of
Tenant’s first three fiscal quarters of each of Tenant’s fiscal years during the
Term, prepared in accordance with US GAAP, (iii) at Landlord’s request from time
to time, updated business plans, including cash flow projections and/or pro
forma balance sheets and income statements, all of which shall be treated by
Landlord as confidential information belonging to Tenant, (iv) corporate
brochures and/or profiles prepared by Tenant for prospective investors, and
(v) any other financial information or summaries that Tenant typically provides
to its lenders or shareholders.

(d) Recordation. Neither this Lease nor a memorandum of lease shall be filed by
or on behalf of Tenant in any public record. Landlord may prepare and file, and
upon request by Landlord Tenant will execute, a memorandum of lease.

(e) Interpretation. The normal rule of construction to the effect that any
ambiguities are to be resolved against the drafting party shall not be employed
in the interpretation of this Lease or any exhibits or amendments hereto. Words
of any gender used in this Lease shall be held and construed to include any
other gender, and words in the singular number shall be held to include the
plural, unless the context otherwise requires. The captions inserted in this
Lease are for convenience only and in no way define, limit or otherwise describe
the scope or intent of this Lease, or any provision hereof, or in any way affect
the interpretation of this Lease.

(f) Not Binding Until Executed. The submission by Landlord to Tenant of this
Lease shall have no binding force or effect, shall not constitute an option for
the leasing of the Premises, nor confer any right or impose any obligations upon
either party until execution of this Lease by both parties.

(g) Limitations on Interest. It is expressly the intent of Landlord and Tenant
at all times to comply with applicable law governing the maximum rate or amount
of any interest payable on or in connection with this Lease. If applicable law
is ever judicially interpreted so as to render usurious any interest called for
under this Lease, or contracted for, charged, taken, reserved, or received with
respect to this Lease, then it is Landlord’s and Tenant’s express intent that
all excess amounts theretofore collected by Landlord be credited on the
applicable obligation (or, if the obligation has been or would thereby be paid
in full, refunded to Tenant), and the provisions of this Lease immediately shall
be deemed reformed and the amounts thereafter collectible hereunder reduced,
without the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder.

(h) Choice of Law. Construction and interpretation of this Lease shall be
governed by the internal laws of the state in which the Premises are located,
excluding any principles of conflicts of laws.

(i) Time. Time is of the essence as to the performance of Tenant’s obligations
under this Lease.

(j) Incorporation by Reference. All exhibits and addenda attached hereto are
hereby incorporated into this Lease and made a part hereof. If there is any
conflict between such exhibits or addenda and the terms of this Lease, such
exhibits or addenda shall control, except that this Lease shall control over the
Rules and Regulations.

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(k) Entire Agreement. This Lease, including the exhibits attached hereto,
constitutes the entire agreement between Landlord and Tenant pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements,
understandings, letters of intent, negotiations and discussions, whether oral or
written, of the parties, and there are no warranties, representations or other
agreements, express or implied, made to either party by the other party in
connection with the subject matter hereof except as specifically set forth
herein.

[ Signatures on next page ]

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the day
and year first above written.

 

TENANT:

EXELIXIS, INC.,

a Delaware corporation

By:   /s/ George Scangos Its:   President & Chief Executive Officer

 

LANDLORD:

ARE-SAN FRANCISCO NO. 12, LLC,

a Delaware limited liability company

By:  

ALEXANDRIA REAL ESTATE EQUITIES, L.P., a Delaware limited partnership,

its managing member

 

 

By:  

ARE-QRS CORP.,

a Maryland corporation,

its general partner

 

By:   /s/ Jennifer Pappas Its:   SVP- ARE General Counsel

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EXHIBIT A TO LEASE

DESCRIPTION OF PREMISES

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EXHIBIT B TO LEASE

DESCRIPTION OF PROJECT

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EXHIBIT C TO LEASE

WORK LETTER

THIS WORK LETTER dated September 14, 2007 (this “Work Letter”) is made and
entered into by and between ARE-SAN FRANCISCO NO. 12, LLC, a Delaware limited
liability company (“Landlord”), and EXELIXIS, INC., a Delaware corporation
(“Tenant”), and is attached to and made a part of the Lease dated September 14,
2007 (the “Lease”), by and between Landlord and Tenant. Any initially
capitalized terms used but not defined herein shall have the meanings given them
in the Lease.

1. General Requirements.

(a) Tenant’s Authorized Representative. Tenant designates Frank Karbe, Eric
Meuser and Lupe Rivera (any of such individuals acting alone, “Tenant’s
Representative”) as the only persons authorized to act for Tenant pursuant to
this Work Letter. Landlord shall not be obligated to respond to or act upon any
request, approval, inquiry or other communication (“Communication”) from or on
behalf of Tenant in connection with this Work Letter unless such Communication
is in writing from Tenant’s Representative. Tenant may change either Tenant’s
Representative at any time upon not less than 5 business days advance written
notice to Landlord. Neither Tenant nor Tenant’s Representative shall be
authorized to direct Landlord’s contractors in the performance of Landlord’s
Work (as hereinafter defined), but Landlord shall include in its contracts with
Landlord’s contractors a provision requiring them to keep Tenant’s
Representatives informed on the progress of the Landlord’s Work and to invite
Tenant’s Representatives to all project meetings.

(b) Landlord’s Authorized Representative. Landlord designates Dan Tsang and Greg
Gehlen (either such individual acting alone, “Landlord’s Representative”) as the
only persons authorized to act for Landlord pursuant to this Work Letter. Tenant
shall not be obligated to respond to or act upon any request, approval, inquiry
or other Communication from or on behalf of Landlord in connection with this
Work Letter unless such Communication is in writing from Landlord’s
Representative. Landlord may change either Landlord’s Representative at any time
upon not less than 5 business days advance written notice to Tenant. Landlord’s
Representative shall be the sole persons authorized to direct Landlord’s
contractors in the performance of Landlord’s Work.

(c) Architects, Consultants and Contractors. Landlord and Tenant hereby
acknowledge and agree that: (i) the general contractor for the Building Shell
shall be Whiting Turner and any subcontractors for the Tenant Improvements shall
be selected by Landlord, subject to Tenant’s approval, which approval shall not
be unreasonably withheld, conditioned or delayed; (ii) Dowler Gruman Associates
shall be the architect (the “TI Architect”) for the Tenant Improvements, which
shall include the lobby of the Building; and (iii) the general contractor for
the Tenant Improvements shall be DPR.

(d) Information on Building Shell. Upon the request of Tenant, Landlord shall
from time to time provide information about the projected date of completion of
the Building Shell.

2. Definitions.

(a) Definition of Building Shell, Tenant Improvements and Landlord’s Work. The
term, “Building Shell” shall mean a warm shell including, without limitation,
the following: the systems for the foundation, structural steel including any
special reinforcement required in connection with Tenant’s server room and/or
fire proof condensed storage rooms, curtain wall, roof, roof screen, any
structural or system upgrades that Landlord in its sole and absolute discretion
elects to make in order to make the Building more readily convertible to use as
laboratory space (including without limitation plumbing upgrades), restrooms,
elevators and elevator shafts, penthouse structures, mechanical yards, equipment
pads, HVAC, mechanical, electrical, plumbing and life safety systems, and
related parking and landscaping, and expressly excluding all hard and soft costs
for finishes and any other improvement shown on the Construction Drawings that
is not required for the issuance of a certificate of occupancy.

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The term “Tenant Improvements” shall mean all improvements to the Project of a
fixed and permanent nature as shown on the Construction Drawings approved by
both parties (including the lobby of the Building) other than those improvements
included within the definition of Building Shell. As used herein, “Landlord’s
Work” shall mean collectively the work of construction of (i) a Building Shell
and (ii) the Tenant Improvements, including without limitation, the lobby of the
Building. Other than its obligation to perform Landlord’s Work, Landlord shall
not have any obligation whatsoever with respect to the finishing of the Premises
for Tenant’s use and occupancy.

(b) Tenant’s Space Plans. If the schematic drawings and outline specifications
(the “Design Drawings”) detailing Tenant’s requirements for the Tenant
Improvements, including, without limitation, the lobby of the Building, have not
been agreed upon by the parties by the date of execution of this Lease, Landlord
and Tenant shall respond to one another and the TI Architect with any written
objections, questions or comments with regard to the Design Drawings within 2
business days of receipt of any written objections, questions or comments until
both parties have approved the Design Drawings.

(c) Working Drawings. Not later than 45 days following the approval of the
Design Drawings, Landlord shall cause the TI Architect to prepare and deliver to
Tenant for review and comment construction plans, specifications and drawings
for the Tenant Improvements, including, without limitation, the lobby of the
Building (“Construction Drawings”), which Construction Drawings shall be
prepared substantially in accordance with the Design Drawings. Tenant shall be
solely responsible for ensuring that the Construction Drawings reflect Tenant’s
requirements for the Tenant Improvements, including, without limitation, the
lobby of the Building. Tenant shall deliver its written comments on the
Construction Drawings to Landlord not later than 10 business days after Tenant’s
receipt of the same; provided, however, that Tenant may not disapprove any
matter that is consistent with the Design Drawings without submitting a Change
Request. Landlord and the TI Architect shall consider all such comments in good
faith and shall, within 10 business days after receipt, notify Tenant how
Landlord proposes to respond to such comments. Any disputes in connection with
such comments shall be resolved in accordance with Section 2(d) hereof. Provided
that the design reflected in the Construction Drawings is consistent with the
Design Drawings, Tenant shall approve the Construction Drawings submitted by
Landlord, unless Tenant submits a Change Request. Once approved by Tenant,
subject to the provisions of Section 4 below, Landlord shall not materially
modify the Construction Drawings except as may be reasonably required in
connection with the issuance of the TI Permit (as defined in Section 3(a)
below).

(d) Approval and Completion. It is hereby acknowledged by Landlord and Tenant
that the Construction Drawings must be completed and approved not later than
October 15, 2007, in order for the Landlord’s Work to be Substantially Complete
by the Target Completion Date (as defined in the Lease). Upon any dispute
regarding the design of the Tenant Improvements, which is not settled within 10
business days after notice of such dispute is delivered by one party to the
other, Tenant may make the final decision regarding the design of the Tenant
Improvements, provided (i) Tenant acts reasonably and such final decision is
either consistent with or a compromise between Landlord’s and Tenant’s positions
with respect to such dispute, and (ii) Tenant’s decision will not adversely
affect the base Building, structural components of the Building or any Building
systems. Any changes to the Construction Drawings following Landlord’s and
Tenant’s approval of same requested by Tenant shall be processed as provided in
Section 4 hereof.

3. Performance of Landlord’s Work.

(a) Commencement and Permitting. Landlord shall commence and complete the
Building Shell in a diligent manner and shall commence construction of the
Tenant Improvements, including without limitation, the lobby of the Building
upon obtaining a building permit (the “TI Permit”) authorizing the construction
of the Tenant Improvements consistent with the Construction Drawings approved by
Tenant. If any Governmental Authority having jurisdiction over the construction
of Landlord’s Work or any portion thereof shall impose terms or conditions upon
the construction thereof that: (i) are inconsistent with Landlord’s obligations
hereunder, (ii) increase the cost of constructing Landlord’s Work, or (iii) will
materially delay the construction of Landlord’s Work, Landlord and Tenant shall
reasonably and in good faith seek means by which to mitigate or eliminate any
such adverse terms and conditions, at no additional out of pocket cost to Tenant
if it relates to the Building Shell and Excess Rent if it relates to the Tenant
Improvements and exceeds the TI Allowance and Additional TI Allowance.

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(b) Substantial Completion of Landlord’s Work. On or before the Target
Completion Date (subject to Tenant Delays and Force-Majeure Delays), Landlord
shall substantially complete, or cause to be substantially completed, Landlord’s
Work. The terms “Substantial Completion” or “Substantially Complete” shall mean
that Landlord’s Work has been completed in compliance with the Construction
Drawings approved by Tenant in accordance with this Work Letter, in compliance
with applicable Legal Requirements, in a good and workmanlike manner, in
accordance with the TI Permit subject to Minor Variations and normal “punch
list” items of a non-material nature that do not interfere with the use of the
Premises, and a temporary certificate of occupancy has been issued. Upon
Substantial Completion of Landlord’s Work, Landlord shall require the TI
Architect and the general contractor to execute and deliver, for the benefit of
Tenant and Landlord, a Certificate of Substantial Completion in the form of the
American Institute of Architects (“AIA”) document G704. For purposes of this
Work Letter, “Minor Variations” shall mean any modifications reasonably
required: (i) to comply with all applicable Legal Requirements and/or to obtain
or to comply with any required permit (including the TI Permit); (ii) to comply
with any request by Tenant for modifications to Landlord’s Work; (iii) to
comport with good design, engineering, and construction practices that are not
material; or (iv) to make reasonable adjustments for field deviations or
conditions encountered during the construction of Landlord’s Work.

(c) Selection of Materials. Where more than one type of material or structure is
indicated on the Construction Drawings approved by Landlord and Tenant, the
option will be selected at Landlord’s reasonable discretion; provided that they
shall be of good quality and new, unless otherwise expressly instructed by the
Construction Drawings. As to all building materials and equipment that Landlord
is obligated to supply under this Work Letter, Landlord shall select the
manufacturer thereof in its sole and absolute subjective discretion, unless
otherwise specified in the Construction Drawings.

(d) Delivery of the Premises. When Landlord’s Work is Substantially Complete,
subject to the remaining terms and provisions of this Section 3(d), Tenant shall
accept the Premises, subject to Landlord’s obligation to complete the punch list
items. Tenant’s taking possession and acceptance of the Premises shall not
constitute a waiver of: (i) any warranty with respect to workmanship (including
installation of equipment) or material (exclusive of equipment provided directly
by manufacturers), (ii) any non-compliance of Landlord’s Work with applicable
Legal Requirements, or (iii) any claim that Landlord’s Work was not completed
substantially in accordance with the Construction Drawings (subject to Minor
Variations and such other changes as are permitted hereunder) (collectively, a
“Construction Defect”). Tenant shall have one year after Substantial Completion
within which to notify Landlord of any such Construction Defect discovered by
Tenant, and Landlord shall use reasonable efforts to remedy or cause the
responsible contractor to remedy any such Construction Defect within 30 days
after receipt of written notice from Tenant.

Tenant shall be entitled to receive the benefit of all construction warranties
and manufacturer’s equipment warranties relating to equipment installed in the
Premises and Landlord shall cooperate with Tenant in the enforcement of any such
warranties. If requested by Tenant, Landlord shall attempt to obtain extended
warranties from manufacturers and suppliers of such equipment, but the cost of
any such extended warranties shall be borne solely out of the TI Fund. Landlord
shall promptly undertake and complete, or cause to be completed, all punch list
items in good and workmanlike manner in compliance with applicable Legal
Requirements promptly after the Commencement Date.

(e) Delay. Except as otherwise provided in the Lease, Delivery of the Premises
shall occur, and the Term shall commence, when Landlord’s Work has been
Substantially Completed. To the extent that Substantial Completion of Landlord’s
Work shall have been actually delayed by any one or more of the following causes
(“Tenant Delay”), upon Substantial Completion of the Landlord’s Work, Tenant
shall pay to Landlord the Tenant Delay Rent in accordance with the provisions of
Section 4 of the Lease:

(i) Tenant’s Representative was not available during normal business hours to
give or receive any Communication or to take any other action required to be
taken by Tenant hereunder;

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(ii) Tenant’s request for Change Requests (as defined in Section 4(a) below)
whether or not any such Change Requests are actually performed;

(iii) Construction of any Change Requests;

(iv) Tenant’s request for materials, finishes or installations requiring
unusually long lead times; provided that Landlord informed Tenant in writing at
the time of Tenant’s request that the requested items would require unusually
long lead times;

(v) Tenant’s delay in reviewing, revising or approving plans and specifications
beyond the periods set forth herein;

(vi) Tenant’s delay in providing information critical to the normal progression
of the Project. Tenant shall provide such information as soon as reasonably
possible, but in no event longer than one week after receipt of any request for
such information from Landlord;

(vii) Any other act or omission by Tenant; or

(ix) The Construction Drawings have not been approved by both parties and the
City of South San Francisco on or before October 17, 2007, provided that
Landlord has used reasonable diligence in submitting them to Tenant for approval
in accordance with its obligations under this Work Letter.

If Delivery is delayed for any of the foregoing reasons, then Landlord shall
cause the TI Architect to certify the date on which the Tenant Improvements
would have been Substantially Completed but for such Tenant Delay.

4. Changes. Any changes requested by Tenant to the Tenant Improvements,
including without limitation, the lobby of the Building after the delivery and
approval by Landlord of the Design Drawings shall be requested and instituted in
accordance with the provisions of this Section 4 and shall be subject to the
written approval of Landlord and the TI Architect, such approval not to be
unreasonably withheld, conditioned or delayed.

(a) Tenant’s Request For Changes. If Tenant shall request changes to the Tenant
Improvements (“Changes”), Tenant shall request such Changes by notifying
Landlord 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 such Change. Such Change Request must be signed by Tenant’s
Representative. Landlord shall, before proceeding with any Change, use
commercially reasonable efforts to respond to Tenant as soon as is reasonably
possible with an estimate of: (i) the time it will take, and (ii) the
architectural and engineering fees and costs that will be incurred, to analyze
such Change Request. Landlord shall thereafter submit to Tenant in writing,
within 5 business days of receipt of the Change Request (or such longer period
of time as is reasonably required depending on the extent of the Change
Request), an analysis of the additional cost or savings involved, including,
without limitation, architectural and engineering costs and the period of time,
if any, that the Change will extend the date on which Landlord’s Work will be
Substantially Complete. Any such delay in the completion of Landlord’s Work
caused by a Change, including any suspension of Landlord’s Work while any such
Change is being evaluated and/or designed, shall be Tenant Delay.

(b) Implementation of Changes. If Tenant: (i) approves in writing the cost or
savings and the estimated extension in the time for completion of Landlord’s
Work, if any, Landlord shall cause the approved Change to be instituted.
Notwithstanding any approval or disapproval by Tenant of any estimate of the
delay caused by such proposed Change, the TI Architect’s determination of the
amount of Tenant Delay in connection with such Change shall be final and binding
on Landlord and Tenant.

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5. Costs.

(a) Budget For Tenant Improvements; Allocation of Lobby Cost. Before the
commencement of construction of the Tenant Improvements including, without
limitation, the lobby of the Building, Landlord shall obtain a detailed
breakdown by trade of the costs incurred or that will be incurred in connection
with the design and construction of the Tenant Improvements including, without
limitation, the lobby of the Building and deliver the breakdown to Tenant for
approval, which approval shall not be unreasonably withheld, conditioned or
delayed (once approved by Tenant, the “Budget”). The Budget shall be based upon
the Construction Drawings approved by Tenant. Notwithstanding anything to the
contrary contained herein, 1/2 of the all of the costs in connection with the
design and construction of the lobby of the Building (“Lobby Cost”) shall be
charged against the TI Allowance and/or Additional TI Allowance and the other
1/2 shall be borne by Landlord; provided, however, that if (i) Tenant elects to
lease the Expansion Space, then the remaining half of the Lobby Cost borne by
Landlord shall be charged against the Expansion Space TI Allowance, and (ii) if
the Lobby Cost, including, without limitation, the costs of the standard of
finishes selected by Tenant for the lobby exceeds the cost, on a per square foot
basis, that would be incurred in constructing a lobby of the quality and finish
comparable to the lobbies located in the buildings at the following addresses:
681 Gateway Boulevard, 901 Gateway Boulevard and 210 East Grand Avenue, South
San Francisco (the “Comparable Lobby Cost”), the entire difference in cost
between the Lobby Cost and the Comparable Lobby Cost shall be added to the cost
of the Landlord’s Work and subject to the Base Rent adjustment provisions of
Section 4(b)(ii) of the Lease.

(b) TI Allowance. Landlord shall provide a tenant improvement allowance (the “TI
Allowance”) of $70 per rentable square foot of the Premises. The TI Allowance
shall be disbursed in accordance with this Work Letter. In addition, Landlord
shall provide an additional tenant improvement allowance (the “Additional TI
Allowance”) of $10 per rentable square foot of the Premises and the same shall
be disbursed in accordance with this Work Letter in the same manner that the TI
Allowance is disbursed and, to the extent that any portion of the same is
expended, Base Rent shall be adjusted as provided for in Section 4(b) of the
Lease.

Except as otherwise provided in Section 4(a) of the Lease, Tenant shall have no
right to the use or benefit of any portion of the TI Allowance not required for
the construction of (i) the Tenant Improvements including the lobby of the
Building described in the Construction Drawings approved pursuant to
Section 2(d) or (ii) any Changes pursuant to Section 4.

Tenant shall have no right to the use or benefit of any portion of the
Additional TI Allowance not required for the construction of (i) the Tenant
Improvements including the lobby of the Building described in the Construction
Drawings approved pursuant to Section 2(d) or (ii) any Changes pursuant to
Section 4.

(c) Costs Includable in TI Fund. The TI Fund shall be used solely for the
payment of design, permits and construction costs in connection with the
construction of the Tenant Improvements including the lobby of the Building, and
further including, without limitation, the cost of electrical power and other
utilities used in connection with the construction of the Tenant Improvements,
the cost of preparing the Design Drawings and the Construction Drawings, all
costs set forth in the Budget, including Landlord’s out-of-pocket expenses,
costs resulting from Tenant Delays and the cost of Changes (collectively, “TI
Costs”). Notwithstanding anything to the contrary contained herein, the TI Fund
shall not be used to purchase any furniture, personal property or other
non-Building system materials or equipment, including, but not limited to,
Tenant’s voice or data cabling, non-ducted biological safety cabinets and other
scientific equipment not incorporated into the Tenant Improvements.

(d) Excess TI Costs. If the TI Costs incurred by Landlord exceed the TI
Allowance and Additional TI Allowance (“Excess TI Costs”), then, following the
Substantial Completion of the Landlord’s Work and commencement of the Term, Rent
shall be adjusted in accordance with Section 4 of the Lease. During any period
in which Excess TI Costs are being incurred by Landlord, Landlord shall present
to

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Tenant monthly invoices, together with documentation supporting such invoices,
describing in detail the amount of the Excess TI Costs incurred. The TI
Allowance, Additional TI Allowance and Excess TI Costs are herein referred to as
the “TI Fund.” Notwithstanding anything to the contrary contained in this Lease,
the term Excess TI Costs shall not include costs or expenses incurred as a
result of Landlord’s breach of its obligations under this Lease or under
Landlord’s contracts with contractors or architects retained to perform
Landlord’s Work.

6. Tenant Access.

(a) Tenant’s Access Rights. Landlord hereby agrees to permit Tenant access, at
Tenant’s sole risk and expense, to the Premises (i) 30 days prior to the
Commencement Date to perform any work (“Tenant’s Work”) required by Tenant other
than Landlord’s Work, provided that such Tenant’s Work is coordinated with the
TI Architect and the general contractor, and complies with the Lease and all
other reasonable restrictions and conditions Landlord may impose, and (ii) prior
to the completion of Landlord’s Work, to inspect and observe work in process;
all such access shall be during normal business hours or at such other times as
are reasonably designated by Landlord. Notwithstanding the foregoing, Tenant
shall have no right to enter onto the Premises or the Project unless and until
Tenant shall deliver to Landlord evidence reasonably satisfactory to Landlord
demonstrating that any insurance reasonably required by Landlord in connection
with such pre-commencement access is in full force and effect. Any entry by
Tenant shall comply with all established safety practices of Landlord’s
contractor and Landlord until completion of Landlord’s Work and acceptance
thereof by Tenant.

(b) No Interference. Neither Tenant nor any Tenant Party (as defined in the
Lease) shall interfere with the performance of Landlord’s Work, nor with any
inspections or issuance of final approvals by applicable Governmental
Authorities, and upon any such interference, Landlord shall have the right to
exclude Tenant and any Tenant Party from the Premises and the Project until
Substantial Completion of Landlord’s Work.

(c) No Acceptance of Premises. The fact that Tenant may, with Landlord’s
consent, enter into the Project prior to the date Landlord’s Work is
Substantially Complete for the purpose of performing Tenant’s Work shall not be
deemed an acceptance by Tenant of possession of the Premises, but in such event
Tenant shall defend with counsel reasonably acceptable by Landlord, indemnify
and hold Landlord harmless from and against any loss of or damage to Tenant’s
property, completed work, fixtures, equipment, materials or merchandise, and
from liability for death of, or injury to, any person, caused by the act or
omission of Tenant or any Tenant Party.

7. Miscellaneous.

(a) Consents. Whenever consent or approval of either party is required under
this Work Letter, that party shall not unreasonably withhold, condition or delay
such consent or approval, unless expressly set forth herein to the contrary.

(b) Modification. No modification, waiver or amendment of this Work Letter or of
any of its conditions or provisions shall be binding upon Landlord or Tenant
unless in writing signed by Landlord and Tenant.

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

 

TENANT:     EXELIXIS, INC.,     a Delaware corporation       By:           Its:
    LANDLORD:     ARE-SAN FRANCISCO NO. 12, LLC,     a Delaware limited
liability company       By:  

ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

a Delaware limited partnership,

its managing member

 

By:  

ARE-QRS CORP.,

a Maryland corporation,

its general partner

 

By:     Its:    

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EXHIBIT D TO LEASE

ACKNOWLEDGMENT OF COMMENCEMENT DATE

This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this              day of
            ,                 , between ARE-SAN FRANCISCO NO. 12, LLC, a
Delaware limited liability company (“Landlord”), and EXELIXIS, INC., a Delaware
corporation (“Tenant”), and is attached to and made a part of the Lease dated
                ,                 (the “Lease”), by and between Landlord and
Tenant. Any initially capitalized terms used but not defined herein shall have
the meanings given them in the Lease.

Landlord and Tenant hereby acknowledge and agree, for all purposes of the Lease,
that the Commencement Date of the Base Term of the Lease is                 ,
             and the termination date of the Base Term of the Lease shall be
midnight on             ,             . In case of a conflict between the terms
of the Lease and the terms of this Acknowledgment of Commencement Date, this
Acknowledgment of Commencement Date shall control for all purposes.

IN WITNESS WHEREOF, Landlord and Tenant have executed this ACKNOWLEDGMENT OF
COMMENCEMENT DATE to be effective on the date first above written.

 

TENANT:     EXELIXIS, INC.,     a Delaware corporation       By:           Its:
    LANDLORD:     ARE-SAN FRANCISCO NO. 12, LLC,     a Delaware limited
liability company       By:  

ALEXANDRIA REAL ESTATE EQUITIES, L.P.,

a Delaware limited partnership,

its managing member

 

By:  

ARE-QRS CORP.,

a Maryland corporation,

its general partner

 

By:     Its:    

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EXHIBIT E TO LEASE

Rules and Regulations

1. The sidewalk, entries, and driveways of the Project shall not be obstructed
by Tenant, or any Tenant Party, or used by them for any purpose other than
ingress and egress to and from the Premises. Tenant may unpack boxes and crates
on the loading dock.

2. Other than as expressly permitted by the Lease, or consented to in writing by
Landlord, Tenant shall not place any objects, in the parking areas, landscaped
areas or other areas outside of its Premises, or on the roof of the Project;
provided that Tenant may host an outdoor event not more than once per month in
locations reasonably acceptable to Landlord and, on the day of the applicable
outdoor event, place such objects as are reasonably necessary to permit Tenant
to host such event. In no event shall such outdoor events interfere with the use
and operation of the Project including, without limitation access and parking
for other parties.

3. Except for animals assisting the disabled, or present in compliance with Dog
Visitation Policy attached as Exhibit G, no animals shall be allowed in the
offices, halls, or corridors in the Project.

4. Tenant shall not disturb the occupants of the Project or adjoining buildings
by the use of any radio or musical instrument or by the making of loud or
improper noises.

5. Tenant shall not install or operate any steam or gas engine or boiler, or
other mechanical apparatus in the Premises, except as specifically approved in
the Lease. The use of oil, gas or inflammable liquids for heating, lighting or
any other purpose is expressly prohibited. Explosives or other articles deemed
extra hazardous shall not be brought into the Project.

6. Parking any type of recreational vehicles is specifically prohibited on or
about the Project. Except for the overnight or more extended parking of
operative vehicles by Tenant’s employees traveling on business, no vehicle of
any type shall be stored in the parking areas at any time. In the event that a
vehicle is disabled, it shall be removed within 48 hours. There shall be no “For
Sale” or other advertising signs on or about any parked vehicle. All vehicles
shall be parked in the designated parking areas in conformity with all signs and
other markings. All parking will be open parking, and no reserved parking,
numbering or lettering of individual spaces will be permitted except as
specified by Landlord.

7. Landlord reserves the right to exclude or expel from the Project any person
who, in the judgment of Landlord, is intoxicated or under the influence of
liquor or drugs or who shall in any manner do any act in violation of the Rules
and Regulations of the Project.

8. Tenant shall not cause any unnecessary labor by reason of Tenant’s
carelessness or indifference in the preservation of good order and cleanliness.
Landlord shall not be responsible to Tenant for any damage done to the effects
of Tenant by the janitors or any other employee or person.

9. Tenant shall give Landlord prompt notice of any defects in the water, lawn
sprinkler, sewage, gas pipes, electrical lights and fixtures, heating apparatus,
or any other service equipment affecting the Premises of which Tenant becomes
aware.

10. Tenant shall not permit storage outside the Premises, dumping of waste or
refuse, or the placement of any harmful materials in any drainage system or
sanitary system in or about the Premises.

11. All moveable trash receptacles provided by the trash disposal firm for the
Premises must be kept in the trash enclosure areas, if any, provided for that
purpose.

12. No auction, public or private, will be permitted on the Premises or the
Project.

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13. No awnings shall be placed over the windows in the Premises except with the
prior written consent of Landlord.

14. The Premises shall not be used for lodging, sleeping or cooking or for any
immoral or illegal purposes or for any purpose other than that specified in the
Lease; provided that Tenant may host an outdoor event not more than once per
month in a location reasonably acceptable to Landlord which involve cooking, and
Tenant may use microwave ovens, coffee makers and similar devices typically used
in office kitchens. No gaming devices shall be operated in the Premises.

15. Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account the
capacity of the electrical wiring in the Project and the Premises and the needs
of other tenants, if any, and shall not use more than such safe capacity.
Landlord’s consent to the installation of electric equipment shall not relieve
Tenant from the obligation not to use more electricity than such safe capacity.

16. Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant’s ordinary use of
the Premises and shall keep all such machinery free of vibration, noise and air
waves which may be transmitted beyond the Premises.

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EXHIBIT F TO LEASE

TENANT’S PERSONAL PROPERTY

None.

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EXHIBIT G TO LEASE

DOG VISITATION POLICY

Purpose

On occasion, an employee of Tenant may need a temporary solution to ensure their
dog is appropriately cared for during working hours. This policy does not apply
to the use of service animals at work, and appropriate arrangements will be
determined in such cases.

Dog Visit Policy

Bringing a dog to work is a privilege and requires complete responsibility on
the part of the person bringing the do to work (each, an “Owner”). Owners must
recognize that (1) not all employees and/or visitors and/or other occupants of
the Project appreciate dogs in the office, and (2) certain employees and/or
visitors and/or other occupants of the Project may have intolerance to dogs,
such as allergy, fear of, or phobia. Owners are required to follow these rules
when bringing a dog to the Project and such other rules as may be implemented by
Landlord and/or Tenant from time to time:

Prerequisites for a Dog to be at the Project

 

  •  

Properly licensed and vaccinated with proof of such license and vaccination
available upon request.

 

  •  

Free from contagious illness and internal and external parasites including
fleas.

 

  •  

Exhibits appropriate office behavior: Walks beside you on a leash; reliably
housebroken; remains calm when left alone; well socialized to people, places,
sounds, and objects; enjoys being around people.

 

  •  

Does not exhibit inappropriate office behavior (including but not limited to):
aggression, growling, barking, chasing, biting, nipping, over-exuberance,
dominance, territorialism, running away, having accidents (i.e., urinating
indoors), chewing or damaging office furniture or equipment, whining, howling,
or otherwise interfering with an employee’s ability to do their work.

Dog Boundaries at Work

 

  •  

Dogs must be on a leash or confined to a crate while entering and leaving the
Building.

 

  •  

Dogs must not be in or near the laboratories, employee cafeteria, break rooms,
bathrooms, or conference rooms.

 

  •  

Dogs must not be taken to relieve themselves near entrances to buildings, and
dog owners are responsible for removing any waste generated at the Project.
Owners must take dogs to grassy, dirt or gravel areas behind buildings, followed
by the immediate clean-up and disposal of the waste.

Expectations of Dog Owners

 

  •  

Owners must supervise their dogs at all times, or appoint a willing and able
watcher.

 

  •  

Owners must clean up after their dogs and bring supplies such as pet waste bags.

 

  •  

Owners should maintain adequate liability insurance coverage against dog mishaps
and take full responsibility.