Exhibit 10.45

 

SUBLEASE

 

BY AND BETWEEN

 

E. I. DU PONT DE NEMOURS AND COMPANY

 

AND

 

INCYTE CORPORATION

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TABLE OF CONTENTS

 

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1.

  

DATE OF SUBLEASE; PARTIES

   1

2.

  

SUBLEASED PREMISES

   1

3.

  

TERM

   2

4.

  

RENT

   3

5.

  

USE OF PREMISES

   5

6.

  

UTILITIES AND SERVICES

   15

7.

  

SIGNS

   17

8.

  

ASSIGNMENT AND SUBLETTING

   17

9.

  

CONDITION OF PREMISES

   18

10.

  

ALTERATIONS

   18

11.

  

MAINTENANCE AND REPAIRS

   20

12.

  

LIABILITY

   20

13.

  

ACCESS TO SUBLEASED PREMISES

   21

14.

  

CASUALTY

   21

15.

  

ADDITIONAL INDEMNITY

   22

16.

  

EVENTS OF DEFAULT AND REMEDIES

   23

17.

  

EMINENT DOMAIN

   24

18.

  

PRIME LEASE; SUBORDINATION AND NON-DISTURBANCE.

   24

19.

  

WAIVER OF LANDLORD’S LIEN

   26

20.

  

SURRENDER

   26

21.

  

INSURANCE

   26

22.

  

QUIET ENJOYMENT

   27

23.

  

MAINTENANCE OF RECORDS/INSPECTION

   27

24.

  

JURISDICTION; FORUM; ETC

   28

25.

  

NOTICES

   28

26.

  

CORPORATE COVENANTS AND REPRESENTATIONS

   29

27.

  

INTEGRATION

   29

28.

  

NO PARTNERSHIP

   29

29.

  

GOVERNING LAW

   29

30.

  

HEADINGS

   29

 

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TABLE OF CONTENTS

(continued)

 

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31.

  

SEVERABILITY

   29

32.

  

SUCCESSION

   29

33.

  

COUNTERPARTS

   29

34.

  

INTERPRETATION

   29

35.

  

BROKERS

   30

36.

  

FORCE MAJEURE

   30

37.

  

SURVIVAL

   30

38.

  

CONFIDENTIALITY

   30

39.

  

DATA TRANSFER AND PRIVACY

   31

40.

  

NON-SOLICITATION OF SUBLANDLORD EMPLOYEES

   31

 

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EXHIBITS

 

Exhibit “A”

  —    

Diagram of SUBLEASED PREMISES

Exhibit “B”

  —    

Rent Schedule

Exhibit “C”

  —    

Permitted Use Restrictions

Exhibit “D”

  —    

DuPont Corporate Policies, Standards and Guidelines

Exhibit “E”

  —    

Initial SUBTENANT Alterations

Exhibit “F”

  —    

Shared Utilities and Ancillary Rent Services

Exhibit “G”

  —     Decontamination Procedures( i.e. Annex G; Recommended Microbiological
Decontamination Procedure (NSF Standard #49) And Chemical Fume Hood
Decontamination Procedure

Exhibit “H”

     

Wilmington Area Safety, Health and Environmental Procedures

Exhibit “I”

     

Experimental Station Site Conditions and Procedures

Exhibit “J”

     

Air Permit

Exhibit “K”

     

Demand Services

Exhibit “L”

     

Public Affairs and Related Issues

 

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SUBLEASE – EXPERIMENTAL STATION

 

SUBLEASE AGREEMENT

 

1. DATE OF SUBLEASE; PARTIES. THIS SUBLEASE AGREEMENT (this “Sublease”) is made
this 16th day of June, 2003, by and between E. I. DU PONT DE NEMOURS AND
COMPANY, a Delaware corporation (“SUBLANDLORD”) or (“DuPont”), and INCYTE
CORPORATION, a Delaware corporation (“SUBTENANT”).

 

2. SUBLEASED PREMISES.

 

(a) Subleased Premises. SUBLANDLORD hereby subleases to SUBTENANT, and SUBTENANT
hereby rents from SUBLANDLORD, a portion of Building E-400 and a portion of
Building E-336, which is more particularly shown on Exhibit “A” attached hereto
and made a part hereof, including loading areas, lobbies and hallways
(collectively, the “SUBLEASED PREMISES”). The Building Space is located within
SUBLANDLORD’s Experimental Station situated at Route 141 and Powder Mill Road in
the County of New Castle, State of Delaware (the “Shared Site”). SUBLANDLORD and
SUBTENANT have agreed that the space to be occupied by SUBTENANT in Building
E-336 contains 56,906 rentable square feet and the space to be occupied by
SUBTENANT in Building E-400 contains 30,387 rentable square feet. The subleasing
of the SUBLEASED PREMISES includes (i) all laboratory hoods and work bench
stations (and appurtenances to the foregoing, but excluding detachable biosafety
cabinets), if any, located therein and all other property located therein which,
by reason of intention, annexation, unity, attachment or adaptation for
particular use, may fairly be deemed fixtures under applicable law (“Fixtures”),
(ii) the right to use the parking spaces shown on Exhibit “A” and those in
Overflow Parking Lot 1 (collectively, the “Parking Spaces”), and (iii) the
right, in common with SUBLANDLORD and other occupants of the Shared Site, to use
internal roads, driveways, sidewalks and other appurtenances of the Shared Site
commonly used by the occupants of the Shared Site, including without limitation
the Cafeteria located in Building E-444 (collectively, “Common Areas”).
SUBTENANT acknowledges that, except as expressly set forth in this Sublease,
SUBTENANT is not relying on any statement or representation that has been made
by SUBLANDLORD or any of SUBLANDLORD’s employees, agents, attorneys or
representatives concerning the condition of the SUBLEASED PREMISES (whether
relating to physical conditions, operation, performance or legal matters).

 

(b) Right of First Offer for Additional Space. If, during the Term (defined in
subparagraph 3(a) below), SUBLANDLORD shall desire to make available to one its
own business groups or to an affiliate any or all of the additional space in the
Building E-400 or Building E-336, which additional space is identified as year
2004 and year 2005 on the Exhibit “A” attached hereto (the “Additional Space”),
SUBLANDLORD shall first notify SUBTENANT in writing of such desire and identify
the relevant portion of the Additional Space. In such event, SUBLANDLORD hereby
gives and grants to SUBTENANT the right of first offer to sublease the portion
of the Additional Space identified in SUBLANDLORD’S notice (the “ROFO Space”).
If SUBTENANT wishes to exercise such right, SUBTENANT shall notify SUBLANDLORD
of its intent to sublease within 10 business days following SUBTENANT’s receipt
of SUBLANDLORD’s notice. If SUBTENANT does exercise such right,

 

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SUBLANDLORD shall be obligated to sublease the ROFO Space to SUBTENANT on the
date specified in SUBTENANT’s exercise notice, which date (the “ROFO Delivery
Date”) shall be no later than 20 business days after the date of SUBTENANT’s
exercise notice. Effective on the ROFO Delivery Date, (i) the ROFO Space shall
be added to and become a part of the SUBLEASED PREMISES, (ii) the
representations and warranties of SUBLANDLORD in Paragraph 9 below shall be
deemed to be re-made with respect to the ROFO Space, and (iii) the base rent
shall be the same on a rentable square foot basis as is then charged for the
balance of the SUBLEASED PREMISES. Should SUBTENANT fail to notify SUBLANDLORD
within the prescribed 10 business day period, SUBLANDLORD shall be free to
sublease the ROFO Space, free and clear of all restrictions otherwise imposed by
this subparagraph 2(b), but SUBTENANT’s rights with respect to the remaining
portion of the Additional Space shall continue. Notwithstanding that SUBTENANT
should fail or refuse to exercise its right of first offer, if the ROFO Space is
not subleased or used by SUBLANDLORD within three (3) months after SUBLANDLORD’s
notice, then SUBTENANT’s right of first offer and provisions of this
subparagraph 2(b) shall be reinstated.

 

(c) Right of First Refusal for Additional Space. If, during the Term,
SUBLANDLORD shall receive, and wish to accept, a bona fide offer for the
sublease of any or all of the Additional Space, SUBLANDLORD shall first notify
SUBTENANT in writing of such offer and provide to SUBTENANT a copy of the offer.
In such event, SUBLANDLORD hereby gives and grants unto SUBTENANT the right of
first refusal to sublease the portion of the Additional Space identified in
SUBLANDLORD’S notice (the “ROFR Space”). If SUBTENANT wishes to exercise such
right, SUBTENANT shall notify SUBLANDLORD of its intent to sublease within 10
business days following SUBTENANT’s receipt of SUBLANDLORD’s notice. If
SUBTENANT does exercise such right, SUBLANDLORD shall be obligated to sublease
the ROFR Space to SUBTENANT on the date specified in SUBTENANT’s exercise
notice, which date (the “ROFR Delivery Date”) shall be no later than 20 business
days after the date of SUBTENANT’s exercise notice. Effective on the ROFR
Delivery Date, (i) the ROFR Space shall be added to and become a part of the
SUBLEASED PREMISES, (ii) the representations and warranties of SUBLANDLORD in
Paragraph 9 below shall be deemed to be re-made with respect to the ROFR Space,
and (iii) the base rent shall be the same on a rentable square foot basis as is
then charged for the balance of the SUBLEASED PREMISES. Should SUBTENANT fail to
notify SUBLANDLORD within the prescribed 10 business day period, SUBLANDLORD
shall be free to sublease the ROFR Space, free and clear of all restrictions
otherwise imposed by this subparagraph 2(c), but SUBTENANT’s rights with respect
to the remaining portion of the Additional Space shall continue. Notwithstanding
that SUBTENANT should fail or refuse to exercise its right of first refusal, if
the ROFR Space is not subleased or used by SUBLANDLORD within three (3) months
after SUBLANDLORD’s notice, then SUBTENANT’s right of first refusal and
provisions of this subparagraph 2(c) shall be reinstated.

 

3. TERM.

 

(a) Term. The term of this Sublease (the “Term”) shall commence on the date
hereof (the “Commencement Date”) and shall end on the date (“Expiration Date”),
which is the last day of the month in which the fifth anniversary of the Rent
Commencement Date occurs,

 

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subject to the terms of subparagraphs 3(b) below. The parties shall confirm the
Expiration Date in writing once the Rent Commencement Date has occurred.

 

(b) Extension Option. Provided that there is no uncured Event of Default (as
defined in Paragraph 16 below) hereunder on the part of the SUBTENANT, SUBTENANT
may extend the Term for a period of two (2) years commencing upon the Expiration
Date. In order to exercise such option, SUBTENANT shall provide written notice
to SUBLANDLORD at least ninety (90) days prior to the Expiration Date of
SUBTENANT’s intent to extend the Term. In such event, the Term shall
automatically be extended such that the Expiration Date shall then occur on the
last day of the month in which the seventh anniversary of the Commencement Date
occurs and all references herein to the “Term” shall be deemed to refer to the
Term as extended pursuant to this Section 3(b). The terms and conditions of this
Sublease shall apply during the extended Term, including without limitation the
annual base rent increases set forth in subparagraph 4(a) below.

 

4. RENT.

 

(a) Base Rent.

 

(i) Beginning on that date which is ninety (90) days after the Commencement Date
(the “Rent Commencement Date”), and thereafter on the first business day of each
calendar month, SUBTENANT shall pay to SUBLANDLORD for the SUBLEASED PREMISES
monthly base rent the amounts set forth on Exhibit “B” attached hereto (except
that for any partial calendar month during the Term for which base rent shall be
due and payable under this Sublease, the base rent shall be apportioned based on
the number of days in such month). The parties agree that base rent includes
payment of the utilities and ancillary rent services to be provided to SUBTENANT
by SUBLANDLORD pursuant to Exhibit “F” (the “Shared Utilities and Ancillary Rent
Services Exhibit”), but does not include payments for fuel oil adjustments,
water and sewer, electric and snow removal adjustments, all of which shall be
paid pursuant to subparagraph 4(c) below.

 

(ii) The annual base rent shall be increased to an amount equal to the product
of (1) the annual base rent payable during the last Sublease year of the Term
and (2) a fraction (A) the numerator of which is the Consumer Price Index for
the calendar month in which the last day of the Sublease year of the Term falls
and (B) the denominator of which is the Consumer Price Index (the “Base CPI”)
for the calendar month immediately preceding the first calendar month of the
last Sublease year of the Term; provided, however, that in no event shall the
sum, as adjusted for inflation, be less than such sum prior to being adjusted
for inflation.

 

“Consumer Price Index” means the Consumer Price Index for All Urban Consumers
published by the Bureau of labor Statistics of the United States Department of
Labor, New York-Northern New Jersey-Long Island, NY-NJ-CT area, All Items
(1982-1984 = 100) or any successor index thereto appropriately adjusted. If the
Consumer Price Index ceases to be published, and there is no successor thereto,
such other index as SUBLANDLORD and SUBTENANT agree upon, each acting
reasonably, as appropriately adjusted, shall be substituted for the Consumer
Price Index. If the Consumer Price Index ceases to use 1982-1984 = 100 as the
basis of calculation, the Consumer Price Index shall be adjusted accordingly.

 

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(b) Place of Payment. All payments of base rent and other sums required to be
paid to SUBLANDLORD hereunder shall be in lawful money of the United States of
America and shall be paid to SUBLANDLORD at the following address: P.O. Box
905552, Charlotte, N.C. 28290-5552 or to such other person and/or at such other
place as SUBLANDLORD may designate from time to time.

 

(c) Additional Rent. During the term hereof, SUBTENANT shall pay to SUBLANDLORD,
as additional rent (together with all other amounts payable by SUBTENANT
hereunder other than base rent payable under subparagraph 4(a), “Additional
Rent”), Subtenant’s Share of (i) electricity, (ii) water and sewer, (iii) any
increases in the costs of fuel oil, and (iv) any increases in the costs of snow
removal. Furthermore, SUBTENANT shall be entitled to a credit against its rent
obligations in an amount equal to Subtenant’s Share of any decreases in the
costs of fuel oil, and (ii) any decreases in the costs of snow removal. The
manner of calculating Subtenant’s Share of the foregoing costs and credits is
more particularly set forth in the Shared Utilities and Ancillary Rent Services
Exhibit. For the purposes of this Sublease, “Subtenant’s Share” shall mean (i)
when determining electricity and water and sewer usage, a fraction, the
numerator of which is the number of square feet of rentable area in the
SUBLEASED PREMISES, and the denominator of which is the number of square feet of
rentable area in Building E-336 and Building E-400 combined, calculated on a
consistent basis, and (ii) when determining increases or decreases in the costs
of fuel oil and snow removal, a fraction, the numerator of which is the number
of square feet of rentable area in the SUBLEASED PREMISES, and the denominator
of which is the number of square feet of rentable area in the Shared Site,
calculated on a consistent basis.

 

(d) No Payment for Common Costs. Except for charges for fuel oil adjustments,
water and sewer, electric and snow removal, SUBTENANT’s payment of base rent
shall include all amounts payable by SUBTENANT for its use of the Common Areas
and the other services to be provided to SUBTENANT as described in the Shared
Utilities and Ancillary Rent Services Exhibit.

 

(e) Government Incentive Programs. SUBLANDLORD acknowledges that SUBTENANT is
eligible for, and may receive, tax abatements, tax credits, grants or other
governmental or publicly-supported financial awards (collectively, “Incentive
Payments”) for locating SUBTENANT’s business in the State of Delaware.
SUBLANDLORD shall cooperate with SUBTENANT in procuring any Incentive Payments
for which SUBTENANT is eligible, and to the extent that any such Incentive
Payments intended for SUBTENANT are awarded to SUBLANDLORD (as, for example, an
abatement of Taxes attributable to SUBLANDLORD’s or any affiliate’s interest the
Shared Site) the entire economic benefit of such Incentive Payments shall be
passed through to SUBTENANT as a reduction in base rent or in another manner
mutually agreed upon by SUBLANDLORD and SUBTENANT. In the event that any such
Incentive Payments are awarded to SUBLANDLORD and passed through to SUBTENANT,
SUBTENANT shall have the right to inspect, upon reasonable prior notice and at
reasonable times, SUBLANDLORD’s books and records relating to such Incentive
Payments. In no event shall SUBTENANT have any right to, or claim upon, any
Incentive Payments for which SUBLANDLORD may be separately eligible, the parties
hereby agreeing that this subparagraph 4(e) only applies to Incentive Payments
clearly intended for SUBTENANT.

 

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(f) Invoicing for Water and Sewer, Electric, Fuel Oil Adjustment and Snow
Removal. SUBLANDLORD shall have the option of issuing invoices to SUBTENANT on a
monthly or quarterly basis. Each such invoice shall set forth the amount of the
total fee for fuel oil adjustments, water and sewer, electric and snow removal
due for such month or quarter, as applicable. Payment terms are net 30 days of
invoice receipt. SUBTENANT shall not be entitled to set off or reduce its
payments to SUBLANDLORD by any amounts SUBTENANT claims are owed to it by
SUBLANDLORD. The parties will implement arrangements to provide for electronic
funds transfer on customary terms for such payments. Upon the termination of
this Sublease, there will be a final accounting, and each party shall promptly
pay to the other any amounts owed. Undisputed late payment shall bear an
interest on the amount paid late at the prime rate of interest announced
publicly from time to time in New York City, New York, U.S.A. by Morgan Guaranty
Trust prorated for the number of days such overdue amounts are outstanding.

 

5. USE OF PREMISES.

 

(a) Permitted Uses. Subject to the further provisions of this Paragraph 5,
SUBTENANT may use and occupy the SUBLEASED PREMISES for general office purposes
and for drug discovery, research and development, including any ancillary uses,
all of which shall be subject to the use limitations set forth on Exhibit “C”
attached hereto.

 

(b) Access; Parking. Subject to the further provisions of this Paragraph 5,
SUBLANDLORD shall provide SUBTENANT and its invitees with full and complete
ingress and egress to the SUBLEASED PREMISES across SUBLANDLORD’s lands and
properties on a 24 hour per day, seven day per week basis. Notwithstanding the
foregoing, in the event SUBTENANT is prohibited from using its usual means of
ingress and egress to the SUBLEASED PREMISES for any reason (including without
limitation, maintenance being performed at the Shared Site), SUBLANDLORD may
provide SUBTENANT with an alternate route of ingress and egress to the SUBLEASED
PREMISES regardless of whether such route is more circuitous. SUBLANDLORD shall
provide to SUBTENANT nine (9) specifically-designated Parking Spaces in close
proximity to Building E-336 and two (2) specifically-designated Parking Spaces
in close proximity to Building E-400, which Parking Spaces may be designated by
SUBTENANT for visitors and executive-level employees of SUBTENANT for their
exclusive use. SUBLANDLORD hereby represents that sufficient Parking Spaces
shall be available to SUBTENANT’s other employees on the Shared Site for use by
SUBTENANT’s employees on a non-exclusive basis with other employees at the
Shared Site, provided, however, that such Parking Spaces may not be in the
immediate proximity of the SUBLEASED PREMISES. SUBTENANT shall have the right to
use all Parking Spaces provided pursuant to this subparagraph 5(b) at no
additional charge.

 

(c) Occupancy of SUBLEASED PREMISES. SUBTENANT shall not permit the SUBLEASED
PREMISES (or a portion thereof) to become or remain vacant or unoccupied for a
period of time exceeding six (6) months, except as may be necessary in
connection with alterations, improvements or replacements made pursuant to
Paragraphs 10 or 11 hereof.

 

(d) Compliance With Laws. SUBTENANT shall comply at SUBTENANT’s sole cost and
expense with all applicable federal, state, county and local laws, codes,
ordinances

 

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and regulations, and with the rules or regulations of any applicable Local Board
of Underwriters, with respect to use and occupancy of the SUBLEASED PREMISES;
provided, however, to the extent any capital improvements or replacements are
required to be made to any portion of the SUBLEASED PREMISES in order to comply
with any of the foregoing, SUBTENANT shall only be responsible for SUBLANDLORD
approved capital improvements and replacements required by SUBTENANT’s manner of
use of the SUBLEASED PREMISES.

 

(e) Rules and Regulations. SUBTENANT shall comply with DuPont’s PSGs and
Security Policies and Standards (as defined in subparagraph 5(g) below), as
modified from time to time, provided that (1) written notice is first given to
SUBTENANT in the event of any addition or modification to the PSGs and Security
Policies and Standards and (2) the PSGs and Security Policies and Standards are
reasonably promulgated and uniformly applied to, and enforced against, all
occupants of the Shared Site.

 

(f) Hazardous Substances. Any use, production, storage, deposit or disposal of
Hazardous Substances (as defined in subparagraph 5(g) below) by SUBTENANT on any
portion of the SUBLEASED PREMISES shall be performed or accomplished in
accordance with all Environmental Laws and PSGs (as defined in subparagraph 5(g)
below). Unless otherwise agreed to by SUBLANDLORD, SUBTENANT, during and upon
termination of this Sublease, shall promptly remove all such Hazardous
Substances used, produced, or stored on site by SUBTENANT from the SUBLEASED
PREMISES in accordance with all Environmental Laws and PSGs.

 

(g) Environmental Matters.

 

(i) Certain Defined Terms. As used in this Sublease, the following terms have
the following meanings (such meanings equally to be applicable to the singular
as well as the plural form of the terms defined):

 

(1) “Chemical Substance” means an organic or inorganic substance of molecular
identity, microorganisms and their DNA molecules.

 

(2) “DuPont’s PSGs” means those SHE Policies, Standards and Guidelines and
Security Policies and Standards as implemented at the Shared Site as of the date
hereof and described as Exhibits “D, F, G, H, I and J” a copy of which has been
provided to SUBTENANT.

 

(3) “Environment” means any surface water, groundwater, drinking water supply,
land surface or subsurface strata, or ambient air.

 

(4) Environmental Claim” means any claim, action, cause of action,
investigation, demand, order, directive or written notice by or on behalf of,
any Governmental Authority or any other individual, corporation, limited
liability company, partnership, trust or other entity, or former employee,
alleging potential liability (including, without limitation, potential liability
for investigatory costs, clean-up costs, governmental response costs, natural
resources damages, property damages, personal injuries, medical monitoring or
penalties) arising out of, based on or resulting from: (i) the presence, Release
or

 

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threatened Release of any Hazardous Substance at any location; (ii) exposure to
any Hazardous Substance; or (iii) requirements or violation of any Environmental
Law or Environmental Permit.

 

(5) “Environmental Laws” means all Laws relating to pollution or protection of
human health or the Environment, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act, the
Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act,
the Occupational Safety and Health Act, the Toxic Substances Control Act, the
Chemical Weapons Convention and any amendments thereto and any rules and
regulations promulgated pursuant to or implementing the foregoing, similar state
Laws and other Laws relating to any of (i) Releases, threatened Releases or the
presence of Hazardous Substances or the manufacture, processing, distribution,
use, treatment, storage, transport or handling of Hazardous Substances,
including the disposal of biological, chemical, radioactive materials, (ii)
noise or odors, (iii) pollution or protection of the air, surface water,
groundwater, drinking water, land surface or subsurface strata, or (iv) exposure
to Hazardous Substances and employee health and safety (v) use, storage, or
handling of plant, animal and human pathogens.

 

(6) “Environmental Permit” means any permit, license, approval or other
authorization under any applicable Law or of any Governmental Authority relating
to Environmental Laws.

 

(7) “Governmental Authority” means the United States of America, the State of
Delaware and any municipality or other political subdivision thereof, and any of
their respective entities, bodies, agencies, commissions or courts exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government and any executive official thereof.

 

(8) “Hazardous Substance” means any substance, whether solid, liquid or gaseous,
which is listed, defined or regulated as a “biohazardous”, “Biohazardous waste”,
“hazardous substance”, “hazardous waste”, “oil”, “pollutant”, “toxic substance”,
“hazardous material waste”, or “contaminant” or is otherwise classified as
hazardous or toxic, in or pursuant to any Environmental Law; or which is or
contains any asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, explosive, nuclear, or radioactive material, or motor fuel or other
petroleum hydrocarbons, or pesticides, insecticides, fungicides, or
rodenticides, or biohazardous materials or waste.

 

(9) “Laws” means all laws, statutes, ordinances, rules, regulations, orders,
writs, judgments, codes, injunctions or decrees of any Governmental Authority.

 

(10) “Losses” means any and all damages, losses, deficiencies, liabilities,
obligations, penalties, judgments, settlements, claims, payments, fines,
interest, costs and expenses (including, without limitation, the costs and
expenses of any and all actions and demands, assessments, judgments, settlements
and compromises relating thereto and the costs and expenses of attorneys’,
accountants’, consultants’ and other professionals’ fees and expenses incurred
in the investigation or defense thereof or the enforcement of rights hereunder),

 

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but excluding consequential damages, loss of profits and punitive damages (other
than such damages awarded to any third party against the party being
indemnified).

 

(11) “Release” means any release, spill, emission, discharge, leaking, pumping,
injection, deposit, disposal, dispersal, leaching or migration into the indoor
or outdoor Environment or into or out of any property, including the movement of
Hazardous Substances through or in the air, soil, surface water or groundwater.

 

(12) “Shared Site Biosafety Committee” means an entity of representatives of
DuPont and SUBTENANT with the responsibility to conduct a Safety, Health and
Environmental risk assessment review.

 

(ii) General.

 

(1) SUBTENANT acknowledges that hazards may be involved in its operations on the
Shared Site. Accordingly, SUBTENANT shall perform its work in a careful and
workmanlike manner and take all necessary precautions in processing, handling,
transporting and disposing of material and product involved in its operations,
to avoid: (w) an unhealthy or unsafe work environment; (x) injuries to persons;
(y) damage to property; or (z) pollution. The methods employed and the
precautions taken shall be determined by and rest solely with SUBTENANT. Any
information supplied by SUBTENANT to SUBLANDLORD shall be the latest information
known to SUBTENANT.

 

(2) SUBLANDLORD acknowledges that hazards may be involved in its operations on
the Shared Site. Accordingly, SUBLANDLORD shall perform its work in a careful
and workmanlike manner and take all necessary precautions in processing,
handling, transporting and disposing of material and product involved in its
operations, to avoid: (w) an unhealthy or unsafe work environment; (x) injuries
to persons; (y) damage to property; or (z) pollution. The methods employed and
the precautions taken shall be determined by and rest solely with SUBLANDLORD.
Any information supplied by SUBLANDLORD to SUBTENANT shall be the latest
information known to SUBLANDLORD.

 

(iii) DuPont’s PSGs.

 

(1) Subject to the other provisions of this subparagraph 5(g), SUBTENANT, its
invitees and contractors shall adhere to DuPont’s PSGs and the Security Policies
and Standards then in effect to the extent the same are applicable to
SUBTENANT’s operations. SUBTENANT shall advise its employees and the employees
of its invitees and contractors that:

 

(A) It is the policy of SUBLANDLORD to prohibit the use, possession, sale,
manufacture, dispensing, and distribution of drugs or other controlled
substances on the Shared Site for non-prescription personal use, and to prohibit
in the workplace the presence of an individual with such substances in the body
for non-prescription personal use; and

 

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(B) Any person who is found in violation of such guidelines and policies or who
refuses to permit inspection may be removed or barred from the Shared Site at
the sole and absolute discretion of SUBLANDLORD.

 

(2) SUBLANDLORD and SUBTENANT each agrees to perform its activities on or use
the Shared Site in and, subject to the other provisions of this subparagraph
5(g), in compliance with DuPont’s PSGs, including any updates, corrections or
modifications thereto. SUBLANDLORD and SUBTENANT recognize that certain aspects
of DuPont’s PSGs may not be applicable to SUBTENANT’s operations, and SUBTENANT
shall only be obligated to adhere and comply with DuPont’s PSGs to the extent
applicable to SUBTENANT’s operations or to the use of the Shared Site generally.
SUBLANDLORD and SUBTENANT shall jointly identify the provisions of DuPont’s PSGs
that are applicable to SUBTENANT’s operations or use of the Shared Site.
SUBLANDLORD and SUBTENANT shall cooperate and assist each other in complying
with all Environmental Laws and the DuPont’s PSGs. DuPont’s PSGs, including any
updates, corrections or modifications thereto, are furnished to SUBTENANT under
a nontransferable, non-exclusive and royalty-free license by SUBLANDLORD to
SUBTENANT for SUBTENANT’s use at the SUBLEASED PREMISES. This license is
effective on the Commencement Date and shall remain in effect until this
Sublease expires or sooner terminates. DuPont’s PSGs, in whole or in part, are
the property of SUBLANDLORD, and no title to or ownership of the DuPont’s PSGs,
or in any intellectual property rights relating to the DuPont’s PSGs, is
transferred to SUBTENANT. DuPont’s PSGs contain proprietary and confidential
information of SUBLANDLORD and as a condition of this license, and except as
required by law or prudent business practice (e.g., bankers, attorneys,
insurers), SUBTENANT agrees not to sell, sublease, or otherwise transfer,
provide, disclose or make available copies of any DuPont’s PSGs to any other
party without the prior written consent of DuPont.

 

(3) SUBTENANT recognizes that DuPont’s PSGs may provide only minimal guidance
for SUBTENANT’s compliance with Environmental Laws and therefore will not rely
on them for that purpose.

 

(4) In order to protect its employees, contractors, visitors and premises,
SUBLANDLORD has determined that there are certain minimally acceptable elements
that must be present in SUBTENANT’s policies, practices, and operations at the
SUBLEASED PREMISES. The sole purpose of SUBLANDLORD communicating such elements
in the DuPont’s PSGs and Security Policies and Standards is for the protection
of DuPont’s employees, contractors, visitors, and premises and neighbors. There
is no intention to communicate to SUBTENANT a comprehensive safety, health, and
environmental program which will meet its particular needs with respect to its
employees, contractors, visitors, and premises and neighbors. It is understood
that it remains the ultimate responsibility of SUBTENANT to evaluate its
needs/risks and to develop those programs and procedures it deems necessary to
manage those needs/risks. Notwithstanding the foregoing, SUBLANDLORD retains the
right in its absolute discretion, upon reasonable prior notice and at
SUBLANDLORD’s sole expense to enter at all reasonable times to audit SUBTENANT’s
compliance with DuPont’s PSGs and/or Security Policies and Standards and
SUBTENANT agrees to cooperate in a reasonable manner with such audit; provided,
however, that any such audit shall occur no more frequently than once every
month unless SUBLANDLORD has

 

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reasonable grounds to perform an audit more frequently and identifies such
grounds in a written notice to SUBTENANT. SUBLANDLORD shall promptly provide
SUBTENANT with the findings of the audit and shall not disclose the findings to
third parties, except as may be required by Environmental Laws and only after
notice to SUBTENANT (and, if permitted by the applicable Environmental Laws,
shall allow SUBTENANT to make such disclosure provided SUBTENANT does so within
five business days of receiving notice of the need therefor from SUBLANDLORD).
SUBLANDLORD shall promptly provide SUBTENANT with the findings of the audit and
SUBTENANT shall immediately correct any deficiencies identified in the audit
findings.

 

(iv) Chemical Substances. Within sixty (60) days after the Commencement Date and
as amended on a timely basis, SUBTENANT shall provide SUBLANDLORD a list by
chemical name, Chemical Abstract Service Number, by trade name and quantity of
all Chemical Substances, biological materials and Hazardous Substances which it
intends to make, process, use or store at the SUBLEASED PREMISES so that
SUBLANDLORD may use such information to comply with Environmental Laws.
SUBLANDLORD shall keep all information furnished by SUBTENANT, including but not
limited to any information pertaining to Chemical Substances, biological
materials and Hazardous Substances that SUBTENANT designates as information
which SUBTENANT is creating or developing or any other information which is
otherwise of a proprietary or confidential nature (the “SUBTENANT Proprietary
Information”), confidential and shall not use such information for any purpose
other than complying with such legal obligations. SUBLANDLORD further agrees
that SUBTENANT may avail itself, and SUBLANDLORD shall avail itself on
SUBTENANT’s behalf, of any confidential business information (CBI) procedures
available under any applicable Laws with respect to any information disclosed by
or obtained from SUBTENANT.

 

(v) Permits. SUBTENANT will obtain SUBLANDLORD’s prior approval for any permits
SUBTENANT may need to obtain so that such permits do not conflict with or impose
additional regulatory burden on SUBLANDLORD’s operations at the Shared Site.
SUBLANDLORD will provide support with respect to its Title V Air Permit in
accordance with Exhibit J, and SUBTENANT shall comply with, the relevant
provisions of the Shared Utilities and Ancillary Rent Services Exhibit.
SUBTENANT agrees to notify and receive approval from DuPont prior to obtaining
federal, state, and/or local Safety, Health and Environmental permits. SUBTENANT
will provide information regarding the permits as requested by the SUBLANDLORD
to the extent necessary to enable SUBLANDLORD to comply with any Environmental
Law and its Title V Air Permit obligations (including SUBTENANT Proprietary
Information). SUBLANDLORD shall keep all such information (including but not
limited to SUBTENANT Proprietary Information) confidential and shall not use
such information for any purpose other than complying with such legal
obligations. SUBLANDLORD further agrees that SUBTENANT may avail itself, and
SUBLANDLORD shall avail itself on SUBTENANT’s behalf, of any confidential
business information (CBI) procedures available under any applicable Laws with
respect to any information disclosed by or obtained from SUBTENANT.

 

(vi) Wastes. Unless as otherwise agreed and except as to SUBLANDLORD’s
Environmental Liabilities (as defined below), SUBTENANT shall retain

 

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sole and complete responsibility for the management, storage and proper disposal
of chemical substances, wastes, discharges and emissions in all media produced
from its activities. SUBTENANT shall provide SUBLANDLORD an updated list of the
identity of any waste disposal subcontractor, methods of waste disposal to be
used, and the locations of sites to be used for waste disposal not covered by
the Shared Utilities and Ancillary Rent Services Exhibit. SUBTENANT shall
transport and dispose of such waste in a safe and environmentally sound manner
to prevent any waste from entering the environment as a pollutant. SUBTENANT
agrees that it will not engage in and will not knowingly permit any other party
to engage in any activity without prior approval from SUBLANDLORD with respect
to the SUBLEASED PREMISES that would reasonably be expected to cause the
SUBLEASED PREMISES or the adjoining property of SUBLANDLORD to become a
hazardous waste treatment, storage or disposal facility within the meaning of
RCRA.

 

(vii) MSDS. SUBTENANT shall submit Material Safety Data Sheets complying with
the Federal Hazard Communication Standard (OSHA 1910.1200) together with its
submission of the lists of Chemical Substances and Hazardous Substances required
by subparagraph 5(g)(iv) above. Such Chemical Substances and Hazardous
Substances shall be properly labeled and strictly controlled by SUBTENANT as to
their use and disposal.

 

(viii) Notice. Each party hereto shall notify the other party of any incidents
or conditions that may have adverse safety, health or environmental consequences
to employees, contractors, visitors or property or neighbors. While SUBLANDLORD
or SUBTENANT may discover and/or disclose issues regarding the other party’s
compliance with Environmental Laws and make recommendations to that party to
avoid noncompliance with Environmental Laws, neither party hereto makes a
representation or warranty that all possible compliance issues have been
identified and disclosed or that its disclosures or recommendations include all
possible recommendations to prevent the occurrence of noncompliance with
Environmental Laws. Neither party shall disclose information relating to the
other party’s compliance with Environmental Laws to third parties, except as
required by Environmental Laws and only after notice to the other party (and, if
permitted by the applicable, Environmental Laws, such party will allow the
non-complying party to make such disclosure provided the non-complying party
does so within five business days of receiving notice of the need therefor from
the other party). Neither party hereto certifies the other party’s or any third
party’s compliance with present or future Environmental Laws, and each party
agree to seek its own legal advice regarding its own compliance unless otherwise
required. Notwithstanding the above, SUBTENANT will certify compliance with the
Title V Air Permit described in exhibit “J” to the extent that such
certifications relate solely to SUBTENANT’s operations.

 

(ix) Compliance.

 

(1) SUBLANDLORD shall grant or withhold its consent to SUBTENANT activities
involving the use of Center for Disease Control, Animals Plants Health
Inspection Services, United States Department of Agriculture Select Agents or
Toxins and/or the equivalent Delaware Department of Public Health biological
agents, or biological agents or recombinant DNA-biological agents with a
biohazards risk assessment of Biosafety Level –3 in accordance with this
paragraph. First, SUBTENANT shall, at least 90 days prior to its intended
acquisition of any such Agents, Toxins or biological agents and/or its

 

11

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intended initiation of R&D protocols in connection therewith, register with the
Shared Site Biosafety Committee, and submit a Safety, Health and Environmental
risk assessment for SUBTENANT. Second, for those biological materials listed as
Select Agents or Toxins by the federal Department of Health and Human Services
or those set forth on the equivalent list of agents maintained by the Delaware
Department of Public Health, and in each case their subsequent updates, at the
same time SUBTENANT submits the risk assessment to the Shared Site Biosafety
Committee (or before making such submission if SUBTENANT so elects), SUBTENANT
shall request SUBLANDLORD’s approval to use the particular biological materials,
and SUBLANDLORD shall have the right to grant or withhold approval in its sole
discretion. SUBTENANT will not make an acquisition or initiate an R&D protocol
until the acquisition or protocol is reviewed and approved by the Shared Site
Biosafety Committee and, if applicable, by SUBLANDLORD.

 

(2) At the commencement of this Sublease, the SUBTENANT will provide SUBLANDLORD
with the name of the SUBTENANTS’ Biosafety Officer. The SUBTENANT’s Biosafety
Officer will participate as a member of the Shared Site Biosafety Committee.

 

(3) Each party shall be responsible for complying with Environmental Laws
relating to the operation of its activities at the Shared Site and with respect
to the provision and receipt of shared services under the Shared Utilities and
Ancillary Rent Services Exhibit. Notwithstanding the above, SUBLANDLORD or
SUBTENANT may contract out the record keeping and/or reporting activities
required by any Environmental Laws, provided that such party shall not contract
away its liability and responsibility for assuring that any required records or
reports comply with the legal requirements and are truthful and accurate.

 

(4) Notwithstanding the foregoing, complaints from the community regarding odors
or excessive emissions shall be handled through SUBLANDLORD procedures and
communicated promptly to each party’s site representative.

 

(x) Indemnity.

 

(1) SUBLANDLORD agrees to indemnify, release, defend and hold harmless SUBTENANT
from and against all Environmental Claim(s) and/or Losses which arise, or are
alleged to arise, from or in connection with:

 

(A) Any non-compliance with any Environmental Law or Environmental Permits at
the Shared Site (whether on or off the Shared Site) occurring prior to the date
hereof and any such non-compliance caused by SUBLANDLORD after the date hereof;

 

(B) The generation, manufacture, refining, transportation, treatment, storage,
handling, disposal, discharge, Release or spill of any Hazardous Substance at
the Shared Site (whether on or off the Shared Site) occurring prior to the date
hereof and any such generation, manufacture, refining, transportation,
treatment, storage, handling, disposal, discharge, Release or spill of any
Hazardous Substance caused by SUBLANDLORD after the date hereof;

 

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(C) Any disturbance, migration, leaching or Release of any Hazardous Substance
onto, off of, near, under, or otherwise affecting the Shared Site occurring
prior to the date hereof and any such disturbance, migration, leaching or
Release of any Hazardous Substance continuing or caused by SUBLANDLORD after the
date hereof; or

 

(D) Any quantity of a Hazardous Substance which was at the Shared Site and
disposed of off the Shared Site in any such case, prior to the date hereof, or
disposed of or caused by SUBLANDLORD after the date hereof.

 

Notwithstanding the foregoing clauses (a) through (d) above, (collectively,
SUBLANDLORD’s “Environmental Indemnities”), SUBLANDLORD’s indemnity does not
extend to Environmental Claims or Losses directly resulting from soil
excavation, characterization or disposal by/for SUBTENANT after the date hereof
(as for example and not a limitation, excavation, characterization or disposal
undertaken during construction or facility modification as permitted pursuant to
the terms hereof) and such Environmental Claims or Losses shall be borne by
SUBTENANT to the extent of SUBTENANT’s excavation, characterization or disposal.

 

(2) SUBTENANT agrees to indemnify, release, defend and hold harmless SUBLANDLORD
from and against all Environmental Claims or Losses which arise, or are alleged
to arise, from or in connection with:

 

(A) SUBTENANT’s release of a Hazardous Substance in violation of any
Environmental Law at the Shared Site (whether on or off the Shared Site)
occurring on or after the Commencement Date;

 

(B) SUBTENANT’s violation of any Environmental Law including permitting
conditions at the Shared Site (whether on or off the Shared Site) occurring on
or after the Commencement Date;

 

(C) The generation, manufacture, refining, transportation, treatment, storage,
handling, disposal, discharge, Release or spill of any Hazardous Substance at
the Shared Site by SUBTENANT or its contractors or subcontractors; and

 

(D) Any disturbance, migration, leaching or Release of any Hazardous Substances
on, onto, near, under or otherwise affecting the Shared Site (including, without
limitation, the SUBLEASED PREMISES), provided that the origin, disturbance,
migration, leaching or release of the Hazardous Substance was due to the actions
or operations of SUBTENANT or its contractors or subcontractors.

 

(3) Where SUBLANDLORD and SUBTENANT have jointly caused any Environmental Claims
or Losses, whether or not a third party’s acts or omissions also were causal,
SUBTENANT and SUBLANDLORD shall contribute to their common liability a pro rata
share based upon the relative degree of fault of each (including attorneys’ fees
and other costs of defense). Each party hereto shall bear its own attorneys’
fees and costs of defense, subject to reimbursement by the other party, until:

 

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(A) There is a final court judgment allocating fault between the SUBLANDLORD and
SUBTENANT; or

 

(B) SUBLANDLORD and SUBTENANT otherwise agree to an allocation.

 

Upon the occurrence of an event described in clauses (A) or (B) above, SUBTENANT
shall reimburse SUBLANDLORD for that portion of the past costs, attorneys’ fees
and defense costs incurred by SUBLANDLORD which is equal to SUBTENANT’s share of
the allocation, or SUBLANDLORD shall reimburse SUBTENANT for that portion of the
past costs, attorneys’ fees and defense costs paid by SUBTENANT which is equal
to SUBLANDLORD’s share of the allocation, whichever is applicable. Thereafter,
SUBLANDLORD and SUBTENANT shall share the costs according to the allocation.

 

(4) In the event of any Environmental Claims and/or Losses for which a party
hereto is entitled to indemnity hereunder, the party seeking indemnity shall
immediately notify in writing the indemnifying party of such matter, shall fully
cooperate with the indemnifying party in the defense of the, Environmental
Claims and/or Losses and, at the indemnifying party’s cost, permit the
indemnifying party’s attorneys to handle and control the conduct and/or
settlement of such Environmental Claims and/or Losses, including making
personnel and records available for the defense. In no event shall the
indemnifying party agree to a settlement that contains a non-monetary component
without the consent of the indemnified party, which consent not to be
unreasonably withheld or delayed. The above indemnification provision is
contingent upon the indemnified party promptly turning over the complete control
of the Environmental Claims and/or Losses to the indemnifying party.

 

(xi) Limitation. The foregoing indemnities are subject to the provisions of
subparagraph 15(c). Furthermore, nothing contained herein shall prohibit either
party hereto from seeking restitution or contribution from third parties.

 

(xii) Survival. The provisions of this subparagraph 5(g) shall expressly survive
the expiration or earlier termination of this Sublease.

 

(h) Criminal Background Checks. Prior to hiring or assigning any employee to
perform work at the SUBLEASED PREMISES, SUBTENANT shall have performed a
criminal background check to determine whether such employee has been convicted
of any felony crimes, felony crimes plea bargained to a lesser charge, or
previous misdemeanor crime. SUBTENANT shall not, without SUBLANDLORD’s prior
written approval, permit an employee to work at the SUBLEASED PREMISES if that
employee has within the prior seven year period been convicted of any felony
crimes, felony crimes plea bargained to a lesser charge, or previous misdemeanor
crime. Any contractor who is assigned (working) on the Shared Site for three
days or less can be escorted 100% of the time in lieu of the criminal background
check. Any assignment of a contractor that is longer than three days
(cumulative) must have a criminal background check conducted in accordance with
the first two sentences of this subparagraph. All other contractors entering the
Shared Site must provide 2 forms of photo identification to SUBLANDLORD.
Additionally, SUBTENANT shall obtain a criminal background check for any
contractor who both frequently makes scheduled (or routine) deliveries to the
Shared Site

 

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and who obtains a “contractor” license at the Shared Site. SUBTENANT’s criminal
background check program must be in compliance with the Fair Credit Reporting
Act, a copy of which has been provided to SUBTENANT. Further, SUBTENANT shall
notify SUBLANDLORD’s Security Manager U.S. Region at the following address:

 

E. I. DU PONT DE NEMOURS AND COMPANY

1007 Market Street Room NG1

Wilmington, Delaware 19898

Attention Security Manager U.S. Region

 

6. UTILITIES AND SERVICES.

 

(a) General. SUBLANDLORD shall furnish the SUBLEASED PREMISES with those
utilities and services necessary to use the SUBLEASED PREMISES for the purposes
described in subparagraph 5(a) above, including without limitation those
identified on the Shared Utilities and Ancillary Rent Services Exhibit.
SUBLANDLORD and SUBTENANT hereby agree that the Shared Utilities and Ancillary
Rent Services Exhibit shall govern the provision of such services in connection
with the SUBTENANT’s use of the SUBLEASED PREMISES. SUBLANDLORD shall provide
shared utilities and ancillary rent services to SUBTENANT using the same degree
of care as it exercises in providing such utilities and services for its own
use, and nothing in this Sublease shall imply or require that SUBLANDLORD shall
meet a higher standard of care which might be applicable to commercial providers
of such services. Nothing in this Sublease shall require SUBLANDLORD to favor
SUBTENANT over the businesses of SUBLANDLORD, nor shall SUBLANDLORD favor its
business over the SUBTENANT’s business in providing such utilities and services.
Should SUBTENANT’s use of shared utilities or services require SUBLANDLORD to
expand, modify or modernize its equipment or distribution lines to provide such
utilities or services, and SUBTENANT requests that SUBLANDLORD proceed with such
expansion, modification or modernization after written notice from SUBLANDLORD
of the need therefor, the cost of such work shall be for SUBTENANT’s account,
unless agreed otherwise. Should SUBLANDLORD, in it’s sole discretion, expand,
modify, or modernize its equipment or distribution lines to provide such
utilities or services, the cost thereof shall be apportioned fairly between
SUBLANDLORD, SUBTENANT and any other occupants at the Shared Site. All utilities
and services shall be provided by employees of SUBLANDLORD or its affiliates, or
at SUBLANDLORD’s election, by third parties to whom it has contracted. All
references in this Sublease to SUBLANDLORD providing a utilities or services
shall include both provision by the SUBLANDLORD and indirect provision by third
parties. SUBTENANT agrees that the utilities or services provided by third
parties are conditioned upon performance by such third parties under their
separate agreements between SUBLANDLORD and such third parties. SUBLANDLORD
reserves the right to purchase any utilities or services from a third party or
to change a third party provider. In no event shall SUBTENANT be entitled to
re-sell or supply any utilities or ancillary rent service to a third party.
SUBLANDLORD shall not be required to provide SUBTENANT extraordinary levels of
service that are above the ordinary levels, special studies, training, or the
like.

 

(b) Temporary Shutdown. SUBLANDLORD, at its sole and absolute discretion, shall
have the right to temporarily shut down and/or suspend any utility or ancillary
rent service, in whole or in part, at any time, but solely to the extent
necessary to address a

 

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material threat to safety, health or the environment. In this regard,
SUBLANDLORD will use good faith efforts and reasonable diligence to address such
safety, health or environmental matters, and SUBTENANT shall fully cooperate
with SUBLANDLORD. SUBLANDLORD shall use good faith efforts and reasonable
diligence to expeditiously resume the supply of the affected utility or
ancillary rent service after, in the sole and absolute judgment of SUBLANDLORD,
such concern is abated. Further, in the event of a temporary partial loss of a
utility or ancillary rent service due to equipment failure or Force Majeure
causes, SUBLANDLORD will fairly allocate such portions of the affected utilities
or ancillary rent services between SUBLANDLORD’s operations, SUBTENANT and other
tenants of the Shared Site. If any utility or service is not fully restored
within fifteen (15) days of the shut down or suspension thereof, and if such
shut down or suspension materially interferes with SUBTENANT’s use and enjoyment
of the SUBLEASED PREMISES, SUBLANDLORD shall proportionately reduce the rent due
hereunder during the period of material interference.

 

(c) SUBLANDLORD Not a Public Utility. It is understood that neither party hereto
considers SUBLANDLORD to be a regulated public utility. Furthermore, neither
party intends by this Sublease to engage in the business of being a public
utility or to enjoy any of the powers and privileges of a public utility or by
its performance of its obligations to dedicate to public or quasi-public use or
purpose any of the facilities which it operates, and each party agrees that the
execution of this Sublease shall not, nor shall any performance or partial
performance, be or ever be deemed, asserted or urged by a party to be a
dedicated public or quasi-public use of any such facilities of the other party,
or as subjecting the other party to any jurisdiction or regulation as a public
utility. Notwithstanding the foregoing, should SUBLANDLORD be determined to be a
public utility or should SUBLANDLORD determine in good faith based on the advice
of counsel that there is a material risk of it being deemed to be a public
utility SUBLANDLORD may terminate the affected utility or service(s) upon not
less than ninety (90) days’ written notice to SUBTENANT. Notwithstanding the
foregoing, in the event SUBLANDLORD receives an order from any governmental
authority requiring SUBLANDLORD to cease providing a service in less than ninety
(90) days and SUBLANDLORD is unable to timely obtain a stay of enforcement of
that order after exercising its good faith efforts to do so, SUBLANDLORD shall
immediately notify SUBTENANT of such occurrence and may terminate such utility
or ancillary rent service consistent with the time period set forth in that
order. Upon request by SUBTENANT and at SUBTENANT’s expense, SUBLANDLORD must
appeal such order and/or seek a stay of enforcement, so SUBLANDLORD can continue
providing such utility or ancillary rent service pending appeal of that order.
If any utility or service is not fully restored within fifteen (15) days
SUBLANDLORD ceases to provide it, and if such cessation of a utility or service
materially interferes with SUBTENANT’s use and enjoyment of the SUBLEASED
PREMISES, SUBLANDLORD shall proportionately reduce the rent due hereunder during
the period of material interference.

 

(d) No Representations. SUBLANDLORD MAKES NO REPRESENTATION OR WARRANTY OF ANY
KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO ANY WARRANTY
ARISING FROM OPERATION OF LAW OR OTHERWISE, INCLUDING ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT TO ANY UTILITY
OR SERVICE PROVIDED HEREUNDER, THE QUALITY OR CONDITION

 

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THEREOF, OR ANY OTHER MATTER. SUBTENANT ASSUMES ALL RISK AND LIABILITY RESULTING
FROM ITS RECEIPT AND/OR USE OF A UTILITY OR SERVICE.

 

(e) Telecommunications Infrastructure. SUBLANDLORD is not providing any
telecommunications services to SUBTENANT. SUBTENANT, together with any third
party provider, shall be solely responsible for the design and functionality of
any telecommunications system installed in the SUBLEASED PREMISES. Any new
telecommunications system installed by SUBTENANT must use no less than Category
5E fire retardant wiring.

 

(f) Non-Standard Services. In the event that SUBTENANT requests SUBLANDLORD to
provide any non-standard service, or any service not contemplated by Exhibit
“F,” SUBLANDLORD shall have the option of providing such service, but shall have
no obligation to do so. If SUBLANDLORD elects to provide the service, it will be
provided on terms and conditions agreed upon by the parties, including without
limitation the costs thereof.

 

7. SIGNS. SUBTENANT shall be permitted to install its logo and/or business name
(a) on the existing sign at the main gate for the Shared Site, (b) on the
existing monument signs at the entrances to Building E-336 and Building E-400,
and (c) on the glass entry doors to each building, provided that in each case
the logo and/or business name shall be affixed in a manner and be of such size,
design and color as shall be (i) consistent with the lettering, design, etc.
utilized by SUBLANDLORD on such existing signs and on other building entry doors
on the Shared Site, (ii) compliant in all respects with local zoning and/or
other municipal ordinances; and (iii) approved in advance in writing by
SUBLANDLORD, which approval shall not be unreasonably withheld, conditioned or
delayed. SUBTENANT, at its sole cost and expense, shall remove such logo and/or
business name upon the termination of this Sublease. Any defacement or damage to
the Building or the SUBLEASED PREMISES caused by logo and/or business name or
the installation or removal thereof shall be repaired promptly by SUBTENANT.
SUBTENANT shall not have the right to install any signs on the exterior of
Building E-336 and Building E-400.

 

8. ASSIGNMENT AND SUBLETTING. SUBTENANT shall not assign, convey, sublet,
mortgage, encumber or otherwise transfer (all of the foregoing a “Transfer”) all
or any portion of its rights and obligations under this Sublease, including
without limitation a Transfer to an Affiliate, without the prior written consent
of the SUBLANDLORD, which consent shall be in SUBLANDLORD’s sole discretion. For
purposes of this Paragraph 8, the term “Affiliate” means any entity who,
directly or indirectly, controls or is controlled by or is under common control
with SUBTENANT, whether through the ownership of voting securities or by
contract or otherwise. If there is a change of control of SUBTENANT (as defined
below), SUBTENANT will so notify SUBLANDLORD. Following a change of control of
SUBTENANT and provided that at least twenty-one (21) months remain under the
unexpired Term (including any extension option), SUBLANDLORD may, in its sole
discretion, terminate this Sublease upon at least twenty-one (21) months’ prior
written notice to the other party. For purposes of this section, a “change of
control of SUBTENANT” has occurred if (i) any person or group becomes the owner
of more than 50% of the voting stock in SUBTENANT, (ii) SUBTENANT sells or
leases all or substantially all of its assets relating to its drug discovery
operations, or (iii) SUBTENANT

 

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merges, consolidates or otherwise combines with another entity and SUBTENANT’s
stockholders fail to own at least 50% of the surviving entity. In the event of
any permitted Transfer, SUBTENANT shall nonetheless remain liable for the
performance of all of the obligations of the SUBTENANT hereunder.

 

9. CONDITION OF PREMISES.

 

(a) Representations. To induce SUBTENANT to enter this Sublease and take
possession of the SUBLEASED PREMISES, SUBLANDLORD hereby represents and warrants
to SUBTENANT as follows:

 

(i) The SUBLEASED PREMISES and the operation thereof complies in all material
respects with all applicable federal, state and local laws, regulations, codes,
orders, ordinances, rules and statutes and any restrictive covenants applicable
to the SUBLEASED PREMISES. SUBLANDLORD has obtained all permits, approvals and
licenses necessary for the Shared Site and the use thereof. The purposes for
which the SUBLEASED PREMISES may be used pursuant to subparagraph 5(a) are
permitted within the zoning classification of the Shared Site or appropriate
zoning relief from such classification has been obtained and is in effect.

 

(ii) The improvements and Fixtures included in the SUBLEASED PREMISES have been
kept and maintained in good working order and condition and will be in such
condition as of the Commencement Date.

 

(iii) Each portion of space comprising the SUBLEASED PREMISES (A) has been
completely decommissioned in accordance with all applicable Laws, including
Environmental Laws, and in accordance with DuPont’s PSGs, (B) has been
decontaminated in accordance with the procedures set forth on Exhibit “G,” and
(C) to SUBLANDLORD’s knowledge, does not contain any lead-based paint, asbestos
or asbestos containing materials, polychlorinated biphenyls or urea formaldehyde
foam insulation.

 

(b) No Alterations. SUBTENANT acknowledges that SUBLANDLORD has no obligation to
alter, remodel or improve the SUBLEASED PREMISES and that SUBLANDLORD’s
obligations are limited to delivering the SUBLEASED PREMISES to SUBTENANT in the
condition specified in subparagraph (a) above.

 

(c) Joint Inspection. At the time of occupancy, SUBTENANT shall inspect and
execute the “Chemical Laboratory Final Check List,” a copy of which has been
provided to SUBTENANT, to acknowledge the condition of laboratory space.

 

10. ALTERATIONS.

 

(a) General Provisions. SUBTENANT shall have no right to make any alterations,
installations, changes and improvements whatsoever in and upon the SUBLEASED
PREMISES without the prior written consent of SUBLANDLORD, which consent shall
not be unreasonably withheld, conditioned or delayed; provided, however, that
SUBTENANT shall have the right to make those initial alterations for SUBTENANT’s
occupancy which are more particularly identified on Exhibit “E” attached hereto
and made a part hereof. In this regard, the

 

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Parties shall meet to review the proposed alteration and, if SUBLANDLORD agrees
that SUBTENANT may make the alteration, the Parties shall establish and
implement a coordinated management process under which SUBTENANT’s procurement
and installation of goods or services necessary for the alteration will be
overseen by SUBLANDLORD and SUBTENANT to assure compliance with applicable PSGs
and site safety and security requirements. SUBTENANT shall bear all costs for
such alterations and shall pay SUBLANDLORD a negotiated fee to cover SUBLANDLORD
costs for administrative oversight.

 

(b) Rights of Removal. Upon termination or expiration of this Sublease or at any
time during the continuance hereof (but provided that no Event of Default shall
have occurred and be continuing hereunder), (i) SUBTENANT shall have the right
to remove from the SUBLEASED PREMISES any articles of personal property or trade
fixtures made or installed by SUBTENANT (which does not include any hoods, duct
work, stacks, blowers, casework and any other generic laboratory equipment that
are existing on the date hereof which may be deemed to be trade fixtures
(collectively, “Excluded Trade Fixtures”), and (ii) except as otherwise agreed
in writing by the parties, SUBTENANT shall have the right to remove from the
SUBLEASED PREMISES any alterations, installations, changes, improvements or
other property, including fixtures (other than Excluded Trade Fixtures), made or
installed by SUBTENANT whether or not constituting or becoming a part of the
SUBLEASED PREMISES and whether made or installed under subparagraph 10(a) or
otherwise; provided that, in the case of both clause (i) and clause (ii) above,
any damage caused by such removal will be fully repaired by SUBTENANT at
SUBTENANT’s sole cost and expense prior to surrender of the SUBLEASED PREMISES.

 

(c) Obligation to Remove. Upon termination or expiration of this Sublease, (i)
SUBLANDLORD shall have the right to require SUBTENANT to remove from the
SUBLEASED PREMISES all articles of SUBTENANT’s property, whether fixtures or
personalty, other than any alterations, installations, changes or improvements
made by SUBTENANT to the SUBLEASED PREMISES in accordance with the provisions of
subparagraph 10(a) hereof, whether or not the same have become an actual part
thereof, and any damage caused by any such removal will be fully repaired by
SUBTENANT at SUBTENANT’s sole cost and expense prior to the surrender of the
SUBLEASED PREMISES, and (ii) in the event SUBTENANT fails to remove any property
from the SUBLEASED PREMISES as and when required by SUBLANDLORD in accordance
with clause (i) of this subparagraph 10(c), SUBLANDLORD shall have the right to
(x) remove, transport and dispose of same (without taking title or ownership
thereto); and (y) fully repair any damage caused by such removal, and SUBTENANT
shall indemnify and hold harmless SUBLANDLORD for any costs, expenses or
liabilities whatsoever associated with such removal, transportation and disposal
and any such repair (other than to the extent any such costs, expenses or
liabilities arise from the gross negligence, recklessness or willful misconduct
of SUBLANDLORD in performing such activities).

 

(d) Abandonment. Any alterations, installations, changes, improvements or other
property which SUBTENANT has placed on the SUBLEASED PREMISES and which is not
removed within sixty (60) days following the termination or expiration of this
Sublease shall be deemed to have been abandoned by SUBTENANT and shall become
the property of SUBLANDLORD upon the termination or expiration of this Sublease,
subject to

 

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SUBLANDLORD’s rights to remove, transport and dispose of same (without taking
title or ownership thereto) at SUBTENANT’s sole cost and expense as set forth in
subparagraph 10(c) hereof.

 

(e) Compliance with Laws. Any alterations, additions or improvements made by
SUBTENANT shall be made in accordance with applicable federal, state, county and
local laws and ordinances and building codes, rules and regulations.

 

11. MAINTENANCE AND REPAIRS.

 

(a) SUBTENANT’s Responsibilities. SUBTENANT, at its own cost and expense, shall
keep the interior of the SUBLEASED PREMISES and all improvements made by
SUBTENANT in good order and shall be responsible for the full cost of the repair
to any such item, unless it is a repair for which SUBLANDLORD is responsible
under subparagraph 11(b) below.

 

(b) SUBLANDLORD’s Responsibilities. SUBLANDLORD shall keep in good order,
condition and repair and replace when necessary the structural portions of each
building included in the SUBLEASED PREMISES, the roof and roof membrane,
foundations, appurtenances, heating, ventilation and air conditioning equipment,
electrical systems, plumbing systems, lighting, storm drainage and other
mechanical systems of the Building, exterior walls and windows of the Building
and utility and sewer pipes serving the Building. SUBLANDLORD shall also perform
all routine maintenance required at each building included in the SUBLEASED
PREMISES, including without limitation painting, repairing broken glass and
ordinary maintenance of all such building components. SUBLANDLORD shall also be
responsible for repairing any damage to the SUBLEASED PREMISES caused by leaks
in the roof, bursting pipes (by freezing or otherwise) or by defects in any
building. SUBLANDLORD shall keep all roads and sidewalks on the Shared Site in a
neat and clean condition and promptly remove all dirt, trash, snow and ice
therefrom.

 

If SUBLANDLORD fails to make any repairs required by this Sublease within
fifteen (15) days of SUBLANDLORD’s receipt of written notice from SUBTENANT of
need therefor (except in the event of an emergency in which case SUBTENANT shall
only have to wait a period of time that is reasonable under the circumstances),
and if such failure materially interferes with SUBTENANT’s use and enjoyment of
the SUBLEASED PREMISES, SUBTENANT may make such repairs and offset the cost
thereof against base rent and other amounts due under this Sublease and may
recover the amount thereof from SUBLANDLORD in addition to any other legal or
equitable remedies SUBTENANT may have. Notwithstanding the foregoing, if
SUBLANDLORD shall have commenced to make such repairs within such fifteen (15)
day period (or shorter period in the event of an emergency) and shall be
diligently pursuing the completion thereof, SUBTENANT shall not have the right
to make such repairs and recover the cost of doing so from SUBLANDLORD unless
SUBLANDLORD ceases to diligently pursue the completion thereof.

 

12. LIABILITY. SUBLANDLORD in no event shall be liable for any damage or injury
to SUBTENANT or any agent, employee or invitee of SUBTENANT, or to any person or
persons coming upon the SUBLEASED PREMISES in connection with the occupancy by

 

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SUBTENANT or otherwise, or to any goods, chattels, or other property of
SUBTENANT or any other person or persons which may during the term of this
Sublease be located in the SUBLEASED PREMISES, which damage or injury has been
caused or contributed to by water, rain, snow, breakage of pipes, leakage,
casualty (including, without limitation, any damage resulting from a casualty of
the nature insured against under a comprehensive policy of property insurance
with extended coverage riders) or by any other cause beyond SUBLANDLORD’s
control, except when caused by the gross negligence, recklessness or willful
misconduct of SUBLANDLORD, its invitees, agents or employees. Nothing in this
Paragraph 12 is intended to limit or otherwise affect SUBLANDLORD’s indemnity
obligations to SUBTENANT relating to environmental matters as provided in
subparagraph 5(g) of this Sublease.

 

13. ACCESS TO SUBLEASED PREMISES. SUBTENANT shall permit SUBLANDLORD to enter
upon the SUBLEASED PREMISES at all times in an emergency and otherwise at all
reasonable times upon reasonable notice (which shall mean at least 48 hours
prior notice) for the purpose of inspecting the same and/or providing services
pursuant to Paragraph 6 and the Shared Utilities and Ancillary Rent Services
Exhibit and/or maintenance or making repairs or replacements pursuant to
subparagraph 11(b) hereof and/or making any repairs or rebuilding under
Paragraph 14 hereof.

 

14. CASUALTY.

 

(a) Non-Material Casualty. In the event that fire or other casualty damages the
SUBLEASED PREMISES to an extent that does not materially interfere with
SUBTENANT’s use thereof as permitted under subparagraph 5(a) hereof, SUBLANDLORD
shall repair the SUBLEASED PREMISES promptly after such casualty at its sole
cost and expense.

 

(b) Material Casualty. In the event that fire or other casualty damages the
SUBLEASED PREMISES to an extent that materially interferes with SUBTENANT’s use
thereof as permitted under subparagraph 5(a) hereof, SUBLANDLORD shall
proportionately reduce the rent due hereunder during the period of material
interference, and SUBLANDLORD shall have the option, in its sole discretion, of
rebuilding or repairing the SUBLEASED PREMISES at its sole cost and expense;
provided, however, that SUBLANDLORD shall rebuild or repair the SUBLEASED
PREMISES if such rebuilding or repairs are reasonably estimated as being capable
of rebuilding or repair for less than $100,000.00. If SUBLANDLORD is not
required and elects not to rebuild or repair the SUBLEASED PREMISES and
continued occupancy thereof is otherwise lawful, SUBLANDLORD shall so inform
SUBTENANT and SUBTENANT may (i) vacate the part of the SUBLEASED PREMISES
rendered unusable by the fire or other casualty and continue to occupy the
remainder of the SUBLEASED PREMISES and to pay the proportionately reduced rent,
or (ii) promptly quit the SUBLEASED PREMISES by notifying SUBLANDLORD in writing
of SUBTENANT’s election to terminate this Sublease and thereafter this Sublease
shall terminate as of the effective date of such notice and SUBTENANT shall be
entitled to a refund for any unearned rent paid or credited in advance to
SUBLANDLORD. If SUBLANDLORD elects not to rebuild the SUBLEASED PREMISES and
continued occupancy thereof is unlawful, SUBLANDLORD shall so inform SUBTENANT,
and SUBTENANT shall promptly quit the SUBLEASED PREMISES at which time this
Sublease shall terminate and SUBTENANT shall be entitled to a refund for any
unearned rent paid or

 

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credited in advance to SUBLANDLORD. If SUBLANDLORD is not required but does
elect to rebuild or repair, SUBLANDLORD shall notify SUBTENANT within thirty
(30) days of learning of the casualty of its intention to rebuild or repair,
which notice shall provide SUBTENANT with SUBLANDLORD’s good faith estimate of
the time needed to complete the rebuilding or repairing, and this Sublease shall
remain in full force and effect (with the rent proportionately reduced until
such rebuilding or repairing is complete); provided, however, that in the event
that (i) SUBLANDLORD’s reasonable estimate indicates that rebuilding or
repairing would take longer than six (6) months, or (ii) rebuilding or repairing
in fact takes longer than six (6) months, SUBTENANT may thereupon quit the
SUBLEASED PREMISES and within five (5) days after vacating the SUBLEASED
PREMISES notify SUBLANDLORD in writing of SUBTENANT’s election to terminate this
Sublease, in which case this Sublease shall terminate as of the date of
SUBLANDLORD’s receipt of such notice and SUBTENANT shall be entitled to a refund
for any unearned rent paid or credited in advance to SUBLANDLORD. If SUBTENANT
fails to notify SUBLANDLORD of SUBTENANT’s election to quit the SUBLEASED
PREMISES in accordance with this Paragraph 14, SUBTENANT shall be liable for
rent accruing to the date of SUBLANDLORD’s actual knowledge of SUBTENANT’s
vacation or impossibility of further occupancy. Notwithstanding any other
provision to the contrary, SUBLANDLORD shall have the right to retain any and
all insurance proceeds regardless of its decision regarding rebuilding or
repairing the SUBLEASED PREMISES.

 

(c) SUBTENANT shall bear the risk of loss for all its personal property (and all
personal property of its employees and invitees) including improvements and
fixtures within the SUBLEASED PREMISES.

 

15. ADDITIONAL INDEMNITY.

 

(a) SUBTENANT Indemnity. Except as otherwise herein provided (including, without
limitation, as provided in subparagraph 5(g) hereof), SUBTENANT, promptly
following demand by SUBLANDLORD, shall indemnify and hold SUBLANDLORD safe and
harmless from and against any and all Losses (i) on account of the death of or
injury to any person or persons or the damage to or destruction of any property
arising from or growing out of SUBTENANT’s use and occupancy of the SUBLEASED
PREMISES or (ii) resulting from any failure by SUBTENANT to perform or observe
any covenant or agreement to be performed or observed by SUBTENANT under this
Sublease, but only to the extent such Losses are not caused by the gross
negligence or willful misconduct of SUBLANDLORD. The provisions of this
subparagraph 15(a) shall expressly survive the expiration or earlier termination
of this Sublease.

 

(b) SUBLANDLORD Indemnity. SUBLANDLORD, promptly following demand by SUBTENANT,
shall indemnify and hold SUBTENANT safe and harmless from and against any and
all Losses (i) on account of the death of or injury to any person or persons or
the damage to or destruction of any property arising from or growing out of
SUBLANDLORD’s use and occupancy of the Shared Site other than the SUBLEASED
PREMISES (including without limitation the portions of Buildings 336 and 400 not
occupied by SUBTENANT) or (ii) resulting from any failure by SUBLANDLORD to
perform or observe any covenant or agreement to be performed or observed by
SUBLANDLORD under this Sublease, but only to the extent such Losses are not
caused by the gross negligence or willful misconduct of SUBTENANT. Nothing

 

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in this subparagraph 15(b) is intended to limit or otherwise affect
SUBLANDLORD’s indemnity obligations to SUBTENANT relating to environmental
matters as provided in subparagraph 5(g) of this Sublease. The provisions of
this subparagraph 15(b) shall expressly survive the expiration or earlier
termination of this Sublease.

 

(c) Limitations. All indemnity obligations of SUBLANDLORD and SUBTENANT arising
under this Sublease, and all claims, demands, damages and losses assertable by
SUBLANDLORD and SUBTENANT against the other in any suit or cause of action
arising out of or relating to this Sublease, the SUBLEASED PREMISES or the
Shared Site, or the use and occupancy thereof, are limited as follows:

 

(i) By the releases and waivers expressed herein, including, without limitation,
the mutual releases and waivers of rights set forth in Paragraph 12 above and
subparagraph 20(d) below;

 

(ii) All claims for indemnification and other recoveries shall be limited to
direct, proximately caused damages and exclude all consequential or indirect
damages, including, but not limited to, business loss or interruption, suffered
by the party asserting the claim or seeking the recovery; and

 

(iii) In the event that SUBLANDLORD and SUBTENANT (or the persons for whom they
are liable as expressly set forth herein) are determined to be contributorily
responsible for the indemnified injury or loss, each indemnitor’s obligation
shall be limited to the indemnitor’s equitable share of the losses, costs or
expenses to be indemnified against based on the relative culpability of each
indemnifying person whose negligence or misconduct contributed to the injury or
loss.

 

16.   EVENTS OF DEFAULT AND REMEDIES.

 

(a) General. Each of the following, if so declared in writing by SUBLANDLORD,
shall constitute an “Event of Default” by Tenant under this Sublease:

 

(i) if SUBTENANT fails to pay any base rent or Additional Rent when due and
payable hereunder or under the Shared Utilities and Ancillary Rent Services
Exhibit and such failure continues for a period of ten (10) days after written
notice thereof is given to SUBTENANT by SUBLANDLORD;

 

(ii) if SUBTENANT fails to comply with all applicable Laws and with all PSGs and
Site Security Policies and Standards and such failure continues for a period of
ten (10) days after written notice thereof is given to SUBTENANT by SUBLANDLORD;
provided, however, in the event any such failure by SUBTENANT is deemed by
SUBLANDLORD to create a material threat to safety, health or the environment or
to create the possibility of a material adverse effect on the other businesses
of SUBLANDLORD or its affiliates at the Shared Site, then an Event of Default
shall be deemed to have occurred if SUBLANDLORD identifies such threat or
possibility in its notice to SUBTENANT and SUBTENANT thereafter fails to cure
such failure immediately upon its receipt of SUBLANDLORD’s notice even if such
notice is verbal notice; or

 

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(iii) if Tenant fails to perform or observe any covenant or agreement set forth
in this Sublease (other than the covenants described in clauses (i) and (ii)
above) in accordance with the terms thereof and such failure continues for a
period of thirty (30) days after written notice thereof is given to SUBTENANT by
SUBLANDLORD; provided, however, that if the failure cannot, by its nature, be
cured within thirty (30) days, then an Event of Default shall not be deemed to
have occurred so long as SUBTENANT diligently pursues the cure of such failure
to completion.

 

(b) Additional Events of Default. Any of the following shall also constitute an
Event of Default: (i) SUBTENANT is adjudicated a bankrupt, (ii) SUBTENANT
institutes proceedings for a reorganization or for an arrangement under the
bankruptcy laws of the United States codified as Title 11 of the United States
Code (“Bankruptcy Act”) or (iii) an involuntary petition in bankruptcy is filed
against SUBTENANT under the Bankruptcy Act, which is not dismissed or vacated
within ninety (90) days.

 

(c) Remedies. Upon the declaration of an Event of Default under subparagraphs
16(a) or 16(b), SUBLANDLORD (i) shall have the right, upon the giving of five
(5) days’ advance written notice to SUBTENANT, to terminate this Sublease and if
such Event of Default shall not have been cured by SUBTENANT within such five
(5) day period, this Sublease shall terminate and expire at midnight on such
fifth day, and (ii) shall have all other rights and remedies provided by law or
in equity.

 

17. EMINENT DOMAIN. If the whole or any part of the SUBLEASED PREMISES shall be
taken by any public authority under the power of eminent domain such as to
materially interfere with SUBTENANT’s use thereof as permitted under Paragraph
5(a) hereof, then the terms of this Sublease shall cease on the part so taken on
the date possession of that part is surrendered, and from that day SUBTENANT
shall have the right either (i) to cancel this Sublease and declare the same
null and void, giving written notice to SUBLANDLORD of same, and to be entitled
to any unearned rent paid or credited in advance, or (ii) to continue in
possession of the remainder of the SUBLEASED PREMISES under the terms herein
provided, giving written notice to SUBLANDLORD of same, except that the base
rent and SUBTENANT’S SHARE shall be equitably adjusted by SUBLANDLORD and
SUBTENANT as may be appropriate in light of the portions of the Building taken
in such proceeding. Notwithstanding anything to the contrary contained herein,
SUBTENANT shall not be entitled to share in any portion of the award in respect
of such taking.

 

18. PRIME LEASE; SUBORDINATION AND NON-DISTURBANCE.

 

(a) Prime Lease. In order to induce SUBTENANT to enter into this Sublease,
SUBLANDLORD represents and warrants to SUBTENANT that: (i) SUBLANDLORD is the
owner of the land on which the Shared Site is located, (ii) Du Pont De Nemours
and Company, L.L.C. (“Building Owner”) owns the buildings in which the SUBLEASED
PREMISES are located and is permitted to maintain such buildings on the land by
SUBLANDLORD, as land owner, pursuant to an easement agreement (“Easement
Agreement”), (iii) Building Owner has leased the buildings in which the
SUBLEASED PREMISES are located to Acorn Leasing, L.L.C. (“Prime Landlord”)
pursuant to a lease agreement (the “Prime Lease”), (iv) Building Owner has given
a mortgage (the “Mortgage”) encumbering the buildings in which the

 

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SUBLEASED PREMISES are located (and certain other real property) to Laurel N.A.,
L.L.C. (“Mortgagee”), (v) there are no leases, mortgages, judgments or any other
matters superior to the interest of SUBTENANT in the SUBLEASED PREMISES other
than the Easement Agreement, the Prime Lease and the Mortgage, (vi) each of the
Easement Agreement, the Prime Lease and the Mortgage is in full force and effect
and there exists no state of facts and no event has occurred which, with the
passage of time or the giving of notice, or both, would constitute a default by
any party thereto, (vii) SUBLANDLORD has the right and authority under the
Easement Agreement, the Prime Lease and the Mortgage to enter into this
Sublease, and Building Owner, Prime Landlord and Mortgagee each hereby joins in
the execution of this Sublease to evidence its consent thereto, and (viii) there
are no terms or provisions of the Easement Agreement, the Prime Lease or the
Mortgage which impose any duty or obligation upon SUBTENANT or which place any
restriction upon SUBTENANT’s use of the SUBLEASED PREMISES beyond what is
contained in this Sublease.

 

(b) Current Subordination and Non-Disturbance; Indemnity. SUBLANDLORD, as land
owner, Building Owner, Prime Landlord and Mortgagee each hereby joins in the
execution of this Sublease to evidence its agreement that if (and for as long
as) no event of default by SUBTENANT under this Sublease has occurred and is
continuing, then (i) SUBTENANT shall not be made a party to any action or
proceeding by any of them to recover possession of the property of which the
SUBLEASED PREMISES forms a part, (ii) SUBTENANT shall not be made a party to the
termination of any interest in the SUBLEASED PREMISES that is senior to the
interest of SUBTENANT or any proceeding related thereto, (iii) SUBTENANT’s
possession shall not be disturbed, and (iv) this Sublease shall not be canceled
or terminated and shall continue in full force and effect upon such foreclosure,
termination or recovery of possession upon all the terms, covenants, conditions
and agreements set forth in this Sublease. If any of SUBLANDLORD, as land owner,
Building Owner, Prime Landlord or Mortgagee acquires the right to possession of
the SUBLEASED PREMISES, SUBTENANT shall, if requested, attorn to and become the
tenant of the party acquiring the right to possession upon the same terms and
conditions as are set forth herein for the balance of the Term.

 

(c) Future Subordination and Non-Disturbance. This Sublease and the estate,
interest and rights hereby created will be subordinate to any mortgage or
mortgages hereafter placed upon the Shared Site or any estate or interest
therein, and to all renewals, modifications, consolidations, replacements and
extensions of the same, and any substitutes therefor, so long as the holder of
any such mortgagee enters into a subordination/recognition and non-disturbance
agreement with SUBTENANT on terms and conditions that are mutually acceptable to
SUBLANDLORD, SUBTENANT, the holder and any other party with an interest in the
SUBLEASED PREMISES that is superior to this Sublease.

 

19. WAIVER OF LANDLORD’S LIEN. SUBLANDLORD, and PRIME LANDLORD by consenting to
this Sublease in writing, hereby acknowledge and agree that no lien, security
interest or claim shall be asserted by SUBLANDLORD or PRIME LANDLORD or be
allowed to attach to personal property or fixtures within the SUBLEASED PREMISES
which are owned or leased by SUBTENANT or any third party.

 

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20. SURRENDER. On or before the Expiration Date or prior termination of this
Sublease, SUBTENANT shall peaceably surrender the SUBLEASED PREMISES, and the
SUBLEASED PREMISES shall be turned over to SUBLANDLORD (i) in substantially the
condition existing on the date of this Sublease (ordinary wear and tear, damage
by casualty and repairs that are SUBLANDLORD’s responsibility hereunder
excepted), (ii) in compliance with the conditions and requirements specified in
subparagraphs 5(f), 5(g), 10(b) and 10(c) and in Paragraph 7, (iii) having been
decommissioned in accordance with all applicable Laws, including Environmental
Laws, and in accordance with SUBLANDLORD’s PSGs, and (iv) having been
decontaminated in accordance with the procedures set forth on Exhibit “G.” Any
personal property remaining within the SUBLEASED PREMISES after termination
shall be treated as provided for in Paragraph 10 hereof.

 

21. INSURANCE.

 

(a) SUBTENANT’s Insurance. SUBTENANT shall obtain and keep in effect during the
term of this Sublease, from one or more reputable insurance companies licensed
to do business in the State of Delaware:

 

(i) Comprehensive general liability insurance policy (Occurrence Form),
including Blanket Contractual Liability, Product/Completed Operations, Broad
Form Property Damage, and Personal Injury in a combined single limit for Bodily
Injury and Property Damage not less than $2,000,000 per occurrence. Such policy
shall name SUBLANDLORD and Prime Landlord as additional insureds and shall
contain a waiver of subrogation in favor of SUBLANDLORD and Prime Landlord. Each
such policy shall contain a thirty (30) day prior written notice provision to
SUBLANDLORD prior to any such cancellation or termination. SUBTENANT may provide
its insurance coverage for the SUBLEASED PREMISES through a blanket or umbrella
policy.

 

(ii) Workers’ Compensation—Statutory; Employer’s Liability—$1,000,000 per
accident/per employee; and such other generic insurance as may be required by
law.

 

(iii) Business Auto Liability, in a combined single limit for Bodily Injury and
Property Damage—$1,000,000 per occurrence.

 

SUBTENANT shall further file a certificate of insurance evidencing the above
required minimum coverage with SUBLANDLORD’s designee. Neither the failure of
SUBTENANT to comply with any or all of the insurance provisions of this
Sublease, nor the failure to secure endorsements on policies as may be necessary
to carry out the terms and provisions of this Sublease, shall be construed to
limit or relieve SUBTENANT from any of its obligations under this Sublease,
including this insurance paragraph.

 

(b) SUBLANDLORD’s Insurance. SUBLANDLORD shall either obtain and keep in effect
fire and extended coverage casualty insurance (“Casualty Insurance”) in the
amount of the full replacement cost of the SUBLEASED PREMISES or, if permitted
by subparagraph 20(c) below, establish a self-insurance program in lieu of
obtaining third party insurance in accordance with the requirements of
subparagraph 20(c). Neither the failure of

 

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SUBLANDLORD to comply with any or all of the insurance provisions of this
Sublease, nor the failure to secure endorsements on policies as may be necessary
to carry out the terms and provisions of this Sublease, shall be construed to
limit or relieve SUBLANDLORD from any of its obligations under this Sublease,
including this insurance paragraph.

 

(c) Self-Insurance. Notwithstanding anything to the contrary contained herein,
for so long as (i) E.I. du Pont de Nemours and Company is the SUBLANDLORD
hereunder, (ii) E.I. du Pont de Nemours and Company has a net worth in excess of
$2,000,000,000, and (iii) E.I. du Pont de Nemours and Company has an investment
grade credit rating from each of the nationally recognized rating agencies then
rating its debt, SUBLANDLORD may self-insure in lieu of obtaining or keeping in
effect third party insurance (including, without limitation, Casualty Insurance)
relating to the Shared Site, including the SUBLEASED PREMISES.

 

(d) Release and Waiver of Subrogation. Any provision of this Sublease to the
contrary notwithstanding, SUBLANDLORD and SUBTENANT hereby release the other
from any and all liability or responsibility to the other or anyone claiming
through or under them by way of subrogation or otherwise (i) from any and all
liability for any loss or damage to the property of the releasing party, (ii)
for any loss or damage that may result, directly or indirectly, from the loss or
damage to such property (including rental value and business interruption), and
(iii) from legal liability for any loss or damage to property (no matter who the
owner of the property may be), all to the extent that the releasing party’s loss
or damage is insured or, if not insured, was insurable under commercially
available fire and extended coverage property insurance policies, including
additional coverages typically obtained by owners and tenants of comparable
premises, even if such loss or damage or legal liability shall be caused by or
result from the fault or negligence of the other party or anyone for whom such
party may be responsible and even if the releasing party is self insured in
whole or in part or the amount of the releasing party’s insurance is inadequate
to cover the loss or damage or legal liability. It is the intention of the
parties that SUBLANDLORD and SUBTENANT shall look solely to their respective
insurance carriers or self-insurance programs for recovery against any such
property loss or damage or legal liability, without (in the case of third party
coverage) such insurance carriers having any rights of subrogation against the
other party.

 

22. QUIET ENJOYMENT. SUBLANDLORD warrants its right to create the Subleasehold
interest created herein and covenants that SUBTENANT, upon paying the rent and
all other sums and charges to be paid by it under this Sublease, and observing
and keeping all covenants, agreements and conditions of this Sublease on its
part to be kept, shall have peaceful, quiet and uninterrupted possession of the
SUBLEASED PREMISES during the Term of this Sublease.

 

23. MAINTENANCE OF RECORDS/INSPECTION. SUBLANDLORD shall maintain or cause to be
maintained in the ordinary course of business, books and records relating to its
calculation of rent due hereunder and the costs of water, electric and fuel oil
adjustments charged to SUBTENANT hereunder. SUBLANDLORD shall make such records
available for inspection by SUBTENANT during regular business hours and upon
reasonable notice (or by an independent accountant or other designee of
SUBTENANT to which SUBLANDLORD does not have reasonable objection); provided,
however, that any such inspection by SUBTENANT shall

 

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not occur more than once each year and shall be conducted in a manner which does
not interfere unreasonably with the operation of the day-to-day business affairs
of SUBLANDLORD.

 

24. JURISDICTION; FORUM; ETC. Any controversy, claim or issue arising out of or
relating to either party’s performance under this Sublease or the
interpretations, validity or effectiveness of this Sublease shall, upon the
written request of either party, be referred to designated senior management
representatives of SUBLANDLORD and SUBTENANT for resolution. Such
representatives shall promptly meet and, in good faith, attempt to resolve the
controversy, claim or issue referred to them. If SUBTENANT and SUBLANDLORD
cannot so resolve such controversy, claim or issue, then upon written notice
from either party within the next sixty (60) days, the parties will attempt in
good faith to resolve the dispute through mediation to be held in Wilmington,
Delaware, unless the parties otherwise agree upon another location. If the
controversy, claim or issue is not resolved through mediation, then such
controversy, claim or issue shall be settled by binding arbitration before the
American Arbitration Association (“AAA”) to be held in Wilmington, Delaware,
unless the parties otherwise agree upon another location. Such arbitration shall
be conducted in accordance with AAA’s then current Commercial Arbitration Rules.
The award rendered by the arbitrator or arbitrators shall be final and
unappealable, and judgment may be entered upon the award in accordance with
applicable law in any Court having jurisdiction thereof. The non-prevailing
party in such arbitration shall be required to reimburse the prevailing party
its reasonable attorneys’ fees and costs incurred in such arbitration and any
action to enter judgment upon the arbitration award.

 

25. NOTICES. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered personally, telecopied (which is confirmed) or sent by registered or
certified mail (postage prepaid, return receipt requested) or by a nationally
recognized overnight delivery service to the parties at the following addresses:

 

If to SUBTENANT, to:

Incyte Corporation

3160 Porter Drive

Palo Alto, CA 94304

Attn.: Robin Weckesser, Sr. Director, Real Estate and Facilities

 

With a courtesy copy to:

Incyte Corporation

3160 Porter Drive

Palo Alto, CA 94304

Attn.: General Counsel

 

If to SUBLANDLORD, to:

E. I. du Pont de Nemours and Company

1007 Market Street

Wilmington, DE 19898

Attn: Corporate Real Estate

Room: D-12090

 

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or to such other address as SUBLANDLORD or SUBTENANT may specify by notice to
the other (provided that notice of any change of address shall be effective only
upon receipt thereof).

 

26. CORPORATE COVENANTS AND REPRESENTATIONS. Each person executing this Sublease
on behalf of SUBLANDLORD and SUBTENANT hereby covenants and warrants that
SUBLANDLORD or SUBTENANT, as applicable, is a duly constituted corporation
qualified to do business in the State of Delaware and that such person is duly
authorized to execute and deliver this Sublease on behalf of SUBTENANT.

 

27. INTEGRATION. This Sublease and the documents referred to herein set forth
all the agreements, conditions and understandings between SUBLANDLORD and
SUBTENANT relative to the SUBLEASED PREMISES, and there are no promises,
agreements, conditions or understandings, either oral or written, between them
other than that certain Confidentiality Agreement dated February 5, 2002 by and
between them (which agreement may be amended from time to time). No subsequent
alteration, amendment, supplement, change or addition to this Sublease shall be
binding upon SUBLANDLORD or SUBTENANT unless reduced to writing and signed by
both parties hereto.

 

28. NO PARTNERSHIP. The parties do not intend to create any partnership or joint
venture between themselves with respect to the SUBLEASED PREMISES or any other
matter. In all matters relating to this Sublease, both parties will be acting
solely as independent contractors and will be solely responsible for the acts of
their employees, officers, directors, contractors and agents. Employees, agents,
or contractors of one party shall not be considered employees, agents, or
contractors of the other party. Neither party shall have the right, power, or
authority to create any obligation, express or implied, on behalf of the other
party.

 

29. GOVERNING LAW. This Sublease shall be governed by and construed in
accordance with the laws of the State of Delaware, regardless of the laws that
might otherwise govern under applicable principles of conflicts of laws.

 

30. HEADINGS. The descriptive headings herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Sublease.

 

31. SEVERABILITY. The invalidity or unenforceability of any provision of this
Sublease shall not affect the validity or enforceability of any other provisions
of this Sublease, each of which shall remain in full force and effect.

 

32. SUCCESSION. This Sublease shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.

 

33. COUNTERPARTS. This Sublease may be executed in two or more counterparts,
each of which shall be deemed to be an original, but all of which shall
constitute one and the same agreement.

 

34. INTERPRETATION.

 

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(a) Reference to any law, or to any provision of any law, in this Sublease shall
include any modification or reenactment of that legislation or legislation
substituted therefor and all legislation, orders, regulations and amendments
issued under such legislation.

 

(b) Reference to any party shall include a reference to its legal successors and
permitted assignees.

 

35. BROKERS. SUBLANDLORD covenants, represents and warrants to SUBTENANT that
SUBLANDLORD has had no dealing or negotiations with any broker or agent or
finder with respect to this Sublease. SUBTENANT covenants, represents and
warrants to SUBLANDLORD that SUBTENANT has had no dealing or negotiations with
any broker or agent or finder with respect to this Sublease. SUBLANDLORD and
SUBTENANT each covenant and agree to pay, hold harmless and indemnify the other
from and against any and all costs, expenses, including reasonable attorneys’
fees, and liability for any compensation, commissions or charges claimed by any
broker or agent with whom the indemnifying party has had any dealings or
negotiations with respect to this Sublease.

 

36. FORCE MAJEURE. “Force Majeure” means, for either party, any circumstance(s)
beyond the reasonable control of that party, which prevents full performance of
an obligation hereunder. For the avoidance of doubt, the following circumstances
shall also constitute a Force Majeure event: failure by a third party to supply
(in whole or in part) any utilities or ancillary rent service to the extent that
such failure prevents, hinders or delays SUBLANDLORD’s ability to provide that
utility or ancillary rent service to SUBTENANT; a Governmental Authority
notifies SUBLANDLORD or commences a legal or administrative action alleging that
provision of utilities or ancillary rent services results in SUBLANDLORD being
deemed a public utility. The party affected by an event constituting Force
Majeure shall be excused from performance of its obligations under or pursuant
to this Sublease if, and to the extent that, performance of such obligations is
delayed, hindered or prevented by such Force Majeure. A Force Majeure may excuse
a delay in making any payment due hereunder where the delay in payment was
caused by the Force Majeure, but otherwise the parties shall continue to make
payments due hereunder for the remaining utilities or ancillary rent services
provided hereunder. If a party is in a position of Force Majeure or is aware of
the likelihood of a situation constituting Force Majeure arising, it shall
notify the other party in writing promptly of the cause and extent of such
non-performance or likely non-performance, the date or likely date of
commencement thereof and the means proposed to be adopted to remedy or abate the
Force Majeure, and the parties shall consult with a view to take such steps as
may be appropriate to mitigate the effects of such Force Majeure. If any such
Force Majeure continues for more than fifteen (15) days and materially
interferes with SUBTENANT’s use and enjoyment of the SUBLEASED PREMISES,
SUBLANDLORD shall proportionately reduce the rent due hereunder during the
period of material interference.

 

37. SURVIVAL. The expiration or termination of this Sublease shall not affect
any rights or obligations that have arisen or accrued hereunder before such
expiration or termination.

 

38. CONFIDENTIALITY. Each of SUBLANDLORD and SUBTENANT will not use any
Confidential Information (defined below) for any purpose other than complying
with its obligations under this Sublease and under Environmental Laws and other
similar laws relating to

 

30

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health, safety and public welfare. Furthermore, each of SUBLANDLORD and
SUBTENANT will not disclose or otherwise make available any Confidential
Information to any other person, firm, corporation or other entity, except to
the extent required by applicable law, regulation or court order (including
without limitation any securities filings), provided in each case that the
disclosing party (a) has given prompt advance written notice to the other
(except that no notice shall be required in the case of securities filings) and
(b) has made a reasonable legal determination that such Confidential Information
must be disclosed. For the purposes of this Sublease, “Confidential Information”
means business, financial and scientific written information which is disclosed
in the course of the dealings in connection with this Sublease and is designated
in writing as “Confidential.” Such Confidential Information shall not apply to
information which:

 

(a) was known by either party prior to receipt hereunder, as evidenced by the
written records of the party claiming this exemption;

 

(b) was generally known to the public prior to receipt hereunder;

 

(c) subsequent to receipt hereunder becomes generally known to the public other
than by act or omission on the part of the party claiming this exemption; or

 

(d) subsequent to receipt hereunder, is made available to by a third party who
is legally entitled to do so.

 

The obligations of the parties described in this paragraph will apply to any
Confidential Information disclosed to either in connection with that certain
lease dated February 26, 2002 between the parties for space at the Stine-Haskell
Research Center, which lease is being terminated on or about the date of this
Sublease. All obligations of confidentiality shall survive the expiration or
termination of the above –mentioned lease and this Sublease for a period of one
(1) year from said date of expiration or termination.

 

39. DATA TRANSFER AND PRIVACY. Unless otherwise agreed by the parties in
writing, any personal information provided by one party to the other hereunder
may only be used for conducting the transactions that are the subject of this
Sublease. Personal information means any information by which the identity of a
person could be revealed. Examples of personal information include, but are not
limited to, name, address, telephone number, date of birth, social security
number, e-mail address or any combination thereof.

 

40. NON-SOLICITATION OF SUBLANDLORD EMPLOYEES. SUBTENANT will not recruit or
solicit for employment any of SUBLANDLORD’s current employees.

 

(rest of page intentionally left blank)

 

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IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be executed
as of the day and year first above written.

 

Witness:

  

E. I. DU PONT DE NEMOURS AND COMPANY

    

By:

  

/s/    DIANE L. BOC        

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/s/    LOIS J. SMITH        

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

              

Title:

  

Manager Corporate Real Estate U.S. Region

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Witness:

  

INCYTE CORPORATION

    

By:

  

/s/    JOHN VUKo        

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

/s/    ROBIN WECKESSER        

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

         

Sr. Director Real Estate and Facilities

  

Title:

  

CFO

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

 

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JOINDER OF BUILDING OWNER, PRIME LANDLORD AND MORTGAGEE

 

Each of Building Owner, Prime Landlord and Mortgagee join in the execution of
this Sublease for the purpose of confirming its agreements to Paragraph 18 of
this Sublease.

 

Witness:

  

DU PONT DE NEMOURS AND COMPANY, L.L.C.

    

By:

  

/s/    KAREN K. MENEELY        

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

/s/    ANN BATES        

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

              

Title:

  

Manager

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Witness:

  

ACORN LEASING, L.L.C.

    

By:

  

/s/    KAREN K. MENEELY        

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

/s/    ANN BATES        

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

              

Title:

  

Manager

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Witness:

  

LAUREL N.A., L.L.C.

    

By:

  

/s/    KAREN K. MENEELY        

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/s/    ANN BATES        

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Title:

  

Manager

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